<PAGE>   1

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ---------------------

                                   FORM 10-K
                             ---------------------

<TABLE>
<C>               <S>
   (MARK ONE)
      [X]         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 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 ____________
</TABLE>

                         COMMISSION FILE NUMBER 0-31341

                         VIASOURCE COMMUNICATIONS, INC.
             (Exact name of Registrant as specified in its charter)

<TABLE>
<S>                              <C>                                  <C>
                                                                          22-2966853
          NEW JERSEY                            1731                   (I.R.S. Employer
(State or other jurisdiction of     (Primary Standard Industrial        Identification
incorporation or organization)       Classification Code Number)             No.)
</TABLE>

                     200 EAST BROWARD BOULEVARD, SUITE 2100
                         FORT LAUDERDALE, FLORIDA 33301
                                  800-683-0253
          (Address, including zip code and telephone number, including
            area code, of Registrant's principal executive offices)

                                CRAIG A. RUSSEY
                     PRESIDENT AND CHIEF EXECUTIVE OFFICER
                     200 EAST BROWARD BOULEVARD, SUITE 2100
                         FORT LAUDERDALE, FLORIDA 33301
                                  800-683-0253
           (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

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

                                      None

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

                           Common Stock, no par value

     INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(g) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO REPORT), AND (2) HAS BEEN SUBJECT TO SUCH SHORT
FILING REQUIREMENTS FOR THE PAST 90 DAYS.     [X]  Yes     [ ]  No

     INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGISTRATION S-K (SECTION 229.405 OF THIS CHAPTER) IS NOT CONTAINED
HEREIN AND WILL NOT BE CONTAINED, TO THE BEST OF THE REGISTRANT'S KNOWLEDGE, IN
DEFINITIVE PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III
OF THIS FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K.  [X]

     THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF
THE REGISTRANT AS OF MARCH 28, 2001 WAS $25,613,705.

     THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AS OF APRIL 11, 2001 WAS
43,163,836.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Parts of the Registrant's Definitive Proxy Statement on Schedule 14A for
its 2001 Annual Meeting of Stockholders, which will be filed not more than 120
days after December 30, 2000, are incorporated by reference in Part III of this
Annual Report on Form 10-K.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>   2

                         VIASOURCE COMMUNICATIONS, INC.

                        2000 ANNUAL REPORT ON FORM 10-K

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                        PAGE
                                                                        ----
<S>       <C>                                                           <C>
PART I................................................................    1
Item 1.   Business....................................................    1
Item 2.   Properties..................................................   10
Item 3.   Legal Proceedings...........................................   10
Item 4.   Submission of Matters to a Vote of Security Holders.........   10

PART II...............................................................   11
Item 5.   Market for Registrant's Common Equity and Related              11
            Stockholder Matters.......................................
Item 6.   Selected Financial Data.....................................   11
Item 7.   Management's Discussion and Analysis of Financial Condition    13
            and
            Results of Operations.....................................
Item 8.   Financial Statements and Supplementary Data.................   25
Item 9.   Changes in and Disagreements with Accountants on Accounting    54
            and
            Financial Disclosure......................................

PART III..............................................................   54
Item 10.  Directors and Executive Officers of the Registrant..........   54
Item 11.  Executive Compensation......................................   54
Item 12.  Security Ownership of Certain Beneficial Owners and            54
            Management................................................
Item 13.  Certain Relationships and Related Transactions..............   54

PART IV...............................................................   54
Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form   54
            8-K.......................................................
</TABLE>

---------------
The information required by Items 10, 11, 12 and 13 of Part III is hereby
incorporated by reference to the Registrant's Definitive Proxy Statement on
Schedule 14A, which will be filed not more than 120 days after December 30,
2000.

                                        i
<PAGE>   3

                                     PART I

ITEM 1.  BUSINESS

OVERVIEW

     Viasource Communications, Inc. ("Viasource," "we," "us," or "our") is a
leading, nationwide enabler of broadband technologies to residential and
commercial consumers. We offer comprehensive network integration services to
enable technologies offered by providers in the cable, telecommunications, and
satellite and wireless industries. Our technology enabling services include
installation, integration, fulfillment, and long-term maintenance and support
services for broadband video, voice and data technologies. Broadband service
providers use us for the critical "last mile" to make the connections between
their network infrastructures and equipment located at the premises of
residential and commercial end-users. We also provide premise networking
services, in which we design, install and maintain LANs/WANs and other
communications network applications for commercial and residential premises.

     Our principal clients are full-spectrum broadband service providers in the
cable, telecommunications, and satellite and wireless industries. To serve the
end-user, our clients retain us to rapidly deploy the latest technologies to
support advanced cable services, cable telephony and high-speed data service,
digital subscriber line ("DSL"), and satellite and wireless broadband services.
We have a long history of providing leading-edge technology enabling services.
We have been successful in developing long-term relationships with many of our
clients, including many of the leaders in the industries we serve, who engage us
to deliver a full suite of services over multiple geographic regions.

     We operate in four reportable segments:

     - CABLE, which includes traditional and advanced cable television
       installation, disconnect, equipment recovery, account collection and
       system audit services,

     - TELEPHONY AND INTERNET, which includes installation and maintenance of
       DSL services, cable telephony and high-speed data services and other
       broadband services, as well as traditional telephony services for
       commercial and residential consumers,

     - SATELLITE AND WIRELESS, which includes installation, equipment conversion
       and maintenance services for direct broadcast satellite ("DBS"), and
       other wireless technologies, and

     - PREMISE NETWORKING, STAFFING AND OTHER, which includes design,
       installation and maintenance of LANs/WANs and other network applications
       for commercial and residential consumers, as well as the provision of
       installation technicians to commercial customers.

     See "Note 15 to Notes to Consolidated Financial Statements", included in
"Item 8. Financial Statements and Supplementary Data," for a summary of the
contribution of each of our segments to our total revenues, operating loss and
total assets during the 52 week fiscal years ended January 2, 1999, January 1,
2000 and December 30, 2000 (fiscal 1998, fiscal 1999 and fiscal 2000,
respectively).

HISTORY AND RECENT ACQUISITIONS

     We were founded in New Jersey in 1972 and have grown through a series of
acquisitions in fiscal 1999 and the second quarter of fiscal 2000. See "Item 7.
Management Discussion and Analysis of Financial Conditions and Results of
Operations" for additional information regarding these acquisitions. In August
2000, we completed our initial public offering, whereby we sold 5,000,000 shares
of common stock for $8.00 a share, resulting in gross proceeds of $40 million.
In September 2000, an over allotment of 750,000 shares was sold for $8.00 a
share, resulting in gross proceeds of $6 million. We received $3 million of
proceeds from the over allotment and a selling shareholder received the
remaining proceeds. The costs associated with the initial public offering were
$7.6 million. The initial public offering resulted in net proceeds to us of
$35.5 million.

                                        1
<PAGE>   4

BUSINESS STRATEGY

     Our business strategy is to be the leading provider of comprehensive
installation, integration, fulfillment, long-term maintenance and support
services to broadband service providers serving residential and commercial
end-users. Key elements of our growth and operating strategies are to:

     - provide broad-based, leading-edge technological expertise,

     - broaden our geographic reach and expand our presence in existing markets,

     - develop and deploy a broad range of higher value-added network
       integration and support services,

     - expand and strengthen our client relationships,

     - build upon our relationships with leading manufacturers of broadband
       communications equipment,

     - enhance our brand recognition and customer service,

     - maintain our technological expertise through the recruitment, retention
       and continued training of qualified technicians, and

     - pursue selective strategic acquisitions.

SERVICES

     We provide a wide variety of services to our clients. For our cable
clients, we install the new technologies necessary to implement Internet access,
such as cable modems and network cards, in the consumers' premises, as well as
provide traditional cable services such as placement of the drop cable from the
main distribution lines to the consumers' homes and businesses and wiring inside
the consumers' premises to connect the drop cable to television sets, and a
broad range of other services, including audit, converter box recovery,
analog-to-digital box swap, and warranty services. Our technicians install
broadband telephony network interface units and additional premise phone lines
for telephony consumers, and we assume service responsibilities for a period of
time after the installation. We provide testing and certification to determine
whether existing cable plants are capable of supporting two way, high-speed data
and telephony technologies. As of December 30, 2000, we deployed cable services
to approximately 184 systems in 24 states.

     For our DSL clients, we provide a comprehensive solution to the complex
technical and administrative requirements associated with DSL installation,
maintenance and network integration. Key components of these services include
service order scheduling, equipment management, installation and network
integration service, service order monitoring, integrated management systems,
and assignment of technicians on a contract basis. Our technicians make end-user
connections, test and monitor installed lines, and install and configure
customer premise equipment and end-user work stations. As of December 30, 2000,
we deployed DSL enabling services in 27 major markets in 17 states.

     For our DBS clients, we install satellite dishes and receivers at
residential and commercial consumer premises, including conducting
pre-installation surveys of the premises for suitability, designing and
installing the necessary wiring, and activating the DBS service. We also provide
ongoing maintenance and support services, such as repositioning satellite
dishes, repairing or replacing faulty wiring and equipment, and diagnosing and
rectifying other service problems. As of December 30, 2000, we provided DBS
services to DIRECTV, the largest DBS provider in the United States, in 33
states.

     For our premises networking clients, we install central network connection
boxes at the consumer premises, and run coaxial cable, twisted wire and fiber
optic lines to implement the advanced premise networks. For our entertainment
industry clients, we provide advanced premise networking services such as
designing, installing and maintaining structured wiring systems for the computer
animation, lighting and ride control of theme park attractions.

                                        2
<PAGE>   5

CLIENTS

     We served a diverse group of approximately 50 clients in 1999 and 2000. The
following customers accounted for at least ten percent of our revenues: AT&T
Broadband Services, DIRECTV and Time Warner Cable accounted for approximately
28%, 25% and 14%, respectively, for fiscal 2000. AT&T Broadband Services, Time
Warner Cable, Comcast and DIRECTV accounted for approximately 29%, 22%, 11% and
11%, respectively, for fiscal 1999.

EMPLOYEES

     As of December 30, 2000, we had approximately 2,769 field-based technicians
whose pay includes productivity, quality and hourly components. We also had
approximately 573 salaried employees, including executive officers, project
managers or engineers, job superintendents, staff and clerical personnel. Until
recently, approximately half of our employees are technically employed by two
independent, professional employer organizations, which provide payroll services
and certain employee benefits for these employees. We discontinued use of these
professional employer organizations at the end of the first quarter of fiscal
2001. Approximately 175 of our employees are covered by collective bargaining
agreements, which require us to pay specified wages to union employees, observe
certain workplace rules and make employee benefit payments to multi-employer
pension plans and employee benefit trusts. We believe that our relationship with
our union employees and their unions is favorable.

     The number of our employees can fluctuate due to project-based work,
seasonality and other matters. However, we carefully monitor our workforce
levels to minimize short-term fluctuations and manage our growth in relation to
our client's needs. We try to minimize the use of short-term employees and
subcontractors, using them only when we have significant short-term staffing
needs in rural areas or otherwise in response to client demand.

     Typically, newly hired field technicians attend various Viasource developed
and sponsored technical and safety training courses during the initial 30 days
of employment. We also provide a variety of continuing education programs
designed to assist our employees in maintaining technical competence and
professional certifications.

COMPETITION

     Our business is highly competitive. Our competitors include both local,
industry-specific independent technology enablers and the in-house service and
fulfillment organizations of our existing or prospective clients, which often
employ personnel who perform some of the same types of services as those
provided by us.

     Historically, there have been relatively few barriers to entry into the
markets in which we operate. However, as the size and geographic scope of
broadband service providers in the industries we serve have expanded, we believe
that these providers are increasingly requiring technology enabling companies to
provide installation, integration, fulfillment, and long-term maintenance and
support services simultaneously over multiple geographic regions.

     We believe that the principal competitive factors in our market include
technical expertise, reputation, established relationships, price and quality of
service, availability of skilled technical personnel, geographic presence,
breadth of service offering, adherence to industry standards and financial
stability.

     Although some of the industries we serve are heavily regulated, our
services are not heavily regulated. Some states in which we operate require that
we register and/or obtain licenses to perform our services.

                                        3
<PAGE>   6

                                  RISK FACTORS

     Our business may be adversely affected by a number of risks, including the
factors discussed below. You should carefully consider the risks described
below, together with all of the other information in this Annual Report on Form
10-K.

WE HAVE A LIMITED HISTORY OF OPERATING AS A COMBINED COMPANY WHICH MAKES IT
DIFFICULT FOR YOU TO EVALUATE OUR PERFORMANCE.

     We have grown rapidly through a number of acquisitions. In July 1999, we
acquired Communication Resources, Inc. ("CRI"). In September 1999, we acquired
the assets of Nassau Communications Inc., (d/b/a "Telecrafter"). In the second
quarter of 2000, we acquired TeleCore, Inc.("TeleCore"), Excalibur Cable
Communication, LTD. ("Excalibur"), D.S. Cable TV Contractor, Inc. ("D.S. Cable")
and Service Cable Corporation and Service Cable Electric, Inc., (collectively
"Service Cable"). As a result, you have limited information upon which to
evaluate the performance of the combined companies. Furthermore, after giving
effect to these recent transactions, our historical and pro forma financial
information may not be indicative of our future operating results. You should
read the discussions under "Item 1. Business -- History and Recent
Acquisitions," "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations -- History and Recent Acquisitions" and
"Item 13. Certain Relationships and Related Transactions" for information
concerning our history.

WE HAVE INCURRED LOSSES AND EXPERIENCED NEGATIVE CASH FLOW, AND WE EXPECT TO
EXPERIENCE LOSSES AND NEGATIVE CASH FLOW FOR AT LEAST THE NEXT SEVERAL QUARTERS.

     As a result of our acquisitions, we incurred significant losses and
experienced negative operating cash flow in fiscal 2000. We also incurred
additional debt in connection with the acquisitions and will require additional
cash to fund operations. Consequently, we expect to report operating losses and
experience negative cash flow in our combined business for at least the next
several quarters. If our revenue does not grow as expected or capital and
operating expenditures exceed our plans, then our business, prospects, operating
results and financial condition will be materially adversely affected. We cannot
be certain if or when we will be profitable or if or when we will generate
positive operating cash flow.

WE HAVE A SIGNIFICANT AMOUNT OF INDEBTEDNESS OUTSTANDING. AS A RESULT, WE MAY BE
UNABLE TO MEET OUR FUTURE CAPITAL AND LIQUIDITY REQUIREMENTS.

     We have a significant amount of long-term debt. We expect that our
principal sources of funds will be cash generated from our operating activities
and limited borrowing capacity under our existing revolving credit facility. We
believe that these funds will provide us with sufficient liquidity and capital
resources for us to meet our current and future financial obligations, as well
as to provide funds for our working capital, capital expenditures and other
needs, for at least the next 12 months. Despite our expectations, however, we
may require additional equity or debt financing to meet our working capital
requirements, to repay our existing debt and to execute our operating strategy.
This financing may not be available when required or, may be available only on
terms unsatisfactory to us. In addition, our existing revolving credit facility
imposes restrictions on our ability to incur more debt. Further, if we issue
equity securities, the ownership percentage of our shareholders will be reduced,
and the new equity securities may have rights senior to those of our common
stock.

MANY OF OUR DSL CLIENTS EXPERIENCED SIGNIFICANT FINANCIAL DIFFICULTIES IN THE
FOURTH QUARTER OF FISCAL 2000, RESULTING IN SUBSTANTIALLY REDUCED REVENUES FROM
THESE CLIENTS, AND, TO THE EXTENT THAT THESE, AS WELL AS OTHER, CLIENTS
EXPERIENCE FINANCIAL DIFFICULTIES IN THE FUTURE OUR GROWTH AND PROFITABILITY
COULD BE ADVERSELY AFFECTED.

     During the fourth quarter of fiscal 2000, a significant fundamental shift
occurred in the DSL industry where the competitive landscape gave regional bell
operating companies (each a "RBOC") an advantage over our data local exchange
carrier ("DLEC") clients. Consequently, many of our DLEC clients experienced
significant financial difficulties, resulting in substantially reduced revenues
from these clients. As a result, there was a permanent impairment of our DLEC
client relationships and we recorded a non-cash impairment

                                        4
<PAGE>   7

loss of $52.9 million in the fourth quarter of fiscal 2000 primarily due to the
impairment loss on intangible assets and related goodwill associated with these
client relationships and our trained workforce. To the extent that these, as
well as other, clients experience financial difficulties in the future, our
growth and profitability could be adversely affected.

WE INCURRED A SIGNIFICANT AMOUNT OF GOODWILL AND OTHER INTANGIBLES AS A RESULT
OF OUR ACQUISITIONS IN 1999 AND THE SECOND QUARTER OF FISCAL 2000 THAT WILL
DECREASE OUR EARNINGS IN FUTURE PERIODS.

     We recorded approximately $161.4 million of goodwill and other intangibles
as a result of our acquisitions in 1999 and the second quarter of fiscal 2000.
The goodwill and other intangibles are being amortized over periods ranging from
1 to 20 years with a weighted average life of 11 years. Although, as discussed
above, $52.9 million of certain intangible assets and related goodwill were
written down in the fourth quarter of fiscal 2000, thus reducing future annual
intangible asset amortization by approximately $5.7 million, the amortization of
our remaining goodwill and other intangibles will adversely affect our earnings
and profitability in future periods.

IF WE ARE UNABLE TO INTEGRATE OR SUCCESSFULLY MANAGE THE COMBINED COMPANIES, OR
COMPANIES WE MAY ACQUIRE IN THE FUTURE, WE MAY INCUR UNEXPECTED EXPENDITURES AND
OUR GROWTH AND PROFITABILITY COULD BE ADVERSELY AFFECTED.

     If we are unable to integrate or successfully manage the combined companies
or companies we may acquire in the future, we may not realize anticipated cost
savings and revenue growth which may result in reduced profitability or
operating losses. We intend to continue to integrate the management information,
accounting and financial reporting systems, and some of the operational,
administrative, purchasing and insurance practices, of the businesses we have
acquired and may acquire in the future. The successful integration and
management of acquired companies involve the following principal risks that
could adversely affect our growth and profitability:

     - We may not be able to successfully integrate common systems and
       procedures without substantial costs, delays or other operations or
       financial problems.

     - Our management team may be unable to successfully manage the combined
       companies, or the integration may place significant demands on our
       management, diverting their attention from, and making it more difficult
       for them to manage, our operations.

     - Our existing operational, financial and management systems may be
       incompatible with or inadequate to effectively integrate and manage
       acquired systems and any steps taken to implement changes in our systems
       may not be sufficient.

     - Future acquisitions, if any, may result in liabilities and contingencies,
       which could be significant to our operations and related cash flows.

     - Future acquisitions, if any, may require substantial financial resources
       that otherwise could be used in the development of other aspects of our
       business.

     We cannot assure you that we will be able to successfully integrate any
businesses, technologies or personnel that we might acquire in the future, and
our failure to do so could adversely affect our business, prospects, operating
results and financial condition.

A LOSS OF ONE OR MORE OF OUR KEY CLIENTS COULD CAUSE A SIGNIFICANT DECREASE IN
OUR REVENUES.

     We have derived and may continue to derive a significant portion of our
revenues from a limited number of clients. In fiscal 2000, AT&T Broadband
Services, DIRECTV and Time Warner Cable accounted for 28%, 25% and 14%,
respectively, of our revenues. The services required by any one client can be
limited by a number of factors, including industry consolidation, technological
developments, economic slowdown and internal budget constraints. Our clients are
not obligated to purchase additional services and most of our contracts are
cancelable on short notice. As a result of these factors, the volume of work
performed for specific

                                        5
<PAGE>   8

clients is likely to vary from period to period and a major client in one period
may not use our services in a subsequent period. A temporary or permanent loss
of any of our key clients could seriously harm our business.

MOST OF OUR CONTRACTS CAN BE CANCELED ON SHORT NOTICE, AND IF ONE OR MORE
SIGNIFICANT CONTRACTS WERE CANCELED, WE MAY NOT BE ABLE TO GENERATE REVENUE AT
OR EXCEEDING HISTORICAL LEVELS.

     Most of our contracts are cancelable on short notice, generally less than
90 days. Accordingly, we cannot assure you that our future revenues will
approximate our historical performance. If any canceled contracts were not
replaced with contracts from other clients, our revenues might decrease and our
profitability could be adversely affected.

IF THE GROWTH IN THE BROADBAND COMMUNICATIONS INDUSTRIES DOES NOT CONTINUE OR
CONTINUES SLOWER THAN ANTICIPATED, OUR CLIENTS MAY NOT REQUIRE THE SAME VOLUME
OF SERVICES FROM US AND WE MAY NOT BE ABLE TO EXECUTE OUR GROWTH STRATEGY.

     The broadband communications industries have experienced a high rate of
growth. If the rate of growth slows, and broadband service providers reduce
their capital investments in upgrades or expansion of their systems, our clients
may not require the same volume of services from us and we may not be able to
execute our growth strategy. In that case, our profitability and our prospects
could be adversely affected.

IF BROADBAND SERVICE PROVIDERS DECREASE THEIR RELIANCE ON INDEPENDENT COMPANIES
FOR INSTALLATION, INTEGRATION, FULFILLMENT, AND LONG-TERM MAINTENANCE AND
SUPPORT SERVICES, OUR REVENUES MAY DECLINE AND OUR BUSINESS COULD BE HARMED.

     Our success is dependent on the continued reliance by broadband service
providers on independent companies like us for performance of their
installation, integration, fulfillment, and long-term maintenance and support
services. If these providers elect to perform these services themselves, our
revenues may decline and our business could be harmed.

THE CONSOLIDATION OF BROADBAND SERVICE PROVIDERS COULD REDUCE THE NUMBER OF OUR
CLIENTS OR POTENTIAL CLIENTS.

     Recently, the cable, telecommunications, and satellite and wireless
industries have been characterized by significant consolidation activity. In
addition, the consolidation of our clients could have the effect of reducing the
number of our current or potential clients which could result in our dependence
on a smaller number of clients.

NEW TECHNOLOGIES MAY EMERGE WHICH COULD REDUCE DEMAND FOR OUR SERVICES.

     Our industry is subject to rapid changes in technology. Existing
technologies for transmission of video, voice and data are subject to potential
displacement by various new technologies. New technologies may be developed that
allow broadband service providers to deliver their services to consumers without
a significant upgrade of their existing systems. Furthermore, new technologies
may be developed that enable consumers to perform more easily their own
installation and maintenance of the equipment required for the delivery of these
services at their premises. Such technologies could reduce the need for
installation, replacement and maintenance services, which could reduce the
demand for our services.

IF WE ARE UNABLE TO KEEP PACE WITH RAPID TECHNOLOGICAL CHANGES IN OUR INDUSTRY,
WE MAY LOSE CURRENT CLIENTS OR BE UNABLE TO OBTAIN NEW CLIENTS.

     We will need to be able to enhance our current service offerings to keep
pace with technological developments and to address increasingly sophisticated
client needs. We may not be successful in developing and marketing in a timely
manner service offerings that respond to technological advances, and our
services may not adequately or competitively address the needs of the changing
marketplace. If we are not successful in responding in a timely manner to
technological changes, market conditions and industry developments, we may lose
current clients or be unable to obtain new clients and our business, prospects,
operating results and financial condition could suffer.

                                        6
<PAGE>   9

WE MAY BE UNABLE TO SUCCESSFULLY COMPETE WITH OTHER COMPANIES IN OUR INDUSTRY.

     Our industry is fragmented and highly competitive. Accordingly, we cannot
assure you that we will be able to maintain or enhance our competitive position.
Historically, there have been relatively few barriers to entry into the markets
in which we operate. As a result, any organization that has adequate financial
resources and access to technical expertise may become one of our competitors.
Competition in the industry depends on a number of factors, including price. Our
competitors may have lower cost structures and may, therefore, be able to
provide their services at lower rates than we can. We also face competition from
the in-house service organizations of our existing or prospective clients which
often employ personnel who perform some of the same types of services as we do.
If we are unable to maintain or enhance our competitive position, our business,
prospects, operating results and financial condition may suffer materially. You
should read "Item 1. Business -- Competition" for additional information.

IF WE ARE UNABLE TO ATTRACT AND RETAIN QUALIFIED EMPLOYEES, WE MAY BE UNABLE TO
MEET OUR CONTRACTUAL COMMITMENTS OR MAINTAIN THE QUALITY OF OUR SERVICE.

     Our ability to provide high-quality services on a timely basis requires
that we employ an adequate number of field technicians. Accordingly, our ability
to meet the demand for our services will be limited by our ability to attract,
train and retain skilled personnel. Our industry is characterized by highly
competitive labor markets and, like many of our competitors, we have
historically experienced high rates of employee turnover. Furthermore, our labor
expenses may increase as a result of a shortage in the supply of skilled
personnel and our efforts to improve our employee retention, which could
adversely impact our profitability. We cannot be certain that we will be able to
improve our employee retention rates or maintain an adequate skilled labor force
necessary to operate efficiently and to support our growth strategy. Failure to
do so could impair our ability to operate efficiently and maintain our
reputation for high quality service. This could also impair our ability to
retain current clients and attract new clients which could cause our financial
performance to decline. You should read "Item 1. Business -- Employees" for
additional information.

OUR BUSINESS MAY BE HARMED IF WE INCREASE OUR STAFFING LEVELS IN ANTICIPATION OF
A PROJECT AND UNDERUTILIZE OUR PERSONNEL BECAUSE THE PROJECT IS DELAYED, REDUCED
OR TERMINATED.

     Since our business is driven by large, and sometimes multi-year, contracts,
we forecast our personnel needs for future projected business. From time to
time, we have increased our staffing levels in anticipation of a project which
is subsequently delayed, reduced or terminated, and we have underutilized these
additional personnel, which has increased our expenses. Any such
underutilization in the future could harm our business.

IF WE WERE TO LOSE MEMBERS OF OUR SENIOR MANAGEMENT AND COULD NOT FIND
APPROPRIATE REPLACEMENTS IN A TIMELY MANNER, OUR OPERATIONS COULD BE DISRUPTED
AND OUR BUSINESS COULD BE ADVERSELY AFFECTED.

     Our success is substantially dependent upon the retention of, and the
continued performance by, our senior management and other key employees,
including certain key employees of the companies we have acquired and key
employees of companies that we may acquire in the future. If any member of our
senior management team becomes unable or unwilling to participate in our
business and operations and we are not able to replace them in a timely manner,
our business could suffer. We do not maintain "key man" life insurance policies
on any member of our senior management or any of our key employees. You should
read the discussion under "Item 10. Directors and Executive Officers of the
Registrant" for information concerning the experience of some of these
individuals.

WE MAY NOT BE ABLE TO GROW THROUGH ACQUISITIONS.

     Although we have no present intention to engage in acquisitions in the near
term, we will not be able to grow through such acquisitions in the future if we
cannot identify candidates and finance such transactions. If we are not able to
use our common stock as part of the consideration for such acquisitions, we
would be required to utilize our cash resources and borrowings available under
our revolving credit facility. Using cash for acquisitions limits our financial
flexibility and makes us more likely to seek additional capital through

                                        7
<PAGE>   10

future debt or equity financings, which we cannot be certain will be available
to us on acceptable terms. In addition, we are required to obtain the consent of
our lenders for acquisitions.

ANTI-TAKEOVER PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND BYLAWS COULD
MAKE AN ACQUISITION OF OUR COMPANY MORE DIFFICULT.

     Our certificate of incorporation and bylaws, and New Jersey law, include
provisions that could delay or make it more difficult for a third party to
acquire us or effect changes in our management, even if an acquisition or change
in management would benefit our shareholders. These provisions include:

     - authorizing our Board of Directors to issue preferred stock without
       shareholder approval.

     - staggered terms for the members of our Board of Directors.

     - requiring advance notice of shareholder nominations for directors and
       limiting the ability of shareholders to call a meeting of shareholders.

     - statutory limits regarding business combinations.

WE HAVE SIGNIFICANT SHAREHOLDERS WHO MAY BE ABLE TO INFLUENCE MAJOR CORPORATE
EVENTS AND MAY HAVE INTERESTS THAT DIFFER FROM THOSE OF OTHER SHAREHOLDERS.

     As a result of the transactions that combined the companies that now
comprise Viasource, Crest Communications Holdings LLC presently beneficially
owns approximately 23% of our common stock and may be deemed to control
Viasource. In addition, members of our senior management beneficially own
approximately 16% of our common stock. As a significant shareholder, Crest
Communications will be able to influence the outcome of matters submitted to a
vote of our shareholders, including the election of directors and the approval
of any merger or consolidation involving us, or any sale of all or substantially
all of our assets. Because our certificate of incorporation does not provide for
cumulative voting for the election of directors, the holders of a majority of
the shares voted at a meeting of our shareholders can elect all of the directors
then standing for election. Our senior managers, to the extent they may vote in
the same manner, will similarly be able to influence the outcome of matters
submitted to the vote of our shareholders. Crest Communications and these
management shareholders may have interests in such matters that differ from
those of other shareholders. See "Item 12. Security Ownership of Certain
Beneficial Owners and Management" for additional information.

SINCE OUR INITIAL PUBLIC OFFERING IN AUGUST 2000, THERE HAS BEEN A LIMITED
TRADING MARKET FOR OUR COMMON STOCK AND WE CANNOT PREDICT THE EXTENT TO WHICH A
MORE ACTIVE TRADING MARKET WILL DEVELOP FOR OUR COMMON STOCK.

     There has been a limited public market for our common stock since our
initial public offering in August 2000. We cannot predict the extent to which a
more active trading market will develop or how liquid that market might become.

THE PRICE OF OUR COMMON STOCK MAY BE VOLATILE WHICH MAY LEAD TO LOSSES BY
INVESTORS.

     The trading price of our common stock could be subject to fluctuations in
response to a number of factors, including:

     - variations in our results of operations,

     - developments that affect our industry,

     - changes in the overall economy, and

     - changes in the financial markets.

     The market price of our common stock is also influenced by market
conditions for the common stock of our competitors and by changes in
recommendations or earnings estimates by securities analysts. Volatility in the
market price of our common stock could lead to losses by investors.

                                        8
<PAGE>   11

WE MAY EXPERIENCE QUARTERLY VARIATIONS IN REVENUES AND PROFITABILITY WHICH COULD
RESULT IN INCREASED VOLATILITY OF THE PRICE OF OUR COMMON STOCK.

     We may experience quarterly variations in revenues and profitability, which
could result in increased volatility of the price of our common stock. Quarterly
variations may result from many factors, including:

     - fluctuations in demand for our services,

     - a change in the mix of our clients, contracts or business,

     - the budgetary spending patterns of our clients,

     - the timing and volume of work under new agreements,

     - the termination of existing agreements,

     - variations in the profitability of projects performed during any
       particular quarter,

     - shortages of qualified field technicians or of materials supplied by our
       clients that are necessary to the provision of our services,

     - costs we incurred to support growth internally or through acquisitions,

     - the timing of our expansion into new markets,

     - the timing of acquisitions,

     - the costs associated with integrating businesses we have acquired or may
       acquire in the future, and

     - adverse weather conditions that interfere with our ability to provide
       services.

FUTURE SALES BY EXISTING SHAREHOLDERS COULD DEPRESS THE MARKET PRICE OF OUR
COMMON STOCK.

     Sales of a substantial number of shares of common stock in the public
market, or the threat that substantial sales might occur, could cause the market
price of our common stock to decrease. These factors could also make it
difficult for us to raise capital by selling additional equity securities.

THERE ARE RISKS THAT MAY MAKE IT DIFFICULT FOR US TO ACHIEVE THE OUTCOMES
ANTICIPATED IN OUR FORWARD-LOOKING STATEMENTS.

     Some of the statements in this Annual Report on Form 10-K are
forward-looking statements that are subject to a number of risks and
uncertainties, including statements about:

     - our business strategy,

     - our plans for growth,

     - our ability to keep pace with rapidly changing technologies,

     - the future growth of the industries we serve, and

     - the future level of reliance by broadband service providers on
       independent technology enabling companies like us.

ITEM 2.  PROPERTIES

     Our facilities generally fall into the following categories: corporate or
divisional headquarter facilities, field/system offices (which serve as our
dispatch centers, generally accommodating a large number of vehicles and
sufficient warehousing capacity to provision our vehicles) and training
facilities.

     Our corporate headquarters are located in leased space in Fort Lauderdale,
Florida. Our other divisions operate from leased offices in New Providence, New
Jersey, Lakewood, Colorado, Murfreesboro, Tennessee and Irvine, California. The
total leased area is approximately 220,000 square feet and the total annual base

                                        9
<PAGE>   12

rent for our headquarters and divisional facilities is approximately $1.8
million. The leases for those facilities have terms ranging from one to fifteen
years.

     Our divisions also lease various district field offices, equipment yards,
shop facilities and temporary storage locations. We also lease other smaller
properties, as necessary. We believe that our facilities are generally adequate
for our current needs. We do not anticipate difficulty in replacing such
facilities or securing additional facilities, if needed.

     We operate a fleet of owned and leased service and support vehicles and
utilize a variety of specialty installation equipment. The total size of our
fleet is approximately 1,600 vehicles. We believe that these vehicles generally
are well maintained and insured and adequate for our present operations. We
believe that we will be able to lease or purchase this equipment at favorable
prices due to our large size and the volume of our leasing and purchasing
activity. In addition to Company owned and/or leased vehicles, we also utilize
employee provided vehicles when available and cost-effective. The employee is
required to maintain certain levels of insurance.

ITEM 3.  LEGAL PROCEEDINGS

     We occasionally are party to legal proceedings incidental to our ordinary
business operations. At present, we are not currently a party to any pending
legal proceedings that we believe could have a material adverse effect on our
business, financial condition or results of operations.

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

     None.

                                        10
<PAGE>   13

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Our common stock is traded on the Nasdaq National Market under the symbol
"VVVV." Our common stock began trading on the Nasdaq National Market in August
2000. The following table sets forth for the periods indicated the high and low
bid quotations per share for our common stock, as reported on the Nasdaq
National Market. These bid quotations reflect inter-dealer prices, without
retail mark-ups, markdowns or commissions and may not necessarily represent
actual transactions.

<TABLE>
<CAPTION>
                                                               HIGH     LOW
                                                              ------   -----
<S>                                                           <C>      <C>
Fiscal year ended December 30, 2000:
First Quarter...............................................      --      --
Second Quarter..............................................      --      --
Third Quarter (August 18, 2000 through September 30,
  2000).....................................................  $11.37   $5.63
Fourth Quarter..............................................  $ 6.44   $1.38
</TABLE>

     As of April 11, 2001, there were approximately 3,300 record holders of our
common stock.

     We have never declared a dividend or paid any dividends on our common
stock. We currently intend to retain any future earnings for funding growth and,
therefore, we do not anticipate paying cash dividends on our common stock in the
foreseeable future. In addition, the terms of our debt limit our ability to pay
cash dividends on our common stock. Any future determination to pay cash
dividends will be at the discretion of our Board of Directors and will be
dependent upon our financial condition, operating results, capital requirements
and other factors deemed relevant by our Board of Directors.

ITEM 6.  SELECTED FINANCIAL DATA

     The following table presents our selected financial data. The selected
financial data as of January 1, 2000 and December 30, 2000 and for the fiscal
years ended January 2, 1999, and January 1, 2000 and December 30, 2000 are
derived from our audited consolidated financial statements included elsewhere
herein. The selected financial data as of January 2, 1999 and the fiscal year
ended January 3, 1998 are derived from our audited consolidated financial
statements, not included elsewhere herein. The selected financial data as of
January 4, 1997 and January 3, 1998 and for the fiscal year ended June 1, 1996
and for the period from June 2, 1996 through January 4, 1997 have been derived
from unaudited financial statements, which have been prepared on the same basis
as the audited financial statements. In 1996, we changed our fiscal year from a
52/53 week year ending in May to a 52/53 week calendar year.

     The Company's historical results include the results of CRI from July 23,
1999, Telecrafter from September 7, 1999, D.S. Cable from April 21, 2000,
Service Cable from May 4, 2000, Excalibur from June 1, 2000 and TeleCore from
June 1, 2000, their respective acquisition dates. These acquisitions are all
accounted for under the purchase method of accounting. See note 3 of the notes
to our consolidated financial statements included elsewhere herein.

                                        11
<PAGE>   14

                            SELECTED FINANCIAL DATA
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                             PERIOD
                                                              FROM
                                                FISCAL      JUNE 2,
                                                 YEAR         1996                        FISCAL YEAR ENDED
                                                ENDED       THROUGH     -----------------------------------------------------
                                               JUNE 1,     JANUARY 4,   JANUARY 3,   JANUARY 2,    JANUARY 1,    DECEMBER 30,
                                                 1996         1997         1998         1999          2000           2000
                                              ----------   ----------   ----------   ----------   ------------   ------------
<S>                                           <C>          <C>          <C>          <C>          <C>            <C>
OPERATING DATA:
Revenues....................................   $20,039      $11,787      $25,707      $33,816       $61,396        $196,040
                                               -------      -------      -------      -------       -------        --------
Operating Expenses:
Cost of revenues............................    16,926       10,232       20,971       26,866        51,265         168,687
Selling, general and administrative.........     2,124        1,189        2,443        3,230         8,270          28,915
Depreciation and amortization...............       660          350          780          980         2,814          15,398
Recapitalization costs......................        --           --           --           --         1,108              --
Impairment loss on intangible assets and
  related goodwill..........................        --           --           --           --            --          52,912
                                               -------      -------      -------      -------       -------        --------
         Total operating expenses...........    19,710       11,771       24,194       31,076        63,457         265,912
                                               -------      -------      -------      -------       -------        --------
Income (loss) from operations...............       329           16        1,513        2,740        (2,061)        (69,872)
Interest income.............................        --           --           --           --            76             460
Interest expense............................       146           79          177          122         1,419           5,326
                                               -------      -------      -------      -------       -------        --------
Income (loss) before income taxes...........       183          (63)       1,336        2,618        (3,404)        (74,738)
Income tax provision (benefit)..............       105           42          747        1,203          (555)          2,205
                                               -------      -------      -------      -------       -------        --------
Net income (loss)...........................   $    78      $  (105)     $   589      $ 1,415       $(2,849)       $(76,943)
                                               =======      =======      =======      =======       =======        ========
Basic and diluted net income (loss) per
  share.....................................   $    --      $    --      $  0.03      $  0.07       $ (0.13)       $  (2.27)
                                               =======      =======      =======      =======       =======        ========
OTHER FINANCIAL DATA:
EBITDA......................................   $   989      $   366      $ 2,293      $ 3,720       $   753        $(54,474)
Capital expenditures........................       978          400        1,030        2,231         4,383          13,699
Cash flows provided by (used in) operating
  activities................................       835          334        1,660        2,236         1,903         (13,961)
Cash flows used in investing activities.....      (710)        (667)      (1,030)      (2,231)      (14,191)        (15,544)
Cash flows provided by (used in) financing
  activities................................      (308)         515          104         (315)       17,668          36,645
</TABLE>

<TABLE>
<CAPTION>
                                                                           AS OF
                                              ----------------------------------------------------------------
                                              JANUARY 4,   JANUARY 3,   JANUARY 2,   JANUARY 1,   DECEMBER 30,
                                                 1997         1998         1999         2000          2000
                                              ----------   ----------   ----------   ----------   ------------
<S>                                           <C>          <C>          <C>          <C>          <C>            <C>
BALANCE SHEET DATA:
Cash and cash equivalents...................   $   453      $ 1,187      $   877      $ 6,257       $13,397
Working capital.............................     1,716        1,899        1,926       11,949        19,038
Goodwill and other intangibles..............        --           --           --       32,618        97,382
         Total assets.......................     7,065        8,241        9,784       67,182       181,513
Long-term debt, net of current portion......     1,411        1,249          661       20,927        58,201
Redeemable common stock and warrants........        --           --           --        5,827            --
         Total shareholders' equity.........     2,915        3,428        4,818       26,649        85,394
</TABLE>

                                        12
<PAGE>   15

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     Some of the statements in this report, including statements regarding
Viasource's business strategy and expectations, plans for growth and business
relationships, are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to a number of risks and uncertainties, which could cause Viasource's
actual results to differ materially from those anticipated in such statements.
Factors that could cause such results to differ include Viasource's limited
operating history, competitive pricing pressures in Viasource's industry,
provisions in Viasource's agreements with clients that permit cancellation on
short notice and other factors discussed in Viasource's filings with the
Securities and Exchange Commission ("SEC"), including the "Risk Factors"
included herein. Viasource does not assume any obligation to update any such
forward-looking statements.

     The following discussion and analysis contains statements of a
forward-looking nature relating to future events or our future financial
performance. This discussion and analysis should be read in conjunction with the
financial statements and related notes which appear elsewhere herein.

OVERVIEW

     We derive revenues from providing installation, integration, fulfillment,
and long-term maintenance and support services to broadband service providers on
both a residential and commercial basis. We design, install and maintain
LANs/WANs and other network applications on a commercial and residential basis.

     We operate in four reportable segments:

     - CABLE, which includes traditional and advanced cable television
       installation, disconnect, equipment recovery, account collection and
       system audit services,

     - TELEPHONY AND INTERNET, which includes installation and maintenance of
       digital subscriber line, or DSL, services, cable telephony and high-speed
       data services and other broadband services, as well as traditional
       telephony services for commercial and residential consumers,

     - SATELLITE AND WIRELESS, which includes installation, equipment conversion
       and maintenance services for direct broadcast satellite, or DBS, and
       other wireless technologies, and

     - PREMISE NETWORKING, STAFFING AND OTHER, which includes design,
       installation and maintenance of LANs/WANs and other network applications
       for commercial and residential consumers, as well as the provision of
       installation technicians to commercial customers.

     We provide services to our clients pursuant to service contracts, most of
which are cancelable on short notice. Under the terms of such contracts, the
client can typically terminate the contract with 30 to 90 days prior written
notice. Historically, these service contracts have been awarded through a
competitive bidding process, but recently we have experienced trends toward
securing such contracts by negotiations. These service contracts provide for
payment based on the installations or other services we provide. Revenues are
generally recognized as services are performed, except that a portion of our
satellite and wireless revenues has been deferred, discussed elsewhere herein.

     Cost of revenues is our principal expense and it consists mostly of
labor-related expenses. The cost of revenues includes all costs of field service
technicians, supervisory and quality control personnel, subcontractor costs, all
costs related to the operation and maintenance of vehicles and equipment, cost
of materials not supplied by the client, field office occupancy costs and
insurance costs. Cost of revenues includes all direct costs of providing
services under our contracts, other than depreciation on vehicles and equipment
owned or utilized by us under capital leases. Typically, newly hired field
technicians attend various Viasource developed and Viasource sponsored technical
and safety training courses during the initial 30 days of employment. Viasource
also provides a variety of continuing education programs designed to assist our
employees in maintaining technical competence and professional certifications.
Costs associated with operating and maintaining safety and training centers,
including educational training and safety manuals, materials and supplies,
occupancy costs and staffing costs, are charged to the cost of revenues.
Included in cost of revenues are non-recurring, non-cash compensation charges
associated with the amortization of unearned compensation


                                        13
<PAGE>   16

related to certain stock and stock option grants issued during fiscal 1999 and
the first six months of 2000 to certain employees and consultants for services
rendered to us.

     Selling, general and administrative costs include all costs of executive
personnel, certain clerical and administrative support personnel, occupancy
costs, travel and entertainment costs, provision for doubtful accounts and
accounting, legal, consulting and other professional fees. Included in selling
general and administrative costs are compensation charges identified as special
compensation charges as discussed above.

     Depreciation and amortization expenses include depreciation of property and
equipment and amortization of goodwill and other intangibles. The goodwill and
other intangibles are being amortized over periods ranging from 1 to 20 years
with a weighted average life of 11 years.

     We have included EBITDA in our Management's Discussion and Analysis of
Financial Condition and Results of Operations. We have presented EBITDA to
enhance the reader's understanding of its operating results. EBITDA consists of
net income (loss) excluding net interest, taxes, depreciation and amortization.
EBITDA is provided because it is an important measure of financial performance
commonly used in the telecommunications industry to determine the value of
companies within the industry and to define standards for borrowing from
institutional lenders. The reader should not construe EBITDA as an alternative
to operating income, as an indicator of our operating performance or as an
alternative to cash flows from operating activities as a measure of our
liquidity, determined in accordance with generally accepted accounting
principles. We may calculate EBITDA differently than other companies.

     We operate on a 52/53 week fiscal year basis. This discussion and analysis
describes our results for fiscal 1998, fiscal 1999 and fiscal 2000.

     For further information, see our consolidated financial statements and
notes thereto included elsewhere herein.

HISTORY AND RECENT ACQUISITIONS

     In June 1999, we effected a recapitalization in connection with an investor
group led by Crest Communications, which purchased a controlling interest in
Viasource from our then shareholders. We incurred $1.1 million of non-recurring
transaction related expenses, principally for professional fees associated with
the recapitalization.

     On July 23, 1999, we acquired all of the outstanding common stock of CRI in
exchange for approximately $17.5 million of its common stock and an additional
$4.3 million of common stock that was subject to an agreement with one of the
former shareholders of CRI which gave the former shareholder the right to put
the shares to us and one of our shareholders. On January 3, 2000, the former
shareholder exercised the right to put 691,033 of the shares back to us. In
consideration for these shares, we issued a $1.5 million promissory note, which
was repaid upon completion of our initial public offering. In connection with
this acquisition, we assumed an earn-out contingency, which was resolved in
August 2000, which resulted in the issuance of an additional 66,294 shares of
our common stock in the third quarter of 2000.

     On September 7, 1999, we acquired substantially all of the assets and
assumed substantially all of the liabilities of Telecrafter for approximately
$18.2 million, which we paid in a combination of cash, common stock and a
promissory note.

     On April 21, 2000, we acquired substantially all of the assets and assumed
substantially all of the liabilities of D.S. Cable for approximately $5.9
million, which we paid in a combination of cash, common stock and a promissory
note. For the period from January 1, 2000 to April 21, 2000, D.S. Cable's
revenues and operating loss was $0.9 million and $0.1 million, respectively.

     On May 4, 2000, we acquired substantially all of the assets and assumed
substantially all of the liabilities of Service Cable for approximately $6.2
million, which we paid in a combination of cash, common stock, options and a
promissory note. For the period from January 1, 2000 to May 4, 2000, Service
Cable's revenues and operating loss was $1.8 million and $20,000, respectively.

                                        14
<PAGE>   17

     On June 1, 2000, we acquired Excalibur for approximately $25.4 million,
which we paid in a combination of cash, common stock and a promissory note. The
purchase price is subject to a post-closing adjustment based upon the increase,
if any, in Excalibur's net worth, as adjusted, during the period from December
31, 1999 through the closing date (June 1, 2000). Management currently estimates
that this post-closing adjustment will result in a payment by Viasource of
approximately $1.1 million, which payment will be allocated among shares of
Viasource common stock, cash and notes in the same proportions as the original
purchase price was allocated. The post-closing adjustment is expected to be
finalized by the second quarter of 2001. For the period from January 1, 2000 to
June 1, 2000, Excalibur's revenues and operating loss was $19.2 million and $6.1
million, respectively. Included in the operating loss are $1.9 million and $2.5
million of bonus expense incurred by Excalibur under a bonus plan in May 2000
and special stock-based compensation, respectively. Also included in the
operating loss is the effect of $5.6 million of deferred revenue associated with
the DIRECTV conversion program.

     On June 1, 2000, we acquired TeleCore for approximately $86.8 million,
which we paid in a combination of cash, common stock, preferred stock, common
stock options and a promissory note. For the period from January 1, 2000 to June
1, 2000, TeleCore's revenues and operating loss was $12.9 million and $9.3
million, respectively. Included in the operating loss are $1.3 million of merger
and other transaction expenses and $1.1 million of information system selection
and development expenses. At the time of the acquisition, TeleCore was one of
the nation's leading installers of DSL services. During the fourth quarter of
fiscal 2000 a significant, fundamental shift occurred in the DSL industry.
Substantially all of TeleCore's customers are experiencing severe financial
difficulty. Most of TeleCore's DSL customers no longer have access to capital
and some have recently filed for bankruptcy protection. Due to the resulting
change in the market for TeleCore's services, there has been a significant
impairment in the value of the customer relationships, trained workforce and
related goodwill acquired in the business combination. In accordance with the
provisions of Statement of Financial Accounting Standards ("SFAS 121"),
Viasource recorded a write-down of the carrying value of the customer
relationships acquired and the related goodwill to fair value. An impairment
loss of approximately $52.9 million was recognized in the fourth quarter of
fiscal 2000 related to TeleCore's customer relationships, trained workforce and
related goodwill.

     All of these acquisitions are accounted for under the purchase method of
accounting. The operating results of the acquired companies are only included in
our operating results from their respective dates of acquisition.

     Our historical financial condition and results of operations may not be
indicative of our future results because of recent significant events,
including:

     - the acquisitions of TeleCore, Excalibur, D.S. Cable and Service Cable,

     - the $127.4 million of goodwill and other intangibles incurred in
       connection with these acquisitions; after adjusting for the $52.9 million
       impairment loss on intangible assets and related goodwill, we will
       amortize the remaining goodwill and other intangible assets at a rate of
       $12.3 million per year over a period of 1 to 20 years with a weighted
       average life of 11 years,

     - a significant, fundamental shift has occurred in the DSL industry whereby
       substantially all of our customers are experiencing severe financial
       difficulties. Due to the resulting change in the market for our services,
       there has been a significant impairment in the value of the customer
       relationships acquired in the business combination as well as potential
       losses related to the provision for bad debts established for these DSL
       customers, and

     - the completion of the DirecTV-PrimeStar, conversion program during the
       fourth quarter of 2000 significantly reduced the number of installations
       that we performed compared to prior quarters. The current contract with
       DIRECTV has certain installation minimums, however we do not expect to
       reach the same level of installations during the first and second
       quarters of 2001 as we had completed during the conversion program during
       1999 and 2000.

                                        15
<PAGE>   18

RESULTS OF OPERATIONS

     The following table presents certain operating and other financial data for
the fiscal years 1998, 1999, and 2000.

<TABLE>
<CAPTION>
                                                                      FISCAL YEARS
                                                              ----------------------------
                                                               1998     1999(1)   2000(2)
                                                              -------   -------   --------
                                                                     (IN THOUSANDS)
<S>                                                           <C>       <C>       <C>
OPERATING DATA:
  Revenues..................................................  $33,816   $61,396   $196,040
  Operating expenses:
     Cost of revenues.......................................   26,866    51,265    168,687
     Selling, general and administrative....................    3,230     8,270     28,915
     Depreciation and amortization..........................      980     2,814     15,398
     Recapitalization costs.................................       --     1,108         --
     Impairment loss on goodwill and other intangibles......       --        --     52,912
                                                              -------   -------   --------
          Total operating expenses..........................   31,076    63,457    265,912
  Income (loss) from operations.............................    2,740    (2,061)   (69,872)
                                                              -------   -------   --------
  Interest income...........................................       --        76        460
  Interest expense..........................................      122     1,419      5,326
                                                              -------   -------   --------
  Income (loss) before income taxes.........................    2,618    (3,404)   (74,738)
  Income tax provision (benefit)............................    1,203      (555)     2,205
                                                              -------   -------   --------
  Net income (loss).........................................  $ 1,415   $(2,849)  $(76,943)
                                                              =======   =======   ========
OTHER FINANCIAL DATA:
  EBITDA (3)................................................  $ 3,720   $   753   $(54,474)
                                                              =======   =======   ========
</TABLE>

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

(1) Includes the results of CRI from July 23, 1999 and Telecrafter from
    September 7, 1999, their respective acquisition dates.
(2) Includes the results of D.S. Cable from April 21, 2000, Service from May 4,
    2000, Excalibur from June 1, 2000 and TeleCore from June 1, 2000, their
    respective acquisition dates.
(3) Includes the $52.9 million impairment loss on intangible assets and related
    goodwill for the fiscal year ended December 30, 2000.

                                        16
<PAGE>   19

     The following table presents certain selected financial data for our
operating segments, as well as our corporate expenses (which include certain
financing costs, employee benefit costs and other selling, general and
administrative expenses), for the fiscal years 1998, 1999 and 2000.

<TABLE>
<CAPTION>
                                                                      FISCAL YEARS
                                                              ----------------------------
                                                               1998     1999(1)   2000(2)
                                                              -------   -------   --------
                                                                     (IN THOUSANDS)
<S>                                                           <C>       <C>       <C>
REVENUES:
  Cable.....................................................  $22,387   $45,501   $ 92,775
  Telephony and Internet....................................    4,261     8,221     42,785
  Satellite and Wireless....................................    7,047     7,125     49,548
  Premise Networking, Staffing and Other....................      121       549     10,932
                                                              -------   -------   --------
          Total.............................................  $33,816   $61,396   $196,040
                                                              =======   =======   ========
DEPRECIATION AND AMORTIZATION:
  Cable.....................................................  $   702   $ 2,027   $  4,057
  Telephony and Internet....................................      153       373      8,017
  Satellite and Wireless....................................      121       295      2,018
  Premise Networking, Staffing and Other....................        4        50      1,024
  Corporate.................................................       --        69        282
                                                              -------   -------   --------
          Total.............................................  $   980   $ 2,814   $ 15,398
                                                              =======   =======   ========
INCOME (LOSS) FROM OPERATIONS
  Cable.....................................................  $ 3,359   $ 2,295   $  4,856
  Telephony and Internet (3)................................      822     2,020    (64,129)
  Satellite and Wireless....................................      479    (1,163)    (2,645)
  Premise Networking, Staffing and Other....................       (7)      (80)    (1,903)
  Corporate.................................................   (1,913)   (5,133)    (6,051)
                                                              -------   -------   --------
          Total.............................................  $ 2,740   $(2,061)  $(69,872)
                                                              =======   =======   ========
</TABLE>

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

(1) Includes the results of CRI from July 23, 1999 and Telecrafter from
    September 7, 1999, their respective acquisition dates.
(2) Includes the results of D.S. Cable from April 21, 2000, Service Cable from
    May 4, 2000, Excalibur from June 1, 2000 and TeleCore from June 1, 2000,
    their respective dates of acquisition.
(3) Includes an impairment loss recognized on intangible assets and related
    goodwill for the fiscal year ended December 30, 2000.

  Fiscal Year Ended December 30, 2000 Compared to Fiscal Year Ended January 1,
  2000

     REVENUES.  Total revenues for fiscal 2000 were $196.0 million, an increase
of $134.6 million, or 219%, as compared to total revenues of $61.4 million for
fiscal 1999. Of this increase, $59.7 million, or 44%, was attributable to the
companies acquired in fiscal 1999 and $52.3 million, or 39% related to the
companies acquired during fiscal 2000, and the balance of 17% was attributable
to internal growth. We diversified our revenue mix during fiscal 2000, whereby
we are no longer dependent on one primary revenue source.

     In fiscal 2000, we recognized $92.8 million of revenue from our Cable
segment, as compared to $45.5 million in the prior fiscal year, an increase of
104%. This increase resulted primarily from revenues contributed by the 2000
acquisitions of $4.1 million and $39.4 million relating to the 1999
acquisitions, which were included in fiscal 1999 for only a partial period.
Cable revenues represented 47% of our total revenue in fiscal 2000 as compared
to 74% of our total revenue in fiscal 1999.

     We recognized $42.8 million of revenues in fiscal 2000 from our Telephony
and Internet segment, as compared to $8.2 million in fiscal 1999, an increase of
420%. The increase includes $11.3 million of DSL revenue from our acquisition of
TeleCore during 2000 and the increased volume from the installation of high

                                        17
<PAGE>   20

speed data, cable modem and cable telephony services. Telephony and Internet
revenues represented 22% of our total revenue in fiscal 2000 as compared to 13%
of total revenue in fiscal 1999.

     A significant, fundamental shift has occurred in the DSL industry whereby
substantially all of our customers are experiencing severe financial difficult.
Most of TeleCore's DSL customers no longer have access to capital and some have
recently filed for bankruptcy protection. Due to the resulting change in the
market for TeleCore's services, there has been a significant impairment in the
value of the customer relationships acquired in the business combination and we
believe that our telephony and internet revenues in the future will
significantly be reduced by this change.

     We recognized $49.5 million of revenues in fiscal 2000 from Satellite and
Wireless, as compared to $7.1 million in fiscal 1999, an increase of $42.4
million or 595%. The increase during 2000 is primarily due to the acquisition of
Excalibur during 2000, which contributed $22.3 million of revenue for satellite
and wireless. The remaining difference relates to the increased demand for our
services primarily related to the conversion program discussed below that
continued through the fourth quarter of 2000. Our clients, DIRECTV and Primestar
merged in the first half of 1999. After the merger, DIRECTV initiated a
conversion of PRIMESTAR's customers to its own technology platform, which
increased the demand for our services since the third quarter of 1999. The
conversion program ended in late 2000. Of the revenues derived from the
conversion program in fiscal 1999 and 2000, $1.5 million and $7.7 million were
subject to potential charge-backs and are recorded as deferred revenue. During
1999 and 2000, we recognized these amounts as revenues as the right of
charge-back expired over a period of 16 months. Also during 2000, we signed a
five-year contract with DIRECTV. We believe that none of the revenue associated
with the new contract is subject to potential charge-back and would not require
a revenue deferral. The completion of the conversion program during the fourth
quarter of 2000 significantly reduced the number of installations that we
performed compared to prior quarters. The current contract with DIRECTV has
certain installation minimums, however we do not expect to reach the same level
of installations during the first and second quarter of 2001 as we had completed
during the conversion program during 1999 and 2000. Satellite and Wireless
revenues represented 25% of our total revenue in fiscal 2000 primarily
associated with the conversion program as compared to 11.6% of total revenue in
fiscal 1999.

     COST OF REVENUES.  Cost of revenues for fiscal 2000 was $168.6 million, an
increase of $117.6 million, or 231%, as compared to cost of revenues of $51.0
million in fiscal 1999. The increase in cost of revenues directly relates to the
increased revenue discussed above, and our recent acquisitions and increased
demand for our services. During the third quarter of 2000, we incurred
approximately $1.8 million in costs to maintain infrastructure and workforce in
anticipation of the alliance with DIRECTV.

     During 1999, our clients, DIRECTV and PRIMESTAR, merged, and they focused
on integrating their businesses. We experienced lower demand for its services
from them and lower revenue levels, but we had to maintain our service personnel
and infrastructure in place so that we would be able to supply services to these
clients when the demand for our services resumed. As a result, we experienced
lower margins in our Satellite and Wireless segment. The increased cost of
revenues for fiscal 1999 also reflects higher costs associated with conversion
services performed for DIRECTV and higher direct costs of services related to
the acquired companies.

     SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and administrative
expenses for fiscal 2000 were $28.9 million, an increase of $20.6 million, or
250%, as compared to $8.3 million in fiscal 1999. Of the increase during fiscal
2000, the companies acquired in fiscal 2000 contributed $6.3 million, or 33% and
the companies acquired in fiscal 1999 contributed $5.9 million, or 31%. In
addition, provisions for doubtful accounts amounted to $1.3 million, the
investment in infrastructure and personnel to support our combined operations
contributed $6.4 million and special compensation charges amounted to $1.0
million. The increased provision for doubtful accounts relates to the
delinquencies and bankruptcies or pending bankruptcies associated with our DSL
customers.

     DEPRECIATION AND AMORTIZATION.  Depreciation and amortization expenses for
fiscal 2000 was $15.4 million, an increase of $12.6 million, or 449%, as
compared to depreciation and amortization expenses of $2.8 million in fiscal
1999. The increase reflects $2.9 million of additional depreciation resulting
from capital
                                        18
<PAGE>   21

expenditures incurred in the ordinary course of business and assets acquired in
the acquisitions completed in fiscal 1999 and 2000 and $9.7 million of
amortization of goodwill and other intangible assets related to these
acquisitions. As discussed below, we incurred an impairment loss on intangible
assets and related goodwill of $52.9 million. The resulting impairment loss will
reduce goodwill amortization in future periods, on an annual basis by $5.7
million.

     IMPAIRMENT LOSS ON INTANGIBLE ASSETS AND RELATED GOODWILL.  In June 2000,
we acquired all the outstanding common stock of TeleCore. The excess of purchase
price over net deficit acquired was allocated to identifiable intangibles and
goodwill, including $45.0 million allocated to customer relationships and $3.4
million allocated to trained work force. At the time of the acquisition,
TeleCore was the largest independent provider of DSL technology enabling
services in the United States. During the fourth quarter of fiscal 2000 a
significant fundamental shift occurred in the DSL industry where the competitive
environment has given the regional bell operating companies an advantage over
Viasource's data local exchange carrier customers ("DLECs"). Consequently, many
of our DSL customers have experienced severe financial difficulty resulting in a
permanent impairment of our customer relationship intangible assets. In
addition, certain of our DSL customers no longer have access to capital and some
have recently filed for bankruptcy protection. Due to the resulting change in
the market for our services, an impairment occurred in the value of the customer
relationships acquired in the business combination.

     An impairment loss of $52.9 million was recognized in the fourth quarter of
fiscal 2000 and is included in the caption "Impairment loss on intangible assets
and related goodwill" in the accompanying statement of operations. Our DSL
enabling services are included in the Telephony and Internet business segment.

     OPERATING LOSS.  For fiscal 2000, we recognized an operating loss of $69.9
million, as compared to an operating loss of $2.1 million in fiscal 1999.
Included in the operating loss in 2000 is the $52.9 million impairment loss on
intangible assets and related goodwill, $2.3 million of special compensation
charges, deferred revenue of $6.2 million and $10.4 million of amortization of
goodwill attributed to the 1999 and 2000 acquisitions. Included in the 1999
operating loss, is $1.2 million attributable to the special compensation
charges, $1.1 million attributable to recapitalization costs, deferred revenue
of $1.5 million and $.7 million related to the amortization of goodwill.

     Operating income from Cable was $4.8 million in fiscal 2000 as compared to
$2.3 million in the prior fiscal year, an increase of 107%. The increased demand
for our services and efficiencies attributed to the recent acquisitions provided
us with higher operating income attributed to this segment. Telephony and
Internet operating loss was $64.1 million in fiscal 2000 as compared to
operating income of $2.0 million in the prior fiscal year. The acquisition of
TeleCore contributed $65.5 million of loss primarily related to the amortization
of goodwill and other intangible assets, the impairment loss on intangible
assets and related goodwill and the problems attributed to the DSL industry.

     Operating loss from Satellite and Wireless was $2.6 million in fiscal 2000
as compared to $1.2 million in the prior fiscal year. During 1999, our DBS
clients, DIRECTV and PRIMESTAR, merged and as they focused on integrating their
businesses, we experienced lower demand for our services from our clients and
lower revenue levels during 1999 and late 2000. From the third quarter of 1999
to the fourth quarter in 2000, we experienced increased demand for our services
related to the conversion program discussed above. Of the revenues derived from
this program in fiscal 1999 and 2000, $1.5 million and $7.7 million were subject
to potential charge-backs and were recorded as deferred revenue.

     INTEREST EXPENSE.  For fiscal 2000, interest expense was $5.3 million, an
increase of $3.9 million as compared to interest expense of $1.4 million in
fiscal 1999. The increased interest expense was due to higher debt levels
incurred in connection with the 1999 and 2000 acquisitions and the amortization
of financing transaction costs and fees.

     INCOME TAX PROVISION (BENEFIT).  We had a provision for income taxes of
$2.2 million for fiscal 2000 as compared to a benefit of $0.6 million in fiscal
1999. The effective tax rate differs from the federal statutory tax rate due to
the amortization of goodwill and other intangible assets that do not provide a
tax benefit, impairment loss on intangible assets and related goodwill and
certain other business expenses that are not

                                        19
<PAGE>   22

deductible for tax purposes. During the fiscal year ended December 30, 2000, we
established a valuation allowance of $5.4 million related to our net deferred
tax assets. Management believes, based on our history of operating losses and
ability to generate future taxable income, it is more likely than not we will
not be able to recognize these deferred tax assets.

     NET INCOME (LOSS).  We recognized a net loss of $76.9 million for fiscal
2000, as compared to a net loss of $2.1 million in fiscal 1999. The 2000 net
loss was primarily related to the impairment loss on intangible assets and
related goodwill of $52.9 million, goodwill amortization of $10.4 million,
deferred revenue of $6.2 million and special compensation charges of $2.3
million. The 1999 net loss was substantially due to the deferred revenues,
special compensation charges and recapitalization costs of $1.5 million, $1.2
million and $1.1 million, respectively.

     EBITDA.  For fiscal 2000, EBITDA was a negative $54.5 million, a decrease
of $55.3 million, as compared to a positive EBITDA of $0.8 million in fiscal
1999. The 2000 decrease primarily related to the impairment loss on intangible
assets and related goodwill, deferred revenue and special compensation charges
of $52.9 million, $6.2 million and $2.3 million, respectively.

  Fiscal Year Ended January 1, 2000 Compared to Fiscal Year Ended January 2,
  1999

     REVENUES.  Total revenues for fiscal 1999 were $61.4 million, an increase
of $27.6 million, or 81.6%, as compared to total revenues of $33.8 million for
fiscal 1998. Of this increase, $21.3 million, or 77.2%, was attributable to the
companies acquired in fiscal 1999 and $6.3 million, or 22.8%, was attributable
to internal growth reflecting increased demand for our services.

     In fiscal 1999, we recognized $45.5 million of revenue from our Cable
segment, as compared to $22.4 million in the prior fiscal year, an increase of
103.2%. This increase resulted primarily from revenues contributed by acquired
companies of $19.7 million and increased volumes for installations, collections,
disconnects and other cable services of $3.4 million. Cable revenues represented
74.1% of our total revenue in fiscal 1999 as compared to 66.2% of its total
revenue in fiscal 1998.

     We recognized $8.2 million of revenues in fiscal 1999 from our Telephony
and Internet segment, as compared to $4.3 million in fiscal 1998, an increase of
92.9%. This increase resulted primarily from increased consumer demand for
broadband services, high-speed data and Internet access and cable telephony.
Telephony and Internet revenues represented 13.4% of its total revenue in fiscal
1999 as compared to 12.6% of our total revenue in fiscal 1998.

     We recognized $7.1 million of revenues in fiscal 1999 from Satellite and
Wireless, as compared to $7.0 million in fiscal 1998. After our clients, DIRECTV
and PRIMESTAR, merged in the first half of 1999, they focused on integrating
their businesses and as a result we experienced lower demand for its services
from them and lower revenue levels. Since the third quarter of 1999, we have
experienced increased demand for services related to the conversion program. Of
the revenues derived from this program in fiscal 1999, $1.5 million are subject
to potential charge-backs and are recorded as deferred revenue. We recognized
these amounts as revenue as the right of charge-back expired over a period of 16
months. Satellite and Wireless revenues represented 11.6% of our total revenue
in fiscal 1999 as compared to 20.8% of total revenue in fiscal 1998.

     COST OF REVENUES.  Cost of revenues for fiscal 1999 was $51.0 million, an
increase of $24.1 million, or 89.9%, as compared to cost of revenues of $26.9
million in fiscal 1998. After our clients, DIRECTV and PRIMESTAR, merged in the
first half of 1999, we experienced lower margins in our Satellite and Wireless
segment. The increased cost of revenues for fiscal 1999 also reflects higher
costs associated with conversion services performed for DIRECTV, $0.3 million of
special compensation charges related to stock option grants issued to certain
employees and consultants, and higher direct costs of services related to the
acquired companies, partially offset by lower costs in our Telephony and
Internet segment due to improved labor and equipment utilization.

     SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and administrative
expenses for fiscal 1999 were $8.3 million, an increase of $4.9 million, or
148%, as compared to $3.2 million in fiscal 1998. Of the increase, the companies
acquired in fiscal 1999 contributed $2.1 million, or 51.2%, and the investment
in infrastructure
                                        20
<PAGE>   23

and personnel to support our combined operations contributed $2.0 million.
During fiscal 1999, we incurred non-cash, special compensation charges of $0.9
million as a result of certain stock option grants we made to employees and
consultants.

     DEPRECIATION AND AMORTIZATION.  Depreciation and amortization expenses for
fiscal 1999 were $2.8 million, an increase of $1.8 million, or 187.1%, as
compared to depreciation and amortization expenses of $1.0 million in fiscal
1998. The increase reflects $1.1 million of additional depreciation resulting
from capital expenditures incurred in the ordinary course of business and assets
acquired in the acquisitions completed in fiscal 1999 and $0.7 million of
amortization of goodwill and other intangible assets related to these
acquisitions.

     RECAPITALIZATION COSTS.  During fiscal 1999, we effected a recapitalization
in connection with which an investor group led by Crest Communications acquired
6,470,588 shares of common stock for $11.0 million directly from the then
shareholders of Viasource. In addition, Crest Communications provided us with
$5.0 million of bridge equity financing. We incurred $1.1 million of
non-recurring transaction related expenses, principally for professional fees
associated with the recapitalization.

     OPERATING INCOME (LOSS).  For fiscal 1999, we recognized an operating loss
of $2.1 million, as compared to operating income of $2.7 million in fiscal 1998.
Included in this operating loss is $1.2 million attributable to the special
compensation charges and $1.1 million attributable to recapitalization costs. If
we had not incurred the recapitalization expenses and special compensation
charges in fiscal 1999, it would have recognized operating income of $0.2
million.

     Operating income from Cable was $2.3 million in fiscal 1999 as compared to
$3.4 million in the prior fiscal year, a decrease of 31.7%. Higher direct cost
of revenues from the acquired companies, due to their higher field service and
administrative costs, was the primary factor for the decline in operating
income. Telephony and Internet operating income was $2.0 million in fiscal 1999
as compared to $0.8 million in the prior fiscal year, an increase of 145.7%.
Improved pricing and higher labor productivity were the primary factors
contributing to the higher operating income in the Telephony and Internet
segment.

     Operating loss from Satellite and Wireless was $1.2 million in fiscal 1999
as compared to operating income of $0.5 million in the prior fiscal year. After
our clients, DIRECTV and PRIMESTAR, merged in the first half of 1999, they
focused on integrating their businesses and we experienced lower demand for its
services from these clients and lower revenue levels. At the same time, we
maintained our service personnel and infrastructure in place so that it would be
able to supply these services when the demand resumed.

     INTEREST EXPENSE.  For fiscal 1999, interest expense was $1.4 million, an
increase of $1.3 million as compared to interest expense of $0.1 million in
fiscal 1998. The increased interest expense was due to higher debt levels
incurred in connection with our acquisition of Telecrafter and the amortization
of direct financing transaction costs and fees.

     INCOME TAX PROVISION (BENEFIT).  We had a benefit for income taxes of $0.6
million for fiscal 1999 as compared to a provision for income taxes of $1.2
million in fiscal 1998. The effective tax rate differs from the federal
statutory tax rate due to the amortization of goodwill and other intangible
assets that do not provide a tax benefit, and certain other business expenses
that are not deductible for tax purposes.

     NET INCOME (LOSS).  We recognized a net loss of $2.8 million for fiscal
1999, as compared to net income of $1.4 million in fiscal 1998. The net loss was
substantially due to the non-recurring special compensation charges and the
recapitalization costs of $1.2 million and $1.1 million, respectively.

     EBITDA.  For fiscal 1999, EBITDA was $0.8 million, a decrease of $3.0
million, or 79.8%, as compared to $3.7 million in fiscal 1998. The decrease was
primarily due to the non-recurring special compensation charges and the
recapitalization costs of $1.2 million and $1.1 million, respectively.

LIQUIDITY AND CAPITAL RESOURCES

     We have funded our working capital requirements, capital expenditures and
acquisitions to date through a combination of internally generated funds,
operating and capital lease financing arrangements, long-term


                                        21
<PAGE>   24

revolving credit and term note facilities, private equity contributions and the
proceeds from the initial public offering. We intend to continue to finance
these expenditures through internally generated funds, long-term credit
facilities and equity financings.

     For fiscal 2000, net cash used in operating activities was $14.0 million.
The net cash used in operating activities related to a net loss of $76.9
million, partially offset by non-cash charges of $52.9 million for the
impairment loss on intangible assets and related goodwill and $15.4 million for
depreciation and amortization. After including non-cash charges, we used $8.0
million to expand our operations and to finance our internal growth. Net cash
provided by operating activities was $2.2 million and $1.9 million in fiscal
1998 and 1999, respectively. Net cash provided by operating activities in 1999
of $1.9 million consisted of a net loss of $2.8 million offset by non-cash
charges of $3.5 million and a decrease in working capital of $1.2 million.

     For fiscal 2000, net cash used in investing activities for capital
expenditures was $11.6 million as compared to $4.4 million in 1999. The increase
in capital expenditures for fiscal 2000 and 1999 reflects the expansion of our
business both geographically and by service offerings. In addition, we invested
$2.1 million in integrated financial and management operating systems. We intend
to spend an additional $800,000 through the end of the second quarter of 2001
relating to the integrated financial and management operating systems.

     During fiscal 2000, the net cash used of $1.6 million related to the 2000
acquisitions of D.S Cable, Service Cable, Excalibur and TeleCore. During 1999,
we used net cash of $9.3 million to acquire Telecrafter and CRI.

     In fiscal 2000, net cash provided by financing activities was $36.6
million, which consisted of net cash proceeds of $35.5 million relating to our
initial public offering. In August 2000, we completed our initial public
offering whereby we sold 5,000,000 shares of common stock for $8.00 a share for
gross proceeds of $40 million. In September 2000, an over allotment of 750,000
shares was sold for $8.00 a share for gross proceeds of $6 million. We received
$3 million of proceeds from the over allotment and a selling shareholder
received the remaining proceeds. The costs associated with the initial public
offering were $7.6 million. The proceeds from the offering were used for general
corporate purposes and the repayment of the following indebtedness:

     - $3.7 million of notes we issued to shareholders in our recent
       acquisitions of Telecrafter and D.S. Cable,

     - $5.1 million of other indebtedness assumed in our acquisition of
       TeleCore, and

     - $1.5 million of other indebtedness.

     In fiscal 1999, net cash provided by financing activities was $17.7
million, which included net cash proceeds consisting of $15.0 million from our
term note with GECC and $4.9 million from the sale of common stock offset by
$4.0 million of treasury stock purchases and $1.7 million of long-term debt
repayments. In addition, in fiscal 1999 we received bridge equity financing of
$5.0 million, which was repaid with the proceeds of the sale of common stock.

     In September 1999, we entered into a subordinated credit agreement with
General Electric Capital Corporation ("GECC"), which provided for initial
borrowings of $15.0 million under a term note. This facility, which matures on
September 7, 2004, bears interest at 4% over LIBOR or 2.75% over the prime rate,
at our option. The facility is secured by all of our assets, including the stock
of our subsidiaries. We incurred financing costs of approximately $1.7 million
in connection with the term note, which costs include the value of warrants we
issued and are being amortized using the effective interest rate method over the
life of the term note. The proceeds from the term note were used to fund the
$10.5 million cash consideration in our acquisition of Telecrafter, to repay
debt and to fund general working capital needs. On August 17, 2000, GECC waived
the requirement that we repay the subordinated facility upon the successful
completion of our initial public offering.

     In March 2000, we entered into our current $15.0 million senior revolving
credit facility with GECC. This facility, which matures on September 7, 2004,
includes a $12.0 million revolving credit facility and a sub-facility of up to
$3.0 million for letters of credit, and is secured by all of our assets,
including the stock of our subsidiaries. We are required to pay an annual
non-utilization fee equal to 0.50% of the unused portion of the facility. The
initial borrowings of $5.2 million under this facility were used to repay all
outstanding principal
                                        22
<PAGE>   25

amounts under previous senior bank credit facilities and bank equipment loans.
We borrowed an additional $6.5 million under this facility in connection with
our acquisitions of TeleCore, Excalibur, D.S. Cable and Service Cable. In
connection with the 2000 acquisitions, on May 31, 2000, we amended our
subordinated credit agreement and senior revolving facility, which changed
certain of the financial covenants. On August 15, 2000, we entered into an
amendment to our revolving credit facility to increase our available borrowing
capacity to $25 million, including the sub-facility of up to $3.0 million for
letters of credit. GECC has waived certain debt compliance covenants during 2000
and 2001. On April 13, 2001, the Company executed an amendment to the term note
and revolving credit facility, which changed its financial covenants relating to
coverage ratios such as leverage, debt service and capital expenditures for
fiscal 2001.

     We have approximately $5.0 million available for future borrowings
including approximately $3.0 million available for letters of credit under our
revolving credit facility. While we have no specific plans to borrow additional
amounts under our revolving credit facility, we will draw on it as needed to
fund our operations in the ordinary course of business. We have outstanding
approximately $22.3 million of subordinated notes issued to shareholders in our
2000 acquisitions of TeleCore, Excalibur and Service Cable. The notes payable to
former stockholders have stated maturity dates in November 2001, however all of
these notes are subordinate to the GECC term note and revolving credit facility
and all principal and interest payments are contingent upon the repayment of the
GECC term note and revolving credit facility. As a result, the subordinated
notes and related accrued interest have been classified as long term debt in the
accompanying consolidated balance sheets.

     During 2001, we intend to implement a workforce automation software that
will enable us to create an integrated wireless workforce management platform.
Based on the anticipated user level, the total cost of the software is $1.5
million, annual maintenance costs are approximately $330,000 and consulting
services relating to implementation and training are estimated to be $1.5
million. The hardware costs relating to this projects is estimated to be
approximately $1.0 million. The first phase of this project is expected to be
completed by the fourth quarter of 2001. The above project is contingent upon
certain approvals and securing adequate financing.

     We expect that our capital resources, together with existing cash and cash
equivalents, will be sufficient to meet our financial obligations at our current
levels of business for at least the next twelve months. We are currently
investigating various sources of additional financing. There can be no
assurances that such additional financings will be available on terms acceptable
to us. Our needs for additional capital are dependent on our future operating
results and cash flows including our debt repayment requirements and borrowing
availability. Our future operating results and cash flows may be affected by a
number of factors including our success in securing future service contracts,
integrating existing and future acquisitions and managing controllable costs.

SEASONALITY; FLUCTUATIONS OF QUARTERLY RESULTS

     Our operations are seasonal, generally resulting in higher revenues and
operating profits in the second and third quarters compared to the first and
fourth quarters of the year, except that our satellite and wireless segment
experience higher revenue during the fourth quarter. Quarterly variations in
operating results may result from many factors, including fluctuations in demand
for services, a change in the mix of clients, the timing and volume of work
under new agreements, the termination of existing agreements, variations in the
profitability of projects performed during any particular quarter, the length of
sales cycles, costs incurred to support growth internally, the timing of
expansion in new markets, the timing of acquisitions, the costs associated with
integrating businesses, and adverse weather conditions that interfere with the
ability to provide services. As a result, our operating results in any
particular quarter may not be indicative of the results that can be expected for
any other quarter or the entire year.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133").
SFAS 133 as amended, is effective for fiscal years beginning after June 15,
2000. SFAS 133 requires that every derivative instrument be recorded in the

                                        23
<PAGE>   26

balance sheet as either an asset or liability measured at its fair value.
Changes in derivative's fair value will be recognized in income unless specific
hedge accounting criteria are met. We will adopt SFAS 133, as amended, beginning
December 31, 2000, and do not anticipate that it will have a material impact on
our consolidated financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     Our senior revolving credit facility and subordinated term note facility
with GECC bear interest at floating rates. Accordingly, we are exposed to
potential losses related to changes in interest rates. We do not enter into
derivatives or other financial instruments for trading or speculative purposes.
As of December 30, 2000, approximately 58% of our outstanding borrowings are
exposed to interest rate risk. Assuming a 100 basis point increase in interest
rates, based on our indebtedness outstanding on that date, our annual interest
expense would increase by approximately $0.4 million.

                                        24
<PAGE>   27

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                         INDEX TO FINANCIAL STATEMENTS

                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
FINANCIAL STATEMENTS:
  VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES
     Report of Independent Certified Public Accountants.....   26
     Consolidated Balance Sheets as of January 1, 2000 and
      December 30, 2000.....................................   27
     Consolidated Statements of Operations for the Fiscal
      Years Ended January 2, 1999, January 1, 2000 and
      December 30, 2000.....................................   28
     Consolidated Statements of Shareholders' Equity for the
      Fiscal Years Ended January 2, 1999, January 1, 2000
      and December 30, 2000.................................   29
     Consolidated Statements of Cash Flows for the Fiscal
      Years Ended January 2, 1999, January 1, 2000 and
      December 30, 2000.....................................   30
     Notes to Consolidated Financial Statements.............   31
Schedule II -- Valuation and Qualifying Accounts............   53
</TABLE>

                                        25
<PAGE>   28

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To Viasource Communications, Inc.:

     We have audited the accompanying consolidated balance sheets of Viasource
Communications, Inc. (a New Jersey corporation) and subsidiaries as of January
1, 2000 and December 30, 2000, and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the three fiscal
years in the period ended December 30, 2000. These financial statements and the
schedule referred to below are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Viasource
Communications, Inc. and subsidiaries as of January 1, 2000 and December 30,
2000, and the results of their operations and their cash flows for each of the
three fiscal years in the period ended December 30, 2000 in conformity with
accounting principles generally accepted in the United States.

     Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to
financial statements is presented for purposes of complying with the Securities
and Exchange Commission's rules and is not part of the basic financial
statements. This schedule has been subjected to auditing procedures applied in
the audits in the basic financial statements and, in our opinion, fairly states
in all material aspects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Fort Lauderdale, Florida,
  March 19, 2001 (except with respect to the matter
  discussed in the fourth paragraph of Note 9, as
  to which the date is April 13, 2001)

                                        26
<PAGE>   29

                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                              JANUARY 1, 2000   DECEMBER 30, 2000
                                                              ---------------   -----------------
<S>                                                           <C>               <C>
                                             ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.................................    $ 6,257,290       $ 13,396,907
  Restricted cash...........................................        550,000          1,348,854
  Accounts receivable, net..................................     15,097,378         36,438,835
  Supply inventory..........................................      1,064,554          4,040,137
  Prepaid expenses and other................................      1,875,541          1,581,377
                                                                -----------       ------------
          Total current assets..............................     24,844,763         56,806,110
PROPERTY AND EQUIPMENT, net.................................      7,660,278         25,063,934
GOODWILL AND OTHER INTANGIBLES, net.........................     32,617,953         97,382,300
OTHER ASSETS................................................      2,058,894          2,260,899
                                                                -----------       ------------
                                                                $67,181,888       $181,513,243
                                                                ===========       ============

                              LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Current portion of long-term debt.........................    $ 1,249,764       $  3,046,847
  Accounts payable..........................................      2,658,910         13,469,335
  Accrued expenses..........................................      8,238,252         13,549,079
  Deferred revenue..........................................        748,468          7,702,807
                                                                -----------       ------------
          Total current liabilities.........................     12,895,394         37,768,068
                                                                -----------       ------------
LONG-TERM DEBT..............................................     20,927,108         58,200,629
                                                                -----------       ------------
DEFERRED REVENUE............................................        705,139                 --
                                                                -----------       ------------
DEFERRED TAX LIABILITY......................................        178,344            150,304
                                                                -----------       ------------
REDEEMABLE COMMON STOCK AND WARRANTS
  (Redemption value of $5,826,842 and $0 at January 1, 2000
     and December 30, 2000).................................      5,826,842                 --
                                                                -----------       ------------
COMMITMENTS AND CONTINGENCIES (Note 12)

SHAREHOLDERS' EQUITY:
  Preferred stock, no par value, 15,000,000 shares
     authorized, no shares outstanding......................             --                 --
  Common stock, no par value, 115,000,000 shares authorized,
     29,617,924 and 45,516,690 shares issued and 27,264,983
     and 42,472,729 outstanding.............................     31,479,212        165,090,893
  Common stock purchase warrants............................        250,000                 --
  Deferred compensation.....................................     (3,278,153)          (779,175)
  Accumulated other comprehensive income (loss).............        160,905            (11,337)
  Retained earnings (accumulated deficit)...................      2,037,097        (74,906,139)
  Treasury stock, 2,352,941 and 3,043,974 shares at cost....     (4,000,000)        (4,000,000)
                                                                -----------       ------------
          Total shareholders' equity........................     26,649,061         85,394,242
                                                                -----------       ------------
                                                                $67,181,888       $181,513,243
                                                                ===========       ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        27
<PAGE>   30

                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                    FISCAL YEAR ENDED
                                                         ----------------------------------------
                                                         JANUARY 2,    JANUARY 1,    DECEMBER 30,
                                                            1999          2000           2000
                                                         -----------   -----------   ------------
<S>                                                      <C>           <C>           <C>
REVENUES...............................................  $33,815,638   $61,395,868   $196,039,974
OPERATING EXPENSES:
  Cost of revenues.....................................   26,865,856    51,264,541    168,687,383
  Selling, general and administrative..................    3,229,503     8,269,804     28,914,575
  Depreciation and amortization........................      980,108     2,813,689     15,397,756
  Recapitalization costs...............................           --     1,108,314             --
  Impairment loss on intangible assets and related
     goodwill..........................................           --            --     52,912,448
                                                         -----------   -----------   ------------
          Total operating expenses.....................   31,075,467    63,456,348    265,912,162
                                                         -----------   -----------   ------------
       Income (loss) from operations...................    2,740,171    (2,060,480)   (69,872,188)
                                                         -----------   -----------   ------------
INTEREST INCOME........................................           --        76,074        460,239
INTEREST EXPENSE.......................................      122,176     1,419,300      5,325,800
                                                         -----------   -----------   ------------
       Income (loss) before income taxes...............    2,617,995    (3,403,706)   (74,737,749)
INCOME TAX PROVISION
  (BENEFIT)............................................    1,202,500      (554,630)     2,205,487
                                                         -----------   -----------   ------------
NET INCOME (LOSS)......................................  $ 1,415,495   $(2,849,076)  $(76,943,236)
                                                         ===========   ===========   ============
Basic and diluted net income (loss) per share..........  $      0.07   $     (0.13)  $      (2.27)
                                                         ===========   ===========   ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        28
<PAGE>   31

                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                                                              COMMON
                                          PREFERRED STOCK              COMMON STOCK            STOCK
                                     -------------------------   -------------------------   PURCHASE      DEFERRED
                                       SHARES        AMOUNT        SHARES        AMOUNT      WARRANTS    COMPENSATION
                                     ----------   ------------   ----------   ------------   ---------   ------------
<S>                                  <C>          <C>            <C>          <C>            <C>         <C>
BALANCE, JANUARY 3, 1998...........          --   $         --   21,130,282   $  2,318,100   $      --   $        --
Comprehensive income:
Net income.........................          --             --           --             --          --            --
Unrealized loss on marketable
 securities........................          --             --           --             --          --            --
       Total comprehensive
        income.....................
                                     ----------   ------------   ----------   ------------   ---------   -----------
BALANCE, JANUARY 2, 1999...........          --             --   21,130,282      2,318,100          --            --
Purchase of treasury stock.........          --             --           --             --          --            --
Cancellation of treasury stock.....          --             --   (9,365,592)    (2,318,100)         --            --
Recapitalization...................          --             --           --             --          --            --
Sale of common stock, net..........          --             --    2,941,176      4,907,507          --            --
Issuance of common stock and
 options to employees to purchase
 common stock below fair market
 value.............................          --             --       29,412      1,535,936          --    (1,170,936)
Issuance of warrants in connection
 with bridge financing.............          --             --           --             --     250,000            --
Issuance of common stock and
 options in acquisition of CRI.....          --             --   12,235,587     17,629,914          --            --
Issuance of common stock in
 acquisition of Telecrafter........          --             --    2,647,059      4,500,000          --            --
Issuance of options to purchase
 common stock to consultants.......          --             --           --      2,905,855          --    (2,905,855)
Amortization of deferred
 compensation......................          --             --           --             --          --       798,638
Comprehensive loss:
Net loss...........................          --             --           --             --          --            --
Unrealized gain on marketable
 securities........................          --             --           --             --          --            --
       Total comprehensive loss....
                                     ----------   ------------   ----------   ------------   ---------   -----------
BALANCE, JANUARY 1, 2000...........          --             --   29,617,924     31,479,212     250,000    (3,278,153)
Reclassification of redeemable
 common stock due to put right
 termination.......................          --             --           --      2,808,014          --            --
Issuance of options to employees to
 purchase common stock below fair
 market value......................          --             --           --        582,700          --      (582,700)
Issuance of options to consultant
 and director to purchase common
 stock below fair market value.....          --             --           --        292,210          --            --
Proceeds from exercise of options
 to purchase common stock..........          --             --       55,351         94,095          --            --
Issuance of stock and options in
 2000 acquisitions.................   3,096,159     27,865,431    6,288,365     65,237,299          --            --
Shares issued in initial public
 offering, net of costs............          --             --    5,375,000     35,465,569          --            --
Conversion of preferred stock upon
 initial public offering...........  (3,096,159)   (27,865,431)   3,096,159     27,865,431          --            --
Conversion of warrants upon initial
 public offering...................          --             --    1,017,597      1,740,071    (250,000)           --
Payment of stock for earn-out
 provision on 1999 acquisition.....          --             --       66,294        596,169          --            --
Forfeiture of unvested deferred
 compensation......................          --             --                     (19,396)         --        19,396
Amortization of deferred
 compensation......................          --             --           --     (1,050,481)         --     3,062,282
Comprehensive loss:
Net loss...........................          --             --           --             --          --            --
Unrealized loss on marketable
 securities........................          --             --           --             --          --            --
       Total comprehensive loss....          --             --           --             --          --            --
                                     ----------   ------------   ----------   ------------   ---------   -----------
BALANCE, DECEMBER 30, 2000.........          --   $         --   45,516,690   $165,090,893   $      --   $  (779,175)
                                     ==========   ============   ==========   ============   =========   ===========

<CAPTION>
                                      ACCUMULATED
                                         OTHER         RETAINED
                                     COMPREHENSIVE     EARNINGS
                                        INCOME       (ACCUMULATED    TREASURY
                                        (LOSS)         DEFICIT)        STOCK         TOTAL
                                     -------------   ------------   -----------   ------------
<S>                                  <C>             <C>            <C>           <C>
BALANCE, JANUARY 3, 1998...........    $(49,774)     $  3,563,416   $(2,403,781)  $  3,427,961
Comprehensive income:
Net income.........................          --         1,415,495            --      1,415,495
Unrealized loss on marketable
 securities........................     (25,407)               --            --        (25,407)
                                                                                  ------------
       Total comprehensive
        income.....................                                                  1,390,088
                                       --------      ------------   -----------   ------------
BALANCE, JANUARY 2, 1999...........     (75,181)        4,978,911    (2,403,781)     4,818,049
Purchase of treasury stock.........          --                --        (7,057)        (7,057)
Cancellation of treasury stock.....          --           (92,738)    2,410,838             --
Recapitalization...................          --                --    (4,000,000)    (4,000,000)
Sale of common stock, net..........          --                --            --      4,907,507
Issuance of common stock and
 options to employees to purchase
 common stock below fair market
 value.............................          --                --            --        365,000
Issuance of warrants in connection
 with bridge financing.............          --                --            --        250,000
Issuance of common stock and
 options in acquisition of CRI.....          --                --            --     17,629,914
Issuance of common stock in
 acquisition of Telecrafter........          --                --            --      4,500,000
Issuance of options to purchase
 common stock to consultants.......          --                --            --             --
Amortization of deferred
 compensation......................          --                --            --        798,638
Comprehensive loss:
Net loss...........................          --        (2,849,076)           --     (2,849,076)
Unrealized gain on marketable
 securities........................     236,086                --            --        236,086
                                                                                  ------------
       Total comprehensive loss....                                                 (2,612,990)
                                       --------      ------------   -----------   ------------
BALANCE, JANUARY 1, 2000...........     160,905         2,037,097    (4,000,000)    26,649,061
Reclassification of redeemable
 common stock due to put right
 termination.......................          --                --            --      2,808,014
Issuance of options to employees to
 purchase common stock below fair
 market value......................          --                --            --             --
Issuance of options to consultant
 and director to purchase common
 stock below fair market value.....          --                --            --        292,210
Proceeds from exercise of options
 to purchase common stock..........          --                --            --         94,095
Issuance of stock and options in
 2000 acquisitions.................          --                --            --     93,102,730
Shares issued in initial public
 offering, net of costs............          --                --            --     35,465,569
Conversion of preferred stock upon
 initial public offering...........          --                --            --             --
Conversion of warrants upon initial
 public offering...................          --                --            --      1,490,071
Payment of stock for earn-out
 provision on 1999 acquisition.....          --                --            --        596,169
Forfeiture of unvested deferred
 compensation......................          --                --            --             --
Amortization of deferred
 compensation......................          --                --            --      2,011,801
Comprehensive loss:
Net loss...........................          --       (76,943,236)           --    (76,943,236)
Unrealized loss on marketable
 securities........................    (172,242)               --            --       (172,242)
                                                                                  ------------
       Total comprehensive loss....          --                --            --    (77,115,478)
                                       --------      ------------   -----------   ------------
BALANCE, DECEMBER 30, 2000.........    $(11,337)     $(74,906,139)  $(4,000,000)  $ 85,394,242
                                       ========      ============   ===========   ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        29
<PAGE>   32

                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                     FISCAL YEAR ENDED
                                                          ---------------------------------------
                                                          JANUARY 2,   JANUARY 1,    DECEMBER 30,
                                                             1999         2000           2000
                                                          ----------   -----------   ------------
<S>                                                       <C>          <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss).....................................  $1,415,495   $(2,849,076)  $(76,943,236)
  Adjustments to reconcile net income (loss) to net cash
     provided by (used in) operating activities:
     Impairment loss on intangible assets and related
       goodwill.........................................          --            --     52,912,448
     Depreciation and amortization......................     980,108     2,813,689     15,397,756
     Amortization of deferred compensation..............          --       798,638      2,011,801
     Amortization of debt issuance costs................          --       368,530        392,162
     Provision for deferred taxes (benefit).............      78,000      (861,895)     1,969,480
     Stock compensation expense.........................          --       365,000        292,210
     Changes in operating assets and liabilities:
       Accounts receivable..............................    (392,525)   (3,517,712)    (7,603,526)
       Supply inventory.................................      12,962      (557,920)      (539,224)
       Prepaid expenses and other.......................    (248,030)      441,856      1,588,580
       Accounts payable.................................    (156,691)    1,917,234     (5,171,352)
       Deferred tax liabilities.........................          --            --        (28,040)
       Accrued expenses and deferred revenue............     546,253     2,984,731      1,759,543
                                                          ----------   -----------   ------------
          Net cash provided by (used in) operating
            activities..................................   2,235,572     1,903,075    (13,961,398)
                                                          ----------   -----------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment...................  (2,230,788)   (4,383,325)   (13,699,067)
  Increase in restricted cash...........................          --      (550,000)      (798,854)
  Business acquisitions, net of cash acquired...........          --    (9,257,592)    (1,576,236)
     Disposal of property plant and equipment...........          --            --        530,117
                                                          ----------   -----------   ------------
          Net cash used in investing activities.........  (2,230,788)  (14,190,917)   (15,544,040)
                                                          ----------   -----------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from long-term debt..........................     700,000    24,108,703     17,473,309
  Repayments on long-term debt..........................  (1,014,990)   (7,341,050)   (16,398,092)
  Purchase of treasury stock............................          --    (4,007,057)            --
  Proceeds from sale of common stock, net...............          --     4,907,507     35,465,569
  Proceeds from exercise of warrants....................          --            --         10,174
  Proceeds from exercise of stock options...............          --            --         94,095
                                                          ----------   -----------   ------------
          Net cash provided by (used in) financing
            activities..................................    (314,990)   17,668,103     36,645,055
                                                          ----------   -----------   ------------
NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS...........................................    (310,206)    5,380,261      7,139,617
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD..........   1,187,235       877,029      6,257,290
                                                          ----------   -----------   ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD................  $  877,029   $ 6,257,290   $ 13,396,907
                                                          ==========   ===========   ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        30
<PAGE>   33

                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  BACKGROUND

     Viasource Communications, Inc. and subsidiaries ("Viasource" or the
"Company") is a nationwide enabler of broadband technologies to residential and
commercial consumers. As a technology-neutral enabler, the Company offers
comprehensive network integration services to providers in the cable,
telecommunications, and satellite and wireless industries. Viasource provides
installation, integration, fulfillment, and long-term maintenance and support
services for broadband video, voice and data technologies.

     On June 14, 1999, the Company effected a recapitalization whereby Crest
Communication Partners L.P. ("Crest") and two other financial investors acquired
6,470,588 shares of common stock for $11,000,000 directly from the then Company
shareholders on a pro rata basis. Crest then provided the Company $5,000,000 of
bridge equity financing which was convertible into 2,941,176 shares of common
stock and bore interest at 10%. The proceeds from the bridge equity financing
were used by the Company to redeem 2,352,941 shares of common stock for a
purchase price of $4,000,000 from the shareholders on a pro rata basis with the
remaining $1,000,000 of proceeds used as working capital. In connection with the
bridge equity financing, Crest received a warrant to purchase 147,059 shares of
common stock at $.02 per share (see Note 10). The $5,000,000 bridge equity
financing was repaid on September 7, 1999 when the Company sold 2,941,176 shares
of common stock at $1.70 per share to three new financial investors. Upon
completion of the recapitalization transaction described above, including taking
into consideration the shares and warrants used in the bridge equity financing,
the new investor group held 76.5% of the voting equity and the remaining 23.5%
of common stock, was retained by the pre-recapitalization Company shareholders.
The Company incurred $1,108,314 of recapitalization costs, which were charged to
the Consolidated Statement of Operations during fiscal 1999. In July 1999, the
Company changed its name from The RTK Group, Inc. to Viasource Communications,
Inc.

     The Company has grown through a number of acquisitions and has a limited
history of operating as a combined company. In 1999, the Company acquired two
businesses and in the second quarter of fiscal 2000 the Company acquired four
businesses. All these businesses had been operating independently.

     On August 18, 2000, the Company completed its initial public offering,
whereby it sold 5,000,000 shares of common stock for $8.00 a share for gross
proceeds of $40 million. In September 2000, an over allotment of 750,000 shares
was sold for $8.00 a share for gross proceeds of $6 million. The Company
received $3 million of proceeds from the over allotment of 375,000 shares and a
selling shareholder received the remaining proceeds for the sale of 375,000
shares. The costs associated with the initial public offering were $7.6 million.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

     The accompanying consolidated financial statements include the accounts of
Viasource Communications, Inc. and its wholly owned subsidiaries. All
significant intercompany balances and transactions have been eliminated.

USE OF ESTIMATES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Significant estimates includes the allowance for doubtful accounts, the
valuation allowance related to the Company's deferred tax assets, the allocation
of purchase price of acquired businesses and the effect of intangible assets.

                                        31
<PAGE>   34
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FISCAL YEAR

     The Company operates on a 52/53-week fiscal year ending on the last
Saturday nearest December 31. The years ended January 2, 1999 ("fiscal 1998"),
January 1, 2000 ("fiscal 1999") and December 30, 2000 ("fiscal 2000") each
include 52 weeks of operations.

RECLASSIFICATIONS

     Certain balances in the accompanying consolidated financial statements have
been reclassified to conform to the current year presentation.

REVENUE RECOGNITION

     Revenues are generally recognized as services are performed. One of the
Company's satellite installation customers, beginning in 1999, paid the Company
a portion of its revenues subject to a charge-back. The Company has not
accumulated sufficient client-specific historical data to reliably estimate the
amount of potential charge-backs. Accordingly, as required under the Securities
and Exchange Commission Staff Accounting Bulletin ("SAB") No. 101 -- Revenue
Recognition in Financial Statements, the Company recorded these amounts subject
to charge-back as deferred revenue and records revenue as the right of charge-
back expires.

CASH AND CASH EQUIVALENTS

     The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents. At January 1, 2000 and
December 30, 2000, cash and cash equivalents include cash on hand, cash in the
bank, money market accounts and various government bonds with seven-day reset
features.

RESTRICTED CASH

     At January 1, 2000 and December 30, 2000, the Company had restricted cash
relating to letters of credit outstanding, which primarily relates to collateral
established for workers' compensation policies.

MARKETABLE SECURITIES

     The Company follows Statement of Financial Accountings Standards ("SFAS")
No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The
marketable securities, which consist of equity securities, have been classified
as available-for-sale securities and are stated at fair market value. Unrealized
gains and losses are included as a separate component of stockholders' equity
until realized. Investments are included in prepaid expenses and other in the
accompanying consolidated balance sheets.

SUPPLY INVENTORY

     Supply inventory is stated at the lower of cost (first-in, first-out
method) or market and is comprised of materials used to provide services.

PROPERTY AND EQUIPMENT

     Property and equipment are recorded at cost. Property and equipment
capitalized under capital leases are recorded at the present value of the
minimum lease payments due over the term of the lease. Depreciation and
amortization are provided using the straight-line method over the estimated
useful lives or the lease term, whichever is shorter. As required by Statement
of Position 98-1 ("SOP 98-1"), "Accounting for Costs of Computer Software
Developed or Obtained for Internal Use", the Company began capitalizing certain

                                        32
<PAGE>   35
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

computer software developed or obtained for internal use in fiscal 2000.
Capitalized computer software is depreciated using the straight-line method over
the shorter of the estimated life of the software or five years.

     Expenditures for maintenance, repairs and betterments that do not prolong
the useful life of an asset are charged to operations as incurred. Additions and
betterments that substantially extend the useful life of the asset are
capitalized. Upon sale or other disposition of assets, the cost and related
accumulated depreciation and amortization are removed from the respective
accounts, and the resulting gain or loss, if any, is included in income.

INCOME TAXES

     The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes." Under SFAS No. 109, deferred income tax assets
and liabilities are determined based on differences between the financial
reporting and income tax bases of assets and liabilities measured using enacted
income tax rates and laws that are expected to be in effect when the differences
reverse. See Note 11.

GOODWILL AND OTHER INTANGIBLES

     The Company amortizes, on a straight-line basis, the excess of cost over
the fair value of the net tangible and identifiable intangible assets of
acquired businesses over an estimated life of 10 to 20 years. Other identifiable
intangible assets, including agreements not-to-compete, tradenames, trained
workforce and customer relationships, are amortized on a straight-line basis
over the estimated economic lives of 1 to 20 years.

     The Company continually evaluates whether events and changes in
circumstances warrant revised estimates of useful lives or recognition of an
impairment loss of unamortized goodwill. The conditions that would trigger an
impairment assessment of unamortized goodwill include a significant negative
trend in the Company's operating results or cash flows, a decrease in demand for
the Company's services, change in the competitive environment and other industry
and economic factors. The Company measures impairment of unamortized goodwill
utilizing the discounted cash flow method. The present value of those estimated
cash flows is then compared to the Company's net book value; if the book value
exceeds the present value of those cash flows, the excess of the unamortized
goodwill is written off. The discount rate used in determining the present value
of those cash flows would be based on the Company's weighted average cost of
capital commensurate with the risk involved. As of December 30, 2000 the Company
determined that there has been no impairment of goodwill, except as described in
Note 5.

IMPAIRMENT OF LONG-LIVED ASSETS

     The Company accounts for possible impairments of long-lived assets in
accordance with SFAS No. 121, "Accounting for Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of". SFAS No. 121 requires that
long-lived assets, certain identifiable intangibles, and goodwill related to
those assets to be held and used and long-lived assets and certain identifiable
intangibles to be disposed of, be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. If events or changes in circumstances indicate that the carrying
amount of an asset that the Company expects to hold and use may not be
recoverable, future cash flows (undiscounted and without interest charges)
expected to result from the use of the asset and its eventual disposition must
be estimated. If the undiscounted value of the future cash flows is less than
the carrying amount of the asset the carrying value of the assets and related
goodwill are reduced by the amount by which the carrying value exceeds fair
value. Assets to be disposed of or no longer available for use are reported at
the lower of carrying amount or fair value less cost to sell. Fair value is
determined based on various discounted cash flow valuation techniques. See Note
5.

                                        33
<PAGE>   36
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

STOCK-BASED COMPENSATION

     The Company accounts for stock-based compensation to employees using the
intrinsic value method in accordance with Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees", and as interpreted
in FASB Interpretation No. 44. "Accounting for Certain Transactions Involving
Stock Compensation". ("FIN 44") The Company has recognized deferred stock
compensation related to certain stock option grants (see Note 10). The Company
accounts for stock-based compensation to non-employees using the fair value
method in accordance with SFAS No. 123, "Accounting for Stock-Based
Compensation" and Emerging Issues Task Force ("EITF") 96-18, "Accounting for
Equity Instruments that are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling Goods or Services."

NET INCOME (LOSS) PER SHARE

     The Company has presented basic and diluted net income (loss) per share
pursuant to SFAS No. 128, "Earnings per Share," and the Securities and Exchange
Commission SAB No. 98. In accordance with SFAS No. 128, basic net income (loss)
per share has been computed by dividing net income (loss) by the weighted-
average number of shares of common stock outstanding during the period. Diluted
net income (loss) per share includes the effect, if any, from the potential
exercise or conversion of securities, such as stock options, which would result
in the issuance of shares of common stock. For fiscal 1998, diluted net income
per share is the same as basic net income per share, since the Company did not
have any common stock equivalents outstanding. For fiscal 1999 and 2000, diluted
net loss per share is the same as basic net loss per share as all additional
potential dilutive shares from the exercise or conversion of securities into
common stock are excluded as the result is anti-dilutive due to the Company's
losses. The amount of shares of common stock equivalents that were excluded from
the dilutive earnings per share calculation because they were considered
anti-dilutive for 1999 and 2000 were 584,109 and 1,243,904, respectively.

     The following table presents the calculation of basic and diluted net
income (loss) per share:

<TABLE>
<CAPTION>
                                                             FISCAL YEAR ENDED
                                                  ---------------------------------------
                                                  JANUARY 2,   JANUARY 1,    DECEMBER 30,
                                                     1999         2000           2000
                                                  ----------   -----------   ------------
<S>                                               <C>          <C>           <C>
Net income (loss)...............................  $1,415,495   $(2,849,076)  $(76,943,236)
                                                  ==========   ===========   ============
Basic and diluted:
  Weighted-average shares used in computing
     basic and diluted net income (loss) per
     share......................................  20,233,081    21,492,717     33,828,320
                                                  ==========   ===========   ============
Basic and diluted net income (loss) per share...  $     0.07   $     (0.13)  $      (2.27)
                                                  ==========   ===========   ============
</TABLE>

FAIR VALUE OF FINANCIAL INSTRUMENTS

     Cash and cash equivalents, accounts receivable and accounts payable are
reflected at fair value in the accompanying financial statements due to the
short-term nature of those instruments. The carrying amount of long-term debt
approximates fair value at the balance sheet dates.

RECENTLY ISSUED ACCOUNTING STANDARDS

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133").
SFAS 133 as amended, is effective for fiscal years beginning after June 15,
2000. SFAS 133 requires that every derivative instrument be recorded in the
balance sheet as either an asset or liability measured at its fair value.
Changes in derivative's fair value will be recognized in income unless specific
hedge accounting criteria are met. The Company will adopt SFAS 133,

                                        34
<PAGE>   37
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

as amended, beginning December 31, 2000, and does not anticipate that it will
have a material impact on its consolidated financial statements.

STOCK SPLIT

     On August 14, 2000, the Company effected a 0.588-for-1 reverse stock split
of each outstanding share of common and preferred stock. All share, stock option
and warrant data have been restated to reflect the reverse stock split.

3.  BUSINESS COMBINATIONS

     On July 23, 1999, the Company acquired Communication Resources Incorporated
("CRI") whereby the outstanding shares of CRI common stock were exchanged for
10,283,658 shares of Viasource common stock valued at $17,482,218 or $1.70 per
share and 1,951,929 shares of Viasource common stock valued at $4,346,946,
subject to a put agreement. The $1.70 per share fair value estimate was based on
the June 14, 1999 Viasource recapitalization whereby the pre-recapitalization
shareholders received $1.70 per share for shares sold on that date and the price
paid by the new investors in June and September 1999. In addition, the
outstanding CRI options to purchase shares of CRI common stock were exchanged
for an option to purchase 149,156 shares of Viasource common stock valued at
$147,696. Transaction costs related to this merger amounted to $246,236. The
acquisition was accounted for as a purchase. An allocation of the purchase price
resulted in $19,044,356 of excess purchase price over the estimated fair value
of the net tangible assets acquired of $3,774,356. The excess purchase price was
allocated to intangible assets consisting of $1,000,000 for agreements
not-to-compete, $1,500,000 for trade names, $570,000 for trained workforce,
$12,200,000 for customer relationships and $3,399,972 for goodwill. Intangible
assets are amortized on a straight-line basis over their estimated useful lives
of 3 to 4 years for agreements not-to-compete, 20 years for trade-names, 7.5
years for trained workforce, 20 years for customer relationships and 20 years
for goodwill.

     On January 3, 2000, the selling shareholder of CRI put back to the Company
691,033 shares of common stock at $2.23 per share in accordance with the put
agreement. In consideration for these shares, the Company issued a $1,538,932
Secured Subordinated Promissory Note that matured upon the Company's initial
public offering and was repaid in August 2000. The Company accounted for the
share repurchase as an increase to treasury stock outstanding. In addition, on
January 3, 2000, the selling shareholder put back to certain existing
shareholders 1,260,896 shares of common stock at $2.23 per share. Since the put
right on these shares is now terminated, the shares were reclassified from
redeemable common stock to common stock.

     In connection with the CRI acquisition, the Company assumed an earn-out
contingency, which was resolved in July 2000, which resulted in the issuance of
an additional 66,294 shares of common stock.

     On September 7, 1999, the Company acquired substantially all of the assets
(and assumed substantially all of the liabilities) of Nassau Communications,
Inc. d/b/a Telecrafter Services Corporation ("Telecrafter") for $18,223,943,
including transaction costs. The purchase price consisted of $10,500,000 in
cash, $3,000,000 in seller notes and 2,647,059 shares of common stock valued at
$1.70 per share, or $4,500,000. The application of the purchase method resulted
in $14,949,675 of excess purchase price over the estimated fair value of the net
tangible assets acquired of $3,915,878. The excess purchase price was allocated
to intangible assets consisting of $1,200,000 for the agreement not-to-compete,
$1,100,000 for trade-names, $470,000 for trained workforce, $10,500,000 for
customer relationships and $1,679,675 for goodwill. Intangible assets are
amortized on a straight-line basis over their estimated useful lives of 5 years
for the agreement not-to-compete, 20 years for trade-names, 7.5 years for
trained workforce, 20 years for customer relationships and 20 years for
goodwill.

     On April 21, 2000, the Company acquired substantially all of the assets
(and assumed substantially all of the liabilities) of D.S. Cable TV Contractors,
Inc. ("D.S. Cable") for approximately $5.9 million, including transaction costs.
The purchase price consisted of $1,500,000 in cash, $750,000 in seller notes,
387,735 shares

                                        35
<PAGE>   38
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

of common stock valued at $9.00 per share or $3,489,615. The application of the
purchase method resulted in $5,034,230 of excess purchase price over the
estimated fair value of the net tangible assets acquired of $871,490. The excess
purchase price was allocated to intangible assets consisting of $180,000 for an
agreement not-to-compete, $300,000 for trained workforce, $2,840,000 for
customer relationships and $1,714,230 for goodwill. Intangible assets are
amortized on a straight-line basis over their estimated useful lives of 6 years
for the agreement not-to-compete, 7.5 years for trained workforce, 20 years for
customer relationships and 20 years for goodwill.

     On May 4, 2000, the Company acquired substantially all of the assets (and
assumed substantially all of the liabilities) of Service Cable Electric, Inc.
and Service Cable Corporation (collectively "Service Cable") for approximately
$6.2 million, including transaction costs. The purchase price consisted of
$980,000 in cash, $1,960,000 in seller notes, 329,412 shares of common stock
valued at $9.00 per share, or $2,964,708, options to purchase common stock with
a fair value of $189,374. The application of the purchase method resulted in
$6,161,682 of excess purchase price over the estimated fair value of the net
tangible assets acquired of $44,637. The excess purchase price was allocated to
intangible assets consisting of $190,000 for an agreement not-to-compete,
$500,000 for trained workforce, $2,970,000 for customer relationships and
$2,501,682 for goodwill. Intangible assets are amortized on a straight-line
basis over their estimated useful lives of 6 years for the agreement
not-to-compete, 7.5 years for trained workforce, 20 years for customer
relationships and 20 years for goodwill.

     On June 1, 2000, the Company acquired all of the outstanding stock of
Excalibur Cable Communications, Ltd. ("Excalibur") for approximately $25.4
million (subject to certain post-closing adjustments), including transaction
costs. The purchase price consisted of $4,000,000 in cash, $4,000,000 in seller
notes and 1,882,353 shares of common stock valued at $9.00 per share or
$16,941,177. The application of the purchase method resulted in approximately
$24,201,592 of excess purchase price over the estimated fair value of the net
tangible assets acquired of $3,097,894. The excess purchase price was allocated
to intangible assets consisting of $1,200,000 for an agreement not-to-compete,
$1,300,000 for trained workforce, $16,300,000 for customer relationships and
$5,401,592 for goodwill. Intangible assets are amortized on a straight-line
basis over their estimated useful lives of 5 years for the agreement
not-to-compete, 7.5 years for trained workforce, 20 years for customer
relationships and 20 years for goodwill.

     On June 1, 2000, the Company acquired all of the outstanding stock of
TeleCore, Inc. ("TeleCore") for approximately $86.8 million, including
transaction costs. The purchase price consisted of $16,866,481 in seller notes,
3,688,865 and 3,096,159 shares of common and preferred stock, respectively, both
valued at $9.00 per share, or a total of $61,065,216, 1,183,196 options to
purchase common stock valued at $8,452,640. The application of the purchase
method resulted in approximately $92,048,321 of excess purchase price over the
estimated fair value of the net deficit acquired of $5,380,027. The excess
purchase price was allocated to intangible assets consisting of $19,500,000 for
agreements not-to-compete, $3,400,000 for trained workforce, $45,000,000 for
customer relationships and $24,148,321 for goodwill. Intangible assets are
amortized on a straight-line basis over their estimated useful lives of 3.6
years for the agreements not-to-compete, 7.5 years for trained workforce, 10
years for customer relationships and 10 years for goodwill. Allocation of excess
purchase price over the estimated fair value at the date of acquisition does not
reflect the impairment loss on intangible assets and related goodwill of $52.9
million recorded in the fourth quarter of 2000. See Note 5.

     The following unaudited pro forma summary combines the consolidated results
of operations of Viasource, CRI, Telecrafter, D.S. Cable, Service Cable,
Excalibur and TeleCore as if the transactions had occurred as of the beginning
of the year presented after giving effect to certain adjustments including
amortization of the purchase price in excess of the net tangible assets acquired
and interest expense. The unaudited pro forma results are for informational
purposes and are not necessarily indicative of the results of

                                        36
<PAGE>   39
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

operations that would have occurred if Viasource, CRI, Telecrafter, D.S. Cable,
Service Cable, Excalibur and TeleCore had been combined during such periods or
the future results of operations of the Company.

<TABLE>
<CAPTION>
                                                                   FISCAL YEARS ENDED
                                                       ------------------------------------------
                                                       JANUARY 2,     JANUARY 1,    DECEMBER 30,
                                                          1999           2000           2000
                                                       -----------   ------------   -------------
<S>                                                    <C>           <C>            <C>
Revenue..............................................  $73,707,430   $130,525,823   $ 230,849,522
                                                       ===========   ============   =============
Operating loss.......................................  $   123,026   $(16,899,966)  $ (90,740,327)
                                                       ===========   ============   =============
Net loss.............................................  $(1,617,884)  $(21,134,368)  $(100,095,451)
                                                       ===========   ============   =============
Basic and diluted net loss per share.................  $     (0.05)  $      (0.52)  $       (2.57)
                                                       ===========   ============   =============
</TABLE>

4.  SUPPLEMENTAL CASH FLOW INFORMATION

     For fiscal 1998, 1999 and 2000, the Company paid interest of $122,177,
$851,531 and $4.0 million, respectively, and income taxes of $979,429, $624,196
and $242,659, respectively.

     The following table displays the net non-cash assets that were acquired
during fiscal 1999 as a result of the business acquisitions described in Note 3:

<TABLE>
<CAPTION>
                                                     CRI        TELECRAFTER      TOTAL
                                                 ------------   -----------   ------------
<S>                                              <C>            <C>           <C>
Non-cash assets (liabilities):
  Current assets...............................  $  4,013,025   $3,689,141    $  7,702,166
  Property and equipment.......................     1,541,039      299,503       1,840,542
  Other assets.................................       597,339       20,812         618,151
  Goodwill and other intangibles...............    19,044,356   14,949,675      33,994,031
  Current liabilities..........................    (1,787,110)  (2,865,152)     (4,652,262)
  Debt.........................................      (674,754)     (93,422)       (768,176)
                                                 ------------   ----------    ------------
  Net non-cash assets acquired.................    22,733,895   16,000,557      38,734,452
  Less: Common stock issued....................   (17,482,218)  (4,500,000)    (21,982,218)
     Put option issued.........................    (4,346,946)          --      (4,346,946)
     Options issued............................      (147,696)          --        (147,696)
     Notes payable to sellers of business......            --   (3,000,000)     (3,000,000)
                                                 ------------   ----------    ------------
  Cash paid for business acquisitions, net.....  $    757,035   $8,500,557    $  9,257,592
                                                 ============   ==========    ============
</TABLE>

                                        37
<PAGE>   40
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following table displays the net non-cash assets that were acquired
during fiscal 2000 as a result of the business acquisitions described in Note 3:

<TABLE>
<CAPTION>
                        D.S. CABLE    SERVICE CABLE    EXCALIBUR       TELECORE        TOTAL
                        -----------   -------------   ------------   ------------   -----------
<S>                     <C>           <C>             <C>            <C>            <C>
Non-cash assets
  (liabilities):
  Current assets......  $   424,441    $1,452,859     $  9,989,932   $  5,938,622   $17,805,854
  Property and
     equipment........      404,466       118,313        1,711,009      3,280,233     5,514,021
  Other assets........       58,324            --          156,101        215,313       429,738
  Goodwill and other
     intangibles......    5,034,230     6,161,682       24,201,592     92,048,321   127,445,825
  Current
     liabilities......     (461,033)   (1,657,139)     (15,135,765)    (7,361,852)  (24,615,789)
  Debt................           --            --         (764,410)    (7,559,792)   (8,324,202)
                        -----------    ----------     ------------   ------------   -----------
  Net non-cash assets
     acquired.........    5,460,428     6,075,715       20,158,459     86,560,845   118,255,447
  Less: Common and
     preferred stock
     issued...........   (3,489,615)   (2,964,708)     (16,941,177)   (61,065,216)  (84,460,716)
     Options issued...           --      (189,374)              --     (8,452,640)   (8,642,014)
     Notes payable to
       sellers of
       business.......     (750,000)   (1,960,000)      (4,000,000)   (16,866,481)  (23,576,481)
                        -----------    ----------     ------------   ------------   -----------
  Cash paid for
     (received in)
     business
     acquisitions,
     net..............  $ 1,220,813    $  961,633     $   (782,718)  $    176,508   $ 1,576,236
                        ===========    ==========     ============   ============   ===========
</TABLE>

5.  IMPAIRMENT LOSS ON INTANGIBLE ASSETS AND RELATED GOODWILL

     In June 2000, the Company acquired all the outstanding common stock of
TeleCore. The excess of purchase price over net deficit acquired was allocated
to identifiable intangibles and goodwill, including $45.0 million allocated to
customer relationships and $3.4 million allocated to trained work force. At the
time of the acquisition, TeleCore was the largest independent provider of
digital subscriber line ("DSL") technology enabling services in the United
States. During the fourth quarter of fiscal 2000 a significant, fundamental
shift occurred in the DSL industry where the competitive environment has given
the regional bell operating companies an advantage over Viasource's data local
exchange carrier customers ("DLECs"). Consequently, many of Viasource's DSL
customers have experienced severe financial difficulty resulting in a permanent
impairment of the customer relationship intangible assets. In addition certain
of the Company's DSL customers no longer have access to capital and some have
recently filed for bankruptcy protection. Due to the resulting change in the
market for TeleCore's services, an impairment occurred in the value of the
customer relationships acquired in the business combination.

     In accordance with the provisions of SFAS 121, the Company has recorded an
impairment loss of $50.7 million to write-down the customer relationship
intangible assets and related goodwill to fair value. The $50.7 million
impairment loss is comprised of $37.8 million related to continuing
relationships with DSL installation customers, including an allocation of
goodwill of $10 million and $12.9 million related to DSL installation customer
relationships that are not continuing and accordingly are no longer available
for use.

                                        38
<PAGE>   41
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Company performed an analysis by key customer of the cash inflows
expected to be generated by continuing DSL installation customer relationships
less the future cash outflows expected to be necessary to obtain those inflows.
The sum of the expected future cash flows (undiscounted and without interest
charges) was less than the carrying amount of the continuing DSL installation
customer relationship intangible asset, thus indicating that the tested asset
and related goodwill had been impaired. The fair value of the customer
relationship was determined based upon the present value of the estimated future
cash flows attributable to the intangible asset discounted over the remaining
life of the asset. The estimated cash flows were based on projections of
operating performance, historical operating performance and industry and
customer-specific growth characteristics taking into consideration the change in
the competitive environment for the Company's customers.

     The Company also recognized a $2.2 million impairment loss to write-down
the trained work force intangible asset to fair value. The impairment of the
trained work forces was triggered due to the termination of 70% of the acquired
trained work force resulting from the change in the demand for TeleCore's
services. The fair value of the trained work force was determined based upon a
cost approach valuation technique which considered time, material and facilities
that were required to develop the intangible asset.

     The total impairment loss of $52.9 million was recognized in the fourth
quarter of fiscal 2000 and is included in the caption "Impairment loss on
intangible assets and related goodwill" in the accompanying statement of
operations. The Company's DSL enabling services are included in the Telephony
and Internet business segment.

6.  ACCOUNTS RECEIVABLE

     The components of accounts receivable, net of allowance for doubtful
accounts are as follows:

<TABLE>
<CAPTION>
                                                              JANUARY 1,    DECEMBER 30,
                                                                 2000           2000
                                                              -----------   ------------
<S>                                                           <C>           <C>
Accounts receivable, trade..................................  $13,157,400   $32,579,595
Unbilled receivables........................................    2,266,848     5,406,220
Other receivables...........................................      714,779       913,118
                                                              -----------   -----------
                                                               16,139,027    38,898,933
Allowance for doubtful accounts.............................   (1,041,649)   (2,460,098)
                                                              -----------   -----------
                                                              $15,097,378   $36,438,835
                                                              ===========   ===========
</TABLE>

     Unbilled receivables represent receivables from current month services,
which primarily are billed in the following month's billing cycle.

                                        39
<PAGE>   42
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7.  PROPERTY AND EQUIPMENT

     Property and equipment, net of accumulated depreciation and amortization
are as follows:

<TABLE>
<CAPTION>
                                             USEFUL LIVES    JANUARY 1, 2000   DECEMBER 30, 2000
                                            --------------   ---------------   -----------------
<S>                                         <C>              <C>               <C>
Vehicles..................................         5 years     $6,339,427         $18,573,905
Machinery and equipment...................    2 to 5 years      4,817,467           6,534,158
Office furniture and equipment............    2 to 5 years      2,041,782          10,114,356
Land and buildings........................  39 to 40 years             --             760,910
Leasehold improvements....................    3 to 5 years        385,783             914,072
                                                               ----------         -----------
                                                               13,584,459          36,897,401
Accumulated depreciation and
  amortization............................                     (5,924,181)        (11,833,467)
                                                               ----------         -----------
                                                               $7,660,278         $25,063,934
                                                               ==========         ===========
</TABLE>

     For fiscal 1998, 1999 and 2000, depreciation and amortization expense was
$980,108, $2,153,611 and $4,915,544, respectively.

8.  ACCRUED EXPENSES

     The components of accrued expenses are as follows:

<TABLE>
<CAPTION>
                                                              JANUARY 1,   DECEMBER 30,
                                                                 2000          2000
                                                              ----------   ------------
<S>                                                           <C>          <C>
Accrued compensation........................................  $3,328,226   $ 5,054,091
Accrued professional fees...................................     607,735       344,753
Accrued insurance...........................................     835,927     1,077,863
Accrued payable to former owners of acquired companies......     673,224       400,000
Other.......................................................   2,793,140     6,672,372
                                                              ----------   -----------
                                                              $8,238,252   $13,549,079
                                                              ==========   ===========
</TABLE>

                                        40
<PAGE>   43
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9.  LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                              JANUARY 1,    DECEMBER 30,
                                                                 2000           2000
                                                              -----------   ------------
<S>                                                           <C>           <C>
Term note with principal payable in quarterly installments
  of $468,750 commencing on December 31, 2000, $937,500 on
  December 31, 2001 and $1,406,250 on December 31, 2003;
  bearing interest at prime plus 2.75% or LIBOR plus 4.00%
  payable quarterly, through September 7, 2004, when all
  remaining principal and interest is due and payable. At
  January 1, 2000 and December 30, 2000, the interest rate
  was 10.96% and 10.80%, respectively.......................  $15,000,000   $15,000,000
Revolving line of credit up to $25,000,000 due on September
  7, 2004 bearing interest at prime plus 2.25% or LIBOR plus
  3.5% payable quarterly through September 7, 2004. At
  December 30, 2000 the interest rate was 10.28%............           --    20,031,006
Subordinated notes payable to shareholders of acquired
  companies. At January 1, 2000 and December 30, 2000, the
  interest rate was 9%, which includes $818,380 of accrued
  interest at December 30, 2000.............................    3,000,000    22,280,194
Term notes with variable principal payments over a term of
  36 to 48 months plus interest ranging from 7.50% to
  8.50%.....................................................      868,205            --
Equipment line of credit up to $2,000,000 due on March 31,
  2000, plus interest at the bank's prime rate less .5%
  (8.00% at January 1, 2000)................................    1,595,000            --
Revolving line of credit up to $1,500,000 due on March 31,
  2000, plus interest at the bank's prime rate less .5%
  (8.00% at January 1, 2000)................................    1,000,000            --
Three-year term note with 36 equal monthly principal
  payments plus interest at the bank's prime rate plus .5%
  (8.25% and 9.00% at January 2, 1999 and January 1, 2000,
  respectively).............................................      204,167            --
Three-year term note with 36 equal monthly principal
  payments plus interest at the bank's prime rate less .5%
  (7.25% and 8.00% of January 2, 1999 and January 1, 2000,
  respectively).............................................      173,333            --
Capital lease obligations (see Note 12).....................      336,167     3,936,276
                                                              -----------   -----------
                                                               22,176,872    61,247,476
Less -- Current maturities..................................   (1,249,764)   (3,046,847)
                                                              -----------   -----------
                                                              $20,927,108   $58,200,629
                                                              ===========   ===========
</TABLE>

     Minimum principal repayments of long-term debt as of December 30, 2000,
excluding capitalized lease obligations (see Note 12), are as follows for fiscal
years ended:

<TABLE>
<S>                                                           <C>
2001........................................................  $ 1,875,000
2002........................................................    3,750,000
2003........................................................    3,750,000
2004........................................................   47,936,200
                                                              -----------
                                                              $57,311,200
                                                              ===========
</TABLE>

TERM NOTE AND REVOLVING CREDIT FACILITIES

     In connection with the Telecrafter acquisition on September 7, 1999, the
Company entered into a Credit Agreement which provided for initial borrowings of
$15,000,000 under a Term Note ("Term Note"). The Company incurred costs of
$1,745,351 in connection with the Term Note which are included in other assets
in the accompanying consolidated balance sheet as of January 1, 2000 and are
being amortized using the

                                        41
<PAGE>   44
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

effective interest rate method over the life of the Term Note. For the years
ended January 1, 2000 and December 30, 2000, amortization of debt issuance costs
was $368,530 and $392,162, respectively. The proceeds from the Term Note were
used to fund the $10,500,000 cash consideration in the Telecrafter acquisition,
repay debt and to fund general working capital needs. Borrowings under the Term
Note are collateralized by substantially all of the assets of the Company. The
Term Note contains various financial and non-financial covenants, the most
restrictive of which require the maintenance of certain financial ratios,
restrict future indebtedness and prohibit cash dividends.

     In addition to the above scheduled payments, the Company is required to
make certain prepayments based on excess cash flows, as defined in the
agreement. Prepayments are also required when assets are sold and when debt or
equity securities are issued in excess of $5,000,000 on an aggregate basis. On
August 17, 2000, the Term Note holder agreed to waive repayment upon completion
of the Company's initial public offering.

     In March 2000, the Company entered into a $15,000,000 Revolving Credit
Facility (the "Revolver"), which matures on September 7, 2004 with the same
lender as the Term Note. The Revolver provided for a $12,000,000 working capital
facility and a sub-facility of up to $3,000,000 for letters of credit. The
Revolver bears interest, at the Company's option, at prime plus 2.25% or LIBOR
plus 3.5% and requires an annual commitment fee of 0.50% on the unused portion
of the Revolver. The Revolver contains the same financial covenants and
non-financial covenants as the Term Note. Together the Term Note and Revolver
are referred to as the "Term Note and Revolving Credit Facility". On May 31,
2000, the Company executed an amendment to the Term Note and Revolving Credit
Facility, which changed its financial covenants. In July 2000, the lender waived
compliance with certain covenants for the second quarter of 2000 and revised the
covenants prospectively. On August 15, 2000, the Company entered into an
amendment on the revolver to increase the available borrowing capacity to
$25,000,000 including the sub-facility of up to $3,000,000 for letters of
credit. The initial borrowings on the Revolver were used to repay the Bank
Facility (as defined below), as well as certain bank indebtedness. As of
December 30, 2000, the outstanding balance on the Revolver was $20,031,006.

     On April 13, 2001, the Company executed an amendment to the Term Note and
Revolving Credit Facility, which changed its financial covenants relating to
coverage ratios, such as leverage, debt service and capital expenditures for
fiscal 2001.

SUBORDINATED NOTES

     On September 7, 1999, the Company entered into a $3,000,000 subordinated
note as partial consideration for the net assets acquired from Telecrafter. The
note was subject to prepayment upon an initial public offering and was repaid in
August 2000. The Company has outstanding approximately $22.3 million of
subordinated notes issued to shareholders in its 2000 acquisitions of TeleCore,
Excalibur and Service Cable. The notes payable to shareholders have stated
maturity dates in November 2001, however all of these notes are subordinate to
the Term Note and Revolving Credit Facility and all principal and interest
payments are contingent upon the repayment of the Term Note and Revolving Credit
Facility. As a result, the subordinated notes and related accrued interest have
been classified as long-term debt in the accompanying consolidated balance
sheets. These notes bear interest at 9%.

BANK FACILITY

     The Company was a party to a bank facility consisting of (i) a $1,500,000
revolving line of credit, (ii) a $2,000,000 equipment line of credit, (iii) a
$1,100,000 three-year term note, (iv) a $240,000 three-year term note and (v) a
$1,000,000 letter of credit line. This facility was collateralized by trade
accounts receivable less than 90 days old, inventories and equipment and
machinery. There was an annual one percent fee on the issuance of letters of
credit. These agreements were repaid in the first quarter of 2000.


                                        42
<PAGE>   45
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10.  STOCK OPTIONS AND WARRANTS

STOCK OPTIONS

     On June 14, 1999, the Company established the 1999 Stock Incentive Plan
(the "1999 Plan") for its employees, officers, directors and certain other
individuals. A committee of the Board of Directors administers and awards grants
under the 1999 Plan. The 1999 Plan allows for the issuance of either incentive
stock options or nonqualified stock options. Options granted under the 1999 Plan
expire no later than ten years after the grant date. Each option entitles the
holder to purchase one share of common stock at the indicated exercise price. As
of June 1, 2000, no further grants will be made pursuant to the Plan.

     In May 2000, the Company established the 2000 Stock Option Plan (the "2000
Plan") and reserved 2,235,294 shares for issuance. The 2000 Plan allows for the
grant of incentive stock options, nonqualified stock options and certain other
stock-based awards to the Company's employees, officers, directors or
consultants. Options granted under the Plan expire no later than ten years after
the grant date. In August 2000, the Company granted options to purchase
approximately 1.4 million shares of common stock at the Company's initial public
offering price per share of $8.00.

     In June 2000, the Company adopted the TeleCore, Inc. 1999 Stock Option
Plan. As of June 1, 2000, no further grants will be made pursuant to the Plan.

     The following table summarizes stock option activity under the Plans:

<TABLE>
<CAPTION>
                                                                                       WEIGHTED
                                                                                        AVERAGE
                                                                                       EXERCISE
                                                                           EXERCISE      PRICE
                                                              ACTIVITY      PRICE      PER SHARE
                                                              ---------   ----------   ---------
<S>                                                           <C>         <C>          <C>
Balance outstanding, June 14, 1999..........................         --   $       --     $  --
Granted.....................................................  1,250,208         1.70      1.70
Granted below fair market value.............................    264,706         0.51      0.50
Granted in CRI acquisition..................................    149,156         1.70      1.70
                                                              ---------   ----------     -----
Balance outstanding, January 1, 2000........................  1,664,070     .51-1.70      1.51
Granted.....................................................  1,966,746     .23-8.00      6.03
Granted below fair market value.............................    170,588         7.20      7.20
Granted in Service Cable acquisition........................     58,824         7.60      7.60
Granted in Telecore acquisition.............................  1,183,196     .24-5.92      3.28
Exercised...................................................    (55,351)        1.70      1.70
Canceled....................................................   (549,618)   1.70-8.00      3.69
                                                              ---------   ----------     -----
Balance outstanding, December 30, 2000......................  4,438,455   $ .23-8.00     $4.63
                                                              =========   ==========     =====
Exercisable at December 30, 2000............................  1,380,084
                                                              ---------
Available for grant at December 30, 2000....................    561,320
                                                              =========
</TABLE>

                                        43
<PAGE>   46
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following table summarizes information about fixed stock options
outstanding at December 30, 2000:

<TABLE>
<CAPTION>
                                                  OPTIONS OUTSTANDING                  OPTIONS EXERCISABLE
                                         --------------------------------------   ------------------------------
                                                         WEIGHTED-
                                                          AVERAGE     WEIGHTED-
RANGE OF                                    NUMBER       REMAINING     AVERAGE       NUMBER         WEIGHTED-
EXERCISE                                 OUTSTANDING    CONTRACTUAL   EXERCISE    EXERCISABLE        AVERAGE
 PRICES                                  AT 12/30/00       LIFE         PRICE     AT 12/30/00    EXERCISE PRICES
--------                                 ------------   -----------   ---------   ------------   ---------------
<S>                                      <C>            <C>           <C>         <C>            <C>
$0.00-0.80.............................     473,294         8.80        $0.39        399,419          $0.42
$0.81-1.60.............................   1,557,173         8.10        $1.78        795,525          $1.84
$1.61-4.80.............................     125,518         8.42        $3.35         23,988          $3.40
$4.81-7.20.............................     436,437         8.83        $6.11         31,152          $5.91
$7.21-7.60.............................      58,824         9.33        $7.60              0          $0.00
$7.61-8.00.............................   1,787,209         9.60        $7.97        130,000          $8.00
                                          ---------        -----        -----      ---------          -----
$0.00-8.00.............................   4,438,455         8.90        $4.63      1,380,084          $2.12
                                          =========        =====        =====      =========          =====
</TABLE>

     The Company follows APB Opinion No. 25, "Accounting for Stock Issued to
Employees" and as interpreted by FIN 44 in accounting for its employee stock
options. Under APB Opinion No. 25, if the exercise price of the Company's
employee stock options equals or exceeds the market price of the underlying
stock on the date of the grant, no compensation expense is recognized.

     Pro forma information regarding net income (loss) required by SFAS No. 123,
"Accounting for Stock-Based Compensation," has been determined as if the Company
had accounted for its employee stock options under the fair value method of that
statement. The determination of the fair value of the options noted above was
estimated at the date of grant using a Black-Scholes option pricing model with
the following weighted-average assumptions for fiscal 2000: dividend yield of
zero, risk free interest rate of between 6.08% and 6.43%, volatility factor of
the expected market price of the Company's common stock of 101%, an expected
life of the options of five years and a turnover rate of 50%. For fiscal 1998
and 1999, the weighted average assumptions were: dividend yield of zero, risk
free interest rate of 6.0%, volatility factor of the expected market price of
the Company's common stock of 0% and an expected life of the options of five
years.

     For fiscal 2000, the weighted average fair value of employee stock options
granted at fair market value is $6.03 and the weighted average fair value of
options granted below fair market value is $7.20. For purposes of pro forma
disclosure, the estimated fair value of the option is amortized to expense over
the option's vesting period.

     For fiscal 1999, the weighted average fair value of employee stock options
granted at fair market value is $1.70 and the weighted average fair value of
options granted below fair market value is $0.51.

                                        44
<PAGE>   47
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Under SFAS 123, compensation expense computed by the fair market value
method would be increased by $2.8 million and $1.9 million for the fiscal years
ended January 1, 2000 and December 30, 2000, respectively. Fiscal 1998
compensation expense remains unchanged.

<TABLE>
<CAPTION>
                                                     FOR THE FISCAL YEARS ENDED
                                              -----------------------------------------
                                              JANUARY 2,    JANUARY 1,     DECEMBER 30,
                                                 1999          2000            2000
                                              ----------    -----------    ------------
<S>                                           <C>           <C>            <C>
Net income (loss) -- as reported............  $1,415,495    $(2,849,076)   $(76,943,236)
                                              ==========    ===========    ============
Net income (loss) -- Pro forma..............  $1,415,495    $(5,639,524)   $(78,853,587)
                                              ==========    ===========    ============
Basic and diluted net income (loss) per
  share.....................................  $     0.07    $     (0.13)   $      (2.27)
                                              ==========    ===========    ============
Basic and diluted net income (loss) per
  share -- Pro forma........................  $     0.07    $     (0.26)   $      (2.33)
                                              ==========    ===========    ============
</TABLE>

     In June 1999, in connection with the grant of 264,706 options to two senior
executives, the Company recorded compensation expense of $315,000, which
represents the difference between the option exercise price and the fair value
of the Company's common stock of $1.70 per share on the date the stock options
were granted. The fair value of $1.70 per share of the underlying common stock
equaled the $1.70 per share price paid to redeem the Viasource shareholders in
June 1999 and the price paid by the new investors in June and September 1999.
These options were immediately exercisable on the date of grant. None of these
options were exercised as of January 1, 2000 and December 30, 2000.

     In October 1999, the Company granted options to purchase 172,132 shares of
common stock to a consultant. These options vest over nine quarters and are
exercisable for ten years. In accordance with SFAS No. 123, the Company recorded
the fair value of the options issued to the consultant as deferred compensation,
which was being amortized over the vesting period of the options. The fair value
of the options was determined using the Black-Scholes option pricing model with
the following assumptions: dividend yield of zero, risk free interest rate of
6.0%, volatility factor of the expected market price of the Company's common
stock of 70% and the contractual term of the options of ten years. The fair
value of the options issued to the consultant will be re-measured at each
balance sheet date over the vesting period. Any increases or decreases in the
fair value of the options will be recorded as adjustments to deferred
compensation and amortized over the remaining vesting period. For fiscal 1999,
the Company recorded stock-based compensation expense of $408,326 for
amortization of the related deferred compensation. The Company amended their
arrangement with this consultant in March 2000, which immediately vested the
remaining unvested options issued under the October 1999 consulting agreement
and removed the requirement for any further services. In accordance with SFAS
No. 123, the Company recorded compensation expense of $1,447,048 during the
first quarter of fiscal 2000.

     On December 31, 1999, performance based options to purchase 76,532 shares
of common stock were granted to various employees. These options have an
exercise price of $1.70 per share, vest one-third per year beginning in 1999 and
have a ten-year life. The Company recorded the $1,170,936 fair value of these
options as deferred compensation and recorded stock-based compensation expense
of $390,312 for amortization of the related deferred compensation. As of January
1, 2000 and December 30, 2000, the Company has unamortized deferred compensation
of $780,624 and $390,312, respectively, associated with these options, which
will be amortized over the remaining two-year vesting period. As of December 31,
1999, all performance requirements have been met. The Company does not have any
other performance-based options outstanding as of December 30, 2000.

     In January 2000, the Company granted options to purchase 20,588 and 14,706
shares of common stock at $1.70 per share, to a consultant and a director,
respectively. These options were immediately exercisable on the date of grant
and are exercisable for ten years. In accordance with SFAS No. 123, the Company
recorded

                                        45
<PAGE>   48
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the $292,210 fair value of these options, as determined using the Black-Scholes
option-pricing model, as compensation expense during fiscal 2000. The fair value
of the underlying common stock was $9.00 per share. In January 2000, the Company
granted options to purchase 58,824 shares of common stock to one senior
executive. These options vest over three years and are exercisable for ten
years. The Company recorded deferred compensation of $429,000, which will be
amortized over the options vesting period and represents the difference between
the option exercise price of $1.70 per share and the $9.00 per share fair value
of the Company's common stock on the date such stock options were granted. For
the year ended December 30, 2000, the Company recorded stock-based compensation
expense of $143,000 for the amortization of the related deferred compensation.
At December 30, 2000, the Company had $286,100 of unamortized deferred
compensation.

     In April and May 2000, the Company issued options to two employees to
purchase 170,588 shares of the Company's common stock at a 10% discount to the
Company's initial public offering price per share of $8.00. These options vest
over three years and have a ten-year life. The Company recorded deferred
compensation for the difference between the exercise price per share and the
estimated initial public offering price per share and is amortizing the amount
over the vesting period. For the year ended December 30, 2000, the Company
recorded stock-based compensation expense of $31,740 for amortization of the
related deferred compensation. At December 30, 2000, the Company had unamortized
deferred compensation of $102,763. During September 2000, one of these employees
resigned and forfeited the related options amounting to $19,396.

WARRANTS

     On June 14, 1999, the Company granted warrants to purchase 147,059 shares
of the Company's common stock at $.02 per share in connection with a $5,000,000
bridge financing. These warrants were valued at their estimated fair value of
$250,000 and recorded as debt issue cost. The fair value of $1.70 per share of
the underlying common stock equaled the $1.70 per share price paid to redeem the
Viasource shareholders in June 1999 and the price paid by the new investors in
June and September 1999. In connection with the repayment of the bridge
financing on September 7, 1999, the remaining unamortized debt issue costs were
recorded as interest expense. The warrants are exercisable for ten years. Upon
completion of the Company's initial public offering in August 2000, warrants to
purchase 147,059 shares of common stock were exercised.

     On September 7, 1999, the Company granted warrants to purchase 870,538
shares of common stock at $.02 per share in connection with sale of Common stock
and the $15,000,000 Credit Agreement. These warrants were valued at their
estimated fair value of $1,479,896 using the Black-Scholes pricing model with
the following assumptions: dividend yield of zero, risk free interest rate of
6.0%, volatility factor of the expected market price of the Company's common
stock of 70% and the contractual term of the warrants of ten years. The warrants
are exercisable for ten years. Upon completion of the Company's initial public
offerings in August 2000, warrants to purchase 870,538 shares of common stock
were exercised. The fair value of the warrants was recorded proportionately to
the relative fair value of the capital raised, as follows:

<TABLE>
<S>                                                           <C>
Common stock................................................  $   92,493
Debt issuance costs.........................................   1,387,403
                                                              ----------
          Total.............................................  $1,479,896
                                                              ==========
</TABLE>

                                        46
<PAGE>   49
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11.  INCOME TAXES

     The components of the provision (benefit) for income taxes are as follows:

<TABLE>
<CAPTION>
                                                              FISCAL YEAR ENDED
                                                    --------------------------------------
                                                    JANUARY 2,   JANUARY 1,   DECEMBER 30,
                                                       1999         2000          2000
                                                    ----------   ----------   ------------
<S>                                                 <C>          <C>          <C>
Current:
  Federal.........................................  $  881,823   $ 318,000    $  (109,451)
  State...........................................     242,677     (10,735)       345,458
                                                    ----------   ---------    -----------
                                                     1,124,500     307,265        236,007
                                                    ----------   ---------    -----------
Deferred:
  Federal.........................................      69,149    (861,895)    (3,408,465)
  State...........................................       8,851          --             --
                                                    ----------   ---------    -----------
                                                        78,000    (861,895)    (3,408,465)
Establishment of a valuation allowance on deferred
  tax assets......................................          --          --      5,377,945
                                                    ----------   ---------    -----------
                                                    $1,202,500   $(554,630)   $ 2,205,487
                                                    ==========   =========    ===========
</TABLE>

     Deferred taxes are determined based upon the estimated future tax effects
of differences between the financial statement and income tax bases of assets
and liabilities given the provisions of the enacted tax laws.

     The reconciliation of the statutory federal income tax amount to the
Company's effective income tax amount is as follows:

<TABLE>
<CAPTION>
                                                             FISCAL YEAR ENDED
                                                  ---------------------------------------
                                                  JANUARY 2,   JANUARY 1,    DECEMBER 30,
                                                     1999         2000           2000
                                                  ----------   -----------   ------------
<S>                                               <C>          <C>           <C>
Statutory federal income tax amount (benefit)...  $  890,118   $(1,157,260)  $(25,410,835)
State taxes, net of federal tax benefit.........     211,647        (7,085)       228,001
Non-deductible expenses, principally
  non-deductible intangible amortization........          --       462,222      3,098,808
Non-deductible impairment loss on intangible
  assets and related goodwill...................          --            --     17,990,232
Establishment of a valuation allowance on net
  deferred tax assets...........................          --            --      5,377,945
Other...........................................     100,735       147,493        921,336
                                                  ----------   -----------   ------------
                                                  $1,202,500   $  (554,630)  $  2,205,487
                                                  ==========   ===========   ============
</TABLE>

     During the year ended December 30, 2000, the Company established a
valuation allowance of $5.4 million related to its net deferred tax assets.
Realization of the future tax benefits related to deferred tax assets is
dependent on many factors, including the Company's ability to generate future
taxable income. Management has considered these factors in reaching its
conclusions as to the need for a valuation allowance for financial reporting
purposes.

                                        47
<PAGE>   50
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The tax effect of temporary differences as established in accordance with
SFAS No. 109 that give rise to deferred taxes are as follows:

<TABLE>
<CAPTION>
                                                              JANUARY 1,   DECEMBER 30,
                                                                 2000          2000
                                                              ----------   ------------
<S>                                                           <C>          <C>
Deferred tax asset:
Accruals not currently deductible...........................  $1,051,146   $ 4,817,365
Allowance for doubtful accounts.............................          --       836,433
Other.......................................................     378,638            --
                                                              ----------   -----------
                                                               1,429,784     5,653,798
                                                              ----------   -----------
Deferred tax liability:
Depreciation and amortization...............................    (190,728)     (169,141)
Other.......................................................    (188,436)     (106,712)
                                                              ----------   -----------
                                                                (379,164)     (275,853)
                                                              ----------   -----------
  Net deferred tax asset before valuation allowance.........   1,050,620     5,377,945
  Less valuation allowance relating to net deferred tax
     asset..................................................          --    (5,377,945)
                                                              ----------   -----------
  Net deferred tax asset....................................  $1,050,620   $        --
                                                              ==========   ===========
</TABLE>

12.  COMMITMENTS AND CONTINGENCIES

LEASES

     The Company leases its office facilities and equipment under various
capital and noncancellable operating leases, which expire on various dates
through March 2011. Interest rates on capital leases range from 8.6% to 18.73%.
Rent expense for all operating leases was $1,681,771, $3,126,960 and $9,485,584
in fiscal 1998, 1999 and 2000, respectively.

     Future minimum lease payments as of December 30, 2000 are as follows:

<TABLE>
<CAPTION>
                                                               OPERATING     CAPITAL
                                                                LEASES        LEASES
                                                              -----------   ----------
<S>                                                           <C>           <C>
2001........................................................  $ 4,810,191   $1,478,808
2002........................................................    3,803,626    1,267,937
2003........................................................    2,413,107      758,317
2004........................................................    2,035,083      233,311
2005........................................................    1,027,488           --
Thereafter..................................................      437,970           --
                                                              -----------   ----------
          Total minimum lease payments......................  $14,527,465    3,738,373
                                                              ===========   ==========
Less -- amount representing interest........................                  (341,997)
                                                                            ----------
Present value of future minimum lease payments..............                 3,396,376
                                                                            ----------
Less -- current portion of principal payments...............                 1,171,847
                                                                            ----------
                                                                            $2,224,529
                                                                            ==========
</TABLE>

                                        48
<PAGE>   51
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

EMPLOYMENT AGREEMENTS

     As of January 1, 2000, the Company has employment agreements with fourteen
executives, which expire at various dates through November 2002. These
agreements provide for, among other things, salary, bonus, severance and change
in control provisions. The amounts due, excluding bonus, severance and change in
control provision under these employment contracts are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR ENDING
------------------
<S>                                                           <C>
2001........................................................  $2,779,779
2002........................................................   2,437,801
2003........................................................     920,703
                                                              ----------
          Total.............................................  $6,138,283
                                                              ==========
</TABLE>

EMPLOYEE BENEFIT PLANS

     At December 30, 2000, the Company had various 401(k) plans and a profit
sharing thrift plan, at some of the acquired companies. All of these plans were
frozen as of December 30, 2000 and the Company expects to establish a
company-wide 401(k) plan in the second quarter of 2001. The Company has made no
contributions to these plans for the fiscal periods ended 1999 and 2000.

LETTERS OF CREDIT

     At January 1, 2000 and December 30, 2000, the Company had letters of credit
outstanding totaling $1,348,854, which primarily relate to collateral
established for various workers' compensation policy. The contract amount of the
letters of credit is a reasonable estimate of their fair value as the value for
each is fixed over the life of the commitment.

LITIGATION

     In the normal course of business, the Company is a party to various claims
and legal proceedings. Although the ultimate outcome of these matters is not
presently determinable, management of the Company, after consultation with legal
counsel, does not believe that these matters will have a material adverse effect
on the Company's consolidated financial position or results of operations.

13.  CONCENTRATION RISKS

     Financial instruments, which potentially subject the Company to
concentrations of credit risk are primarily cash, short-term investments and
accounts receivable. The Company performs periodic evaluations of the relative
credit standing of the financial institutions with which it does business. The
Company periodically evaluates the financial condition of its obligors and
generally does not require collateral. The Company's allowance for doubtful
accounts reflects current market conditions and management's assessment
regarding the collectibility of its accounts receivable.

     For fiscal 1998, 1999 and 2000, five, four and five customers,
respectively, in aggregate, accounted for approximately 82%, 73% and 80% of
total revenues, respectively. At January 1, 2000 and December 30, 2000, these
customers, in aggregate, accounted for 64% and 63% of accounts receivable,
respectively. A loss of or a material reduction in revenues from any of these
customers could have a material adverse effect on the

                                        49
<PAGE>   52
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company's operating results and financial condition. Revenues from these
significant customers by segment and by fiscal year are as follows:

<TABLE>
<CAPTION>
                                                                FISCAL YEAR
                                                  ---------------------------------------
SEGMENT                                              1998          1999          2000
-------                                           -----------   -----------   -----------
<S>                                               <C>           <C>           <C>
Cable...........................................  $16,452,549   $29,889,093   $64,380,780
                                                  ===========   ===========   ===========
Telephony and Internet..........................  $ 4,246,831   $ 8,115,764   $40,893,214
                                                  ===========   ===========   ===========
Satellite and Wireless(1).......................  $ 7,047,859   $ 6,868,475   $49,196,698
                                                  ===========   ===========   ===========
</TABLE>

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

(1) Of the revenues derived from the conversion program in fiscal 1999 and 2000,
    $1.5 million and $7.7 million were subject to potential charge-backs and are
    recorded as deferred revenue.

14.  RELATED-PARTY TRANSACTIONS

     In addition to the recapitalization transaction discussed in Note 1, during
1999, the Company repurchased 553 shares of common stock from a shareholder for
$7,057. For fiscal 1998 and 1999, the Company paid $157,533 and $305,300,
respectively, to a shareholder for consulting services.

     In connection with the Telecrafter acquisition on September 7, 1999 (see
Note 3), the Company entered into a facility lease with one of the selling
shareholders, which expires in March 2011. The lease provides for escalating
lease payments over the life of lease. For the period from September 7, 1999
through January 1, 2000, the Company recorded $13,757 of expense under this
lease and for the year ended December 30, 2000, the Company recorded $68,620 of
expense under this lease.

     During August 2000, in connection with the waiver and amendment of the Term
Loan and Revolving Credit Facility, Crest Communications agreed that, if the
Company did not completed their initial public offering or an equity or
subordinated debt financing to prepay $2.5 million of the principal under its
subordinated term credit agreement by November 15, 2000, it or its designee
would purchase up to $2.5 million in equity or subordinated debt securities of
Viasource to prepay such principal amount. The Company agreed to pay Crest
Communications a cash fee of $100,000 as compensation for providing this
commitment.

     The Company has paid $311,572 and $221,962 during fiscal 2000 and fiscal
1999, respectively, to an employee of one of our principal stockholders for
legal service, primarily related to acquisitions and financing transactions.

     During the year ended December 30, 2000, the Company paid to a shareholder
and former owner of TeleCore, $350,000 in cash relating to minimum interest on
subordinated notes issued in the acquisition.

15.  SEGMENTS

     The Company follows SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." The Company classifies its operations into
four segments: Cable Services, Telephony and Internet, Satellite and Wireless
Services and Premise Networking, Staffing and Other. The operating segments are
managed separately because each operating segment represents a strategic
business unit that offers different services. The accounting policies of the
operating segments are the same as described in the summary of significant
accounting policies. The business segments are described in further detail
below:

          The Cable segment provides traditional and advanced cable
     installation, disconnects, equipment recovery, collection and system audit
     services.

                                        50
<PAGE>   53
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

          The Telephony and Internet segment includes installation and
     maintenance of DSL services, cable telephony and high-speed data services
     and other broadband services, as well as traditional telephony services for
     commercial and residential consumers.

          The Satellite and Wireless segment includes installation, equipment
     conversion and maintenance services of direct broadcast satellite and other
     wireless technologies.

          The Premise Networking, Staffing and Other segment includes
     installation and maintenance of local area and wide area networking
     services and other communication systems for commercial and residential
     consumers as well as provision of installation technicians to commercial
     customers.

          Corporate operations include senior management activities,
     professional services and headquarters' facility and support and employee
     benefit costs, not allocated to the other segments.

          Segment assets include amounts specifically identified to Cable,
     Telephony and Internet, Satellite and Wireless Services and Premise
     Networking Services, Staffing and Other segments. Corporate assets consist
     primarily of cash and cash equivalents, marketable securities, capitalized
     financing costs and long-term debt.

          Business segment information is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                  FISCAL YEAR ENDED
                                                        --------------------------------------
                                                        JANUARY 2,   JANUARY 1,   DECEMBER 30,
                                                           1999         2000          2000
                                                        ----------   ----------   ------------
<S>                                                     <C>          <C>          <C>
REVENUES
  Cable...............................................   $22,387      $45,501       $ 92,775
  Telephony and Internet..............................     4,261        8,221         42,785
  Satellite and Wireless..............................     7,047        7,125         49,548
  Premise Networking, Staffing and Other..............       121          549         10,932
                                                         -------      -------       --------
                                                         $33,816      $61,396       $196,040
                                                         =======      =======       ========
OPERATING INCOME (LOSS)
  Cable...............................................   $ 3,359      $ 2,295       $  4,856
  Telephony and Internet..............................       822        2,020        (64,129)
  Satellite and Wireless..............................       479       (1,163)        (2,645)
  Premise Networking, Staffing and Other..............        (7)         (80)        (1,903)
  Corporate...........................................    (1,913)      (5,133)        (6,051)
                                                         -------      -------       --------
                                                         $ 2,740      $(2,061)      $(69,872)
                                                         =======      =======       ========
TOTAL ASSETS
  Cable...............................................   $ 5,969      $43,713       $ 65,132
  Telephony and Internet..............................     1,208        3,358         37,891
  Satellite and Wireless..............................     1,492        8,108         44,960
  Premise Networking, Staffing and Other..............       109        1,214         16,004
  Corporate...........................................     1,006       10,789         17,526
                                                         -------      -------       --------
                                                         $ 9,784      $67,182       $181,513
                                                         =======      =======       ========
</TABLE>

                                        51
<PAGE>   54
                VIASOURCE COMMUNICATIONS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                                                  FISCAL YEAR ENDED
                                                        --------------------------------------
                                                        JANUARY 3,   JANUARY 1,   DECEMBER 30,
                                                           1999         2000          2000
                                                        ----------   ----------   ------------
<S>                                                     <C>          <C>          <C>
DEPRECIATION AND AMORTIZATION
  Cable...............................................   $   702      $ 2,027       $  4,057
  Telephony and Internet..............................       153          373          8,017
  Satellite and Wireless..............................       121          295          2,018
  Premise Networking, Staffing and Other..............         4           50          1,024
  Corporate...........................................        --           69            282
                                                         -------      -------       --------
                                                         $   980      $ 2,814       $ 15,398
                                                         =======      =======       ========
CAPITAL EXPENDITURES
  Cable...............................................   $ 1,599      $ 3,001       $  5,499
  Telephony and Internet..............................       347          793          2,533
  Satellite and Wireless..............................       275          427          2,932
  Premise Networking, Staffing and Other..............        10           58            639
  Corporate...........................................        --          104          2,096
                                                         -------      -------       --------
                                                         $ 2,231      $ 4,383       $ 13,699
                                                         =======      =======       ========
</TABLE>

16.  QUARTERLY FINANCIAL DATA (UNAUDITED)

     Our operations are seasonal, generally resulting in higher revenues and
operating profits in the second and third quarters compared to the first and
fourth quarters of the year. Quarterly variations in operating results may
result from many factors, including fluctuations in demand for services, a
change in the mix of clients, the timing and volume of work under new
agreements, the termination of existing agreements, variations in the
profitability of projects performed during any particular quarter, the length of
sales cycles, costs incurred to support growth internally, the timing of
expansion in new markets, the timing of acquisitions, the costs associated with
integrating businesses, and adverse weather conditions that interfere with the
ability to provide services. As a result, our operating results in any
particular quarter may not be indicative of the results that can be expected for
any other quarter or the entire year.

     The following is the selected quarterly results of operations for the
quarters stated:

<TABLE>
<CAPTION>
2000                               FIRST        SECOND         THIRD       FOURTH(1)      TOTAL 2000
----                            -----------   -----------   -----------   ------------   ------------
<S>                             <C>           <C>           <C>           <C>            <C>
Revenues......................  $29,097,733   $45,292,515   $61,335,514   $ 60,314,212   $196,039,974
Cost of Revenues..............  $24,988,978   $41,062,695   $54,639,798   $ 47,995,912   $168,687,383
Net loss......................  $(4,060,704)  $(4,552,743)  $(9,085,786)  $(59,244,003)  $(76,943,236)
Basic and diluted net loss per
  share.......................  $     (0.09)  $     (0.22)  $     (0.24)  $      (1.40)  $      (2.27)
</TABLE>

<TABLE>
<CAPTION>
1999                               FIRST        SECOND         THIRD       FOURTH(1)      TOTAL 2000
----                            -----------   -----------   -----------   ------------   ------------
<S>                             <C>           <C>           <C>           <C>            <C>
Revenues......................  $ 8,608,688   $ 8,776,015   $19,504,476   $ 24,506,689   $ 61,395,868
Cost of Revenues..............  $ 7,221,638   $ 6,804,894   $15,617,721   $ 21,620,288   $ 51,264,541
Net income (loss).............  $   191,137   $  (787,148)  $  (112,806)  $ (2,140,259)  $ (2,849,076)
Basic and diluted net income
  (loss) per share............  $      0.01   $     (0.04)  $     (0.01)  $      (0.08)  $      (0.13)
</TABLE>

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

(1) The fourth quarter of fiscal 2000 includes the $52.9 million impairment loss
    on intangible assets and related goodwill.

                                        52
<PAGE>   55

                                  SCHEDULE II
                         VIASOURCE COMMUNICATIONS, INC.
                       VALUATION AND QUALIFYING ACCOUNTS
                        FISCAL YEARS 1998, 1999 AND 2000

<TABLE>
<CAPTION>
                                                          JANUARY 3,    JANUARY 1,    DECEMBER 30,
                                                             1999          2000           2000
                                                          ----------    ----------    ------------
<S>                                                       <C>           <C>           <C>
Allowance for Doubtful Accounts
Beginning balance.......................................   $200,000     $  200,000     $1,041,649
  Additions Charged to Costs and Expenses...............         --        318,739      1,251,710
  Allowance for doubtful accounts of acquired
     companies..........................................         --        745,000        821,848
  Charge-offs...........................................         --       (222,090)      (655,109)
                                                           --------     ----------     ----------
  Ending Balance........................................   $200,000     $1,041,649     $2,460,098
                                                           ========     ==========     ==========
</TABLE>

                                        53
<PAGE>   56

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     None

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information required by Item 10 of Form 10-K is hereby incorporated by
reference to our Definitive Proxy Statement on Schedule 14A, which will be filed
not more than 120 days after December 30, 2000.

ITEM 11.  EXECUTIVE COMPENSATION

     The information required by Item 11 of Form 10-K is hereby incorporated by
reference to our Definitive Proxy Statement on Schedule 14A, which will be filed
not more than 120 days after December 30, 2000.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by Item 12 of Form 10-K is hereby incorporated by
reference to our Definitive Proxy Statement on Schedule 14A, which will be filed
not more than 120 days after December 30, 2000.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by Item 13 of Form 10-K is hereby incorporated by
reference to our Definitive Proxy Statement on Schedule 14A, which will be filed
not more than 120 days after December 30, 2000.

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a)(1) Financial Statements.  See Index to Financial Statements on page 25.

     (a)(2) Financial Statement Schedules.  None.

     (a)(3) Exhibits.  The exhibits filed as part of this Annual Report on Form
10-K, as required by Item 601 of Regulation S-K, are included in the Index to
Exhibits included elsewhere in this Annual Report on Form 10-K.

     (b) Reports on Form 8-K.  No current reports on Form 8-K were filed during
the fourth quarter of the fiscal year ended December 30, 2000.

                                        54
<PAGE>   57

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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, in Fort Lauderdale,
Florida on April 13, 2001.

                                          Viasource Communications, Inc.

                                          /s/ CRAIG A. RUSSEY
                                          --------------------------------------
                                          Craig A. Russey
                                          President, Director and Principal
                                          Executive Officer

                               POWER OF ATTORNEY

     Know all persons by these presents, that each person whose signature
appears below hereby constitutes and appoints, jointly and severally, Craig A.
Russey and Douglas J. Betlach, and each of them, as his or her attorney-in-fact,
with full power of substitution, for him or her in any and all capacities, to
sign any and all amendments to this Annual Report on Form 10-K, if any, and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by our said attorney to any and
all amendments to said Annual Report on Form 10-K.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                      SIGNATURE                                     TITLE                       DATE
                      ---------                                     -----                       ----
<S>                                                      <C>                             <C>

/s/ CRAIG A. RUSSEY                                      (President and Director              April 13, 2001
-----------------------------------------------------    Principal Executive Officer)
Craig A. Russey

/s/ WILLIAM W. SPRAGUE                                   Chairman of the Board of             April 13, 2001
-----------------------------------------------------    Directors
William W. Sprague

/s/ DOUGLAS J. BETLACH                                   Executive Vice President,            April 13, 2001
-----------------------------------------------------    Chief Financial Officer,
Douglas J. Betlach                                       Treasurer and Secretary
                                                         (Principal Financial and
                                                         Accounting Officer)

/s/ V. MICHAEL FITZGERALD                                Director                             April 13, 2001
-----------------------------------------------------
V. Michael Fitzgerald

/s/ BRUCE A NASSAU, PH.D.                                Director                             April 13, 2001
-----------------------------------------------------
Bruce A. Nassau, Ph.D.

/s/ ROY D. TARTAGLIA                                     Director                             April 13, 2001
-----------------------------------------------------
Roy D. Tartaglia

/s/ LAWRENCE J. TOOLE                                    Director                             April 13, 2001
-----------------------------------------------------
Lawrence J. Toole
</TABLE>

                                        55
<PAGE>   58

<TABLE>
<CAPTION>
                      SIGNATURE                                     TITLE                       DATE
                      ---------                                     -----                       ----
<S>                                                      <C>                             <C>
/s/ RANDALL R. LUNN                                      Director                             April 13, 2001
-----------------------------------------------------
Randall R. Lunn

/s/ BERNARD G. DVORAK                                    Director                             April 13, 2001
-----------------------------------------------------
Bernard G. Dvorak

/s/ RON COOPER                                           Director                             April 13, 2001
-----------------------------------------------------
Ron Cooper
</TABLE>

                                        56
<PAGE>   59

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER                                 DESCRIPTION
---------                               -----------
<S>        <C>  <C>
3.1+       --   Amended and Restated Certificate of Incorporation
3.2+       --   Bylaws
4.1+       --   Specimen Certificate of Viasource common stock
4.2+       --   Amended and Restated Stockholders Agreement dated as of June
                1, 2000
10.1+      --   Employment Agreement, dated as of July 19, 2000, by and
                between Viasource and Douglas J. Betlach
10.2+      --   Employment Agreement, dated as of July 23, 1999, by and
                between Viasource and Richard Rettstadt
10.3       --   [Reserved]
10.4+      --   Employment Agreement, dated as of September 7, 1999, by and
                between Viasource and Bruce Nassau
10.5(a)+   --   1999 Stock Incentive Plan
10.5(b)+   --   2000 Stock Option Plan
10.5(c)+   --   TeleCore, Inc. 1999 Stock Option Plan
10.6+      --   Stock Purchase Agreement by and among The RTK Group, Inc.,
                Crest Communications, Jackson National Life Insurance
                Company, BancBoston Investments Inc. and the Sellers named
                therein dated as of June 14, 1999
10.7+      --   Share Repurchase Agreement by and among The RTK Group, Inc.
                and the Sellers named therein, dated as of June 14, 1999
10.8+      --   Agreement and Plan of Merger among The RTK Group, Inc., CRI
                Acquisition Corp., Communication Resources Incorporated, and
                Crest Communications/CRI LLC, dated as of July 23, 1999
10.9+      --   Asset Purchase Agreement by and among Viasource, Nassau
                Communications Inc., Telecrafter Acquisition Corp., Dr.
                Bruce Nassau and Lurie Nassau, dated as of July 28, 1999
10.10(a)+  --   Amended and Restated Credit Agreement, dated as of March 10,
                2000, by and between Viasource, as Borrower, and General
                Electric Capital Corporation, as Lender
10.10(b)+  --   Amendment No. 1, dated as of December 22, 1999, to the
                Amended and Restated Credit Agreement dated as of March 10,
                2000, by and between Viasource, as Borrower and General
                Electric Capital Corporation, as Lender
10.10(c)+  --   Amendment No. 2, dated as of May 31, 2000, to the Amended
                and Restated Credit Agreement, dated as of March 10, 2000,
                by and between Viasource, as Borrower and General Electric
                Capital Corporation, as Lender
10.10(d)+  --   Amendment No. 3, dated as of July 24, 2000, to the Amended
                and Restated Credit Agreement dated as of March 10, 2000, by
                and between Viasource, as Borrower and General Electric
                Capital Corporation, as Lender
10.10(e)+  --   Amendment No. 4, dated as of August 17, 2000, to the Amended
                and Restated Credit Agreement dated as of March 10, 2000, by
                and between Viasource, as Borrower and General Electric
                Capital Corporation, as Lender
10.10(f)   --   Amendment No. 5, dated as of April 13, 2001, to the Amended
                and Restated Credit Agreement dated as of March 10, 2000, by
                and between Viasource, as Borrower, and General Electric
                Capital Corporation, as Lender
</TABLE>

                                        57
<PAGE>   60

<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER                                 DESCRIPTION
---------                               -----------
<S>        <C>  <C>
10.11+     --   Asset Purchase Agreement entered into as of April 18, 2000,
                by and among Viasource Communications, Inc; DS Acquisition,
                Inc.; DS Cable TV Contractor, Inc.; Dennis M. Scanlan and
                Lisa Scanlan
10.12+     --   Asset Purchase Agreement entered into as of May 4, 2000, by
                and among Viasource Communications, Inc.; SCC Acquisition,
                Inc.; Service Cable Electric, Inc., and its wholly-owned
                subsidiaries, Service Cable Corporation and its
                subsidiaries; Anthony K. Scruggs, Joe Kubisak and Mark
                Kubisak
10.13+     --   Merger Agreement entered into as of June 1, 2000 by and
                among Viasource Communications, Inc., Ex Acquisition, Inc.,
                Excalibur Cable Communications, Ltd., and Poth, the Trust
                and the Employee Shareholders (as defined)
10.14+     --   Merger Agreement entered into as of June 1, 2000 by and
                among Viasource Communications, Inc., TC Acquisition, Inc.,
                TeleCore, Inc., John M. Clarey, Christy Clarey, Mark Stagen,
                Scott Sussman, Palomar Ventures I, L.P., Crest
                Communications Partners, L.P., Mark IV Ventures, L.L.C.,
                Mark IV Capital, BV-P Holding 1, L.L.C. and Phil Paul
10.15+     --   Lease Agreement effective as of April 1, 2000 by and between
                The Irvine Company and TeleCore
10.16+     --   Lease Agreement made and executed the 15th day of March 1996
                by and between Bruce A. Nassau and Nassau Communications,
                Inc., d/b/a Telecrafter Services Corporation
10.17+     --   Lease Agreement made and entered into on February 22, 1995
                by and between 1001 Executive Park Associates, Ltd. and
                Cabsco Corporation and Lease Modification Agreements No. 1,
                No. 2 and No. 3 thereto
10.18+     --   Lease Agreement made as of the 16th day of September 1988 by
                and between Floral Avenue Associates, L.P. and RTK
                Corporation and First Amendment thereto
10.19+     --   Employment Agreement, dated as of April 24, 2000, by and
                between Viasource and Craig A. Russey
10.20+     --   Employment Agreement, dated as of January 3, 2000, by and
                between Viasource and Patrick M. Ahern
10.21      --   Employment Agreement, dated as of September 25, 2000, by and
                between Viasource and Colin McWay
10.22      --   Employment Agreement, dated as of November 27, 2000, by and
                between Viasource and Gerald Thorning
21+        --   Subsidiaries of Viasource
23.1       --   Consent of Arthur Andersen LLP
24         --   Powers of Attorney (included on signature page of this
                Annual Report on Form 10-K)
</TABLE>

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

+ Incorporated by reference to the exhibit with the corresponding number
  contained in the Registrant's Registration Statement on Form S-1 (File No.
  333-38476).

                                        58