SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K
(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 31, 1999

[ ]  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from        to

                          Commission file number 0-7282

                             COMPUTER HORIZONS CORP.
             (Exact name of registrant as specified in its charter)

          New York                                          13-2638902
--------------------------------------------------------------------------------
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                          Identification No.)


    49 Old Bloomfield Avenue
    Mountain Lakes, New Jersey                               07046-1495
--------------------------------------------------------------------------------
(Address of principal executive offices)                     (Zip Code)


Registrant's telephone number,
    including area code:                                  (973) 299-4000

          Securities registered pursuant to Section 12(b) of the Act:

                                               Name of each exchange
Title of each class                            on which registered
-------------------                            -------------------
      None                                            None

          Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock (Par value $.10 per share)
                                (Title of class)

                    Series A Preferred Stock Purchase Rights
                                (Title of class)
<PAGE>
         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ]   No [   ]

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  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. [ ]

         The  aggregate  market value of the  registrant's  voting stock held by
non-affiliates  of the  registrant  as of  March  28,  2000,  was  approximately
$575,620,000.

         Indicate the number of shares  outstanding of each of the  registrant's
classes of common stock as of March 28, 2000: 33,152,206 shares.


                       DOCUMENTS INCORPORATED BY REFERENCE

               There is incorporated  herein by reference the  registrant's  (i)
Annual Report to  Shareholders  for the year ended December 3l, l999, in Part II
of this  Report  and  (ii)  Proxy  Statement  for the  2000  Annual  Meeting  of
Shareholders,  expected to be filed with the Securities and Exchange  Commission
on or before April 7, 2000, in Part III hereof.
<PAGE>

                                     PART I
Item 1.  Business

General

         The Company  provides a wide range of information  technology  services
and  solutions  to major  corporations.  Historically  a  professional  services
staffing  firm,  the  Company  has,  over  the  past six  years,  developed  the
technological  and  managerial  infrastructure  to offer its clients value added
service,   e-business  solutions,   human  resource   e-procurement   solutions,
enterprise  network  management,   software  products,   outsourcing,   customer
relationship management and knowledge transfer. The Company markets solutions to
both existing and  potential  clients with the objective of becoming a preferred
provider of comprehensive information technology services and solutions for such
clients.  The Company  believes that the range of services and solutions that it
offers,  combined  with its  worldwide  network  of 50  offices  and  subsidiary
organizations,  provides  it  with  significant  competitive  advantages  in the
information technology marketplace.

         The  Company's   clients  primarily  are  Global  1000  companies  with
significant  information  technology  budgets and recurring staffing or software
development needs. In 1999, the Company provided information technology services
to 785 clients.  During 1999, the Company's largest client,  AT&T, accounted for
7.4% of the Company's  consolidated revenues. The Company's next largest client,
Prudential,  accounted for 7.0% of the Company's  consolidated  revenues with no
other client accounting for more than 4.1% of such revenues.

         With the trend in the commercial market moving towards fully integrated
information  systems solutions,  the Company offers its clients a broad range of
business and technical  services as a service  outsourcer and systems integrator
capable of providing complex total solutions. This

                                       3
<PAGE>
total  solutions  approach  comprises  proprietary  software  and tools,  proven
processes and methodologies,  tested project  management  practices and resource
management and procurement programs.

         The  Company  offers a range of  information  technology  services  and
solutions,  which include (1)  e-Business  Solutions,  (2)  Consolidated  Hiring
Internet  Management  Efficiency  System  ("CHIMES"),   (3)  enterprise  network
management,  (4) software products,  (5) outsourcing,  (6) professional services
staffing, (7) knowledge transfer and (8) the solution for the millenium change.

         (1) e-Business Solutions: The Company has the capability to develop and
implement  open computer  e-Business  strategy,  architecture,  and  engineering
design,  implementation and operational services. Such services include customer
relationship  management (CRM), project management,  selection of viable systems
platforms,  creation of migration  plans,  development  of  customized  software
applications,  and systems and database integrations. G. Triad Development Corp.
("G. Triad"), a wholly-owned  subsidiary of the Company,  provides comprehensive
web application  development and Internet- working solutions, as well as network
engineering and server management.  G. Triad's development  practice specializes
in information design. Windows NT systems  administration,  data driven web site
development, systems integration project management and knowledge in ColdFusion.

         (2) CHIMES: As an electronic  market-maker,  CHIMES, Inc. ("CHIMES"), a
wholly owned  subsidiary of the Company,  is a leading provider of e-Procurement
Solutions for Human Resource  Acquisition  and Management.  CHIMES'  Centralized
Vendor  Management  ("CVM") offering procures the top professionals on demand by
utilizing  proven  supply chain  management  techniques.  CVM manages the entire
process, simplifying billing and timesheet administration,  and coordinating the
activities  of all  the  customer's  vendors.  CHIMES  uses  scalable  ISO  9002
compliant procedures and browser based software.

         (3) Enterprise Network  Management:  eB Networks,  Inc., a wholly-owned
subsidiary of the Company,  specializes in building and  implementing  strategic
network  infrastructure to assist companies in achieving e Business  objectives.
EB Networks' service offerings include infrastructure  architecture,  enterprise
management,  security,  operating  systems  integration  and  high  availability
internet.
<PAGE>

         (4)  Software  Products:  Princeton  Softech,  Inc.  ("Princeton"),   a
wholly-owned  subsidiary  of the  Company,  is a software  products and services
company that delivers leveraging  technologies for  enterprise-scale  e-Business
solutions.  Princeton's  component-based  development  tools enable customers to
synchronize  IT and  business  objectives  while  moving at eSpeed  through  the
application  lifecycle.   Princeton's  eData  distribution  and  management  and
intelligent   archiving   technologies  allow  organizations  to  optimize  data
availability and deploy application data to the point of best business leverage.
Over  2,000 of the  world's  largest  companies  in more than 30  countries  use
Princeton's products and services.

         (5) Outsourcing: Spurred by global competition and rapid  technological
change,  large  companies,  in particular,  are downsizing and  outsourcing  for
reasons  ranging  from cost  reduction  to capital  asset  improvement  and from
improved technology  introduction to better strategic focus. In response to this
trend, the Company has created a group of regional  outsourcing  centers with 24
hour/7day a week support,  which are fully  equipped with the latest  technology
and  communications,  as well as a  complete  staff  that  includes  experienced
project  managers,  technicians and operators.  These  professionals  facilitate
essential   data  functions   including:   applications   development,   systems
maintenance, data network management, voice network administration and help desk
operations.

         (6) Professional  Services Staffing:  Providing highly skilled software
professionals  to augment the internal  information  management  staffs of major
corporations  remains the Company's  primary  business.  The Company  offers its
clients centralized vendor management, supplying their staffing needs from among
the Company's over 2,600 software professionals.



                                       5
<PAGE>
The  Company is  committed  to  expanding  its  professional  services  staffing
operations in conjunction with its solutions business.


         (7)  Knowledge  Transfer:   The  Company's  Education  Division  offers
custom-designed and/or existing training programs to enhance the competencies of
client   staff  in   specific   technologies,   languages,   methodologies   and
applications.  The prevailing  focus of the Company is to assist clients through
instructor-led,   on-site   training  and   consulting  in  the   transition  IT
organization   of  Global  1000   corporations.   To  support  these   changing
technologies,  the Company  has  developed  extensive  curriculum  offerings  in
Operating Systems, Mainframe Technology,  Client/Server and Open Systems, Object
Orientation,   Application  Development,   Information   Engineering,   Internet
/Intranet, and ERP packages.

         (8) Solution for the Millennium  Change:  The Company's  Signature 2000
offering combines an internally developed proprietary software toolkit,  skilled
resources,  proven  methodologies,  experienced project  management,  as well as
significant millennium project experience. It analyzes, locates, reports on, and
then restructures all programs and database  definitions affected by the absence
of a century date field to permit  processing of dates after  December 31, 1999.
The solution is customized  for each  particular  enterprise  and deals with all
collateral  issues.  In effect,  Signature  2000  provides  the Company  with an
opportunity to facilitate  field  expansion,  and century data windowing,  while
simultaneously  performing other systems  upgrades such as language  conversions
and platform  migrations.  In addition,  Signature  2000  provides the Company a
fully  integrated  testing solution across all phases of the testing life cycle,
including Testing  Processes,  Software Products and experienced  management and
technical  resources.  The Company also provides a workstations  solution of the
Year 2000, including Asset Management, assessment and correction of spreadsheets
and databases,  correction to the workstations  clocks,  and third-party  vendor
compliancy assessment.

Personnel

         As of December 3l, 1999, the Company had a staff of 4,149, of whom more
than  2,600  were  IT professionals.   The  Company  devotes  significant
resources to  recruitment  of qualified  professionals  and provides  continuing
in-house  training  and  education,  and a career  path  management  development
program within the Company.

Competition

         The Company competes in the commercial  information technology services
market which is highly  competitive and served by numerous firms,  many of which
serve only their respective local markets. The market includes participants in a
variety of market segments,  including systems consulting and integration firms,
professional   services  companies,   application   software  firms,   temporary
employment  agencies,  the  professional  service  groups of computer  equipment
companies,  facilities  management and management  information  systems  ("MIS")
outsourcing  companies,   certain  "Big  Five"  accounting  firms,  and  general
management  consulting  firms. The Company's  competitors also include companies
such  as  Andersen  Consulting,  Technology  Solutions  Corporation,   Cambridge
Technology  Partners,  Inc.,  Cap Gemini  America,  Business  System Group,  the
consulting  division of Computer Sciences  Corporation,  Analysts  International
Corp., CIBER, Inc., Computer Task Group Inc., and Keane Inc.

                                       6
<PAGE>

         Many participants in the information technology consulting and software
solutions market have significantly  greater financial,  technical and marketing
resources and generate greater  revenues than the Company.  The Company believes
that the principal competitive factors in the commercial  information technology
services industry include  responsiveness to client needs,  speed of application
software development,  quality of service,  price, project management capability
and technical  expertise.  Pricing has its greatest  importance as a competitive
factor in the area of professional  service staffing.  The Company believes that
its ability to compete also depends in part on a number of  competitive  factors
outside its control,  including the ability of its  competitors to hire,  retain
and motivate  skilled  technical  and  management  personnel,  the  ownership by
competitors  of software  used by potential  clients,  the price at which others
offer comparable  services and the extent of its competitors'  responsiveness to
customer needs.

Item 2.   Properties

         The  Company's  Corporate and  Financial  Headquarters,  as well as its
Eastern  Regional  Office,  comprising  approximately  63,000  square feet,  are
located at 49 Old Bloomfield  Avenue,  Mountain Lakes, New Jersey.  The Mountain
Lakes  leases are for terms  expiring  December 31,  2002,  at a current  annual
rental of  approximately  $1,500,000.  As of December 3l, l999, the Company also
maintained facilities

                                       7

<PAGE>

in Arizona,  California,  Colorado,  Connecticut,  Florida,  Georgia,  Illinois,
Indiana, Iowa, Kansas, Kentucky, Maryland,  Massachusetts,  Michigan, Minnesota,
Missouri, New Jersey, New York, North Carolina, Ohio,  Pennsylvania,  Tennessee,
Texas,  Washington  and  Washington  D.C., as well as  international  operations
located in Europe and Canada, with an aggregate of approximately  382,000 square
feet. The leases for these  facilities are at a current annual  aggregate rental
of approximately $6,000,000.  These leases expire at various times with no lease
commitment longer than December 31, 2009.

Item 3.   Legal Proceedings
         There are no material pending legal proceedings.

Item 4. Submission of Matters to a Vote of Security Holders
        ---------------------------------------------------
         None.

                                       8
<PAGE>
                        Executive Officers of the Company

         The following table sets forth certain  information with respect to the
executive  officers  of the  Company,  who are  elected to serve  until the next
annual meeting of the Board of Directors and until their  successors are elected
and qualify. All the positions listed are or were held by such officers with the
Company.


                                                                     PERIOD
NAME                   AGE                TITLE                  POSITION HELD
----                   ---                -----                  -------------

John J. Cassese         55         Chairman of the Board          1982 - Present
                                   and President
                                   Director                       1969 - Present

William J. Murphy       55         Executive Vice President       1997 - Present
                                   and CFO
                                   Director                       1999 - Present

Michael J. Shea         39         Controller                     1995 - Present
                                   Vice President                 1996 - Present



                                       9

<PAGE>


                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters
         ---------------------------------------------------------------------

         The  information  required by this item is contained  under the caption
"Market and Dividend Information" in the Company's Annual Report to Shareholders
for the year  ended  December  3l,  1999,  which  material  is  incorporated  by
reference in this Form 10-K Annual Report.

Item 6.  Selected Financial Data
         The  information  required by this item is contained  under the caption
"Selected Financial Data" in the Company's Annual Report to Shareholders for the
year ended  December 3l, 1999,  which material is  incorporated  by reference in
this Form 10-K Annual Report.

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
        of Operation
        ------------------------------------------------------------------------

         The  information  required by this item is contained  under the caption
"Management's  Discussion  and  Analysis"  in the  Company's  Annual  Report  to
Shareholders   for  the  year  ended  December  3l,  1999,   which  material  is
incorporated by reference in this Form 10-K Annual Report.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

         The  information  required by this item is contained  under the caption
"Management's  Discussion  and  Analysis"  in the  Company's  Annual  Report  to
Shareholders   for  the  year  ended  December  3l,  1999,   which  material  is
incorporated by reference in this Form 10-K Annual Report.

                                       10
<PAGE>

Item 8.  Financial Statements and Supplementary Data
         -------------------------------------------

         The  financial  statements  together  with the report  thereon by Grant
Thornton  LLP,  Independent  Certified  Public  Accountants,  appearing  in  the
Company's  Annual Report to  Shareholders  for the year ended December 31, 1999,
are incorporated herein by reference.  Such information is listed in Item 14(a)1
of this Form 10-K Annual Report.

Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosure
          ----------------------------------------------------------------------

         There  have  been  no  disagreements  with  the  Company's  independent
accountants involving accounting and financial disclosure matters.

                                       11
<PAGE>

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant
          --------------------------------------------------

         (a)  The   information   called   for  by  Item  10  with   respect  to
identification  of directors of the Company is incorporated  herein by reference
to the material under the caption "Election of Directors" in the Company's Proxy
Statement for its 2000 Annual  Meeting of  Shareholders  which is expected to be
filed with the  Securities  and Exchange  Commission  on or before April 7, 2000
(the "2000 Proxy Statement").
         (b) The  information  called for by Item 10 with  respect to  executive
officers  of the  Company  is  included  in  Part I  herein  under  the  caption
"Executive Officers of the Company".

Item 11.  Executive Compensation
          ----------------------

         The  information  called  for by  Item 11 with  respect  to  management
remuneration  and  transactions  is  incorporated  herein  by  reference  to the
material under the caption "Executive Compensation" in the 2000 Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management
         --------------------------------------------------------------

         The  information  called  for by  Item  12  with  respect  to  security
ownership of certain beneficial owners and management is incorporated  herein by
reference  to  the  material  under  the  caption  "Certain  Holders  of  Voting
Securities" in the 2000 Proxy Statement.

Item 13. Certain Relationships and Related Transactions
         ----------------------------------------------
         None

                                       12
<PAGE>


                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K
          ----------------------------------------------------------------

         (a) 1. The following  consolidated  financial statements,  appearing in
         the Company's  1999 Annual  Report to  Shareholders,  are  incorporated
         herein by reference.

            - Consolidated balance sheets as of December 3l, 1999 and 1998

            -  Consolidated  statements of income for each of the three years in
               the period ended December 31, 1999

            -  Consolidated  statement of  shareholders'  equity for each of the
               three years in the period ended December 31, 1999

            -  Consolidated statements of cash flows for each of the three years
               in the period ended December 31, 1999

            -  Notes to consolidated financial statements

            -  Report  of  independent   certified  public  accountants  on  the
               consolidated financial statements

       2.  Schedule II - Valuation and  qualifying  accounts for the years ended
           December 31, 1999, 1998 and 1997.

              -  Report  of  independent  certified  public  accountants  on the
                 financial statements schedule.

            All other  schedules are omitted  because they are not applicable or
            the  required  information  is shown in the  consolidated  financial
            statements or notes thereto.

       3.   The exhibit index

       4.   Consent of Grant Thornton LLP

         (b) No reports on Form 8K have been filed  during the quarter for which
             this report is filed.

                                       13
<PAGE>


                                   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.

                                   COMPUTER HORIZONS CORP.


Date: March 30, 2000               By:/s/John J. Cassese
                                      ------------------
                                      John J. Cassese, Chairman
                                      of the Board and President


         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.

                                   COMPUTER HORIZONS CORP.


Date: March 30, 2000              By:/s/John J. Cassese
                                      ------------------
                                      John J. Cassese, Chairman
                                      of the Board and President
                                      (Principal Executive Officer) and Director

Date: March 30, 2000              By: /s/ William J. Murphy,
                                      ----------------------
                                      William J. Murphy,
                                      Executive Vice President and CFO
                                     (Principal Financial Officer) and Director

Date: March 30, 2000              By: /s/ Michael J. Shea
                                      -------------------
                                      Michael J. Shea
                                      Vice President and Controller
                                     (Principal Accounting Officer)

Date: March 30, 2000               By:/s/Thomas J. Berry
                                      ------------------
                                      Thomas J. Berry, Director


Date: March 30, 2000               By:/s/William M. Duncan
                                      -------------------
                                      William M. Duncan, Director


Date: March 30, 2000               By:/s/Rocco J. Marano
                                      ------------------
                                      Rocco J. Marano, Director


Date: March 30, 2000               By:/s/Earl Mason
                                      -------------
                                      Earl Mason, Director

                                       14
<PAGE>

                                  EXHIBIT INDEX

Exhibit      Description                           Incorporated by Reference to

3(a-1)       Certificate of Incorporation as       Exhibit 3(a) to Registration
             amended through 1971.                 Statement on Form S-1 (File
                                                   No. 2--42259).

3(a-2)       Certificate of Amendment dated        Exhibit 3(a-2) to Form 10K
             May 16, 1983 to Certificate of        for the fiscal year ended
             Incorporation.                        February 28, 1983.

3(a-3)       Certificate of Amendment dated        Exhibit 3(a-3) to Form 10K
             June 15, 1988 to Certificate of       for the fiscal year ended
             Incorporation.                        December 31, 1988.

3(a-4)       Certificate of Amendment dated        Exhibit 3(a-4) to Form 10K
             July 6, 1989 to Certificate of        for the fiscal year ended
             Incorporation.                        December 31, 1994.

3(a-5)       Certificate of Amendment dated        Exhibit 3(a-5) to Form 10K
             February 14, 1990 to Certificate      for the fiscal year ended
             of Incorporation.                     December 31, 1989.

3(a-6)       Certificate of Amendment dated        Exhibit 3(a-6) to Form 10K
             May 1, 1991 to Certificate of         for the fiscal year ended
             Incorporation.                        December 31, 1994.

3(a-7)       Certificate of Amendment dated        Exhibit 3(a-7) to Form 10K
             July 12, 1994 to Certificate of       for the fiscal year ended
             Incorporation.                        December 31, 1994.

3(b)         Bylaws, as amended and                Exhibit 3(b) to Form 10K for
             presently in effect.                  the year ended December 31,
                                                   1988.

4(a)         Rights Agreement dated as of          Exhibit 1 to Registration
             July 6, 1989 between the              Statement on Form 8-A dated
             Company and Chemical Bank, as         July 7, 1989.
             Rights Agent ("Rights Agreement")
             which includes the form of Rights
             Certificate as Exhibit B.

4(b)         Amendment No. 1 dated as of           Exhibit 1 to Amendment No.
             February 13, 1990 to Rights           1 on Form 8 dated February
             Agreement.                            13, 1990 to Registration
                                                   Statement on Form 8-A.

                                       15
<PAGE>

16

17

4(c)         Amendment No. 2 dated as of           Exhibit 4(c) to Form 10K
             August 10, 1994 to Rights             for the fiscal year ended
             Agreement.                            December 31, 1994.

4(d)         Employee's Savings Plan and           Exhibit 4.4 to Registration
             Amendment Number One.                 Statement on Form S-8 dated
                                                   December 5, 1995.

4(e)         Employee's Savings Plan Trust         Exhibit 4.5 to Registration
             Agreement as Amended and              Statement on Form S-3 dated
             Restated Effective January 1,         December 5, 1995.
             1996.

4(f)         Amendment No. 3                       Exhibit 4.1 to Form 8-K dated
             dated as fo July 13, 1999             July 13, 1999
             to Rights Agreement

10(a)        Employment Agreement dated as         Exhibit 10(a) to Form 10K for
             of February 16, 1990 between the      the year ended December 31,
             Company and John J. Cassese.          1989.

10(b)        Employment Agreement dated as         Exhibit 10(g) to Form S-3
             of January 1, 1997 between the        dated August 14, 1997.
             Company and William J. Murphy.

10(c)        Employment Agreement dated as         Exhibit 10(c) to Form 10K for
             of March 6, 1997 between the          the year ended December 31,
             Company and Michael J. Shea.          1996.


10(d)        1991 Directors' Stock Option          Exhibit 10(g) to Form 10-K
             Plan, as amended.                     for the year ended December,
                                                   31, 1994

10(e)        1994 Incentive Stock Option and       Exhibit 10(h) to Form 10K
             Appreciation Plan.                    for the fiscal year ended
                                                   December 31, 1994.

10(f)        $15,000,000 Discretionary Line of     Exhibit 10(h) to Form S-3
             Credit payable to Chase Manhattan     dated August 14, 1997
             Bank dated as of June 30, 1998.

10(g)        $10,000,000 Discretionary Line        Exhibit 10(h) to Form 10K
             of Credit from PNC Bank dated         for the fiscal year ended
             as of June 5, 1998                    December 31, 1996

10(h)        1999 Employee Stock Purchase Plan     Exhibit 99.1 to Form S-8
                                                   dated March 17, 1999

10(i)        Amendment    to   the    employment
             agreement  dated  as of  March  24,
             2000   between   the   Company  and
             William J. Murphy
<PAGE>

10(j)        $15,000,000  Discretionary  Line of
             Credit  payable to Chase  Manhattan
             Bank dated as of June 30, 1998,  as
             amended    on   March   15,    2000
             (increased to $30,000,000).

13           Annual Report to Security Holders.


21           List of Subsidiaries.


                                       16
<PAGE>
REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTS ON SCHEDULE


Board of Directors and Shareholders
Computer Horizons Corp.

In  connection  with  our  audit of the  consolidated  financial  statements  of
Computer  Horizons  Corp.  and  Subsidiaries  referred  to in our  report  dated
February 21, 2000  (except for Note 5, as to which the date is March 15,  2000),
which is included in the 1999 Annual Report to Shareholders  and incorporated by
reference in this Form 10-K,  we have also  audited  Schedule II for each of the
years ended  December 31, 1999,  1998 and 1997.  In our opinion,  this  schedule
presents fairly, in all material  respects,  the information  required to be set
forth therin.


/S/ GRANT THORNTON LLP
----------------------
GRANT THORNTON LLP


Edison, New Jersey
February 21, 2000 (except for Note 5, as to
      which the date is March 15, 2000)



<PAGE>
<TABLE>
<CAPTION>
Computer Horizons Corp. and Subsidiaries

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

For the years ended December 31, 1999, 1998 and 1997



          Column A                                Column B            Column C           Column D           Column E
          --------                                --------            --------           --------           --------

                                            Balance at beginning   Charged to cost      Deductions -     Balance at end
        Description                              of period           and expenses       describe (1)        of period
        -----------                              ---------           ------------       ------------        ---------
<S>                                             <C>                 <C>                <C>                 <C>
Year ended December 31, 1999
    Allowance for doubtful accounts             $ 3,209,000         $ 3,367,000        $   757,000         $ 5,819,000
                                                ===========         ===========        ===========         ===========

Year ended December 31, 1998
    Allowance for doubtful accounts             $ 1,742,000         $ 1,676,000        $   209,000         $ 3,209,000
                                                ===========         ===========        ===========         ===========

Year ended December 31, 1997
    Allowance for doubtful accounts             $ 1,203,000         $   575,000        $    36,000         $1,742,000
                                                ===========         ===========        ===========         ===========

</TABLE>
Notes

    (1)  Uncollectible accounts written off, net of recoveries.


                                       17

<PAGE>
<TABLE>
<CAPTION>

                                              Computer Horizons Corp. and Subsidiaries

                                                       SELECTED FINANCIAL DATA

                                                       Year ended December 31,

                                                          1999            1998             1997              1996          1995
                                                        ---------       ---------       -----------        ---------       ------
                                                   ----------------(dollar amounts in thousands, except per share data)-------------

<S>                                                <C>             <C>               <C>               <C>             <C>
Revenues                                           $    534,594    $    514,921      $    350,310      $    261,411    $    224,809

Costs and expenses:
   Direct costs                                         365,310         326,795           233,574           180,410         156,125
   Selling, general and administrative                  131,087         109,505            73,563            59,000          48,234
   Amortization of intangibles                            6,202           3,530               602               677             603
   Restructuring charges                                  6,355              --                --                --              --
   Merger-related expenses                                   --           4,272               976                --              --

Income from operations                                   25,640          70,819            41,595            21,324          19,847

Other income (expense):
   Interest income                                        1,353           5,334             1,700               404             346
   Interest expense                                      (1,355)           (750)             (276)             (507)           (667)
   Equity in net earnings of
     joint venture                                           --             (90)               13               885             361
   Gain on sale of joint venture                             --           4,180                --                --              --

Income before income
   taxes                                                 25,638          79,493            43,032            22,106          19,887

Income taxes                                             11,013          35,906            18,498             9,031           8,572
                                                   ------------    ------------      ------------      ------------    ------------

Net income                                         $     14,625    $     43,587      $     24,534      $     13,075    $     11,315
                                                   ============    ============      ============      ============    ============

Earnings per share:
    Basic                                          $       0.47    $       1.41      $       0.89      $       0.50    $       0.47
                                                   ============    ============      ============      ============    ============

    Diluted                                        $       0.46    $       1.35      $       0.85      $       0.47    $       0.44
                                                   ============    ============      ============      ============    ============

Weighted average number of shares outstanding:
     Basic                                           30,940,000      30,925,000        27,567,000        26,380,000      24,312,000
                                                   ============    ============      ============      ============    ============

     Diluted                                         31,647,000      32,230,000        28,999,000        27,932,000      25,823,000
                                                   ============    ============      ============      ============    ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                          Computer Horizons Corp. and Subsidiaries

                                             SELECTED FINANCIAL DATA (continued)

                                                   Year ended December 31,



                                                 1999              1998             1997              1996            1995
                                               ---------         ---------       -----------        ---------       ------
                                               ---------------------(in thousands, except per share data)------------------
Analysis (%)
<S>                                      <C>               <C>              <C>              <C>              <C>
   Revenues                                      100.0%            100.0%           100.0%          100.0%           100.0%
     Gross margin                                 31.7              36.6             33.3            31.0             30.5
     Selling, general and
       administrative                             24.5              21.3             21.0            22.5             21.4
   Amortization of intangibles                     1.2               0.7              0.1             0.3              0.3
   Restructuring charges                           1.2              --               --              --               --
   Merger-related expenses                        --                 0.8              0.3            --               --
   Income from operations                          4.8              13.8             11.9             8.2              8.8
     Interest income/(expense) - net              --                 0.9              0.4            --               (0.1)
     Equity in net earnings of joint
     venture                                      --                --               --               0.3              0.1
     Gain on sale of joint venture                --                 0.8             --              --               --
     Income before income taxes                    4.8              15.5             12.3             8.5              8.8
   Income taxes                                    2.1               7.0              5.3             3.5              3.8

Net income                                         2.7               8.5              7.0             5.0              5.0

   Revenue growth YOY                              3.8              47.0             34.0            16.3             29.8
   Net income growth (decline) YOY               (66.4)             77.7             87.6            15.6             58.7
   Return on equity, average                       5.7              20.2             18.9            19.9             25.0
   Effective tax rate                             43.0              45.2             43.0            40.9             43.1

At year-end
   Total assets                            $   347,994       $   296,052      $   217,625      $   96,610       $   63,096
   Working capital                             129,857           158,760          160,370          55,052           42,553
   Long-term debt                                4,100                --               --           1,442            3,324
   Shareholders' equity                        262,652           246,534          185,974          73,747           57,931

   Stock price                             $     16.19       $     26.63      $     45.50      $    25.67       $    16.89
   P/E multiple                                     34                19               51              51               36

Employees                                        4,149             4,834            3,794           3,228            2,830
Clients (during year)                              785               768              549             556              538
Offices (worldwide)                                 50                55               49              49               45
</TABLE>
<PAGE>
   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations


Results of Operations

The  following  table sets  forth  certain  operating  data as a  percentage  of
consolidated  revenues for the period  indicated:

                                                 Year Ended December 31,

                                                1999          1998        1997
   Revenues                                    100.0%        100.0%      100.0%
   Cost and expenses:
      Direct costs                               68.3          63.4        66.7
      Selling, general, and administrative       24.5          21.3        21.0
      Amortization of intangibles                 1.2           0.7         0.1
      Restructuring charges                       1.2            --          --
      Merger-related expenses                      --           0.8         0.3
   Income from operations                         4.8          13.8        11.9
   Other income (expense):
      Interest income/(expense), net               --           0.9         0.4
      Gain on sale of joint venture                --           0.8          --
   Income before income taxes                     4.8          15.5        12.3
   Income taxes:
      Current                                     3.0           7.7         5.6
      Deferred                                   (0.9)         (0.7)       (0.3)
   Net income                                     2.7           8.5         7.0




<PAGE>


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

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

Revenues

Revenues  increased to $534.6  million in the year ended  December 31, 1999 from
$514.9  million  in the year ended  December  31,  1998,  an  increase  of $19.7
million, or 3.8%.  E-Solutions Group revenues increased to $101.6 million in the
year  ended  December  31,  1999 from $55.2  million in the year ended  December
31,1998, an increase of $46.4 million or 84.1%. IT Services revenues,  including
Year 2000  revenues,  decreased to $433.0 million in the year ended December 31,
1999 from $459.7  million in the year ended  December  31,  1998,  a decrease of
$26.7 million or 5.8%. Year 2000 services revenues decreased to $44.5 million in
the year ended December 31, 1999, from $136.0 million in the year ended December
31, 1998, a decrease of $91.5 million or 67.3%. The Company's Year 2000 business
accounted for  approximately 8% of total revenues in the year ended December 31,
1999 versus  approximately  26% of total revenues in 1998. As  anticipated,  the
decline  in  Year  2000  business  is  reflective  of  the  completion  of  code
remediation  assignments for major customers.  IT Services  revenues,  excluding
Year 2000  services,  increased to $388.5 million in the year ended December 31,
1999,  from $323.7  million in the year ended  December 31, 1998, an increase of
$64.8 million.

Direct Costs

Direct  costs  increased to $365.3  million in the year ended  December 31, 1999
from $326.8 million in the year ended December 31, 1998.  Gross margin decreased
to 31.7% in the year  ended  December  31,  1999  from  36.6% in the year  ended
December 31, 1998. This decrease in gross margin was primarily due to a decrease
in the Company's higher margin Year 2000 business and significant investments in
the  E-Solutions  business  during 1999.  The  Company's  margins are subject to
fluctuation due to a number of factors,  including the level of salary and other
compensation-related   expenses   necessary  to  attract  and  retain  qualified
technical  personnel  and the mix of IT  Services  versus  E-solutions  business
during the year.

Selling, General, and Administrative

Selling,  general and administrative  expenses (excluding  amortization expense,
restructuring  charges and merger-related  expenses) increased to $131.1 million
in the year  ended  December  31,  1999 from  $109.5  million  in the year ended
December  31,  1998,  an increase  of $21.6  million or 19.7%.  The  increase in
selling,  general and administrative expenses was primarily a result of salaries
and commissions for additional  sales and recruiting  personnel and, to a lesser
extent,  growth in the  administrative  infrastructure of certain  subsidiaries.
During 1998, the Company incurred  merger-related expenses of approximately $4.3
million or 0.8% of revenues.


<PAGE>


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


Amortization of Intangibles

Amortization of intangibles increased to $6.2 million in the year ended December
31, 1999 from $3.5 million in the year ended  December 31, 1998,  an increase of
$2.7  million  or 77.1%.  This  increase  in  amortization  of  intangibles  was
primarily due to the  additional  acquisitions  of G. Triad  Enterprises,  Inc.,
Integrated Computer Management and Select Software Tools plc.


Restructuring Charges

During the third quarter of 1999, the Company recorded a restructuring charge of
approximately $6.4 million primarily related to the consolidating and closing of
certain  facilities,  generally  used for Year  2000 and  other  legacy  related
services, as well as attendant reduction of related staff levels. This provision
includes an accrued  payment of  approximately  $4.0  million as of December 31,
1999  relating to future costs  associated  with  continuing  rent and severance
commitments.

Income from Operations

Income   from   operations,  excluding   restructuring   charges   in  1999  and
merger-related  expenses in 1998,  decreased to $32.0  million in the year ended
December  31, 1999 from $75.1  million in the year ended  December  31,  1998, a
decrease of $43.1 million or 57.4%. Operating margins,  excluding  restructuring
charges in 1999 and merger- related  expenses in 1998,  decreased to 6.0% in the
year ended December 31, 1999 from 14.6% in the year ended December 31, 1998. The
decrease was primarily due to decreases in the Company's higher margin Year 2000
business and personnel  investments  in the  E-Solutions  business in 1999.  The
Company's business is labor-intensive and, as such, is sensitive to inflationary
trends.  This sensitivity applies to client billing rates, as well as to payroll
costs.

Other Income/Expense

For the year ended December 31, 1999, other income decreased $8.7 million.  This
reduction in other income was due to a decrease in the  Company's  cash position
during  1999,  primarily  as a result  of  several  acquisitions  and the  stock
repurchase  program.  In addition,  other income in 1998  included a gain on the
sale of the Company's  Birla  Horizons  Joint Venture ($4.2 million or $0.06 per
share).
Provision for Income Taxes

The effective tax rate for Federal,  state, and local income taxes was 43.0% and
45.2% in the years ended December 31,1999 and 1998,  respectively.  The decrease
in the  1999  effective  tax  rate  was  primarily  due to  less  non-deductible
acquisition costs than in 1998.

Net Income

Net income  decreased to $14.6 million in the year ended  December 31, 1999 from
$43.6  million in the year ended  December 31, 1998, a decrease of $29.0 million
or 66.5%.  Net income per share  (diluted)  decreased to $0.46 in the year ended
December 31, 1999 from $1.35 in the year ended  December 31, 1998. The effect of
restructuring  charges  amounted  to $0.11 per share in 1999,  with no effect in
1998.



<PAGE>

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

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

Revenues

Revenues  increased to $514.9  million in the year ended  December 31, 1998 from
$350.3  million in the year ended  December  31,  1997,  an  increase  of $164.6
million,  or 47%. IT Services'  revenues increased to $459.7 million in the year
ended December 31, 1998 from $334.7 million in the year ended December 31, 1997,
an increase of $125.0  million,  or 37.3%.  Year 2000  services,  included in IT
Services  revenues,  totaled  $136.0 million in the year ended December 31, 1998
and $72.1 million in the year ended  December 31, 1997.  The Company's Year 2000
business  accounted for approximately  26.4% of total revenues in the year ended
December  31,  1998  versus   approximately  21%  of  total  revenues  in  1997.
E-Solutions  Group revenue increased to $55.2 million in the year ended December
31, 1998 from $15.6 million in the year ended  December 31, 1997, an increase of
$39.6 million, or 253.8%.

Direct Costs

Direct  costs  increased to $326.8  million in the year ended  December 31, 1998
from $233.6 million in the year ended December 31, 1997.  Gross margin increased
to 36.6% in the year  ended  December  31,  1998  from  33.3% in the year  ended
December 31, 1997.  The  increase in gross  margin was  primarily  due to stable
margins in the  Company's  staffing  business  and an increase in the  Company's
higher  margin  Year  2000  business.  The  Company's  margins  are  subject  to
fluctuation due to a number of factors,  including the level of salary and other
compensation-related   expenses   necessary  to  attract  and  retain  qualified
technical  personnel  and the mix of IT  Services  versus  E-Solutions  business
during the year.

Selling, General, and Administrative

Selling,   general  and  administrative   expenses  (excluding  amortization  of
intangibles and merger-related expenses) increased to $109.5 million in the year
ended  December 31, 1998 from $73.6 million in the year ended December 31, 1997,
an  increase of $35.9  million or 48.8%.  The  increase in selling,  general and
administrative  expenses was primarily a result of salaries and  commissions for
additional sales and recruiting personnel and, to a lesser extent, growth in the
Company's  administrative  infrastructure.  During  1998,  the Company  incurred
merger-related  expenses of approximately  $4.3 million or 0.8% of revenues,  an
increase from $1.0 million, or 0.3% of revenues in 1997 and amortization expense
of approximately $3.5 million or 0.7% of revenues, an increase from $0.6 million
or 0.2% of revenues in 1997.

<PAGE>
   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations


Amortization of Intangibles

Amortization of intangibles increased to $3.5 million in the year ended December
31, 1998 from $0.6 million in the year ended  December 31, 1997,  an increase of
$2.9 million.  This increase is primarily  attributable  to the  acquisitions of
Enterprise Solutions Group, RPM Consulting and Infomatics Search Group.

Income from Operations

Income from operations,  excluding merger-related  expenses,  increased to $75.1
million in the year ended December 31, 1998 from $42.6 million in the year ended
December  31, 1997,  an increase of $32.5  million or 76.3%.  Operating  margins
increased  to 14.6% in the year ended  December  31, 1998 from 12.2% in the year
ended  December 31, 1997.  This increase was primarily due to an increase in the
Company's  higher margin Year 2000 business and the acquisition of a high margin
products  company.  The Company's  business is labor- intensive and, as such, is
sensitive to inflationary  trends.  This  sensitivity  applies to client billing
rates, as well as to payroll costs.

Other Income

Other income  increased to $8.7 million in the year ended December 31, 1998 from
$1.4 million in the year ended  December  31,1997,  an increase of $7.3 million.
This  increase  was  primarily  the  result of the sale of the  Company's  Birla
Horizons Joint Venture ($0.06 per share),  as well as increased  interest income
resulting from the follow-on  offering of approximately $84 million completed in
the third quarter of 1997.

Provision for Income Taxes

The effective tax rate for Federal,  state, and local income taxes was 45.2% and
43.0% in the years ended December 31,1998 and 1997,  respectively.  The increase
in  the  1998   effective   tax  rate  was  primarily  due  to  an  increase  in
non-deductible merger-related expenses incurred in 1998.

Net Income

Net income  increased to $43.6 million in the year ended  December 31, 1998 from
$24.5 million in the year ended December 31, 1997, an increase of $19.1 million,
or 78.0%.  Net income per share  (diluted)  increased to $1.35 in the year ended
December 31, 1998 from $0.85 in the year ended  December 31, 1997. The effect of
merger-related  expenses amounted to $0.11 per share in 1998,  compared to $0.03
per share in 1997. All net income per share and share amounts have been adjusted
to  reflect  a  three-for-two  common  stock  split,  effected  as a  50%  stock
distribution, distributed on June 9, 1997.

Liquidity and Capital Resources

Computer Horizons finances its operations primarily through cash generated from
operations,  borrowings  against bank lines of credit and the public sale of its
common stock.  At December 31, 1999,  the Company had $129.9  million in working
capital,  of which $17.1 million was cash and cash equivalents.  There was $15.0
million in borrowings  outstanding  against one of the  Company's  bank lines of
credit.
<PAGE>

Net cash used in  operating  activities  for the year ended  December  31,  1999
totaled  $19.5  million,  primarily  attributable  to an  increase  in  accounts
receivable.  The  significant  increase in accounts  receivable  during 1999 was
primarily  attributable  to delays in billing to  customers  resulting  from the
implementation of an  enterprise-wide  information  system. Net cash provided by
operating  activities was $15.8 million and $17.0  million,  for the years ended
December 31, 1998 and 1997,  respectively,  consisting  primarily of net income,
offset in part by an increase in accounts receivable.
<PAGE>
   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations

Net cash used in investing activities was $14.3 million, $55.6 million and $22.1
million in the years ended December 31, 1999, 1998, and 1997, respectively.  Net
cash used in investing  activities in 1999 consisted  primarily of $14.0 million
used for the acquisitions of the assets of SELECT Software Tools plc, Integrated
Computer Management, G. Triad Enterprises,  Inc., SPP and Unibase. Net cash used
in investing  activities in 1998  consisted  primarily of $50.4 million used for
the  acquisitions of the assets of Enterprise  Solutions  Group, RPM Consulting,
and Infomatics Search Group. In addition,  the Company used  approximately  $6.0
million relating to the Company's new  accounting/information  system.  Net cash
used in  investing  activities  in 1997  consisted  primarily of the purchase of
short term investments,  as well as the Company's  acquisitions of the assets of
Millennium  Computer  Technology  for  approximately  $5 million on December 31,
1997.

For the year ended  December 31, 1999 net cash used in financing  activites  was
$2.1 million,  primarily  resulting from $15.0 million in borrowings against the
Company's  bank  lines of  credit,  partially  offset by $12.8  million  used to
repurchase the Company's  stock.  Net cash used in 1998 totaled $0.6 million and
resulted  primarily from  repayments of notes to banks,  offset by cash received
from the exercise of stock options. Net cash provided by financing activities in
the year ended December 31, 1997, was $83.4 million, consisting of $83.7 million
in net proceeds from the Company's public offering of common stock.

At December  31,  1999,  the Company had a current  ratio  position of 2.6 to 1,
long-term debt of $4.1 million and $15.0 million of outstanding  borrowing under
its two  unsecured  discretionary  lines of  credit of $30.0  million  and $10.0
million.  The  Company  believes  that its cash and cash  equivalents,  lines of
credit and  internally  generated  funds will be  sufficient to meet its working
capital needs through 2001.

The Company's  billed accounts  receivable were $128.2 million and $83.4 million
at December  31, 1999 and December  31,  1998,  respectively.  Billed days sales
outstanding  were 84 days at December 31, 1999 and 57 days at December 31, 1998,
based on annual sales.

Year 2000

The  Company  utilizes a wide  variety of complex  information  technologies  to
conduct daily business  operations.  The Company examined all systems that could
be  significantly  affected by the Year 2000.  Concurrently,  a review was being
conducted  to select a new  accounting/information  system to support the future
growth  of the  Company.  As a  result,  the  Company  chose a new  system  that
addressed,  among  other  areas,  Year  2000  compliance.  The  new  system  was
implemented  in  late  1998.  The  total  cost  of the  Year  2000  project  was
approximately  $10 million,  of which  approximately $9 million was capitalized.
The  project was funded  through  operating  cash flows.  As of the date of this
filing,  the Company has not  experienced  any  material  year 2000  problems or
disruptions from any internal systems or outside vendors.
<PAGE>


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


Market Risk Exposure

The Company has  financial  instruments  that are subject to interest rate risk,
principally   short-term   investments.   Historically,   the  Company  has  not
experienced  material  gains or losses due to interest rate changes when selling
short-term investments. Based on the current holdings of short-term investments,
the exposure to interest  rate risk is not material.  Additionally,  the Company
had $15  million  in  outstanding  borrowings  against a bank line of credit at
December 31, 1999, which has a floating LIBOR interest rate.

Foreign Currency Exposure

The Company's  international  operations  expose it to translation risk when the
local currency financial  statements are translated to U.S. dollars. As currency
exchange   rates   fluctuate,   translation  of  the  statements  of  income  of
international  business  into U.S.  dollars  will  affect the  comparability  of
revenues and expenses  between  years.  None of the  components of the Company's
consolidated  statements  of income was  materially  affected by  exchange  rate
fluctuations in 1999, 1998 or 1997.


<PAGE>



                       FINANCIAL STATEMENTS AND REPORT OF
                    INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

                             COMPUTER HORIZONS CORP.

                           December 31, 1999 and 1998




<PAGE>




               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS




Board of Directors and Shareholders
Computer Horizons Corp.


We have  audited  the  accompanying  consolidated  balance  sheets  of  Computer
Horizons  Corp.  and  Subsidiaries  as of December  31,  1999 and 1998,  and the
related consolidated  statements of income,  shareholders' equity and cash flows
for each of the  three  years in the  period  ended  December  31,  1999.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with 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 Computer Horizons
Corp.  and  Subsidiaries  as of December 31, 1999 and 1998 and the  consolidated
results of their  operations and their  consolidated  cash flows for each of the
three years in the period ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.





/s/GRANT THORNTON LLP
---------------------
GRANT THORNTON LLP

Edison, New Jersey
February 21, 2000 (except for Note 5, as to which the date is March 15, 2000)


<PAGE>
<TABLE>
<CAPTION>

                    Computer Horizons Corp. and Subsidiaries

                           CONSOLIDATED BALANCE SHEETS


                                                                          December 31,
                                       ASSETS                      1999                  1998
                                                                   ----                  ----
                                                                 ---------(in thousands)---------
Current assets:
<S>                                                               <C>                   <C>
    Cash and cash equivalents (Note 1)                             $17,072              $ 51,796
    Short-term investments (Note 1)                                     --                11,259
    Accounts receivable (Note 3)                                   172,806               135,447
    Deferred income tax benefit (Note 7)                             8,945                 4,987
    Refundable income taxes                                          5,499                    --
    Other                                                            4,459                 2,049
                                                                  --------              --------

           Total current assets                                    208,781               205,538
                                                                  --------              --------






Property and equipment:
    Furniture, equipment and other                                  38,365                26,469
    Less accumulated depreciation                                   18,144                11,141
                                                                    ------              --------

                                                                    20,221                15,328
                                                                    ------              --------




Other assets - net:
    Goodwill (Note 1)                                               94,349                66,315
    Deferred income tax benefit (Note 7)                             2,458                 1,348
    Purchased software (Note 1)                                      9,306                 1,663
    Other                                                           12,879                 5,860
                                                                    ------             ---------

                                                                   118,992               75,186
                                                                   -------              --------


           Total Assets                                           $347,994              $296,052
                                                                  ========               =======
</TABLE>



The accompanying notes are an integral part of these statements.


<PAGE>
<TABLE>
<CAPTION>

                                                                                  December 31,
                        LIABILITIES AND SHAREHOLDERS' EQUITY               1999                  1998
                                                                           ----                  ----
                                                                        ---------(in thousands)---------
<S>                                                                     <C>                 <C>
Current liabilities:
    Current portion of long-term debt (Note 5)                          $19,502                    --
    Accrued payroll, payroll taxes and benefits                          17,764             $  24,262
    Accounts payable                                                     17,741                 5,258
    Income taxes payable                                                     --                 6,437
    Restructuring reserve                                                 4,003                    --
    Deferred revenue                                                      9,576                 6,719
    Other accrued expenses                                               10,338                 4,102
                                                                         ------            ----------

           Total current liabilities                                     78,924                46,778
                                                                         ------              --------



Long-term debt                                                            4,100                    --

Other liabilities                                                         2,318                 2,740
                                                                          -----             ---------


Shareholders' equity:
    Preferred  stock,  $.10  par;  authorized  and  unissued,
    200,000  shares, including 50,000 Series A
    Common stock, $.10 par; authorized, 100,000,000
       shares; issued 33,149,595 shares and 32,351,580
       shares at December 31, 1999 and 1998, respectively                  3,315                 3,235
    Additional paid-in capital                                           138,821               128,821
    Accumulated comprehensive income                                         385                  (762)
    Retained earnings                                                    138,568               123,943

                                                                         281,089               255,237
                                                                         -------               -------

    Less shares held in treasury, at cost; 1,780,721 and 1,061,662
       shares at December 31, 1999 and 1998, respectively                (18,437)               (8,703)
                                                                         --------            ---------

           Total shareholders' equity                                    262,652               246,534
                                                                         -------               -------

           Total Liabilities and Shareholders' Equity                   $347,994              $296,052
                                                                         =======               =======
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                    Computer Horizons Corp. and Subsidiaries

                        CONSOLIDATED STATEMENTS OF INCOME

                                                                          Year ended December 31,
                                                         -------------------------------------------------
                                                               1999               1998              1997
                                                         ------(in thousands, except per share data)------
<S>                                                      <C>                <C>                <C>
Revenues                                                 $    534,594       $    514,921       $    350,310
                                                         ------------       ------------       ------------
Costs and expenses:
   Direct costs                                               365,310            326,795            233,574
   Selling, general and administrative                        131,087            109,505             73,563
   Amortization of intangibles                                  6,202              3,530                602
   Restructuring charges                                        6,355                 --                 --
   Merger-related expenses                                         --              4,272                976
                                                         ------------       ------------       ------------

                                                              508,954            444,102            308,715
                                                         ------------       ------------       ------------

Income from operations                                         25,640             70,819             41,595
                                                         ------------       ------------       ------------
Other income (expense):
   Interest income                                              1,353              5,334              1,700
   Interest expense                                            (1,355)              (750)              (276)
   Equity in net earnings/(loss) of
      joint venture (Note 4)                                       --                (90)                13
   Gain on sale of joint venture (Note 4)                          --              4,180                 --
                                                         ------------       ------------       ------------

                                                                   (2)             8,674              1,437
                                                         ------------       ------------       ------------

Income before income taxes                                     25,638             79,493             43,032
                                                         ------------       ------------       ------------
Income taxes (Notes 1 and 7):
   Current                                                     16,081             39,645             19,448
   Deferred                                                    (5,068)            (3,739)              (950)
                                                         ------------       ------------       ------------

                                                               11,013             35,906             18,498
                                                         ------------       ------------       ------------

Net Income                                               $     14,625       $     43,587       $     24,534
                                                         ============       ============       ============
Earnings per share (Notes 1 and 8):
    Basic                                                $       0.47       $       1.41       $       0.89
                                                         ============       ============       ============
    Diluted                                              $       0.46       $       1.35       $       0.85
                                                         ============       ============       ============

Weighted average number of shares outstanding:
    Basic                                                  30,940,000         30,925,000         27,567,000
                                                         ============       ============       ============
    Diluted                                                31,647,000         32,230,000         28,999,000
                                                         ============       ============       ============
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
<TABLE>
<CAPTION>

                    Computer Horizons Corp. and Subsidiaries

                     CONSOLIDATED STATEMENT OF SHAREHOLDERS'
                                     EQUITY

                  Years ended December 31, 1999, 1998 and 1997




                                                            Addi-       Accumulat-
                                    Common stock           tional        ed other                  Treasury stock
                                --------------------       paid-in      comprehen-   Retained
                                  Shares      Amount       capital     sive income   earnings    Shares      Amount      Total
                                  ------      ------       -------     -----------   --------    ------      ------      -----
                               ---------------------------------------(dollars in thousands)----------------------------------------
<S>                            <C>             <C>        <C>             <C>       <C>       <C>            <C>        <C>
Balance, December 31 1996      19,510,314      1,951        30,773        290        55,381    1,786,883       14,648   $73,747

Net income for the year                                                              24,534                              24,534
Other comprehensive income
Foreign currency translation
   adjustments                                                           (206)                                             (206)
                                                                                                                        -------
 Total comprehensive income                                                                                              24,328

Three-for-two stock split
 declared May 1997              8,861,715        886          (886)
Stock options exercised           375,040         38         1,759                               (94,630)        (776)    2,573
Tax benefits related to
  stock option plans                                         2,610                                                        2,610
Sale of common stock, net of
  expenses                      2,500,000        250        83,462                                                       83,712
Dividends paid (Spargo)                                                                (996)                               (996)
                               ----------      -----      -------          ----     -------   ---------     -------     -------

Balance, December 31, 1997     31,247,069     $3,125      $117,718     $   84     $  78,919   1,692,253     $13,872    $185,974
                               ----------      -----      -------          ----     -------   ---------     -------     -------

Net income for the year                                                              43,587                              43,587
Other comprehensive income:
   Foreign currency
   translation
   adjustments                                                            (846)                                           (846)
                                                                                                                          -----
Total comprehensive income                                                                                               42,741
Increase resulting from
   immaterial pooling             954,213         95          170                     2,607                               2,872
Stock options exercised             2,265                    (250)                     (399)   (510,209)     (4,182)      3,533
Tax benefits related to
   stock option plans                                       2,998                                                         2,998
Stock issuance costs                                          (20)                                                          (20)
Issuance of common stock
for purchase of assets            148,033         15        8,205                              (120,382)       (987)      9,207
Dividends paid (Spargo)                                                                (771)                               (771)
                               ----------      -----      -------          ----     -------   ---------     -------     -------

Balance, December 31, 1998     32,351,580     $3,235     $128,821        $(762)    $123,943   1,061,662      $8,703    $246,534
                               ----------      -----      -------          ----     -------   ---------     -------     -------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                            <C>             <C>        <C>             <C>       <C>       <C>            <C>        <C>
Net income for the year                                                              14,625                              14,625
Other comprehensive income:
   Foreign currency
   translation
   adjustments                                                            1,147                                           1,147
                                                                                                                          -----
Total comprehensive income                                                                                               15,772
Stock options exercised                                       (14)                             (230,684)     (1,890)      1,876
Other issuance of common stock     32,816          3                                                                          3
Tax benefits related to
   stock option plans                                          99                                                            99
Stock warrants exercised                                      (76)                               (9,250)        (76)         --
Issuance of common stock
for  purchase of assets           765,199         77        9,840                                (5,575)        (48)      9,965
Employee Stock Purchase
   Program                                                    151                              (122,432)     (1,004)      1,155
Purchase of Treasury Shares                                                                   1,087,000      12,752     (12,752)
                               ----------      -----      -------          ----     -------   ---------     -------     -------

Balance, December 31, 1999     33,149,595     $3,315     $138,821          $385    $138,568   1,780,721     $18,437    $262,652
                               ==========      =====      =======          ====     =======   =========      ======     =======
</TABLE>





The accompanying notes are an integral part of this statement.


<PAGE>
<TABLE>
<CAPTION>

                    Computer Horizons Corp. and Subsidiaries
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                  Year ended December 31,
                                                                             ---------------------------------
                                                                          1999             1998              1997
                                                                          ----             ----              ----
                                                                      -------------------(in thousands)-------------------
<S>                                                                    <C>               <C>               <C>
Cash flows from operating activities
   Net income                                                          $ 14,625          $ 43,587          $ 24,534
   Adjustments to reconcile net income to net cash provided by
     operating activities:
       Deferred taxes                                                    (5,068)           (3,665)             (950)
       Depreciation                                                       5,463             3,218             1,857
       Loss on disposal of fixed assets                                      --                --               (26)
       Gain on sale of joint venture                                         --            (3,125)
       Amortization of intangibles                                        6,202             4,145               602
       Provision for bad debts                                            3,367             1,676               575
       Changes in assets and liabilities, net of acquisitions:
         Accounts receivable                                            (36,009)          (43,085)          (22,850)
         Other current assets                                            (2,036)             (572)             (108)
         Other assets                                                    (5,898)           (1,462)              (64)
         Refundable income taxes                                         (5,499)               --                --
         Accrued payroll, payroll taxes and benefits                     (6,498)            5,784             4,887
         Accounts payable                                                10,750               415               328
         Income taxes payable                                            (6,547)            4,544             5,187
         Other accrued expenses                                           8,650            (1,529)            2,370
         Other liabilities                                               (1,030)            5,866               626
                                                                       --------          --------          --------
         Net cash (used in) provided by operating activities            (19,528)           15,797            16,968
                                                                       --------          --------          --------
Cash flows from investing activities
   Purchases of furniture and equipment                                  (7,924)          (11,122)           (2,480)
   Acquisitions, net of cash                                            (13,955)          (51,948)           (5,467)
   Changes in goodwill                                                   (3,670)              262                --
   Changes in other assets                                                   --                --              (968)
   Proceeds from sale of joint venture                                       --             4,695                --
   Purchases of short-term investments                                   11,259             2,556           (13,165)
                                                                       --------          --------          --------
         Net cash used in investing activities                          (14,290)          (55,557)          (22,080)
                                                                       --------          --------          --------
Cash flows from financing activities
   Notes payable - banks, net                                             7,502            (2,313)               --
   Long-term debt                                                           100            (1,000)           (1,903)
   Dividends paid (Spargo)                                                   --              (771)             (996)
   Stock issuance cost                                                       --               (20)               --
   Stock options exercised                                                1,989             3,533             2,573
   Purchase of treasury shares                                          (12,752)               --                --
   Other stock issuances                                                    (11)               --                --
   Stock issued on employee stock option plan                             1,155                --                --
   Issuance of common stock for purchase of assets                          (36)               --                --
   Proceeds from issuance of stock                                           --                --            83,712
                                                                       --------          --------          --------
         Net cash (used in)/provided by financing activities             (2,053)             (571)           83,386
                                                                       --------          --------          --------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                    <C>               <C>               <C>
          Foreign currency gains/(losses)                                 1,147                41              (315)
         Net (decrease)/increase in cash and cash equivalents           (34,724)          (40,290)           77,959
Cash and cash equivalents at beginning of year                           51,796            92,086            14,127
                                                                       --------          --------          --------
Cash and cash equivalents at end of year                               $ 17,072          $ 51,796          $ 92,086
                                                                       ========          ========          ========
Supplemental disclosures of cash flow information:
   Cash paid during the year for:
     Interest                                                          $    811         $     132          $    249
     Income taxes                                                        28,025            35,111            13,694

Details of acquisition:
   Fair value of assets                                                $ 46,853          $ 70,590          $  5,590
   Liabilities                                                           32,898            20,177               242
                                                                       --------          --------          --------
   Cash paid for acquisition                                           $ 13,955          $ 50,413          $  5,348
                                                                       ========          ========          ========
</TABLE>


The accompanying notes are an integral part of these statements.


<PAGE>


                    Computer Horizons Corp. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Description of Business

     Computer   Horizons   Corp.  is  a  strategic   e-Business   solutions  and
     professional services company. The Company enables its Global 1000 customer
     base to realize  competitive  advantages  through two major divisions,  CHC
     eB-Solutions  and  IT  Services.   Combined,   Computer  Horizons  provides
     enterprise  application  services,  e-business  solutions,  customized  Web
     development  and  Web  enablement  of  strategic   applications,   Customer
     Relationship  Management (CRM), network services,  e-procurement  solutions
     for  Human  Resource   acquisition  and  management   (CHIMES),   strategic
     outsourcing  and managed  resourcing,  as well as software  and  relational
     database products.

     Principles of Consolidation

     The  consolidated  financial  statements  include the  accounts of Computer
     Horizons Corp.  and its  wholly-owned  subsidiaries  (the  "Company").  The
     Company's  investment  in a joint  venture (Note 4) was accounted for under
     the equity method of  accounting.  All material  intercompany  accounts and
     transactions have been eliminated.

     Revenue Recognition

     The Company recognizes revenues as professional services are performed.  On
     fixed fee  engagements,  revenue and gross profit  adjustments  are made to
     reflect  revisions in estimated total costs and contract values.  Estimated
     losses are recorded when identified.

     Recruitment Costs

     Recruitment costs are charged to operations as incurred.



<PAGE>

                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997


NOTE 1 (continued)

     Cash and Cash Equivalents

     Cash and cash equivalents include highly liquid instruments with a maturity
     of  three  months  or  less at the  time of  purchase  and  consist  of the
     following at December 31:

                                              1999                1998
                                              ----                ----
                                            -------(in thousands)-------

       Cash                                   $10,762           $  7,170
       Money market funds                       4,830             24,689
       Demand obligations                       1,480             17,962
       Commercial paper                            --              1,975
                                             --------            -------

                                              $17,072            $51,796
                                               ======             ======

     Short-term Investments

     The Company  considers  investments with an original  maturity of more than
     three  months, at the  time  of  purchase,  as short-term  investments  and
     classifies  them as held to  maturity.  At December  31,  1999,  short-term
     investments  maturing within one year consist of commercial paper valued at
     cost which approximates fair value.

     Concentrations of Credit Risk

     Financial   instruments,   which   potentially   subject   the  Company  to
     concentrations  of credit  risk,  regardless  of the  degree of such  risk,
     consist  principally of cash and cash equivalents,  short-term  investments
     and trade accounts  receivable.  In addition,  as of December 31, 1999, the
     Company had $15 million of debt  outstanding with a floating Libor interest
     rate.  The Company  invests the majority of its excess cash in money market
     funds, commercial paper and demand obligations of high-credit, high-quality
     financial  institutions  or companies,  with certain  limitations as to the
     amount that can be invested in any one entity.



<PAGE>

                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997



NOTE 1 (continued)

     The Company  maintains  its cash  balances  principally  in five  financial
     institutions  located in the United States,  Canada and the United Kingdom.
     The  balances in U.S.  banks are insured by the Federal  Deposit  Insurance
     Corporation up to $100,000 for each entity at each institution. The balance
     in  the  Canadian  bank  is  insured  by  the  Canadian  Deposit  Insurance
     Corporation up to $60,000 Canadian  (approximately $42,000 US). There is no
     depository insurance in the United Kingdom. At December 31, 1999, uninsured
     amounts  held  by  the  Company  at  these  financial   institutions  total
     approximately $16,312,000.

     The Company's  customers are generally very large, Global 1000 companies in
     many industries and with wide geographic dispersion.  The Company's largest
     customer accounts for approximately  7.9% of billed accounts  receivable at
     December  31,  1999.  The Company  establishes  an  allowance  for doubtful
     accounts  based  upon  factors  surrounding  the  credit  risk of  specific
     customers, historical trends, and other information.

     The  Company's   largest  client   accounted  for  7.4%,  8.8%  and  11.2%,
     respectively,  of the  Company's  consolidated  revenues in 1999,  1998 and
     1997.

     Fair Value of Financial Instruments

     The carrying value of financial instruments (principally consisting of cash
     and cash  equivalents,  short-term  investments,  accounts  receivable  and
     payable and long-term  debt)  approximates  fair value because of the short
     maturities  or, as to long-term  debt, the rates  currently  offered to the
     Company.

     Property and Equipment and Depreciation

     Property and equipment are stated at cost.  Depreciation  is computed using
     the  straight-line  method over the  estimated  useful  lives of the assets
     which range from three to seven years.

     Goodwill and Purchased Software

     Goodwill,  the cost in excess of the fair value of net assets acquired,  is
     being  amortized  by the  straight-line  method,  for periods  ranging from
     twenty  to  thirty  years.  Accumulated  amortization  is  $10,303,000  and
     $6,301,000 at December 31, 1999 and 1998, respectively.  Purchased software
     is being amortized by the straight-line method, for a period of five years.
     Accumulated  amortization is $3,742,000 at December 31, 1999. On an ongoing
     basis,  management  reviews the valuation and  amortization of goodwill and
     purchased software. As part of this review, the Company estimates the value
     of future cash flows to determine that no impairment has occurred.
<PAGE>


                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997



NOTE 1 (continued)

     Income Taxes

     The Company  and its  domestic  subsidiaries  file a  consolidated  Federal
     income tax  return.  The foreign  subsidiaries  file in each of their local
     jurisdictions.

     Deferred  income taxes result from  temporary  differences  between  income
     reported for financial and income tax purposes. These temporary differences
     result  primarily  from the allowance for doubtful  accounts  provision and
     certain accrued expenses which are deductible,  for tax purposes, only when
     paid.

     Tax  benefits  from  early  disposition  of the  stock by  optionees  under
     incentive  stock  options and from  exercise of  non-qualified  options are
     credited to additional paid-in capital.

     The Company  provides United States income taxes on the earnings of foreign
     subsidiaries,  unless they are considered  permanently invested outside the
     United States.  As of December 31, 1999,  there is no cumulative  amount of
     earnings on which United States income taxes have not been provided.

     Earnings Per Share

     Basic earnings per share is based on the weighted  average number of common
     shares  outstanding  without  consideration  of common  stock  equivalents.
     Diluted  earnings  per  share is based on the  weighted  average  number of
     common and common equivalent shares outstanding. The calculation takes into
     account  the shares  that may be issued  upon  exercise  of stock  options,
     reduced by the shares that may be repurchased  with the funds received from
     the exercise, based on the average price during the year.

     Use of Estimates in Financial Statements

     In preparing  financial  statements in conformity  with generally  accepted
     accounting  principles,  management  makes estimates and  assumptions  that
     affect the reported  amounts of assets and  liabilities  and disclosures of
     contingent assets and liabilities at the date of the financial  statements,
     as well as the  reported  amounts  of  revenues  and  expenses  during  the
     reporting period. Actual results could differ from those estimates.



<PAGE>

                     Computer Horizons Corp. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997



NOTE 1 (continued)

     Foreign Currency Translation

     For operations outside the United States that prepare financial  statements
     in currencies  other than the United States  dollar,  results of operations
     and cash flows are  translated  at the average  exchange  rates  during the
     period, and assets and liabilities are translated at end of period exchange
     rates.  Translation  adjustments  are  included as a separate  component of
     shareholders' equity.

     New Accounting Pronouncements

     In June  1998,  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
     Instruments and Hedging  Activities" ("SFAS 133"). SFAS 133 establishes new
     accounting and reporting standards for derivative financial instruments and
     for  hedging  activities.  SFAS 133  requires  an  entity  to  measure  all
     derivatives  at fair value and to recognize them in the balance sheet as an
     asset or liability,  depending on the entity's rights or obligations  under
     the applicable derivative contract. SFAS No. 133 is effective for financial
     statements  for fiscal  years  beginning  after  June  1999.  The impact of
     adopting  SFAS  133 is not  expected  to be  material  to the  consolidated
     financial statements or notes to consolidated financial statements.


NOTE 2 - ACQUISITIONS

     1999

     On  October  18,  1999,   the  Company   acquired  G.  Triad   Enterprises,
     Inc.("G.Triad"),  a New Jersey based Internet / Intranet  development firm,
     for  approximately  $14.5 million in cash and stock.  The  acquisition  was
     accounted for as a purchase.  The resulting  goodwill of approximately  $14
     million is being  amortized to  operations  over a 20-year period.  Had the
     acquisition  of G. Triad occured on January 1, 1999, the effect on revenues
     and net income would have been immaterial.

     On May 6, 1999,  the Company  acquired all the common  stock of  Integrated
     Computer  Management  ("ICM"),  a New Jersey-based  solutions  company that
     provides technology  consulting,  packaged software  integration,  customer
     software development,  systems integration and advanced learning solutions,
     for stock,  cash and promissory notes totaling  approximately  $17 million.
     The acquisition was accounted for as a purchase.  The resulting goodwill of
     approximately  $15 million is being  amortized to operations over a 20-year
     period.  Had the acquisition of ICM occurred on January 1, 1999, the effect
     on revenues and net income would have been immaterial.

     Princeton

     On June 1, 1999,  Princeton  Softech  Inc.  ("Princeton"),  a  wholly-owned
     subsidiary  of the Company,  acquired the software  products,  intellectual
     property  rights and  certain  other  assets of SELECT  Software  Tools plc
     ("Select"), a London-based software firm, for approximately $8 million cash
     plus the  assumption  of certain  liabilities  such as  severance,  certain
     payments  due to a vendor  under a contract  that the  Company  expected to
     derive  no  future  benefit,  and  certain  other  assumed  liabilities  in

<PAGE>

     connection  with its  acquisition.  These  liabilities  had the  effect  of
     increasing the value of the  intangible  assets  (purchased  software) that
     were  acquired.  The amount of such  liabilities  aggregated  $3,100,000 of
     which  approximately  $1,800,000  had been paid prior to December 31, 1999.
     Substantially  all of the accrued  severance  (which was for employees that
     had been made  redundant upon  acquisition in the United  Kingdom) had been
     paid prior to December 31,  1999.  The  remaining  accrued  liabilities  of
     approximately $1,300,000 consist primarily of payments due  pursuant to the
     contract  discussed above. The acquisition was accounted for as a purchase.
     The cost of the purchased  software and other intangibles  approximates $12
     million,  and is being amortized to operations over a five-year period. Had
     the  acquisition  of Select  occurred  on January  1,  1999,  the effect on
     revenues and net income would have been immaterial.
<PAGE>

                     Computer Horizons Corp. and Subsidiary

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997


NOTE 2 (continued)

     On May 7, 1999,  Princeton  purchased the distribution  rights in Australia
     held by its  former  distributor,  SPP.  No  tangible  assets  of SPP  were
     acquired.  The aggregate cash purchase price was approximately  $740,000 of
     which  approximately  $672,000 was paid prior to year-end.  The transaction
     was  accounted  for  using  purchase  accounting,  and the  aggregate  cash
     purchase  price of $740,000 was allocated to  distribution  rights which is
     being amortized to operations  over a 48 month period.  Had the acquisition
     occurred on January 1, 1999,  the effect on revenues  and net income  would
     have been immaterial.

     On April 14, 1999, Princeton purchased all of the capital stock of Unibase,
     its French distributor. The aggregate cash purchase price was approximately
     $1,424,000 including approximately $92,000 of fees and expenses relating to
     such  transaction.   The  transaction  was  accounted  for  using  purchase
     accounting. The excess of purchase price over tangible  assets  acquired of
     approximately  $1,090,000  was allocated to  distribution  rights which are
     being amortized to operations  over a 48 month period.  Had the acquisition
     of Unibase  occurred  on January 1, 1999,  the effect on  revenues  and net
     income would have been immaterial.

     1998

     On  September  25,  1998,  the Company  acquired  the assets of  Enterprise
     Solutions  Group,  LLC  ("ESG"),   a  Cincinnati,   Ohio-based   technology
     organization  that provides  training and  educational  services as well as
     consulting  services  for  Global  1000  companies.   The  acquisition  was
     accounted  for  as a  purchase.  The  total  adjusted  purchase  price  was
     approximately $8,883,000 in cash and common stock. Approximately $1,550,000
     is to be paid out in two  payments,  approximately  $1 million  was paid in
     January of 2000 and the remaining $550,000 owed in January of 2001 has been
     accrued.  Had the acquisition of ESG occurred on January 1, 1998 the effect
     on revenues and net income would have been immaterial.

     On August 4,  1998,  the  Company  acquired  the  assets of RPM  Consulting
     ("RPM"),  a  Maryland  based  provider  of  network  consulting   services,
     specializing  in  architecting,  designing and upgrading  large  enterprise
     networks.  The purchase  agreement was for a combination of cash and common
     stock  totaling  approximately   $27,700,000,   and  two  earnout  payments
     (totaling  $2.2  million)  based on pretax  profit  margins which were paid
     during 1999.  The  acquisition  was  accounted  for as a purchase.  Had the
     acquisition  of which were paid off during 1999 RPM  occurred on January 1,
     1998, the effect on revenues and net income would have been immaterial.

     On July 2, 1998, the Company's Canadian  subsidiary acquired the net assets
     of Infomatics  Search Group ("ISG"),  a Toronto,  Canada based  information
     technology  service firm,  offering both  professional  staffing and career
     placement  services.  The acquisition was accounted for as a purchase.  The
     total  purchase price was  approximately  $21,600,000 in cash. The purchase
     agreement  includes an earnout clause equal to two times increases in prior
     period  adjusted  earnings  (as defined in the  purchase  agreement)  to be
     earned in 1999 and 2000.  There was no earnout adjustment for 1998. Had the
     acquisition  of ISG occurred on January 1, 1998, the effect on revenues and
     net income would have been immaterial.



<PAGE>

                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997

NOTE 2 (continued)

     On June 24,  1998,  the Company  acquired all of the common stock of Spargo
     Consulting PLC ("Spargo"),  an information  technology  consultancy service
     provider,  organized  under the laws of the United  Kingdom  for  1,887,000
     shares of Computer  Horizon stock.  This transaction was accounted for as a
     pooling  of  interests  and,   accordingly,   the  consolidated   financial
     statements  for the  periods  presented  have been  restated to include the
     accounts of Spargo.

     On February  27,  1998,  the Company  acquired  all of the common  stock of
     Princeton  Softech,  Inc.  ("Princeton")  in exchange for 954,213 shares of
     Computer  Horizons stock.  Princeton  specializes in relational  databases,
     data synchronization, intelligent data migration and data management tools,
     and is based in Princeton,  New Jersey.  This transaction was accounted for
     as an  immaterial  pooling of interests  and the results of Princeton  have
     been included since January 1, 1998.


NOTE 3 - ACCOUNTS RECEIVABLE

     Accounts receivable consist of the following at December 31:

                                                    1999                 1998
                                                    ----                 ----
                                                   --------(in thousands)-------

       Billed                                      $128,197           $  83,394
       Unbilled                                      50,428              55,262
                                                     ------            --------

                                                    178,625             138,656
       Less allowance for doubtful accounts           5,819               3,209
                                                      -----           ---------

                                                   $172,806            $135,447
                                                    =======             =======


NOTE 4 - GAIN ON SALE OF JOINT VENTURE

     In 1995, the Company entered into a software development and services joint
     venture with the Birla Group, a large multinational conglomerate located in
     India.  The  Company's  total  investment in Birla  Horizons  International
     ("BHI") was $1,672,000 at December 31, 1997,  representing the initial cost
     plus equity in the  undistributed  net earnings  since  formation,  and was
     included  in other  noncurrent  assets.  BHI  provided  consultants  to the
     Company  at a total cost of  $3,437,000  and  $5,017,000  in 1998 and 1997,
     respectively. Approximately $992,000 was included in accounts payable as of
     December 31, 1998.

     During the fourth quarter of 1998, the Company sold its 50% interest to the
     Birla  Group  for a cash  payment  of  $5,750,000.  Accordingly,  a gain of
     $4,180,000 was recognized. The impact on net income was $1,975,000 or $0.06
     per share.

<PAGE>
                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997


NOTE 5 - LONG-TERM DEBT AND LINES OF CREDIT

    As of December 31, 1999, debt consisted of the following (in thousands):


                                                1999

       Line of Credit                         $15,000
       Debt pertaining to acquisitions          8,000
       Other                                      602
                                               ------
                                               23,602
                                               ------
       Less current maturities                 19,502
                                               ------

       Long-term debt due in 2001              $4,100
                                               ======


     At  December  31,  1999,  the  Company  has two bank lines of credit in the
     amounts of $30 million and $10 million  expiring March 31, 2000 and May 31,
     2000,  respectively,  of which $15 million was  outstanding at December 31,
     1999. On March 15, 2000 the $30 million bank line of credit was extended to
     April 28, 2000.  Under the first line of credit,  the Company has a standby
     letter of credit in the amount of  $903,000.  At  December  31,  1999,  the
     unused lines of credit amounted to $24 million.

     In addition to the above, the Company's subsidiary G. Triad also has a line
     of  credit  in the  amount of  $50,000.  This line is backed by G.  Triad's
     business assets  approximating $1.7 million.  As of December 31, 1999 there
     was no  outstanding  balance  due on  the  line  of  credit.  ICM,  another
     subsidiary,  has two  letters  of credit in the  amounts  of  $149,609  and
     $76,800.  These  letters  expire on March 31, 2000 and  September 30, 2000,
     respectively.  The  $149,609  letter of credit was renewed for $101,414 and
     will  expire on March 31,  2001.  There  were no  outstanding  balances  at
     December 31, 1999.

     The  Company  financed  part  of the  acquisition  of ICM  by  issuing  ten
     promissory notes totaling $8 million,  bearing interest at 7%. Four million
     of the notes come due on May 6, 2000 and the  remainder  are payable on May
     6, 2001.

     The Company also has a $320,000 Canadian (approximately $222,000 US) demand
     loan outstanding with a Canadian bank as of December 31, 1999.


NOTE 6 - SHAREHOLDERS' EQUITY

     Authorized Shares

     On  May 6,  1998,  the  Company  approved  an  amendment  to the  Company's
     Certificate of Incorporation  increasing the authorized number of shares of
     the Company's common stock from 60,000,000 to 100,000,000.

<PAGE>

                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997



NOTE 6 (continued)

     Stock Splits

     The Board of Directors of the Company declared a three-for-two common stock
     split  in  the  form  of a 50%  stock  distribution  on May  7,  1997,  for
     shareholders  of record as of May 22, 1997.  The  distribution  was paid on
     June 9, 1997.

     An amount equal to the $0.10 par value of the common shares distributed has
     been  retroactively  transferred from additional  paid-in capital to common
     stock. All references in the financial  statements with regard to number of
     shares of common stock, common stock prices and per share amounts have been
     restated to reflect the above-mentioned stock split.

     Stock Options and SFAS No. 123 Pro Forma Disclosure

     In 1994,  the Company  adopted a stock  option plan which  provides for the
     granting,  to officers and key employees,  of options for the purchase of a
     maximum of 7,594,000 shares of common stock and stock  appreciation  rights
     (SARs). Options and SARs generally expire five years from the date of grant
     and  become  exercisable  in  specified  amounts  during  the  life  of the
     respective options. No SARs have been granted as of December 31, 1999. This
     plan,  which replaces the Company's  1985 Plan,  will terminate on June 15,
     2004.  There were  3,400,000 and 4,789,000  shares  available for option at
     December 31, 1999 and 1998.

     In 1998,  the Company  amended the  non-qualified  Directors'  Stock Option
     Plan,  providing  that  each  new  director  of the  Company  who is not an
     employee of the Company (i) shall  immediately  receive options to purchase
     10,000 shares of its common stock and (ii) shall  receive  annual grants to
     purchase  10,000 shares of its common  stock.  The plan expires on March 4,
     2001. There were 454,000 shares available for option at December 31, 1999.

     The exercise  price per share on all options and/or SARs granted may not be
     less than the fair value at the date of the option grant.  Accordingly,  no
     compensation  cost has been recognized for the plans. Had compensation cost
     for the plans been determined based on the fair value of the options at the
     grant  dates  and been  consistent  with the  method of SFAS No.  123,  the
     Company's  net income and earnings per share would have been reduced to the
     pro forma amounts indicated below:



<PAGE>
<TABLE>
<CAPTION>
                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997


NOTE 6 (continued)
                                                          1999                   1998                  1997
                                                          ----                   ----                  ----

<S>                                                   <C>                    <C>                   <C>
       Net income                 As reported         $ 14,625,000           $43,587,000           $24,534,000
                                  Pro forma           $ 12,721,000           $39,516,000           $21,623,000

       Earnings per share
          Basic                   As reported              $0.47                 $1.41                  $0.89
                                  Pro forma                $0.41                 $1.28                  $0.78

          Diluted                 As reported              $0.46                 $1.35                  $0.85
                                  Pro forma                $0.40                 $1.23                  $0.75
</TABLE>

     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes options-pricing model with the following weighted-average
     assumptions used for grants in 1999, 1998 and 1997, respectively:  expected
     volatility of 77%, 127% and 61%;  risk-free  interest rates of 6.52%, 6.00%
     and 5.47%; and expected lives of 5.0, 4.5 and 5.0 years.

     A summary of the status of the Company's  stock option plans as of December
     31, 1999, 1998 and 1997, and changes during the years ending on those dates
     is presented below:
<TABLE>
<CAPTION>

                                                    1999                        1998                         1997
                                            ----------------------      ----------------------      ----------------------
                                                          Weighted                    Weighted                     Weighted
                                                           Average                     Average                      Average
                                                          Exercise                    Exercise                     Exercise
                                             Shares         Price        Shares         price        Shares          price
                                            ----------------------       -------      --------      ----------------------
                                              (000)                       (000)                       (000)

<S>                           <C>            <C>             <C>         <C>            <C>          <C>           <C>
        Outstanding - January 1              2,410           $13.94      2,035          $9.97        2,200         $  7.03

        Granted                              1,571            11.75      1,634          26.39          333           23.39
        Exercised                             (230)            5.97       (512)          6.88         (462)           5.37
        Canceled/forfeited                    (151)           14.67       (747)         35.09          (36)          13.36
                                             -----            -----      -----          -----        -----         -------

        Outstanding - December 31            3,600            13.46      2,410          13.94        2,035            9.97
                                             =====            =====     ======          =====        =====         =======

        Options exercisable - December 31    1,547            13.61      1,003          10.84          833            7.10
                                             =====            =====      =====          =====        =====         =======
        Weighted average fair value of
           options granted during the                         $7.78                   $ 13.03                      $ 23.30
           year
</TABLE>

<PAGE>
                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997

NOTE 6 (continued)

     The following  information  applies to options  outstanding at December 31,
     1999:
<TABLE>
<CAPTION>
                                                       Options outstanding                        Options exercisable
                                           --------------------------------------------           -------------------
                                                              Weighted
                                            Outstanding        Average         Weighted         Exercisable     Weighted
                                               as of          Remaining         average            as of         average
                                           December 31,      Contractual       exercise        December 31,     exercise
         Range of exercise prices              1999             life             price             1999           price
         ------------------------          -----------      -----------      -----------       -----------    ---------
                                              (000's)                                             (000's)
<S>        <C>          <C>                  <C>                <C>            <C>                <C>             <C>
           $ 0.00 -     $ 9.99                  627             3.3            $  4.45             562            $ 4.36
            10.00  -     14.99                1,651             3.8              11.21             199             12.77
            15.00  -     19.99                  303             6.0              16.79             207             16.68
            20.00 and over                    1,019             3.8              21.49             579             21.75
                                              -----            -----            -------          -----             -----


                                              3,600             3.9              13.46           1,547             13.61
                                              =====            =====            =======          =====             =====
</TABLE>

     Certain  officers  have the right to borrow  from the  Company  against the
     exercise  price of  options  exercised.  As of  December  31,  1999,  total
     borrowings pertaining to one officer, amounted to $100,000.

     The Company has issued  warrants to purchase  shares of its common stock to
     two outside business/ legal consulting firms. There were no warrants issued
     in either 1999 or 1998.  Warrants  for 8,625  shares were granted in 1997 .
     The exercise  price is the fair value at the date of grant.  As of December
     31,  1999,   9,250  warrants  were  exercised  and  29,375   warrants  were
     outstanding.

     Shareholder Rights Plan

     In July 1989, the Board of Directors  declared a dividend  distribution  of
     .131 preferred  stock purchase  right on each  outstanding  share of common
     stock of the Company.  The rights were  amended on February 13, 1990.  Each
     right  will,  under  certain  circumstances,  entitle the holder to buy one
     one-hundredth (1/100) of a share of Series A preferred stock at an exercise
     price of $30.00 per one one-hundredth (1/100) share, subject to adjustment.
     Each one  one-hundredth  (1/100) of a share of Series A preferred stock has
     voting,  dividend  and  liquidation  rights and  preferences  substantively
     equivalent to one share of common stock.

     The rights will be exercisable and transferable  separately from the common
     stock only if a person or group  acquires  20% or more,  subject to certain
     exceptions, of the Company's outstanding common stock or announces a tender
     offer that would result in the ownership of 20% or more of the common

<PAGE>
                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997


NOTE 6 (continued)

     stock.  If a person  becomes  the  owner of at least  20% of the  Company's
     common shares (an  "Acquiring  Person"),  each holder of a right other than
     the Acquiring Person is entitled, upon payment of the then current exercise
     price per right (the "Exercise  Price"),  to receive shares of common stock
     (or common  stock  equivalents)  having a market  value  equal to twice the
     Exercise Price.

     Additionally,  if the  Company  subsequently  engages  in a merger or other
     business  combination with the Acquiring Person in which the Company is not
     the  surviving  corporation,  or in which  the  outstanding  shares  of the
     Company's common stock are changed or exchanged, or if more than 50% of the
     Company's  assets or earning  power is sold or  transferred,  a right would
     entitle a Computer  Horizon  Corp.  shareholder,  other than the  Acquiring
     Person and its affiliates,  to purchase upon payment of the Exercise Price,
     shares of the Acquiring  Person having a market value of twice the Exercise
     Price.  Prior to a person becoming an Acquiring  Person,  the rights may be
     redeemed  at  a  redemption  price  of  one  cent  per  right,  subject  to
     adjustment.   The  rights  are  subject  to  amendment  by  the  Board.  No
     shareholder  rights have become  exercisable.  The rights  originally would
     have expired on July 16, 1999, however, the Board of Directors approved the
     adoption of a new Shareholder Rights Plan to replace the existing plan. The
     terms of the new Rights  Plan are  substantially  the same as the  original
     plan. The new rights will expire on July 15, 2009.

     Repricing of Stock Options

     On  October  16,  1998,  the  Company's  Board of  Directors  approved  the
     repricing of  approximately  732,000 stock options that had been granted to
     employees  earlier  in the year.  This  decision  was made in  response  to
     competitive  pressures  and  as  a  means  to  retain  key  employees.   No
     compensation  expense  was  recorded  as a result of the  above  referenced
     repricing.

NOTE 7 - INCOME TAXES

     The following is a  geographical  breakdown of the Company's  income before
taxes:

                                          Year ended December 31,
                             ----------------------------------------------
                               1999              1998            1997
                               ----              ----            ----
                           -------------------(in thousands)-------------------

            Domestic         $ 31,650          $ 72,714         $ 40,169

            Foreign            (6,012)            6,779            2,863
                             --------          --------         --------

                             $ 25,638          $ 79,493         $ 43,032
                             ========          ========         ========


<PAGE>

                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997


NOTE 7 (continued)

     The  provision  for income taxes  consists of the  following  for the years
ended December 31:

<TABLE>
<CAPTION>
                                           1999            1998          1997
                                           ----            ----         ----
                                          -------------(in thousands)-----------

      Current
<S>                                        <C>            <C>           <C>
          Federal                          $ 12,348      $ 28,539      $ 13,927
          State                               2,865         8,334         4,558
          Foreign                               868         2,772           963
                                           --------      --------      --------

                  Total current              16,081        39,645        19,448

      Deferred
          Federal                            (2,403)       (2,926)         (703)
          State                                (330)         (794)         (244)
          Foreign                            (2,335)          (19)           (3)
                                           --------      --------      --------

                  Total deferred             (5,068)       (3,739)         (950)
                                           --------      --------      --------

                                           $ 11,013      $ 35,906      $ 18,498
                                           ========      ========      ========
</TABLE>


<PAGE>
                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997

NOTE 7 (continued)

 Deferred tax assets and  liabilities  consist of the  following at December 31:
<TABLE>
<CAPTION>
                                                           1999              1998
                                                           ----              ----
                                                          -------(in thousands)----

<S>                                                       <C>
       Deferred tax liabilities

           Depreciation and amortization                  $ (1,044)           --
           Capitalized Software development costs             (241)     $   (290)
           Other                                                --          (466)
                                                          --------      --------

                       Total deferred tax liabilities       (1,285)         (756)
                                                          --------      --------

       Deferred tax assets
           Accrued insurance                                   123           293
           Foreign net operating losses                      2,336            --
           Accrued payroll and benefits                      2,593         1,982
           Deferred revenue                                  2,712         2,346
           Allowance for doubtful accounts                   1,968         1,059
           Depreciation and amortization                        --           715
           Accrued severance and lease costs                 2,052            --
           Other                                               904           696
                                                          --------      --------

                       Total deferred tax assets            12,688         7,091
                                                          ========      ========
           Net deferred tax assets                        $ 11,403      $  6,335
                                                          ========      ========
</TABLE>


<PAGE>

                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997


NOTE 7 (continued)

     A  reconciliation  of  income  taxes,  as  reflected  in  the  accompanying
     statements, with the statutory Federal income tax rate of 35% for the years
     ended December 31, 1999, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>

                                                        1999        1998         1997
                                                        ----         ----        ----
                                                     -----------(in thousands)--------
<S>                                                  <C>          <C>          <C>
      Statutory Federal income taxes                 $  8,973     $ 27,822     $ 15,061
      State and local income taxes, net of
          Federal tax benefit                           1,648        4,901        2,804
      Foreign taxes provided at rates other than
          the U.S. statutory rate                          98          122          (37)
      Amortization of goodwill                            282          203          203
      Equity in net earnings of joint venture              --          343
      Merger-related expenses                              --        1,673
      Other, net                                           12          842          467
                                                     --------     --------     --------

                                                     $ 11,013     $ 35,906     $ 18,498
                                                     ========     ========     ========
</TABLE>


     Certain  foreign  subsidiaries  of the  Company  have  net  operating  loss
     carryforwards  at December 31,  1999,  totaling  approximately  $7,200,000,
     $264,000 expires in 2005,  $1,136,000 expires in 2006 and the remainder has
     no expiration.

     During  1998,  the Company  completed  a business  combination  which,  for
     financial   statement    purposes,    has   been   accounted   for   as   a
     pooling-of-interests.  For income tax  purposes  the Company  believes  the
     transaction  qualifies as a taxable  purchase that gives rise to future tax
     deductions.  Since the tax  structure  of the  transaction  is  subject  to
     determination  by the tax  authorities,  the Company has not  recorded  any
     potential  tax  impact in its  financial  statements.  When  resolved,  the
     Company  will record a deferred tax asset net of an  appropriate  valuation
     allowance.  The net benefit will be reflected as an increase in  additional
     paid-in-capital. Any adjustments to the valuation allowance will be charged
     or credited to income.


<PAGE>

                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997


NOTE 8 - EARNINGS PER SHARE DISCLOSURES
<TABLE>
<CAPTION>
                                                                                    For the year ended
                                                                            -------------------------------------
                                                                                                                   Per
                                                                     Income                 Shares                share
                                                                   (numerator)           (denominator)           amount
                                                                 -------------         ---------------        ---------
                                                                 --------(in 000's, except share and per share data)----
      December 31, 1999
<S>                                                                  <C>                    <C>                  <C>
          Net income                                                 $14,625
                                                                     =======
          Basic earnings per share
            Income available to common stockholders                  $14,625                30,940,000           $0.47
                                                                                                                  ====
          Effect of diluted securities
            Options                                                                            707,000
                                                                                               -------
          Diluted earnings per share
            Income available to common stock-
              holders plus assumed conversions                       $14,625                31,647,000           $0.46
                                                                      ======                ==========            ====

      December 31, 1998
          Net income                                                 $43,587
                                                                      ======
          Basic earnings per share
            Income available to common stockholders                  $43,587                30,925,000           $1.41
                                                                                                                  ====
          Effect of diluted securities
            Options                                                                          1,305,000
                                                                                           -----------
          Diluted earnings per share
            Income available to common stock-
              holders plus assumed conversions                       $43,587                32,230,000           $1.35
                                                                      ======                ==========            ====

      December 31, 1997
          Net income                                                 $24,534
                                                                      ======
          Basic earnings per share
            Income available to common stockholders                  $24,534                27,567,000           $0.89
                                                                                                                  ====
          Effect of diluted securities
            Options                                                                          1,432,000
                                                                                           -----------
          Diluted earnings per share
            Income available to common stock-
              holders plus assumed conversions                       $24,534                28,999,000           $0.85
                                                                      ======                ==========            ====
</TABLE>


<PAGE>

                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997


NOTE 8 (continued)

     The  computation  of  diluted  earnings  per share  excludes  options  with
     exercise prices greater than the average market price.  During 1999,  there
     were  1,322,000  excluded  options  outstanding  at December  31, 1999 with
     exercise  prices of $15.53 to $28.13 per  share.  All  options to  purchase
     shares of common stock were included in the computation of diluted earnings
     per share in 1998.  During 1997 options to purchase  8,713 shares of common
     stock,  ranging from $25.67 to $35.58,  per share were outstanding but were
     not included in the  computation of diluted  earnings per share because the
     option's exercise price was greater than the average market price of common
     shares.

NOTE 9 - SEGMENT INFORMATION

     In 1998, the Company adopted SFAS No. 131,  "Disclosures  about Segments of
     an Enterprise and Related Information".  SFAS 131 establishes standards for
     the way that public business enterprises report information about operating
     segments in annual financial statements and requires that those enterprises
     report selected  information about operating  segments in interim financial
     reports issued to shareholders.  It also establishes  standards for related
     disclosures  about  products  and  services,  geographic  areas,  and major
     customers.  SFAS No. 131 was effective for financial  statements for fiscal
     years beginning after December 15, 1997.  Financial  statement  disclosures
     for all prior periods have been restated.

     The  Company  has  changed its  segment  breakout  and has  identified  two
     segments:  IT Services and the E-Solutions  Group.  The IT Services segment
     consists largely of the professional services traditionally rendered by the
     Company and primarily related to legacy and client server environments.  IT
     Services is primarily Staffing,  Outsourcing and Y2K. The E-Solutions Group
     consists of  e-products,  e-services  and  e-commerce  components.  Broadly
     defined,  revenue is derived  from product  sales and services  that enable
     customers to conduct business electronically.  Operating income consists of
     income before income taxes,  excluding  interest income,  interest expense,
     amortization  of  intangibles,   restructuring   charges,   merger  related
     expenses,  equity in  earnings  of joint  venture and gain on sale of joint
     venture , amounting to $12.6  million,  $(1.0)  million and $0.1 million in
     1999, 1998 and 1997,  respectively.  Long-term  assets  includes  goodwill,
     property,  plant and equipment and purchased software.  Corporate services,
     consisting  of general  and  administrative  services  are  provided to the
     segments  from a  centralized  location.  Such costs are  allocated  to the
     segments based on either revenue or headcount.

<PAGE>

                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997


NOTE 9 (continued)
<TABLE>
<CAPTION>

      BY LINE OF BUSINESS                     1999           1998          1997
                                              ----           ----          ----
                                           ------------(in thousands)--------------
 <S>                                       <C>            <C>            <C>
     REVENUE
           IT Services                     $ 433,044      $ 459,740      $ 334,729
           E-Solutions Group                 101,550         55,181         15,581
           Corporate and other                    --             --             --
                                           ---------      ---------      ---------

                Total Revenue              $ 534,594      $ 514,921      $ 350,310
                                           =========      =========      =========

      OPERATING INCOME
           IT Services                        46,549         69,918         40,454
           E-Solutions Group                  (8,352)         8,793          2,706
           Corporate and other                    --            (90)            13
                                           ---------      ---------      ---------
                Total Operating Income     $  38,197      $  78,621      $  43,173
                                           =========      =========      =========

      ASSETS
           IT Services                       183,694        151,111         92,528
           E-Solutions Group                 111,417         57,802          6,109
           Corporate and other                52,883         87,139        118,988
                                           ---------      ---------      ---------
                Total Assets               $ 347,994      $ 296,052      $ 217,625
                                           =========      =========      =========

      DEPRECIATION EXPENSE
           IT Services                         1,094            810            935
           E-Solutions Group                   1,851            681            150
           Corporate and other                 2,518          1,727            772
                                           ---------      ---------      ---------
                Total Depreciation         $   5,463      $   3,218      $   1,857
                                           =========      =========      =========
</TABLE>
<PAGE>

                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997


NOTE 9 (continued)
<TABLE>
<CAPTION>

      BY GEOGRAPHIC AREA                                 1999                1998                1997
                                                         ----                ----                ----
                                                    --------------------(in thousands)--------------------
<S>                                                     <C>              <C>                  <C>
      REVENUE
           United States                                $480,131         $   476,252          $  334,334
           Europe                                         26,134              23,651              15,581
           Australia                                         757                  --                  --
           Canada                                         27,572              15,018                 395
                                                          ------         ------------        -----------

                Total Revenue                           $534,594         $   514,921          $  350,310
                                                         =======          ===========          =========

      LONG-TERM ASSETS
           United States                                 102,562              63,478              22,395
           Europe                                          1,623                 334                 323
           Australia                                          55                  --                  --
           Canada                                         19,636              19,494                  72
                                                          ------         ------------       ------------

                Total Long-Term Assets                  $123,876        $     83,306         $    22,790
                                                         =======         ============         ==========
</TABLE>

NOTE 10 - SAVINGS PLAN AND OTHER RETIREMENT PLANS

     The Company maintains a defined contribution savings plan covering eligible
     employees.  The Company makes  contributions up to a specific percentage of
     participants'   contributions.   The  Company   contributed   approximately
     $1,440,000, $704,000 and $469,000 in 1999, 1998 and 1997, respectively.

     In 1995, the Company  instituted a Supplemental  Executive  Retirement Plan
     whereby key  executives are entitled to receive  lump-sum  payments (or, if
     they elect, a ten-year payout) upon reaching the age of 65 and being in the
     employ of the Company. The maximum commitment if all plan members remain in
     the employ of the  Company  until age 65 is  approximately  $13.1  million.
     Benefits accrue and vest based on a formula which includes total years with
     the Company and total years possible until age 65. The plan is nonqualified
     and not  formally  funded.  Life  insurance  policies  on the  members  are
     purchased to assist in funding the cost. The deferred  compensation expense
     is charged to operations  during the remaining service lives of the members
     and amounted to  approximately  nil,  $285,000 and $183,000 in 1999,
     1998 and 1997, respectively.


<PAGE>

                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997


NOTE 10 (continued)


     During 1999 the Company  adopted an Employee  Stock Purchse Plan to provide
     substantially  all  employees  who have  completed  one year of  service an
     opportunity  to  purchase  shares  of  its  common  stock  through  payroll
     deductions,   up  to  10  percent  of  eligible  compensation.   Quarterly,
     participant  account  balances  are used to purchase  shares of stock at 85
     percent of its fair  market  value on either the first or the last  trading
     day of each calendar  quarter.  A total of 250,000 shares are available for
     purchase under the plan. There were 122,432 shares purchased under the plan
     in 1999.

     In  addition,  the  Company  adopted a Deferred  Compensation  Plan for Key
     Executives  that permits the individuals to defer a portion of their annual
     salary or bonus for a period of at least five years.  There is no effect on
     the  Company's  operating  results  since any amounts  deferred  would have
     previously  been expensed.  Amounts  deferred have been included in accrued
     payroll and  amounted to $4.0  million and $2.8  million as of December 31,
     1999, and 1998 respectively.


NOTE 11 - COMMITMENTS

     Leases

     The Company leases office space under long-term  operating  leases expiring
     through  2006.  As  of  December  31,  1999,   approximate  minimum  rental
     commitments were as follows:

                        Year ending           (in thousands)
                            2000                $ 13,382
                            2001                  12,848
                            2002                  11,972
                            2003                  10,394
                            2004                   9,349
                             Thereafter            3,251
                                                --------
                                                $ 61,196
                                                ========



     Office rentals are subject to escalations based on increases in real estate
     taxes and operating  expenses.  Aggregate rent expense for operating leases
     approximated  $7,500,000,  $5,136,000  and  $3,721,000,  in the years ended
     December 31, 1999, 1998 and 1997, respectively.
<PAGE>

                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997


NOTE 13 - SELECTED QUARTERLY FINANCIAL DATA (Unaudited)

     For the  years  ended  December  31,  1999  and  1998,  selected  quarterly
financial data is as follows:
<TABLE>
<CAPTION>
                                                                                     Quarters
                                                      --------------------------------------------------------------------
                                                              First          Second            Third           Fourth
                                                        -------------    -------------     -------------    -----------
                                                      --------------(in thousands, except per share data)-----------------
      1999
<S>                                                      <C>              <C>                <C>              <C>
        Revenues                                         $ 138,141        $ 142,874          $ 135,061        $ 118,518

        Direct costs                                        90,720           95,830             95,017           83,743
        Selling, general and administrative                 29,941           33,164             33,833           34,148
        Amortization of intangibles                          1,192            1,520              1,629            1,861
        Restructuring charges                                   --               --              6,355               --
        Income/(loss) from operations                       16,288           12,360             (1,773)          (1,234)
        Interest income/(exp.) - net                           266              124               (232)            (161)
        Income/(loss) before income taxes                   16,554           12,484             (2,005)          (1,395)
        Income taxes (benefit)                               7,035            5,243               (842)            (423)
        Net income/(loss)                                    9,519            7,241             (1,163)            (972)

        Earnings/(loss) per share:
          Basic                                               0.30             0.24              (0.04)           (0.03)
          Diluted                                             0.30             0.23              (0.04)           (0.03)
</TABLE>


<PAGE>


                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997



NOTE 13 (continued)
<TABLE>
<CAPTION>
                                                                                     Quarters
                                                        ---------------------------------------------------------------
                                                              First          Second            Third           Fourth
                                                        -------------    -------------     -------------    -----------
                                                        --------------(in thousands, except per share data)-------------
      1998
<S>                                                        <C>              <C>             <C>              <C>
          Revenues                                         $111,512         $123,735        $ 136,633        $ 143,041

          Direct costs                                       70,748           79,619           86,587           89,841
          Selling, general and administrative                24,199           25,751           28,075           31,480
          Amortization of intangibles                           240              493            1,052            1,745
          Merger-related expenses                             1,328            2,209              735               --
          Income from operations                             14,997           15,663           20,184           19,975
          Interest income - net                               1,333            1,526              951              774
          Equity in net loss of joint
             venture                                            (90)              --               --               --
          Gain on sale of joint venture                          --               --               --            4,180
          Income before income taxes                         16,240           17,189           21,135           24,929
          Income taxes                                        7,603            7,653            9,316           11,334
          Net income                                          8,637            9,536           11,819           13,595

          Earnings per share:
            Basic                                             $0.28            $0.31            $0.38            $0.44
            Diluted                                           $0.27            $0.30            $0.37            $0.42
</TABLE>


<PAGE>

                    Computer Horizons Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                        December 31, 1999, 1998 and 1997


NOTE 14 - Restructuring Charges

During the third quarter of 1999, the Company recorded a restructuring charge of
approximately $6.4 million primarily related to the consolidating and closing of
certain  facilities,  generally  used for Year  2000 and  other  legacy  related
services, as well as attendant reduction of related staff levels. This provision
includes an accrued  payment of  approximately  $4.0 million  relating to future
costs associated with continuing rent and severance commitments.

                                                                 Remaining
                                      Recorded      Paid     at Dec. 31, 1999
                                      --------    -------    ----------------
SEVERANCE
          US                           $ 1,172     ($1,021)        $   151
          Europe                         1,127        (775)            352
          Canada                           122         (89)             33
                                       -------     -------         -------
          Total Severance              $ 2,421     ($1,885)        $   536
                                       =======     =======         =======


LEASE OBLIGATIONS
          US                             3,564        (254)          3,310
          Canada                           101         (25)             76
                                       -------     -------         -------
          Total Lease Obligations      $ 3,665     ($  279)        $ 3,386
                                       =======     =======         =======

GENERAL OFFICE CLOSURE
          Canada                       $   269     $  (188)        $    81
                                       -------     -------         -------


TOTAL                                  $ 6,355     ($2,352)        $ 4,003
                                       =======     =======         =======


<PAGE>

                    Computer Horizons Corp. and Subsidiaries

                         MARKET AND DIVIDEND INFORMATION

                     Years ended December 31, 1999 and 1998



The Company's  common stock is quoted on the Nasdaq National  Market,  under the
symbol CHRZ. The range of high and low closing stock prices,  as reported by the
Nasdaq  National  Market,  for each of the quarters for the years ended December
31, 1999 and 1998 is as follows:

                                  1999                        1998
                        ----------------------        ---------------------
                         High             Low         High              Low
                        -----            -----        ----             ----

  Quarter
      First            $28.63          $10.63       $ 52.19         $ 39.50
      Second            19.25            9.50         51.75           30.38
      Third             14.25           10.88         43.75           23.38
      Fourth            18.56           11.06         28.63           18.13


The Company plans to reinvest its earnings in future growth  opportunities  and,
therefore,  does not anticipate paying cash dividends in the near future and has
not paid any to date. As of December 31, 1999,  there were  approximately  1,207
holders of record of common stock.