##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
 FORM 10-Q  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2005 Commission file number 019433 (TSC LOGO)Technology Solutions Company Incorporated in the State of Delaware  I.R.S. Employer Identification No. 36-3584201
 205 North Michigan Avenue
Suite 1500
Chicago, Illinois 60601
(312) 228-4500 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 þ No o Indicate by check mark whether the registrant is an accelerated filer (as defined by Exchange
Act Rule 12b-2). Yes o No þ As of May 4, 2005 there were outstanding 46,935,038 shares of TSC Common Stock, par value
$.01.




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TECHNOLOGY SOLUTIONS COMPANYIndex to Form 10-Q Executive Officer Stock Option AgreementDirector Stock Option AgreementCEO CertificationCFO CertificationCertification Pursuant to Section 1350Certification Pursuant to Section 1350
  PageNumberPart IFINANCIAL INFORMATION (UNAUDITED)ITEM 1. FINANCIAL STATEMENTSConsolidated Balance Sheets as of March 31, 2005 and December 31, 2004
    
    3Consolidated Statements of Operations for the Three Months Ended March 31, 2005 and 2004
    
    4Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2005 and 2004
    
    5Notes to Consolidated Financial Statements
    
    6ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    12ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    22ITEM 4. CONTROLS AND PROCEDURES
    
    22Part IIOTHER INFORMATIONITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    23ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    23ITEM
6. EXHIBITS
    
    24SIGNATURE
    
    25
 
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PART I. FINANCIAL INFORMATION 
 
 ITEM 1. Financial Statements TECHNOLOGY SOLUTIONS COMPANY 
 CONSOLIDATED BALANCE SHEETS
  March 31,
    
    
    December 31,2005
    
    
    2004(unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    24,122
    
    
    $
    30,032Receivables, less allowance for doubtful receivables
of $73 and $73
    
    
    7,376
    
    
    
    6,182Other current assets
    
    
    317
    
    
    
    708Total current assets
    
    
    31,815
    
    
    
    36,922COMPUTERS, FURNITURE AND EQUIPMENT, NET
    
    
    384
    
    
    
    509GOODWILL
    
    
    7,884
    
    
    
    7,884INTANGIBLE ASSETS, NET
    
    
    1,834
    
    
    
    2,090LONG-TERM RECEIVABLES AND OTHER
    
    
    5,648
    
    
    
    5,679Total assets
    
    $
    47,565
    
    
    $
    53,084LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    1,393
    
    
    $
    960Line of credit
    
    
    
    
    
    
    649Accrued compensation and related costs
    
    
    4,804
    
    
    
    4,987Restructuring accruals
    
    
    529
    
    
    
    696Other current liabilities
    
    
    3,070
    
    
    
    3,998Total current liabilities
    
    
    9,796
    
    
    
    11,290COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY:Preferred stock, $.01 par value; shares authorized 
10,000,000; none issued
    
    
    
    
    
    
    Common stock, $.01 par value; shares authorized 
100,000,000; shares issued  50,533,970;
shares outstanding 46,935,038 and 46,851,460
    
    
    505
    
    
    
    505Capital in excess of par value
    
    
    127,535
    
    
    
    127,583Stock based compensation
    
    
    89
    
    
    
    Accumulated deficit
    
    
    (85,469
    )
    
    
    (81,282
    )Treasury stock, at cost, 3,598,932 and 3,682,510 shares
    
    
    (5,099
    )
    
    
    (5,217
    )Accumulated other comprehensive income:Cumulative translation adjustment
    
    
    208
    
    
    
    205Total stockholders equity
    
    
    37,769
    
    
    
    41,794Total liabilities and stockholders equity
    
    $
    47,565
    
    
    $
    53,084
 The accompanying Notes to Consolidated Financial Statements are an integral part of this financial information. 
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TECHNOLOGY SOLUTIONS COMPANY 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 For the ThreeMonths EndedMarch 31,2005
    
    
    2004(unaudited)REVENUES:Revenues before reimbursements
    
    $
    9,828
    
    
    $
    8,635Reimbursements
    
    
    1,240
    
    
    
    1,09211,068
    
    
    
    9,727COSTS AND EXPENSES:Project personnel
    
    
    6,834
    
    
    
    5,540Other project expenses
    
    
    2,471
    
    
    
    1,454Reimbursable expenses
    
    
    1,240
    
    
    
    1,092Bad debt credit
    
    
    
    
    
    
    (120
    )Management and administrative support
    
    
    4,641
    
    
    
    3,378Intangible asset amortization
    
    
    256
    
    
    
    Restructuring and other credits
    
    
    
    
    
    
    (579
    )Incentive compensation
    
    
    
    
    
    
    22815,442
    
    
    
    10,993OPERATING LOSS
    
    
    (4,374
    )
    
    
    (1,266
    )OTHER INCOME:Net investment income
    
    
    187
    
    
    
    227LOSS BEFORE INCOME TAXES
    
    
    (4,187
    )
    
    
    (1,039
    )INCOME TAX PROVISION
    
    
    
    
    
    
    NET LOSS
    
    $
    (4,187
    )
    
    $
    (1,039
    )BASIC NET LOSS
PER COMMON SHARE
    
    $
    (0.09
    )
    
    $
    (0.03
    )WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
    
    
    46,855
    
    
    
    40,819DILUTED NET LOSS
PER COMMON SHARE
    
    $
    (0.09
    )
    
    $
    (0.03
    )WEIGHTED AVERAGE NUMBER OF
COMMON AND COMMON EQUIVALENT
SHARES OUTSTANDING
    
    
    46,855
    
    
    
    40,819
 The accompanying Notes to Consolidated Financial Statements are an integral part of this financial information. 
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TECHNOLOGY SOLUTIONS COMPANY




CONSOLIDATED STATEMENTS OF CASH FLOWS


For theThree Months EndedMarch 31,2005
    
    
    2004(unaudited)CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (4,187
    )
    
    $
    (1,039
    )Restructuring and other credits
    
    
    
    
    
    
    (579
    )Adjustments to reconcile net loss to net
cash from operating activities:Depreciation and amortization
    
    
    381
    
    
    
    107Credit for receivable valuation allowances and
reserves for possible losses
    
    
    
    
    
    
    (120
    )Non-cash stock compensation
    
    
    89
    
    
    
    Changes in assets and liabilities:Receivables
    
    
    (1,195
    )
    
    
    (66
    )Sales of trading securities related to deferred
compensation plan
    
    
    
    
    
    
    6,712Other current assets
    
    
    390
    
    
    
    530Accounts payable
    
    
    435
    
    
    
    (30
    )Accrued compensation and related costs
    
    
    (182
    )
    
    
    (42
    )Deferred compensation liability
    
    
    
    
    
    
    (6,712
    )Restructuring accruals
    
    
    (166
    )
    
    
    (481
    )Other current liabilities
    
    
    (908
    )
    
    
    (225
    )Other assets
    
    
    31
    
    
    
    17Net cash used in operating activities
    
    
    (5,312
    )
    
    
    (1,928
    )CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    
    
    
    
    (367
    )Net cash used in investing activities
    
    
    
    
    
    
    (367
    )CASH FLOWS FROM FINANCING ACTIVITIES:Line of credit
    
    
    (649
    )
    
    
    Proceeds from exercise of stock options
    
    
    6
    
    
    
    Proceeds from employee stock purchase plan
    
    
    65
    
    
    
    38Net cash (used in) provided by financing activities
    
    
    (578
    )
    
    
    38EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS
    
    
    (20
    )
    
    
    (50
    )DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (5,910
    )
    
    
    (2,307
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    30,032
    
    
    
    41,104CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    24,122
    
    
    $
    38,797


The accompanying Notes to Consolidated Financial Statements are an integral part of this financial information.




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TECHNOLOGY SOLUTIONS COMPANY  
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Unaudited)
  
 NOTE 1  BASIS OF PRESENTATION The consolidated financial statements include the accounts of Technology Solutions Company and its
subsidiaries (TSC or the Company). The consolidated balance sheet as of March 31, 2005, the
consolidated statements of operations for the three months ended March 31, 2005 and 2004 and the
consolidated statements of cash flows for the three months ended March 31, 2005 and 2004 have been
prepared by the Company without audit. In the opinion of management, these financial statements
include all adjustments necessary to present fairly the financial position, results of operations
and cash flows as of March 31, 2005 and for all periods presented. Certain information and footnote
disclosures normally included in the financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been condensed or omitted. The
Company believes that the disclosures included are adequate and provide a fair presentation of
interim period results. Interim financial statements are not necessarily indicative of financial
position or operating results for an entire year. It is suggested that these interim financial
statements be read in conjunction with the audited financial statements and the notes thereto
included in the Companys Annual Report on Form 10-K for the year ended December 31, 2004 filed
with the United States Securities and Exchange Commission (SEC) on March 24, 2005. NOTE 2  THE COMPANY Delivering business benefits through the application of information technology (IT), Technology
Solutions Company (TSC) is a consulting company committed to helping clients in Manufacturing,
Healthcare, Consumer and Retail, and Financial Services. TSC focuses on IT Strategy, Planning and
Process Transformation; Enterprise Application Services; Customer Relationship Management; Business
Technology; Extended Support; Compliance; and Process Adaptation & Training. TSCs clients are
primarily located throughout the United States. NOTE 3  NEW ACCOUNTING STANDARDS In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 123R, Share-Based Payment. SFAS No. 123R is a revision to SFAS
No. 123. SFAS No. 123R will, with certain exceptions, require entities that grant stock options
and shares to employees to recognize the fair value of those options and shares as compensation
cost over the service (vesting) period in their financial statements. The measurements of that
cost will be based on the fair value of the equity or liability instruments issued. In April 2005,
the Securities and Exchange Commission (SEC) issued Release No. 33-8568 which amended the
compliance date of SFAS No. 123R to be effective beginning with the first interim or annual
reporting period of the first fiscal year beginning on or after June 15, 2005. SFAS No. 123R will
be effective for the Company starting with the quarter ending March 31, 2006. While the Company is
currently evaluating the impact of the adoption of SFAS No. 123R, we believe the impact will be
material to our results of operations as shown in our current disclosure under SFAS No. 123 (see
Note 4). 
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TECHNOLOGY SOLUTIONS COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Unaudited)
(Continued) 
 NOTE 4  STOCK OPTIONS The Company accounts for stock-based compensation using the intrinsic value method prescribed by
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and
related interpretations. Compensation costs for employee stock options are measured as the excess,
if any, of the quoted market price of the Companys common stock at the date of grant over the
amount an employee must pay to acquire the stock. For options issued during the three months ended
March 31, 2005 and 2004, no stock-based compensation is reflected in net loss in the accompanying
consolidated statements of operations, as all such options had an exercise price equal to the
market value of the underlying common stock on the date of grant. Stock based compensation of $89
was recorded during the three months ended March 31, 2005 relating to an option grant that took
place within a six month period prior to a cancellation. The following table illustrates the effect on net loss and loss per share if the Company had
applied the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based
Compensation, to stock-based compensation. For the Three MonthsEnded March 31,2005
    
    
    2004Net loss:As reported
    
    $
    (4,187
    )
    
    $
    (1,039
    )Less: Stock-based compensation expense
determined under fair value method for all
awards, net of related taxes (as applicable)
    
    
    (372
    )
    
    
    (485
    )Pro forma
    
    $
    (4,559
    )
    
    $
    (1,524
    )Basic net loss
per common share:As reported
    
    $
    (0.09
    )
    
    $
    (0.03
    )Pro forma
    
    $
    (0.10
    )
    
    $
    (0.04
    )Diluted net loss
per common share:As reported
    
    $
    (0.09
    )
    
    $
    (0.03
    )Pro forma
    
    $
    (0.10
    )
    
    $
    (0.04
    )
 As of March 31, 2005 and 2004, options to purchase 12,993,123 and 9,988,063 shares of common stock
were outstanding, respectively, and options to purchase an additional 1,310,227 and 3,036,920
shares of common stock were available for grant, respectively, under the Technology Solutions
Company 1996 Stock Incentive Plan. 
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TECHNOLOGY SOLUTIONS COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Unaudited)
(Continued) 
 NOTE 5  CAPITAL STOCK The Company has a stock repurchase program, which allows for share repurchases of up to 11,525,327
shares of outstanding Company common stock (the Repurchase Program). During the three months
ended March 31, 2005 and 2004, the Company did not purchase any shares. The Company has repurchased
an aggregate total of 6,838,127 shares since the inception of this Repurchase Program in September
2000. As of March 31, 2005, there were 4,687,200 shares available to be purchased under the
Repurchase Program. The timing and size of any future stock repurchases are subject to market conditions, stock prices,
cash position and other cash requirements. NOTE 6  LOSS PER COMMON SHARE The Company discloses basic and diluted loss per share in the consolidated statements of operations
under the provisions of SFAS No. 128, Earnings Per Share. Diluted loss per common share is
computed by dividing net loss by the weighted average number of common shares outstanding during
each period presented, plus the dilutive effect of common equivalent shares arising from the
assumed exercise of stock options using the treasury stock method. Common equivalent shares of
1,418,792 and 1,633,574 were not included in the diluted loss per share calculation as they were
antidilutive for the three months ended March 31, 2005 and 2004, respectively. Basic loss per
common share is computed by dividing net loss by the weighted average number of common shares
outstanding during each period presented. Reconciliation of basic and diluted loss per share for the three months ended: March 31, 2005
    
    
    March 31, 2004Net
    
    
    Shares
    
    
    Per Common
    
    
    Net
    
    
    Shares
    
    
    Per CommonLoss
    
    
    (In Thousands)
    
    
    Share
    
    
    Loss
    
    
    (In Thousands)
    
    
    ShareBasic loss per share
    
    $
    (4,187
    )
    
    
    46,855
    
    
    $
    (0.09
    )
    
    $
    (1,039
    )
    
    
    40,819
    
    
    $
    (0.03
    )Effect of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Diluted loss per share
    
    $
    (4,187
    )
    
    
    46,855
    
    
    $
    (0.09
    )
    
    $
    (1,039
    )
    
    
    40,819
    
    
    $
    (0.03
    )
 
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TECHNOLOGY SOLUTIONS COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Unaudited)
(Continued) 
 NOTE 7  COMPREHENSIVE (LOSS) INCOME The Companys comprehensive (loss) income was as follows: For the Three MonthsEnded March 31,2005
    
    
    2004Net loss
    
    $
    (4,187
    )
    
    $
    (1,039
    )Other comprehensive income (loss):Translation adjustment
    
    
    3
    
    
    
    (15
    )Other comprehensive income (loss)
    
    
    3
    
    
    
    (15
    )Total comprehensive loss
    
    $
    (4,184
    )
    
    $
    (1,054
    )
 NOTE 8  BUSINESS SEGMENTS TSC currently operates within one reportable business segment. The following is revenue and
long-lived asset information by geographic area: For and as of the Three Months Ended March 31, 2005
    
    United States
    
    
    Foreign Subsidiary
    
    
    TotalRevenues
    
    $
    11,068
    
    
    
    
    
    
    $
    11,068Identifiable assets
    
    $
    47,346
    
    
    $
    219
    
    
    $
    47,565
 For and as of the Three Months Ended March 31, 2004
    
    United States
    
    
    Foreign Subsidiary
    
    
    TotalRevenues
    
    $
    9,727
    
    
    
    
    
    
    $
    9,727Identifiable assets
    
    $
    50,826
    
    
    $
    224
    
    
    $
    51,050
 Foreign revenues and identifiable assets are based on the country in which the subsidiary is
domiciled. No single foreign countrys revenues or identifiable assets were material to the
consolidated revenues or identifiable assets of the Company. NOTE 9  OTHER EVENTS In the second quarter of 2003, the Company recorded $5,211 in restructuring and other charges as a
result of organizational changes announced in June 2003. These charges consisted of the severance
costs of professional personnel and executives, and office reductions as well as professional fees
incurred in connection with terminated negotiations with a party that had expressed interest in
acquiring the Company. During the three months ended March 31, 2004, this charge was reduced by
$266 to $4,945 as the Company was able to favorably terminate one of its office leases. As of March
31, 2005, there was an accrual balance of $529. The Company expects to utilize the balance by the
third quarter of 2005. The following table provides the components of this charge. 
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TECHNOLOGY SOLUTIONS COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Unaudited)
(Continued) 
 Cash(1)
    
    
    Non-cash
    
    
    Balance as ofRestructuring and Other Charges  2003
    
    Charge
    
    
    Payments
    
    
    Usage
    
    
    Mar. 31, 2005Severance costs
(approximately 30
employees)
    
    $
    3,917
    
    
    $
    3,449
    
    
    $
    33
    
    
    $
    435Office reductions
    
    
    921
    
    
    
    549
    
    
    
    2
    
    
    
    370Professional fees
    
    
    373
    
    
    
    383
    
    
    
    
    
    
    
    (10
    )Total original charge
    
    
    5,211
    
    
    
    4,381
    
    
    
    35
    
    
    
    7952004 adjustment
    
    
    (266
    )
    
    
    
    
    
    
    
    
    
    
    (266
    )Total
    
    $
    4,945
    
    
    $
    4,381
    
    
    $
    35
    
    
    $
    529
   (1) Net cash payments totaling $167 were made during the three months ended March
31, 2005. In 2000, the Company recorded a pre-tax charge of $4,701 for the closure of its Latin American
operations. Subsequently in 2000, the Company collected $400 of accounts receivable previously
written-off and, as a result, the cumulative charge was reduced to $4,301. This charge was further
reduced by $181 to $4,120 during the three months ended March 31, 2004 as the Company completed the
closure of its Latin American operations and, accordingly, no further payments are due. The
following table provides the components of this charge. Cash
    
    
    Non-cash
    
    
    Balance as ofLatin America Charge  2000
    
    Charge
    

    
    Payments
    
    
    Usage
    
    
    Mar. 31, 2005Severance costs
(approximately
40 employees)
    
    $
    1,785
    
    
    $
    1,574
    
    
    $
    
    
    
    $
    211Other costs
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    (30
    )Asset write-offs
    
    
    2,916
    
    
    
    
    
    
    
    2,916
    
    
    
    Total original charge
    
    
    4,701
    
    
    
    1,604
    
    
    
    2,916
    
    
    
    181Accounts receivable
collections  2000
    
    
    (400
    )
    
    
    (400
    )
    
    
    
    
    
    
    2004 adjustment
    
    
    (181
    )
    
    
    
    
    
    
    
    
    
    
    (181
    )Total
    
    $
    4,120
    
    
    $
    1,204
    
    
    $
    2,916

    
    
    $
    
 In 1999, the Company recorded $6,967 in restructuring and other charges associated with lease
terminations, former executive severance costs, CourseNet Systems, Inc. acquisition costs and asset
write-offs. On February 15, 2000, the Company distributed the common stock of eLoyalty Corporation
(eLoyalty) owned by the Company to the Companys stockholders (the Spin-Off). eLoyalty operated
within the Company prior to the Spin-Off and is now a separate, publicly traded company. The
Company determined that a portion of the lease terminations became unnecessary due to changes in
TSC office usage by TSC and eLoyalty and also determined that the actual costs for these lease
terminations would be less than previously anticipated and, as a result, the cumulative charge was
reduced by $2,036 to $4,931 during 2000, 2001 and 2002 and by $132 to $4,799 during the quarter
ended March 31, 2004. During the quarter ended June 30, 2004, the Company made the final payment on
its remaining contractual lease obligation. Accordingly, no further payments are due on this
charge. The following table 
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TECHNOLOGY SOLUTIONS COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Unaudited)
(Continued) 
 provides the components of this charge. Cash
    
    
    Non-cash
    
    
    Balance as ofRestructuring and Other Charges  1999
    
    Charge
    
    
    Payments
    
    
    Usage
    
    
    Mar. 31, 2005Lease terminations
    
    $
    3,011
    
    
    $
    725
    
    
    $
    35
    
    
    $
    2,251Former executive
severance costs
    
    
    1,814
    
    
    
    1,747
    
    
    
    150
    
    
    
    (83
    )CourseNet Systems, Inc.
acquisition costs
    
    
    1,300
    
    
    
    
    
    
    
    1,300
    
    
    
    Asset write-offs
    
    
    842
    
    
    
    
    
    
    
    842
    
    
    
    Total original charge
    
    
    6,967
    
    
    
    2,472
    
    
    
    2,327
    
    
    
    2,1682000 adjustment
    
    
    (404
    )
    
    
    
    
    
    
    
    
    
    
    (404
    )2001 adjustment
    
    
    (1,488
    )
    
    
    
    
    
    
    
    
    
    
    (1,488
    )2002 adjustment
    
    
    (144
    )
    
    
    
    
    
    
    
    
    
    
    (144
    )2004 adjustment
    
    
    (132
    )
    
    
    
    
    
    
    
    
    
    
    (132
    )Total
    
    $
    4,799
    
    
    $
    2,472
    
    
    $
    2,327
    
    
    $
    
 
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TECHNOLOGY SOLUTIONS COMPANY 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSISOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 RESULTS OF OPERATIONS OVERVIEW During 2004 we acquired two businesses in separate transactions, Zamba Corporation (Zamba) and
Proceed North America LLC (Proceed). On December 31, 2004 we completed the acquisition of Zamba,
which gives us a stronger position in the customer relationship management market. Under the terms
of the transaction, Zamba stockholders received 0.15 shares of our Common Stock for each share of
Zamba Common Stock effective December 31, 2004. On October 5, 2004, we entered into an asset
purchase agreement with Proceed under which we acquired Proceeds business. Proceed is the primary
implementation partner for SAP® Packaged Services in the US. The results of our operations are affected by general economic conditions as well as the level of
economic activity and changes in the industries that we serve. While the general economy and the
information technology (IT) consulting services market may be improving, there is no assurance
that improving conditions will result in an increase in our future revenues given the fundamental
changes in the IT service industry as described below. In addition, increases in demand for our
services generally tend to lag behind economic cycles. Accordingly, any benefit to our business of
any economic recovery may take longer to realize. In the second half of 2003, we began to refocus and rebuild our business by investing in a range of
specialty services in order to differentiate ourselves from our competition. In mid 2004, we
continued this rebuilding process and transformation of our business model by increasing focus on
and strengthening both our vertical industry and competency groups. As part of this transformation,
we hired new client officers during the second half of 2004 to provide additional expertise in
these industries and functional capabilities. In addition, we made two acquisitions, as discussed
above. We continue to look at appropriate acquisition opportunities that meet our business model.
We expect quarterly revenues in the second quarter of 2005 to be approximately $9.5 million to
$10.5 million, broadly in-line with the first quarter of 2005. We incurred operating losses during
the three months ended March 31, 2005 and each quarter in 2004 and we expect to incur an operating
loss for 2005 as we continue our efforts to transform and rebuild our business. We believe the information technology services industry continues to undergo fundamental changes,
resulting in increased competitive pressure. These changes include competition from application
software firms as they continue to enhance services and implementation capabilities to increase
their revenue; offshore application development and system consulting and support firms which
typically have much lower labor costs and billing rates; and the proliferation of Enterprise
Resource Planning (ERP) expertise within the IT departments of organizations, reducing the need
to engage outside consulting services. The availability of offshore technical expertise has and
will continue to have an impact on the IT consulting market. However, we believe the demand for
high end value added technically and functionally
competent 
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TECHNOLOGY SOLUTIONS COMPANY MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued) 
 innovative consultants will increase
over time. The complexity of corporate IT functions is not diminishing. Our business is also driven by the pace of technological change, our ability to differentiate
ourselves from our competitors through specialty services that address targeted industry and
business concerns, and the type and level of spending by our clients in the areas in which we
provide services. Many factors can result in a deferral, reduction or cancellation of services
requested by our prospective or current clients including budget constraints, economic conditions
and perceived project progress, success or value. The economic uncertainties of recent years have
led many corporations to reassess their IT goals and budgets. This, combined with the lack of
significant new technology to stimulate spending, dampened demand for our services. However, we
believe that many companies have very old systems and technology and real time business decision
making capabilities will fuel growth in many of our markets. During periods of decreased demand, companies try to minimize costs and negotiate lower prices for
our services. Our ability to successfully identify and prepare for these changes is a key driver of
our performance. Therefore, our strategy is to try to anticipate these trends and identify
cost-management initiatives that will allow us to manage costs relative to expected revenues as
well as identifying opportunities to increase revenues. Although we remain committed to spending
our funds wisely, there is a point at which further cost cutting can be counter-productive. Project personnel costs constitute the majority of our operating costs. Since project personnel
costs are primarily driven by the cost of billable personnel, mainly compensation and benefits,
maintaining these costs at a reasonable and predictable percentage of revenue is critical to our
financial performance. Project personnel costs as a percentage of revenues are driven by
utilization and average hourly billing rates. Utilization represents the percentage of time our
billable professionals spend on billable work. It is our strategy to try to match our project
personnel supply with demand. At times this requires us to reduce headcount and reassign employees
to other active projects when they are no longer needed on a particular project. However, because
of the mix of skills needed and project duration, implementation of this strategy may be delayed at
times. Accordingly, any decline in revenues without a corresponding and timely reduction in
staffing, or a staffing increase that is not accompanied by a corresponding increase in revenues,
would have an adverse effect on our business, operating results and financial condition, which
could be material. REVENUES For presentation purposes, we show two components of revenues: 1) revenues before reimbursements,
which consist of revenue for performing consulting services; and 2) reimbursements, consisting of
reimbursements we receive from clients for out-of-pocket expenses incurred. We believe revenues
before reimbursements is a more meaningful representation of our economic activity since it
excludes pass-through, zero-margin expense reimbursements. 
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TECHNOLOGY SOLUTIONS COMPANY MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued) 
 COSTS AND EXPENSES Project Personnel Project personnel costs consist primarily of professional salaries and benefits. Other Project Expenses Other project expenses consist of the cost for subcontractors hired for use on our client projects
and billed to our clients; employee termination costs; and nonreimbursable expenses incurred for
client projects and business development. Nonreimbursable expenses include recruiting fees, certain
selling expenses and personnel training. Reimbursable Expenses Reimbursable expenses represent project related and other out-of-pocket expenses that are
reimbursable by the client. An equivalent amount is included in revenues under the caption
Reimbursements. Bad Debt Expense We maintain an allowance for doubtful receivables resulting from the failure of our customers to
make required payments. We also analyze our notes receivable, which are included in Long-Term
Receivables and Other on our Consolidated Balance Sheet. Management and Administrative Support Management and administrative support costs consist of client officer costs and infrastructure
costs. Client officer costs include client officer salaries and travel, marketing costs and
recruiting costs. Client officers are a critical component in our client relationship-selling
model. Each of our clients has at least one client officer assigned to them. The client officers
are responsible for delivery excellence, client relationship and satisfaction, revenues,
utilization, project margins, days sales outstanding and human capital, including recruiting and
career development. In addition, each client officer is also a billable consulting resource.
Infrastructure costs include costs related to our senior corporate management and board of
directors; accounting; financial reporting; finance; tax; legal; treasury; human resources;
employee benefits; marketing; public and investor relations; office operations; staffing of our
project personnel; recruiting; training; internal communications; internal technology applications;
management of new business opportunities; planning; quality assurance; and risk management. Intangible asset amortization Our acquired intangible assets, consist of amounts related to customer relationships, backlog,
agreements not to compete and other business agreements, with definitive lives are amortized over
their estimated useful lives. In addition, we evaluate the intangible assets with definite lives
to determine whether adjustment to these amounts or estimated useful lives are required based on
current events and circumstances. 
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TECHNOLOGY SOLUTIONS COMPANY MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued) 
 Incentive Compensation Incentive compensation, if any, is accrued at a set percentage of base salary, which varies by
level of employee, and is adjusted to reflect the amounts needed for active employees and for
performance against targets, goals and objectives. Payments of incentive compensation, if any, are
performance based and are determined by both objective (financial-based) and subjective measures.
These objectives include both quarterly and full fiscal year parameters. CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of financial statements, in conformity with accounting principles generally
accepted in the United States of America, requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of revenues and
expenses during the reporting period. Management bases its estimates on historical experience and
other assumptions, which it believes are reasonable. If actual amounts are ultimately different
from these estimates, the revisions are included in the Companys results of operations for the
period in which the actual amounts become known. Accounting policies are considered critical when they require management to make assumptions about
matters that are highly uncertain at the time the estimate is made and when different estimates
than management reasonably could have used have a material impact on the presentation of the
Companys financial condition, changes in financial condition or results of operations. Revenue Recognition We derive our revenues from a variety of business and information technology consulting services,
including systems integration, packaged software integration and implementation services,
programming, training and extended support services. Our services are contracted on either a time
and materials basis or a fixed price basis. For our time and materials contracts, we recognize
revenue as work is performed, primarily based on hourly billing rates. For our fixed price
contracts, we recognize revenues using the percentage-of-completion method, which is based on the
percentage of work performed in the period compared to the total estimated work to be performed
over the entire contract. Revenues are subject to revision as the contract progresses to
completion. Any revisions in the estimate are charged to operations in the period in which the
facts that give rise to the revision become known. Contracts are performed in phases. Losses on
contracts, if any, are reserved in full when determined. Contract losses are determined by the
amount by which the estimated cost of the contract exceeds the estimated total revenues that will
be generated by the contract. Extended support revenues are recognized as services are rendered. Allowance for Doubtful Receivables An allowance for doubtful receivables is maintained for potential credit losses. When evaluating
the adequacy of our allowance for doubtful receivables, management specifically analyzes 
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TECHNOLOGY SOLUTIONS COMPANY MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued) 
 accounts
receivable on a client by client basis, including customer credit worthiness and current economic
trends, and records any necessary bad debt expense based on the best estimate of the facts known to
date. Should the facts regarding the collectability of receivables change, the resulting change in
the allowance would be charged or credited to income in the period such determination is made. Such
a change could materially impact our financial position and results of operations. Accounting for Income Taxes We use an asset and liability approach to financial accounting and reporting for income taxes.
Deferred income taxes are provided using currently enacted tax rates when tax laws and financial
accounting standards differ with respect to the amount of income for a year and the basis of assets
and liabilities. Significant management judgment is required in determining our provision for
income taxes, deferred tax assets and liabilities and any valuation allowance recorded against our
net deferred tax assets. We have generated certain deferred tax assets as a result of operating
losses and temporary differences between book and tax accounting, as well as tax benefits resulting
from the exercise of employee stock options that were recorded as additional paid-in capital in the
period of exercise. Statement of Financial Accounting Standards (SFAS) No. 109 Accounting for
Income Taxes, requires the establishment of a valuation allowance to reflect the likelihood of
realization of deferred tax assets. During 2003, we recorded a full valuation allowance against our
deferred tax assets. If the realization of our deferred tax assets in future periods is considered
more likely than not, an adjustment to our deferred tax asset would increase net income in the
period such determination is made. The amount of deferred tax assets considered realizable is based
on significant estimates. Changes in these estimates could materially affect our financial
condition and results of operations in future periods. Valuation of Stock Options and Warrants We account for stock-based compensation using the intrinsic value method prescribed in Accounting
Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related
interpretations. Compensation costs for employee stock options are measured as the excess, if any,
of the quoted market price of the Companys common stock at the date of grant over the amount an
employee must pay to acquire the stock. In connection with our acquisition of Zamba, we used the Black-Scholes option-pricing model for the
valuation of the options and warrants issued in connection with this acquisition. The
Black-Scholes option-pricing model requires assumptions as to the expected lives of the options and
warrants, expected volatility of our stock price and risk-free interest rates. As we have not and
do not anticipate paying dividends, the dividend yield is assumed to be zero. Goodwill and Intangible Assets We account for Goodwill and Intangible Assets in accordance with SFAS No. 141, Business
Combinations and SFAS No. 142, Goodwill and Other Intangible Assets. Under SFAS No. 142,
goodwill and intangibles that are deemed to have indefinite lives are no longer
amortized 
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TECHNOLOGY SOLUTIONS COMPANY MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued) 
 but,
instead, are to be reviewed at least annually for impairment. Intangible assets continue to be
amortized over their estimated useful lives. SFAS No. 142 requires that goodwill be evaluated for impairment annually or if an event occurs or
if circumstances change that may reduce the fair value of the acquisition below its book value.
The impairment test is conducted (based on the revenues derived from the acquired entity) utilizing
a fair value methodology. We evaluate the fair value of our acquisitions utilizing various
valuation techniques including discounted cash flow analysis. This implied fair value is compared
to the carrying amount of the goodwill for the individual acquisition. If the fair value is less,
we would then recognize an impairment loss. In addition, we evaluate the intangible assets with
definite lives to determine whether adjustment to these amounts or estimated useful lives are
required based on current events and circumstances. THREE MONTHS ENDED MARCH 31, 2005 COMPARED WITH THREE MONTHS ENDED MARCH 31, 2004 Revenues Consolidated net revenues were $11.1 million for the three months ended March 31, 2005, an increase
of 14 percent from the same period in the prior year. Revenues before reimbursements increased 14
percent to $9.8 million from $8.6 million. This increase was due to the acquisition of Zamba on
December 31, 2004. During the three months ended March 31, 2005 and 2004, no client accounted for more than 10 percent
of revenues before reimbursements. We added 28 new clients and 54 new projects during the three
months ended March 31, 2005 compared to 7 new clients and 27 new projects during the same period in
the prior year. The new clients and projects added during the three months ended March 31, 2005
included 12 new clients related to the acquisition of Zamba. Costs and Expenses Project personnel costs were $6.8 million for the three months ended March 31, 2005, an increase of
23 percent from the same period in the prior year. This increase was due to an increase in
professional headcount as a result of the acquisition of Zamba. Project personnel costs as a
percentage of revenues before reimbursements increased to 70 percent for the three months ended
March 31, 2005 compared to 64 percent in the same period in the prior year as a result of a decline
in utilization, partially offset by an increase in average hourly billing rates. Utilization
declined to 59 percent from 72 percent and average hourly billing rates increased 9 percent to
$153. Other project expenses were $2.5 million for the three months ended March 31, 2005, an increase of
70 percent from the same period in the prior year. This increase was a result of additional
subcontractor costs of $0.6 million, due to the increased use of subcontractors for certain
specialized skills; severance costs of $0.2 million; and an increase in various other costs of $0.2
million such as hiring and non-billable travel costs. Other project expenses as a percentage of 
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TECHNOLOGY SOLUTIONS COMPANY MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued) 
 revenues before reimbursements increased to 25 percent for the three months ended March 31, 2005
from 17 percent from the same period in the prior year mainly due to the increase in subcontractor
and severance costs. There was no bad debt expense for the three months ended March 31, 2005 compared to a credit of
$0.1 million in the same period in the prior year. Management and administrative support costs increased to $4.6 million for the three months ended
March 31, 2005 from $3.4 million for the same period in the prior year. This increase mainly
resulted from an increase in labor costs due to additional client officers added during the second
half of 2004 as well as the acquisition of Zamba. Intangible asset amortization was $0.3 million for the three months ended March 31, 2005 due to the
acquisitions of Zamba and Proceed. During the three months ended March 31, 2004, we reversed restructuring and other charges of $0.6
million. This amount consisted of $0.3 million related to certain lease terminations recorded
during the quarter ended June 30, 2003; $0.2 million related to the closure of our Latin American
operations recorded in 2000; and $0.1 million related to certain lease terminations recorded in
1999. No incentive compensation was recorded during the three months ended March 31, 2005 as we did not
meet our quarterly objective. Incentive compensation expense was $0.2 million for the three
months ended March 31, 2004. If the Company and our employees meet their 2005 quarterly and annual
quantitative and qualitative objectives, we expect to accrue incentive compensation during the
remaining quarters of 2005. Operating Loss Consolidated operating loss was $4.4 million for the three months ended March 31, 2005 compared to
$1.3 million for the same period in the prior year. Our operating loss for the quarter ended March
31, 2004 included restructuring and other credits of $0.6 million. The increase in the operating
loss, excluding this credit, mainly resulted from the increased headcount from the Zamba
acquisition and additional client officers hired during the second half of 2004, increased use of
subcontractors and an increase in severance costs, partially offset by an increase in revenues. Other Income Other income for the three months ended March 31, 2005 was $0.2 million, a slight decrease from the
same period in the prior year. This decrease was a result of lower cash balances. Our cash and
cash equivalents were primarily invested in overnight money market type accounts. Average interest
rates were approximately 2.44 percent for the three months ended March 31, 2005 compared to
approximately 0.90 percent during the same period in the prior year. 
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TECHNOLOGY SOLUTIONS COMPANY MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued) 
 Income Tax Provision We did not recognize an income tax benefit for the three months ended March 31, 2005 or 2004 since
we recorded a full valuation allowance against our deferred taxes in 2003. Shares Outstanding Weighted average number of common shares outstanding and weighted average number of common and
common equivalent shares outstanding increased to 46,855,000 from 40,819,000 mainly due to
5,838,182 shares issued as a result of the Zamba acquisition, as well as shares issued under our
employee stock purchase plan and stock option plans. LIQUIDITY AND CAPITAL RESOURCES Net cash used in operating activities was $5.3 million and $1.9 million for the three months ended
March 31, 2005 and 2004, respectively. Net cash used in operating activities for the three months
ended March 31, 2005 primarily resulted from the loss for the quarter, payments related to the
acquisitions of Zamba and Proceed and an increase in receivables due to the increase in revenues
and days sales outstanding. Days sales outstanding increased by 5 days to 60 days at March 31,
2005 as compared to 55 days at March 31, 2004. The payments relating to the acquisitions of Zamba
and Proceed resulted in a decrease in other current liabilities. Estimated future cash commitments include various office facilities, property and office equipment
under operating leases and other costs that expire at various dates; an annual commitment for
telecommunications; and cash payment related to the acquisition of Proceed. The Company has no
guarantees of third party debt or any other off-balance sheet commitments as of March 31, 2005. A
summary of our contractual obligations at March 31, 2005 is as follows: Payments Due By PeriodRemainingQuarters in(In thousands)
    
    2005
    
    
    2006-2007
    
    
    2008
    
    
    Thereafter
    
    
    TotalOperating leases (net of
restructuring and other
charges)
    
    $
    1,058
    
    
    $
    1,207
    
    
    $
    1
    
    
    $
    
    
    
    $
    2,266Cash outlay for restructuring
and
other charges
    
    
    529
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    529Purchase obligations
    
    
    162
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    162Cash outlays for the acquisition
of Proceed
    
    
    250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250Total
    
    $
    1,999
    
    
    $
    1,207
    
    
    $
    1
    
    
    $
    
    
    
    $
    3,207
 There were no cash flows used in investing activities during the three months ended March 31, 2005.
We currently have no material commitments for capital expenditures. 
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TECHNOLOGY SOLUTIONS COMPANY MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued) 
 Net cash used in financing activities was $0.6 million for the three months ended March 31, 2005 as
the line of credit, which was recorded as part of our acquisition of Zamba on December 31, 2004,
was paid in full. Partially offsetting this amount were proceeds from the exercise of stock
options and our employee stock purchase plan. Our cash and cash equivalents at March 31, 2005 were $24.1 million. Depending on revenues and cash
collections, we expect our cash and cash equivalent balance at June 30, 2005 to be approximately
$16.5 million to $18.0 million. Our investment policy is to maintain most of our cash and cash
equivalents in highly liquid, large money market type funds. This policy exposes us to short-term
interest rate fluctuations. We expect to experience continued operating losses until revenues
increase sufficiently to cover operating costs. Until such time as we are able to generate positive
cash flow, our primary sources of liquidity are our existing cash and cash equivalents. If we are
not successful in increasing revenues and eliminating negative cash flows, it could become
necessary to raise additional capital to offset losses from operations. There can be no assurance
that we will be able to obtain any financing or that, if we were to be successful in finding
financing, it would be on favorable terms. Operating results and liquidity, including our ability to raise additional capital if necessary,
may be materially and adversely affected by continued low demand for the Companys services. In
addition, a number of other factors, including general economic conditions, technological changes,
competition and other factors affecting the IT industry generally, and the suspension or
cancellation of a large project could have an adverse effect on future results and liquidity. These
aforementioned factors, as well as other factors, are more fully described in the Companys Annual
Report on Form 10-K for the year ended December 31, 2004 under Managements Discussion and Analysis
of Financial Condition and Results of Operations Assumptions Underlying Certain Forward-Looking
Statements and Factors that May Affect Future Results. NEW ACCOUNTING STANDARDS In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123R,
Share-Based Payment. SFAS No. 123R is a revision to SFAS No. 123. SFAS No. 123R will, with
certain exceptions, require entities that grant stock options and shares to employees to recognize
the fair value of those options and shares as compensation cost over the service (vesting) period
in their financial statements. The measurements of that cost will be based on the fair value of
the equity or liability instruments issued. In April 2005, the SEC issued Release No. 33-8568
which amended the compliance date of SFAS No. 123R to be effective beginning with the first interim
or annual reporting period of the first fiscal year beginning on or after June 15, 2005. SFAS No.
123R will be effective for us starting with the quarter ended March 31, 2006. While we are
currently evaluating the impact of the adoption of SFAS No. 123R, we believe the impact will be
material to our results of operations as shown in our current disclosure under SFAS No. 123. 
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TECHNOLOGY SOLUTIONS COMPANY MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued) 
 ASSUMPTIONS UNDERLYING CERTAIN FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT FUTURE
RESULTS This Form 10-Q contains or may contain certain forward-looking statements concerning our financial
position, results of operations, cash flows, business strategy, budgets, projected costs and plans
and objectives of management for future operations as well as other statements including words such
as anticipate, believe, plan, estimate, expect, intend, and other similar expressions.
These forward-looking statements involve significant risks and uncertainties. Although we believe
that the expectations reflected in such forward-looking statements are based on reasonable
assumptions, readers are cautioned that no assurance can be given that such expectations will prove
correct and that actual results and developments may differ materially from those conveyed in such
forward-looking statements. We claim the protection of the safe harbor for forward-looking
statements contain in the Private Securities Litigation Reform Act of 1995 for all forward-looking
statements. Important factors that could cause actual results to differ materially from the
expectations reflected in the forward-looking statements in this Form 10-Q include, among others,
our ability to successfully introduce new service offering, our ability to manage the pace of
technological change including our ability to refine and add to our service offerings to adapt to
technological changes, our ability to manage the current downturn in our business and in our
industry and the economy in general, our ability to manage our current decreased revenue levels,
our ability to attract new business and increase revenues, our ability to attract and retain
employees, the decreasing level of options available for grants to attract new employees and to
retain existing employees, our ability to accommodate a changing business environment, general
business and economic conditions in our operating regions, market conditions and competitive
factors, our dependence on a limited number of clients and the potential loss of significant

clients, our ability to continue to attract new clients and sell additional work to existing
clients, our ability to successfully integrate the Zamba business with our business, and our
ability to manage costs and headcount relative to expected revenues, all as more fully described
herein and in our Annual Report on Form 10-K for the year ended December 31, 2004 under
Managements Discussion and Analysis of Financial Condition and Results of Operations Assumptions
Underlying Certain Forward-Looking Statements and Factors that May Affect Future Results and
elsewhere from time to time in our other SEC reports. Such forward-looking statements speak only as
of the date on which they are made and we do not undertake any obligation to update any
forward-looking statement to reflect events or circumstances after the date of this Form 10-Q. If
we do update or correct one or more forward-looking statements, investors and others should not
conclude that we will make additional updates or corrections with respect thereto or with respect
to other forward-looking statements. Actual results may vary materially. 
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TECHNOLOGY SOLUTIONS COMPANY PART I. FINANCIAL INFORMATION
(Continued) 
 
 ITEM 3QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK TSC is exposed to interest rate fluctuations. Changes in interest rates affect interest income and
expense on cash and cash equivalents. The Companys cash and cash equivalents are primarily
invested in overnight money market type accounts. Average interest rates were approximately 2.44
percent during the three months ended March 31, 2005 compared to 0.90 percent during the same
period in the prior year. Based on the cash and cash equivalents balances as of March 31, 2005 and
2004, a hypothetical 1.00 percent increase in interest rates would have resulted in approximately
$0.1 million in additional net investment income during each of the quarters ended March 31, 2005
and 2004. The financial statements of the Companys non-U.S. subsidiaries are remeasured into U.S. dollars
using the local currency as the functional currency. The market risk associated with the foreign
currency exchange rates is not material in relation to the Companys consolidated financial
position, results of operations or cash flows. The Company does not have any significant accounts
payable, account receivable or commitments in a currency other than that of the reporting units
functional currency. The Company does not utilize derivative financial instruments to manage the
exposure in non-U.S. operations. 
 ITEM 4CONTROLS AND PROCEDURES The management of the Company, including the Chief Executive Officer and Chief Financial Officer,
has conducted an evaluation of the effectiveness of the Companys disclosure controls and
procedures pursuant to Exchange Act Rule 13a-15 (b) as of the end of the period covered by this
quarterly report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Companys disclosure controls and procedures are effective in providing
reasonable assurance that all material information relating to the Company that is required to be
included in the reports that the Company files with the SEC is recorded, processed, summarized and
reported within the time periods specified in the SECs rules and forms. There have been no changes
in the Companys internal controls over financial reporting that were identified during the
evaluation that occurred during the Companys last fiscal quarter that have materially affected, or
are reasonably likely to materially affect, the Companys internal control over financial
reporting. 
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TECHNOLOGY SOLUTIONS COMPANY 
 PART II. OTHER INFORMATION 
 
 ITEM 2UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The Company has a stock repurchase program, which allows for share repurchases of up
to 11,525,327 shares of outstanding Company common stock (the Repurchase Program).
The Repurchase Program was approved by the Board of Directors during September 2000
(3,000,000 shares), August 2001 (2,000,000 shares), April 2002 (3,930,327 shares)
and February 2003 (2,595,000 shares). During the three months ended March 31, 2005,
the Company did not purchase any shares. The Company has repurchased an aggregate
total of 6,838,127 shares since the inception of this Repurchase Program in
September 2000. As of March 31, 2005, there were 4,687,200 shares available to be
purchased under the Repurchase Program. All repurchases were made in the open
market, subject to market conditions and trading restrictions. The timing and size
of any future stock repurchases are subject to market conditions, stock prices, cash
position and other cash requirements. 
 ITEM 4SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Companys 2005 Annual Meeting of Stockholders (the Annual Meeting) was held on May 5,
2005. Represented at the Annual Meeting, either in person or by proxy, were 36,229,356
voting shares. The following actions were taken by a vote of the Companys stockholders at
the Annual Meeting:  1.
    Ms. Paula Krueger and Messrs. Raymond P. Caldiero, Carl F. Dill, Jr., Michael
R. Gorsage, Gerald Luterman, Stephen B. Oresman and John R. Purcell were elected to
serve as members of the Companys Board of Directors receiving 35,167,450;
34,995,141; 35,185,071; 26,580,086; 35,544,244; 26,576,631; and 35,159,789 votes in
favor of election, respectively, and 1,061,905; 1,234,214; 1,044,284; 9,649,269;
685,111; 9,652,724; and 1,069,566 votes withheld, respectively.2.
    The appointment of Grant Thornton LLP to serve as the Companys independent
auditors for its fiscal year ending December 31, 2005 was ratified; 36,011,445
votes were cast for the ratification; 152,612 votes were cast against the
ratification; and there were 65,299 abstentions. There were no broker non-votes 
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TECHNOLOGY SOLUTIONS COMPANY PART II. OTHER INFORMATION  (continued) 
 
 ITEM 6EXHIBITS  (a)
    Exhibits Exhibit #
    
    Description of Document10.1*
    
    Executive officer stock option agreement10.2*
    
    Director stock option agreement31.1*
    
    CEO Certification31.2*
    
    CFO Certification32.1*
    
    Certification of Michael R. Gorsage Pursuant to Section 1350 of
Chapter 63 of Title 18 of the United States Code32.2*
    
    Certification of Sandor Grosz Pursuant to Section 1350 of
Chapter 63 of Title 18 of the United States Code
 All other items in Part II are either not applicable to the Company during the
quarter ended March 31, 2005, the answer is negative, or a response has been
previously reported and an additional report of the information is not
required, pursuant to the instructions to Part II.   *
    
    Filed herewith 
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SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TECHNOLOGY SOLUTIONS COMPANYDate: May 11, 2005
    By:
    /s/ SANDOR GROSZSandor GroszChief Financial Officer 
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