<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

/X/      Quarterly report pursuant to Section 13 or 15(d) of the Securities and
         Exchange Act of 1934 for the quarterly period ended March 31, 2001, or

/ /      Transition report pursuant to Section 13 or 15(d) of the Securities
         and Exchange Act of 1934 for the transition period
         from ____________ to ____________

                         Commission file number 0-27444

                               F.Y.I. INCORPORATED
             (Exact name of registrant as specified in its charter)

                 DELAWARE                                 75-2560895
       (State or other jurisdiction         (I.R.S. Employer Identification No.)
    of incorporation or organization)

     3232 MCKINNEY AVENUE, SUITE 1000
              DALLAS, TEXAS                                 75204
 (Address of principal executive offices)                 (Zip code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:  (214) 953-7555

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 / /

As of April 30, 2001, 16,498,874 shares of the registrant's Common Stock, $.01
par value per share, were outstanding.

<PAGE>

                      F.Y.I. INCORPORATED AND SUBSIDIARIES
                  FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 2001

                                      INDEX
<TABLE>
<S>                                                                                                             <C>
   PART I.              FINANCIAL INFORMATION                                                                    3

   Item 1               Financial Statements                                                                     3

                        Consolidated  Balance  Sheets - December  31, 2000 and March 31, 2001
                        (unaudited)                                                                              4

                        Consolidated Statements of Operations - Three months
                        ended March 31, 2000 and 2001 (unaudited)                                                5

                        Consolidated Statements of Cash Flows - Three months
                        ended March 31, 2000 and 2001 (unaudited)                                                6

                        Notes to Consolidated Financial Statements                                               7

   Item 2               Management's Discussion and Analysis of Financial Condition and
                        Results of Operations                                                                   12

   Item 3               Quantitative and Qualitative Disclosures about Market Risk                              15

   PART II.             OTHER INFORMATION                                                                     II-1

   Item 5               Other Information                                                                     II-1

   Item 6               Exhibits and Reports on Form 8-K                                                      II-1

                        SIGNATURES                                                                            II-4
</TABLE>


                                        2
<PAGE>

PART I.       FINANCIAL INFORMATION

ITEM 1.       FINANCIAL STATEMENTS



                                        3
<PAGE>

                      F.Y.I. INCORPORATED AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                                                           DECEMBER 31,        MARCH 31,
                                                                               2000              2001
                                                                           ------------      ------------
                                  ASSETS                                                      (UNAUDITED)
<S>                                                                        <C>               <C>
CURRENT ASSETS:
     Cash and cash equivalents                                             $      9,504      $      5,204
     Accounts and notes receivable, less allowance for doubtful
       accounts of $14,111 and $18,246, respectively                             93,583           106,210
     Inventories                                                                  5,112             5,575
     Deferred income taxes                                                        3,935             4,675
     Prepaid expenses and other current assets                                    6,747             8,681
                                                                           ------------      ------------
         Total current assets                                                   118,881           130,345

PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation
    $46,326 and $50,124, respectively                                            50,341            54,591
GOODWILL AND OTHER INTANGIBLES, net of amortization of $19,241
    and $21,729, respectively                                                   278,709           322,403
OTHER NONCURRENT ASSETS                                                           6,778             8,525
                                                                           ------------      ------------
                     Total assets                                          $    454,709      $    515,864
                                                                           ============      ============
                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable and accrued liabilities                              $     57,351      $     68,603
     Current maturities of long-term obligations                                    851               809
     Income tax payable                                                           4,759            10,334
                                                                           ------------      ------------
         Total current liabilities                                               62,961            79,746

LONG-TERM OBLIGATIONS, net of current maturities                                123,784           149,613
DEFERRED INCOME TAX                                                               3,541             3,053
OTHER LONG-TERM OBLIGATIONS                                                      11,031            17,607
                                                                           ------------      ------------
                     Total liabilities                                          201,317           250,019

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
     Preferred stock, $.01 par value, 1,000,000 shares authorized,
         no shares issued and outstanding                                            --                --
     Common stock, $.01 par value, 26,000,000 shares authorized,
         16,191,416 and 16,365,494 shares issued and outstanding
          at December 31, 2000 and March 31, 2001, respectively                     162               164
     Additional paid-in-capital                                                 166,608           171,027
     Accumulated other comprehensive loss                                            --              (662)
     Retained earnings                                                           87,286            95,980
                                                                           ------------      ------------
                                                                                254,056           266,509
     Less - Treasury stock, $.01 par value, 42,605 shares
         at December 31, 2000 and March 31, 2001                                   (664)             (664)
                                                                           ------------      ------------
                     Total stockholders' equity                                 253,392           265,845
                                                                           ------------      ------------
                     Total liabilities and stockholders' equity            $    454,709      $    515,864
                                                                           ============      ============
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.


                                        4
<PAGE>

                      F.Y.I. INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
                                                             THREE MONTHS
                                                                ENDED
                                                               MARCH 31,
                                                       --------------------------
                                                          2000            2001
                                                       ----------      ----------
                                                               (UNAUDITED)
<S>                                                    <C>             <C>
  REVENUE                                              $  107,765      $  121,404

  COST OF SERVICES                                         65,673          71,678
  DEPRECIATION                                              3,116           3,912
                                                       ----------      ----------
                    Gross profit                           38,976          45,814
  SELLING, GENERAL AND ADMINISTRATIVE
      EXPENSES                                             23,474          27,092
  AMORTIZATION                                              1,890           2,492
                                                       ----------      ----------
                    Operating income                       13,612          16,230

  OTHER (INCOME) EXPENSE:
      Interest expense                                      1,852           2,341
      Interest income                                        (102)           (105)
      Other (income) expense, net                             (75)            (29)
                                                       ----------      ----------
                    Income before income taxes             11,937          14,023

  PROVISION FOR INCOME TAXES                                4,775           5,329
                                                       ----------      ----------
  NET INCOME                                           $    7,162      $    8,694
                                                       ==========      ==========
  NET INCOME PER COMMON SHARE
      BASIC                                            $     0.49      $     0.54
                                                       ==========      ==========
      DILUTED                                          $     0.46      $     0.52
                                                       ==========      ==========
  WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
      BASIC                                                14,564          16,212
                                                       ==========      ==========
      DILUTED                                              15,520          16,876
                                                       ==========      ==========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.


                                        5
<PAGE>

                      F.Y.I. INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                              THREE MONTHS
                                                                                                 ENDED
                                                                                                MARCH 31,
                                                                                     ------------------------------
                                                                                         2000              2001
                                                                                     ------------      ------------
                                                                                               (UNAUDITED)
<S>                                                                                  <C>               <C>
  CASH FLOWS FROM OPERATING ACTIVITIES:
      Net income                                                                     $      7,162      $      8,694
      Adjustments to reconcile net income to net cash provided
         by operating activities:
             Depreciation and amortization                                                  5,006             6,404
      Change in operating assets and liabilities:
                  Accounts and notes receivable                                            (4,396)           (6,714)
                  Prepaid expenses and other assets                                        (2,670)           (2,593)
                  Accounts payable and other current liabilities                            1,383             9,174
                                                                                     ------------      ------------
                        Net cash provided by operating activities                           6,485            14,965

  CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchase of property, plant and equipment                                            (3,655)           (5,093)
      Cash paid for acquisitions, net of cash acquired                                    (40,762)           (7,848)
                                                                                     ------------      ------------
                        Net cash used for investing activities                            (44,417)          (12,941)

  CASH FLOWS FROM FINANCING ACTIVITIES:
      Proceeds from common stock issuance, net of underwriting
         discounts and other costs                                                            657             1,103
      Proceeds from long-term obligations                                                  48,500            10,993
      Principal payments on long-term obligations                                          (8,691)          (18,220)
      Cash paid for debt issuance costs                                                        --              (200)
                                                                                     ------------      ------------
                        Net cash provided by (used for) financing activities               40,466            (6,324)

  NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                      2,534            (4,300)

  CASH AND CASH EQUIVALENTS, beginning of period                                            9,396             9,504
                                                                                     ------------      ------------
  CASH AND CASH EQUIVALENTS, end of period                                           $     11,930      $      5,204
                                                                                     ============      ============
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.


                                        6
<PAGE>

                      F.Y.I. INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION:

         The accompanying consolidated financial statements and related notes to
consolidated financial statements include the accounts of F.Y.I. Incorporated
and our subsidiaries.

         In the opinion of our management, the accompanying consolidated
financial statements include all of our accounts and the adjustments necessary
to present fairly our financial position at March 31, 2001, our results of
operations for the three months ended March 31, 2000 and 2001, and our cash
flows for the three months ended March 31, 2000 and 2001. All significant
intercompany transactions have been eliminated. Although we believe that the
disclosures are adequate to make the information presented not misleading,
certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission (the "Commission"). These consolidated
financial statements should be read in conjunction with our consolidated
financial statements and the related notes thereto in our Annual Report on Form
10-K filed with the Commission on March 30, 2001. The results of operations for
the three month periods ended March 31, 2000 and 2001 may not be indicative of
the results for the full year.


2. WEIGHTED AVERAGE SHARES OUTSTANDING

         Basic and diluted net income per common share were computed in
accordance with SFAS No. 128, "Earnings Per Share." The differences between
basic weighted average common shares and diluted weighted average common shares
and common stock equivalents are as follows (in thousands):
<TABLE>
<CAPTION>
                                                               THREE MONTHS
                                                                  ENDED
                                                                 MARCH 31,
                                                       -----------------------------
                                                           2000             2001
                                                       ------------     ------------
<S>                                                    <C>              <C>
Basic weighted average common shares                         14,564           16,212
Weighted average options and warrants and other
   contingent consideration                                     956              664
                                                       ------------     ------------
Diluted weighted average common shares                       15,520           16,876
                                                       ============     ============
</TABLE>


                                        7
<PAGE>

3. BUSINESS COMBINATIONS

2001 ACQUISITIONS

         During the first three months of 2001, we acquired three business
process outsourcing solutions businesses, which were accounted for as purchases
(the "Purchased Companies"). These acquisitions were (i) STAT Healthcare
Consultants, Inc., (ii) Micromedia of New England, Inc., (iii) Image Entry
Inc., Image Entry of Owsley County Inc., Image Entry of Indianapolis Inc., Image
Entry Federal Systems Inc., Image Entry of Arkansas Inc., and Image Entry of
Alabama Inc. The aggregate consideration paid for the Purchased Companies
consisted of $40.2 million in cash and 93,365 shares of common stock. The
preliminary allocation of the purchase price is set forth below (in thousands):
<TABLE>
<S>                                                       <C>
         Consideration Paid                               $    42,695
         Estimated Fair Value of Identifiable Assets           11,232
         Estimated Fair Value of Liabilities                    3,412
         Goodwill                                              34,875
</TABLE>

         The weighted average fair market values of the shares of common stock
used in calculating the consideration paid for the Purchased Companies was
$27.20 per share, which represents a 20% discount from the average trading price
of the common stock based on the length and type of restrictions in the purchase
agreements.

         The estimated fair market values reflected above are based on
preliminary estimates and assumptions and are subject to revision. In
management's opinion, the preliminary allocations are not expected to be
materially different from the final allocations.

CONTINGENT CONSIDERATION

         Certain of our acquisitions are subject to adjustments in their overall
consideration based upon the achievement of specified earning targets over one
to three year periods. During the first three months of 2001, we paid
consideration of $0.9 million in cash and 13,139 shares of common stock at an
average price of $29.48 in relation to contingent consideration agreements that
have been finalized. Based upon the evaluation of cumulative earnings through
March 31, 2001 against the specified earnings targets, we have accrued aggregate
contingent consideration of approximately $29.4 million, of which $16.4 million
is classified as accounts payable and accrued liabilities and will be settled in
cash and $13.0 million is classified as long-term obligations and will be
settled in common stock. All of the periods applicable for the earnout targets
have not been completed, and additional amounts may be payable in future periods
under the terms of the agreements.

INTANGIBLE ASSETS

         Intangibles consist primarily of goodwill. Based on the historical
profitability of the purchased companies and trends in the legal, healthcare and
other industries regarding the outsourcing of document management functions in
the foreseeable future, goodwill is being amortized over periods not to exceed
30 years. Management continually evaluates whether events and circumstances
indicate that the remaining estimated useful life of intangible assets might
warrant revisions or that the remaining balance of intangibles or other
long-lived assets may not be recoverable. To make this evaluation, management
compares the estimated undiscounted future cash flows over the remaining life of
the intangibles or other long-lived assets to the carrying amount of the assets
being evaluated. If the expected future cash flows do not exceed the carrying
amount of the assets being evaluated, an impairment loss is recognized based on



                                        8
<PAGE>

the excess of the carrying amount of the impaired assets over their fair value.
The goodwill associated with a majority of our acquisitions is not deductible
for income tax purposes.

4. SEGMENT REPORTING

         We and our subsidiaries are principally engaged in business process
outsourcing services. We have identified segments based on management
responsibility as follows:

         F.Y.I. Image: (i) electronic imaging services, involving the conversion
of paper or microfilm documents into digitized information, database management
and indexing; (ii) analog services involving the conversion of paper documents
into microfilm images, film processing and computer based indexing and
formatting; (iii) data capture and database management services involving data
capture, data consolidation and elimination, storage, maintenance, formatting
and report creation; (iv) claims processing; and (v) integrated solutions, which
deliver technical services with a focus on document imaging, work flow,
COLD (Computer Output to Laser Disk) and document information management
systems using third party imaging systems.

         F.Y.I. Legal: (i) automated litigation support, including document
conversion, computer indexing and automated document retrieval; (ii) litigation
consulting services such as discovery assistance, labor discrimination, forensic
analysis and other trial support services; (iii) high-speed, multiple-set
reproduction of documents; (iv) records acquisition in the form of subpoena of
business documents and service of process; and (v) employee and investor
services which provides administration, record keeping and information
processing services.

         F.Y.I. HealthSERVE and Government: (i) processing a request for a
patient's medical records from a physician, insurance company, attorney,
healthcare institution or individual; (ii) off-site active storage of a
healthcare institutions medical records; (iii) online delivery of images of
selected medical records for healthcare institutions; (iv) document and data
conversion services for healthcare institutions; (v) document conversion
services for state government disability; workers compensation claims and other
government agencies; (vi) temporary staffing services; (vii) providing attending
physicians' statements for life and health insurance underwriting; and (viii)
managed care compliance reviews.

         F.Y.I. Direct: (i) direct mail, which includes direct mail and
fulfillment services to clients who need rapid, reliable and cost-effective
methods for making large scale distributions of advertising, literature and
other information; (ii) full service commercial printing, including printing and
related services such as electronic prepress services, full-color report
production of annual reports, flyers and catalogs; and (iii) statement
processing.


                                        9
<PAGE>

         We measure segment profit as income before income taxes. Information on
segments follows (in thousands):
<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED MARCH 31, 2001
                               ------------------------------------------------------------------------------------
                                                             F.Y.I. HEALTHSERVE/
                                                             -------------------
                               F.Y.I. IMAGE  F.Y.I. LEGAL    GOVERNMENT SERVICES     F.Y.I. DIRECT     CONSOLIDATED
                               ------------  ------------    -------------------     -------------     ------------
<S>                            <C>           <C>             <C>                     <C>               <C>
Revenue                           $40,814       $19,455            $39,851            $21,284            $121,404
Income before income taxes          5,092         2,288              4,456              2,187              14,023

<CAPTION>
                                                     THREE MONTHS ENDED MARCH 31, 2000
                               -------------------------------------------------------------------------------
                                                             F.Y.I. HEALTHSERVE/
                                                             -------------------
                               F.Y.I. IMAGE  F.Y.I. LEGAL    GOVERNMENT SERVICES     F.Y.I. DIRECT     CONSOLIDATED
                               ------------  ------------    -------------------     -------------     ------------
<S>                            <C>           <C>             <C>                     <C>               <C>
Revenue                           $36,566       $21,283            $31,389            $18,527            $107,765
Income before income taxes          4,547         2,609              3,675              1,106              11,937
</TABLE>

5. DERIVATIVES AND OTHER COMPREHENSIVE LOSS

         Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities". This statement requires that all derivative financial instruments
be recognized as either assets or liabilities in the balance sheet and carried
at fair value. Gains or losses on derivatives designated as cash flow hedges are
initially reported as a component of other comprehensive income and later
classified into earnings in the period in which the hedged item also affects
earnings.

         The Company has entered into an interest rate swap for a notional
amount of $50 million to hedge, through March 31, 2003, its exposure to
fluctuations in interest rates on $50 million of its debt. The swap has been
designated by the Company as a cash flow hedge. As of March 31, 2001, the
fair value of the interest rate swap was a liability of $1.1 million ($0.7
million, net of tax), which was recorded in the accompanying consolidated
balance sheet in other long-term obligations with an offset recorded in
equity as other comprehensive loss. This swap has the effect of fixing the
interest rate on $50 million of the Company's debt at 5.775% plus the
applicable floating spread.

                                        10
<PAGE>

         Comprehensive income (loss) is defined as the change in equity during a
period from transactions and other events, except those resulting from
investments by and distributions to stockholders. The components of
comprehensive income (loss) for the three month periods ended March 31, 2000 and
2001 are as follows:
<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED
                                                                            MARCH 31,
                                                                      2000             2001
                                                                  ------------     ------------
<S>                                                               <C>              <C>
Net income                                                        $      7,162     $      8,694
Other comprehensive income (loss):
 Change in fair value of interest rate swap, net of tax
   benefit of $0 and $406, respectively                                      0             (662)
                                                                  ------------     ------------
Total comprehensive income                                        $      7,162     $      8,032
                                                                  ============     ============
</TABLE>

         Statement of Financial Accounting Standards No. 130 "Reporting
Comprehensive Income" establishes standards for reporting and display of
comprehensive income and its components in the financial statements. The
objective of SFAS 130 is to report a measure of all changes in equity of an
enterprise that result from transactions and other economic events of the period
other than transactions with owners. Comprehensive income is the total of net
income and all other non-owner changes within a company's equity.


 6. SUBSEQUENT EVENT

         On April 3, 2001, we entered into a new $297.5 million line of
credit with Bank of America as arrangement agent and SunTrust Bank and Wells
Fargo Bank as co-agents. The annual interest rate applicable to borrowings
under this facility is, at our option, (i) grid pricing ranging from 0.0% to
0.5% plus the prime rate based on the ratio of funded debt to EBITDA (as
defined in the credit agreement) or (ii) grid pricing ranging from 1.125% to
2.0% plus the Eurodollar rate based on the ratio of funded debt to EBITDA.
This credit facility replaced the previous $175 million facility. This new
credit facility matures in April 2004 and is subject to customary borrowing
capacity requirements.

                                        11
<PAGE>

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

         The following discussion should be read in conjunction with our
financial statements and the related notes thereto appearing elsewhere in this
Report on Form 10-Q.

INTRODUCTION

         We are a leading provider of business process outsourcing solutions. We
offer customers in information intensive industries - such as healthcare, law,
banking, insurance, retailing, high tech, manufacturing and government - the
solutions to manage their information and document intensive business processes,
enabling these organizations to concentrate on their core competencies.

         Since our inception, we have acquired 69 and divested 2 companies.
We evaluate candidates for acquisition and periodically for divestiture as a
part of our strategic plan of providing customers a single solution for
business process outsourcing. The criteria for evaluation include geographic
need, additional technology, market growth potential, industry expertise,
service expansion to broaden service offerings, expansion of our customer
base, revenue and earnings growth potential, and expected sources and uses of
capital. The Company is currently evaluating, but has made no final decisions
regarding several non-strategic entities for divestiture. The Company may
commit to a plan of action with these entities during 2001.

         Our revenue relates to the following divisions: F.Y.I.
HealthSERVE/Government Services; F.Y.I. LEGAL; F.Y.I. IMAGE; and F.Y.I. DIRECT.
Revenue relates to the following services, by division:

         F.Y.I. HEALTHSERVE/GOVERNMENT SERVICES: (i) processing a request for a
patient's medical records from a physician, insurance company, attorney,
healthcare institution or individual; (ii) off-site active storage of a
healthcare institutions medical records; (iii) online delivery of images of
selected medical records for healthcare institutions; (iv) document and data
conversion services for healthcare institutions; (v) document conversion
services for state government disability workers compensation claims and other
government agencies; (vi) temporary staffing services; (vii) providing attending
physicians' statements for life and health insurance underwriting; and (viii)
managed care compliance reviews.

         F.Y.I. LEGAL: (i) automated litigation support, including document
conversion, computer indexing and automated document retrieval; (ii) litigation
consulting services such as discovery assistance, labor discrimination, forensic
analysis and other trial support services; (iii) high-speed, multiple-set
reproduction of documents; (iv) records acquisition in the form of subpoena of
business documents and service of process; and (v) employee and investor
services which provides administration, record keeping and information
processing services.

         F.Y.I. IMAGE: (i) electronic imaging services, involving the conversion
of paper or microfilm documents into digitized information, database management
and indexing; (ii) analog services involving the conversion of paper documents
into microfilm images, film processing and computer based indexing and
formatting; (iii) data capture and database management services involving data
capture, data consolidation and elimination, storage, maintenance, formatting
and report creation; (iv) claims processing; (v) integrated solutions, which
deliver technical services with a focus on document imaging, work flow, COLD and
document information management systems using third party imaging systems; and
(vi) electronic object storage and internet-based retrieval capabilities to
compliment our document capture and conversion services.


                                        12
<PAGE>

         F.Y.I. DIRECT: (i) direct mail, which includes direct mail and
fulfillment services to clients who need rapid, reliable and cost-effective
methods for making large scale distributions of advertising, literature and
other information; (ii) full service commercial printing, including printing and
related services such as electronic prepress services, full-color report
production of annual reports, flyers and catalogs; and (iii) statement
processing.

         Cost of services consists primarily of compensation and benefits to
employees providing goods and services to our clients, occupancy costs,
equipment costs and supplies. Our cost of services also includes the cost of
products sold for micrographics supplies and equipment, computer hardware and
software and business imaging supplies and equipment.

    Selling, general and administrative expenses ("SG&A") consist primarily of:
(i) compensation and related benefits to sales and marketing, executive
management, accounting, human resources and other administrative employees; (ii)
other sales and marketing costs; (iii) communications costs; (iv) insurance
costs; and (v) legal and accounting professional fees and expenses.


THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000

    REVENUE

    Revenue increased 12.7% from $107.8 million for the three months ended March
31, 2000 to $121.4 million for the three months ended March 31, 2001. This
increase was largely due to revenue from the acquisitions completed subsequent
to March 31, 2000 and internal revenue growth, excluding acquired revenue, of
3.7%. This revenue growth was primarily attributable to an increase in revenue
for data capture services, class action administrative services, and medical
records request processing.

    GROSS PROFIT

    Gross profit increased 17.5% from $39.0 million for the three months ended
March 31, 2000 to $45.8 million for the three months ended March 31, 2001,
largely due to acquisitions completed subsequent to March 31, 2000. Gross profit
as a percentage of revenue increased from 36.2% for the three months ended March
31, 2000 to 37.7% for the three months ended March 31, 2001, primarily due to
higher than average margins on acquisitions completed subsequent to March 31,
2000 and class action administrative services.

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

    SG&A increased 15.4% from $23.5 million, or 21.8% of revenue, for the three
months ended March 31, 2000 to $27.1 million, or 22.3% of revenue, for the three
months ended March 31, 2001. This increase was a result of SG&A at companies
acquired subsequent to March 31, 2000 and increased corporate overhead required
to manage the consolidated group.

    OPERATING INCOME

    Operating income increased 19.2% from $13.6 million, or 12.6% of revenue,
for the three months ended March 31, 2000 to $16.2 million, or 13.4% of revenue,
for the three months ended March 31, 2001, largely attributable to the factors
discussed above.


                                        13
<PAGE>

    INCOME BEFORE INCOME TAXES AND NET INCOME

    Income before income taxes increased 17.5% from $11.9 million for the three
months ended March 31, 2000 to $14.0 million for the three months ended March
31, 2001, and net income increased 21.4% from $7.2 million for the three months
ended March 31, 2000 to $8.7 million for the three months ended March 31, 2001,
largely attributable to the factors discussed above and to the change in the
effective tax rate from 40% to 38%.

LIQUIDITY AND CAPITAL RESOURCES

    At March 31, 2001, we had $50.6 million of working capital and $5.2 million
of cash. Cash flows provided by operating activities for the three months ended
March 31, 2001 were $15.0 million. Net cash provided by operating activities was
approximately 172% of net income for the three months ended March 31, 2001,
mostly due to cash savings from our tax planning, as well as strong cash flow
from some recent business additions. Net cash used in investing activities was
$12.9 million for the three months ended March 31, 2001, as we paid $7.8 million
for acquisitions, net of cash acquired, including contingent consideration
related to prior year acquisitions. Net cash used by financing activities was
$6.3 million for the three months ended March 31, 2001, primarily due to
paydowns of $18.2 million on our line of credit, net of proceeds of $11.0
million on long-term obligations.

    On April 3, 2001, we entered into a new $297.5 million line of credit
with Bank of America as arrangement agent and SunTrust Bank and Wells Fargo
Bank as co-agents. The annual interest rate applicable to borrowings under
this facility is, at our option, (i) grid pricing ranging from 0.0% to 0.5%
plus the prime rate based on the ratio of funded debt to EBITDA (as defined
in the credit agreement) or (ii) grid pricing ranging from 1.125% to 2.0%
plus the Eurodollar rate based on the ratio of funded debt to EBITDA. This
credit facility replaced the previous $175 million facility. This new credit
facility matures in April 2004 and is subject to customary borrowing capacity
requirements.

    In January 2000, we registered on Form S-4 (Registration No. 333-92981)
3,012,217 shares of common stock for issuance in connection with our acquisition
program (the "Acquisition Shelf"), of which 1,979,528 shares were available as
of March 31, 2001.

RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS

         This Report contains certain forward-looking statements such as our
intentions, hopes, beliefs, expectations, strategies, predictions or any other
variation thereof or comparable phraseology of our future activities or other
future events or conditions within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Act"), and Section 21E of the Securities Exchange
Act of 1934, as amended, which are intended to be covered by the safe harbors
created thereby. Investors are cautioned that all forward-looking statements
involve risks and uncertainty, including, without limitation, variations in
quarterly results, volatility of our stock price, development by competitors of
new or superior products, technology or services, the entry into the market by
new competitors, the sufficiency of our working capital and our ability to
realize benefits from consolidating certain general and administrative
functions, to assimilate and integrate acquisitions, to continue our acquisition
program, to manage our growth, to retain management, to implement our focused
business strategy, to expand our document and information management services
geographically, to attract and retain customers, to increase revenue by
cross-selling services and to successfully defend our company in ongoing and
future litigation. Although we believe that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and, therefore, there can be no assurance that
the forward-looking statements included in this Report will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by us or any other person that our
objectives and plans will be achieved. Further, we disclaim any obligation to
update any such forward-looking statements.


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<PAGE>

ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The Company is subject to interest rate risk on its term loans and revolving
credit facility. Interest rates are fixed on the indenture and capital lease
obligations. The Company has entered into an interest rate swap for a notional
amount of $50 million to hedge, through March 31, 2003, its exposure to
fluctuations in interest rates on $50 million of its debt. This swap has the
effect of fixing the interest rate on $50 million of the Company's debt at
5.775% plus the applicable floating spread. The swap has been designated by the
Company as a cash flow hedge. As of March 31, 2001, the fair value of the
interest rate swap was a liability of $1.1 million, which was recorded in the
accompanying consolidated balance sheet in other long-term obligations with an
offset recorded in equity as other comprehensive loss


                                        15
<PAGE>

PART II.      OTHER INFORMATION

ITEM 5.       OTHER INFORMATION

RECENT DEVELOPMENTS

ACQUISITIONS

Since March 31, 2001, we have acquired the following business process
outsourcing solutions businesses: (i) Kinsella Communications, a class-action
lawsuit notification service located in Washington D.C., and (ii) Digital
Data Resources, Inc., a document imaging business located in Iowa.

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

     2.20     Stock Purchase Agreement dated as of March 31, 2001 by and among
              F.Y.I. Incorporated, Image Entry Acquisition Corp. Image Entry
              Inc., Image Entry of Owsley County Inc., Image Entry of
              Indianapolis Inc., Image Entry Federal Systems Inc., Image Entry
              of Arkansas Inc. and Image Entry of Alabama Inc. and the
              Shareholders of Image Entry Inc., Image Entry of Owsley County
              Inc., Image Entry of Indianapolis Inc., Image Entry Federal
              Systems Inc., Image Entry of Arkansas Inc. and Image Entry of
              Alabama Inc. (Incorporated by reference to Exhibit 2.20 to the
              Company's Current Report on Form 8-K filed on April 12, 2001)

     4.3      Warrant No. W057 issued to Thomas C. Walker, dated January 24,
              2001 (Incorporated by reference to Exhibit 4.3 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.4      Warrant No. W058 issued to Ed H. Bowman, Jr., dated January 24,
              2001. (Incorporated by reference to Exhibit 4.4 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.5      Warrant No. W059 issued to Joe A. Rose, dated January 24, 2001.
              (Incorporated by reference to Exhibit 4.5 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.6      Warrant No. W060 issued to Barry L. Edwards, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.6 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.7      Warrant No. W061 issued to Charles S. Gilbert, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.7 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.8      Warrant No. W062 issued to Michael S. Rupe, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.8 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.9      Warrant No. W063 issued to Ronald Zazworsky, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.9 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

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<PAGE>


     4.10     Warrant No. W064 issued to Gary Patton, dated January 24, 2001.
              (Incorporated by reference to Exhibit 4.10 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.11     Warrant No. W065 issued to David Byerley, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.11 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.12     Warrant No. W066 issued to Mary Baker, dated January 24, 2001.
              (Incorporated by reference to Exhibit 4.12 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.13     Warrant No. W067 issued to Hossein Borhani, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.13 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.14     Warrant No. W068 issued to Charles Haworth, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.14 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.15     Warrant No. W069 issued to Joan Haworth, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.15 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.16     Warrant No. W070 issued to Stuart Haworth, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.16 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.17     Warrant No. W071 issued to Sharon Kelly, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.17 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.18     Warrant No. W072 issued to Sam Kimelman, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.18 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.19     Warrant No. W073 issued to Steve Swartz, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.19 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.20     Warrant No. W074 issued to Janet Thornton, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.20 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.21     Warrant No. W075 issued to Paul White, dated January 24, 2001.
              (Incorporated by reference to Exhibit 4.21 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)


                                       II-2
<PAGE>


     4.22     Warrant No. W076 issued to Holly Barnett, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.22 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.23     Warrant No. W077 issued to Dennis Reinhold, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.23 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.24     Warrant No. W078 issued to E. Leo Cooper, dated January 24,
              2001. (Incorporated by reference to Exhibit 4.24 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

     4.25     Warrant No. W079 issued to Kerry D. Walbridge, dated March 22,
              2001. (Incorporated by reference to Exhibit 4.25 to Company's
              Registration Statement on Form S-8 (Registration No. 333-60768)
              effective May 11, 2001)

(b)  Reports on Form 8-K

     The Company filed a Current Report on Form 8-K with the Commission on
     April 12, 2001, reporting under Item 2 thereto, the acquisition of Image
     Entry Inc., Image Entry of Owsley County Inc., Image Entry of Indianapolis
     Inc., Image Entry Federal Systems Inc., Image Entry of Arkansas Inc. and
     Image Entry of Alabama Inc.


                                       II-3
<PAGE>


                                   SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report on Form 10-Q to be signed on its behalf
by the undersigned thereunto duly authorized.

                                    F.Y.I. Incorporated

Date:  May 15, 2001                 By:  /s/ Ed H. Bowman, Jr.
                                         ------------------------------
                                         Ed H. Bowman, Jr.
                                         Chief Executive Officer and President

Date:  May 15, 2001                 By:  /s/ Barry L. Edwards
                                         ------------------------------
                                         Barry L. Edwards
                                         Executive Vice President and Chief
                                         Financial Officer (Principal Financial
                                         and Accounting Officer)


                                      II-2