<PAGE>

                   U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-Q

(Mark one)
/X/            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

                   OF THE SECURITIES EXCHANGE ACT OF 1934.

                For the quarterly period ended March 31, 1997

                                      OR

/ /           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

                   OF THE SECURITIES EXCHANGE ACT OF 1934

            For the transition period from ________ to ________

                        Commission file number: 0-28268

                            USCS INTERNATIONAL, INC.
                     --------------------------------------
             (Exact name of registrant as specified in its charter)

              DELAWARE                                      94-1727009
    -------------------------------                       ---------------
    (State or other jurisdiction of                        (IRS Employer
     incorporation or organization)                       Identification)


2969 PROSPECT PARK DRIVE,
RANCHO CORDOVA,  CALIFORNIA                                  95670-6148
----------------------------------------                  ---------------
(Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code (916) 636-4500
-----------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last 
report)

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

                          Yes   X              No
                               ---                 ---

Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practicable date.

   Class                                      Outstanding at April 30, 1997
   -----------------------------              -----------------------------
   Common Stock, $.05 par value               23,137,012 shares

<PAGE>

                           USCS INTERNATIONAL, INC.
                              REPORT ON FORM 10-Q
                     FOR THE QUARTER ENDED MARCH 31, 1997
 
                                                                      PAGE NO.
  
Part I.  Financial Information

   Item 1.  Financial Statements                                         3

     Consolidated Condensed Balance Sheets
     March 31, 1997 (Unaudited) and December 31, 1996                    4

     Consolidated Condensed Statements of Operations (Unaudited)
     Three months ended March 31, 1997 and 1996                          5

     Consolidated Condensed Statements of Cash Flows (Unaudited)
     Three months ended March 31, 1997 and 1996                          6

     Notes to Consolidated Condensed Financial Statements                7

   Item 2.  Management's Discussion and Analysis of Financial
            Condition, Results of Operations, and Certain Factors
            That May Affect Future Results.                             8-14

Part II. Other Information

   Item 1.  Legal Proceedings                                            15

   Item 2.  Changes in Securities                                        15

   Item 3.  Defaults Upon Senior Securities                              15

   Item 4.  Submission of Matters to a Vote of Security Holders          15

   Item 5.  Other Information                                            15

   Item 6.  Exhibits and Reports on Form 8-K                             15

            Signature                                                    16


                                       2

<PAGE>

                            USCS INTERNATIONAL, INC.

PART I- FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

The following consolidated condensed financial statements, except for the 
balance sheet as of December 31, 1996, have been prepared by USCS 
International, Inc. (the Company) without audit by independent public 
accountants, but in accordance with the rules and regulations of the 
Securities and Exchange Commission (SEC) and, in the opinion of the Company, 
include all adjustments (consisting only of normal recurring adjustments) 
necessary for a fair statement of results for each period shown. Certain 
information and footnote disclosures normally included in financial 
statements prepared in accordance with generally accepted accounting 
principles have been condensed or omitted pursuant to such SEC rules and 
regulations. The Company believes that the disclosures made are adequate to 
make the information presented not misleading.  These financial statements 
should be read in conjunction with the financial statements and notes thereto 
included in the Company's Registration Statement on Form S-1 (Registration 
No. 333-3842) declared effective by the SEC on June 20, 1996 and the 
Company's Annual Report to Stockholders and the Company's Annual Report on 
Form 10-K for the year ended December 31, 1996. The results of operations for 
the three months ended March 31, 1997 are not necessarily indicative of  the 
results to be expected for the entire year ending December 31, 1997.


                                       3

<PAGE>

                            USCS INTERNATIONAL, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEETS

                 (In thousands except share and per share amounts)

<TABLE>
<CAPTION>
                                                           March 31,   December 31,
                                                             1997          1996
                                                          -----------  ------------
                                                          (Unaudited)
                                    ASSETS
<S>                                                       <C>          <C>
Current Assets:
  Cash                                                     $  11,026     $  8,452
  Accounts receivable                                         68,340       73,458
  Current portion of net investment in leases                  4,457        4,922
  Paper products and other inventory                           3,985        4,418
  Other                                                        9,688        8,972
                                                           ---------     --------
    Total current assets                                      97,496      100,222
Property and equipment, net                                   92,644       94,350
Net investment in leases, net of current portion               5,695        6,252
Other                                                          4,991        4,735
                                                           ---------     --------
Total assets                                               $ 200,826    $ 205,559
                                                           ---------     --------
                                                           ---------     --------

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable and accrued expenses                    $  44,648    $  48,975
  Current portion of long-term debt                            4,790        4,772
  Deferred revenue                                             4,247        9,434
                                                           ---------     --------
    Total current liabilities                                 53,685       63,181
Long-term debt, net of current portion                         4,175        5,647
Customer deposits                                             13,377       12,752
Other liabilities                                              9,035        8,646
                                                           ---------     --------
    Total liabilities                                         80,272       90,226
                                                           ---------     --------
Stockholders' Equity:
  Preferred Stock, $.05 par value, 10,000,000 shares 
    authorized; no shares issued and outstanding                  -            -
  Common Stock, $.05 par value,
    Authorized 40,000,000 shares; Issued and outstanding:
    23,123,053 shares at March 31, 1997 (unaudited)  and
    23,068,826 shares at December 31, 1996                     1,156        1,153
  Additional paid-in capital                                  54,134       53,902
  Retained earnings                                           65,490       60,437
  Foreign currency translation adjustment                       (226)        (159)
                                                           ---------     --------
    Total stockholders' equity                               120,554      115,333
                                                           ---------     --------
Total liabilities and stockholders' equity                 $ 200,826    $ 205,559
                                                           ---------     --------
                                                           ---------     --------
</TABLE>

                                       4

<PAGE>

                            USCS INTERNATIONAL, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

                                   (Unaudited)
                      (In thousands except per share amounts)

<TABLE>
<CAPTION>
                                                         Three months ended
                                                              March 31,
                                                       -----------------------
                                                         1997          1996
                                                       ---------     ---------
<S>                                                    <C>           <C>
Revenue:
  Software and services:
  Customer management                                  $ 37,779      $ 32,477
  Bill processing                                        28,398        22,944
                                                       --------      --------
    Total                                                66,177        55,421
  Equipment sales and services                            4,793         4,834
                                                       --------      --------
    Total revenue                                        70,970        60,255
                                                       --------      --------
Cost of revenue:
  Software and services:
  Customer management                                    18,528        18,230
  Bill processing                                        20,860        16,998
                                                       --------      --------
    Total                                                39,388        35,228
  Equipment sales and services                            2,798         2,933
                                                       --------      --------
    Total cost of revenue                                42,186        38,161
                                                       --------      --------
Gross profit                                             28,784        22,094
                                                       --------      --------
Operating expenses:
  Research and development                                6,871         5,642
  Selling, general and administrative                    13,265        11,009
                                                       --------      --------
    Total operating expenses                             20,136        16,651
                                                       --------      --------
Operating income                                          8,648         5,443
Interest expense                                            169         1,206
                                                       --------      --------

Income before income taxes                                8,479         4,237

Income tax provision                                      3,426         1,674
                                                       --------      --------
Net income                                             $  5,053      $  2,563
                                                       --------      --------
                                                       --------      --------
Earnings per share                                     $   0.21      $   0.12
                                                       --------      --------
                                                       --------      --------
Weighted average common
  shares and equivalents                                 24,224        20,659
                                                       --------      --------
                                                       --------      --------
</TABLE>


                                       5

<PAGE>

                            USCS INTERNATIONAL, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

                                  (Unaudited)
                                 (In thousands)

                                                          Three months ended
                                                               March 31,
                                                        -----------------------
                                                          1997          1996
                                                        ---------     ---------
Cash flows from operating activities:
Net cash provided by operating activities               $  7,527      $  4,804
                                                        --------      --------

Cash flows from investing activities:
  Capital expenditures, net                               (3,734)       (5,608)
  Other                                                        -          (250)
                                                        --------      --------

Net cash used in investing activities                     (3,734)       (5,858)
                                                        --------      --------

Cash flows from financing activities:
     Net borrowing under revolving credit agreement            -         8,000
     Payments on long-term debt                           (1,454)       (7,601)
     Proceeds from issuance of common stock                  235             -
     Repurchase of common stock                                -           (42)
                                                        --------      --------

Net cash (used) provided by financing activities          (1,219)          357
                                                        --------      --------

Net increase (decrease) in cash                            2,574          (697)

Cash at January 1                                          8,452         6,627
                                                        --------      --------

Cash at March 31                                        $ 11,026      $  5,930
                                                        --------      --------
                                                        --------      --------


                                       6

<PAGE>

                            USCS INTERNATIONAL, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


1.  Stockholders' Equity

       In June 1996, the Company completed an initial public offering
       (IPO) of its common stock.  Upon the close of the IPO, the Company
       effected certain stock splits and conversions of its Voting and
       Non-Voting Common Stock.  All share and per share data have been
       restated to reflect the effect of the stock splits.

2.  Long-term Debt
       
       The Company has a five year unsecured revolving credit line with
       two banks in the amount of $50 million.  Borrowings under the
       agreement bear interest at the Company's choice of LIBOR (plus a
       margin ranging from .55% to 1.25%), the bank's base rate or a
       quoted rate. Under the borrowing agreement, the Company is required
       to maintain certain financial ratios and meet a net worth test.
       The revolving credit line expires September, 2001.

3.  Income Tax

       Income tax provisions for interim periods are based on estimated
       effective annual income tax rates. The Company recognizes deferred
       tax assets and liabilities for the expected future tax consequences
       of temporary differences between tax bases and financial reporting
       bases of assets and liabilities.

4.  Earnings per Share

       Earnings per share are based on the weighted average number of
       shares outstanding and common stock equivalents during the
       respective periods, including the assumed net shares issuable upon
       exercise of stock options when dilutive. Common and common
       equivalent shares issued during the twelve month period prior to
       the IPO are included in the calculations as if they were
       outstanding for all periods presented.
       
       Under the recently issued FAS 128, the pro forma basic earnings per
       share, as defined by the statement, would be $0.22 and $0.14 for
       the quarters ended March 31, 1997 and 1996, based on weighted
       average shares outstanding of 23,096,000 and 18,329,000,
       respectively.  The pro forma diluted earnings per share, as defined
       by the statement, do not materially differ from  amounts presented.


                                       7

<PAGE>


Item 2.   Management's Discussion and Analysis of Financial Condition, and
          Results of Operations, and Certain Factors that May Affect Future
          Results

This Quarterly Report contains forward-looking statements that involve risks 
and uncertainties.  The statements that are not historical facts or 
statements of current status are forward-looking statements as defined in the 
Private Securities Litigation Reform Act of 1995 and as such are subject to 
risks and uncertainties including, but not limited to, the risks and 
uncertainties set forth under the caption " CERTAIN FACTORS THAT MAY AFFECT 
FUTURE RESULTS."  The Company's future results may differ significantly from 
the results and forward-looking statements discussed in this Report.

Founded in 1969, USCS is a leading global provider of customer care and 
billing solutions to the communications industry and other service 
industries.  USCS operates in one segment with revenue derived primarily from 
providing software and bill processing services to cable television and 
multi-service providers and bill processing services to telecommunications  
companies.  Software and bill processing services for cable television and 
multi-service providers are generally provided under bundled service 
arrangements.  Most of the Company's revenue is derived based on the number 
of subscribers or end-users of the Company's clients, the number of billing 
statements mailed and/or the number of images, generally one-page-side, 
produced.  Most of the Company's revenue is derived under long-term contracts 
with terms ranging from three to seven years.  Clients are billed monthly, 
generally based on the number of end-users they serve. As a result, a 
significant portion of the Company's revenue is recurring and increases as 
the service provider's customer base grows.  In addition, the Company sells 
computer hardware and provides associated maintenance. Leasing is provided as 
an alternative to equipment purchases for clients.

The Company provides software and services to North American and U.K. cable 
television and multi-service providers primarily through a direct sales 
force. Outside of North America and the U.K., the Company markets its 
software services primarily through strategic alliances with companies 
specializing in system integration or computer hardware manufacturing that 
are capable of providing local sales and support.  Building and maintaining 
relationships with its clients is an important part of the Company's strategy 
because selling cycles can extend a year or longer. The Company has committed 
increased resources to the international, multi-service and 
telecommunications markets because it believes these represent opportunities 
to grow at rates greater than in the U.S. cable television marketplace alone.


                                       8

<PAGE>


RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the Company's 
consolidated condensed statements of operations and the percentage of revenue 
represented by each line item:

<TABLE>
                                                                    Three months ended
                                                                         March 31,
                                                          ----------------------------------------
                                                                 1997                  1996
                                                          ------------------    ------------------
                                                                   (Dollars in thousands)
                                                                        (Unaudited)
<S>                                                       <C>         <C>       <C>         <C>
Revenue:
  Software and services:
    Customer management                                   $ 37,779     53.2%    $ 32,477     53.9%
    Bill processing                                         28,398     40.0       22,944     38.1
                                                          --------    -----     --------    -----
      Total                                                 66,177     93.2       55,421     92.0
  Equipment sales and services                               4,793      6.8        4,834      8.0
                                                          --------    -----     --------    -----
      Total revenue                                         70,970    100.0       60,255    100.0
                                                          --------    -----     --------    -----
Cost of revenue:
  Software and services:
    Customer management                                     18,528     26.1       18,230     30.3
    Bill processing                                         20,860     29.4       16,998     28.1
                                                          --------    -----     --------    -----
      Total                                                 39,388     55.5       35,228     58.4
  Equipment sales and services                               2,798      3.9        2,933      4.9
                                                          --------    -----     --------    -----
      Total cost of revenue                                 42,186     59.4       38,161     63.3
                                                          --------    -----     --------    -----
Gross profit                                                28,784     40.6       22,094     36.7
                                                          --------    -----     --------    -----
Operating expenses:
  Research and development                                   6,871      9.7        5,642      9.4
  Selling, general and administrative                       13,265     18.7       11,009     18.3
                                                          --------    -----     --------    -----
    Total operating expenses                                20,136     28.4       16,651     27.7
                                                          --------    -----     --------    -----
Operating income                                             8,648     12.2        5,443      9.0
Interest expense                                               169       .3        1,206      1.9
                                                          --------    -----     --------    -----

Income before income taxes                                   8,479     11.9        4,237      7.1

Income tax provision                                         3,426      4.8        1,674      2.8

                                                          --------    -----     --------    -----
Net income                                                $  5,053      7.1%    $  2,563      4.3%
                                                          --------    -----     --------    -----
                                                          --------    -----     --------    -----
</TABLE>


                                       9

<PAGE>


Revenue. Total revenue increased by 18%, to $71.0 million in the first 
quarter of 1997 from $60.3 million in the comparable quarter in 1996. 
Software and  services, which was 93% of total revenue in the first quarter 
of 1997 versus 92% in the first quarter in 1996, increased in the first 
quarter of 1997 by 19% over the prior year quarter. Customer management 
software and services revenue, of which a significant majority comes from 
bundling software with bill processing services, increased by 16% to $37.8 
million in the first quarter of 1997 from $32.5 million in the 1996 first 
quarter. Bill processing services revenue provided primarily to 
telecommunications companies as a stand alone service increased by 24%, to 
$28.4 million in the first quarter of 1997 from $22.9 million in the 
comparable quarter of the prior year. Equipment sales and services, as 
expected, remained flat in the first quarter of 1997 compared to the same 
quarter in 1996, at $4.8 million, and decreased from 8% of revenue in the 
first quarter of 1996 to 7% in the first quarter of 1997.

Growth in revenue in customer management software and services, for the first 
quarter 1997 compared to the first quarter of 1996, came primarily from sales 
of additional services and increases in the number of subscribers of existing 
and new clients in the U.S. and international markets.  The bill processing 
services revenue increase for the first quarter of 1997 compared to the first 
quarter of 1996 was attributable to increased statement production from the 
addition of new customers as well as internal growth of existing customers 
and the sale of additional services.

Cost of Revenue and Gross Profit. The Company's gross profit margin increased 
to approximately 41% in the first quarter of 1997 from approximately 37% in 
the comparable quarter in 1996.  Customer management software and services 
gross profit margin increased to 51% in the first quarter of 1997 from 44% in 
the comparable quarter in 1996.  Bill processing services gross profit margin 
exceeded 26% in the first quarter of 1997, an increase of nearly 1% over the 
comparable 1996 quarter.  Gross profit margins increased because of economies 
of scale associated with higher subscriber counts and statement processing 
volume, operational efficiencies and increased revenues from selling 
additional services.  The gross profit margin on equipment-related revenue 
increased to approximately 42% in the first quarter of 1997 from 39% in the 
comparable quarter in 1996. This is primarily attributed to renewals of 
existing lease contracts.

Research and Development.  Research and development spending in the first 
quarter, exclusive of amounts reimbursable by development partners, was $6.9 
million, an increase of $1.2 million, or approximately 22% over the 
comparable quarter in the prior year. Research and development represented 
about 10% of total revenue in the first quarter of 1997.  The added spending 
was aimed at expanding features and functionality primarily in customer 
management software and services.

Selling, General and Administrative.  Selling, general and administrative 
expenses represented 19% of total revenue for the three months ended March 
31, 1997 versus 18% for the comparable three months of the prior year. 
Selling, general and administrative expenses in the first quarter of 1997 
increased by approximately 20% over the comparable quarter in the prior year. 
Sales and marketing increased 23% in the first quarter of 1997 compared to 
the first quarter of 1996.  This increase is attributable to increased sales 
and marketing efforts in the domestic and international markets. General and 
administrative expenses increased 18% in the first quarter of 1997 compared 
to the first quarter of 1996 but remained constant as a percentage of 
revenue. This increase is attributed to greater support for a higher level of 
sales, as well as customer and investor relations activity and support 
required for company growth.

Net Income. Net income in the first quarter of 1997 increased by 97%, to $5.1 
million from $2.6 million in the comparable 1996 quarter.  This increase is 
primarily because of the factors cited above and a net reduction of interest 
expense of approximately $1 million in the quarter due to the retirement of 
debt primarily through IPO proceeds.  Net income per share increased 75% in 
the first quarter of 1997 versus the comparable period in 1996. The increase 
in net income per share in the first quarter of 1997 resulted from the 
Company's higher earnings, partially offset by an increase of 17% in the 
number of shares used in the calculation of earnings per share.


                                      10

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The primary sources of financing the Company's growth have been cash 
provided by operations, borrowing from banks and financial institutions and 
the IPO proceeds.  The Company utilized the net proceeds from the IPO to 
reduce debt under certain revolving credit agreements and, in combination 
with positive cash flow from operations, to prepay insurance company loans.  
The retirement of a majority of the Company's debt allowed the redirection of 
cash used for debt service to operations and growth.

The Company collects from its clients and remits to the U.S. Postal Service a 
substantial amount of postage.  The majority of contracts allow the Company 
to pre-bill and/or require deposits from its clients to mitigate the effect 
on cash flow. As of March 31, 1997, 32% of the Company's accounts receivable 
represented amounts due from clients for postage.  Postage collections and 
remittances are not included in the Company's statements of operations.

At March 31, 1997 the Company had $11 million of cash, $68.3 million of 
accounts receivable (including postage receivable of $ 21.7 million), $4.5 
million of current net investment in leases, and $43.8 million of working 
capital.  At March 31, 1997 the Company had no borrowings under unsecured 
bank credit arrangements with a total borrowing availability of $50 million. 
Of the $9 million of total debt outstanding at March 31, 1997, $4.8 million 
is due over the following 12-month period.  $6.9 million of the total debt 
outstanding pertains to the Company's leasing subsidiary and is 
collateralized, without recourse, by rents receivable, with the remaining 
$2.1 million pertaining to bonds collateralized by real estate.

The Company continues to make significant investments in capital equipment, 
research and development as well as to expand into new domestic and 
international markets. The Company believes that net cash from operations and 
the Company's borrowing availability will be sufficient to support operations 
through the next twelve months.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

A number of uncertainties exist that could affect the Company's future 
operating results, including, without limitation, changes in the cable 
television market, the Company's ability to retain existing customers and 
attract new customers, the Company's continuing ability to develop products 
that are responsive to the evolving needs of its customers, increased 
competition, changes in operating expenses, changes in government regulation 
of the Company's clients and general economic factors.

Dependence on the Cable Television Market

The Company is highly dependent on the cable television market. Approximately 
two-thirds of the Company's revenue was derived from sales to U.S. and 
international cable television service providers in the first quarter of 1997 
and 1996.  The number of providers of cable television service in the U.S. 
has been declining, resulting in a reduction of the number of potential cable 
television clients in the U.S.  As the number of companies serving the 
available subscriber base decreases, the loss of a single client could have a 
greater adverse impact on the Company than in the past.  Even if the number 
of clients remains the same, a decrease in the number of subscribers served 
by the Company's cable television clients would result in lower revenue for 
the Company. Furthermore, a decrease in the number of cable subscribers or 
any adverse development in the cable television market could have a material 
adverse effect on the financial condition and results of operations of the 
Company.  Also see "International Business Activities."


                                      11

<PAGE>

Changing Communications Market

The communications market is characterized by rapid technological 
developments, changes in client requirements, evolving industry standards and 
frequent new product introductions. The Company's future success will depend, 
in part, upon its ability to enhance its existing applications, develop and 
introduce new products that take advantage of technological advances and 
respond promptly to new client requirements and evolving industry standards. 
The Company has expended considerable funds to develop products to serve the 
changing communications market. If the communications market grows or 
converges more slowly than anticipated or the Company's products and services 
fail to achieve market acceptance, there could be a material adverse effect 
on the financial condition and results of operations of the Company. Further, 
the Company's development projects are subject to all of the risks associated 
with the development of new software and other products based on innovative 
technologies. The failure of such development projects could have a material 
adverse effect on the financial condition and results of operations of the 
Company.

Variability of Quarterly Operating Results

The Company's quarterly operating results may fluctuate from quarter to 
quarter depending on various factors, including the impact of significant 
start-up costs associated with initiating the delivery of contracted services 
to new clients, the hiring of additional staff, new product development and 
other expenses, introduction of new products by competitors, pricing 
pressures, the evolving and unpredictable nature of the markets in which the 
Company's products and services are sold and general economic conditions.

New Products, Rapid Technological Changes and Competition

The market for the Company's products and services is highly competitive, and 
competition is increasing as additional market opportunities arise. The 
Company believes its most significant competitors for customer management 
software and services are independent providers of such software and services 
and in-house systems.  Tele-Communications, Inc. ("TCI"), after giving effect 
to the purchase of the cable operations of Viacom in 1996, which was a client 
of the Company, represented approximately 19% and 20% of the Company's 
revenue in the first quarter of 1997 and 1996, respectively.  In June 1996, 
the Company entered into a new three-and-one-half  year contract to continue 
to provide customer management software and bill processing services to TCI.  
Under the contract, TCI may remove subscribers from the agreement during its 
term, subject to price increases based on the number of subscribers remaining 
under contract.  TCI has announced that it is developing and testing an 
in-house system and that such in-house system will replace the Company's 
customer management software system.  The Company cannot estimate when, or 
if, TCI would be successful in converting its subscriber base to the TCI 
system.  Another client, which accounted for approximately 4% of total 
revenue in the first quarter of 1997 and 1996, has orally advised the Company 
that it may move to an alternative solution for its customer management 
software requirements.

In addition, competitive factors could influence or alter the Company's 
overall revenue mix between customer management software, services, including 
bill processing services, and equipment sales and leasing. Any of these 
events could have a material adverse effect on the financial condition and 
results of operations, including gross profit margins, of the Company.

Concentration of Client Base

Aggregate revenue from the Company's ten largest clients accounted for 
approximately two-thirds of total revenue in the first quarter of 1997 and 
1996.  Loss of all or a significant part of the business of any of these 
clients or a decrease in their respective customer bases would have a 
material adverse effect on the financial condition and results of operations 
of the Company.  Three of the Company's clients represented approximately 42% 
and 46% of total revenue in the first quarter of 1997 and 1996, respectively.


                                      12

<PAGE>

Management of Growth

Management of the Company's growth may place a considerable strain on the 
Company's management, operations and systems. The Company's ability to 
execute its business strategy will depend in part upon its ability to manage 
the demands of a growing business. Any failure of the Company's management 
team to effectively manage growth could have a material adverse effect on the 
Company's business, financial condition or results of operations.

Client Failure to Renew or Utilize Contracts

Substantially all of the Company's revenue is derived from the sale of 
services or products under long-term contracts with its clients. The Company 
typically does not have the unilateral option to extend the terms of such 
contracts upon their expiration. In addition, certain of the Company's 
contracts do not require clients to make any minimum purchase. Others require 
minimum purchases that are substantially below the current level of business 
under such contracts and all such contracts are cancelable by clients under 
certain conditions. The failure of clients to renew contracts, a reduction in 
usage by clients under any contracts or the cancellation of contracts could 
have a material adverse effect on the Company's financial condition and 
results of operations.

International Business Activities

The Company markets its products in a variety of international markets. To 
date, the Company's customer management software has been installed 
in 20 countries.  More than 5% of the Company's customer management software 
and services revenue came from international sources in the first quarter of 
1997 compared to less than 5%  for the same period in the prior year. The 
Company is expanding its international presence, primarily through third 
party marketing and distribution alliances. The Company's current and 
proposed international business activities are subject to certain inherent 
risks. There can be no assurance that such risks will not have a material 
adverse effect on the Company's future international sales and, consequently, 
the Company's business, operating results and financial condition.

Attraction and Retention of Key Personnel

The Company's future success depends in large part on the continued service 
of its key management, sales, product development and operational personnel. 
The Company believes that its future success also depends on its ability to 
attract and retain skilled technical, managerial and marketing personnel, 
including, in particular, additional personnel in the areas of research and 
development and technical support. Competition for qualified personnel is 
intense. The Company has from time to time experienced difficulties in 
recruiting qualified skilled technical personnel. Failure by the Company to 
attract and retain the personnel it requires could have a material adverse 
effect on the financial condition and results of operations of the Company.

Dependence on Proprietary Technology

The Company relies on a combination of patent, trade secret and copyright 
laws, nondisclosure agreements, and other contractual and technical measures 
to protect its proprietary technology. There can be no assurance that these 
provisions will be adequate to protect its proprietary rights. Although the 
Company believes that its products and services do not infringe upon the 
proprietary rights of third parties, there can be no assurance that third 
parties will not assert infringement claims against the Company or the 
Company's clients.


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<PAGE>

Government Regulation

The Company's existing and potential clients are subject to extensive 
regulation, and certain of the Company's revenue opportunities may depend on 
continued deregulation in the worldwide communications industry. In addition, 
the Company's clients are subject to certain regulations governing the 
privacy and use of the customer information that is collected and managed by 
the Company's products and services. Regulatory changes that adversely affect 
the Company's existing and potential clients could have a material adverse 
effect on the financial condition and results of operations of the Company.

Possible Volatility of Stock Price

Although the Company believes that it has the product offerings and resources 
needed for continuing success, future revenue and margin trends cannot be 
reliably predicted and may cause the Company to adjust its operations. The 
Company's stock price, like that of other technology companies, is subject to 
significant volatility.  The announcement of new products, services or 
technologies by the Company or its competitors, quarterly variations in the 
Company's results of operations, changes in revenue or earnings estimates by 
the investment community and speculation in the press or investment community 
are among the factors affecting the Company's stock price.  In addition, the 
stock price may be affected by general market conditions and domestic and 
international macroeconomic factors unrelated to the Company's performance.  
Because of the foregoing reasons, recent trends should not be considered 
reliable indicators of future stock prices or financial results.


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<PAGE>

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings.

          None.

Item 2.   Changes in Securities.

          None

Item 3.   Defaults Upon Senior Securities.

          None.

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

          The election of directors and ratification of independent accountants 
          have been submitted to a vote of security holders and are 
          incorporated herein by reference to the Registrant's Definitive Proxy 
          Statement and Notice of Annual Meeting of Stockholders dated 
          April 17, 1997, for the annual meeting of stockholders to be held 
          May 21, 1997.

Item 5.   Other information

          None

Item 6.   Exhibits and Reports on Form 8-K

    (a)   Exhibits

          Exhibit 11  Computation of Per Share Earnings

          Exhibit 27  Financial Data Schedule

    (b)   Reports on Form 8-K

          The Registrant filed the following report on Form 8K during the 
          quarter ended March 31, 1997:

          Registrant's Press Release, dated as of March 6, 1997, announcing 
          statement processing contract with CBIS, as exhibit 99.1 to Form 8K, 
          and contract (redacted) filed as exhibit 10.31 to the Registrant's 
          December 31, 1996 Form 10K.


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<PAGE>

                            USCS INTERNATIONAL, INC.
                                   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.

                                        USCS INTERNATIONAL, INC.
                                        (Registrant)

Dated: May 12, 1997                     By:  /s/ DOUGLAS L. SHURTLEFF
                                        ------------------------------
                                        Douglas L. Shurtleff
                                        Senior Vice President, Finance
                                        (Chief Financial Officer)


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