<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C.


                                    FORM 10-Q


[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


[ ]  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: 0-20941


                         PRECISION RESPONSE CORPORATION
             (Exact name of Registrant as specified in its charter)



             FLORIDA                                         59-2194806
 (State or other jurisdiction of                          (I.R.S. Employer 
  incorporation or organization)                         Identification No.)
 


                  1505 N.W. 167TH STREET, MIAMI, FLORIDA 33169
               (Address of principal executive offices) (Zip code)


                                 (305) 626-4600
              (Registrant's telephone number, including area code)


         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 [ ]

         ON MAY 12, 1997, THE REGISTRANT HAD 21,512,000 OUTSTANDING SHARES OF
COMMON STOCK, $0.01 PAR VALUE.


<PAGE>   2


                         PRECISION RESPONSE CORPORATION

                                      INDEX


                                     PART I.

<TABLE>
<CAPTION>

ITEM NO.                                                                        PAGE(S)
--------                                                                        -------
<S>                                                                                 <C>
      1.     FINANCIAL STATEMENTS

             Balance Sheets -
                  March 31, 1997 (Unaudited) and December 31, 1996                  3

             Statements of Operations (Unaudited) -
                  Three months ended March 31, 1997 and 1996                        4

             Statements of Cash Flows (Unaudited) -
                  Three months ended March 31, 1997 and 1996                        5

             Notes to Financial Statements                                        6-7

      2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS                                      8-13


                                    PART II.

      2.    CHANGES IN SECURITIES                                                  14

      6.    EXHIBITS AND REPORTS ON FORM 8-K                                       14
 
            Signatures                                                             15


</TABLE>





                                       2
<PAGE>   3


                         PART I. FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                         PRECISION RESPONSE CORPORATION
                                 BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                MARCH 31, 1997   DECEMBER 31, 1996
                                                                  (UNAUDITED)     
                                                                --------------   -----------------
<S>                                                                 <C>             <C>      
ASSETS
Current assets:
    Cash and cash equivalents                                       $  31,996       $   7,262
    Accounts receivable, net of allowances
        of $2,876 and $2,650, respectively                             37,230          30,049
    Deferred income taxes                                               1,720           1,321
    Prepaid expenses and other current assets                           3,529           2,999
                                                                    ---------       ---------
            Total current assets                                       74,475          41,631
Property and equipment, net                                            60,304          42,034
Other assets                                                            4,627           4,750
                                                                    ---------       ---------
            Total assets                                            $ 139,406       $  88,415
                                                                    =========       =========

LIABILITIES AND SHAREHOLDERS' EQUITY 
Current liabilities:
    Current maturities of long-term obligations                     $   2,468       $   2,624
    Accounts payable                                                   15,916          17,294
    Accrued compensation expenses                                       2,583           4,078
    Income taxes payable                                                 --             1,645
    Other accrued expenses                                              3,136           1,721
    Customer deposits                                                   1,819           2,420
                                                                    ---------       ---------
            Total current liabilities                                  25,922          29,782
Long-term obligations, less current maturities                          5,369           4,190
Deferred income taxes                                                   2,498           1,493
                                                                    ---------       ---------
            Total liabilities                                          33,789          35,465
                                                                    ---------       ---------

Commitments and contingencies                                            --              --

Shareholders' equity:
    Common stock, $0.01 par value; 100,000,000
        shares authorized; 21,512,000 and
        20,000,000 issued and outstanding,
        respectively                                                      215             200
    Additional paid-in capital                                         97,082          47,808
    Retained earnings                                                   8,686           5,394
    Unearned compensation                                                (366)           (452)
                                                                    ---------       ---------
            Total shareholders' equity                                105,617          52,950
                                                                    ---------       ---------
            Total liabilities and shareholders' equity              $ 139,406       $  88,415
                                                                    =========       =========
</TABLE>



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




                                       3
<PAGE>   4


                         PRECISION RESPONSE CORPORATION
                            STATEMENTS OF OPERATIONS
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                               FOR THE THREE MONTHS
                                                                   ENDED MARCH 31,
                                                           ------------------------------- 
                                                               1997                1996
                                                           ------------       ------------
<S>                                                        <C>                <C>         
REVENUES                                                   $     38,015       $     11,626
                                                           ------------       ------------
OPERATING EXPENSES:
    Cost of services                                             27,497              8,672
    Selling, general and administrative expenses                  5,203              2,064
                                                           ------------       ------------
            Total operating expenses                             32,700             10,736
                                                           ------------       ------------
            Operating income                                      5,315                890

OTHER INCOME (EXPENSE):
    Interest income                                                 345               --
    Interest expense                                               (173)              (136)
                                                           ------------       ------------
            INCOME BEFORE INCOME TAXES                            5,487                754
Income tax provision                                              2,195               --
                                                           ------------       ------------
            NET INCOME                                     $      3,292       $        754
                                                           ============       ============

            NET INCOME PER COMMON SHARE                    $       0.16
                                                           ============

PROFORMA DATA:
    Income before proforma income taxes                                       $        754
    Proforma provision for income
        taxes relating to S corporation                                                312
                                                                              ------------
            PROFORMA NET INCOME                                               $        442
                                                                              ============

            PROFORMA NET INCOME PER
                COMMON SHARE                                                  $       0.03
                                                                              ============

Weighted average number of common
        shares outstanding                                   21,024,300         16,527,061
                                                           ============       ============

</TABLE>



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

                                       4
<PAGE>   5


                         PRECISION RESPONSE CORPORATION
                            STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                  FOR THE THREE MONTHS 
                                                                                     ENDED MARCH 31,
                                                                                  -------------------- 
                                                                                    1997           1996
                                                                                 --------       --------
<S>                                                                              <C>            <C>     
Cash flows from operating activities:
    Net income                                                                   $  3,292       $    754
    Adjustments to reconcile net income to net
        cash used in operating activities:
        Depreciation and amortization                                               2,078            325
        Provision for bad debts and sales allowances                                  535             26
        Amortization of unearned compensation                                          86           --
        Deferred income tax expense                                                   606           --
    Changes in operating assets and liabilities:
        Accounts receivable                                                        (7,716)        (2,998)
        Prepaid expenses and other current assets                                    (530)           154
        Other assets                                                                  609            (44)
        Accounts payable                                                           (1,378)           877
        Accrued compensation expenses                                              (1,495)          (162)
        Income taxes payable                                                       (1,645)          --
        Other accrued expenses                                                      1,415            (33)
        Customer deposits                                                            (601)           111
                                                                                 --------       --------
            Net cash used in operating activities                                  (4,744)          (990)
                                                                                 --------       --------

Cash flows from investing activities:
    Purchases of property and equipment, net                                      (18,363)          (479)
    Software development costs                                                       (785)          --
                                                                                 --------       --------
            Net cash used in investing activities                                 (19,148)          (479)
                                                                                 --------       --------

Cash flows from financing activities:
    Proceeds from revolving credit loan                                              --            1,750
    Payments on long-term obligations                                                (664)          (340)
    Net proceeds from issuance of common stock                                     49,290           --
    Net advances to shareholders                                                     --             (156)
                                                                                 --------       --------
            Net cash provided by financing activities                              48,626          1,254
                                                                                 --------       --------

Net increase (decrease) in cash and cash equivalents                               24,734           (215)

Cash and cash equivalents at beginning of period                                    7,262            266
                                                                                 --------       --------
Cash and cash equivalents at end of period                                       $ 31,996       $     51
                                                                                 ========       ========

Supplemental schedule of non-cash investing and financing activities:
    Installment loans and capital lease obligations                              $  1,687       $    407
                                                                                 ========       ========

</TABLE>


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


                                       5
<PAGE>   6
                         PRECISION RESPONSE CORPORATION
                         NOTES TO FINANCIAL STATEMENTS


1.  DESCRIPTION OF BUSINESS

         Precision Response Corporation (the "Company") is a full-service
provider of teleservicing, database marketing and management, and fulfillment
services on an outsourced basis to large corporations.

2.  INTERIM FINANCIAL STATEMENTS

         The accompanying unaudited financial statements were prepared in
accordance with generally accepted accounting principles for interim financial
information and the rules and regulations of the Securities and Exchange
Commission (the "SEC"). The unaudited interim financial information reflects all
normal recurring adjustments, which are, in the opinion of management, necessary
for a fair presentation of the interim financial statements. The balance sheet
at December 31, 1996 included herein has been derived from the audited financial
statements at that date but does not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. Operating results for the three months ended March 31,
1997 and 1996 are not necessarily indicative of results that may be expected for
the full fiscal years. These unaudited financial statements should be read in
conjunction with the audited financial statements and notes thereto contained in
the Company's annual report on Form 10-K for the fiscal year ended December 31,
1996 filed with the SEC on March 31, 1997.

         Certain amounts in the 1996 financial statements have been reclassified
to conform with the current year presentation.

3.  PUBLIC OFFERING

         Effective January 29, 1997 (the actual closing date was February 4,
1997), the Company and certain selling shareholders completed an equity offering
of 4,740,000 shares of the Company's common stock (the "Common Stock") at an
offering price of $35.125 per share (the "Second Equity Offering"). Of the
4,740,000 shares of Common Stock, 1,500,000 shares were sold by the Company. Net
proceeds to the Company from the Second Equity Offering in the amount of $49.2
million, after deducting $3.5 million in costs associated with the offering, are
being used for call center expansion, other capital expenditures necessary to
support the Company's growth, working capital and other general corporate
purposes.

4.  REVENUES

         Revenues for the three months ended March 31, 1997 included $32.8
million of the Company's traditional teleservicing, database marketing and
management and fulfillment services. Additional revenues of $5.2 million were
generated during the quarter from the transfer of teleservicing-based software
applications, primarily in conjunction with the Company's teleservicing
activities. These transfers produced significantly higher margins than would
have been the case had the Company developed unique applications for these
customers. Such transfers of existing teleservicing-based applications were made
in lieu of developing new but functionally similar applications over time for
these customers.




                                       6
<PAGE>   7


5.  PROPERTY AND EQUIPMENT

         Property and equipment is comprised of both owned property and property
under capital leases, the details of which are set forth below (in thousands):

<TABLE>
<CAPTION>
                                           MARCH 31, 1997                              DECEMBER 31, 1996
                               --------------------------------------       --------------------------------------
                                OWNED          LEASED         TOTAL           OWNED         LEASED         TOTAL
                                -----          ------         -----           -----         ------         -----
<S>                            <C>            <C>            <C>            <C>            <C>            <C>     
Telecommunications
    equipment                  $ 15,058       $  5,759       $ 20,817       $  9,312       $  4,940       $ 14,252
Computer equipment               23,141          5,741         28,882         16,601          4,933         21,534
Leasehold improvements           13,025           --           13,025          8,289           --            8,289
Furniture and fixtures            4,892            973          5,865          2,741            973          3,714
Other                               186             60            246            995           --              995
                               --------       --------       --------       --------       --------       --------
                                 56,302         12,533         68,835         37,938         10,846         48,784
Accumulated
    depreciation                   
    and amortization             (6,120)        (2,411)        (8,531)        (4,736)        (2,014)        (6,750)
                               --------       --------       --------       --------       --------       --------
                               $ 50,182       $ 10,122       $ 60,304       $ 33,202       $  8,832       $ 42,034
                               ========       ========       ========       ========       ========       ========

</TABLE>

6.  PROFORMA DISCLOSURES

         On July 16, 1996, the Company converted from an S corporation to a C
corporation and adopted the asset and liability method of accounting for income
taxes. Proforma net income for the three months ended March 31, 1996 includes a
proforma provision for Federal and state income taxes as if the Company were
subject to such taxes as a C corporation for the entire period. This proforma
provision is computed using a combined Federal and state tax rate of 37.6%.

7.  STOCK OPTIONS

         During the first quarter of 1997, the Company granted options to
purchase 278,000 shares of Common Stock to three employees pursuant to the
Company's Amended and Restated 1996 Incentive Stock Plan. These options were
granted at the fair market value of the Common Stock at the date of grant at
exercise prices ranging from $33.38 to $35.38 per share, with terms of seven
years and vesting rates of 20% per year, except for an option to purchase
200,000 shares granted to an executive officer of the Company which vests at the
rate of one-third on each of the third, fifteenth and twenty-seventh month
anniversaries of the date of grant. During the first quarter of 1997, options to
purchase 7,000 shares at an exercise price of $0.01 per share and 5,000 shares
at an exercise price of $14.50 per share were exercised and outstanding options
covering 16,000 shares were canceled.

         During the first quarter of 1997, the Company granted an option to
purchase 2,500 shares of Common Stock to a non-employee director pursuant to the
1996 Non-employee Director Stock Option Plan. This option has an exercise price
of $33.75 per share (the fair market value of the Common Stock at the date of
grant), a term of ten years and vests in equal installments over three years.





                                       7
<PAGE>   8


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

         The following discussion of the financial condition and results of
operations of the Company should be read in conjunction with the financial
statements and notes thereto included elsewhere in this report.

OVERVIEW AND BASIS OF PRESENTATION

         The Company currently offers its customers single source, integrated
solutions for their teleservicing, database marketing and management and
fulfillment needs. The Company's primary source of revenue is teleservicing
activities which are comprised of both inbound (customer-initiated) and outbound
(Company-initiated) calls. The majority of teleservicing revenues are derived
from inbound calls, which represented 91% of teleservicing revenues and 63% of
total revenues for the three months ended March 31, 1997 as compared to 82% of
teleservicing revenues and 56% of total revenues for the three months ended
March 31, 1996.

         Information services provided by the database marketing and management
group typically include the design, development and implementation of software
applications for use in a particular client program and the integration of the
Company's systems with those of its clients. Additionally, although the
Company's core business is providing teleservices on an outsourced basis to its
clients, certain clients prefer to "co-source" certain programs whereby the
Company and the client will jointly manage programs, with the Company making
available to the client certain software, systems and services.

         Fulfillment services include high-speed laser and electronic document
printing, lettershop and mechanical inserting, sorting, packaging and mailing
capabilities. While fulfillment services represent a relatively small portion of
the Company's total revenues, they are an important element in the Company's
overall marketing strategy of providing its customers with a "one-stop" solution
to their telephone-based customer service and direct marketing needs.

         Costs associated with servicing the Company's clients, consisting
primarily of certain costs incurred in the operations of call centers and the
fulfillment facility, such as rent for real property and leased equipment,
insurance, property taxes and certain departmental overhead directly related to
revenue-producing departments, were reclassified from selling, general and
administrative expenses to cost of services beginning in the fourth quarter of
1996, with all previously reported periods restated accordingly.




                                       8
<PAGE>   9


RESULTS OF OPERATIONS

         The following table sets forth certain statements of operations data,
as a percentage of revenues, for the periods indicated:

<TABLE>
<CAPTION>

                                                            FOR THE THREE MONTHS
                                                               ENDED MARCH 31,
                                                          ------------------------  
                                                             1997           1996
                                                          -----------    ---------   
<S>                                                         <C>          <C>   
SELECTED OPERATING RESULTS:
    Revenues                                                 100.0%       100.0%
    Cost of services                                          72.3         74.5
    Selling, general and administrative expenses              13.7         17.8
                                                           -------      -------
        Operating income                                      14.0          7.7
    Interest income                                            0.9         --
    Interest expense                                          (0.5)        (1.2)
                                                           -------      -------
        Income before income taxes                            14.4          6.5
    Income tax provision (1)                                   5.8         --
                                                           -------      -------
        Net income (1)                                         8.6%         6.5%
                                                           =======      =======
PROFORMA DATA (1):
    Income before proforma income taxes                                     6.5%
    Proforma provision for income
        taxes relating to S corporation                                     2.7
                                                                        -------
        Proforma net income                                                 3.8%
                                                                        =======
</TABLE>

-----------

(1)  On July 16, 1996, the Company converted from an S corporation to a C
     corporation. Accordingly, the Company was an S corporation during the three
     months ended March 31, 1996 and was not subject to Federal and state income
     taxes. Proforma net income includes a provision for income taxes using a
     combined Federal and state tax rate of 37.6%.

REVENUES

         Revenues increased by $26.4 million, or 227%, for the three months
ended March 31, 1997 in comparison to the same period of the prior year. The
principal components of revenues are teleservicing activities (representing
68.9% and 68.5% of revenues for the three months ended March 31, 1997 and 1996,
respectively) and information services (representing 24.2% and 17.2% of revenues
for the three months ended March 31, 1997 and 1996, respectively), with the
balance primarily represented by fulfillment services. The number of call
centers in operation increased from three as of March 31, 1996 to eight as of
March 31, 1997. Since March 31, 1996, the Company has opened six new call
centers and converted one smaller call center to administrative offices.
Workstation capacity increased substantially from 980 as of March 31, 1996 to
approximately 4,400 as of March 31, 1997, including 940 workstations added in
late March 1997 which, as a result of the timing of the new call center's
opening, did not generate any revenues for the three-month period ended March
31, 1997. In addition, the workstations in the call center opened in late
December 1996 were still in the process of "ramping up" at the end of the first
quarter of 1997.

         Teleservicing activities, principally inbound services, accounted for
the majority of the revenue growth during the three months ended March 31, 1997
with an increase of $18.2 million, or 229%, to $26.2 million from $8.0 million
in the comparable period of the prior year. Major factors contributing to the
increase in teleservicing revenues were primarily the addition of several new
programs for existing clients in the telecommunications industry as well as the
addition of new clients, principally in the direct broadcasting and
telecommunications equipment industries.




                                       9
<PAGE>   10


         Revenues from information services increased by $7.2 million, or 360%,
to $9.2 million for the three months ended March 31, 1997 from $2.0 million in
the comparable period of 1996 due to the increased development of systems for
clients and the transfers of teleservicing-based application software.

COST OF SERVICES

         Cost of services generally include all direct and some indirect costs
incurred in connection with the Company's revenue-producing departments,
including, but not limited to, labor, telephone expenses directly related to
revenue-generating activities, equipment under operating leases used in the call
centers and fulfillment facility, direct overhead for all such operational
facilities, such as rent, security and insurance, and depreciation and
amortization of property and equipment used in operations. Cost of services
increased by $18.8 million, or 217.1%, for the three months ended March 31, 1997
as compared to the same period of the prior year, principally as a result of the
growth in operations. The decrease in cost of services, as a percentage of
revenues, from 74.5% for the three months ended March 31, 1996 to 72.3% for the
three months ended March 31, 1997 was attributable to greater operational
efficiencies derived from mature client programs and to significantly higher
margins associated with the transfer of teleservicing-based application
software, partially offset by volume pricing for certain large teleservicing
programs.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         Selling, general and administrative expenses generally include the
costs of central services the Company provides to support and manage its
operations, including senior management, sales and marketing, human resources,
as well as finance and accounting functions. The increase of $3.1 million, or
152%, in selling, general and administrative expenses for the three months ended
March 31, 1997 as compared to the same period of the prior year was primarily
due to increases in sales commissions and administrative salaries and benefits
to support the Company's growth. As a percentage of revenues, selling, general
and administrative expenses decreased from 17.8% for the three months ended
March 31, 1996 to 13.7% for the three months ended March 31, 1997 principally as
a result of the absorption of such costs by an increased base of revenues.

INTEREST, NET

         Interest income, net of interest expense, was $172,000 for the three
months ended March 31, 1997 as compared to interest expense, net of interest
income, totaling $136,000 for the three months ended March 31, 1996. This
improvement reflected additional interest income generated during the three
months ended March 31, 1997 from the investment of a portion of the net proceeds
from the Second Equity Offering and the absence of borrowings from the Company's
existing credit facility during the current quarter. See Note 3 - Public
Offering of the notes to the financial statements. The proceeds from borrowings
during the three months ended March 31, 1996 were primarily obtained from the
then existing revolving loan and capital lease financing.

INCOME TAXES

         Prior to the Company's initial public offering of its Common Stock
completed in July 1996 (the "Initial Public Offering"), the Company was an S
corporation and, accordingly, was not subject to Federal and state income taxes.
Therefore, the three-month period ended March 31, 1996 does not include a
provision for Federal and state income taxes.



                                       10
<PAGE>   11


PROFORMA NET INCOME

         Proforma net income increased by $2.8 million, or 645%, to $3.3 million
for the three months ended March 31, 1997 from $0.4 million in the comparable
period of the prior year primarily as a result of the increase in pretax income
stemming from the Company's growth in operations. Proforma net income for the
three months ended March 31, 1996 includes a proforma provision for Federal and
state income taxes as if the Company were subject to such taxes as a C
corporation for that period. The Company was a C corporation throughout the
three months ended March 31, 1997; therefore, net income during the three months
ended March 31, 1997 includes the appropriate provision under such income tax
status.

LIQUIDITY AND CAPITAL RESOURCES

         Prior to the Initial Public Offering, the Company funded its operations
and capital expenditures primarily through cash flows from operations, bank
borrowings and capital lease financing. During the first quarter of 1997, the
Company obtained additional liquidity from the net proceeds of the Second Equity
Offering.

         Effective January 29, 1997 (the actual closing date was February 4,
1997), the Company and certain selling shareholders completed the Second Equity
Offering at an offering price of $35.125 per share. Of the 4,740,000 shares of
Common Stock, 1,500,000 shares were sold by the Company. Net proceeds to the
Company from the Second Equity Offering in the amount of $49.2 million, after
deducting $3.5 million in costs associated with the offering, are being used for
call center expansion, other capital expenditures necessary to support the
Company's growth, working capital and other general corporate purposes.

         The Company has a revolving credit facility (the "Senior Revolving
Facility") which provides for revolving loans in an aggregate principal amount
not to exceed $15.0 million and matures in May 1999. The Company may borrow up
to 85% of eligible accounts receivable. The Senior Revolving Facility is
primarily collateralized by accounts receivable. Based upon eligible accounts
receivable and no outstanding borrowings under the Senior Revolving Facility as
of March 31, 1997, availability thereunder was $15.0 million as of March 31,
1997. The Senior Revolving Facility accrues interest at the Company's option at
the prime rate plus 0.5% or the LIBOR rate plus 3.0%. The Company pays a fee of
0.25% per annum on unused commitments under the Senior Revolving Facility. The
Company is required, under the terms of the Senior Revolving Facility, to
maintain certain financial covenants, including minimum tangible net worth and
earnings. The agreement also contains certain restrictions on additional
indebtedness, capital expenditures and the declaration and payment of dividends.

         Net cash used in operating activities was $4.7 million and $1.0 million
for the three months ended March 31, 1997 and March 31, 1996, respectively. The
$3.7 million increase in net cash used in operating activities during the three
months ended March 31, 1997 in comparison to the same period of the prior year
was primarily due to the use of cash to finance accounts receivable relating to
the significant growth in revenues and the payment of estimated income taxes as
a result of the Company's C corporation income tax status.

         The Company's working capital as of March 31, 1997 and December 31,
1996 was $48.6 million and $11.8 million, respectively. Major factors
contributing to the $36.8 million increase in working capital for the three
months ended March 31, 1997 were net proceeds provided by the Second Equity
Offering and a $7.2 million increase in accounts receivable. The $1.4 million
reduction in accounts 



                                       11
<PAGE>   12

payable was due, in part, to the Company's favorable cash position resulting
from the Second Equity Offering. The net increase in accounts receivable was due
to the Company's growth in operations.

         Net cash used in investing activities in the amounts of $19.1 million
and $0.5 million for the three months ended March 31, 1997 and 1996,
respectively, was principally for capital expenditures. Workstation capacity
increased from 3,220 as of December 31, 1996 to 4,400 as of March 31, 1997. The
major increases in capital expenditures for the three months ended March 31,
1997 were telecommunications and computer equipment principally attributable to
the increase in the Company's total workstation capacity and, to a lesser
extent, leasehold improvements for the new call center to house the additional
workstations. In addition, the Company expended $0.8 million during the
three-month period ended March 31, 1997 for the internal development of software
which is being used as part of the Company's teleservicing programs or otherwise
marketed to clients.

         Capital expenditures, including the capitalized value of property and
equipment, were $20.8 million and $0.9 million for the three months ended March
31, 1997 and 1996, respectively. Capital expenditures for 1997 are expected to
total $45.0 million for the fiscal year. This capital program, which is subject
to continuing change and review, currently includes the projected opening of
four new call centers throughout the remainder of 1997 with an anticipated
aggregate workstation capacity of 1,500. Workstation capacity as of December 31,
1997 is expected to approximate 5,900.

         Net cash provided by financing activities was $48.6 million and $1.3
million for the three months ended March 31, 1997 and 1996, respectively. During
the three months ended March 31, 1997, the Company raised additional capital
from the Second Equity Offering and used a portion of the net proceeds provided
by such offering principally to fund anticipated workstation capacity growth.
Borrowings during the three months ended March 31, 1996 were primarily from the
Company's then existing revolving credit loan and were principally used for
working capital needs.

         The Company believes that funds generated from operations, the net
proceeds from the Second Equity Offering, available borrowings under the Senior
Revolving Facility and lease financing will be sufficient to finance its planned
capital expenditures and anticipated growth at least through 1997. The Company's
long-term capital requirements will depend on many factors, including, but not
limited to, the rate at which the Company expands its business. To the extent
that the funds generated from the sources described above are insufficient to
fund the Company's activities in the short or long term, the Company would need
to raise additional funds through public or private financings. No assurance can
be given that additional financing will be available or that, if available, it
will be available on terms favorable to the Company.

FLUCTUATIONS IN QUARTERLY RESULTS

         The Company experiences quarterly variations in revenues and operating
income principally as a result of the timing of clients' marketing campaigns and
customer service programs, the commencement of new contracts, changes in the
Company's revenue mix among its various services offered to clients and the
timing of additional operating expenses to acquire and support new business.
While the effects of seasonality on the Company's business are typically
obscured by the addition of new clients and growing revenues, the Company's
business tends to be slower in the first and third quarters of its fiscal year
as client marketing programs are typically slower in the post-holiday and summer
months.


                                       12
<PAGE>   13


FORWARD-LOOKING STATEMENTS

         This report contains forward-looking statements (within the meaning of
Section 21E. of the Securities Exchange Act of 1934, as amended), representing
the Company's current expectations and beliefs concerning future events. When
used in this report, the words "believes," "estimates," "plans," "expects,"
"intends," "anticipates," and similar expressions as they relate to the Company
or its management are intended to identify forward-looking statements. The
actual results of the Company could differ materially from those indicated by
the forward-looking statements because of various risks and uncertainties
related to and including, without limitation, the Company's effective and timely
initiation and development of new client relationships, the maintenance of
existing client relationships and programs, the successful marketing of the
Company's information services and teleservicing-based application software, the
opening of new call centers in accordance with strategic plans, the recruitment
and retention of qualified personnel, the continued enhancement of
telecommunications, computer and information technologies and operational and
financial systems, the continued and anticipated growth in industry trends
towards outsourcing of telephone-based marketing and customer service operations
(particularly in the telecommunications, transportation, consumer products and
food and beverage industries), changes in competition and the forms of direct
sales and marketing techniques, general economic conditions, costs of telephone
services, financing and leasing of equipment, the adequacy of cash flows from
operations and available financings to fund capital needs and future growth,
changes in governmental rules and regulations applicable to the Company and
other risks in the Company's other filings with the Securities and Exchange
Commission. These risks and uncertainties are beyond the ability of the Company
to control; in many cases, the Company cannot predict the risks and
uncertainties that could cause actual results to differ materially from those
indicated by the forward-looking statements.






                                       13
<PAGE>   14


                                    PART II.

ITEM 2.       CHANGES IN SECURITIES

(c)        Sales of Unregistered Securities

         The Company did not issue or sell any unregistered securities during
the quarter ended March 31, 1997, except as follows:

         (i)  The Company granted options to purchase 278,000 shares of Common
              Stock to three employees pursuant to the Company's Amended and
              Restated 1996 Incentive Stock Plan. Of these options, 200,000 were
              granted at an exercise price of $35.38 per share and 78,000 were
              granted at an exercise price of $33.38 per share. These options
              have a term of seven years and vest at the rate of 20% per year,
              except for an option to purchase 200,000 shares granted to an
              executive officer of the Company which vests at the rate of
              one-third on each of the third, fifteenth and twenty-seventh month
              anniversaries of the date of grant.

         (ii) The Company also granted an option to purchase 2,500 shares of
              Common Stock to a non-employee director pursuant to the 1996
              Non-employee Director Stock Option Plan. This option has an
              exercise price of $33.75 per share, a term of ten years and vests
              in equal installments over three years.

         The foregoing stock options were granted by the Company in reliance
upon the exemption from registration available under Section 4(2) of the
Securities Act of 1933, as amended.

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

(a)        Exhibits

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>

  EXHIBIT
  NUMBER                                        DESCRIPTION OF EXHIBIT                                       PAGE
  -------                                       ----------------------                                       ----

<S>                    <C>                                                                                   <C>   
    3.2             Amendment to Article II, Section 6 of the Bylaws of the Company 
                    effective on February 19, 1997                                                            
                    

   27.1             Financial Data Schedule (for SEC use only)                                                

</TABLE>


(b)        Reports on Form 8-K

       No reports on Form 8-K were filed by the Company during the quarter ended
March 31, 1997.






                                       14
<PAGE>   15


                                   SIGNATURES


         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.

                               PRECISION RESPONSE CORPORATION
                                         (Registrant)

                               By: /s/ Paul M. O'Hara
                                   --------------------------------------------
                                   Paul M. O'Hara
                                   Senior Vice President - Finance
                                   and Chief Financial Officer
                                   (Principal Financial and Accounting Officer)
Dated:  May 15, 1997








                                       15