UNITED STATES
                       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 October 5, 2005

                                       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 0-20022

                           POMEROY IT SOLUTIONS, INC.
                           --------------------------
             (Exact name of registrant as specified in its charter)


DELAWARE                                           31-1227808
----------------------------------------------     -------------------
(State or other jurisdiction of incorporation      (IRS Employer
or organization)                                   Identification No.)


                     1020 Petersburg Road, Hebron, KY 41048
                     --------------------------------------
                    (Address of principal executive offices)

                                 (859) 586-0600
               --------------------------------------------------
              (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
requirements  for  the  past  90  days.

YES      NO  X
     --     --

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer or a non-accelerated filer.  See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.  (Check
one):

     Large accelerated filer       Accelerated filer  X    Non-accelerated
                             ---                     ---
filer
      ---

     Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).

     Yes      No X
         ---    ---

The number of shares of common stock outstanding as of February 28, 2006 was
12,620,469.


<PAGE>
<TABLE>
<CAPTION>
                              POMEROY IT SOLUTIONS, INC.
                                  TABLE OF CONTENTS

<S>         <C>                    <C>                                           <C>
Part I.     Financial Information

            Item 1.                Financial Statements:                         Page
                                                                                 ----

                                   Consolidated Balance Sheets as of October
                                   5, 2005 (Unaudited) and January 5, 2005          1
                                   Consolidated Statements of Operations for
                                   the Three Months Ended October 5, 2005
                                   and 2004 (Unaudited)                             3

                                   Consolidated Statements of Comprehensive
                                   Income for the Three Months Ended
                                   October 5, 2005 and 2004 (Unaudited)             4

                                   Consolidated Statements of Income for
                                   the Nine Months Ended October 5, 2005
                                   and 2004 (Unaudited)                             5

                                   Consolidated Statements of Comprehensive
                                   Income for the Nine Months Ended October
                                   5, 2005 and 2004 (Unaudited)                     6

                                   Consolidated Statements of Cash Flows for
                                   the Nine Months Ended October 5, 2005
                                   and 2004 (Unaudited)                             7

                                   Notes to Consolidated Financial Statements
                                   (Unaudited)                                      8

            Item 2.                Management's Discussion and Analysis of
                                   Financial Condition and Results of
                                   Operations                                      17

            Item 3.                Quantitative and Qualitative Disclosure
                                   about Market Risk                               23

            Item 4.                Controls and Procedures                         23

Part II.    Other Information

            Item 1.                Legal Proceedings                               24

            Item 2.                Unregistered Sales of Equity Securities and
                                   Use of Proceeds                                 24

            Item 3.                Defaults Upon Senior Securities                 24

            Item 4.                Submission of Matters to a Vote of Security
                                   Holders                                         24

            Item 5.                Other Information                               24

            Item 6.                Exhibits                                        24

SIGNATURES                                                                         25
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                            POMEROY IT SOLUTIONS, INC.
                           CONSOLIDATED BALANCE SHEETS


(in thousands)                                           October 5,   January 5,
                                                            2005         2005
                                                        ------------  -----------
                                                        (Unaudited)
<S>                                                     <C>           <C>
ASSETS

Current Assets:
Cash and cash equivalents                               $        129  $    13,108
Certificates of deposit                                        4,638        4,561

Accounts receivable:
  Trade, less allowance of  $4,289 at October 5, 2005
    and $1,462 at January 5, 2005                            130,007      143,113
  Vendor receivables, less allowance of $100 at
    October 5, 2005 and January 5, 2005                        5,769        5,790
  Net investment in leases                                     3,146        3,814
  Other                                                        2,590        2,902
                                                        ------------  -----------
        Total receivables                                    141,512      155,619
                                                        ------------  -----------

Inventories                                                   13,832       17,188
Other                                                          9,375       10,302
                                                        ------------  -----------
        Total current assets                                 169,486      200,778
                                                        ------------  -----------

Equipment and leasehold improvements:
  Furniture, fixtures and equipment                           30,735       30,113
  Leasehold improvements                                       6,591        6,187
                                                        ------------  -----------
        Total                                                 37,326       36,300

  Less accumulated depreciation                               23,915       21,061
                                                        ------------  -----------
        Net equipment and leasehold improvements              13,411       15,239
                                                        ------------  -----------

Net investment in leases, net of current portion                 977        1,650
Goodwill                                                     115,626      109,913
Intangible assets, net                                         3,078        3,702
Other assets                                                   2,373        1,606
                                                        ------------  -----------
        Total assets                                    $    304,951  $   332,888
                                                        ============  ===========
<FN>


                 See notes to consolidated financial statements.
</TABLE>


                                        1
<PAGE>
<TABLE>
<CAPTION>
                               POMEROY IT SOLUTIONS, INC.
                               CONSOLIDATED BALANCE SHEETS


(in thousands)                                                 October 5,    January 5,
                                                                  2005          2005
                                                              ------------  ------------
                                                              (Unaudited)
<S>                                                           <C>           <C>
LIABILITIES AND EQUITY

Current Liabilities:
Current portion of notes payable                              $          -  $       912
Short-term borrowings                                                3,686       20,153
Accounts payable                                                    56,815       72,656
Deferred revenue                                                     3,368        3,490
Employee compensation and benefits                                   7,760        8,245
Accrued restructuring and severance charges                          6,007        7,585
Other current liabilities                                            8,651        6,778
                                                              ------------  ------------
        Total current liabilities                                   86,287      119,819
                                                              ------------  ------------

Notes payable, less current portion                                      -          250
Deferred income taxes                                                2,134           97
Commitments and contingencies

Equity:
  Preferred stock,  $.01 par value; authorized 2,000 shares
    (no shares issued or outstanding)                                    -            -
  Common stock, $.01 par value; authorized 20,000 shares
    (13,400 and 13,188 shares issued at October 5, 2005
    and January 5, 2005, respectively)                                 134          132
  Paid-in capital                                                   87,861       85,231
  Accumulated other comprehensive income (loss)                         24          (78)
  Retained earnings                                                137,633      136,183
                                                              ------------  ------------
                                                                   225,652      221,468

  Less treasury stock, at cost ( 810 and 778 shares at
    October 5, 2005 and January 5, 2005, respectively)               9,122        8,746
                                                              ------------  ------------
        Total equity                                               216,530      212,722
                                                              ------------  ------------
        Total liabilities and equity                          $    304,951  $   332,888
                                                              ============  ============
<FN>


                     See notes to consolidated financial statements.
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                           POMEROY IT SOLUTIONS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS


(in thousands, except earnings per share data)      Three Months Ended
                                                --------------------------
                                                 October 5,    October 5,
                                                    2005          2004
                                                ------------  ------------
                                                (Unaudited)   (Unaudited)
<S>                                             <C>           <C>
Net sales and service revenues:
  Sales - equipment, supplies and leasing       $   129,281   $    139,403
  Service                                            55,720         61,101
                                                ------------  ------------
        Total net sales and service revenues        185,001        200,504
                                                ------------  ------------

Cost of sales and service:
  Sales - equipment, supplies and leasing           120,058        129,621
  Service                                            42,427         44,433
                                                ------------  ------------
        Total cost of  sales and service            162,485        174,054
                                                ------------  ------------

        Gross profit                                 22,516         26,450
                                                ------------  ------------

Operating expenses:
  Selling, general and administrative                19,005         18,818
  Rent expense                                          830            906
  Depreciation                                        1,187          1,052
  Amortization                                          164            122
  Provision for doubtful accounts                     2,000              -
  Restructuring and severance charges                 1,662          2,423
                                                ------------  ------------
        Total operating expenses                     24,848         23,321
                                                ------------  ------------

Income (loss) from operations                        (2,332)         3,129
                                                ------------  ------------

Other expense:
  Interest , net                                        152             32
  Other                                                   4              4
                                                ------------  ------------
        Total other expense                             156             36
                                                ------------  ------------

Income (loss) before income tax                      (2,488)         3,093
Income tax expense (benefit)                         (1,008)         1,221
                                                ------------  ------------
Net income (loss)                               $    (1,480)  $      1,872
                                                ============  ============

Weighted average shares outstanding:
  Basic                                              12,583         12,240
                                                ============  ============
  Diluted                                            12,583         12,366
                                                ============  ============

Earnings (loss) per common share:
  Basic                                         $     (0.12)  $       0.15
                                                ============  ============
  Diluted                                       $     (0.12)  $       0.15
                                                ============  ============
<FN>
*    Dilutive loss per common share for the three months ended October 5, 2005
would have been anti-dilutive if the number of weighted average shares
outstanding were adjusted to reflect the dilutive effect of outstanding stock
options.

                 See notes to consolidated financial statements.
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                            POMEROY IT SOLUTIONS, INC.
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


(in thousands)                                              Three Months Ended
                                                        --------------------------
                                                         October 5,    October 5,
                                                            2005          2004
                                                        ------------  ------------
                                                        (Unaudited)   (Unaudited)
<S>                                                     <C>           <C>
Net income (loss)
Other comprehensive income:                             $    (1,480)  $      1,872
  Foreign currency translation adjustment, net of tax             -              -
                                                        ------------  ------------
Comprehensive income (loss)                             $    (1,480)  $      1,872
                                                        ============  ============
<FN>


                  See notes to consolidated financial statements.
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                           POMEROY IT SOLUTIONS, INC.
                        CONSOLIDATED STATEMENTS OF INCOME


(in thousands, except earnings per share data)       Nine Months Ended
                                                --------------------------
                                                 October 5,    October 5,
                                                    2005          2004
                                                ------------  ------------
                                                (Unaudited)   (Unaudited)
<S>                                             <C>           <C>
Net sales and service revenues:
  Sales - equipment, supplies and leasing       $    375,617  $    407,724
  Service                                            167,241       126,149
                                                ------------  ------------
        Total net sales and service revenues         542,858       533,873
                                                ------------  ------------

Cost of sales and service:
  Sales - equipment, supplies and leasing            347,438       377,638
  Service                                            124,941        91,685
                                                ------------  ------------
        Total cost of  sales and service             472,379       469,323
                                                ------------  ------------

        Gross profit                                  70,479        64,550
                                                ------------  ------------

Operating expenses:
  Selling, general and administrative                 56,861        44,570
  Rent expense                                         2,556         2,451
  Depreciation                                         3,624         2,968
  Amortization                                           624           201
  Provision for doubtful accounts                      2,000             -
  Restructuring and severance charges                  1,794         2,423
                                                ------------  ------------
        Total operating expenses                      67,459        52,613
                                                ------------  ------------

Income from operations                                 3,020        11,937
                                                ------------  ------------

Other expense:
  Interest , net                                         579             1
  Other                                                    5            27
                                                ------------  ------------
        Total other expense                              584            28
                                                ------------  ------------

Income before income tax                               2,436        11,909
Income tax expense                                       986         4,675
                                                ------------  ------------
Net income                                      $      1,450  $      7,234
                                                ============  ============

Weighted average shares outstanding:
  Basic                                               12,542        12,243
                                                ============  ============
  Diluted                                             12,652        12,419
                                                ============  ============

Earnings per common share:
  Basic                                         $       0.12  $       0.59
                                                ============  ============
  Diluted                                       $       0.11  $       0.58
                                                ============  ============
<FN>


                 See notes to consolidated financial statements.
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>
                            POMEROY IT SOLUTIONS, INC.
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


(in thousands)                                               Nine Months Ended
                                                        --------------------------
                                                         October 5,    October 5,
                                                            2005          2004
                                                        ------------  ------------
                                                        (Unaudited)   (Unaudited)
                                                        ------------  ------------
<S>                                                     <C>           <C>
Net income                                              $      1,450  $     7,234
Other comprehensive income:
  Foreign currency translation adjustment, net of tax            102          (36)
                                                        ------------  ------------

Comprehensive income                                    $      1,552  $     7,198
                                                        ============  ============
<FN>


                  See notes to consolidated financial statements.
</TABLE>


                                        6
<PAGE>
<TABLE>
<CAPTION>
                                POMEROY IT SOLUTIONS, INC.
                          CONSOLIDATED STATEMENTS OF CASH FLOWS


(in thousands)                                                      Nine Months Ended
                                                               --------------------------
                                                                October 5,    October 5,
                                                                   2005          2004
                                                               ------------  ------------
                                                               (Unaudited)   (Unaudited)
<S>                                                            <C>           <C>
Cash flows from operating activities:
  Net income                                                   $     1,450   $     7,234
  Adjustments to reconcile net income to net cash
    from operating activities:
    Depreciation                                                     3,624         2,968
    Amortization                                                       624           201
    Restructuring and severance charges                              1,794             -
    Provision for doubtful accounts                                  2,000             -
    Deferred income taxes                                            3,177            12
    Loss on sale of fixed assets                                         4            30
  Changes in working capital accounts, net of
    effects of acquisitions:
    Accounts receivable                                              9,560        13,232
    Inventories                                                      2,267        (5,959)
    Other current assets                                            (1,769)       (2,210)
    Net investment in leases                                         1,492           377
    Accounts payable                                               (15,245)        1,023
    Deferred revenue                                                  (122)         (501)
    Income tax payable                                                (174)          204
    Employee compensation and benefits                                (485)            -
    Other, net                                                      (3,835)         (669)
                                                               ------------  ------------
  Net operating activities                                           4,362        15,942
                                                               ------------  ------------
Cash flows from investing activities:
  Capital expenditures                                              (1,314)       (1,495)
  Proceeds from sale of fixed assets                                     6            20
  Purchases of certificates of deposit                                 (77)            -
  Acquisition of businesses, net of
    cash acquired                                                   (1,185)      (16,634)
                                                               ------------  ------------
  Net investing activities                                          (2,570)      (18,109)
                                                               ------------  ------------
Cash flows from financing activities:
  Proceeds from (repayments of) short-term borrowings              (16,467)        2,853
  Payments of acquisition notes payable                               (663)      (31,385)
  Proceeds from exercise of stock options
    and related tax benefit                                          2,463           441
  Purchase of treasury stock                                          (376)         (467)
  Proceeds from employee stock purchase plan                           170           160
                                                               ------------  ------------
    Net financing activities                                       (14,873)      (28,398)
                                                               ------------  ------------
Effect of exchange rate changes on cash and cash equivalents           102           (36)
                                                               ------------  ------------
Change in cash and cash equivalents                                (12,979)      (30,601)
Cash and cash equivalents:
  Beginning of period                                               13,108        40,200
                                                               ------------  ------------
  End of period                                                $       129   $     9,599
                                                               ============  ============
<FN>


                     See notes to consolidated financial statements.
</TABLE>


                                        7
<PAGE>
                           POMEROY IT SOLUTIONS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

1.   Basis  of  Presentation

     The consolidated financial statements have been prepared in accordance with
     accounting  principles  generally  accepted in the United States of America
     ("US  GAAP") for interim financial information and with the instructions to
     Form  10-Q  and  Rule  10-01  of  Regulation  S-X. Accordingly, they do not
     include  all  of  the  information  and  footnotes  required by US GAAP for
     complete  financial  statements. Except as disclosed herein, there has been
     no  material  change  in  the  information  disclosed  in  the  notes  to
     consolidated  financial  statements included in the Company's Annual Report
     on  Form  10-K  for  the  year  ended  January  5,  2005. In the opinion of
     management,  all  adjustments  (consisting  of  normal  recurring accruals)
     necessary  for  a  fair presentation of the interim periods have been made.
     The  results  of operations for the nine-month period ended October 5, 2005
     are  not  necessarily  indicative  of  the results that may be expected for
     future  interim  periods  or  for  the  year  ending  January  5,  2006.

2.   Recent  Accounting  Pronouncements

     In  November 2004, the Financial Accounting Standards Board ("FASB") issued
     SFAS  No.  151,  "Inventory  Costs, an Amendment of ARB No. 43, Chapter 4."
     SFAS  No.  151  retains  the  general  principle  of ARB No. 43, Chapter 4,
     "Inventory  Pricing,"  that  inventories are presumed to be stated at cost;
     however,  it  amends  ARB  No.  43 to clarify that abnormal amounts of idle
     facilities,  freight,  handling  costs and spoilage should be recognized as
     current  period  expenses. Also, SFAS No. 151 requires fixed overhead costs
     be  allocated  to  inventories  based  on  normal  production capacity. The
     guidance  in  SAFS No. 151 is effective for inventory costs incurred during
     fiscal  years  beginning  after  June  15,  2005. The Company believes that
     implementing  SFAS  No.  151  should  not  have  any material impact on its
     financial  condition,  results  of  operations  or  cash  flows.

     In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based
     Payment"  ("SFAS  123R"),  which  replaces  SFAS  No.  123, "Accounting for
     Stock-Based  Compensation"  ("SFAS 123") and supersedes APB Opinion No. 25,
     "Accounting  for  Stock  Issued  to  Employees."  SFAS  123R  requires  all
     share-based  payments  to  employees,  including  grants  of employee stock
     options,  to  be recognized in the financial statements based on their fair
     values,  beginning  with  the first interim or annual period of an entity's
     first  fiscal  year  beginning  after  June  15,  2005, with early adoption
     encouraged. The Company expects to adopt SFAS No. 123R effective January 6,
     2006.  The  pro  forma  disclosures  previously permitted under SFAS 123 no
     longer  will  be  an  alternative to financial statement recognition. Under
     SFAS  123R,  we  must determine the appropriate fair value model to be used
     for  valuing share-based payments, the amortization method for compensation
     cost  and  the  transition  method  to  be  used  at  date  of  adoption.

     SFAS No. 123R will apply to awards granted or modified by the Company after
     January  5,  2006. Compensation cost will also be recorded for prior option
     grants  that  vest  after that date. The effect of adopting SFAS 123 on the
     Company's  consolidated  results  of operations will depend on the level of
     future  option  grants  and  the  fair value of the options granted at such
     future  dates,  as well as the vesting periods provided by such awards and,
     therefore,  cannot  currently  be estimated. We do not believe the adoption
     will  result  in amounts that are materially different than the current pro
     forma  disclosures  under  SFAS  123.

     In  March  2005, the SEC issued Staff Accounting Bulletin No. 107 ("SAB No.
     107").  SAB No. 107 covers key topics related to the implementation of SFAS
     No.  123R which include the valuation models, expected volatility, expected
     option  term,  income  tax  effects  of  SFAS  No.  123R, classification of
     stock-based  compensation  cost,  capitalization of compensation costs, and
     disclosure  requirements.

     In  March 2005, the FASB issued FASB Interpretation No. 47, "Accounting for
     Conditional  Asset  Retirement  Obligations"  (FIN  No.  47).  FIN  No.  47
     clarifies  that a company should record a liability for a conditional asset
     retirement obligation when incurred if the fair value of the obligation can
     be  reasonably estimated. This interpretation further clarified conditional
     asset retirement obligation, as used in SFAS No. 143, "Accounting for Asset
     Retirement  Obligations,"  as  a  legal  obligation  to  perform  an  asset
     retirement  activity  in  which  the timing and/or method of settlement are
     conditional  on  a  future  event  that

                                        8
<PAGE>
     may or may not be within the control of the entity. FIN No. 47 is effective
     for  companies  no  later  than  the end of their fiscal years ending after
     December  15,  2005. The Company does not expect the adoption of FIN No. 47
     to  have  a material impact on the Company's financial position, results of
     operations  or  cash  flows.

     In  May  2005,  the FASB issued SFAS No. 154, "Accounting Changes and Error
     Corrections," which replaces APB No. 20, "Accounting Changes," and SFAS No.
     3,  "Reporting  Accounting  Changes  in Interim Financial Statements." This
     statement  requires  that  an  entity  apply  the  retrospective  method in
     reporting  a change in an accounting principle of the reporting entity. The
     standard only allows for a change in accounting principle if it is required
     by  a  newly  issued accounting pronouncement or the entity can justify the
     use  of  an allowable alternative accounting principle on the basis that it
     is  preferable.  This  statement  also requires that corrections for errors
     discovered  in  prior  period  financial  statements be reported as a prior
     period  adjustment  by  restating  the  prior  period financial statements.
     Additional  disclosures  are required when a change in accounting principle
     or  reporting  entity  occurs, as well as when a correction for an error is
     reported.  The  statement  is effective for the Company for fiscal 2006. No
     material  impact  is  anticipated  as  a  result  of  the  adoption of this
     statement.

3.   Cash  and  Short-Term  Borrowings

     The  Company has a $165.0 million Syndicated Credit Facility Agreement with
     GE  Commercial  Distribution  Finance. The credit facility has a three-year
     term  and  its  components include a maximum of $75.0 million for inventory
     financing  and a revolver, collateralized primarily by accounts receivable,
     of  up  to  $110.0  million.  The credit facility also provides a letter of
     credit  facility  of $5.0 million. Interest on outstanding borrowings under
     the  credit  facility  is  payable  monthly  based  on the LIBOR rate and a
     pricing  grid.  This  credit  facility  expires  June  28,  2007.

     The  Company  maintains  a  sweep  account with its bank whereby daily cash
     receipts  are  automatically  transferred  as  payment  towards  balances
     outstanding under the Company's credit facility. As of October 5, 2005, the
     Company  had  an outstanding balance under the Company's credit facility of
     $3.7 million. As of January 5, 2005, the Company had an outstanding balance
     under  the  Company's  credit  facility  of  $20.2  million.

     Under  the  terms of the credit facility, the Company is subject to various
     financial  covenants  including  maintenance of a minimum level of tangible
     net  worth, a minimum fixed charge coverage ratio, a maximum ratio of total
     funded  indebtedness  to  EBITDA,  and  a maximum net loss after tax. As of
     October  5,  2005,  the  Company  was  in  compliance  with those financial
     covenants.

4.   Stock-Based  Compensation

     The Company accounts for stock-based compensation using the intrinsic value
     method  prescribed  in  Accounting  Principles  Board  Opinion  No.  25,
     "Accounting  for Stock Issued to Employees". Accordingly, compensation cost
     for  stock  options is measured as the excess, if any, of the quoted market
     price of the Company's common stock at the date of grant over the amount an
     employee  must  pay  to acquire the stock. The Company adopted SFAS No. 123
     for  disclosure  purposes  and  for  non-employee  stock  options.


                                        9
<PAGE>
     Had  compensation cost for the Company's stock option plans been determined
     based on the fair value of the awards at the grant date consistent with the
     provisions  of  SFAS  No.  123,  as amended by SFAS No.148, "Accounting for
     Stock-Based  Compensation-Transition  and  Disclosure,"  the  Company's net
     income  and  earnings  per  share  would have been reduced to the pro forma
     amounts  indicated  below:

<TABLE>
<CAPTION>
      (in thousands, except per                             Three Months Ended October 5,
     share amounts)                                           2005              2004
                                                        -----------------  ---------------
<S>                                                     <C>                <C>
     Net income (loss) - as reported                    $         (1,480)  $         1,872
     Stock-based compensation expense-net of tax                     897               299
                                                        -----------------  ---------------
     Net income (loss) - pro forma                      $         (2,377)  $         1,573
                                                        =================  ===============
     Net income (loss) per common share - as reported
       Basic                                            $          (0.12)  $          0.15
                                                        =================  ===============
       Diluted                                          $          (0.12)  $          0.15
                                                        =================  ===============
     Net income (loss) per common share - pro forma
       Basic                                            $          (0.19)  $          0.13
                                                        =================  ===============
       Diluted                                          $          (0.19)  $          0.13
                                                        =================  ===============
</TABLE>

<TABLE>
<CAPTION>
      (in thousands, except per                             Nine Months Ended October 5,
     share amounts)                                           2005              2004
                                                        -----------------  ---------------
<S>                                                     <C>                <C>
     Net income - as reported                           $          1,450   $         7,234
     Stock-based compensation expense-net of tax                   2,255             1,099
                                                        -----------------  ---------------
     Net income (loss) - pro forma                      $           (805)  $         6,135
                                                        =================  ===============
     Net income per common share - as reported
       Basic                                            $           0.12   $          0.59
                                                        =================  ===============
       Diluted                                          $           0.11   $          0.58
                                                        =================  ===============
     Net income (loss) per common share - pro forma
       Basic                                            $          (0.06)  $          0.50
                                                        =================  ===============
       Diluted                                          $          (0.06)  $          0.49
                                                        =================  ===============
</TABLE>


                                       10
<PAGE>
5.   Earnings  per  Common  Share

     The following is a reconciliation of the number of shares used in the basic
     EPS  and  diluted  EPS  computations:


<TABLE>
<CAPTION>
(in thousands, except per share data)
                               Three Months Ended October 5,
                         -------------------------------------------
                                2005                  2004
                         ---------------------  --------------------
                                    Per Share             Per Share
                          Shares     Amount     Shares     Amount
                         --------  -----------  -------  -----------
<S>                      <C>       <C>          <C>      <C>
     Basic EPS             12,583  $    (0.12)   12,240  $     0.15
                         --------  -----------  -------  -----------
     Effect of dilutive
       stock options            -           -       126           -
                         --------  -----------  -------  -----------
     Diluted EPS           12,583  $    (0.12)   12,366  $     0.15
                         ========  ===========  =======  ===========
<FN>

* Not presented herein since effect on loss per common share is anti-dilutive
for the three months ended October 5, 2005.
</TABLE>

<TABLE>
<CAPTION>
                                 Nine Months Ended October 5,
                         -------------------------------------------
                                2005                  2004
                         ---------------------  --------------------
                                    Per Share             Per Share
                          Shares     Amount     Shares     Amount
                         --------  -----------  -------  -----------
<S>                      <C>       <C>          <C>      <C>
     Basic EPS             12,542  $     0.12    12,243  $     0.59
                         --------  -----------  -------  -----------
     Effect of dilutive
       stock options          110       (0.01)      176       (0.01)
                         --------  -----------  -------  -----------
     Diluted EPS           12,652  $     0.11    12,419  $     0.58
                         ========  ===========  =======  ===========
</TABLE>

6.   Goodwill  and  Long-Lived  Assets

     Intangible  assets  with  definite lives are amortized over their estimated
     useful  lives.  The  following  table  provides  a summary of the Company's
     intangible  assets with definite lives as of October 5, 2005 and January 5,
     2005:

<TABLE>
<CAPTION>
(in thousands)
                                      Gross                       Net        Gross                      Net
                                     Carrying    Accumulated    Carrying   Carrying    Accumulated   Carrying
                                      Amount    Amortization     Amount     Amount    Amortization    Amount
                                    10/5/2005     10/5/2005    10/5/2005   1/5/2005     1/5/2005     1/5/2005
                                    -------------------------------------  -----------------------------------
<S>                                 <C>         <C>            <C>         <C>        <C>            <C>
     Amortized intangible assets:
     Covenants not-to-compete       $    2,024  $       1,855  $      169  $   2,024  $       1,769  $     255
     Customer lists                      2,877            968       1,909      2,877            559      2,318
     Other intangibles                   1,200            200       1,000      1,200             71      1,129
                                    ----------  -------------  ----------  ---------  -------------  ---------
     Total amortized intangibles    $    6,101  $       3,023  $    3,078  $   6,101  $       2,399  $   3,702
                                    ==========  =============  ==========  =========  =============  =========
</TABLE>

     Amortized intangible assets are being amortized over periods ranging from 1
     to  15 years for covenants not-to-compete, 7 to 15 years for customer lists
     and  7  years for other intangibles. For the quarter ended October 5, 2005,
     amortization  expense  related  to intangible assets was $164 thousand. For
     the  quarter  ended  October  5,  2004,  amortization  expense  related  to
     intangible  assets  was $122 thousand. For the nine months ended October 5,
     2005, amortization expense related to intangible assets with definite lives
     was  $624 thousand. For the nine months ended October 5, 2004, amortization
     expense related to intangible assets with definite lives was $201 thousand.


                                       11
<PAGE>
     Projected  future  amortization  expense  related to intangible assets with
     definite  lives  is  as  follows:

<TABLE>
<CAPTION>
      (in thousands)
     Fiscal Years:
<S>                    <C>     <C>
     2005              $  140  October 6, 2005 - January 5, 2006
     2006                 543
     2007                 504
     2008                 461
     2009                 421
     2010 +             1,009
                       ------
               Total   $3,078
                       ======
</TABLE>

     The change of the net carrying amount of goodwill for the nine months ended
     October  5,  2005  is  as  follows:

<TABLE>
<CAPTION>
    (in thousands)
<S>                                            <C>
     Net carrying amount as of 1/5/05          $109,913
     Goodwill recorded during first quarter         (11)
                                               ---------
     Net carrying amount as of 4/5/05           109,902
                                               ---------
     Goodwill recorded during second quarter        612
                                               ---------
     Net carrying amount as of 7/5/05           110,514
                                               ---------
     Goodwill recorded during third quarter       5,112
                                               ---------
     Net carrying amount as of 10/5/05         $115,626
                                               =========
</TABLE>

     Goodwill  recorded  during  the three and nine months ended October 5, 2005
     was  principally  associated  with  the  adjustment  of  accruals  for
     restructuring  charges  and income taxes established in connection with the
     acquisition  of  Alternative Resources Corporation during the third quarter
     of  fiscal  year  2004.

     Pursuant  to  the provisions of SFAS 142, the Company performs its goodwill
     impairment  testing  on  an  annual  basis.  Historically,  the Company has
     performed  its annual goodwill impairment testing during the fourth quarter
     of  its  fiscal  year  and  reflects  the  results  of  that testing in its
     consolidated  financial  statements  included  in its Annual Report on Form
     10-K. During fiscal 2005, the Company realigned its reporting structure and
     for the fourth quarter of fiscal 2005, is testing its goodwill based on one
     reporting  segment.  In  prior  years,  the  Company's  goodwill impairment
     testing  was  based  on  two  reportable  segments.

     As  part  of  its  goodwill impairment testing, the Company reviews various
     factors, such as the market price of the Company's common stock, discounted
     cash  flows  from projected earnings and values for comparable companies to
     determine whether impairment exists. The Company is working with evaluation
     firm  to  assess  goodwill  impairment.  The  Company  has  not  received a
     determination from the valuation firm assisting the Company in its goodwill
     impairment testing as to goodwill impairment. However, due to the Company's
     declining  stock  price  in  the  fourth quarter of 2005, and the Company's
     declining  profitability  in  fiscal  2005,  the  Company  recognizes  that
     impairment could have occurred. If any impairment has occurred, the Company
     must  determine the magnitude of such impairment. The Company believes that
     if  impairment  does  occur,  the  magnitude  of  that  impairment could be
     significant.  The  Company anticipates that the testing for its goodwill to
     determine  whether  there  is  impairment  and,  if  so,  the determination
     thereof, will be finalized shortly and any adjustments related thereto will
     be reflected in its consolidated financial statements included in Form 10-K
     for  its  fiscal  year  ended  January  5,  2006.

7.   Supplemental  Cash  Flow  Disclosures

     Supplemental disclosures with respect to cash flow information and non-cash
     investing  and  financing  activities  are  as  follows:  (in  thousands)


                                       12
<PAGE>
<TABLE>
<CAPTION>
                                        Nine Months Ended
                                           October 5,
(in thousands)
                                          ------  -------
                                           2005    2004
                                          ------  -------
<S>                                       <C>     <C>
     Interest paid                        $  721  $   270
                                          ======  =======
     Income taxes paid                    $1,422  $ 3,787
                                          ======  =======
     Adjustment to purchase price
       of acquired assets and goodwill    $4,528  $    70
                                          ======  =======

     Business combinations accounted for
     as purchases:
       Assets acquired                    $1,184  $78,256
       Liabilities assumed                     -   61,622
                                          ------  -------
       Net cash paid                      $1,184  $16,634
                                          ======  =======
</TABLE>

8.   Litigation

     There  are  various  legal actions arising in the normal course of business
     that  have  been  brought  against  the  Company. Management believes these
     matters  will not have a material adverse effect on the Company's financial
     position  or  results  of  operations.

9.   Segment  Information

     Effective  in  the  fourth  quarter  of  2005,  the  Company re-aligned its
     business  segments  and operating segments into one business segment, which
     includes  both  product  and  service  offerings.  The  Company follows the
     provisions  of  SFAS  No. 131, "Disclosures about Segments of an Enterprise
     and  Related  Information."  This  statement  establishes standards for the
     reporting  of  information  about  operating segments in annual and interim
     financial  statements.  Operating  segments are defined as components of an
     enterprise  for  which  separate financial information is available that is
     evaluated  regularly  by  the chief operating decision maker(s) in deciding
     how  to  allocate  resources  and  in  assessing performance. The Company's
     operating  segments have similar economic characteristics and therefore can
     be  aggregated  into  one reporting segment. Two or more operating segments
     may  be  aggregated  into  a  single  operating segment if the segments are
     similar  in each of the following areas: (1) the nature of the products and
     services  (2)  the nature of the production processes (3) the type of class
     of  customer  for  the  products  and  service  and  (4)  the nature of the
     regulatory  environment.

     Prior  to fiscal year 2005, the Company disclosed three reporting segments:
     products,  services  and  leasing. Monthly income statements were generated
     and reviewed by management for both the products and service businesses for
     decision  making purposes. The segment reporting (product and services) are
     no  longer  reviewed  by  management  on  a  regular  basis  and  required
     significant  manual  work  to  develop the information solely for quarterly
     external  financial  statement  reporting  purposes.

     During the fourth quarter of 2005, the Company realigned its management and
     reporting  responsibilities  into  functional  lines:  Sales,  Service
     Operations,  Finance and Administrative. The Company also aligned sales and
     service  delivery  into  five  domestic  geographic regions and finance and
     administration  is  centralized.  Each  of the geographic regions sell both
     products  and  services  and  each  geographic  region has similar economic
     characteristics. As a result the Company now reports one reportable segment
     and  the  information  in  this  report  has  been  revised  to reflect the
     Company's  current  segment  reporting.

10.  Reclassifications

     Certain reclassifications of prior period amounts have been made to conform
     to  the  current  period  presentation.


                                       13
<PAGE>

11.  Restructuring  and  Severance  Charges

     During  the  first  quarter  of  2005,  the Company also recorded severance
     charges  of  $0.1  million resulting from a realignment of the structure of
     the  Company's  internal  organization.

     During the third quarter of 2005, the Company recorded severance charges of
     $0.2 million resulting from a realignment of the structure of the Company's
     organization.

     During  the  third  quarter  of  2005,  the  Company recorded restructuring
     charges  aggregating  $1.425 million due to unrecoverable assets related to
     the  Company's  former  wholly-owned  subsidiary,  Technology  Integration
     Financial  Services  ("TIFS"). Substantially all of the assets of TIFS were
     sold  in  April  2002.

     During  the  third  quarter  of  2004, in connection with certain strategic
     initiatives,  the  Company  recorded  restructuring  and  severance charges
     aggregating  $1.0  million.  The  restructuring  and severance charges were
     associated  with legacy Pomeroy costs of facilities and processes that have
     or  will  become  duplicative  or  redundant  as  Alternative  Resources
     Corporation ("ARC") operations are integrated into the Company. These costs
     consisted  of facility closing and involuntary employee reduction severance
     costs  of  $576  thousand and $400 thousand, respectively. These costs were
     accounted  for under FAS 146, "Accounting for Costs Associated with Exit or
     Disposal  Activities,"  and  were  included  as  a charge to the results of
     operations  for  the  three  and  nine-month periods ended October 5, 2004.
     Going  forward,  any  changes  to  the estimates of executing the currently
     approved  plans  of  restructuring  will be reflected in current results of
     operations.

     The  Company  also  recorded  during  the  third  quarter  of  2004  a
     non-recurring,  one-time  charge  for  severance  in  the  amount of $1.447
     million  related  to  the  resignation  of  founder and former CEO David B.
     Pomeroy  II. Mr. Pomeroy continues to serve as Chairman of the Board and as
     a  consultant.

     As  of  October  5,  2005,  the restructuring and severance charge accrual,
     consisted  of  the  following:

<TABLE>
<CAPTION>
                               Total Initial      Cash     Accrued balance at
      (in thousands)               Accrual       payments    October 5, 2005
                               --------------  ----------  ------------------
<S>                            <C>             <C>         <C>
     Severance                 $        2,216  $  (1,701)  $              515
     Facility consolidations              576       (403)                 173
                               --------------  ----------  ------------------
                               $        2,792  $  (2,104)  $              688
                               ==============  ==========  ==================
</TABLE>


     Also, the Company's management recorded a restructuring charge liability in
     connection  with  the  ARC  acquisition  to  eliminate  certain duplicative
     activities  and  reduced  facility requirements. As a result, approximately
     $6.4  million  of costs were recorded as part of the liabilities assumed in
     the  ARC acquisition in October 2004. The restructuring charge consisted of
     costs  of vacating duplicative leased facilities of ARC and severance costs
     associated  with  exiting  activities.  These costs are accounted for under
     EITF 95-3, "Recognition of Liabilities in Connection with Purchase Business
     Combinations."  These  costs  were recognized as a liability assumed in the
     purchase business combination and included in the allocation of the cost to
     acquire  ARC.  Changes to the estimates of executing the currently approved
     plans  of  restructuring  through  July  23,  2005 have been recorded as an
     increase  in  goodwill. During the current period, the Company adjusted the
     estimates for facility consolidation related to certain operating leases as
     a  result  of  changes  in  assumptions.  Any future increases in estimates
     thereafter  will  be  charged  to  operations.

<TABLE>
<CAPTION>
                               Total Intitial      Cash        2005 Adjustment     Liability balance at
      (in thousands)              Liability      Payments   of Initial Liability      October 5, 2005
                               ---------------  ----------  ---------------------  ---------------------
<S>                            <C>              <C>         <C>                    <C>
     Severance                 $         2,682  $  (2,462)  $                   -  $                 220
     Facility consolidations             3,715       (881)                  2,165                  4,999
                               ---------------  ----------  ---------------------  ---------------------
                               $         6,397  $  (3,343)  $               2,165  $               5,219
                               ===============  ==========  =====================  =====================
</TABLE>

     Additionally,  as  part of the acquisition of ARC, the Company acquired the
     remaining  obligations  of  ARC's  existing restructuring plans, which were
     initially  recorded  by  ARC  in  fiscal  2003  and  fiscal 2002. The total
     obligations  assumed in connection with these restructuring plans were $2.1
     million  at  July  23,  2004.


                                       14
<PAGE>
     As  of  October 5, 2005, the balance of the ARC fiscal 2003 and fiscal 2002
     accrued  restructuring  costs  recorded  consisted  of  the  following:

<TABLE>
<CAPTION>
      (in thousands)

     Fiscal 2003 Restructuring Charge

                                       Total Accrual      Cash        Balance at
                                       as of 7/23/04    payments   October 5, 2005
                                       --------------  ----------  ----------------
<S>                                    <C>             <C>         <C>
     Severance                         $          647  $    (647)  $              -
                                       --------------  ----------  ----------------
                                       $          647  $    (647)  $              -
                                       ==============  ==========  ================
</TABLE>
     Fiscal 2002 Restructuring Charge

<TABLE>
<CAPTION>
                                                                        2005          Balance at
                                       Total Accrual      Cash       Adjustment of    October 5,
                                       as of 7/23/04     payments   Initial Accrual     2005
                                       --------------  ----------  ----------------  -----------
<S>                                    <C>             <C>         <C>               <C>
     Facility consolidations           $          756  $    (783)  $            100  $        73
     Other charges                                696       (669)                 -           27
                                       --------------  ----------  ----------------  -----------
                                       $        1,452  $  (1,452)  $            100  $       100
                                       ==============  ==========  ================  ===========
</TABLE>

12.  Subsequent  Events

     On  November 15, 2005, the Company disclosed that it was unable to complete
     its  financial  statements  for the third quarter of fiscal 2005 because it
     has  identified  errors  relating to service billing and cost calculations.
     The  errors  relate  to  problems  with  new  IT  systems and processes for
     services revenues that were implemented during the latter part of the first
     quarter  of  fiscal  2005.  The new IT systems converted and integrated the
     prior  systems  and processes used by the Company and Alternative Resources
     Corporation,  the  services  business acquired by the Company during fiscal
     2004.

     On  November  23,  2005,  the Company received a Nasdaq Staff Determination
     notice  from  the Nasdaq Listing Qualifications Department that the Company
     was  not  in  compliance  with  the  continued listing requirements of NASD
     Marketplace  Rule  4310(c)(14).  The Company requested a hearing before the
     Nasdaq  Listing  Qualifications  Hearings Panel (the "Panel") to review the
     Staff  Determination,  which  was held on December 22, 2005. As a result of
     that  hearing,  on January 30, 2006, the Company received a decision letter
     from  Nasdaq  informing  the Company that the Panel determined to grant the
     Company's  request  for  continued  listing  on  The Nasdaq National Market
     provided  that  the Company filed its quarterly report on Form 10-Q for the
     period  ended  October  5,  2005  (the  "Third  Quarter Form 10-Q") and all
     required  restatements,  by  February  28,  2006.

     On  February  17,  2006, in accordance with the Company's Plan submitted to
     the  Panel,  the  Company notified the Panel that Pomeroy's Audit Committee
     had  concluded  that  the  financial  statements for the Company's quarters
     ended  April 5, 2005 and July 5, 2005 should be restated and requested that
     the  Panel  grant an additional extension of time to file the Third Quarter
     Form  10-Q  and restatements. On February 23, 2006, the Company reported on
     Form  8-K  the  conclusion  of  the  Audit  Committee  that  the  financial
     statements  for the Company's quarters ended April 5, 2005 and July 5, 2005
     should  be  restated. On February 28, 2006, the Company received a decision
     letter from Nasdaq informing the Company that the Panel determined to grant
     the  Company's  request for continued listing on The Nasdaq National Market
     provided  that  the  Company  files  the  Third  Quarter  Form 10-Q and all
     required  restatements by March 31, 2006. In order to fully comply with the
     terms  of  this  exception, the Company must provide prompt notification to
     the  Panel of any significant events that occur during the exception period
     and  demonstrate  compliance with all requirements for continued listing on
     The  Nasdaq  National  Market. If the Company fails to satisfy the terms of
     the  exception,  its  securities  may  be  delisted.


                                       15
<PAGE>
     ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS  OF  OPERATIONS

         Special Cautionary Notice Regarding Forward-Looking Statements
         --------------------------------------------------------------

Certain  of the matters discussed under the caption "Management's Discussion and
Analysis  of  Financial  Condition  and  Results  of Operations" contain certain
forward  looking  statements  regarding future financial results of the Company.
The words "expect," "estimate," "anticipate," "predict," and similar expressions
are  intended  to  identify  forward-looking  statements.  Such  statements  are
forward-looking  statements  for  purposes of the Securities Act of 1933 and the
Securities  Exchange  Act of 1934, as amended, and as such may involve known and
unknown  risks,  uncertainties  and  other  factors  which  may cause the actual
results,  performance  or achievements of the Company to be materially different
from  future  results,  performance or achievements expressed or implied by such
forward-looking  statements.  Important  factors  that  could  cause  the actual
results,  performance  or  achievements of the Company to differ materially from
the  Company's  expectations  are  disclosed in this document including, without
limitation,  those  statements  made  in  conjunction  with  the forward-looking
statements  under  "Management's  Discussion and Analysis of Financial Condition
and  Results  of  Operations".  All  written  or oral forward-looking statements
attributable  to  the  Company are expressly qualified in their entirety by such
factors.


                                       16
<PAGE>
RESULTS  OF  OPERATIONS

The  following  table  sets  forth for the periods presented information derived
from  our consolidated statements of operations expressed as a percentage of net
sales  and  service  revenues:

<TABLE>
<CAPTION>
                                                  Three        Three        Nine         Nine
                                                 Months       Months       Months       Months
                                                  ended        ended        ended        ended
                                               -----------  -----------  -----------  -----------
                                               October 5,   October 5,   October 5,   October 5,
                                                  2005         2004         2005         2004
                                               -----------  -----------  -----------  -----------
                                               (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)
<S>                                            <C>          <C>          <C>          <C>
Net sales and service revenues:
  Sales-equipment, supplies and leasing              69.9%        69.5%        69.2%        76.4%
  Service                                            30.1%        30.5%        30.8%        23.6%
                                               -----------  -----------  -----------  -----------
        Total net sales and service revenues        100.0%       100.0%       100.0%       100.0%
                                               -----------  -----------  -----------  -----------

Cost of sales and service:
  Sales-equipment, supplies and leasing              64.9%        64.6%        64.0%        70.7%
  Service                                            22.9%        22.2%        23.0%        17.2%
                                               -----------  -----------  -----------  -----------
        Total cost of sales and service              87.8%        86.8%        87.0%        87.9%
                                               -----------  -----------  -----------  -----------

        Gross profit                                 12.2%        13.2%        13.0%        12.1%
                                               -----------  -----------  -----------  -----------

Operating expenses:
  Selling, general and administrative                10.3%         9.4%        10.4%         8.3%
  Rent expense                                        0.4%         0.5%         0.5%         0.5%
  Depreciation                                        0.6%         0.5%         0.7%         0.6%
  Amortization                                        0.1%         0.1%         0.1%         0.0%
  Provision for doubtful accounts                     1.1%         0.0%         0.4%         0.0%
  Restructuring and severance charges                 0.9%         1.2%         0.3%         0.5%
                                               -----------  -----------  -----------  -----------
        Total operating expenses                     13.4%        11.6%        12.3%         9.9%
                                               -----------  -----------  -----------  -----------

Income (loss) from operations                        -1.2%         1.6%         0.7%         2.2%

Net other expense                                     0.1%         0.0%         0.1%         0.0%

Income (loss)  before income tax                     -1.3%         1.5%         0.6%         2.2%
                                               -----------  -----------  -----------  -----------
Income tax expense (benefit)                         -0.5%         0.6%         0.2%         0.8%
                                               -----------  -----------  -----------  -----------
Net income (loss)                                    -0.8%         0.9%         0.4%         1.4%
                                               ===========  ===========  ===========  ===========
</TABLE>


                                       17
<PAGE>
                           POMEROY IT SOLUTIONS, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

TOTAL  NET  SALES  AND  SERVICE  REVENUES.  Total net sales and service revenues
decreased  $15.5  million,  or  7.7%,  to $185.0 million in the third quarter of
fiscal  2005  from  $200.5  million in the third quarter of fiscal 2004. Product
sales  decreased  $10.1 million, or 7.2%, to $129.3 million in the third quarter
of  fiscal  2005  from  $139.4  million in the third quarter of fiscal 2004. The
decrease  in  product  sales  is primarily attributable to customers reducing IT
expenditures  during  2005. Service revenues decreased $5.4 million, or 8.8%, to
$55.7  million  in  the  third  quarter of fiscal 2005 from $61.1 million in the
third  quarter  of  fiscal  year  2004. This decline in service revenues relates
primarily  to reductions in Alternative Resources Corporation ("ARC") revenue as
a  result  of  service  engagements  that  were  not  renewed.

Total  net sales and service revenues increased $9.0 million, or 1.7%, to $542.9
million in the first nine months of fiscal 2005 from $533.9 million in the first
nine  months of fiscal 2004.  Product sales decreased $32.1 million, or 7.9%, to
$375.6  million  in  the first nine months of fiscal 2005 from $407.7 million in
the  first  nine months of fiscal 2004.  This decrease is primarily attributable
to  customers  reducing  expenditures  during  2005.  Service revenues increased
$41.1  million,  or  32.6%, to $167.2 million in the first nine months of fiscal
2005  from  $126.1  million in the first nine months of fiscal year 2004.   This
increase  is  due  to  the  acquisition  of  ARC  in  July  2004.

GROSS PROFIT. Gross profit decreased $4.0 million, or 15.1%, to $22.5 million in
the  third  quarter  of  fiscal  2005 from $26.5 million in the third quarter of
fiscal  2004. The decrease resulted primarily from the decrease in product sales
and  a  decline  in  service  gross  margin.  Gross  profit,  as a percentage of
revenue,  decreased  to 12.2% in the third quarter of fiscal 2005 as compared to
13.2%  in  the  third  quarter  of  fiscal  2004.  This decrease in gross margin
resulted  primarily  from a decline in service revenue profitability as a result
of  reduced  profit  in  the  startup  phase  of  new contracts and lower margin
services  in  the  service  mix.  Going  forward,  the  Company  expects  to  be
aggressive in its pricing in order to increase market share, which could have an
unfavorable  impact  on  overall gross margin.   The Company expects to continue
increasing  the  breadth and depth of its offerings, which will have a continued
impact  on  gross  margin.

Gross profit increased $5.9 million, or 9.1%, to $70.5 million in the first nine
months  of  fiscal  2005  from  $64.6 million in the first nine months of fiscal
2004.  The  increase resulted primarily from the increase in revenues due to the
acquisition of ARC. Gross profit, as a percentage of revenue, increased to 13.0%
in  the  first nine months of fiscal 2005 as compared to 12.1% in the first nine
months  of  fiscal  2004.  This  increase in gross margin is primarily due to an
increase  in  service revenue which have higher margins than product sales. On a
forward  looking  basis,  the Company expects to be aggressive in its pricing in
order  to increase existing market share, which could have an unfavorable impact
on  overall  gross  margin.

OPERATING  EXPENSES.  Operating  expenses  increased  $1.5  million, or 6.4%, to
$24.8  million  in  the  third  quarter of fiscal 2005 from $23.3 million in the
third  quarter  of  fiscal  2004.  The  increase is primarily attributable to an
increase  in the allowance for doubtful accounts of $2.0 million and an increase
in  the reserves related to non-trade accounts receivable of $0.5 million in the
third  quarter  of  fiscal  2005, partially offset by a $0.8 million decrease in
restructuring charges from the third quarter of fiscal 2004 to the third quarter
of  fiscal  2005.  Expressed  as  a  percentage  of  total net sales and service
revenues,  these expenses increased to 13.4% in the third quarter of fiscal 2005
from  11.6%  in  the third quarter of fiscal 2004.  Operating expenses increased
$14.9  million,  or  28.3%,  to $67.5 million in the first nine months of fiscal
2005  from  $52.6 million in the first nine months of fiscal 2004.  The increase
is  primarily attributable to an increase in the allowance for doubtful accounts
of  $2.0  million,  an  increase  in  the reserves related to non-trade accounts
receivable  of  $0.5  million  and  to the acquisition of ARC in 2004, partially
offset  by  a $0.6 million decrease in restructuring charges from the first nine
months  of  fiscal 2004 to the first nine months of fiscal 2005.  Expressed as a
percentage  of total net sales and service revenues, these expenses increased to
12.4% in the first nine months of fiscal 2005 from 9.9% in the first nine months
of  fiscal  2004.  The increases are primarily attributable to increased payroll
costs  and  related  benefits,  resulting from the acquisition of ARC in 2004 as
well  as  the  adjustments  in  the accounts receivable allowances and reserves.

INCOME  (LOSS)  FROM  OPERATIONS.  Income  (loss) from operations decreased $5.4
million,  or  174.2%,  to  a loss of $2.3 million in the third quarter of fiscal
2005  from  operating  income  of  $3.1  million  in  the  third  quarter


                                       18
<PAGE>
of  fiscal 2004. The Company's operating margin decreased to (1.2)% in the third
quarter  of fiscal 2005 as compared to 1.6% in the third quarter of fiscal 2004.
This  decrease  is a result of the decrease in sales and in gross profit and the
increase  in  operating  expenses  as  described  above.

Income  from operations decreased $8.9 million, or 74.8%, to $3.0 million in the
first  nine months of fiscal 2005 from $11.9 million in the first nine months of
fiscal  2004. The Company's operating margin decreased to 0.6% in the first nine
months  of  fiscal  2005  as compared to 2.2% in the first nine months of fiscal
2004.  This  decrease  is  the result of increased operating expenses, partially
offset  by  an  increase  in  gross  profit.

INTEREST  EXPENSE.  Net  interest  expense  was  $152  thousand during the third
quarter  of  fiscal  2005  as  compared  to net interest expense of $32 thousand
during  third quarter of fiscal 2004.  This increase in net interest expense was
a  result  of increased borrowings under our credit facility and higher interest
rates.

Net  interest  expense was $579 thousand in the first nine months of fiscal 2005
compared  to  net  interest  expense  of $1 thousand in the first nine months of
fiscal  2004.   This  increase in net interest expense was a result of increased
borrowings  under  our  credit  facility  and  higher  interest  rates.

INCOME  TAXES.  The  Company's  effective income tax rate was 40.5% in the third
quarter  of  fiscal  2005 compared to 39.5% in the third quarter of fiscal 2004.
This increase was principally related to the increased rate in calculating state
and  local  income  taxes.

The  Company's  effective  tax rate was 40.5% in the first nine months of fiscal
2005  compared  to 39.3% in the first nine months of fiscal 2004.  This increase
was  principally  related  to  the increased rate in calculating state and local
income  taxes.

NET INCOME (LOSS). Net income (loss) decreased $3.4 million, or 179.0%, to a net
loss of $1.5 million in the third quarter of fiscal 2005 from net income of $1.9
million  in the third quarter of fiscal 2004 due to the factors described above.

Net  income  decreased $5.7 million, or 79.2%, to $1.5 million in the first nine
months  of  fiscal 2005 from $7.2 million in the first six months of fiscal 2004
due  to  the  factors  described  above.

GOODWILL ANALYSIS - Pursuant to the provisions of SFAS 142, the Company performs
its  goodwill  impairment  testing on an annual basis. Historically, the Company
has  performed  its annual goodwill impairment testing during the fourth quarter
of  its fiscal year and reflects the results of that testing in its consolidated
financial  statements  included in its Annual Report on Form 10-K. During fiscal
2005,  the  Company realigned its reporting structure and for the fourth quarter
of fiscal 2005, is testing its goodwill based on one reporting segment. In prior
years,  the  Company's  goodwill  impairment testing was based on two reportable
segments.

As part of its goodwill impairment testing, the Company reviews various factors,
such  as  the  market price of the Company's common stock, discounted cash flows
from projected earnings and values for comparable companies to determine whether
impairment  exists.  The  Company  is  working  with  evaluation  firm to assess
goodwill  impairment.  The  Company  has  not  received a determination from the
valuation  firm  assisting  the Company in its goodwill impairment testing as to
goodwill  impairment. However, due to the Company's declining stock price in the
fourth  quarter  of  2005,  and  the Company's declining profitability in fiscal
2005,  the  Company  recognizes  that  impairment  could  have  occurred. If any
impairment  has  occurred,  the  Company  must  determine  the magnitude of such
impairment. The Company believes that if impairment does occur, the magnitude of
that  impairment  could be significant. The Company anticipates that the testing
for  its  goodwill  to  determine  whether  there  is impairment and, if so, the
determination  thereof,  will  be  finalized shortly and any adjustments related
thereto  will  be reflected in its consolidated financial statements included in
Form  10-K  for  its  fiscal  year  ended  January  5,  2006.


                                       19
<PAGE>
                         LIQUIDITY AND CAPITAL RESOURCES

Cash  provided by operating activities was $4.4 million in the first nine months
of  fiscal  2005.  Cash  used  in  investing  activities was $2.6 million, which
included  $1.2  million for prior year acquisitions and $1.3 million for capital
expenditures.  Cash  used  in  financing  activities  was  $14.9  million, which
included  $17.1  million  for repayment of short-term borrowings and acquisition
notes  payable,  $0.4  million  for  purchase  of  treasury stock offset by $2.5
million  of  proceeds from exercise of stock options and employee stock purchase
plan.

The amount of cash derived from operating activities will vary based on a number
of  business  factors  which  may  change  from time to time, including terms of
available  financing  from  vendors,  downturns in the Company's business and/or
downturns  in  the  businesses of the Company's customers.  However, a growth or
decline  in  services  revenue in conjunction with a change in the proportion of
services revenue to total revenue is an underlying driver of operating cash flow
during  the period of growth because a majority of the Company's service revenue
is  generated  based  upon  the billings of the Company's technicians.  The cash
outlay for these labor/payroll costs is incurred bi-weekly with each pay period.
The invoicing for the service is generated on various billing cycles as dictated
by  the customers, and the respective cash inflow typically follows within 30 to
60  days  of  invoice date, which may be as long as 60 to 120 days from the time
the services are performed.   This differs from product revenue in that the time
period  between  the  time  that  the  Company  incurs  the cost to purchase the
products  and  collects  the  revenue  from  its  customer is typically shorter,
usually  from  0  to  60  days, and the Company primarily orders inventory for a
particular  customer  rather  than  stocking  large  amounts  of inventory.  The
Company  anticipates  an  increase  in  service revenue and in the proportion of
service  revenue  to  total  revenue  which,  if  it  occurs,  may  result  in a
significant  decrease  in cash flows from operating activities during periods of
significant  growth  or  periods  of  excess  technical  capacity.  In addition,
certain  services,  primarily outsourcing contracts for the Company's Life Cycle
Services,  require  that  the  Company  maintain  a specific parts inventory for
servicing  the  customer;  thus, an increase or decrease in the type of services
provided  can  impact  inventory  levels  and  operating  cash  flows.

Cash  flows provided by operating activities in the nine months ended October 5,
2005  were  $4.4  million  as  compared  to  cash  flows  provided  by operating
activities  of  $15.9  million for the corresponding period of fiscal 2004.  The
decrease  in  cash  flows  from operating activities in the first nine months of
2005 compared to the first nine months of 2004 resulted primarily from lower net
income  and the timing of payments on accounts payable, offset by a reduction in
inventories  and  deferred  taxes.

A  significant  part  of  Pomeroy's  inventories  are  financed  by  floor  plan
arrangements  with  third  parties.  At  October  5, 2005, these lines of credit
totaled  $85.0  million, including $75.0 million with GE Commercial Distribution
Finance  ("GECDF")  and  $10.0 million with IBM Credit Corporation ("ICC").  The
ICC  line  of  credit was subsequently reduced to $1.0 million. Borrowings under
the  GECDF  floor  plan  arrangements  are made on thirty-day notes.  Borrowings
under  the  ICC  floor plan arrangements are made on fifteen-day notes. All such
borrowings  are secured by the related inventory. Financing on substantially all
of the arrangements is interest free due to subsidies by manufacturers. Overall,
the  average  interest rate on these arrangements is less than 1.0%. The Company
classifies  amounts  outstanding  under  the floor plan arrangements as accounts
payable.

The  Company  has  a  $165.0  million  Syndicated Credit Facility Agreement with
GECDF.   The  credit facility has a three-year term and its components include a
maximum  of  $75.0  million  for  inventory  financing  as described above and a
revolving line of credit, collateralized primarily by accounts receivable, of up
to  $110.0 million; provided that the total amount outstanding at any time under
the inventory financing facility and the revolving line of credit may not exceed
$165.0  million.  The  credit facility also provides a letter of credit facility
of  $5.0  million.   The interest rate under the credit facility is based on the
London  InterBank  Offering Rate ("LIBOR") and a pricing grid.  As of October 5,
2005,  the adjusted LIBOR rate was 5.88%.  This credit facility expires June 28,
2007.

As  of  October  5,  2005,  the  Company  had  an  outstanding balance under the
Company's  credit  facility  of $3.7 million. As of January 5, 2005, the Company
had an outstanding balance under the Company's credit facility of $20.2 million.
The  credit  facility  is  collateralized  by substantially all of the assets of
Pomeroy,  except  those  assets  that  collateralize  certain  other  financing
arrangements.  Under  the  terms  of  the credit facility, Pomeroy is subject to
various financial covenants. As of October 5, 2005, Pomeroy was not in violation
of  any financial covenants.


                                       20
<PAGE>
Pomeroy  believes  that  the  anticipated  cash flow from operations and current
financing  arrangements  will  be  sufficient  to  satisfy  Pomeroy's  capital
requirements  for  the  next  twelve  months. Historically, Pomeroy has financed
acquisitions  using a combination of cash, deferred earn-out payments, shares of
its  Common  Stock  and  seller  financing.  Pomeroy  anticipates  that  future
acquisitions  will  be  financed  in  a  similar  manner.


                                       21
<PAGE>
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The  Company  is  exposed  to  interest  rate  risk primarily through its credit
facility  with  GECDF.  Due  to the Company's current debt position, the Company
did  not  experience  a  material  impact  from interest rate risk for the third
quarter  of  fiscal  2005.

Currently,  the  Company does not have any significant financial investments for
trading  or  other  speculative  purposes  or  to manage interest rate exposure.

ITEM 4 - CONTROLS AND PROCEDURES

Evaluation  of  Disclosure  Controls  and  Procedures

The  Company  maintains  disclosure controls and procedures (as defined in Rules
13(a)-15(e)  and  15(d)-15(e) of the Securities Exchange Act of 1934, as amended
(the  "Exchange  Act")  designed  to  provide  reasonable  assurance  that  the
information  required  to  be  reported in its Exchange Act filings is recorded,
processed,  summarized  and  reported  within  the  time  periods  specified and
pursuant to the regulations of the Securities and Exchange Commission, including
controls  and procedures designed to ensure that this information is accumulated
and  communicated  to  the  Company's  management, including its Chief Executive
Officer  and  Chief Financial Officer, as appropriate, to allow timely decisions
regarding  required  disclosure.  It  should  be noted that, because of inherent
limitations,  the  Company's  disclosure  controls  and procedures, however well
designed  and operated, can provide only reasonable, and not absolute, assurance
that  the  objectives  of  the  disclosure  controls  and  procedures  are  met.

As more fully described in Item 9A of the Company's Annual Report on Form 10-K/A
for  the  year  ended  January  5, 2005, the Company reported that it identified
material  weaknesses in its internal control over financial reporting related to
(1) the accuracy of service billing calculations and revenue recognition related
to  service  activity,  and  (2)  appropriately  applying  generally  accepted
accounting  principles  ensuring the adequacy and completeness of disclosures in
the  consolidated  financial  statements as of January 5, 2005. As a result, the
Company's  management, including its Chief Executive Officer and Chief Financial
Officer, concluded that as of January 5, 2005, the Company's disclosure controls
and  procedures  were not effective at a reasonable level of assurance, based on
the  evaluation  of these controls and procedures required by Exchange Act Rules
13(a)-15(e)  or  15(d)-15(e).

As  of  October  5,  2005,  these  material  weaknesses and errors have not been
remediated  and  management  does  not  believe  all material weaknesses will be
remediated  by  year  end.  Accordingly,  our  Chief Executive Officer and Chief
Financial Officer concluded that, as of October 5, 2005, our disclosure controls
and  procedures  were  not  effective  in  providing  reasonable  assurance that
information  required  to  be disclosed by us in reports we file or submit under
the Exchange Act is recorded, processed, summarized and reported within the time
periods  specified  in  the  SEC's  forms  and  rules.  Despite  the  material
weaknesses,  the  financial  statements  reported  on  Form  10-Q for the fiscal
quarter  ended  October  5,  2005, fairly present, in all material respects, the
consolidated  financial  condition  and results of operations of the Company for
the  fiscal  quarters  presented.

Changes  in  Internal  Control  Over  Financial  Reporting

Currently,  the  Company  is  in  the  process of assessing and testing internal
controls  over  financial reporting for 2005. The Company has identified control
weaknesses.  The  Company  has  not  completed its testing but believes that the
material  weaknesses  identified  in  2004 still exist at the end of fiscal year
2005.  In  addition, the Company believes that there will be additional material
weaknesses  in  the  areas  such  as IT system access, payroll and service parts
inventory.


                                       22
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

There  are  various  legal actions arising in the normal course of business that
have  been  brought  against the Company. Management believes these matters will
not  have  a  material  adverse  effect  on  the Company's financial position or
results  of  operations.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On  October  11,  2004,  the Board of Directors approved the repurchase of up to
100,000 shares of the Company's common stock.  This stock redemption program was
approved  to  remain in place and in full force/effect for a period of one year.
There  were  no  shares  repurchased under this program during the quarter ended
October  5,  2005.

During 2004 and through October 5, 2005, the Company did not pay any cash
dividends.  Pomeroy has no plans to pay cash dividends in the foreseeable
future, and the payment of such dividends is restricted under Pomeroy's current
credit facility.  Under such credit facility, cash dividends and stock
redemptions are limited to $5 million annually.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None

ITEM 5 - OTHER INFORMATION
None

ITEM 6 - EXHIBITS

<TABLE>
<CAPTION>
(a)  Exhibits

<S>        <C>
     31.1  Section 302 CEO Certification

     31.2  Section 302 CFO Certification

     32.1  Section 906 CEO Certification

     32.2  Section 906 CFO Certification
</TABLE>


                                       23
<PAGE>
                                    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.

                                               POMEROY IT SOLUTIONS, INC.
                                               ----------------------------
                                                               (Registrant)

Date: March 31, 2006                           By:  /s/ Stephen E. Pomeroy
      --------------                           ----------------------------
                                               Stephen E. Pomeroy
                                               Chief Executive Officer and
                                               Chief Accounting Officer


                                       24
<PAGE>