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,  2004

                                       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  X  NO
    ---    ---

     Indicate  by  check mark whether the registrant is an accelerated filer (as
defined  in  Rule  12b-2  of  the  Exchange  Act).

YES  X  NO
    ---    ---

The  number  of  shares  of  common stock outstanding as of November 5, 2004 was
12,247,390.


                                        1
<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            3
                                  October 5, 2004 (Unaudited) and January
                                  5, 2004

                                  Consolidated Statements of Income for        5
                                  the Three Months Ended October 5, 2004
                                  and 2003 (Unaudited)

                                  Consolidated Statements of                   6
                                  Comprehensive Income for the
                                  Three Months Ended October 5, 2004
                                  and 2003 (Unaudited)

                                  Consolidated Statements of Income for        7
                                  the Nine Months Ended October 5, 2004
                                  and 2003 (Unaudited)

                                  Consolidated Statements of                   8
                                  Comprehensive Income for the
                                  Nine Months Ended October 5, 2004 and
                                  2003 (Unaudited)

                                  Consolidated Statements of Cash Flows        9
                                  for the Nine Months Ended October 5,
                                  2004 and 2003 (Unaudited)

                                  Notes to Consolidated Financial             10
                                  Statements (Unaudited)

           Item 2.                Management's Discussion and Analysis of     18
                                  Financial Condition and Results of
                                  Operations

           Item 3.                Quantitative and Qualitative Disclosure     23
                                  about Market Risk

           Item 4.                Controls and Procedures                     23

Part II.   Other Information                                                  24

SIGNATURE                                                                     25
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                                 POMEROY IT SOLUTIONS, INC.

                                 CONSOLIDATED BALANCE SHEETS

(in thousands)                                                      October 5,   January 5,
                                                                       2004         2004
                                                                   ------------  -----------
                                                                   (unaudited)
<S>                                                                <C>           <C>
ASSETS

Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . .  $      9,599  $    40,200

 Accounts receivable:
  Trade, less allowance of  $1,564 and $2,556 at October 5, 2004
    and January 5, 2004, respectively . . . . . . . . . . . . . .       117,477      111,324
  Vendor receivables, less allowance of $100 at
    October 5, 2004 and January 5, 2004 . . . . . . . . . . . . .         5,052        7,226
  Net investment in leases. . . . . . . . . . . . . . . . . . . .         4,377        2,056
  Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         2,148        2,043
                                                                   ------------  -----------
    Total receivables . . . . . . . . . . . . . . . . . . . . . .       129,054      122,649

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . .        17,680       12,453
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         6,444        5,193
                                                                   ------------  -----------
    Total current assets. . . . . . . . . . . . . . . . . . . . .       162,777      180,495

Equipment and leasehold improvements:
  Furniture, fixtures and equipment . . . . . . . . . . . . . . .        30,746       29,517
  Leasehold improvements. . . . . . . . . . . . . . . . . . . . .         6,304        6,438
                                                                   ------------  -----------
    Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .        37,050       35,955

  Less accumulated depreciation . . . . . . . . . . . . . . . . .        21,158       19,696
                                                                   ------------  -----------
    Net equipment and leasehold improvements. . . . . . . . . . .        15,892       16,259

Net investment in leases, net of current portion. . . . . . . . .         2,219        2,935
Goodwill, net . . . . . . . . . . . . . . . . . . . . . . . . . .       120,403       67,664
Intangible assets, net. . . . . . . . . . . . . . . . . . . . . .         3,864          436
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . .         3,509        1,410
                                                                   ------------  -----------
    Total assets. . . . . . . . . . . . . . . . . . . . . . . . .  $    308,664  $   269,199
                                                                   ============  ===========
<FN>
                       See notes to consolidated financial statements.
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                             POMEROY  IT  SOLUTIONS,  INC.

                              CONSOLIDATED BALANCE SHEETS


(in thousands, except per share data)                          October 5,   January 5,
                                                                  2004         2004
                                                              ------------  -----------
                                                              (unaudited)
<S>                                                           <C>           <C>
LIABILITIES AND EQUITY

Current Liabilities:
Current portion of notes payable . . . . . . . . . . . . . .  $       912   $       912
Short-term borrowings. . . . . . . . . . . . . . . . . . . .        2,853             -
Accounts payable . . . . . . . . . . . . . . . . . . . . . .       63,325        50,051
Deferred revenue . . . . . . . . . . . . . . . . . . . . . .        3,487         3,988
Accrued restructuring and severance charges. . . . . . . . .        8,875             -
Other current liabilities. . . . . . . . . . . . . . . . . .       16,387         8,758
                                                              ------------  -----------
    Total current liabilities. . . . . . . . . . . . . . . .       95,839        63,709

Notes payable, less current portion. . . . . . . . . . . . .          250           913
Deferred income taxes. . . . . . . . . . . . . . . . . . . .        5,446         4,780

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
    (13,021 and 12,943 shares issued at October 5, 2004
    and January 5, 2004, respectively. . . . . . . . . . . .          130           130
  Paid-in-capital. . . . . . . . . . . . . . . . . . . . . .       83,297        82,696
  Accumulated other comprehensive loss . . . . . . . . . . .          (36)            -
  Retained earnings. . . . . . . . . . . . . . . . . . . . .      132,484       125,250
                                                              ------------  -----------
                                                                  215,875       208,076


  Less treasury stock, at cost ( 778 and 738 shares at
  October 5, 2004 and January 5, 2004, respectively. . . . .        8,746         8,279
                                                              ------------  -----------
    Total equity . . . . . . . . . . . . . . . . . . . . . .      207,129       199,797
                                                              ------------  -----------
    Total liabilities and equity . . . . . . . . . . . . . .  $   308,664   $   269,199
                                                              ============  ===========
<FN>
                    See notes to consolidated financial statements.
</TABLE>


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

(in thousands, except per share data)                     Three Months Ended
                                                      --------------------------
                                                       October 5,    October 5,
                                                          2004          2003
                                                      (unaudited)   (unaudited)
                                                      ------------  ------------
<S>                                                   <C>           <C>
Net sales and revenues:
  Sales-equipment, supplies and leasing. . . . . . .  $    139,403  $   125,698
  Service. . . . . . . . . . . . . . . . . . . . . .        61,101       32,374
                                                      ------------  ------------
    Total net sales and revenues . . . . . . . . . .       200,504      158,072

Cost of sales and service:
  Sales-equipment, supplies and leasing. . . . . . .       129,621      116,825
  Service. . . . . . . . . . . . . . . . . . . . . .        44,433       23,612
                                                      ------------  ------------
    Total cost of sales and service. . . . . . . . .       174,054      140,437
                                                      ------------  ------------

      Gross profit . . . . . . . . . . . . . . . . .        26,450       17,635

Operating expenses:
    Selling, general and administrative. . . . . . .        18,818       11,331
    Rent expense . . . . . . . . . . . . . . . . . .           906          802
    Depreciation . . . . . . . . . . . . . . . . . .         1,052        1,228
    Amortization . . . . . . . . . . . . . . . . . .           122           63
    Restructuring and severance charges. . . . . . .         2,423            -
                                                      ------------  ------------
      Total operating expenses . . . . . . . . . . .        23,321       13,424
                                                      ------------  ------------

Income before other expense (income) and income tax.         3,129        4,211

Other expense (income):
    Interest, net. . . . . . . . . . . . . . . . . .            32           (7)
    Other. . . . . . . . . . . . . . . . . . . . . .             4           16
                                                      ------------  ------------
      Total other expense, net . . . . . . . . . . .            36            9
                                                      ------------  ------------

Income  before income tax. . . . . . . . . . . . . .         3,093        4,202
Income tax expense . . . . . . . . . . . . . . . . .         1,221        1,639
                                                      ------------  ------------

    Net income . . . . . . . . . . . . . . . . . . .  $      1,872  $     2,563
                                                      ============  ============

Weighted average shares outstanding:
    Basic. . . . . . . . . . . . . . . . . . . . . .        12,240       12,226
                                                      ============  ============
    Diluted. . . . . . . . . . . . . . . . . . . . .        12,366       12,369
                                                      ============  ============

Earnings per common share:
    Basic. . . . . . . . . . . . . . . . . . . . . .  $       0.15  $      0.21
                                                      ============  ============
    Diluted. . . . . . . . . . . . . . . . . . . . .  $       0.15  $      0.21
                                                      ============  ============
Dividends per common share,  . . . . . . . . . . . .  $         --  $      0.80
                                                      ============  ============
<FN>
             See  notes  to  consolidated  financial  statements.
</TABLE>


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


(in thousands)                                               Three Months Ended
                                                        --------------------------
                                                         October 5,    October 5,
                                                            2004          2003
                                                        ------------  ------------
                                                        (unaudited)   (unaudited)
<S>                                                     <C>           <C>

Net income . . . . . . . . . . . . . . . . . . . . . .  $     1,872   $      2,563
Other comprehensive loss:
  Foreign currency translation adjustment, net of tax.          (36)             -
                                                        ------------  ------------

Comprehensive income . . . . . . . . . . . . . . . . .  $     1,836   $      2,563
                                                        ============  ============
<FN>
           See  notes  to  consolidated  financial  statements.
</TABLE>


                                        6
<PAGE>
<TABLE>
<CAPTION>
                           POMEROY IT SOLUTIONS, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)                      Nine Months Ended
                                                      --------------------------
                                                       October 5,    October 5,
                                                          2004          2003
                                                      ------------  ------------
                                                      (unaudited)   (unaudited)
<S>                                                   <C>           <C>
Net sales and revenues:
  Sales-equipment, supplies and leasing. . . . . . .  $    407,724  $   341,879
  Service. . . . . . . . . . . . . . . . . . . . . .       126,149       93,523
                                                      ------------  ------------
    Total net sales and revenues . . . . . . . . . .       533,873      435,402

Cost of sales and service:
  Sales-equipment, supplies and leasing. . . . . . .       377,638      316,186
  Service. . . . . . . . . . . . . . . . . . . . . .        91,685       67,887
                                                      ------------  ------------
    Total cost of sales and service. . . . . . . . .       469,323      384,073
                                                      ------------  ------------

      Gross profit . . . . . . . . . . . . . . . . .        64,550       51,329

Operating expenses:
    Selling, general and administrative. . . . . . .        44,570       34,777
    Rent expense . . . . . . . . . . . . . . . . . .         2,451        2,397
    Depreciation . . . . . . . . . . . . . . . . . .         2,968        3,643
    Amortization . . . . . . . . . . . . . . . . . .           201          360
    Provision for doubtful accounts. . . . . . . . .             -          200
    Restructuring and severance charges. . . . . . .         2,423            -
                                                      ------------  ------------
      Total operating expenses . . . . . . . . . . .        52,613       41,377
                                                      ------------  ------------

Income before other expense (income) and income tax.        11,937        9,952

Other expense (income):
    Interest, net. . . . . . . . . . . . . . . . . .             1          (21)
    Other. . . . . . . . . . . . . . . . . . . . . .            27            1
                                                      ------------  ------------
      Total other expense (income), net. . . . . . .            28          (20)
                                                      ------------  ------------

Income  before income tax. . . . . . . . . . . . . .        11,909        9,972
Income tax expense . . . . . . . . . . . . . . . . .         4,675        3,889
                                                      ------------  ------------
    Net income . . . . . . . . . . . . . . . . . . .  $      7,234  $     6,083
                                                      ============  ============

Weighted average shares outstanding:
    Basic. . . . . . . . . . . . . . . . . . . . . .        12,243       12,340
                                                      ============  ============
    Diluted. . . . . . . . . . . . . . . . . . . . .        12,419       12,390
                                                      ============  ============

Earnings per common share:
    Basic. . . . . . . . . . . . . . . . . . . . . .  $       0.59  $      0.49
                                                      ============  ============
    Diluted. . . . . . . . . . . . . . . . . . . . .  $       0.58  $      0.49
                                                      ============  ============
Dividends per common share,  . . . . . . . . . . . .  $         --  $      0.80
                                                      ============  ============
<FN>
                See notes to consolidated financial statements.
</TABLE>


                                        7
<PAGE>
<TABLE>
<CAPTION>
                           POMEROY IT SOLUTIONS, INC.
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)                                               Nine Months Ended
                                                        --------------------------
                                                         October 5,    October 5,
                                                            2004          2003
                                                        ------------  ------------
                                                        (unaudited)   (unaudited)
<S>                                                     <C>           <C>

Net income . . . . . . . . . . . . . . . . . . . . . .  $     7,234   $      6,083
Other comprehensive loss:
  Foreign currency translation adjustment, net of tax.          (36)             -
                                                        ------------  ------------

Comprehensive income . . . . . . . . . . . . . . . . .  $     7,198   $      6,083
                                                        ============  ============
<FN>
                See notes to consolidated financial statements.
</TABLE>


                                        8
<PAGE>
<TABLE>
<CAPTION>
                            POMEROY IT SOLUTIONS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)                                                        Nine Months Ended
                                                                 --------------------------
                                                                  October 5,    October 5,
                                                                     2004          2003
                                                                 ------------  ------------
                                                                 (unaudited)   (unaudited)
<S>                                                              <C>           <C>
Cash flows from operating activities:
  Net income. . . . . . . . . . . . . . . . . . . . . . . . . .  $     7,234   $     6,083
  Adjustments to reconcile net income to net cash
    from operating activities:
  Depreciation. . . . . . . . . . . . . . . . . . . . . . . . .        2,968         3,643
  Amortization. . . . . . . . . . . . . . . . . . . . . . . . .          201           360
  Deferred income taxes . . . . . . . . . . . . . . . . . . . .           12         2,365
  Effect of exchange rate changes on cash and cash equivalents.          (36)            -
  Loss on sale of fixed assets. . . . . . . . . . . . . . . . .           30            73
  Changes in working capital accounts, net of
    effects of acquisitions:
    Accounts receivable . . . . . . . . . . . . . . . . . . . .       13,232        (1,624)
    Inventories . . . . . . . . . . . . . . . . . . . . . . . .       (5,959)       (1,851)
    Prepaids. . . . . . . . . . . . . . . . . . . . . . . . . .       (2,210)        3,057
    Net investment in leases. . . . . . . . . . . . . . . . . .          377          (561)
    Accounts payable. . . . . . . . . . . . . . . . . . . . . .        1,023        13,216
    Deferred revenue. . . . . . . . . . . . . . . . . . . . . .         (501)        1,840
    Income tax payable. . . . . . . . . . . . . . . . . . . . .          204             -
    Other, net. . . . . . . . . . . . . . . . . . . . . . . . .         (669)        1,629
                                                                 ------------  ------------
  Net operating activities. . . . . . . . . . . . . . . . . . .       15,906        28,230
                                                                 ------------  ------------
Cash flows from investing activities:
  Capital expenditures. . . . . . . . . . . . . . . . . . . . .       (1,495)       (1,485)
  Proceeds from sale of fixed assets. . . . . . . . . . . . . .           20             1
  Acquisition of businesses, net of
    cash acquired . . . . . . . . . . . . . . . . . . . . . . .      (16,634)       (5,097)
                                                                 ------------  ------------
  Net investing activities. . . . . . . . . . . . . . . . . . .      (18,109)       (6,581)
                                                                 ------------  ------------
Cash flows from financing activities:
  Proceeds from short-term borrowings . . . . . . . . . . . . .        2,853             -
  Payments of  acquisition notes payable. . . . . . . . . . . .      (31,385)         (541)
  Proceeds from exercise of stock options
    and related tax benefit . . . . . . . . . . . . . . . . . .          441           391
  Purchase of treasury stock. . . . . . . . . . . . . . . . . .         (467)       (4,096)
  Proceeds from employee stock purchase plan. . . . . . . . . .          160           165
  Cash dividend paid. . . . . . . . . . . . . . . . . . . . . .            -        (9,809)
                                                                 ------------  ------------
  Net financing activities. . . . . . . . . . . . . . . . . . .      (28,398)      (13,890)
                                                                 ------------  ------------

Change in cash and cash equivalents . . . . . . . . . . . . . .      (30,601)        7,759
Cash and cash equivalents
  Beginning of period . . . . . . . . . . . . . . . . . . . . .       40,200        32,505
                                                                 ------------  ------------
  End of period . . . . . . . . . . . . . . . . . . . . . . . .  $     9,599   $    40,264
                                                                 ============  ============
<FN>
                      See notes to consolidated financial statements.
</TABLE>


                                        9
<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,  2004. 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, 2004
     are  not  necessarily  indicative  of  the results that may be expected for
     future  interim  periods  or  for  the  year  ending  January  5,  2005.

2.   Recent  Accounting  Pronouncements

     In  November  2002,  the  Emerging  Issues  Task  Force  ("EITF") reached a
     consensus  on  Issue  No.  00-21,  "Revenue  Arrangements  with  Multiple
     Deliverables."  EITF  No. 00-21 addresses certain aspects of the accounting
     by  a  vendor for arrangements under which the vendor will perform multiple
     revenue generating activities. EITF No. 00-21 is effective for fiscal years
     beginning  after June 15, 2003. Adoption of EITF No. 00-21 did not have any
     material  impact  on  the  Company's  financial  position  or  results  of
     operations.

     In  November  2002, the EITF reached a consensus on EITF 02-16, "Accounting
     by  a  Customer  (including  a reseller) for Certain Consideration Received
     from  a Vendor." EITF 02-16 requires that cash payments, credits, or equity
     instruments received as consideration by a customer from a vendor should be
     presumed to be a reduction of cost of sales when recognized by the customer
     in  the  income  statement. In certain situations, the presumption could be
     overcome  and the consideration recognized either as revenue or a reduction
     of  a specific cost incurred. The consensus should be applied prospectively
     to  new  or  modified  arrangements  entered  into after December 31, 2002.

     The  Company  had  been  participating  in a vendor program that expired in
     November  of  2003.  Since this program was initiated prior to December 31,
     2002,  the  Company  has  classified  these  vendor  program  payments as a
     reduction  in  selling,  general  and  administrative  expenses.  Under new
     agreements,  the Company has classified these vendor program payments under
     cost  of  sales  in  accordance  with  EITF  02-16.

     In  January  2003, the Financial Accounting Standards Board ("FASB") issued
     FASB  Interpretation  46  (FIN  46),  "Consolidation  of  Variable Interest
     Entities." FIN 46 clarifies the application of Accounting Research Bulletin
     51,  Consolidated  Financial  Statements,  for certain entities that do not
     have  sufficient  equity  at  risk for the entity to finance its activities
     without  additional subordinated financial support from other parties or in
     which  equity  investors  do  not have the characteristics of a controlling
     financial  interest  ("variable  interest  entities").  Variable  interest
     entities  within  the  scope  of  FIN 46 are required to be consolidated by
     their  primary  beneficiary. The primary beneficiary of a variable interest
     entity  is  determined  to  be  the  party  that  absorbs a majority of the
     entity's  expected  losses,  receives a majority of its expected returns or
     both.  FIN  46  applies  immediately  to variable interest entities created
     after  January  31,  2003,  and  to  variable interest entities in which an
     enterprise


                                       10
<PAGE>
     obtains an interest after that date. It applies in the first fiscal year or
     interim  period  beginning  after  December  15, 2003, to variable interest
     entities  in which an enterprise holds a variable interest that it acquired
     before  February 1, 2003. Adoption of FIN 46 did not have any impact on the
     Company's  financial  condition  or  results  of  operations.

     In  April  2003, the FASB issued Statement No. 149, "Amendment of Statement
     133  on Derivative Instruments and Hedging Activities" (SFAS 149). SFAS 149
     amends  and clarifies the financial accounting and reporting for derivative
     instruments,  including  certain  derivatives instruments embedded in other
     contracts,  and  for  hedging  activities  under  SFAS 133. The Company has
     adopted  the  provisions of SFAS 149 and they had no material impact on our
     financial  position  or  results  of  operations.

     In  May  2003,  the  FASB issued Statement No. 150, "Accounting for Certain
     Financial  Instruments with Characteristics of Both Liabilities and Equity"
     (SFAS  150).  SFAS  150  clarifies  the  accounting  for  certain financial
     instruments  that,  under  previous  guidance, issuers could account for as
     either  debt  or  equity.  The  new Statement requires that those financial
     instruments  be  classified  as  liabilities  in  statements  of  financial
     position.  The  Company has adopted the provisions of SFAS 150 and they had
     no  material  impact  on  our  financial position or results of operations.

3.   Cash  and  Short-Term  Borrowings

     On  June  28,  2004,  the  Company  finalized a new $165 million Syndicated
     Credit  Facility Agreement with GE Commercial Distribution Finance. The new
     credit  facility has a three-year term and its components include a maximum
     of  $75  million  for  inventory  financing  and a revolver, collateralized
     primarily  by  accounts  receivable,  of  up to $110 million. Under the new
     agreement,  the  credit facility provides a letter of credit facility of $5
     million.

     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, 2004, the
     Company  had  an outstanding balance under the Company's credit facility of
     $2.9  million.  As  of  January 5, 2004, the Company did not have a balance
     outstanding  under  the  Company's  previous  credit  facility.

4.   Stock-Based  Compensation

     The FASB issued SFAS No. 123, "Accounting for Stock-Based Compensation", in
     the fall of 1995. The statement encourages, but does not require, companies
     to  record compensation cost for stock-based employee compensation plans at
     fair  value.  The  Company  elected to account 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.

     Had  compensation cost for the Company's stock option plans been determined
     based on the fair value at the grant date consistent with the provisions of
     SFAS  No.  123,  the Company's net income and earnings per share would have
     been  reduced  to  the  pro  forma  amounts  indicated  below:


                                       11
<PAGE>
<TABLE>
<CAPTION>
(in thousands, except per                      Three Months Ended October 5,
share amounts)                                     2004              2003
                                              ---------------  ----------------
<S>                                           <C>              <C>
Net income - as reported                      $         1,872  $          2,563
Stock-based compensation expense-net of tax               299               206
                                              ---------------  ----------------
Net income - pro forma                        $         1,573  $          2,357
                                              ===============  ================
Net income per common share - as reported
  Basic                                       $          0.15  $           0.21
                                              ===============  ================
  Diluted                                     $          0.15  $           0.21
                                              ===============  ================
Net income per common share - pro forma
  Basic                                       $          0.13  $           0.19
                                              ===============  ================
  Diluted                                     $          0.13  $           0.19
                                              ===============  ================
</TABLE>

<TABLE>
<CAPTION>
(in thousands, except per                       Nine Months Ended October 5,
share amounts)                                    2004            2003
                                             -------------  -----------------
<S>                                           <C>           <C>
Net income - as reported                      $      7,234  $           6,083
Stock-based compensation expense-net of tax          1,099              1,011
                                             -------------  -----------------
Net income - pro forma                        $      6,135  $           5,072
                                              ============  =================
Net income per common share - as reported
  Basic                                       $       0.59  $            0.49
                                              ============  =================
  Diluted                                     $       0.58  $            0.49
                                              ============  =================
Net income per common share - pro forma
  Basic                                       $       0.50  $            0.41
                                              ============  =================
  Diluted                                     $       0.49  $            0.41
                                              ============  =================
</TABLE>

5.   Earnings  per  Common  Share

     The following is a reconciliation of the number of shares used in the basic
     EPS  and  diluted  EPS  computations: (in thousands, except per share data)


                                       12
<PAGE>
<TABLE>
<CAPTION>
                         Three Months Ended October 5,
                    ----------------------------------------
                           2004                 2003
                    -------------------  -------------------
<S>                 <C>     <C>          <C>     <C>
                             Per Share            Per Share
                    Shares    Amount     Shares    Amount
                    ------  -----------  ------  -----------
Basic EPS           12,240  $     0.15   12,226  $      0.21
Effect of dilutive
  stock options        126           -      143            -
                    ------  -----------  ------  -----------
Diluted EPS         12,366  $     0.15   12,369  $      0.21
                    ======  ===========  ======  ===========


                         Nine Months Ended October 5,
                    ----------------------------------------
                              2004                  2003
                    -------------------  -------------------
                            Per Share            Per Share
                    Shares   Amount      Shares   Amount
                    ------  -----------  ------  -----------
Basic EPS           12,243  $     0.59   12,340  $      0.49
Effect of dilutive
  stock options        176       (0.01)      50            -
                    ------  -----------  ------  -----------
Diluted EPS         12,419  $     0.58   12,390  $      0.49
                    ======  ===========  ======  ===========
</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, 2004 and January 5,
     2004:

<TABLE>
<CAPTION>
(in thousands)                    Gross                       Net        Gross                      Net
                                 Carrying    Accumulated    Carrying   Carrying    Accumulated   Carrying
                                  Amount    Amortization     Amount     Amount    Amortization    Amount
                                10/5/2004     10/5/2004    10/5/2004   1/5/2004     1/5/2004     1/5/2004
                                -------------------------------------  -----------------------------------
<S>                             <C>         <C>            <C>         <C>        <C>            <C>
Amortized intangible assets:
  Covenants not-to-compete      $    2,023  $       1,722  $      301  $   1,844  $       1,650  $     194
  Customer lists                     2,877            485       2,392        627            385        242
  Other intangibles                  1,200             29       1,171          -              -          -
                                ----------  -------------  ----------  ---------  -------------  ---------
  Total amortized intangibles   $    6,100  $       2,236  $    3,864  $   2,471  $       2,035  $     436
                                ==========  =============  ==========  =========  =============  =========
</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 quarters ended October 5, 2004
     and  2003,  amortization expense related to intangible assets with definite
     lives  was  $122  and $63 thousand, respectively. For the nine months ended
     October 5, 2004 and 2003, amortization expense related to intangible assets
     with  definite  lives  was  $201  and  $360  thousand,  respectively.


                                       13
<PAGE>
     Projected  future  amortization  expense  related to intangible assets with
     definite  lives  are  as  follows:

<TABLE>
<CAPTION>
<S>                   <C>
(in thousands)
Fiscal Years:
2004                  $  163  October 6, 2004 - January 5, 2005
2005                     524
2006                     417
2007                     417
2008                     417
2009                     417
2010 and thereafter    1,509
                     -------
Total                 $3,864
                     =======
</TABLE>

     The change in the net carrying amount of goodwill for the nine months ended
     October  5,  2004  by  segment  are  as  follows:

<TABLE>
<CAPTION>
(in thousands)                            Products   Services   Consolidated
                                          ---------  ---------  -------------
<S>                                       <C>        <C>        <C>
Net carrying amount as of 1/5/04          $  35,862  $  31,802  $      67,664
Goodwill recorded during first quarter          130        116            246
                                          ---------  ---------  -------------
Net carrying amount as of 4/5/04             35,992     31,918         67,910
Goodwill recorded during second quarter          66         59            125
                                          ---------  ---------  -------------
Net carrying amount as of 7/5/04             36,058     31,977         68,035
Goodwill recorded during third quarter            1     52,367         52,368
                                          ---------  ---------  -------------
Net carrying amount as of 10/5/04         $  36,059  $  84,344  $     120,403
                                          =========  =========  =============
</TABLE>

     See  footnote  10  for  explanation  of  increase in goodwill for the third
     quarter  of  fiscal  2004.

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)

<TABLE>
<CAPTION>
                                         Nine Months Ended October 5,
                                       --------------------------------
<S>                                    <C>             <C>
                                             2004              2003
                                       --------------  ----------------
Interest paid                          $          270  $            310
                                       ==============  ================
Income taxes paid                      $        3,787  $            744
                                       ==============  ================
Adjustments to purchase price
of acquisition assets and intangibles  $           70  $            299
                                       ==============  ================

Business combinations accounted for
as purchases:
  Assets acquired                      $       78,256  $         10,497
  Liabilities assumed                          61,622             4,074
  Notes payable                                     -             1,326
                                       --------------  ----------------
  Net cash paid                        $       16,634  $          5,097
                                       ==============  ================
</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.


                                       14
<PAGE>
9.   Segment  Information

     Summarized  financial  information  concerning  the  Company's  reportable
     segments  is  shown  in  the  following  table.  (in  thousands)

<TABLE>
<CAPTION>
                                                            Three Months Ended October 5, 2004
                                                     ------------------------------------------------
                                                     Products   Services   Leasing     Consolidated
                                                     ---------  ---------  --------  ----------------
<S>                                                  <C>        <C>        <C>       <C>
Revenues                                             $ 139,346  $  61,101  $     57  $        200,504
Income before other expense (income) and income tax      1,097      1,990        42             3,129
Total assets                                           178,211    123,078     7,375           308,664
Capital expenditures                                       204        229         -               433
Depreciation and amortization                              508        666         -             1,174


                                                             Three Months Ended October 5, 2003
                                                     ------------------------------------------------
                                                     Products   Services   Leasing     Consolidated
                                                     ---------  ---------  --------  ----------------
Revenues                                             $ 125,685  $  32,374  $     13  $        158,072
Income before other expense (income) and income tax      2,468      1,733        10             4,211
Total assets                                           169,879     86,849     8,149           264,877
Capital expenditures                                       160        159         -               319
Depreciation and amortization                              644        647         -             1,291


                                                             Nine Months Ended October 5, 2004
                                                     ------------------------------------------------
                                                     Products   Services   Leasing     Consolidated
                                                     ---------  ---------  --------  ----------------
Revenues                                             $ 407,635  $ 126,149  $     89  $        533,873
Income before other expense (income) and income tax      5,144      6,749        44            11,937
Total assets                                           178,211    123,078     7,375           308,664
Capital expenditures                                       764        731         -             1,495
Depreciation and amortization                            1,559      1,608         2             3,169


                                                               Nine Months Ended October 5, 2003
                                                     ------------------------------------------------
                                                     Products   Services   Leasing     Consolidated
                                                     ---------  ---------  --------  ----------------
Revenues                                             $ 341,715  $  93,523  $    164  $        435,402
Income before other expense (income) and income tax      5,746      4,056       150             9,952
Total assets                                           169,879     86,849     8,149           264,877
Capital expenditures                                       737        748         -             1,485
Depreciation and amortization                            2,073      1,930         -             4,003
</TABLE>

10.  Merger

     On  July 23, 2004, the Company and Pomeroy Acquisition Sub, Inc. ("PAS"), a
     wholly  owned  subsidiary  the Company, completed a merger with Alternative
     Resources  Corporation ("ARC"). On May 11, 2004, the parties entered into a
     definitive  merger  agreement  for  PAS  to  acquire  all of the issued and
     outstanding  shares of capital stock of ARC. The merger was approved by ARC
     shareholders at a meeting held on July 22, 2004. As a result of the merger,
     ARC  is  now  a  wholly-owned  subsidiary  of  the  Company.


                                       15
<PAGE>
     The  cash  consideration  paid at closing, including the cost of all stock,
     stock  options  and  warrants  purchased  and  the  amount  of ARC net debt
     retired,  was  approximately  $46.1  million, which was funded from cash on
     hand and borrowings from Pomeroy's existing line of credit. The Merger will
     nearly  double  total  service  revenues  for  Pomeroy  based on historical
     performance.  In addition, with the anticipated recovery of IT spending, it
     is  believed  that the Merger represents an opportunity to increase revenue
     growth.  The  Merger  will  add  approximately 2,000 technical resources to
     Pomeroy  as  well  as  some  major  new customers. The additional technical
     personnel  will  also  allow  Pomeroy  to  add  new  services capabilities.

     The  operating  results  of  ARC  have  been  included  in  the  Company's
     consolidated  financial  statements  since the acquisition date of July 23,
     2004.  On  an  unaudited  pro  forma  basis,  assuming  the acquisition had
     occurred  at  the January 6, 2004, the Company's consolidated results would
     have  been:

<TABLE>
<CAPTION>
(in thousands, except per share data)                 For the three months ended  For the nine months ended
                                                             October 5,2004            October 5, 2004
                                                      --------------------------  -------------------------
                                                         Actual       Pro forma      Actual      Pro forma
                                                      -------------  -----------  ------------  -----------
<S>                                                   <C>            <C>          <C>           <C>
Net sales and revenues                                $     200,504  $   207,715  $    533,873  $   598,928
Income before other expense (income) and income tax           3,129        2,671        11,937        9,773
Net income                                                    1,872        1,576         7,234        5,787
Earnings per common share, diluted                             0.15         0.13          0.58         0.47
</TABLE>

11.  Restructuring  and  Severance  Charges

     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  charge  is
     associated  with legacy Pomeroy costs of facilities and processes that have
     or  will  become  duplicative or redundant as ARC operations are integrated
     into  the  Company. These costs consist of facility closing and involuntary
     employee  reduction  severance  costs  of  $576 thousand and $400 thousand,
     respectively.  These costs are accounted for under FAS 146, "Accounting for
     Costs  Associated with Exit or Disposal Activities," and have been 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 a non-recurring, one-time charge for severance in
     the  amount  of  $1.447  million  related  to the retirement of founder and
     former CEO David B. Pomeroy II. Mr. Pomeroy will continue to serve as board
     chairman.

     Also, in fiscal 2005, the Company plans to have an additional restructuring
     charge related to exiting unutilized leased facility space of approximately
     $292 thousand. This charge will be recorded when the leased facilities have
     been  vacated.

     During  the  third  quarter of fiscal 2004, the restructuring and severance
     charges  expensed  consisted  of  the  following:


                                       16
<PAGE>
<TABLE>
<CAPTION>
(in thousands)            Total Initial      Cash       Accrued balance
                             Accrual       payments   at October 5, 2004
                          -----------------------------------------------
<S>                       <C>             <C>         <C>
Severance                 $        1,847  $    (142)  $             1,705
Facility consolidations              576          -                   576
                          -----------------------------------------------
                          $        2,423  $    (142)  $             2,281
                          ===============================================
</TABLE>

     Also, the Company's management recorded a restructuring charge liability on
     the  ARC  opening balance sheet to eliminate certain duplicative activities
     and  reduced facility requirements. As a result, approximately $6.4 million
     of  costs were recorded as part of the ARC merger. The restructuring charge
     consisted  of costs of vacating duplicative leased facilities 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.  A  portion  of  the  restructuring liabilities are
     classified  as  long-term  liabilities  in  the  accompanying  consolidated
     balance sheet at October 5, 2004. Changes to the estimates of executing the
     currently  approved  plans of restructuring will be recorded as an increase
     or  decrease  to  goodwill.

<TABLE>
<CAPTION>
(in thousands)            Total Initial      Cash      Liability balance
                            Liability      payments   at October 5, 2004
                          -----------------------------------------------
<S>                       <C>             <C>         <C>
Severance                 $        2,682  $    (453)  $             2,229
Facility consolidations            3,715       (106)                3,609
                          -----------------------------------------------
                          $        6,397  $    (559)  $             5,838
                          ===============================================
</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  in  fiscal 2003 and fiscal 2002. The total obligations
     acquired  in  connection with these restructuring plans was $2.1 million at
     July  23,  2004.  As of October 5, 2004, the Company had paid approximately
     $1.3  million  of  the  acquired  accrued  costs.

     As  of  October 5, 2004, 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, 2004
                            --------------------------------------------
<S>                         <C>             <C>         <C>
Severance                   $          647  $    (461)  $            186
                            --------------------------------------------
                            $          647  $    (461)  $            186
                            ============================================

Fiscal 2002 Restructuring Charge
                            Total Accrual   Cash        Balance at
                            as of 7/23/04   payments    October 5, 2004
                            --------------------------------------------
Facility consolidations     $          756  $    (226)  $            530
Other charges                          696       (656)                40
                            --------------------------------------------
                            $        1,452  $    (882)  $            570
                            ============================================
</TABLE>


                                       17
<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.

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


                                       18
<PAGE>
<TABLE>
<CAPTION>
Financial Results                                         Percentage of net sales and revenues
                                                        Three months ended       Nine months ended
                                                            October 5,              October 5,
                                                     ----------------------  ------------------------
                                                        2004        2003       2004         2003
                                                     ----------  ----------  ---------  -------------
<S>                                                  <C>         <C>         <C>        <C>

Net sales and revenues:
  Equipment, supplies and leasing                         69.5%       79.5%      76.4%          78.5%
  Service                                                 30.5%       20.5%      23.6%          21.5%
                                                     ----------  ----------  ---------  -------------
  Total net sales and revenues                           100.0%      100.0%     100.0%         100.0%
                                                     ==========  ==========  =========  =============

Cost of sales and servce:
  Equipment, supplies and leasing                         64.6%       73.9%      70.7%          72.6%
  Service                                                 22.2%       14.9%      17.2%          15.6%
                                                     ----------  ----------  ---------  -------------
    Total cost of sales and service                       86.8%       88.8%      87.9%          88.2%
                                                     ==========  ==========  =========  =============

Gross profit:
  Equipment, supplies and leasing                          4.9%        5.6%       5.7%           5.9%
  Service                                                  8.3%        5.5%       6.4%           5.9%
                                                     ----------  ----------  ---------  -------------
    Total gross profit                                    13.2%       11.2%      12.1%          11.8%
                                                     ==========  ==========  =========  =============

Operating expenses:
  Selling, general and administrative                      9.4%        7.2%       8.3%           8.0%
  Rent                                                     0.4%        0.5%       0.5%           0.6%
  Depreciation                                             0.5%        0.8%       0.6%           0.8%
  Amortization                                             0.1%        0.0%       0.0%           0.1%
  Provision for doubtful accounts                          0.0%        0.0%       0.0%           0.0%
  Restructuring and severance charges                      1.2%        0.0%       0.5%           0.0%
                                                     ----------  ----------  ---------  -------------
    Total operating expenses                              11.6%        8.5%       9.9%           9.5%
                                                     ==========  ==========  =========  =============

Income before other expense (income) and income tax        1.6%        2.6%       2.2%           2.3%

Net other expense                                          0.1%        0.0%       0.0%           0.0%

Income before income tax                                   1.5%        2.6%       2.2%           2.3%
Income tax expense                                         0.6%        1.0%       0.8%           0.9%

                                                     ----------  ----------  ---------  -------------
Net income                                                 0.9%        1.6%       1.4%           1.4%
                                                     ==========  ==========  =========  =============
</TABLE>


                                       19
<PAGE>
                           POMEROY IT SOLUTIONS, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

TOTAL  NET  SALES  AND  REVENUES.  Total  net sales and revenues increased $42.4
million,  or  26.8%,  to $200.5 million in the third quarter of fiscal 2004 from
$158.1  million in the third quarter of fiscal 2003. This increase was primarily
a  result  of increased industry-wide technology spending and the acquisition of
Alternative  Resources  Corporation  on  July  23, 2004.  Excluding acquisitions
completed  in fiscal years 2003 and 2004, total net sales and revenues increased
11.5%.  Products  and  leasing sales increased $13.7 million, or 10.9% to $139.4
million  in  the  third  quarter of fiscal 2004 from $125.7 million in the third
quarter  of  fiscal  2003. Excluding acquisitions completed in fiscal years 2003
and  2004,  products  and  leasing  sales  in  the  third quarter of fiscal 2004
increased  9.7%  over  the  products  and  leasing sales in the third quarter of
fiscal  2003.  Service  revenues  increased  $28.7  million,  or 88.7%, to $61.1
million  in  the  third  quarter  of fiscal 2004 from $32.4 million in the third
quarter  of  fiscal  year  2003,  primarily  as  a  result of the acquisition of
Alternative Resources Corporation.    Excluding acquisitions completed in fiscal
years  2003  and  2004,  service  revenues  in  the third quarter of fiscal 2004
increased  18.6%  over  service  revenues  in  the third quarter of fiscal 2003.

Total  net  sales  and  revenues  increased  $98.5  million, or 22.6%, to $533.9
million in the first nine months of fiscal 2004 from $435.4 million in the first
nine  months of fiscal 2003.    Excluding acquisitions completed in fiscal years
2003  and  2004,  total  net  sales  and  revenues increased 15.9%. Products and
leasing  sales increased $65.8 million, or 19.3%, to $407.7 million in the first
nine  months  of  fiscal  2004  from  $341.9 million in the first nine months of
fiscal  2003.  Excluding  acquisitions  completed in fiscal years 2003 and 2004,
products  and  leasing  sales  in the first nine months of fiscal 2004 increased
17.8%  over  products and leasing sales in the first nine months of fiscal 2003.
Service  revenues  increased  $32.6  million, or 34.9%, to $126.1 million in the
first  nine months of fiscal 2004 from $93.5 million in the first nine months of
fiscal  year  2003,  primarily  as  a  result  of the acquisition of Alternative
Resources  Corporation  in  the  third  quarter  of  fiscal  2004.  Excluding
acquisitions  completed  in  fiscal years 2003 and 2004, service revenues in the
first  nine  months  of  fiscal 2004 increased 8.8% over service revenues in the
first  nine  months  of  fiscal  2003.

GROSS PROFIT. Gross profit increased $8.8 million, or 50.0%, to $26.4 million in
the  third  quarter  of  fiscal  2004 from $17.6 million in the third quarter of
fiscal  2003.  The  increase  was primarily due to increased total net sales and
revenues.  Gross  profit,  as a percentage of revenue, increased to 13.2% in the
third quarter of fiscal 2004 as compared to 11.2% in the third quarter of fiscal
2003.  This  increase  in  gross  margin resulted primarily from the increase in
service  revenues  as a percentage of total revenues and the increase in service
gross  margin  as  a  percentage of total gross margin due to the acquisition of
Alternative  Resources Corporation. As a consequence of adopting EITF 02-16, the
Company  recorded  approximately $70 thousand during the third quarter of fiscal
2004  of  vendor  considerations  as a reduction of product cost of sales, which
previously  would  have  been  recorded  as  a reduction of selling, general and
administrative expenses.  Excluding the impact of EITF 02-16, and therefore on a
non-GAAP  basis, the gross profit margin would have remained at 13.2% during the
third  quarter  of  fiscal  2004  compared  to 11.2% during the third quarter of
fiscal 2003.  The non-GAAP gross profit margin is included in this discussion to
provide  meaningful comparison to prior periods. On a forward looking basis, the
Company expects to be aggressive in product and service pricing in order to gain
existing  market  share  which  may  have an unfavorable impact on overall gross
margin.   Additionally,  the  Company expects to continue increasing the breadth
and  depth  of  its  service  offerings, which should have a continued favorable
impact  on service gross margin. Factors that may have an impact on gross margin
in  the  future  include  the  continued  changes in hardware margins, change in
personnel  utilization  rates, the mix of products sold and services provided, a
change  in  unit  prices,  the  percentage  of  equipment  or service sales with
lower-margin  customers,  the  ratio  of service revenues to total net sales and
revenues,  and the Company's decision to aggressively price certain products and
services.

Gross  profit  increased  $13.2 million, or 25.8%, to $64.5 million in the first
nine months of fiscal 2004 from $51.3 million in the first nine months of fiscal
2003.  The increase was primarily due to increased total net sales and revenues.
Gross  profit,  as a percentage of revenue, increased to 12.1% in the first nine
months  of  fiscal  2004 as compared to 11.8% in the first nine months of fiscal
2003.  This  increase  in  gross  margin resulted primarily from the increase in
service  revenues  as a percentage of total revenues and the increase in service
gross  margin  as  a  percentage of total gross margin due to the acquisition of
Alternative Resources Corporation.  As a consequence of adopting EITF 02-16, the
Company  recorded  approximately  $543  thousand  during  the  first  nine


                                       20
<PAGE>
months of fiscal 2004 of vendor considerations as a reduction of product cost of
sales,  which  previously  would  have  been recorded as a reduction of selling,
general  and  administrative  expenses.  Excluding the impact of EITF 02-16, and
therefore  on  a  non-GAAP  basis, the gross profit margin would have been 12.0%
during  the  first nine months of fiscal 2004 compared to 11.8% during the first
nine  months  of  fiscal  2003.  The non-GAAP gross profit margin is included in
this  discussion to provide meaningful comparison to prior periods. On a forward
looking  basis,  the  Company  expects  to  be aggressive in product and service
pricing  in  order  to  gain  existing  market  share which may have a continued
unfavorable  impact  on  overall  gross  margin.

OPERATING  EXPENSES.  Selling,  general  and  administrative expenses (including
rent  expense)  expressed  as  a  percentage  of  total  net  sales and revenues
increased  to  9.8%  in  the third quarter of fiscal 2004 from 7.7% in the third
quarter  of  fiscal  2003. Total operating expenses expressed as a percentage of
total  net  sales and revenues increased to 11.6% in the third quarter of fiscal
2004  from 8.5% in the third quarter of fiscal 2003.  This increase is primarily
the result of the acquisition of Alternative Resources Corporation and recording
a  $2.4  million restructuring charge offset by higher net sales and revenues in
the  third  quarter  of  fiscal  2004 as compared to the third quarter of fiscal
2003.    As  a  result  of  adopting  EITF  02-16,  the  Company  reclassified
approximately  $70  thousand  of  vendor consideration to a reduction of cost of
sales,  which  would  previously  have  been recorded as a reduction of selling,
general  and  administrative  expenses.  Excluding the impact of EITF 02-16, and
therefore  on  a non-GAAP basis, operating expenses would have been 11.6% during
the third quarter of fiscal 2004 as compared to 8.5% during the third quarter of
fiscal 2003.  This non-GAAP measurement is included to provide a more meaningful
comparison  to  prior  periods.

Selling,  general  and  administrative  expenses  (including  rent  expense  and
provision  for  doubtful  accounts) expressed as a percentage of total net sales
and revenues increased to 8.8% in the first nine months of fiscal 2004 from 8.6%
in the first nine months of fiscal 2003. Total operating expenses expressed as a
percentage  of  total net sales and revenues increased to 9.9% in the first nine
months  of  fiscal 2004 from 9.5% in the first nine months of fiscal 2003.  This
increase  is  primarily  the  result  of  recording a $2.4 million restructuring
charge  in  the  third  quarter  of  fiscal  2004 offset by higher net sales and
revenues  in  the first nine months of fiscal 2004 as compared to the first nine
months  of  fiscal  2003.   As  a  result  of  adopting  EITF 02-16, the Company
reclassified  approximately $543 thousand of vendor consideration to a reduction
of  cost  of  sales, which would previously have been recorded as a reduction of
selling,  general  and  administrative  expenses.  Excluding  the impact of EITF
02-16,  and  therefore  on  a non-GAAP basis, operating expenses would have been
9.7%  during the first nine months of fiscal 2004 as compared to 9.5% during the
first  nine  months  of  fiscal  2003.  This non-GAAP measurement is included to
provide  a  more  meaningful  comparison  to  prior  periods.

RESTRUCTURING  AND  SEVERANCE  CHARGES.  During  the  third  quarter of 2004, in
connection  with  certain  strategic  initiatives,  the  Company  recorded
restructuring  and  severance charges of $1.0 million.  The restructuring charge
is associated with legacy Pomeroy costs of facilities and processes that have or
will  become  duplicative or redundant as ARC operations are integrated into the
Company.    The  Company  also  recorded  a  non-recurring,  one-time charge for
severance in the amount of $1.4 million related to the retirement of founder and
former  CEO  David  B.  Pomeroy  II.

INCOME  BEFORE  OTHER  EXPENSE  (INCOME) AND INCOME TAX.  Income from operations
decreased $1.1 million, or 25.7%, to $3.1 million in the third quarter of fiscal
2004  from  $4.2  million  in  the  third  quarter of fiscal 2003. The Company's
operating  margin  decreased  to  1.6%  in  the  third quarter of fiscal 2004 as
compared  to  2.6%  in  the  third  quarter  of  fiscal  2003.  This decrease is
primarily due to recording the non-recurring restructuring and severance charges
described  above.

Income  before  other expense (income) and income tax increased $2.0 million, or
19.9%,  to  $11.9  million  in  the  first  nine months of fiscal 2004 from $9.9
million  in the first nine months of fiscal 2003. The Company's operating margin
decreased to 2.2% in the first nine months of fiscal 2004 as compared to 2.3% in
the  first  nine  months  of  fiscal  2003.  This  decrease  is primarily due to
recording  the  restructuring  and  severance  charges described above offset by
increase  in service revenues as a percentage of total revenues and the increase
in  service  gross  margin  as  a  percentage  of  total gross margin due to the
acquisition  of  Alternative  Resources  Corporation.

NET  INTEREST  INCOME (EXPENSE).  Net interest expense was $0.032 million during
the  third  quarter  of fiscal 2004 as compared to net interest income of $0.007
million during the third quarter of fiscal 2003.  This was primarily a result of
increased  borrowings  on  the  credit  facility.


                                       21
<PAGE>
Net  interest expense was $0.001 million in the first nine months of fiscal 2004
compared  to  net  interest  income of $0.02 million in the first nine months of
fiscal  2003.  This  increase  in net interest expense was a result of increased
borrowings under our credit facility and lower interest rates on invested funds.

INCOME  TAXES.  The  Company's effective tax rate was 39.5% in the third quarter
of  fiscal  2004  compared  to  39.0%  in  the  third  quarter  of  fiscal 2003.

The  Company's  effective  tax rate was 39.3% in the first nine months of fiscal
2004  compared  to  39.0%  in  the  first  nine  months  of  fiscal  2003.

NET  INCOME. Net income decreased $0.7 million, or 27.0%, to $1.9 million in the
third  quarter  of  fiscal 2004 from $2.6 million in the third quarter of fiscal
2003  due  to  the  factors  described  above.

Net  income  increased $1.1 million, or 18.9%, to $7.2 million in the first nine
months  of fiscal 2004 from $6.1 million in the first nine months of fiscal 2003
due  to  the  factors  described  above.


                         LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operating activities was $15.9 million in the first nine months
of  fiscal  2004.  Cash  used  in  investing activities was $18.1 million, which
included  payments  of $16.6 million for current and prior year acquisitions and
$1.5  million  for  capital  expenditures. Cash used in financing activities was
$28.4  million,  which  included $31.4 million for payments of acquisition notes
payable  and  $0.5  million  for  the  purchase of treasury stock offset by $2.9
million  of  proceeds  from short-term borrowings, $0.4 million of proceeds from
exercise  of stock options and $0.2 million of proceeds from employee stock plan
purchases.

A  significant  part  of  the  Company's  inventories  is financed by floor plan
arrangements  with  third  parties.  At  October  5, 2004, these lines of credit
totaled  $87.0  million, including $75.0 million with GE Commercial Distribution
Finance  ("GECDF")  and  $10.0  million  with  IBM  Credit  Corporation ("ICC").
Borrowings under the GECDF floor plan arrangements are made on thirty-day notes.
Borrowings  under  the ICC floor plan arrangements are made on either thirty-day
or  sixty-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 rate on these arrangements is
less  than 1.0%. The Company classifies amounts outstanding under the floor plan
arrangements  as  accounts  payable.

The  Company's  financing  of  receivables  is provided through a portion of its
credit  facility with GECDF.  On June 28, 2004, the Company finalized a new $165
million syndicated credit facility with GECDF.  This new $165 million syndicated
credit  facility  has a three-year term and supersedes the $240.0 million credit
facility that was in effect with GECDF prior to the closing of this transaction.
The  new  credit  facility  components  include  a  maximum  of  $75 million for
inventory  financing  and  a  revolver,  collateralized  primarily  by  accounts
receivable, of up to $110 million.  Under the new agreement, the credit facility
provides  a  letter  of  credit facility of $5 million.  The accounts receivable
portion  of  the  credit  facility carries a variable interest rate based on the
London  InterBank  Offering  Rate  ("LIBOR")  and  a  pricing  grid.

As  of  October  5,  2004  the Company had an outstanding balance on the working
capital  component  of  this  facility  of $2.9 million.  The credit facility is
collateralized  by  substantially all of the assets of the Company, except those
assets  that collateralize certain other financing arrangements. Under the terms
of  the  credit facility, the Company is subject to various financial covenants.
Currently,  the  Company  is  in  compliance  with  all  financial  covenants.

The  Company believes that the anticipated cash flow from operations and current
financing  arrangements  will  be  sufficient  to  satisfy the Company's capital
requirements  for the next twelve months. Historically, the Company has financed
acquisitions  using a combination of cash, earn outs, shares of its common stock
and  seller  financing. The Company anticipates that future acquisitions will be
financed  in  a similar manner.  The merger of Alternative Resources Corporation
with  and  into  Pomeroy Acquisition Sub, Inc., a wholly owned subsidiary of the
Company,  completed  on  July  23,  2004  was  financed  using  cash on hand and
borrowings  from  Pomeroy's  existing  line  of  credit.


                                       22
<PAGE>
Aggregated information about the Company's contractual obligations and other off
balance  sheet  commitments as of October 5, 2004 are presented in the following
table:

<TABLE>
<CAPTION>
                                                                          MORE
                                                                         THAN 5
                    TOTAL   YEAR 1   YEAR 2   YEAR 3   YEAR 4   YEAR 5    YEARS
                   -------------------------------------------------------------
<S>                <C>      <C>      <C>      <C>      <C>      <C>      <C>
Acquisition notes  $ 1,162  $   912  $   250  $     -  $     -  $     -  $     -
Operating leases    20,320    5,991    3,979    3,375    3,014    2,719    1,242
                   -------------------------------------------------------------
Total contractual
cash obligations   $21,482  $ 6,903  $ 4,229  $ 3,375  $ 3,014  $ 2,719  $ 1,242
                   =============================================================
</TABLE>

The  operating leases, shown above, are not recorded on the consolidated balance
sheet.  Operating  leases  are  utilized  in  the  normal  course  of  business.


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 cash position, the Company
did  not  experience  a  material  impact  from interest rate risk for the third
quarter  of  fiscal  2004.

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

As  of  October 5, 2004, an evaluation was carried out under the supervision and
with  the  participation  of  the  Company's  management,  including  the  Chief
Executive  Officer  and  Chief  Financial  Officer,  of the effectiveness of our
disclosure  controls  and procedures (as defined in Exchange Act Rules 13a-15(e)
and  15d-15(e)  under  the  Securities  Exchange  Act  of 1934).  Based on their
evaluation,  our  Chief  Executive  Officer  and  Chief  Financial  Officer have
concluded that the Company's disclosure controls and procedures are, to the best
of  their  knowledge,  effective  to  ensure  that  information  required  to be
disclosed  by the Company in reports that it files or submits under the Exchange
Act  is  recorded,  processed,  summarized  and reported within the time periods
specified  in Securities and Exchange Commission rules and forms.  Subsequent to
October  5,  2004,  our Chief Executive Officer and Chief Financial Officer have
concluded  that  there  were  no  significant  changes in the Company's internal
controls  or  in  other  factors  that  could  significantly affect our internal
controls.


                                       23
<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

<TABLE>
<CAPTION>
                         Issuer Purchases of Equity Securities


                                                  (c) Total number    (d) Maximum
                                                     of shares      number of shares
                  (a) Total number  (b) Average     purchased as    that may yet be
                     of shares       price paid   part of publicly  purchased under
Period               purchased       per share     announced plan       the plan
<S>               <C>               <C>           <C>               <C>
7/6/04 - 8/5/04             10,000  $      11.81           423,367                 0
8/6/04 - 9/5/04                  -             -                 -                 -
9/6/04 - 10/5/04                 -             -                 -                 -
                  ------------------------------------------------------------------
Total                       10,000                         423,367                 0
                  ==================================================================
</TABLE>

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 and Reports on Form 8-K

     (a)  Reports on Form 8-K

Item 2.02.  Results of Operations and Financial Condition.

     On  November  11,  2004,  Pomeroy IT Solutions, Inc. issued a press release
announcing financial results for the third quarter and nine months ended October
5,  2004.  A  copy  of  this  press  release is attached hereto as Exhibit 99.1.
Certain  information  in  this  press  release was discussed by Stephen Pomeroy,
Chief  Executive  Officer  and President and Michael Rohrkemper, Chief Financial
Officer  and  Chief Accounting Officer in our third quarter conference call that
was  conducted  following  the  public  issuance  of  the  press  release.

Item 9.01  Financial Statements and Exhibits.
---------------------------------------------

99.1 Press  Release,  dated  November 11, 2004, announcing financial results for
     the  third  quarter  and  nine  months  ended  October  5,  2004.


                                       24
<PAGE>
31.1     Section  302  CEO  Certification

31.2     Section  302  CFO  Certification

32.1     Section  906  CEO  Certification

32.2     Section  906  CFO  Certification



                                     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: November 15, 2004                By: /s/ Michael E. Rohrkemper

                                    --------------------------------------------
                                       Michael E. Rohrkemper
                                       Chief Financial Officer and
                                       Chief Accounting Officer


                                       25
<PAGE>