UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION


                             Washington, D.C. 20549


                                  FORM 10-Q/A
                               (Amendment No. 1)

(Mark One)
(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the quarterly period ended July 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 August 5, 2005 was
12,579,159


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


Part I.     Financial Information
<S>         <C>                    <C>                                        <C>
            Item 1.                Financial Statements:                      Page
                                                                              ----

                                   Consolidated Balance Sheets as of July
                                   5, 2005 (Unaudited) and January 5, 2005      2

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

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

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

                                   Consolidated Statements of Cash Flows
                                   for the Six Months Ended July 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                           25

            Item 2.                Unregistered Sales of Equity Securities
                                   and Use of Proceeds                         25

            Item 3.                Defaults Upon Senior Securities             25

            Item 4.                Submission of Matters to a Vote of
                                   Security Holders                            25

            Item 5.                Other Information                           26

            Item 6.                Exhibits                                    26

SIGNATURES                                                                     27
</TABLE>


<PAGE>
                                EXPLANATORY NOTE


     Pomeroy  IT  Solutions, Inc. (the "Company") is filing this amendment No. 1
(the  "Amendment") to its quarterly report on form 10-Q for the quarterly period
ended  July  5,  2005, originally filed on August 15, 2005 (the "original filing
date"),  As  described  in Note 12 to the Consolidated Financial Statements, the
Company  is  restating its previously filed consolidated financial statements as
of  and  for  the three months and six months ended July 5, 2005 Form 10-Q dated
August  15,  2005, Subsequent to the filing of the Company's Quarterly Report on
Form  10-Q  for  the quarterly period ended July 5, 2005, the Company determined
that  there  were  accounting  errors  related  to  service  revenue  and  cost
calculations  and  capitalized  costs  and  depreciation  expense  related  to
internal-use  software.

     The  Company  reviewed  the  service  revenue and cost calculations and has
concluded  that  they  were  improperly recorded as of and for the three and six
months  ended  July  5, 2005.  The errors primarily related to problems with new
information  technology  systems  and  processes for service revenues and costs,
which were implemented during the quarterly period ended April 5, 2005.  The new
information  technology  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 its fiscal year ended January
5,  2005.  In  addition,  the  Company  has  reviewed  and adjusted depreciation
expense  related  to  internal  use  software.

     During  the fourth quarter of 2005, the Company re-aligned the structure of
its  internal  organization  and  began  operating  under  one business segment.
Previously,  the  Company  operated  under  three  operating segments: products,
services  and leasing.  The aggregation of segments reflects the manner in which
management  and  the  board  of  directors  now  evaluate  operating  results in
accordance with Statement of Financial Accounting Standards No.131, "Disclosures
about  Segments  of  an  Enterprise  and Related Information".  The consolidated
financial  statements  for the three and six months ended July 5, 2005 contained
in  this  Amendment  have  been  amended  to  reflect  this  change.

The  restatement  affects  disclosures  and  tabular  amounts  in Part I Item 1,
Financial  Statements  and  Item  2,  Management's  Discussion  and  Analysis of
Financial  Condition  and Results of Operations. This Amendment speaks as of the
original  filing  date.  This  Amendment  should  be  read  together  with other
documents that the Company has filed with the Securities and Exchange Commission
subsequent  to  the  original  filing.


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



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

Current Assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . .  $               4,218  $              13,108
Certificates of deposit. . . . . . . . . . . . . . . . . . . .                  4,595                  4,561

Accounts receivable:
  Trade, less allowance of  $2,031 at July 5, 2005 and $1,462
    at January 5, 2005 . . . . . . . . . . . . . . . . . . . .                142,662                143,113
  Vendor receivables, less allowance of $100 at
    July 5, 2005 and January 5, 2005 . . . . . . . . . . . . .                  7,301                  5,790
  Net investment in leases . . . . . . . . . . . . . . . . . .                  2,480                  3,814
  Other. . . . . . . . . . . . . . . . . . . . . . . . . . . .                  2,134                  2,902
                                                                ---------------------  ---------------------
    Total receivables. . . . . . . . . . . . . . . . . . . . .                154,577                155,619
                                                                ---------------------  ---------------------

Inventories. . . . . . . . . . . . . . . . . . . . . . . . . .                 18,206                 17,188
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  8,672                 10,302
                                                                ---------------------  ---------------------
    Total current assets . . . . . . . . . . . . . . . . . . .                190,268                200,778
                                                                ---------------------  ---------------------

Equipment and leasehold improvements:
  Furniture, fixtures and equipment. . . . . . . . . . . . . .                 30,513                 30,113
  Leasehold improvements . . . . . . . . . . . . . . . . . . .                  6,474                  6,187
                                                                ---------------------  ---------------------
    Total. . . . . . . . . . . . . . . . . . . . . . . . . . .                 36,987                 36,300

  Less accumulated depreciation. . . . . . . . . . . . . . . .                 22,932                 21,061
                                                                ---------------------  ---------------------
    Net equipment and leasehold improvements . . . . . . . . .                 14,055                 15,239
                                                                ---------------------  ---------------------

Net investment in leases, net of current portion . . . . . . .                  1,741                  1,650
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . .                110,514                109,913
Intangible assets, net . . . . . . . . . . . . . . . . . . . .                  3,242                  3,702
Other assets . . . . . . . . . . . . . . . . . . . . . . . . .                  2,593                  1,606
                                                                ---------------------  ---------------------
    Total assets . . . . . . . . . . . . . . . . . . . . . . .  $             322,413  $             332,888
                                                                =====================  =====================
</TABLE>

                 See notes to consolidated financial statements.


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


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

Current Liabilities:
Current portion of notes payable . . . . . . . . . . . . . .  $                   -  $                912
Short-term borrowings. . . . . . . . . . . . . . . . . . . .                 17,652                20,153
Accounts payable . . . . . . . . . . . . . . . . . . . . . .                 67,996                72,656
Deferred revenue . . . . . . . . . . . . . . . . . . . . . .                  3,103                 3,490
Employee compensation and benefits . . . . . . . . . . . . .                  4,263                 8,245
Accrued restructuring and severance charges. . . . . . . . .                  4,111                 7,585
Other current liabilities. . . . . . . . . . . . . . . . . .                  5,985                 6,778
                                                              ---------------------  ---------------------
    Total current liabilities. . . . . . . . . . . . . . . .                103,110               119,819
                                                              ---------------------  ---------------------

Notes payable, less current portion. . . . . . . . . . . . .                      -                   250
Deferred income taxes. . . . . . . . . . . . . . . . . . . .                  1,597                    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
    (13,368 and 13,188 shares issued at July 5, 2005 and
    January 5, 2005, respectively) . . . . . . . . . . . . .                    134                   132
  Paid-in capital. . . . . . . . . . . . . . . . . . . . . .                 87,556                85,231
  Accumulated other comprehensive income (loss). . . . . . .                     24                   (78)
  Retained earnings. . . . . . . . . . . . . . . . . . . . .                139,114               136,183
                                                              ---------------------  ---------------------
                                                                            226,828               221,468

  Less treasury stock, at cost ( 810 and 778 shares at July 5
    2005 and January 5, 2005, respectively). . . . . . . . .                  9,122                 8,746
                                                              ---------------------  ---------------------
      Total equity . . . . . . . . . . . . . . . . . . . . .                217,706               212,722
                                                              ---------------------  ---------------------
      Total liabilities and equity . . . . . . . . . . . . .  $             322,413  $            332,888
                                                              =====================  =====================
</TABLE>

                 See notes to consolidated financial statements.


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

(in thousands,except earnings per share data)               Three Months Ended
                                               --------------------------------------------
                                                      July 5,                July 5,
                                                       2005                   2004
                                               ---------------------  ---------------------
                                               (Restated-Unaudited)        (Unaudited)
<S>                                            <C>                    <C>
Net sales and service revenues:
  Sales-equipment, supplies and leasing        $             135,093  $            143,722
  Service                                                     56,932                34,433
                                               ---------------------  ---------------------
    Total net sales and service revenues                     192,025               178,155
                                               ---------------------  ---------------------

Cost of sales and service:
  Sales-equipment, supplies and leasing                      124,956               133,444
  Service                                                     41,922                24,980
                                               ---------------------  ---------------------
    Total cost of sales and service                          166,878               158,424
                                               ---------------------  ---------------------

    Gross profit                                              25,147                19,731
                                               ---------------------  ---------------------

Operating expenses:
  Selling, general and administrative                         18,748                12,785
  Rent expense                                                   790                   777
  Depreciation                                                 1,236                 1,027
  Amortization                                                   192                    39
                                               ---------------------  ---------------------
    Total operating expenses                                  20,966                14,628
                                               ---------------------  ---------------------

Income from operations                                         4,181                 5,103
                                               ---------------------  ---------------------

Other expense (income):
  Interest , net                                                 206                   (19)
  Other                                                            -                    21
                                               ---------------------  ---------------------
    Total other expense (income)                                 206                     2
                                               ---------------------  ---------------------

Income before income tax                                       3,975                 5,101
Income tax expense                                             1,610                 2,015
                                               ---------------------  ---------------------
Net income and comprehensive income            $               2,365  $              3,086
                                               =====================  =====================

Weighted average shares outstanding:
  Basic                                                       12,573                12,258
                                               =====================  =====================
  Diluted                                                     12,656                12,401
                                               =====================  =====================

Earnings per common share:
  Basic                                        $                0.19  $               0.25
                                               =====================  =====================
  Diluted                                      $                0.19  $               0.25
                                               =====================  =====================
</TABLE>

                 See notes to consolidated financial statements.


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

(in thousands, except earnings per share data)               Six Months Ended
                                                --------------------------------------------
                                                       July 5,                July 5,
                                                        2005                   2004
                                                ---------------------  ---------------------
                                                (Restated-Unaudited)        (Unaudited)
<S>                                             <C>                    <C>
Net sales and service revenues:
  Sales-equipment, supplies and leasing         $             246,336  $            268,321
  Service                                                     111,521                65,048
                                                ---------------------  ---------------------
    Total net sales and service revenues                      357,857               333,369
                                                ---------------------  ---------------------

Cost of sales and service:
  Sales-equipment, supplies and leasing                       227,380               248,017
  Service                                                      82,514                47,252
                                                ---------------------  ---------------------
    Total cost of sales and service                           309,894               295,269
                                                ---------------------  ---------------------

Gross profit                                                   47,963                38,100
                                                ---------------------  ---------------------

Operating expenses:
  Selling, general and administrative                          37,856                25,752
  Rent expense                                                  1,726                 1,545
  Depreciation                                                  2,437                 1,916
  Amortization                                                    460                    79
  Restructuring and severance charges                             132                     -
                                                ---------------------  ---------------------
    Total operating expenses                                   42,611                29,292
                                                ---------------------  ---------------------

Income from operations                                          5,352                 8,808
                                                ---------------------  ---------------------

Other expense (income):
  Interest, net                                                   427                   (31)
  Other                                                             1                    23
                                                ---------------------  ---------------------
    Total other expense (income)                                  428                    (8)
                                                ---------------------  ---------------------

Income  before income tax                                       4,924                 8,816
Income tax expense                                              1,994                 3,454
                                                ---------------------  ---------------------

Net income                                      $               2,930  $              5,362
                                                =====================  =====================

Weighted average shares outstanding:
  Basic                                                        12,521                12,245
                                                =====================  =====================
  Diluted                                                      12,661                12,362
                                                =====================  =====================

Earnings per common share:
  Basic                                         $                0.23  $               0.44
                                                =====================  =====================
  Diluted                                       $                0.23  $               0.43
                                                =====================  =====================
</TABLE>

                 See notes to consolidated financial statements.


                                        5
<PAGE>
                           POMEROY IT SOLUTIONS, INC.
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
(in thousands)                                                      Six Months Ended
                                                       --------------------------------------------
                                                              July 5,                July 5,
                                                               2005                   2004
                                                       ---------------------  ---------------------
                                                       (Restated-Unaudited)        (Unaudited)
<S>                                                    <C>                    <C>
Net income. . . . . . . . . . . . . . . . . . . . . .  $               2,930  $               5,362
Other comprehensive income:
  Foreign currency translation adjustment, net of tax                    102                      -
                                                       ---------------------  ---------------------

Comprehensive income. . . . . . . . . . . . . . . . .  $               3,032  $               5,362
                                                       =====================  =====================
</TABLE>

                 See notes to consolidated financial statements.


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


(in thousands)                                                     Six Months Ended
                                                              --------------------------
                                                                July 5,       July 5,
                                                                  2005          2004
                                                              ------------  ------------
                                                               (Restated-   (Unaudited)
                                                               Unaudited)
<S>                                                           <C>           <C>
Cash flows from operating activities:
  Net income . . . . . . . . . . . . . . . . . . . . . . . .  $     2,930   $     5,362
  Adjustments to reconcile net income to net cash
    from operating activities:
  Depreciation . . . . . . . . . . . . . . . . . . . . . . .        2,437         1,916
  Amortization . . . . . . . . . . . . . . . . . . . . . . .          460            79
  Restructuring and severance charges. . . . . . . . . . . .          132             -
  Deferred income taxes. . . . . . . . . . . . . . . . . . .        2,641          (395)
  Loss on sale of fixed assets . . . . . . . . . . . . . . .            8            22
  Changes in working capital accounts, net of
    effects of acquisitions:
    Accounts receivable. . . . . . . . . . . . . . . . . . .       (1,765)          668
    Inventories. . . . . . . . . . . . . . . . . . . . . . .       (1,841)       (5,793)
    Other current assets . . . . . . . . . . . . . . . . . .          489          (462)
    Net investment in leases . . . . . . . . . . . . . . . .        2,413           254
    Accounts payable . . . . . . . . . . . . . . . . . . . .       (4,065)        5,332
    Deferred revenue . . . . . . . . . . . . . . . . . . . .         (387)         (908)
    Income tax payable . . . . . . . . . . . . . . . . . . .           18           290
    Employee compensation and benefits . . . . . . . . . . .       (3,982)         (286)
    Other, net . . . . . . . . . . . . . . . . . . . . . . .       (5,068)        1,133
                                                              ------------  ------------
  Net operating activities . . . . . . . . . . . . . . . . .       (5,580)        7,212
                                                              ------------  ------------
Cash flows from investing activities:
  Capital expenditures . . . . . . . . . . . . . . . . . . .       (1,033)       (1,062)
  Proceeds from sale of fixed assets . . . . . . . . . . . .            6            20
  Purchases of certificates of deposit . . . . . . . . . . .          (34)       (1,517)
  Acquisition of businesses, net of
    cash acquired. . . . . . . . . . . . . . . . . . . . . .       (1,139)         (541)
                                                              ------------  ------------
  Net investing activities . . . . . . . . . . . . . . . . .       (2,200)       (3,100)
                                                              ------------  ------------
Cash flows from financing activities:
  Payments of notes payable. . . . . . . . . . . . . . . . .         (662)         (663)
  Proceeds from exercise of stock options
    and related tax benefit. . . . . . . . . . . . . . . . .        2,327           396
  Purchase of treasury stock . . . . . . . . . . . . . . . .         (376)         (349)
  Proceeds from employee stock purchase plan . . . . . . . .            -           160
  Net payments of short-term borrowings. . . . . . . . . . .       (2,501)            -
                                                              ------------  ------------
  Net financing activities . . . . . . . . . . . . . . . . .       (1,212)         (456)
                                                              ------------  ------------
Effect of exchange rate changes on cash and cash equivalents          102             -
                                                              ------------  ------------
Change in cash and cash equivalents. . . . . . . . . . . . .       (8,890)        3,656
Cash and cash equivalents:
  Beginning of period. . . . . . . . . . . . . . . . . . . .       13,108        37,183
                                                              ------------  ------------
  End of period. . . . . . . . . . . . . . . . . . . . . . .  $     4,218   $    40,839
                                                              ============  ============
</TABLE>

                 See notes to consolidated financial statements.


                                        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 six-month period ended July 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  are  evaluating  the
     requirements  of  SFAS  123R  and  have  not  yet  determined the method of
     adoption  or  the  effect of adopting SFAS 123R, and we have not determined
     whether the adoption will result in amounts that are similar to 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.


                                        8
<PAGE>
     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 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 July 5, 2005, the
     Company  had  an outstanding balance under the Company's credit facility of
     $17.7  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 maximum net loss after tax. As of July 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 July 5,
share amounts)                                     2005           2004
                                              --------------  -------------
                                                (Restated)
<S>                                           <C>             <C>
Net income - as reported                      $        2,365  $       3,086
Stock-based compensation expense-net of tax              266            261
                                              --------------  -------------
Net income - pro forma                        $        2,099  $       2,825
                                              ==============  =============
Net income per common share - as reported
  Basic                                       $         0.19  $        0.25
                                              ==============  =============
  Diluted                                     $         0.19  $        0.25
                                              ==============  =============
Net income per common share - pro forma
  Basic                                       $         0.17  $        0.23
                                              ==============  =============
  Diluted                                     $         0.17  $        0.23
                                              ==============  =============
</TABLE>

<TABLE>
<CAPTION>
(in thousands, except per                       Six Months Ended July 5,
share amounts)                                    2005           2004
                                              ------------  --------------
                                               (Restated)
<S>                                           <C>           <C>
Net income - as reported                      $      2,930  $        5,362
Stock-based compensation expense-net of tax          1,358             800
                                              ------------  --------------
Net income - pro forma                        $      1,572  $        4,562
                                              ============  ==============
Net income per common share - as reported
  Basic                                       $       0.23  $         0.44
                                              ============  ==============
  Diluted                                     $       0.23  $         0.43
                                              ============  ==============
Net income per common share - pro forma
  Basic                                       $       0.13  $         0.37
                                              ============  ==============
  Diluted                                     $       0.12  $         0.37
                                              ============  ==============
</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)


                                       10
<PAGE>
<TABLE>
<CAPTION>
                               Three Months Ended July 5,
                         ---------------------------------------
                               2005                 2004
                         -------------------  ------------------
                                  Per Share           Per Share
                         Shares    Amount     Shares    Amount
                         ------  -----------  ------  ----------
                                 (Restated)
<S>                      <C>     <C>          <C>     <C>
     Basic EPS           12,573  $      0.19  12,258  $     0.25
     Effect of dilutive
       stock options         83            -     143           -
                         ------  -----------  ------  ----------
     Diluted EPS         12,656  $      0.19  12,401  $     0.25
                         ======  ===========  ======  ==========
</TABLE>

<TABLE>
<CAPTION>
                                  Six Months Ended July 5,
                         ----------------------------------------
                                 2005                2004
                         -------------------  -------------------
                                  Per Share            Per Share
                         Shares    Amount     Shares    Amount
                         ------  -----------  ------  -----------
                                 (Restated)
<S>                      <C>     <C>          <C>     <C>
     Basic EPS           12,521  $      0.23  12,245  $     0.44
     Effect of dilutive
       stock options        140            -     117       (0.01)
                         ------  -----------  ------  -----------
     Diluted EPS         12,661  $      0.23  12,362  $     0.43
                         ======  ===========  ======  ===========
</TABLE>


6.   Goodwill and Long-Lived Assets

     Intangible assets with definite lives are amortized using straight-line and
     accelerated  methods over their estimated useful lives. The following table
     provides  a  summary of the Company's intangible assets with definite lives
     as  of  July  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
                                7/5/2005     7/5/2005     7/5/2005   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  $       1,841  $     183  $   2,024  $       1,769  $     255
  Customer lists                    2,877            861      2,016      2,877            559      2,318
  Other intangibles                 1,200            157      1,043      1,200             71      1,129
                                ---------  -------------  ---------  ---------  -------------  ---------
  Total amortized intangibles   $   6,101  $       2,859  $   3,242  $   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 July 5, 2005,
     amortization  expense  related  to intangible assets was $192 thousand. For
     the  quarter ended July 5, 2004, amortization expense related to intangible
     assets  was  $39  thousand.  For  the  six  months  ended  July  5,  2005,
     amortization  expense  related to intangible assets with definite lives was
     $460  thousand. For the six months ended July 5, 2004, amortization expense
     related  to  intangible  assets  with  definite  lives  was  $79  thousand.


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

<TABLE>
<CAPTION>
<S>             <C>     <C>
(in thousands)
Fiscal Years:
2005            $  304  July 6, 2005 - January 5, 2006
2006               543
2007               504
2008               461
2009               421
2010 +           1,009
                ------
         Total  $3,242
                ======
</TABLE>

     The  change in the net carrying amount of goodwill for the six months ended
     July 5, 2005 is as follows:

<TABLE>
<CAPTION>

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


7.   Supplemental Cash Flow Disclosures

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

<TABLE>
<CAPTION>
(in thousands)                             Six Months Ended July 5,
                                          -------------------------
                                              2005         2004
                                          ------------  -----------
<S>                                       <C>           <C>
     Interest paid                        $       520   $       162
                                          ============  ===========
     Income taxes paid                    $     1,088   $     2,364
                                          ============  ===========
     Adjustments to purchase price
       of acquired assets and goodwill    $      (538)  $        70
                                          ============  ===========

     Business combinations accounted for
     as purchases:
       Assets acquired                    $     1,139   $       541
       Liabilities assumed                          -             -
                                          -------------------------
       Net cash paid                      $     1,139   $       541
                                          =========================
</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.


                                       12
<PAGE>
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.

11.  Restructuring and Severance Charges

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

     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
     will  continue  to  serve  as  Chairman  of  the Board and as a consultant.


                                       13
<PAGE>
     As  of  July  5,  2005,  the  restructuring  and  severance  charge accrual
     consisted  of  the  following:

<TABLE>
<CAPTION>
                          Total Initial   Cash        Accrued balance
(in thousands)            Accrual         payments    at July 5, 2005
                          --------------------------------------------
<S>                       <C>             <C>         <C>
Severance                 $        1,979  $  (1,700)  $            279
                          --------------------------------------------
Facility consolidations              576       (345)               231
                          --------------------------------------------
                          $        2,555  $  (2,045)  $            510
                          ============================================
</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  July 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  will  be recorded as an
     increase or decrease in goodwill with any increases in estimates thereafter
     charged  to  operations.

<TABLE>
<CAPTION>
                          Total Initial   Cash        Liability balance
(in thousands)            Liability       payments    at July 5, 2005
                          ----------------------------------------------
<S>                       <C>             <C>         <C>
Severance                 $        2,682  $  (2,256)  $              426
                          ----------------------------------------------
Facility consolidations            3,715       (605)               3,110
                          ----------------------------------------------
                          $        6,397  $  (2,861)  $            3,536
                          ==============================================
</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.

     As  of  July  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 as      Cash     Balance at July 5,
                                        of 7/23/04       payments          2005
                                     --------------------------------------------------
<S>                                  <C>                <C>         <C>
          Severance                  $             647  $    (647)  $                 -
                                     --------------------------------------------------
                                     $             647  $    (647)  $                 -
                                     ==================================================


          Fiscal 2002 Restructuring  Charge

                                     Total Accrual as      Cash      Balance at July 5,
                                        of 7/23/04       payments           2005
                                     --------------------------------------------------

          Facility consolidations    $             756  $    (722)  $                34
                                     --------------------------------------------------
          Other charges                            696       (666)                   31
                                     --------------------------------------------------
                                     $           1,452  $  (1,388)  $                65
                                     ==================================================
</TABLE>


                                       14
<PAGE>
12.  Restatement

     Subsequent to the filing of the Company's Quarterly Report on Form 10-Q for
     the  quarterly period ended July 5, 2005, the Company determined that there
     were accounting errors related to service revenue and cost calculations, In
     addition,  the  Company  has  reviewed  and  adjusted  depreciation expense
     related  to  internal  use  software.

     The  following  table  sets forth the consolidated statements of income and
     selected  balance sheet data previously reported on Form 10-Q for the three
     months  and  six  months  ended  July  5,  2005,  and the restated amounts:

<TABLE>
<CAPTION>
Pomeroy IT Solutions, Inc.
Consolidated Statements of Income
(in thousands, except earnings per share data)

                                        Three months ended       Six months ended
                                           July 5, 2005            July 5, 2005
                                      ----------------------  ----------------------
                                      Previously              Previously
                                       Reported    Restated    Reported    Restated
                                      -----------  ---------  -----------  ---------
<S>                                   <C>          <C>        <C>          <C>
Total net sales and service revenues  $   193,671  $ 192,025  $   359,261  $ 357,857
Total cost of sales and service           167,449    166,878      308,603    309,894
                                      -----------  ---------  -----------  ---------
Gross profit                               26,222     25,147       50,658     47,963
Total operating expenses                   20,788     20,966       42,061     42,611
                                      -----------  ---------  -----------  ---------
Income from operations                      5,434      4,181        8,597      5,352
Total other expense                           207        206          428        428
                                      -----------  ---------  -----------  ---------
Income before income tax                    5,227      3,975        8,169      4,924
Income tax expense                          2,116      1,610        3,308      1,994
                                      -----------  ---------  -----------  ---------
Net income                            $     3,111  $   2,365  $     4,861  $   2,930
                                      ===========  =========  ===========  =========

Earnings per share:
Basic                                 $      0.25  $    0.19  $      0.39  $    0.23
                                      ===========  =========  ===========  =========
Diluted                               $      0.25  $    0.19  $      0.38  $    0.23
                                      ===========  =========  ===========  =========
</TABLE>

<TABLE>
<CAPTION>
Pomeroy IT Solutions, Inc.
Selected Consolidated Balance Sheet Data
As of July 5, 2005
(in thousands)

                              Previously
                               Reported    Restated
                              -----------  ---------
<S>                           <C>          <C>
Total current assets          $   190,209  $ 190,268
                              -----------  ---------
Total assets                  $   322,741  $ 322,413
                              ===========  =========

Total current liabilities     $   102,601  $ 103,110
Total long-term liabilities           504      1,597
Total equity                      219,636    217,706
                              -----------  ---------
Total liabilities and equity  $   322,741  $ 322,413
                              ===========  =========
</TABLE>


                                       15
<PAGE>
13.  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.


                                       16
<PAGE>
ITEM 2-MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Restatement

This  section has been updated to give effect to the restatement as discussed in
Note  12  to  the Notes to Consolidated Financial Statements included in Item 1.


         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.


                                       17
<PAGE>
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  service  revenues:

<TABLE>
<CAPTION>
                                                                  Percentage of net sales and service revenues
                                          --------------------------------------------------------------------------------------
Financial Results                                    Three months ended                           Six months ended
                                                            July 5,                                    July 5,
                                                  2005                  2004                  2005                  2004
                                          --------------------  --------------------  --------------------  --------------------
                                               (Restated-           (Unaudited)            (Restated-           (Unaudited)
                                               Unaudited)                                  Unaudited)
<S>                                       <C>                   <C>                   <C>                   <C>
Net sales and service revenues:
  Sales-equipment, supplies and leasing                  70.4%                 80.7%                 68.8%                 80.5%
  Service                                                29.6%                 19.3%                 31.2%                 19.5%
                                          --------------------  --------------------  --------------------  --------------------
    Total net sales and service revenues                100.0%                100.0%                100.0%                100.0%
                                          ====================  ====================  ====================  ====================

Cost of sales and service:
  Sales-equipment, supplies and leasing                  65.1%                 74.9%                 63.5%                 74.4%
  Service                                                21.8%                 14.0%                 23.1%                 14.2%
                                          --------------------  --------------------  --------------------  --------------------
    Total cost of sales and service                      86.9%                 88.9%                 86.6%                 88.6%
                                          ====================  ====================  ====================  ====================

      Gross profit                                       13.1%                 11.1%                 13.4%                 11.4%
                                          --------------------  --------------------  --------------------  --------------------

Operating expenses:
  Selling, general and administrative                     9.8%                  7.2%                 10.6%                  7.7%
  Rent expense                                            0.4%                  0.4%                  0.5%                  0.5%
  Depreciation                                            0.6%                  0.6%                  0.7%                  0.6%
  Amortization                                            0.1%                  0.0%                  0.1%                  0.0%
                                          --------------------  --------------------  --------------------  --------------------
      Total operating expenses                           10.9%                  8.2%                 11.9%                  8.8%
                                          --------------------  --------------------  --------------------  --------------------

Income from operations                                    2.2%                  2.9%                  1.5%                  2.6%

Net other expense                                         0.1%                  0.0%                  0.1%                  0.0%
                                          --------------------  --------------------  --------------------  --------------------

Income  before income tax                                 2.1%                  2.9%                  1.4%                  2.6%
Income tax expense                                        0.9%                  1.2%                  0.6%                  1.0%

                                          --------------------  --------------------  --------------------  --------------------
Net income                                                1.2%                  1.7%                  0.8%                  1.6%
                                          ====================  ====================  ====================  ====================
</TABLE>


                                       18
<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
increased  $13.8  million,  or  7.7%, to $192.0 million in the second quarter of
fiscal  2005  from  $178.2 million in the second quarter of fiscal 2004. Product
sales  decreased  $8.6 million, or 6.0%, to $135.1 million in the second quarter
of  fiscal  2005  from $143.7 million in the second quarter of fiscal 2004. This
decrease  is  due  to  year  over  year  decline as a result of reductions in IT
spending.  Service  revenues increased $22.5 million, or 65.4%, to $56.9 million
in the second quarter of fiscal 2005 from $34.4 million in the second quarter of
fiscal year 2004. This increase reflects both organic growth and the acquisition
of  Alternative  Resources  Corporation  ("ARC")  on  July  23,  2004.

Total net sales and service revenues increased $24.5 million, or 7.3%, to $357.9
million  in the first six months of fiscal 2005 from $333.4 million in the first
six  months of fiscal 2004.   Product sales decreased $22.0 million, or 8.2%, to
$246.3 million in the first six months of fiscal 2005 from $268.3 million in the
first  six  months of fiscal 2004.  Service revenues increased $46.5 million, or
71.5%,  to  $111.5  million  in  the  first six months of fiscal 2005 from $65.0
million  in  the  first  six  months  of  fiscal  year  2004.

GROSS PROFIT. Gross profit increased $5.4 million, or 27.4%, to $25.1 million in
the  second  quarter  of fiscal 2005 from $19.7 million in the second quarter of
fiscal  2004. The increase resulted primarily from increases in service revenues
as  a  result  of  the  acquisition  of  ARC.  Gross  profit, as a percentage of
revenue,  increased to 13.1% in the second quarter of fiscal 2005 as compared to
11.1%  in  the  second  quarter  of  fiscal  2004.  The increase in gross margin
percentage resulted primarily from a change in product/service mix, that yielded
a  higher  gross margin.  The product/service mix change can be attributed to an
increase  in  higher  margin  service  revenues  primarily  as  a  result of the
acquisition  of ARC. Going forward the Company will continue to be aggressive in
its  pricing  in order to increase market share, which could have an unfavorable
impact on overall gross margin in the future.    The Company expects to continue
increasing  the  breadth and depth of its offerings, which will have a continued
impact  on  gross margin. Factors that may have an impact on gross margin in the
future  include changes in personnel utilization rates, the mix of products sold
and  services  provided,  start-up costs on large service contracts, a change in
unit  prices,  the  percentage  of  sales  with lower-margin customers,  and the
Company's  decision  to  aggressively  price  certain  products  and  services.

Gross profit increased $9.9 million, or 26.0%, to $48.0 million in the first six
months of fiscal 2005 from $38.1 million in the first six months of fiscal 2004.
The increase was primarily due to increased total net sales and service revenues
offset  somewhat  by  lower  product  gross  profit in 2005.  Gross profit, as a
percentage of revenue, increased to 13.4% in the first six months of fiscal 2005
as  compared  to  11.4% in the first six months of fiscal 2004.  The increase in
gross margin percentage resulted primarily from a change in product/service mix,
that  yielded  a  higher  gross  margin.  The  product/service mix change can be
attributed primarily to the acquisition of ARC.  On a forward looking basis, the
Company  expects  to  be  aggressive in it's pricing in order to increase market
share,  which  could  have  an  unfavorable  impact  on  overall  gross  margin.
Additionally,  the  Company expects to continue increasing the breadth and depth
of  its offerings, which will have a continued favorable impact on gross margin.
Factors that may have an impact on gross margin in the future include changes in
personnel  utilization  rates, the mix of products sold and services provided, a
change  in unit prices, the percentage of sales with lower-margin customers, and
the  Company's  decision  to  aggressively  price certain products and services.

OPERATING  EXPENSES.  Selling,  general  and  administrative expenses (including
rent  expense) expressed as a percentage of total net sales and service revenues
increased  to 10.2% in the second quarter of fiscal 2005 from 7.6% in the second
quarter  of  fiscal 2004.  Total operating expenses expressed as a percentage of
total net sales and service revenues increased to 10.9% in the second quarter of
fiscal  2005  from 8.2% in the second quarter of fiscal 2004.  The increases are
primarily  attributable  to  increased  payroll  costs  and  related  benefits,
resulting  from  the  acquisition  of  ARC  in  2004.


                                       19
<PAGE>
Selling,  general and administrative expenses (including rent expense) expressed
as  a  percentage  of total net sales and service revenues increased to 11.1% in
the  first six months of fiscal 2005 from 8.2% in the first six months of fiscal
2004.  Total operating expenses expressed as a percentage of total net sales and
revenues  increased to 11.9% in the first six months of fiscal 2005 from 8.8% in
the  first six months of fiscal 2004.   The increases are primarily attributable
to  increased payroll costs and related benefits, resulting from the acquisition
of  ARC  in  2004.

INCOME  FROM  OPERATIONS.  Income  from  operations  decreased  $0.9 million, or
17.6%, to $4.2 million in the second quarter of fiscal 2005 from $5.1 million in
the  second  quarter of fiscal 2004. The Company's operating margin decreased to
2.2%  in  the  second  quarter  of fiscal 2005 as compared to 2.9% in the second
quarter  of fiscal 2004.  This decrease is a result of the increase in operating
expenses.

Income  from operations decreased $3.4 million, or 38.6%, to $5.4 million in the
first  six  months  of  fiscal 2005 from $8.8 million in the first six months of
fiscal  2004.  The Company's operating margin decreased to 1.5% in the first six
months  of  fiscal  2005  as  compared to 2.6% in the first six months of fiscal
2004.  This  decrease  is  primarily  due to the increase in operating expenses.

INTEREST  INCOME/EXPENSE.  Net  interest  expense  was  $206 thousand during the
second quarter of fiscal 2005 as compared to net interest income of $19 thousand
during second quarter of fiscal 2004.  This increase in net interest expense was
a  result  of  increased borrowings under our credit facility and lower interest
rates  on  invested  funds.

Net  interest  expense  was $427 thousand in the first six months of fiscal 2005
compared  to  net  interest  income  of  $31 thousand in the first six months of
fiscal  2004.   This  increase in net interest expense was a result of increased
borrowings  under  our  credit  facility.

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

The  Company's  effective  income  tax rate was 40.5% in the first six months of
fiscal  2005  compared  to  39.2%  in the first six months of fiscal 2004.  This
increase  was principally related to the increased rate in calculating state and
local  income  taxes.

NET  INCOME. Net income decreased $0.7 million, or 22.6%, to $2.4 million in the
second  quarter of fiscal 2005 from $3.1 million in the second quarter of fiscal
2004  due  to  the  factors  described  above.

Net  income  decreased  $2.4 million, or 45.3%, to $2.9 million in the first six
months  of  fiscal 2005 from $5.4 million in the first six months of fiscal 2004
due  to  the  factors  described  above.


                                       20
<PAGE>
                        LIQUIDITY AND CAPITAL RESOURCES

Cash  used  in  operating activities was $5.6 million in the first six months of
fiscal  2005. Cash used in investing activities was $2.2 million, which included
$1.1  million  for  prior  year  acquisitions  and  $1.0  million  for  capital
expenditures.  Cash used in financing activities was $1.2 million which included
$2.5  million  for  repayment  of  short-term  borrowings,  $0.4 million for the
purchase of treasury stock and $0.7 million for payments of notes payable offset
by  $2.3  million  of  proceeds  from  the  exercise  of  stock  options.

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 change 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 stock of 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.

Operating cash flows used in the six months ended July 5, 2005 were $5.6 million
as  compared  to cash flows provided by operating activities of $7.2 million for
the  corresponding  period  of  fiscal  2004.  The  decrease  in cash flows from
operating  activities  in  the  first six months of 2005 resulted primarily from
increases  in  inventory,  slower  collection  of trade accounts receivables and
timing  of  payments  on  accounts  payable.  In  addition  acquisition-related
expenditures  were  made  for  restructuring  charges  (primarily  facility
consolidation)  and  payment  of  year-end  employee  compensation,  bonuses and
severance.

A  significant  part  of  the  Company's  inventories are financed by floor plan
arrangements  with third parties. At July 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"). 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  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 July 5,
2005,  the adjusted LIBOR rate was 5.34%.  This credit facility expires June 28,
2007.

As  of  July 5, 2005, the Company had an outstanding balance under the Company's
credit  facility  of  $17.7  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


                                       21
<PAGE>
subject  to various financial covenants.  As of July 5, 2005 the Company was not
in  violation  of  any  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, deferred earn-out payments, shares of
its  Common  Stock  and  seller  financing.  The Company anticipates that future
acquisitions  will  be  financed  in  a  similar  manner.

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.


                                       22
<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 second
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  a  result  of the identified material weaknesses and subsequently identified
errors  related  service  revenue  and  cost calculations, the Company is taking
steps  to  enhance its internal control over financial reporting in an effort to
prevent  a  recurrence  of  the  errors  which  led  to  the restatements of the
Company's consolidated financial statements for the quarters ended April 5, 2005
and  July  5,2005. The Audit Committee and management have discussed the matters
in  detail  with Pomeroy's auditor as part of their efforts to enhance Pomeroy's
internal controls over financial reporting.  Management has developed a plan for
addressing  each  of  the  material weaknesses; however, as of July 5, 2005, the
material  weaknesses and subsequently identified errors  had 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  July  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 and
subsequently  identified  errors, the financial statements reported on Form 10-Q
for  the  fiscal  quarter  ended  July  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

Pomeroy IT Solutions, Inc. acquired Alternative Resources Corporation ("ARC") in
July  of 2004. As previously disclosed in the Company's Form 10-K/A for the year
ended  January 5, 2005, ARC, whose core competency was the staffing of technical
resources  for  customers, was excluded from management's assessment of internal
control  over  financial reporting. During the three-month period ended April 5,
2005,  the  integration  of  the two companies was substantially completed. This
integration  involved  implementing  a  packaged  resource


                                       23
<PAGE>
management  job  order  application, and interfacing it with Pomeroy's financial
and payroll legacy systems.   As of July 5, 2005, this system had not been fully
tested  from  an internal control perspective. However, management believes that
testing  of  these  controls  may  reveal  material  weaknesses.


                                       24
<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.

<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>
4/6/05 - 5/5/05                 -  $          -                 -           100,000
5/6/05 - 6/5/05            27,400  $      12.18            27,400            72,600
6/6/05 - 7/5/05             3,900  $      10.79             3,900            68,700

                 ----------------                ----------------------------------
Total                      31,300                          31,300            68,700
                 ================                ==================================
</TABLE>

During  2004  and  through  July  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

On June 16, 2005, the Company held its annual meeting of stockholders for the
following purposes:


          1. To elect ten directors; and


          2. To approve certain amendments to the 2002 Amended and Restated
          Outside Directors' Stock Option Plan.


                                       25
<PAGE>
          The voting on the above matters by the stockholders was as follows:

          Matter
          ------
<TABLE>
<CAPTION>
          Election of Directors:  For         Withheld
          ----------------------  ----------  ---------
<S>                               <C>         <C>
          David B. Pomeroy, II     7,619,804  2,878,925
          James H. Smith III       7,613,725  2,885,004
          Michael E. Rohrkemper    7,622,409  2,876,320
          Stephen E. Pomeroy       7,670,639  2,828,090
          William H. Lomicka      10,160,356    338,373
          Vincent D. Rinaldi       7,620,637  2,878,092
          Debra E. Tibey          10,181,168    317,561
          Edward E. Faber         10,326,264    172,465
          Kenneth R. Waters       10,390,406    108,323
          David G. Boucher        10,421,176     77,553
</TABLE>

     APPROVE THE AMENDMENT TO THE COMPANY'S 2002 AMENDED AND RESTATED OUTSIDE
     DIRECTORS' STOCK OPTION PLAN

     5,255,420 shares were voted in favor of the forgoing proposal and 3,895,122
     shares were voted against the forgoing proposal. Stockholders holding
     19,230, shares abstained from voting in this proposal. The number of shares
     voted in favor of the proposal was sufficient for its passage.


ITEM 5-OTHER INFORMATION
None

ITEM 6-EXHIBITS

(a)  Exhibits


<TABLE>
<CAPTION>
<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>


                                       26
<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


                                       27