UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 10-Q

(Mark One)

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

For  the quarterly period ended September 30, 1999 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  0001059083


                             NATIONWIDE CREDIT, INC.
     ----------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Georgia                                       58-1900192
-----------------------------------            --------------------------------
   (State or other jurisdiction                          (IRS Employer
 of incorporation or organization)                     Identification Number)


2015 Vaughn Road, Building 300, Kennesaw, GA                 30144
----------------------------------------------  --------------------------------
(Address of principal executive offices)                   (Zip Code)


Registrant's telephone number, including area code:     (770) 933-6659

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

                                                        Yes  X    No

<PAGE>



                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                                                                               PAGE


PART I.  FINANCIAL INFORMATION


         <S>                                                                                                      <C>
      ITEM 1.  FINANCIAL STATEMENTS

         Condensed Consolidated Balance Sheets
           as of September 30, 1999 and December 31, 1998 ........................................................1

         Condensed Consolidated Statements of Operations
               for the Three Months ended September 30, 1999 and September 30, 1998,
           and  the Nine Months Ended September 30, 1999 and September 30, 1998 ..................................3

         Condensed Consolidated Statements of Cash Flows
           for the Nine Months Ended September 30, 1999 and September 30, 1998....................................4

         Notes to Condensed Consolidated
           Financial Statements as of September 30, 1999..........................................................5


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


PART II.  OTHER INFORMATION

         ITEM 5.          OTHER INFORMATION......................................................................13

         ITEM 6.          EXHIBITS AND REPORTS ON FORM 8-K.......................................................13


SIGNATURE........................................................................................................14

</TABLE>

<PAGE>



PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

NATIONWIDE CREDIT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)

<TABLE>
<CAPTION>


                                                                           September 30,              December 31,
                                                                                1999                      1998
                                                                             Unaudited                  Audited
                                                                         ------------------        -----------------
<S>                                                                      <C>                       <C>
Assets
Current assets:
     Cash and cash equivalents                                           $       1,268             $      3,201
     Cash held for clients                                                       2,203                    2,279
     Accounts receivable, net of allowance of
             $747 and $951, respectively                                        15,024                   12,885
     Prepaid expenses and other current assets                                   3,043                    1,208
                                                                         ------------------        ------------------

Total current assets                                                            21,538                   19,573

Property and equipment, less accumulated
     Depreciation of $7,999 and $4,575, respectively                             9,351                    9,859


Other assets, net:
     Goodwill, less accumulated amortization of $6,259
           and $3,763, respectively                                             99,611                  102,107
     Other intangible assets, less accumulated amortization
           of $17,053 and $15,978, respectively                                  3,226                    4,301
     Deferred financing costs, less accumulated amortization
           of $2,681 and $2,288, respectively                                    4,193                    4,238
     Other assets                                                                   63                      237
                                                                         ------------------        ------------------

Total assets                                                             $     137,982             $    140,315
                                                                         ==================        ==================



<FN>
The  accompanying  notes are an integral  part of these  condensed  consolidated
balance sheets.
</FN>
</TABLE>


<PAGE>


NATIONWIDE CREDIT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)

<TABLE>
<CAPTION>


                                                                             September 30,              December 31,
                                                                                 1999                      1998
                                                                               Unaudited                  Audited
                                                                            -----------------        -----------------
<S>                                                                        <C>                       <C>
Liabilities and stockholder's equity

Current liabilities:
    Collections due to clients                                             $      2,203              $      2,279
    Accrued compensation                                                          4,094                     4,201
    Accounts payable                                                              1,477                     1,870
    Accrued severance and office closure costs                                      939                     1,845
    Other accrued liabilities                                                     3,027                     5,273
    Current maturities of long-term debt                                            250                       250
                                                                           ------------------        ------------------

Total current liabilities                                                        11,990                    15,718

Accrued severance and office closure costs                                        2,179                     2,400

Long-term debt, less current maturities                                         121,763                   118,500

Stockholder's equity:
Common stock - $.01 par value
  Authorized shares - 10,000 shares
   Issued and outstanding shares - 1,000 shares                                      --                        --
Additional paid in capital                                                       43,465                    39,465
Accumulated deficit                                                             (41,275)                  (35,628)
Notes receivable - officers                                                        (140)                     (140)
                                                                           ------------------        ------------------
Total stockholder's equity                                                        2,050                     3,697
                                                                           ------------------        ------------------

Total liabilities and stockholder's equity                                     $137,982                  $140,315
                                                                           ==================        ==================

<FN>
The  accompanying  notes are an integral  part of these  condensed  consolidated
balance sheets.
</FN>
</TABLE>


<PAGE>


NATIONWIDE CREDIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollar amounts in thousands)

<TABLE>
<CAPTION>


                                                                   For the Three Months               For the Nine Months
                                                                   Ended September 30,                Ended September 30,
                                                              -------------------------------    ------------------------------
                                                                  1999            1998               1999            1998
                                                                Unaudited       Unaudited          Unaudited      Unaudited
                                                              -------------- ----------------    -------------- ---------------

<S>                                                             <C>            <C>               <C>              <C>
Revenue                                                         $   26,349     $   24,054        $   81,499       $  78,631

Expenses:
      Salaries and benefits                                         16,657         14,837             53,581         47,588
      Telecommunication                                              1,084          1,128              3,182          3,897
      Occupancy                                                      1,135            960              3,268          3,083
      Other operating and administrative                             3,650          3,701             10,353         11,033
      Depreciation and amortization                                  2,316          5,962              6,994         18,218
      Provision for employee severance and office closure               --             --                243             --
                                                               -------------- ----------------   -------------- ---------------

Total expenses                                                      24,842         26,588             77,621         83,819

                                                              -------------- ----------------    -------------- ---------------
Operating income (loss)                                              1,507         (2,534)             3,878         (5,188)
Interest expense                                                     3,307          3,170              9,525         10,431
                                                              -------------- ----------------    -------------- ---------------
Loss before income taxes                                            (1,800)        (5,704)            (5,647)       (15,619)

Provision for income taxes                                              --             --                 --             --
                                                              -------------- ----------------    -------------- ---------------
Loss before extraordinary item                                      (1,800)        (5,704)            (5,647)       (15,619)

Extraordinary loss on debt extinguishment                               --             --                 --            783
                                                              -------------- ----------------    -------------- ---------------

Net loss                                                         $  (1,800)     $  (5,704)         $  (5,647)    $  (16,402)
                                                              ============== ================    ============== ===============


<FN>
The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements.
</FN>
</TABLE>


<PAGE>


NATIONWIDE CREDIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
<TABLE>
<CAPTION>

                                                                                            For the Nine Months
                                                                                            Ended September 30,
                                                                                  ----------------------------------------
                                                                                       1999                    1998
                                                                                     Unaudited               Unaudited
                                                                                  ----------------        ----------------
<S>                                                                                  <C>                  <C>
Operating activities
     Net loss                                                                        $  (5,647)           $    (16,402)
     Adjustments  to reconcile  net loss to net cash provided by operating
       activities:
         Depreciation and amortization                                                   7,388                  19,735
         Extraordinary loss on debt extinguishment                                          --                     783
             Other non-cash charges                                                        276                      --
      Changes in operating assets and liabilities:
             Accounts receivable                                                        (2,139)                  1,283
             Prepaid expenses and other assets                                          (1,661)                   (283)
             Accrued compensation                                                         (106)                  1,744
             Accounts payable and other accrued liabilities                             (4,246)                  3,741
                                                                                  ----------------        ----------------
     Net cash (used in) provided by operating activities                                (6,135)                 10,601

Investing activities
      Acquisitions, net of cash acquired                                                    --                (149,291)
      Purchases of property and equipment                                               (2,916)                 (3,371)
                                                                                  ----------------        ----------------
      Net cash (used in) investing activities                                           (2,916)               (152,662)

Financing activities
     Proceeds from acquisition facilities                                                   --                 125,000
     Capital contribution from Parent                                                    4,000                  38,975
     Proceeds from long term debt                                                        3,450                 125,000
     Repayment of acquisition facilities                                                    --                (125,000)
     Repayment of long-term debt                                                          (188)                 (6,188)
     Debt issuance and acquisition costs                                                  (144)                 (6,582)
     Other                                                                                  --                    (268)
                                                                                  ----------------        ----------------
     Net cash  provided by financing activities                                          7,118                 150,937
                                                                                  ----------------        ----------------

     (Decrease) increase in cash and cash equivalents                                   (1,933)                  8,876

Cash and cash equivalents at beginning of period                                         3,201                   1,388
                                                                                  ----------------        ----------------

Cash and cash equivalents at end of period                                          $    1,268            $     10,264
                                                                                  ================        ================

Cash paid for interest                                                             $    11,623            $      7,069
                                                                                  ================        ================


<FN>
The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements.
</FN>
</TABLE>

<PAGE>


NATIONWIDE CREDIT, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.     Basis of Presentation

       The accompanying  unaudited  consolidated  financial statements have been
       prepared in accordance with generally accepted accounting  principles for
       interim financial  information and with the instructions to Form 10-Q and
       Article  10 of  Regulation  S-X.  Accordingly,  certain  information  and
       footnote disclosures required by generally accepted accounting principles
       for complete financial  statements have been excluded.  In the opinion of
       management,  all adjustments  (consisting of normal  recurring  accruals)
       considered  necessary for a fair  presentation  have been  included.  All
       significant  intercompany  accounts and transactions have been eliminated
       in the consolidation.  The accompanying  unaudited consolidated financial
       statements  should be read in conjunction  with the audited  consolidated
       financial  statements of the Company for the year ended December 31, 1998
       included in Form 10K, as amended.

       On December 31, 1997, NCI  Acquisition  Corporation  (the  "Buyer"),  NCI
       Merger  Corporation   ("Merger  Sub"),   Nationwide  Credit,   Inc.  (the
       "Company"),  First Data  Corporation  (the "Seller") and its wholly owned
       subsidiary, First Financial Management Corporation ("FFMC"), entered into
       an  agreement  and Plan of merger (the  "Merger  Agreement")  pursuant to
       which  Merger Sub merged with and into the  Company,  with the Company as
       surviving  corporation  and a wholly owned  subsidiary  of the Buyer (the
       "Transaction").  The  Transaction  was  accounted  for under the purchase
       method of  accounting  with the  consideration  and  related  fees of the
       acquisition  allocated  to the assets  acquired and  liabilities  assumed
       based on their estimated fair values at the date of the acquisition.

       The  acquisition  and  related  fees  were  initially   financed  through
       borrowings  of $125.0  million  against a $133.0  million  senior  credit
       facility  (the  "Acquisition  Facilities")  and a  contribution  of $40.4
       million of equity capital (before related fees of $1.4 million).

       Operating  results for the nine-month period ended September 30, 1999 are
       not  necessarily  indicative  of the results that may be expected for the
       year ending December 31, 1999.

       In June 1998, the Financial  Accounting  Standards Board issued statement
       of Financial  Accounting Standards No. 133 "Accounting for Derivative and
       Hedging  Activities"  (SFAS 133).  SFAS 133 requires  companies to record
       derivatives  on the balance sheet as assets or liabilities at fair value.
       Due to a recent amendment, SFAS 133 is effective for financial statements
       for fiscal years beginning after June 15, 2000. The Company is evaluating
       the impact of SFAS 133 on the  Company's  future  earnings and  financial
       position, but does not expect it to be material.

2.     Nature of Operations

       The  Company  is among the  largest  independent  providers  of  accounts
       receivable management services in the United States. The Company's client
       base is comprised  of  companies  located  throughout  the United  States
       primarily  in  the  financial   services,   telecommunications,   retail,
       institutional and healthcare industries.


3.     Commitments and Contingencies

       The  Company is involved in certain  litigation  arising in the  ordinary
       course of business. In the opinion of management, the ultimate resolution
       of these matters will not have a material adverse effect on the Company's
       consolidated financial position or results of operations.

4.     Provision for Merger Costs, Employee Severance and Office Closure

       In 1998, as a result of the  acquisition of the Company and in connection
       with the  implementation  of an operating  improvement  plan, the Company
       accrued  estimated costs of  approximately  $4.0 million  associated with
       closing certain offices and branches ($2.3 million),  severance  payments
       to  employees  ($0.8  million),  and  relocation  costs  ($0.9  million).
       Specifically,  the Company closed and/or reduced  branches which were not
       operating at full capacity,  or whose  operations  could be  consolidated
       with other branches.

       In December 1998, the Company decided to relocate its corporate  offices.
       The Company  recorded a charge of $1.6  million in 1998 which  represents
       the future rent obligations  under the existing lease offset by estimated
       sublease income less broker commissions. In May 1999, the Company entered
       into a lease agreement for the new corporate facility.  The Company moved
       into the new facility in August 1999.

       As  part  of  the  operating   improvement  plan,  the  Company  recorded
       restructuring  charges  of $1.1  million  and $0.3  million  for the nine
       months and three months ended September 30, 1999, respectively.

       The amounts  remaining  at  September  30, 1999 from these  accruals are
       as follows:

                      Office closure               $    2,601
                      Employee severance                  294
                      Relocation                          223
                                                  ===============
                                                   $    3,118
                                                  ===============



<PAGE>



5.     Long  Term Debt and Credit Agreement

       On August  13,  1999,  in order to fund the growth of the  business,  the
       Company raised an additional $4.0 million of equity from certain existing
       investors  and amended its Revolving  Credit  Facility and Term Loan (the
       "Bank  Facilities")  to create an additional $5.0 million of availability
       (See Exhibit  10.01).  Specifically,  $3.4 million of existing debt under
       the  Revolving  Credit  Facility was  converted to a Term Loan  Facility,
       bearing interest at the Base Rate plus the Applicable Margin,  payable in
       13 consecutive quarterly installments of $250,000 beginning September 30,
       2000,  with the final  payment of  $200,000  on December  31,  2003.  The
       existing line of credit under the Revolving Credit Facility was increased
       by $1.5 million from $5.0 million to $6.5 million,  maturing January 2004
       and bearing  interest at the Company's option of either (A) the Base Rate
       plus the Applicable Margin or (B) the Eurodollar Rate plus the Applicable
       Margin.  The maturity date of the existing Term Loan Facility  balance of
       $18.6  million was also  changed  from  December  31, 2004 to January 28,
       2004.

       In connection with the above recapitalization,  the Company negotiated an
       amendment  to the Credit  Agreement  that revised  cumulative  EBITDA and
       related  ratio   covenants  to  reflect  the  Company's   revised  EBITDA
       expectations.  As of September  30, 1999,  the Company was in  compliance
       with these revised covenants.



<PAGE>



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

Results of Operations

(Nine months ended  September 30, 1999  compared to nine months ended  September
30, 1998)

Revenue. Total revenue was $81.5 million for the nine months ended September 30,
1999, as compared to $78.6 million for the nine months ended September 30, 1998,
an increase of $2.9 million or 3.7%.  The increase was primarily the result of a
$6.2 million  increase in revenue from on-site call center  management  services
for a major  telecommunications  company and a $0.2 million  increase in revenue
from outsourced pre-chargeoff management services,  offset by (i) a $1.2 million
decrease in revenue from the Department of Education ("DOE") which is the result
of a delay in new  placements  in 1999 under the new GSA and DOE  contracts  and
(ii)  a  $1.8  million  decrease  in  revenue  from  telecommunications  account
placements.

Expenses. Salaries and benefits expense increased $6.0 million or 12.6% to $53.6
million for the nine months ended  September 30, 1999 from $47.6 million for the
nine months ended  September 30, 1998.  This increase is primarily the result of
the Company's  service  expansion that includes on-site call center staffing and
management services for a major telecommunications company.

Telecommunications  expense  decreased $0.7 million or 17.9% to $3.2 million for
the nine months ended  September  30, 1999 from $3.9 million for the same period
in 1998. The decrease is primarily the result of lower  negotiated long distance
rates.

Occupancy  expense  increased  $0.2 million or 6.5% to $3.3 million for the nine
months ended  September  30, 1999 from $3.1 million for the same period in 1998.
The increase is the result of rent increases in April 1999.

Other  operating and  administrative  expense  decreased $0.6 million or 5.5% to
$10.4  million for the nine months ended  September  30, 1999 from $11.0 million
for the same period in 1998. The decrease is the result of the  continuation  of
the Company's operating improvement plan.

Depreciation and amortization  expense  decreased $11.2 million or 61.5% to $7.0
million for the nine months ended  September 30, 1999 from $18.2 million for the
same period ended  September 30, 1998.  The decrease was primarily the result of
the  amortization  of the value of existing  placements of $10.9 million for the
nine months ended  September  30, 1998, as compared to no  amortization  for the
same  period in 1999.  The value of  existing  placements  of $14.5  million was
amortized over 12 months in 1998.

Provision  for Employee  Severance  and Office  Closure:  Provision for employee
severance and office  closure for the nine months ended  September 30, 1999, was
$0.2 million, all of which related to employee severance.

Operating  Income.  Operating  income was $3.9 million for the nine months ended
September  30,  1999,  an increase of $9.1 million or 175.0% from a loss of $5.2
million for the same period in 1998.  This  increase  has been  explained in the
preceding paragraphs.  To summarize, this increase is primarily the result of an
increase in revenue of $2.9 million, a decrease in depreciation and amortization
expense of $11.2  million,  a  decrease  in  telecommunications  expense of $0.7
million,  a  decrease  in other  operating  and  administrative  expense of $0.6
million,  offset by an increase in salaries and benefits expense of $6.0 million
and an increase in occupancy expense of $0.2 million.

Interest Expense. Interest expense relating to the Term Loan Facility and Senior
Notes was $9.5 million for the nine months ended  September 30, 1999 compared to
$10.4  million for the same  period in 1998,  a decrease  of $0.9  million.  The
decrease is due to the write-off of $1.1 million  related to the cost of interim
financing of the Transaction in January 1998 offset by changing interest rates.

Extraordinary  Loss. The extraordinary  loss for the nine months ended September
30, 1998 of $0.8 million  represents  the  write-off of deferred  debt  issuance
costs related to interim financing of the Transaction.

Net Loss.  The Company  incurred a net loss for the nine months ended  September
30, 1999 of $5.6 million as compared to a net loss of $16.4  million in the same
period of 1998.


(Three months ended  September 30, 1999 compared to three months ended September
30, 1998)

Revenue.  Total revenue was $26.3  million for the three months ended  September
30, 1999, as compared to $24.1 million for the three months ended  September 30,
1998, an increase of $2.2 million or 9.1%. The increase was primarily the result
of (i) an  increase  in  revenue  of  $1.1  million  from  on-site  call  center
management services for a major telecommunications  company, (ii) a $0.9 million
increase  in revenue  from the  Department  of  Education  ("DOE")  (iii) a $0.5
million increase in revenue from telecommunications account placements, and (iv)
a $0.7 million  increase in revenue  from  outsourced  pre-chargeoff  management
services.

Expenses. Salaries and benefits expense increased $1.9 million or 12.8% to $16.7
million for the three months ended September 30, 1999 from $14.8 million for the
three months ended  September 30, 1998. This increase is primarily the result of
the Company's  service  expansion that includes on-site call center staffing and
management services for a major telecommunications company.

Telecommunications  expense  remained  flat at $1.1 million for the three months
ended September 30, 1999 and 1998.

Occupancy  expense increased $0.1 million or 10.0% to $1.1 million for the three
months ended  September  30, 1999 from $1.0 million for the same period in 1998.
The increase is the result of April 1999 rent increases.

Other operating and administrative expense remained flat at $3.7 million for the
three months ended September 30, 1999 and 1998.

Depreciation  and amortization  expense  decreased $3.7 million or 61.7% to $2.3
million for the three months ended  September 30, 1999 from $6.0 million for the
same period ended  September 30, 1998.  The decrease was primarily the result of
the  amortization  of the value of existing  placements  of $3.6 million for the
three months ended  September 30, 1998, as compared to no  amortization  for the
same  period in 1999.  The value of  existing  placements  of $14.5  million was
amortized over 12 months in 1998.

Operating  Income.  Operating income was $1.5 million for the three months ended
September  30,  1999,  an increase of $4.0 million or 160.0% from a loss of $2.5
million  for the same  period  in 1998.  This  increase  has been  explained  in
preceding  paragraphs.  To  summarize,  this  increase  is  primarily  due to an
increase in revenue of $2.2 million, a decrease in depreciation and amortization
expense of $3.7 million,  offset by an increase in salaries and benefits expense
of $1.9 million, and an increase in occupancy expenses of $0.1 million.

Interest Expense. Interest expense relating to the Term Loan Facility and Senior
Notes  increased  by $0.1  million or 3.0% to $3.3  million for the three months
ended September 30, 1999, from $3.2 million for the three months ended September
30, 1998 due to changing interest rates.

Net Loss. The Company  incurred a net loss for the three months ended  September
30, 1999 of $1.8  million as compared to a net loss of $5.7  million in the same
period of 1998.

Liquidity and Capital Resources

Cash used in  operating  activities  was $6.1  million for the nine months ended
September 30, 1999 as compared to cash provided by operating activities of $10.6
million for the nine months ended  September 30, 1998,  resulting in an increase
in cash used of $16.7 million.  This increase is primarily due to an increase in
net working capital items of $5.6 million in the nine months ended September 30,
1999 as compared to a decrease of $4.7 million in the same period of 1998.  Cash
interest  paid on the Senior Notes and the Term Loan  Facility was $11.6 million
in the first nine months of 1999  compared to $7.1 million in the same period of
1998. Net income before  extraordinary items and after adding back depreciation,
amortization,  taxes and interest  (EBITDA) was $11.1 million  compared to $13.0
million in the 1998 period.

Cash used in investing  activities for the nine months ended  September 30, 1999
was $2.9  million and $152.7  million for the nine months  ended  September  30,
1998. The Company's  principal use of cash in investing  activities  during 1999
was for capital expenditures,  primarily for new computer and telecommunications
equipment.  The Acquisition of $149.3 million in 1998 represents the purchase of
the Company (see Note 1).

Cash provided by financing activities was $7.1 million for the nine months ended
September 30, 1999 representing  $4.0 million of equity from certain  investors,
$3.4  million of  proceeds  from a new  five-year  term loan  offset by required
quarterly repayments on the seven-year term loan facility totaling $0.2 million,
and debt issuance costs of $0.1 million.  Cash provided by financing  activities
was $150.9  million for the nine months ended  September 30, 1998,  representing
the funding of the Transaction.

Substantially  all  the  agreements   relating  to  the  Company's   outstanding
indebtedness  contain covenants that impact the Company's  liquidity and capital
resources,  including  financial covenants and restrictions on the incurrence of
indebtedness  and  liens and  asset  sales.  On August  13,  1999,  the  Company
negotiated an amendment to the Credit Agreement that increased the existing line
of credit under the Revolving  Credit Facility from $5.0 million to $6.5 million
and converted $3.4 million of existing debt under the Revolving  Credit Facility
into a Term Loan Facility. In addition to this refinancing,  on August 13, 1999,
certain existing investors of the Company contributed an additional $4.0 million
of equity to fund the growth of the business.

The ability of the Company to meet its debt  service  obligations  and to comply
with the  restrictive  and  financial  covenants  contained in the Senior Credit
Facility,  the Revolving  Credit Facility and the Notes will be dependent on the
future operating and financial performance of the Company, which will be subject
in part to a number of  factors  beyond  the  control  of the  Company,  such as
prevailing economic conditions,  interest rates and demand for credit collection
services.

Management  believes that, based on current levels of operations and anticipated
improvements  in operating  results,  cash flows from  operations and borrowings
available under the credit  facilities will be adequate to allow for anticipated
capital  expenditures  for the  next  several  years,  to fund  working  capital
requirements and to make required payments of principal and interest on its debt
for the next  several  years.  However,  if the  Company  is unable to  generate
sufficient cash flows from operations in the future, it may be necessary for the
Company  to  refinance  all or a  portion  of its debt or to  obtain  additional
financing, but there can be no assurance that the Company will be able to effect
such refinancing or obtain additional financing on commercially reasonable terms
or at all.


Income Taxes

The Company has not recorded any tax benefit on its loss before income taxes for
the nine months ended September 30, 1999 and 1998 as it is not "more likely than
not" that the Company will be able to realize such benefits.


Year 2000

Until  recently,  computer  programs  were  written  to store only two digits of
date-related  information  in order to more  efficiently  handle and store data.
Thus, the programs were unable to properly distinguish between the year 1900 and
the year 2000. This is frequently referred to as the "Year 2000 Problem."

In 1997,  the Company  initiated a  company-wide  Year 2000  project  based on a
methodology  recommended  by an outside  consultant,  with a dedicated Year 2000
Project  Office and  Coordinator.  The  Company  has  completed  the  process of
defining,  assessing and converting, or replacing, various programs and hardware
to make them Year 2000 compatible.  The Company has conducted formal  compliance
tests of the  renovated  applications,  which cover all  sensitive  time periods
(e.g.,  the weeks straddling  December 1999 to January 2000,  February 29, 2000,
etc).

The total cost for the Year 2000 remediation is estimated at approximately  $1.5
million,  which includes $0.4 million for the purchase of new software that will
be capitalized  and $1.1 million that will be expensed as incurred.  The Company
incurred and  expensed  approximately  $0.6 million and $0.1 million  during the
nine months and quarter ended  September 30, 1999,  respectively,  primarily for
assessment of the Year 2000 issue,  the  development of a modification  plan and
programming costs.

The Year 2000 Problem goes beyond the Company's  internal  computer  systems and
requires coordination with clients, vendors, government entities and other third
parties to assure  that their  systems  and related  interfaces  are  compliant.
Accordingly,  the Company  implemented an aggressive  client outreach program to
analyze the data interfaces shared with customers, partners and suppliers and to
coordinate  specific plans for their needs.  The Company  communicated  with all
clients sharing electronic interfaces and developed a program to provide intense
focus on critical  clients.  Currently,  85% of critical clients have interfaces
that are consistent with the Company's Year 2000 specifications. Issues with the
remaining  15%  are  being  worked  aggressively  and it is  expected  that  all
interface issues will be resolved by year-end.

A vendor outreach program was also implemented to identify  critical systems for
supplied  products and services,  and to analyze the risk to the Company and its
customers  should the products or services  fail.  At this point,  all pertinent
vendor  compliance issues have been identified and replacements or upgrades have
occurred.  There will continue to be  replacements  and upgrades of non-critical
systems through the fourth quarter of 1999.

The  Company  also  addressed  the  impact of Year  2000 on its  non-information
technology  systems,  which  include  examination  of each  location  to  ensure
lighting, elevators, copiers and fax machines function properly. This portion of
the Year 2000 project is largely  complete with the remaining  tasks expected to
be completed during the fourth quarter of 1999. Additionally,  on-going internal
and  external  communications  through  monthly  executive  reviews and biweekly
project reviews ensure that progress is monitored by senior management.

The  Company  recognizes  the need for  contingency  plans in all aspects of the
project,  and such plans are now in process.  Contingency  plans for Information
Technology  are  complete  and other  business  area  plans are  expected  to be
complete  well in  advance  of  2000.  The  Company  is also in the  process  of
developing contingency plans customized for critical clients.

The Company  believes  that with  testing and  communication  with its  clients,
vendors  and  employees,  the  Year  2000  problem  will  not  pose  significant
operational problems for its internal systems.  However,  much of the success of
the  Company's  Year 2000  program  depends  upon the  success of the  Company's
clients and  significant  suppliers.  If critical  clients or  suppliers  do not
successfully  achieve Year 2000  compliance,  the Year 2000 Problem could have a
material  impact on the  operations  of the Company  including  a  reduction  in
revenue and profit.

The costs of the  project  and the date on which the  Company  believes  it will
complete the Year 2000  modifications  are based on management's best estimates,
which were derived utilizing  numerous  assumptions of future events,  including
the continued  availability  of certain  resources and other  factors.  However,
there can be no  guarantee  that these  estimates  will be  achieved  and actual
results could differ materially from those anticipated.


Forward-Looking Statements

This Form  10-Q and other  communications,  as well as oral  statements  made by
representatives of the Company, may contain "forward-looking  statements" within
the  meaning of the  Private  Securities  Litigation  Reform Act of 1995.  These
statements  relate to,  among other  things,  the  Company's  outlook for future
periods,  market forces within the industry, cost reduction strategies and their
results,  planned capital  expenditures,  long-term objectives of management and
other  statements of  expectations  concerning  matters that are not  historical
facts.

Predictions of future results contain a measure of uncertainty and, accordingly,
actual  results could differ  materially  due to various  factors.  Factors that
could  change  forward-looking  statements  are,  among  others,  changes in the
general economy, changes in demand for the Company's services and/or cyclicality
in the  industries  to which the Company's  services are rendered,  governmental
regulations and other  unforeseen  circumstances.  A number of these factors are
discussed in this Form 10-Q and in the Company's  annual report on Form 10-K for
the year ended December 31, 1998.




<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



<TABLE>
<CAPTION>

                                 Long Term Debt
                             Non-Traded Instruments
                            As of September 30, 1999
                                   (In $000's)

                                                                                                              Fair
                                    1999      2000      2001       2002      2003    Thereafter     Total       Value
                                   -------- --------- ---------- --------- --------- ------------ ----------- ----------
<S>                                 <C>        <C>       <C>      <C>       <C>       <C>         <C>         <C>
Variable Rate:
    Term Loan Facility :             $ 250      $750     $1,250   $ 1,250   $ 1,200    $17,500     $ 22,200    $22,200
                                                                                        17,500
        $18.0 million                9.26%     9.26%      9.26%     9.26%     9.26%      9.26%
        $.563 million               11.00%    11.00%     11.00%    11.00%    11.00%     11.00%
        $3.45 million               11.25%    11.25%     11.25%    11.25%    11.25%     11.25%

Fixed Rate:
Senior Notes due 2008:               $  --     $  --      $  --     $  --     $  --   $100,000     $100,000    $63,000
$100 million @ 10.25%                                                                   10.25%
</TABLE>


The Company's  primary risk exposure in the normal course of business is that of
interest rate risk. There have been no material changes in this type of exposure
during the periods presented.



PART II.  OTHER INFORMATION

ITEM 5.  OTHER INFORMATION

On July 19,  1999,  the  Company  announced  appointments  of Loren F. Kranz and
Michael Lord as Co-Chief  Executive  Officers,  succeeding Jerry Kaufman who has
been named Vice  Chairman of the Board of  Directors.  These  appointments  will
ensure the  continuity  of  executive  leadership  and  solidify  the  strategic
business unit concept that has been piloted over the last six months.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

a)       The following exhibit is filed as part of this report:

                Third Amendment and Consent Agreement dated August 13, 1999.

b)       Reports on Form 8-K

                None