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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-QQuarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

|(Mark One)                                        |                                                                                         
|------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                 | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002
|OR                                               
|o                                                 | 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 000-21561

MCSi, Inc.(Exact name of registrant as specified in its articles of incorporation)

|Maryland(State or other jurisdiction of
incorporation or organization)                   |  | 31-1001529(I.R.S. Employer
Identification No.)
|---------------------------------------------------------------------------------------- |  | ----------------------------------------------
|4750 Hempstead Station Drive, Dayton, Ohio 45429(Address of principal executive offices)
|(937) 291-8282(Registrant's telephone number, including area code)                      

Indicate
by check 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) had been subject to such filing requirements for the past 90 days.
Yes X No

At
November 12, 2002, 25,051,548 shares of common stock, no par value per share, of the registrant were outstanding.

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MCSi, Inc.

FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2002

INDEX



|                                                                                             
|---------------------------------------------------------------------------------------------
|PART IFINANCIAL INFORMATION                                                                 
|Item 1. Financial Statements (Unaudited):                                                    
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|Item 4. Controls and Procedures                                                              
|PART IIOTHER INFORMATION                                                                    
|Item 1. Legal Proceedings                                                                    
|Item 2. Changes in Securities and Use of Proceeds                                            
|Item 3. Defaults Upon Senior Securities                                                      
|Item 4. Submission of Matters to a Vote of Security Holders                                  
|Item 5. Other Information                                                                    
|Item 6. Exhibits and Reports on Form 8-K                                                     
|Signatures                                                                                   

As
used in this report on Form 10-Q unless the context otherwise requires, the terms "we," "us" or the "Company" and "MCSi" refer to MCSi, Inc., a Maryland corporation and
its consolidated subsidiaries.

2

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PART IFINANCIAL INFORMATION

Item 1. Financial Statements

MCSi, INC.  CONSOLIDATED BALANCE SHEET  (UNAUDITED)(Dollars in thousands)

|                                     |                                                                                                                                                                                        | September 30,
2002                         |         | December 31,
2001 |        
|------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ----------------- | -------
|Assets                               |                                                                                                                                                                                        |                                            |         |                   |        
|Current assets:                      |                                                                                                                                                                                        |                                            |         |                   |        
|                                     | Cash and cash equivalents                                                                                                                                                              |                                            | $       | 4,595             |        
|                                     | Accounts receivable                                                                                                                                                                    |                                            |         | 114,773           |        
|                                     | Inventory                                                                                                                                                                              |                                            |         | 87,346            |        
|                                     | Rental and demonstration equipment inventory                                                                                                                                           |                                            |         | 6,742             |        
|                                     | Prepaid expenses                                                                                                                                                                       |                                            |         | 2,052             |        
|                                     | Assets of discontinued operations                                                                                                                                                      |                                            |         |                  |        
|                                     | Deferred income taxes                                                                                                                                                                  |                                            |         | 20,913            |        
|                                     |                                                                                                                                                                                        |                                            |         |                   |        
|                                     |                                                                                                                                                                                        | Total current assets                       |         |                   | 236,421
|                                     | Property and equipmentnet                                                                                                                                                             |                                            |         | 37,357            |        
|                                     | Notes receivable                                                                                                                                                                       |                                            |         | 12,410            |        
|                                     | Intangible assetsnet                                                                                                                                                                  |                                            |         | 162,735           |        
|                                     | Other assets                                                                                                                                                                           |                                            |         | 1,281             |        
|                                     |                                                                                                                                                                                        |                                            |         |                   |        
|                                     |                                                                                                                                                                                        | Total assets                               |         | $                 | 450,204
|                                     |                                                                                                                                                                                        |                                            |         |                   |        
|Liabilities and Stockholders' Equity |                                                                                                                                                                                        |                                            |         |                   |        
|Current liabilities:                 |                                                                                                                                                                                        |                                            |         |                   |        
|                                     | Accounts payable  trade                                                                                                                                                               |                                            | $       | 22,722            |        
|                                     | Accrued expenses, payroll and income taxes                                                                                                                                             |                                            |         | 15,769            |        
|                                     | Liabilities of discontinued operations                                                                                                                                                 |                                            |         |                  |        
|                                     | Short-term debt                                                                                                                                                                        |                                            |         | 187               |        
|                                     |                                                                                                                                                                                        |                                            |         |                   |        
|                                     |                                                                                                                                                                                        | Total current liabilities                  |         |                   | 38,678 
|Long-term debt                       |                                                                                                                                                                                        |                                            | 108,965 |                   |        
|Deferred income taxes                |                                                                                                                                                                                        |                                            | 3,896   |                   |        
|                                     |                                                                                                                                                                                        |                                            |         |                   |        
|                                     |                                                                                                                                                                                        | Total liabilities                          |         |                   | 151,539
|                                     |                                                                                                                                                                                        |                                            |         |                   |        
|Commitments and contingencies        |                                                                                                                                                                                        |                                            |        |                   |        
|Stockholders' equity:                |                                                                                                                                                                                        |                                            |         |                   |        
|                                     | Preferred stock, no par value; 5,000,000 shares authorized, none outstanding                                                                                                           |                                            |         |                  |        
|                                     | Common stock, no par value; 60,000,000 shares and 30,000,000 shares authorized, 25,050,594 and 24,306,384 shares outstanding at September 30, 2002 and December 31, 2001, respectively |                                            |         |                  |        
|                                     | Additional paid-in capital                                                                                                                                                             |                                            |         | 327,824           |        
|                                     | Retained (deficit) earnings                                                                                                                                                            |                                            |         | (5,015            | )      
|                                     | Accumulated other comprehensive loss                                                                                                                                                   |                                            |         | (809              | )      
|                                     | Unearned compensation                                                                                                                                                                  |                                            |         | (208              | )      
|                                     | Treasury stock, at cost, 2,828,564 and 397,470 shares at September 30, 2002 and December 31, 2001, respectively                                                                        |                                            |         | (23,127           | )      
|                                     |                                                                                                                                                                                        |                                            |         |                   |        
|                                     |                                                                                                                                                                                        | Total stockholders' equity                 |         |                   | 298,665
|                                     |                                                                                                                                                                                        |                                            |         |                   |        
|                                     |                                                                                                                                                                                        | Total liabilities and stockholders' equity |         | $                 | 450,204
|                                     |                                                                                                                                                                                        |                                            |         |                   |        

3

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

4

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MCSi, INC.  CONSOLIDATED STATEMENT OF OPERATIONS  (UNAUDITED)(Dollars in thousands, except per share data)

|                                                                  |  | THREE MONTHS ENDED
SEPTEMBER 30, |            | NINE MONTHS ENDED
SEPTEMBER 30, |  
|----------------------------------------------------------------- |  | -------------------------------- | ---------- | ------------------------------- | -
|
|Net sales                                                         |  | $                                | 137,452    |                                 | $
|Cost of sales                                                     |  |                                  | 95,834     |                                 |  
|                                                                  |  |                                  |            |                                 |  
|Gross profit                                                      |  |                                  | 41,618     |                                 |  
|Selling, general and administrative expenses                      |  |                                  | 34,957     |                                 |  
|                                                                  |  |                                  |            |                                 |  
|Operating income                                                  |  |                                  | 6,661      |                                 |  
|Interest expense                                                  |  |                                  | (1,813     | )                               |  
|Other income (expense), net                                       |  |                                  | 193        |                                 |  
|                                                                  |  |                                  |            |                                 |  
|Income from continuing operations before income taxes             |  |                                  | 5,041      |                                 |  
|Provision for income taxes                                        |  |                                  | 2,017      |                                 |  
|                                                                  |  |                                  |            |                                 |  
|Income from continuing operations                                 |  |                                  | 3,024      |                                 |  
|Loss from discontinued operations, net of income taxes            |  |                                  | (547       | )                               |  
|                                                                  |  |                                  |            |                                 |  
|Net income (loss)                                                 |  | $                                | 2,477      |                                 | $
|                                                                  |  |                                  |            |                                 |  
|Earnings per share of common stock-
basiccontinuing operations   |  | $                                | 0.13       |                                 | $
|                                                                  |  |                                  |            |                                 |  
|Earnings per share of common stock-
dilutedcontinuing operations |  | $                                | 0.13       |                                 | $
|                                                                  |  |                                  |            |                                 |  
|Earnings (loss) per share of common stock-
basic                  |  | $                                | 0.11       |                                 | $
|                                                                  |  |                                  |            |                                 |  
|Earnings (loss) per share of common stock-
diluted                |  | $                                | 0.11       |                                 | $
|                                                                  |  |                                  |            |                                 |  
|Weighted average number of common shares outstandingbasic        |  |                                  | 23,459,067 |                                 |  
|                                                                  |  |                                  |            |                                 |  
|Weighted average number of common shares outstandingdiluted      |  |                                  | 23,463,226 |                                 |  
|                                                                  |  |                                  |            |                                 |  

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

5

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MCSi, INC.  CONSOLIDATED STATEMENT OF CASH FLOWS  (UNAUDITED)(Dollars in thousands)

|                                      |                                                                                                    | NINE MONTHS ENDED
SEPTEMBER 30,                                   |                                                           
|------------------------------------- | -------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ----------------------------------------------------------
|
|Cash flows from operating activities: |                                                                                                    |                                                                   |                                                           
|                                      | Net (loss) income                                                                                  |                                                                   | $                                                         
|                                      | Loss from discontinued operations                                                                  |                                                                   |                                                           
|                                      |                                                                                                    |                                                                   |                                                           
|                                      | Income from continuing operations                                                                  |                                                                   |                                                           
|                                      | Adjustments to reconcile net income to cash (used in) provided by continuing operating activities: |                                                                   |                                                           
|                                      |                                                                                                    | Depreciation and amortization                                     |                                                           
|                                      |                                                                                                    | Other non-cash items                                              |                                                           
|                                      |                                                                                                    | Changes in assets and liabilities, net of effect of acquisitions: |                                                           
|                                      |                                                                                                    |                                                                   | Accounts receivable                                       
|                                      |                                                                                                    |                                                                   | Inventories                                               
|                                      |                                                                                                    |                                                                   | Prepaid expenses and other assets                         
|                                      |                                                                                                    |                                                                   | Accounts payable  trade                                  
|                                      |                                                                                                    |                                                                   | Accrued expenses, payroll and income taxes                
|                                      |                                                                                                    |                                                                   |                                                           
|                                      |                                                                                                    |                                                                   | Cash (used in) provided by continuing operations          
|                                      |                                                                                                    |                                                                   | Cash (used in) discontinued operations                    
|                                      |                                                                                                    |                                                                   |                                                           
|                                      |                                                                                                    |                                                                   | Cash (used in) provided by operating activities           
|                                      |                                                                                                    |                                                                   |                                                           
|Cash flows from investing activities: |                                                                                                    |                                                                   |                                                           
|                                      |                                                                                                    | Capital expenditures                                              |                                                           
|                                      |                                                                                                    | Business combinations                                             |                                                           
|                                      |                                                                                                    | Net proceeds from cash surrender value of insurance policies      |                                                           
|                                      |                                                                                                    | Proceeds from sale of computer technology products division       |                                                           
|                                      |                                                                                                    |                                                                   |                                                           
|                                      |                                                                                                    |                                                                   | Cash provided by (used in) continuing investing activities
|                                      |                                                                                                    |                                                                   | Cash (used in) discontinued investing activities          
|                                      |                                                                                                    |                                                                   |                                                           
|                                      |                                                                                                    |                                                                   | Cash provided by (used in) investing activities           
|                                      |                                                                                                    |                                                                   |                                                           
|Cash flows from financing activities: |                                                                                                    |                                                                   |                                                           
|                                      |                                                                                                    | Proceeds from sale of common stock                                |                                                           
|                                      |                                                                                                    | Cost of sale of common stock                                      |                                                           
|                                      |                                                                                                    | Purchase of treasury shares                                       |                                                           
|                                      |                                                                                                    | Net proceeds from (repayment of) debt                             |                                                           
|                                      |                                                                                                    |                                                                   |                                                           
|                                      |                                                                                                    |                                                                   | Cash provided by continuing financing activities          
|                                      |                                                                                                    |                                                                   | Cash (used in) discontinued financing activities          
|                                      |                                                                                                    |                                                                   |                                                           
|                                      |                                                                                                    |                                                                   | Cash provided by financing activities                     
|                                      |                                                                                                    |                                                                   |                                                           
|Effect of exchange rates on cash      |                                                                                                    |                                                                   | 695                                                       
|                                      |                                                                                                    |                                                                   |                                                           
|                                      |                                                                                                    | Net (decrease) increase in cash and cash equivalents              |                                                           
|                                      |                                                                                                    | Cash and cash equivalents  beginning of period                   |                                                           
|                                      |                                                                                                    |                                                                   |                                                           
|                                      |                                                                                                    | Cash and cash equivalents  end of period                         |                                                           
|                                      |                                                                                                    |                                                                   |                                                           

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

6

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MCSi, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (UNAUDITED)(Dollars in thousands, except per share data)

Note 1General

The accompanying unaudited consolidated financial statements have been prepared in accordance with Rule 10-01 of SEC
Regulation S-X. Consequently, they do not include all the disclosures required under generally accepted accounting principles for complete financial statements. However, in the
opinion of the management of MCSi, Inc. (the "Company"), the consolidated financial statements presented herein contain all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the financial position, results of operations and cash flows of the Company and its consolidated subsidiaries. For further information regarding the Company's accounting
policies and the basis of presentation of the financial statements, refer to the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for
the year ended December 31, 2001. The results of the Company's operations for the interim periods presented are not necessarily indicative of the operating results for the full fiscal year or
any future interim periods. Certain reclassifications have been made to prior period balances in order to conform with the current period presentation.

Note 2Comprehensive Income

Comprehensive income (loss) was $2,133 and $3,829 for the three months ended September 30, 2002 and 2001, respectively and $(32,781) and $11,264 for the
nine months ended September 30, 2002 and 2001, respectively.

Note 3Goodwill and Other Intangible Assets

The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets", on January 1, 2002, and,
in accordance with SFAS 142, discontinued the
amortization of goodwill upon adoption. Assuming goodwill amortization had been discontinued at January 1, 2001, the comparable income from continuing operations and earnings per share (basic
and

6

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diluted) from continuing operations for the prior-year three month and nine month periods ended September 30, 2001 would have been:

|                                                          |  | Three Months Ended
September 30, |       | Nine Months Ended
September 30,
|--------------------------------------------------------- |  | -------------------------------- | ----- | -------------------------------
|
|Income from continuing operations:                        |  |                                  |       |                                
|Reported income from continuing operations                |  | $                                | 3,024 |                                
|Impact of goodwill amortization, net of tax               |  |                                  |      |                                
|                                                          |  |                                  |       |                                
|Adjusted income from continuing operations                |  | $                                | 3,024 |                                
|                                                          |  |                                  |       |                                
|Earnings per sharebasiccontinuing operations:           |  |                                  |       |                                
|Reported income from continuing operations                |  | $                                | 0.13  |                                
|Impact of goodwill amortization, net of tax               |  |                                  |      |                                
|                                                          |  |                                  |       |                                
|Adjusted earnings per sharebasiccontinuing operations   |  | $                                | 0.13  |                                
|                                                          |  |                                  |       |                                
|Earnings per sharedilutedcontinuing operations:         |  |                                  |       |                                
|Reported income from continuing operations                |  | $                                | 0.13  |                                
|Impact of goodwill amortization, net of tax               |  |                                  |      |                                
|                                                          |  |                                  |       |                                
|Adjusted earnings per sharedilutedcontinuing operations |  | $                                | 0.13  |                                
|                                                          |  |                                  |       |                                

As
required by the adoption of SFAS 142, the Company has assessed its goodwill as of January 1, 2002 and determined that no impairment of goodwill exists.

For
the three month and nine month periods ended September 30, 2002, there were no material adjustments to the carrying amount of the Company's goodwill, except that $12,680 of
goodwill was acquired in business combinations. For the three month and nine month periods ended September 30, 2001, the tax benefit resulting from goodwill amortization was immaterial.

Other
intangible assets and their related amortization at September 30, 2002 are insignificant. In addition, estimated amortization expense for future periods is immaterial.

The
Company has elected to perform its required annual impairment analysis in the fourth quarter of each fiscal year. In addition to the annual analysis, SFAS 142 requires interim
impairment analysis if events or circumstances indicate that the Company's goodwill may be impaired. Such factors could include an adverse business climate, a significant change in the business or
other similar factors. Although the Company believes its goodwill was not impaired at September 30, 2002, management will continue to review the carrying amount of its goodwill in the future.

Note 4Restructuring

In the fourth quarter of 2001, the Company implemented a restructuring plan to facilitate and support the growth of its audio-visual integration operations. In
connection with the restructuring, the Company recorded a pre-tax charge and related reserves of $6,073 in the fourth quarter of 2001. Of 361 sales and administrative employees to be
terminated under this plan, all were terminated by the end of the first quarter of 2002. At September 30, 2002, the only remaining restructuring liability relates to leasehold terminations,
totaling $2,006. Total cash payments under this plan were $1,068, $810 and $1,031 for the three month periods ended March 31, 2002, June 30, 2002 and September 30, 2002,
respectively.

Additionally,
in the fourth quarter of 2001, the Company recorded a charge of $885 for merger related integration costs relating to its acquisition of the outstanding common shares of
Zengine, Inc.

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that the Company did not already own. The merger related integration was completed in the first quarter of 2002. Of 57 sales, software engineering and administrative employees to be terminated under
this plan, all were terminated by the end of the first quarter of 2002.

Note 5Discontinued Operations

In December 2001, the Company entered into a definitive agreement to sell its Canadian computer supply division (the "Division") and accounted for the
Division as a discontinued operation. The divestiture was completed in the first quarter of 2002.

On
April 29, 2002, the Company entered into a definitive agreement to sell certain assets and to assign certain liabilities relating to its computer technology product division
("CTG"). CTG primarily represented the U.S. computer supply business of the Company which comprised a separate component of the Company under SFAS 144. The total consideration was $24,800 and
included approximately $11,200 of cash ($8,562 received at closing, $1,000 received in July 2002 and $1,600 receivable from the purchaser, which management expects to receive by
December 31, 2002), $8,100 in the form of a secured, five year note receivable bearing interest at 12% per annum, and the assumption of certain obligations, which included trade accounts
payable. The purchase price was determined by arms-length negotiations between the Company and the purchaser, MCPc, Inc. MCPc, Inc. is owned by certain former employees of
the Company and other outside investors, including the former Vice President of Sales-Chief Development Officer of the Company. CTG accounted for approximately $92,000 of net sales for the six months
ended June 30, 2002 and $211,000 of net sales for the nine months ended September 30, 2001. The sale was completed in June 2002, as adjusted for final closing adjustments which
occurred during the three month period ending September 30, 2002, and has been accounted for as a discontinued operation. As the result of the sale of CTG and the aforementioned sale of the
Division, the Company recorded a net loss from discontinued operations for the three and nine month periods ended September 30, 2002, which are comprised of the following:

|                                                                                             |  | Three months ended
September 30, |      | Nine months ended
September 30, |  
|-------------------------------------------------------------------------------------------- |  | -------------------------------- | ---- | ------------------------------- | -
|
|Results of operations, net of income tax benefit of $, $1,740, $6,253 and $77, respectively |  | $                                |     |                                 | $
|Loss on disposal, net of income tax benefit of $294, $, $12,698 and $, respectively        |  |                                  | (547 | )                               |  
|                                                                                             |  |                                  |      |                                 |  
|                                                                                             |  | $                                | (547 | )                               | $
|                                                                                             |  |                                  |      |                                 |  

Note 6Inventories

Inventories primarily comprise products held for resale and for use in integration projects. Commencing in the third quarter of 2002, inventories held for rental
and demonstration purposes have been separately classified. The rental and demonstration equipment inventories are typically sold within twelve months after their initial purchase.

8

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Note 7New Accounting Pronouncements

In July 2002, the Financial Accounting Standards Board ("FASB") issued SFAS 146, "Accounting for Costs Associated with Exit or Disposal Activities".
SFAS 146 replaces EITF Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred
in a Restructuring"). SFAS 146 requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or
disposal plan. Examples of costs covered by the standard include lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operations, plant
closing, or other exit or disposal activity. SFAS 146 is to be applied prospectively to exit or disposal
activities initiated after December 31, 2002. We will evaluate the impact of this standard on our consolidated financial position, results of operations or cash flows prior to the effective
date of January 1, 2003. Accordingly, the impact of SFAS 146 on the Company's financial position and results of operations has not yet been determined.

Note 8Commitments, Contingencies and Risks

In the normal course of business the Company is subject to claims, both asserted and unasserted. Based on information presently available at September 30,
2002, management does not believe that any of these issues would have a material effect on the Company's financial position, results of operations or cash flows.

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

The following discussion should be read in conjunction with the information contained in the unaudited consolidated financial statements and notes to unaudited
consolidated financial statements. The following information contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act") and is subject
to the safe harbor created by that Act. The words "estimate," "project," "anticipate," "expect," "intend," "believe," "plans" and similar expressions are intended to identify forward-looking
statements. Because such forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by
such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in general economic and business conditions, the availability of
capital on acceptable terms, actions of competitors and key suppliers, risks inherent in acquiring, integrating and operating new businesses, the Company's ability to compete in the audio visual and
broadcast systems integration marketplace, exchange rate fluctuations, the regulatory and trade environment (both domestic and foreign), and changes in business strategies and other factors as
discussed in Exhibit 99.3 hereto.

Overview

We are a provider of integrated technical services and audio-visual presentation and broadcast products. The convergence of audio, data, visual communications and
computer network systems has created the need for sophisticated providers of these products with the ability to design, source, install and service complex systems. We believe that we are one of the
country's leading designers and integrators of custom configured and integrated audio, video and data display, broadcasting, conferencing and networking systems. These systems are designed for use in
board and conference rooms, lecture halls, theaters, command and control centers, museums, churches, professional broadcast facilities and streaming network facilities. Our offices throughout the
United States, United Kingdom and Canada allow us to provide consistent products and services for projects of local, regional, national and global scope.

Our
competitive strengths include:



10

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During
the second quarter of 2002, we sold CTG; during the fourth quarter of 2001, we sold the Division. Both of these divestitures have been accounted for as discontinued operations.

Three Months Ended September 30, 2002 Compared to Three Months Ended September 30, 2001

Net sales.Net sales for the three months ended September 30, 2002 decreased by $29.0 million, or 17.4%, to
$137.5 million from $166.4 million for the three months ended September 30, 2001. This decrease is primarily attributable to a reduction in integration sales of approximately
$34 million as our customers delay or postpone capital expenditure in the current difficult economic environment. This reduction was partially offset by a $5 million increase in product
only sales attributable to stronger educational and governmental purchases in the quarter.

Gross profit.Gross profit for the three months ended September 30, 2002 decreased by $14.7 million or 26.2%,
to $41.6 million from $56.4 million for the three months ended September 30, 2001. Gross profit as a percentage of net sales for the three months ended September 30, 2002
was 30.3% compared to 33.9% for the three months ended September 30, 2001. The margin decreased due to competitive pricing pressure which we believe is a result of the decline in general U.S.
economic conditions and our efforts to maintain market share.

Selling, general and administrative expenses.Selling, general and administrative expenses for the three months ended
September 30, 2002 decreased by $5.6 million, to $35.0 million from $40.6 million for the three months ended September 30, 2001. This decrease was primarily due to
the elimination of goodwill amortization as a result of adoption of SFAS 142 and payroll and rent expense associated with the employees who were severed and the facilities that were closed in
conjunction with our 2001 restructuring activities. Excluding goodwill amortization, our selling, general and administrative expenses were $39.4 for the three months ended September 30, 2001.
As a percentage of net sales, selling, general and administrative expenses were 25.4% for the three months ended September 30, 2002 compared to 24.4% for the three months ended
September 30, 2001. This percentage increase, while overall selling, general and administrative expenses decreased, is due to the net sales decrease mentioned above.

Operating Income.Operating income for the three months ended September 30, 2002 decreased by $9.1 million to
$6.7 million from $15.8 million for the three months ended September 30, 2001, for the reasons stated above. Operating margins were 4.8% for the three months ended
September 30, 2002 compared to 9.5% for the three months ended September 30, 2001. The decrease was caused by lower net sales and gross margins as stated above.

Interest expense.Interest expense for the three months ended September 30, 2002 decreased to $1.8 million from
$4.0 million for the three months ended September 30, 2001 due primarily to the decreased level of average indebtedness and lower interest rates during 2002. Our weighted average
borrowings for the three months ended September 30, 2002 were approximately $104.0 million compared to $170.9 for the three months ended September 30, 2001.

Provision for income taxes.The provision for income taxes for the three months ended September 30, 2002 decreased
$2.5 million to $2.0 million from $4.5 million for the three months ended September 30, 2001 due to a decrease in pre-tax income. Our effective tax rate was
40.0% for the three months ended September 30, 2002 and 39.5% for the three months ended September 30, 2001.

11

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Discontinued operations.Discontinued operations relate to the June 2002 sale of CTG and the December 2001 sale
of the Division. A summary of discontinued operations for the three months ended September 30, follows:

2002

2001Results of operations, net of income tax benefit of $ and $1,740, respectively

$


$
(2,430
)Loss on disposal, net of income tax benefit of $294 and $ , respectively


(547
)

$
(547
)
$
(2,430
)


Nine Months Ended September 30, 2002 Compared to Nine Months Ended September 30, 2001

Net sales.Net sales for the nine months ended September 30, 2002 decreased by $53.1 million, or 11.9%, to
$393.8 million from $446.9 million for the nine months ended September 30, 2001. This decrease is primarily attributable to a reduction in integration sales as our customers delay
or postpone capital expenditures in the current difficult economic environment.

Gross profit.Gross profit for the nine months ended September 30, 2002 decreased by $20.4 million, or 13.6% to
$129.4 million from $149.8 million for the nine months ended September 30, 2001. Gross profit as a percentage of net sales for the nine months ended September 30, 2002 was
32.9% compared to 33.5% for the nine months ended September 30, 2001. The margin decreased due to competitive pricing pressure which we believe is a result of the decline in general U.S.
economic conditions and our efforts to maintain market share.

Selling, general and administrative expenses.Selling, general and administrative expenses for the nine months ended
September 30, 2002 decreased by $13.4 million, to $101.6 million from $115.0 million for the nine months ended September 30, 2001. This decrease was primarily due to
the elimination of goodwill amortization as a result of adoption of SFAS 142 and payroll and rent expense associated with the employees who were severed and the facilities that were closed in
conjunction with our 2001 restructuring activities. Excluding goodwill amortization, our selling, general and administrative
expenses were $111.6 for the nine months ended September 30, 2001. As a percentage of net sales, selling, general and administrative expenses were 25.8% for the nine months ended
September 30, 2002 compared to 25.7% for the nine months ended September 30, 2001. This percentage increase, while overall selling, general and administrative expenses decreased, is due
to the net sales decrease mentioned above.

Operating income.Operating income for the nine months ended September 30, 2002 decreased by $6.9 million to
$27.8 million from $34.7 million for the nine months ended September 30, 2001, for the reasons stated above. Operating margins were 7.1% for the nine months ended
September 30, 2002 compared to 7.8% for the nine months ended September 30, 2001. The decrease was caused by lower net sales and gross margins as stated above.

Interest expense.Interest expense for the nine months ended September 30, 2002 decreased to $5.9 million from
$13.4 million for the nine months ended September 30, 2001 due primarily to the decreased level of average indebtedness and lower interest rates during 2002. Our weighted average
borrowings for the nine months ended September 30, 2002 were approximately $101.3 million compared to $179.9 for the nine months ended September 30, 2001.

Provision for income taxes.The provision for income taxes for the nine months ended September 30, 2002 increased
$0.6 million to $9.0 million from $8.4 million for the nine months ended September 30, 2001 due to an increase in pre-tax income, offset by a reduction in the
effective tax rate.

12

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Our effective tax rate was 40.0% for the nine months ended September 30, 2002 as compared to 40.5% for the nine months ended September 30, 2001.

Discontinued operations.Discontinued operations relate to the June 2002 sale of CTG and the December 2001 sale
of the Division. A summary of discontinued operations for the nine months ended September 30, follows:

2002

2001Results of operations, net of income tax benefit of $6,253 and $77, respectively

$
(9,977
)
$
(113
)Loss on disposal, net of income tax benefit of $12,404 and $ , respectively


(37,019
)

$
(46,996
)
$
(113
)


Liquidity and Capital Resources

As the result of the sales of CTG and the Division, business combinations completed or finalized during the nine month period ended September 30, 2002, and
our continued focus on the audio visual integration business, there are several changes in our September 30, 2002 balance sheet when compared with balances at December 31, 2001. These
include:



For
the nine months ended September 30, 2002, net cash flows used in operating activities of continuing operations were $43.8 million. Net cash flows provided by operating
activities of continuing operations were $26.4 million for the nine months ended September 30, 2001. Cash flows used in operations during the nine month period ended September 30,
2002 relate largely to a reduction in trade accounts payable.

Our
average days sales outstanding for the third quarter of 2002 was 67 days as compared to 53 days for the same period in 2001. The increase of our days sales outstanding
is primarily the result of slow-downs in collections from customers due to the difficult economic environment. To date, management does not believe that the increase in the average days
sales outstanding has resulted in increased credit risk.

Inventory
turnover on an annualized basis was 6 and 8 times at September 30, 2002 and 2001, respectively. The decrease from last year was primarily the result of higher levels of
inventories and reduced sales.

Capital
expenditures for the nine months ended September 30, 2002 were $5.3 million. Funds were used primarily to upgrade and enhance furniture, fixtures, equipment and
information systems.

13

---

Cash
flows provided by financing activities of continuing operations were $45.3 million for the nine months ended September 30, 2002. Cash flows from financing activities
are primarily affected by borrowings and repayments under our credit facility and purchases and sales of the Company's stock.

During
the quarter ended September 30, 2002, the Board of Directors authorized the purchase of up to 4 million shares of the Company's common stock. At September 30,
2002, the Company held 2,828,564 shares of common stock in treasury.

At
September 30, 2002, our operations were financed with long-term lines of credit totaling $166.7 million, of which we had utilized $109.0 million.

Based
on the foregoing, we believe that our financing arrangements provide the financial resources and liquidity required to continue our operations in the normal course of business for
the foreseeable future.

Credit Facility

Loans under the Credit Facility may be incurred by us from time to time to finance working capital and acquisitions and may be made at the Bank's prime rate (as
defined) or at the defined published eurodollar rate plus a "eurodollar margin" that ranges from 150 to 275 basis points based on certain of our indebtedness ratios. Borrowings under the Credit
Facility are secured by substantially all of our
assets and property, including accounts receivable, equipment and inventory. The loan commitment terminates on the maturity date (December 10, 2003), unless terminated earlier. We may
voluntarily prepay any advance without penalty or premium at any time or from time to time.

The
Credit Facility contains restrictive covenants, which may have an adverse effect on our operations in the future. We have agreed that, among other things, we will not:
(i) change the nature of our business; (ii) liquidate or dissolve our affairs, merge, consolidate or acquire the property or assets of any person, other than permitted acquisitions that
comply with the financial covenants of the Credit Facility, certain intercompany mergers, permitted investments, permitted dispositions, certain capital expenditures and leases; (iii) permit
the incurrence of any other lien on our property and assets; (iv) incur certain other indebtedness; (v) pay cash dividends or repurchase more than a certain amount of our capital stock;
(vi) violate certain financial covenants; or (vii) engage in certain other transactions.

Inflation

Certain of our product offerings have been and are expected to continue to be subject to price fluctuations due to inflationary and other market conditions. We
are generally able to pass such increased costs on to our customers through price increases, although we may not be able to adjust our prices immediately. In general, we do not believe that inflation
has had a material effect on our results of operations in recent years.

14

---

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

No significant market risk changes occurred in the nine-month period ended September 30, 2002. Refer to Item 7A in the Company's Annual Report
on Form 10-K for the year ended December 31, 2001 for further information.

ITEM 4. Controls and Procedures

Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures
pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective. The Company's disclosure controls and procedures are
effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic Securities and Exchange
Commission filings. No significant deficiencies or material weaknesses were identified in the evaluation and therefore, no corrective actions were taken. There were no significant changes in the
Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

15

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PART II-OTHER INFORMATION

ITEM 1. Legal Proceedings

We are, and have been involved, from time to time, in various claims, complaints, proceedings and litigation relating to activities arising from the normal course
of our operations. Based on the facts currently available to us, we believe that the matters pending at September 30, 2002 are covered by insurance, without merit, or of such amounts which upon
resolution are not likely to have a material adverse effect on our financial condition, results of operations or cash flows. Reference is made to the Company's Form 10-K for the
year ended December 31, 2001 concerning certain pending litigation. There was no significant change in the status of the caseLemelson Medical, Educational &
Research Foundation, Limited Partnership v. Federal Express Corporation, et al.since the filing of our Form 10-K.

ITEM 2. Changes In Securities and Use of Proceeds

Not applicable.

ITEM 3. Defaults Upon Senior Securities

Not applicable.

ITEM 4. Submission of Matters to a Vote of Security Holders

Not applicable.

ITEM 5. Other Information

Not applicable.

ITEM 6. Exhibits and Reports on Form 8-K





16

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|                        |  | MCSi, Inc.
(Registrant)
|----------------------- |  | -----------------------
|Date: November 14, 2002 |  |                        
|                        |  | By:                    

17

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SECTION 302 CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

I,
Michael E. Peppel, the Chief Executive Officer of MCSi, Inc., certify that:

1.    I
have reviewed this quarterly report on Form 10-Q of MCSi, Inc.;

2.    Based
on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.    Based
on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.    The
registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:

a)    designed
such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)    evaluated
the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report
(the "Evaluation Date"); and

c)    presented
in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.    The
registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):

a)    all
significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and
report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b)    any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.    The
registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

|Date: November 13, 2002 |  | /s/MICHAEL E. PEPPELMichael E. Peppel
Chief Executive Officer
|----------------------- |  | -------------------------------------------------------------

---

SECTION 302 CERTIFICATION OF CHIEF FINANCIAL OFFICER

I,
Ira H. Stanley, the Chief Financial Officer of MCSi, Inc.,certify that:

1.    I
have reviewed this quarterly report on Form 10-Q of MCSi, Inc.;

2.    Based
on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.    Based
on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.    The
registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:

a)    designed
such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)    evaluated
the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report
(the "Evaluation Date"); and

c)    presented
in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.    The
registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):

a)    all
significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and
report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b)    any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.    The
registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

|Date: November 13, 2002 |  | /s/IRA H. STANLEYIra H. Stanley
Chief Financial Officer
|----------------------- |  | -------------------------------------------------------

---