UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

                                   (MARK ONE)

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED JANUARY 03, 2004

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

          FOR THE TRANSITION PERIOD FROM              TO             .
                                         ------------    ------------

                        COMMISSION FILE NUMBER: 000-27617

                       THE MANAGEMENT NETWORK GROUP, INC.


             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)



             DELAWARE                                  48-1129619
   (STATE OR OTHER JURISDICTION OF                  (I.R.S. EMPLOYER
    INCORPORATION OR ORGANIZATION)               IDENTIFICATION NUMBER)


                             7300 COLLEGE BOULEVARD,
                     SUITE 302, OVERLAND PARK, KANSAS 66210
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (913) 345-9315

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:



     TITLE OF EACH CLASS            NAME OF EACH EXCHANGE ON WHICH REGISTERED
     -------------------            -----------------------------------------
COMMON STOCK (.001 PAR VALUE)                  NASDAQ NATIONAL MARKET


        SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE.

Indicate by check mark  whether the  Registrant  (1) has filed all reports to be
filed by Section 13 or 15(d) of the  Securities  Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days. YES [X] NO [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. []

<PAGE>

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). YES [ ] NO [X]

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant,  as of March 26, 2004 was approximately  $65.7 million.  As of March
26, 2004, the Registrant had 34,565,483 shares of common stock, par value $0.001
per share (the Common Stock), issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

The  information  required  to be provided in Part III (Items 10, 11, 12, 13 and
14) of this Annual Report on Form 10-K is hereby  incorporated by reference from
the  Company's  Definitive  2004  Proxy  Statement  which will be filed with the
Securities and Exchange  Commission  within 120 days of the end of the Company's
fiscal year.


<PAGE>




                       THE MANAGEMENT NETWORK GROUP, INC.

                                    FORM 10-K

                                TABLE OF CONTENTS



                                                                        PAGE
                                                                        ----
                                     PART I

Item 1.   Business....................................................     4
Item 2.   Property....................................................    16
Item 3.   Legal Proceedings...........................................    16
Item 4.   Submission of Matters to a Vote of Security Holders.........    17

                                     PART II

Item 5.   Market for Registrant's Common Equity and Related
          Stockholder Matters.........................................    17
Item 6.   Selected Consolidated Financial Data........................    18
Item 7.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations...................................    19
Item 7A.  Quantitative and Qualitative Disclosures About Market
          Risk........................................................    26
Item 8.   Consolidated Financial Statements...........................    27
Item 9.   Changes in and Disagreements With Accountants on Accounting
          and Financial Disclosure....................................    54
Item 9A.  Controls and Procedures ....................................    54

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant..........    54
Item 11.  Executive Compensation......................................    54
Item 12.  Security Ownership of Certain Beneficial Owners and
          Management..................................................    54
Item 13.  Certain Relationships and Related Transactions..............    55
Item 14.  Principal Accountant Fees and Services .....................    55

                                    PART IV

Item 15.  Exhibits, Financial Statement Schedules and Reports on
          Form 8-K....................................................    55
SIGNATURES............................................................    56


<PAGE>


                                     PART I

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

Cautionary statement regarding forward-looking information

With the exception of historical information,  this report on Form 10-K contains
forward-looking  statements  as defined  in the  Private  Securities  Litigation
Reform  Act of 1995  and  identified  by such  words  as  "will  be,"  "intend,"
"continue," "believe," "may," "expect," "hope," "anticipate," "goal," "forecast"
or other comparable terms. The Management Network Group, Inc.'s actual financial
condition,  results of  operations  or business may vary  materially  from those
contemplated  by such forward  looking  statements and involve various risks and
uncertainties, including but not limited to those discussed in Item 1, "Business
- Risk  Factors."  Investors are  cautioned  not to place undue  reliance on any
forward-looking statements.

WEBSITE ACCESS TO EXCHANGE ACT REPORTS

The Management  Network Group,  Inc.'s internet website address is www.tmng.com.
The Management  Network Group,  Inc.  ("TMNG" or "the Company")  makes available
free of charge through TMNG's website the Company's annual reports on Form 10-K,
quarterly  reports on Form 10-Q,  current reports on Form 8-K, and amendments to
those  reports  filed or  furnished  pursuant  to Section  13(a) or 15(d) of the
Exchange Act as soon as reasonably  practicable after the Company electronically
files such  material  with,  or  furnishes  it to the  Securities  and  Exchange
Commission ("SEC").

ITEM 1. BUSINESS

GENERAL

Founded in 1990, TMNG a Delaware  corporation,  is a leader in consulting to the
communications  industry.  The  Company  has built a fully  integrated  suite of
consulting offerings including strategy, management, marketing, operational, and
technology  consulting  services primarily to communications  service providers,
technology  companies and financial services firms located  principally in North
America  and Western  Europe.  Historically,  in  addition to North  America and
Western Europe,  TMNG has provided  consulting services to clients in almost all
other major international  markets. TMNG believes it is unique in its ability to
provide  a  comprehensive  business  solution  to the  communications  industry,
including strategy consulting and business planning,  product/service definition
and launch,  customer acquisition and retention,  business model transformation,
technical  support and process  modeling for business  support systems (BSS) and
operations support systems (OSS). TMNG has consulting experience with almost all
major aspects of managing a global  communications  company.  In addition,  TMNG
provides marketing  consulting services to clients outside of the communications
industry, primarily in the Eastern Region of the United States (Mid-Atlantic).

From  its  inception  to  mid-fiscal  year  2000,  TMNG  was  a  provider  of  a
comprehensive  range of  services  to the global  communications  industry  with
significant  focus  and  emphasis  on  management  and  operational   consulting
services.   During  fiscal  year  2000  the  Company  identified  early  leading
indicators of the market  downturn in the  communications  industry (See "Market
Overview" in Item 1 for an additional discussion of market changes). The Company
broadened its focus and emphasis to include not only  management and operational
consulting  but also  strategy  and  marketing  to enable the Company to deliver
solutions to its  communication  service  provider  clients.  To accomplish this
transformation,  the Company looked to increase the breadth of its employee work
base,  hiring  consultants  of  increasingly  diverse  backgrounds  with various
technical competencies,  and began an acquisition strategy to acquire consulting
companies  whose  offerings  complemented,  expanded and deepened the  offerings
historically  provided by TMNG.  Key  acquisitions  completed by TMNG during the
last four years included Cambridge  Strategic  Management Group, Inc. (now "TMNG
Strategy"),  The  Weathersby  Group,  Inc.  (now "TMNG  Marketing")  and Tri-Com
Computer  Services,  Inc. (now "TMNG  Technologies").  These businesses  focused
primarily on strategy, new product launch initiatives,  customer acquisition and
retention,  and technology consulting to the global communications industry. The
Company believes these acquisitions have expanded key client relationships, have
positioned  TMNG  uniquely in the market to  effectively  serve today's needs of
large global communication service providers,  and have provided an expansion of
key direct  distribution  channel  elements to TMNG.  In fiscal  year 2003,  the
Company  better  integrated  these  practices and now brings a fully  integrated
suite of offerings to the communications marketplace.

As TMNG primarily  focuses on communication  service  providers,  it has learned
during  the course of  numerous  engagements  what the  service  providers'  key
business  objectives  consist  of, both near and long term.  Subsequently,  TMNG
built product offerings  targeting  software solution and technology  companies,
investment  banking,  and private  equity  firms  which  invest in and serve the
communications industry. The Company's services to software and technology firms
have included strategy  definition,  product offering  positioning,  application
development,   assistance  in  responding   to  requests  for   proposals,   and
implementing solutions within the service provider environment.  Services to the
investment   banking  and  private  banking  community  have  included  prospect
validation and due diligence.

Recently,  with the market dynamics changing,  (see "Market Overview" in Item 1)
TMNG is focusing on the  opportunity  to expand its offerings  through  indirect
channel  partners.  Partnering  will  better  enable the  Company to serve large
clients in what has  become a  shrinking  and  consolidating  marketplace.  TMNG
provides  its  partners  with  contacts,  business  analysis,  business  process
outsourcing  (BPO)  solutions,  and depth of knowledge and experience in serving
the  industry.   The  partnerships   bring  technology   solutions  and  systems
integration  capabilities  which  enable  TMNG to  provide a more  comprehensive
client  offerings  and  solution  to  effectively   compete  with  other  global
consultancies.  Such partnerships are also expanding the Company's relationships
with  off-shore  development  firms  located  primarily in the Asian market that
provide high quality, low cost solutions to the industry.

<PAGE>


The Company is evolving its service  offerings to support the next generation of
data and content offerings and is providing communications  consulting expertise
to new and growing  organizations  with increasing demand. The Company continues
to invest  significantly  in wireless,  including a strategic  partnership  with
inCode  Telecom  Group,  in  the  construction  of a  wireless  next  generation
laboratory  located  in San  Diego,  California.  In 2003,  the  Company  took a
leadership  position in the wireless  industry by providing a suite of offerings
to assist  wireless  carriers  with the impact of  wireless  number  portability
(WNP).  The  Company  looks to  focus on  several  data and  broadband  wireless
initiatives in 2004. The Company is also  investing in  intellectual  capital to
assist  major  communication  service  providers  in dealing with the voice over
internet protocol (VOIP) and Internet Protocol managed offerings  transformation
which TMNG believes will have an impact on the  industry.  Finally,  the Company
has recruited  executives  with  expertise and  relationships  serving the rural
local exchange  carrier (RLEC) market and is building  presence and market share
in that industry segment of communications service providers.

The Company  intends to  continue  capitalizing  on its  industry  expertise  by
refreshing existing  proprietary toolsets and building new toolsets to enable it
to provide strategic, management, marketing, operational, and technology support
to clients. TMNG's toolsets are consulting guidelines,  processes and benchmarks
created  and updated by TMNG  consultants  based on their  experience  over many
consulting  engagements.  These toolsets assist clients to improve productivity,
gain  competitive  advantage,  reduce time to market and market entry risk,  and
increase revenues and profits.  TMNG's services are provided by a team comprised
of  senior   professionals   recruited  from  prestigious   university  campuses
complemented by teams of consultants from the communications  industry averaging
15 years of experience.

The Company maintains a unique  technology  agnostic and vendor neutral position
to make unbiased  evaluations and  recommendations  that are based on a thorough
knowledge of each solution and each client's situation.  Therefore, TMNG is able
to  capitalize  on  extensive   experience   across   complex   multi-technology
communications  systems  environments  to provide  the most sound and  practical
recommendations to clients.

MARKET OVERVIEW

The demand for consulting  services  increased  throughout the 1990's,  and this
trend was especially  prevalent for consulting  services of  communications  and
e-commerce  consulting  firms.  The key  contributor to this was the significant
projected  growth  of the  internet  and  e-commerce  which  stimulated  capital
investment into new and existing  wireline  communications  providers,  enabling
their  investment  in new network  technology  and the creation of new broadband
market offerings. Investment was further accelerated through global deregulation
of the  communications  industry  throughout the 1990's. The deregulation of the
communications  industry  resulted in increased  competition  by the creation of
increased  demand for fiber and capacity by the new market  entrants;  a massive
influx of capital to fund carrier  entrants and allow existing firms to purchase
aggressively from one another as they expanded;  rapid internet growth, spurring
broadband  internet  access  services,  digital  subscriber  line (DSL) internet
access and unbundled  local loops that forged the way for wholesale DSL business
models;  and  technological  innovations,  allowing new service offerings in the
areas of voice, data, video and content.

Similarly,  significant  investment  was  made  in the  wireless  communications
industry,  which was experiencing  tremendous growth as a growing  percentage of
voice  communications  were  migrating  to wireless  networks  and  devices.  In
addition,  the personal  communications  services  (PCS)  auctions in the United
States and universal mobile  telecommunications system (UMTS) broadband spectrum
auctions in Europe resulted in new providers,  additional services, and improved
technology.  Customer  penetration  resulted in both  residential  and  business
customers,  and  services  were  expanded  to include  wireless  data  offerings
primarily in Europe and Asia.

By  mid-2000,  following  the first  announcements  of  disappointing  financial
performance by wireline and wireless  communication  service providers and their
vendors,  it became  apparent that the rate of  investment  and adoption was far
exceeding  the  expected  rate  of   consumption  in  e-commerce  and  broadband
offerings.  The massive  inflow of capital in  communications  during the 1990's
resulted in an inflated market  scenario,  where once solid business models were
now ill equipped to function and adjust to the  macroeconomic  environment.  The
cycle was further  perpetuated  by the over  saturation  of new market  entrants
where supply far exceeded levels  sustainable by the market,  creating  pressure
for consolidation and funding contraction. As a result, the industry experienced
a  significant  number of  bankruptcies  and layoffs in excess of half a million
individuals  in the United States alone.  Because the  communications  companies
often purchased  services from one another,  the  bankruptcies  led to a vicious
cycle  of  industry-wide   destabilization   with  each  successive   bankruptcy
jeopardizing another company's liquidity position.

The  industry  experienced  further  instability  during 2002 due to  government
investigations  into the  accounting  practices of several large  communications
providers that revealed the perpetuation of accounting improprieties,  including
the material overstatement of revenues and the understatement of expenses.  Such
inquiries have resulted in ongoing restatements of previously reported financial
statements,  resulting in additional  destabilization  within the industry,  and
eroding investors' confidence.

As  the  macroeconomic  forces  discussed  above  continue  to  destabilize  the
communications  industry,  outside consulting  services for communications  have
been  negatively  impacted,  including  TMNG's.  Communications  companies  have
continued to reduce their demand for external  consultants,  seeking  instead to
utilize more internal resources,  or in some cases delayed capital and operating
expenditures related to the launch of new products and services, particularly in
networks and technology. This has resulted in a continued substantial decline in
TMNG's revenue and profits during fiscal years 2001,  2002 and 2003 (See Item 1,
"Business - Risk Factors" and Item 7, "Management's Discussion and Analysis").

Today,  the global  communications  industry is in the midst of what the Company
believes to be revolutionary  change.

<PAGE>

The Company believes the companies that survived the fallout over the past three
years will either  acquire or be acquired  and/or need to implement  significant
changes to their  organizations.  The Company believes access to capital markets
will remain  limited  and, as a result,  capital and  operating  investment  and
expense will continue to be closely monitored.

As TMNG enters fiscal 2004, the Company believes the large global communications
companies will be strategically  focused on the following key initiatives,  with
priority depending upon present position and state of the company: launching new
products with focus on enterprise customers and broadband and content offerings;
cost cutting through outsourcing on non-critical activities; bundling of product
offerings;   improving  the  customer   experience  and  minimizing  churn;  and
maximizing  invested  network  efficiencies.  It is also  expected  that further
market  consolidation  will occur over the next few years.  It is the  Company's
belief that the regulatory  environment  will also continue to play a key factor
in the strategy and operations of communications  providers. Most notably, as it
relates to  requirements  to offer  wholesale  pricing on network  elements  and
taxation surrounding communications over VOIP. Regulatory decisions will further
facilitate the speed of change to next generation  networks,  as it will provide
input to the business cases. The Company expects demand for consulting  services
over the next decade to be  differentiated  compared to the past, with increased
focus  on  wireless,  and  internet  based  offering,   outsourced  BPO  service
opportunities,  the increasing  presence of offshore  technology partners due to
price advantage,  and the need for existing management  consultancies to provide
solutions  to  communications  industry  challenges.  As  discussed  in  Item 1,
"Business - General," TMNG has invested  significantly  to enable the Company to
provide such services.

It has been the  Company's  experience  that  because  the  expertise  needed by
communications  companies  to address the market's  needs is  typically  outside
their core competencies,  they must ultimately either recruit and employ experts
or  retain  outside  specialists.  The  Company  believes  due to the  range  of
expertise  required  and the  time  associated  with  hiring  and  training  new
personnel,  bringing expertise  in-house is often not a viable option.  Although
demand  for  consulting  services  has been down for the last three  years,  the
Company believes customers will need to outsource some of the expertise required
to adapt to new  environments  and capitalize on new  technologies now emerging.
When retaining outside specialists,  communications  companies need experts that
fully understand the communications industry and can provide timely and unbiased
advice and recommendations. TMNG intends to continue responding to that need.

BUSINESS STRATEGY

The  Company's  objective is to establish  itself as the  consulting  company of
choice to the communications  industry, which includes the service providers and
technology  companies  that serve the industry,  and the financial  services and
investment  banking  firms that  invest in the  sector.  The  following  are key
strategies the Company has adopted to pursue this objective.

- Develop and evolve existing offerings/solutions and thought leadership

The Company plans to continue expanding its end-to-end solutions offerings, both
by organic expansion and/or through  acquisitions.  Organic  expansion  involves
launching new products and services and generating  revenues through  integrated
offerings jointly developed by the Company and its acquired  companies.  Organic
expansion  will also  focus on  offerings  geared  towards  increasing  clients'
efficiencies. The Company expanded its offerings through the acquisition of TMNG
Marketing in late 2000.  TMNG  Marketing  provides a full  spectrum of marketing
consulting services, including product development,  churn management and market
research  that takes  clients from the point of product  definition  to customer
acquisition and retention. In 2001, the Company acquired TMNG Technologies. TMNG
Technologies  provides  end-to-end  OSS, data center,  systems  solutions,  data
sourcing,  legacy integration and middleware  implementation.  Additionally,  in
March 2002, TMNG acquired TMNG Strategy. This newest acquisition provides a wide
range  of  business  strategy  services   including  analyses  of  industry  and
competitive   environments;   product  and  distribution  strategies;   finance,
including business case development,  modeling,  cost analysis and benchmarking;
and due diligence and risk assessment.

The  Company  plans  to  continue   extending  its  product   offerings  to  the
communications  industry. As discussed in "Market Overview" in Item 1 above, the
Company believes wireline and wireless  providers will be strategically  focused
on the following key initiatives,  with priority depending upon present position
and state of the  company:  launching  new  products  with  focus on  enterprise
customers  and  broadband   offerings;   cost  cutting  through  outsourcing  of
non-critical activities;  bundling of product offerings;  improving the customer
experience and minimizing churn; and investing in next generation networks.

- Continue to build the TMNG brand

The Company plans to continue building and communicating the TMNG brand, further
positioning   the  Company  as  the   consultancy   of  choice  for  the  global
communications  industry.  Special  focus  will be placed on brand and  eminence
building  in the  wireless  consulting  market  and in the VOIP  arenas.  Direct
marketing  efforts  and other  marketing  initiatives  are  underway to continue
building  awareness  of TMNG and  communicating  the  Company's  key  strengths,
including the Company's uniquely high level of experienced consultants, focus on
the global  telecommunications  industry,  integrated  end-to-end  solution  and
commitment to bringing  clients a positive return on their  investment.  Each of
the acquisitions by the Company is also being rebranded under the TMNG label.

- Focused and effective retention and recruitment

TMNG plans to further  enhance its business model to accommodate the anticipated
types of  consulting  services  as a result of  revolutionary  change  occurring
within the communications sector. One key element of the business model includes
attracting and retaining high quality,  experienced consultants.  In the current
economic environment, the Company's two primary challenges in the recruitment of
new consulting

<PAGE>

personnel are the ability to recruit  talented  personnel  into a market that is
significantly  depressed  and the ability to execute  such  recruitment  with an
appropriate compensation arrangement.

The  Company   reinvigorates   existing  skill  sets  of  its  consultants  with
proprietary  toolsets  that  provide  methodologies  they use to  augment  their
experience  and helps  analyze  and solve  clients'  problems.  TMNG  utilizes a
network  of  eRooms  to  serve  as  a  knowledge   base,   enabling   consultant
collaboration  on engagements and providing  support  information and updates of
TMNG current  toolsets  and  releases of next  generation  tools.  Finally,  the
Company  continues to manage its flexible  and unique  employee and  independent
subject matter expert model to maximize skill set  offerings,  while  minimizing
the effect of unbillable consultant time.

- Maintaining a global presence

The Company plans to maintain presence globally to deliver services and solution
capabilities to client companies located around the world. Especially in Western
Europe,  the Company  believes the competitive  market  expertise of TMNG's U.S.
consultants can be a key factor for foreign companies facing the business issues
associated with deregulation and competition.

- Building  intellectual  capital and a comprehensive suite of wireless and VOIP
  consultative offerings

TMNG has completed  engagements with wireless clients in the U.S., Europe, Latin
America, Asia and the Middle East. The Company's services have included business
and strategic planning, product development, customer acquisition and retention,
business  and  operations  process  design and  reengineering,  revenue and cost
management and network planning.  In 2003 the Company built a suite of offerings
to support WNP for the wireless industry.

In association  with the Company's  strategic  partner,  inCode Telecom Group, a
technology  laboratory  has been  established  to enable  advances  in  wireless
technology. The Wireless Technology Lab (WTL), located in San Diego, California,
is a center for  testing  and  demonstrating  advanced  wireless  equipment  and
software. It also serves as a neutral location for application development.  The
WTL   is  the   first   independent   facility   to   provide   a   vendor   and
technology-neutral,  real-world  testing  ground  for  next-generation  wireless
technologies.  In 2004, the Company will look to the laboratory to assist in the
creation of service offerings to the wireless marketplace.

In  2004,   the  Company's  top  two  strategic   focuses  will  be  building  a
knowledgebase and developing service offerings supporting wireless communication
service providers and VOIP initiatives.

- Leveraging knowledge and skills to new opportunities and services

The Company is expanding its service  offerings and is providing  communications
consulting expertise to new and growing organizations with increasing demand. In
2002, the Company  obtained a Government  Services  Authorization  (GSA),  which
enables the Company to provide  consulting  services to the Federal  government.
The Company has  recruited  personnel  with  expertise  in building a government
consultancy and looks to develop and launch offerings to the Federal government.
In  addition,  the  Company  has  recruited  executives  with  expertise  and  a
relationship  serving the incumbent  local  exchange  carrier  (ILEC) market and
plans to build  its  presence  and  market  share in that  industry  segment  of
communications service providers.

The  Company  is also  expanding  its focus on  managed  service  offerings  and
partnerships with select global  technology,  outsourcing and system integration
firms as a  complement  to the  Company's  consultancy  offerings.  The  Company
believes  this will be a fast  growing  market  segment  which  should allow the
Company to leverage its  intellectual  capital  while  teaming  with  technology
partners to bring BPO and managed  services  offerings  to select  clients.  The
Company  believes it is uniquely  positioned to capitalize on these  anticipated
market  opportunities,   particularly  because  of  its  vendor  neutrality  and
proprietary productivity toolsets.

SERVICES

TMNG provides a full range of strategic,  marketing,  operations  and technology
consulting services to the communications industry. Services provided include:

- Strategy and Business Case Development

TMNG provides comprehensive  strategic analysis to service providers,  equipment
manufacturers  and  financial  investors  in the  communications  industry.  The
Company's approach combines rigorous qualitative and quantitative  analyses with
a detailed  understanding of industry trends,  technologies,  and  developments.
TMNG  provides  clients with specific  solutions to their key  strategic  issues
relating  to  their  existing  business  as  well  as new  product  and  service
opportunities.  TMNG's  services  include  business case  development,  data and
content  strategies,   marketing  spending   optimization,   service  and  brand
diversification,   enterprise   and  small   business   strategies,   technology
commercialization and operational strategies.

- Product Development and Management

TMNG offers global communications  service providers the benefit of its hands-on
experience  developing  and  launching  new  products  and  services for some of
today's industry leaders.  TMNG's product  development  approach includes market
assessments,   product/service  definition,

<PAGE>

business requirements definition,  project management, testing and release. TMNG
also helps  communication  clients by evaluating the  profitability  of existing
product  and  service  offerings  to  identify   opportunities  to  consolidate,
de-emphasize   or   decommission   offerings   to   improve   clients'   overall
profitability.

- Customer Acquisition and Retention

TMNG has developed and  implemented  acquisition  and retention  strategies  for
clients in the  communications  industry.  TMNG's consultants are skilled in the
areas of target  market  segmentation,  campaign  management  and  sales-process
management. TMNG's strategies take into account the needs and preferences of the
target market and include a mix of marketing  communications,  partner programs,
e-marketing,  direct  sales,  telemarketing,  direct  response  and  loyalty and
retention programs.

- Revenue and Cost Management

TMNG is dedicated to helping clients uncover and recover missed opportunities at
every stage along the revenue  life cycle and reduce the costs  associated  with
managing  business  functions.  TMNG's  approach to revenue and cost  management
centers  around  operational  assessment,  process  improvement,  organizational
restructuring,  and continuous  improvement.  TMNG's  consultants  utilize their
industry expertise and the Company's  proprietary TMNG QBC (R) (Quality Business
Controls) toolset to deliver quantifiable benefits to clients.

- Business and Operations Process Redesign and Reengineering

TMNG  provides  clients with  efficient,  integrated  business  and  operational
processes,  supporting technology systems and web-centric  interfaces across all
OSS/BSS applications.  TMNG takes clients from the point of customer acquisition
to  provisioning  all the way  through  to  billing,  collections  and  accounts
receivable management to cash and profits in the bank. TMNG process redesign and
reengineering  expertise is put to use not only for the Company's  clients,  but
also in TMNG's  Wireless  Technology  Lab where the Company is working  with its
partners to develop and test leading edge wireless applications.

- Corporate Investment Services

The  Company  provides  a  wide  range  of  corporate   investment  services  to
investment/private  equity firms in connection with  investments and mergers and
acquisitions in the  communications  industry.  Services  include  evaluation of
management teams and business plans, identification of strengths and weakness of
the company, and analyses of the company's financial models,  systems,  products
and operational and business processes. Post-investment support is also provided
to help  customers  in the  optimization  of  their  investment.  The  Company's
Operational   Performance   Appraisal  (OPA  (TM))  features  an  assessment  of
communications   companies'  revenue  assurance,   network  inventory,   network
operations,  order management and  provisioning,  disaster recovery planning and
e-commerce  operations  and  products.  The  appraisal  seeks to help  companies
optimize asset utilization, including network assets and inventory. In addition,
OPA(TM) seeks to maximize revenue and minimize associated costs and determine if
the provider's customers are being served effectively.

- TMNG Resources

TMNG Resources, a business unit of TMNG Marketing,  focuses on providing subject
matter  experts  (SMEs)  utilizing a staff  augmentation  model.  As the telecom
industry  starts  to  rebound  ever so  slowly,  the  Company  believes  service
providers  may,  at  least  initially,  be  hesitant  to make  permanent  hiring
decisions  and will seek  temporary  expert  staff.  The Company  believes  TMNG
Resources is uniquely  positioned to fill the recruiting  needs of the Company's
clients.

COMPETITION

The market for  communications  consulting  services  is highly  fragmented  and
changing  rapidly.  TMNG faces  competition  from major  business  and  strategy
consulting firms, large systems  integration and major global outsourcing firms,
offshore development firms from the Asian markets,  equipment and software firms
that have added service offerings, and customers' internal resources.  Recently,
there has been a  significant  increase  in demand for firms that can bundle BPO
with systems and  technical  integration.  Many of these  competitors  are large
organizations  that  provide a broad  range of  services  to  companies  in many
industries,  including the  communications  industry.  Many of these competitors
have  significantly  greater  financial,  technical and marketing  resources and
greater name recognition than TMNG. TMNG believes it has a competitive advantage
due to its single focus on the  communications  industry,  and the comprehensive
offerings it provides to its  customers.  TMNG also  believes the  complementary
experience  and  expertise  of  its   professionals   represents  a  competitive
advantage. TMNG's consulting team is comprised of senior professionals recruited
from prestigious  university campuses  complemented by teams of consultants from
the communications industry averaging 15 years of experience.

The Company has faced, and expects to continue to face,  additional  competition
from new entrants into the communications  consulting  markets.  The Company has
also  experienced  increased price  competition,  particularly  from large Asian
firms  providing  technical  support and  outsourcing and other large firms that
have the financial  resources to aggressively price engagements that they have a
particular interest in obtaining.  Increased competition could result in further
price  reductions,  fewer  client  projects,  underutilization  of  consultants,
reduced operating margins, and loss of market share.

With the communications  industry  experiencing  significant economic challenge,
contraction and consolidation, TMNG believes the Company's

<PAGE>

principal   competitive   factor  is  the  Company's   continual  focus  on  the
communications  industry and the ability to develop and provision solutions that
enhance client revenue and asset  utilization  and provide return on investment.
In a  down  economic  environment,  the  Company's  biggest  competitor  is  the
customer's  internal  resources.  As a result, the most significant  competitive
advantage becomes long-lived  relationships with key client executives that have
developed over time from consistency in responsiveness  to their needs,  quality
and reliability of consultants and deliverables,  and an appropriate price/value
formula.

EMPLOYEES

TMNG's ability to recruit and retain  experienced,  highly  qualified and highly
motivated  personnel has  contributed  greatly to the Company's  performance and
will be critical in the future.  The Company offers a flexible  recruiting model
that  enhances  the ability to attract  consultants  and to  effectively  manage
utilization. TMNG's consultants may work as full time employees or as contingent
employees. Contingent employees receive company-paid medical insurance, vacation
and other employee  benefits.  Instead of receiving a regular  salary,  however,
contingent  employees  will only be paid for time spent  working  on  consulting
projects for  customers or working on internal  projects.  Generally,  TMNG will
offer  contingent  employment  to  personnel  who  are  frequently  utilized  on
consulting projects,  and have a skill set/offering that is in high demand. TMNG
also has  relationships  with many  independent  contracting  firms to assist in
delivery of consulting solutions.  TMNG's current base of independent firms have
specialized  expertise in discrete areas of  communications,  and TMNG typically
deploys these firms only when their unique expertise/offering is required.

As of  January  3,  2004,  TMNG  has  utilized  approximately  180  consultants,
representing a combination of employee  consultants and independent  contracting
firms. Of these, 76 were employee consultants and approximately 104 were working
on engagements for TMNG primarily through independent  subcontracting  firms. In
addition to the consultants,  TMNG has an administrative  staff of approximately
25 employees in the accounting and finance, marketing,  recruiting,  information
technology, human resources and administrative areas.

BUSINESS SEGMENTS

Based on an analysis of the criteria in SFAS No. 131 "Disclosure  about Segments
of an Enterprise and Related  Information" the Company has concluded it has five
operating segments,  of which four are aggregated in one reportable segment, the
Management  Consulting Services segment, and the remaining segment in All Other.
Management   Consulting   Services  include  business   strategy  and  planning,
product/service  definition  and launch,  customer  acquisition  and  retention,
business model  transformation,  and technical and process  modeling for BSS and
OSS  environments.  All Other  consists of  computer  hardware  commissions  and
rebates  received in  connection  with the  procurement  of  hardware  for third
parties.  The accounting policies for the segments are documented in the summary
of  significant  accounting  policies  under  Item  8,  "Consolidated  Financial
Statements,"  Footnote 1  "Organization  and Summary of  Significant  Accounting
Policies." As discussed in Item 8, "Consolidated Financial Statements," Footnote
14,  "Subsequent  Event,"  effective March 4, 2004,  Management and the Board of
Directors approved the closing of the hardware segment of the business.

Management   evaluates  segment   performance  based  upon  Income  (Loss)  from
Operations,   excluding  equity  related   charges,   goodwill  and  intangibles
amortization,  and goodwill and intangible  asset  impairment.  Management  also
evaluates  trade  accounts  receivable as part of its overall  assessment of the
segments'  performance.  There are no intersegment sales. Revenues from external
customers, a measurement of profit or loss and total assets for each segment are
disclosed  in Item 8,  "Consolidated  Financial  Statements,"  Footnote 5 "Major
Customers,  Business  Segments and Significant  Group  Concentrations  of Credit
Risk."

MAJOR CUSTOMERS

Since inception,  TMNG has provided  services to approximately  600 domestic and
international  customers,  primarily  communication  service providers and large
technology and applications  firms ("TMNG Partners")  serving the communications
industry.  The  Company  depends  on a  small  number  of  key  customers  for a
significant  portion of  revenues.  For fiscal year 2003,  revenues  from Nextel
Communications,  Inc. and AT&T  Corporation  each accounted for more than 10% of
revenues,  and in the  aggregate  accounted  for 25.3% of revenues.  Also during
fiscal year 2003,  the Company's top ten customers  accounted for  approximately
66.5% of total revenue.  TMNG generally  provides  discounted  pricing for large
projects on fixed commitments with long-term  customers.  Because TMNG's clients
typically  engage  services on a project  basis,  their needs for services  vary
substantially  from period to period.  TMNG  continues to  concentrate  on large
wireline and wireless global communications companies headquartered  principally
in North  America  and Western  Europe and seeks to offer broad and  diversified
services to these customers. The Company anticipates that operating results will
continue  to  depend  on  volume  services  to  a  relatively  small  number  of
communication  service providers and technology vendors. The Company anticipates
increased market demand for bundled  business process and technical  outsourcing
which the Company and its TMNG Partners have  formalized  agreements to provide.
In addition,  the Company provides marketing consulting across multiple business
verticals, primarily on the East Coast of the United States.

INTELLECTUAL PROPERTY

TMNG's  success  is  dependent,   in  part,  upon   proprietary   processes  and
methodologies,  and the Company  relies upon a combination  of copyright,  trade
secret,  and  trademark  law to  protect  intellectual  property.  Additionally,
employees  and  consultants  are required to sign  non-disclosure  agreements to
assist the Company in  protecting  its  intellectual  property.  The Company has
obtained   federal   registration   for  seventeen   trademarks  and  has  filed
applications  to register four other marks in the United States.  It is possible
that third parties may challenge TMNG trademark applications.

<PAGE>

The  Company  does  not  have  any  patent   protection   for  the   proprietary
methodologies  used by TMNG  consultants.  TMNG  does not  currently  anticipate
applying for patent protection for these toolsets and methodologies.

SEASONALITY

In the past, the Company has experienced seasonal fluctuations in revenue in the
fourth quarter due primarily to the fewer number of business days because of the
holiday  periods  occurring  in  that  quarter.  The  Company  may  continue  to
experience  fluctuations  in revenue in the fourth  quarter  and may  experience
fluctuations in summer months and other vacation periods. As the Company expands
internationally,  third quarter revenue may fluctuate as a result of significant
vacation periods taken in the summer months.

RISK FACTORS

RISKS THAT RELATE TO TMNG'S BUSINESS

TMNG's  business,  operating  results,  and  financial  condition are subject to
numerous risks, uncertainties,  and contingencies,  many of which are beyond the
Company's control.  The following important factors,  among others,  could cause
actual results to differ materially from those  contemplated in  forward-looking
statements  made in this Annual  Report on Form 10-K or  presented  elsewhere by
management from time to time. Investors are urged to consider these risk factors
when evaluating an investment in the Company.

TMNG'S  RESULTS OF OPERATIONS ARE  MATERIALLY  AFFECTED BY ECONOMIC  CONDITIONS,
LEVELS OF BUSINESS  ACTIVITY AND LEVELS OF CHANGE IN THE  INDUSTRIES THE COMPANY
SERVES.

Uncertain global economic and political  conditions affect many of the Company's
clients'  businesses and many clients  continue to reduce or defer  expenditures
for  consulting  services.  In  addition,  TMNG's  business  tends to lag behind
economic cycles and, consequently,  the benefits of any industry recovery to the
Company's  business  may take  longer  to  realize.  The  Company  continues  to
experience pricing  pressures,  but the primary cause of TMNG's eroding revenues
has been budget  constraints and budget  reductions on the part of the Company's
service provider clients. Further deterioration of global industry,  economic or
political conditions could increase these effects.

TMNG FOCUSES ALMOST  EXCLUSIVELY ON SERVING THE COMMUNICATIONS  INDUSTRY,  WHICH
CONTINUES TO EXPERIENCE  DECLINING RESULTS OF OPERATIONS,  BANKRUPTCIES,  FUTURE
UNCERTAINTIES AND A REDUCTION IN THE AVAILABILITY OF INVESTMENT CAPITAL. ADVERSE
INDUSTRY  CONDITIONS  HAVE  RESULTED  IN  DECLINING  DEMAND  FOR  THE  COMPANY'S
SERVICES,  DECLINING  REVENUES,  LOSSES FROM  OPERATIONS AND A DECLINE IN TMNG'S
STOCK  PRICE,  AND COULD  CONTINUE TO HARM THE  COMPANY.  IF  CONDITIONS  IN THE
COMMUNICATIONS  INDUSTRY  DO NOT  IMPROVE  IN THE  NEAR  FUTURE,  THE  COMPANY'S
FINANCIAL  POSITION MAY CONTINUE TO BE DIMINISHED,  THE COMPANY'S  LIQUIDITY MAY
BECOME IMPAIRED AND FUNDING FROM THE CAPITAL MARKETS MAY NOT BE AVAILABLE

The Company  derived  almost all of its  revenues  from  consulting  engagements
within the communications industry. Much of the Company's past growth arose from
business opportunities  presented by industry trends that included deregulation,
increased competition,  technological advances, the growth of e-business and the
convergence of service offerings.

However, beginning in late 2000 and continuing through 2003, many communications
companies,  including  carriers,  equipment  manufacturers  and  other  industry
participants have reported  declining  results of operations and liquidity,  and
there  have  been  numerous  bankruptcy  filings.  These  events  resulted  in a
substantial decline in TMNG's revenues and net losses through the fourth quarter
of 2003. The Company's future operating results could continue to be affected by
continuing   declines  in  results  of  operations  and   continuing   financial
difficulties among communications companies. In addition to continuing decreases
in demand for the  Company's  services,  future  client  financial  difficulties
and/or bankruptcies could require the Company to write-off  receivables that are
in excess of bad debt  reserves,  which  would  harm the  Company's  results  of
operations in future fiscal periods.  Client  bankruptcies  could also create an
at-risk  situation  on balances for  professional  services  collected  near the
bankruptcy   filing  date.  In  addition,   the  worsening   conditions  in  the
communications  sector  could  cause  companies  to delay  new  product  and new
business  initiatives and to seek to control expenses by reducing use of outside
consultants.  Additionally,  the  communications  industry  is  in a  period  of
consolidation,  which could reduce the Company's  client base,  eliminate future
opportunities  or create  conflicts  of  interest  among  clients.  As a result,
current  industry  conditions  may  continue  to harm  the  Company's  business,
financial  condition,  results  of  operations,  liquidity  and  ability to make
acquisitions and raise investment capital.

TMNG IS DEPENDENT ON A LIMITED NUMBER OF LARGE  CUSTOMERS FOR A MAJOR PORTION OF
ITS  REVENUES,  AND THE  LOSS OF A MAJOR  CUSTOMER  COULD  SUBSTANTIALLY  REDUCE
REVENUES AND HARM THE COMPANY'S BUSINESS AND LIQUIDITY

TMNG derives a  substantial  portion of its revenues  from a relatively  limited
number of clients.  The  services  required by any one client may be affected by
industry   consolidation   or   adverse   industry   conditions,   technological
developments, economic slowdown or internal budget constraints. As a result, the
volume of work performed for specific clients varies from period to period,  and
a major client in one period may not use the Company's  services in a subsequent
period.

TMNG's services are often sold under short-term engagements and most clients can
reduce or cancel  their  contracts  with  little or no penalty  or  notice.  The
Company's  operating  results  may suffer if it is unable to  rapidly  re-deploy
consultants  if a client  defers,  modifies or cancels a

<PAGE>

project. Consequently,  investors should not predict or anticipate the Company's
future revenue based on the number or type of clients TMNG has or the number and
scope of its existing engagements.

THE COMPANY'S  REVENUES AND OPERATING RESULTS MAY FLUCTUATE  SIGNIFICANTLY  FROM
QUARTER-TO-  QUARTER,  AND FLUCTUATIONS IN THE COMPANY'S OPERATING RESULTS COULD
CAUSE THE COMPANY'S STOCK PRICE TO DECLINE

TMNG's   revenue   and   operating   results   may   vary   significantly   from
quarter-to-quarter due to a number of factors. In future quarters, the Company's
operating  results may be below the  expectations  of public market  analysts or
investors,  and the price of TMNG's common stock may decline. This is especially
true under present economic conditions impacting the communications  industry, a
typical result being fewer  opportunities and discounted  pricing.  Factors that
could cause quarterly fluctuations include:

-    the beginning and ending of significant contracts during a quarter;

-    the size and scope of assignments;

-    the form of customer  contracts  changing primarily from time and materials
     to fixed price or contingent fee, based on project results;

-    consultant turnover, utilization rates and billing rates;

-    the  loss of key  consultants,  which  could  cause  clients  to end  their
     relationships with TMNG;

-    the ability of clients to terminate engagements without penalty;

-    fluctuations  in demand for the Company's  services  resulting  from budget
     cuts, project delays, industry downturns or similar events;

-    clients'  decisions to divert resources to other projects,  which may limit
     clients'  resources  that would  otherwise  be  allocated  to services  the
     Company could provide;

-    reductions in the prices of services offered by TMNG's competitors;

-    fluctuations in the communications market and economic conditions;

-    seasonality during the summer, vacation and holiday periods;

-    fluctuations in the value of foreign currencies versus the U.S. dollar; and

-    global economic and political conditions and related risks,  including acts
     of terrorism.

Because a  significant  portion of the  Company's  non-consultant  expenses  are
relatively fixed, a variation in the number of client  assignments or the timing
of the initiation or the completion of client  assignments may cause significant
variations  in  operating  results from  quarter-to-quarter  and could result in
continuing  losses.  To the extent the addition of  consultant  employees is not
followed by corresponding  increases in revenues,  additional  expenses would be
incurred  that  would  not be  matched  by  corresponding  revenues.  Therefore,
profitability would decline and the Company could potentially experience further
losses. In addition, the Company's stock price would likely decline.

Additionally, fixed and contingent fee contracts entail subjective judgments and
estimates  about  revenue  recognition  and are  subject  to  uncertainties  and
contingencies.  For a more complete  discussion of the Company's  accounting for
revenue  recognition,  see "Critical  Accounting  Policies"  included in Item 7,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations."

TMNG HAS MADE SEVERAL ACQUISITIONS AND MAY CONTINUE TO MAKE ACQUISITIONS,  WHICH
ENTAIL RISKS THAT COULD HARM THE COMPANY'S FINANCIAL PERFORMANCE OR STOCK PRICE,
AND MAY BE DILUTIVE TO EXISTING SHAREHOLDERS

As part of the Company's  business  strategy,  TMNG has made and may continue to
make  acquisitions.  Any future  acquisition  would be  accompanied by the risks
commonly encountered in acquisitions. These risks include:

-    the difficulty associated with assimilating the personnel and operations of
     acquired companies;

-    the potential disruption of the Company's existing business;

-    further reductions in the Company's cash reserves;

-    adverse effects on the Company's financial statements, including write-offs
     and assumption of liabilities of acquired businesses; and

<PAGE>

-    paying too much for an acquired Company.

If  TMNG  makes  acquisitions  and  any of  these  problems  materialize,  these
acquisitions could negatively affect the Company's operations, profitability and
financial condition.

TMNG HAS GENERATED  SIGNIFICANT DEFERRED INCOME TAX ASSETS AND IF THE COMPANY IS
NOT ABLE TO GENERATE  SUFFICIENT  TAXABLE INCOME IN FUTURE PERIODS,  THE COMPANY
MAY NOT BE ABLE TO REALIZE THE INCOME TAX BENEFITS RELATED TO THOSE ASSETS

During  fiscal year 2003, a valuation  allowance in the amount of $24.0  million
was recorded in connection  with the Company's  deferred tax assets.  Management
continues to evaluate the recoverability of the deferred tax assets balances. As
part of its  analysis,  the  impact of  sources  of future  income  has not been
included due to the Company's  history of cumulative  operating  losses.  In the
event the  Company  continues  to report  net  operating  losses  for  financial
reporting,  no tax benefit would be recognized for those losses.

ANY  CONTINUING  DECREASE  IN  CURRENT  AND  PROJECTED  REVENUES  MAY  RESULT IN
ADDITIONAL  ASSET  IMPAIRMENTS  AND CONTINUE TO ADVERSELY  AFFECT THE  COMPANY'S
PROFITABLITY

As part of TMNG's  business  strategy  the Company has made and may  continue to
make  acquisitions.  As a result,  goodwill and intangible  assets constitute an
increasing  amount of the assets  reported on the Company's  balance sheet.  The
Company may be  required to write down  goodwill  and  intangible  assets on the
Company's financial statements as a result of declining revenues and earnings.

The  Financial  Accounting  Standards  Board  (FASB)  has  issued  Statement  of
Financial  Accounting  Standards  ("SFAS") No. 142  "Accounting for Goodwill and
Intangible  Assets."  SFAS No. 142 requires an annual  evaluation of goodwill to
determine if an  impairment of goodwill has occurred.  The  evaluation  involves
calculating  enterprise fair value,  which may be based on a number of analyses,
including  a  discounted  cash  flow  projection  of future  financial  results.
Estimated  fair  values are then  compared to the total  recorded  book value to
determine  if an  impairment  of  goodwill  is  deemed to have  occurred.  If an
impairment of goodwill is deemed to have occurred,  this would negatively affect
the  Company's   consolidated  results  of  operations.   The  Company  recorded
impairment  charges of $27.1 million and $15.8 million related to the impairment
of  goodwill  in 2002 and  2003,  respectively.  If the  Company  is not able to
achieve projected future operating  performance and related cash flows, goodwill
may become further impaired, and the resulting asset impairment would be charged
to operating income.

In connection  with SFAS No. 144  "Accounting  for the Impairment or Disposal of
Long-Lived Assets" the Company, using its best estimates based on reasonable and
supportable  assumptions  and  projections,  reviews for  impairment  long-lived
assets and certain identifiable  intangibles to be held and used whenever events
or changes in  circumstances  indicate  that the  carrying  amount of its assets
might not be recoverable. During fiscal year 2003, management identified certain
events,   including   significant  decrease  in  revenue  from  customers  whose
relationships  were valued in purchase  accounting.  The  Company  performed  an
impairment   test,   and   determined   that  the  carrying  value  of  customer
relationships  exceeded their fair market value and recorded an impairment  loss
of  approximately  $3.7  million in 2003.  If the Company is not able to achieve
projected future operating performance and related cash flows, intangible assets
may become further impaired, and the resulting asset impairment would be charged
to operating income.

THE COMPANY HAS REDUCED  CONSULTANT  HEADCOUNT  DURING THE PAST FISCAL YEAR, AND
THE  TERMINATION OF CONSULTANTS  COULD RESULT IN A DIMINISHMENT  OF CONSULTATIVE
OFFERINGS AVAILABLE TO CUSTOMERS

Beginning  in fiscal year 2001 and  continuing  through  fiscal  year 2003,  the
Company undertook a series of cost-cutting measures,  including the reduction in
employee consultant  headcount.  As the talents and skill sets of these employee
consultants  are no longer  available  to the  Company,  TMNG could be adversely
affected in its ability to provide various consultative  offerings to customers,
potentially  resulting  in a  diminishment  of  revenue  opportunities  for  the
Company.

THE MARKET IN WHICH TMNG  COMPETES  IS  INTENSELY  COMPETITIVE,  AND  ACTIONS BY
COMPETITORS  COULD  RENDER THE  COMPANY'S  SERVICES  LESS  COMPETITIVE,  CAUSING
REVENUES AND INCOME TO DECLINE

The market for  consulting  services to  communications  companies  is intensely
competitive,  highly fragmented and subject to rapid change. Competitors include
strategy and management consulting firms and major global outsourcing firms like
International  Business  Machines  Corporation  (IBM),  Electronic  Data Systems
Corporation (EDS) and Computer  Sciences  Corporation  (CSC),  which have become
more significant  competitors  recently due to the outsource of certain business
support system (BSS) and operating  support system (OSS)  operations,  and large
technical  firms from the Asian markets,  like Infosys  Technologies,  Ltd. that
provide  significant cost advantage.  Some of these competitors have also formed
strategic  alliances with  communications  and technology  companies serving the
industry.  TMNG also competes with internal  resources of its clients.  Although
non-exhaustive, a partial list of TMNG's competitors includes:

-    Accenture;

-    Booz-Allen & Hamilton;

-    Cap Gemini Ernst & Young;

<PAGE>

-    IBM;

-    Infosys Technologies, Ltd.; and

-    McKinsey & Company.

Many information  technology-consulting firms also maintain significant practice
groups devoted to the  communications  industry.  Many of these companies have a
national and international  presence and may have greater personnel,  financial,
technical and marketing resources.  TMNG may not be able to compete successfully
with its existing competitors or with any new competitors.

TMNG also  believes  the  Company's  ability to  compete  depends on a number of
factors outside of its control, including:

-    the prices at which others offer competitive services, including aggressive
     price  competition  and  discounting  on individual  engagements  which may
     become increasingly prevalent due to worsening economic conditions;

-    the ability and  willingness of TMNG's  competitors  to finance  customers'
     projects on favorable terms;

-    the ability of TMNG's  competitors to undertake  more  extensive  marketing
     campaigns than TMNG can;

-    the extent, if any, to which TMNG's competitors  develop  proprietary tools
     that improve their ability to compete with TMNG;

-    the ability of TMNG's customers to perform the services themselves; and

-    the extent of TMNG's competitors' responsiveness to customer needs.

TMNG may not be able to compete  effectively on these or other factors.  If TMNG
is unable to compete effectively,  the Company's market position,  and therefore
its revenues and profitability, would decline.

TMNG  MUST  CONTINUALLY  ENHANCE  ITS  SERVICES  TO MEET THE  CHANGING  NEEDS OF
CUSTOMERS OR THE COMPANY MAY LOSE FUTURE BUSINESS TO ITS COMPETITORS

The Company's  future  success will depend upon its ability to enhance  existing
services and to introduce new services to meet the  requirements of customers in
a rapidly developing and evolving market,  particularly in the areas of wireless
communications and next generation technologies.  Present or future services may
not satisfy the needs of the communications  market. If the Company is unable to
anticipate or respond adequately to customer needs, lost business may result and
TMNG's financial performance will suffer.

IF TMNG IS NOT ABLE TO EFFECTIVELY  RECRUIT AND RETAIN MANAGEMENT AND CONSULTING
PERSONNEL   THAT  PROVIDE  THE  COMPANY  WITH  NEW  TALENT  SETS   ENABLING  THE
IMPLEMENTATION  OF NEW STRATEGIC  OFFERINGS IN A RAPIDLY  CHANGING  MARKET,  THE
COMPANY'S FINANCIAL PERFORMANCE MAY BE NEGATIVELY IMPACTED.

The  Company  may  face  two  critical  challenges  in  the  recruitment  of new
management  personnel.  The first is the ability to recruit talented  management
personnel into a market that is significantly  depressed,  and the second is the
ability  to  execute  such   recruitment   with  an   appropriate   compensation
arrangement.  If TMNG is not able to effectively recruit within the construct of
these two challenges, the financial performance of the Company may be negatively
affected.

The Company  must attract new  consultants  to implement  strategic  plans.  The
number of  potential  consultants  that meet the  Company's  hiring  criteria is
relatively  small,  and there is significant  competition for these  consultants
from direct competitors and others in the communications  industry.  Competition
for these consultants may result in significant increases in the Company's costs
to  attract  and  retain  the  consultants,   which  could  reduce  margins  and
profitability.   In  addition,   TMNG  will  need  to  attract   consultants  in
international   locations,   principally   Europe,   to  support  the  Company's
international  strategic  plans.  TMNG  has  limited  experience  in  recruiting
internationally,  and may not be able to do so. Any  inability  to  recruit  new
consultants or retain existing consultants could impair the Company's ability to
service  existing  engagements or undertake new  engagements.  If the Company is
unable to attract and retain  quality  consultants,  revenues and  profitability
would decline.

IF INTERNATIONAL  BUSINESS VOLUMES WOULD INCREASE, THE COMPANY MAY BE EXPOSED TO
A NUMBER OF  BUSINESS  AND  ECONOMIC  RISKS,  WHICH  COULD  RESULT IN  INCREASED
EXPENSES AND DECLINING PROFITABILITY

If TMNG's international  business volume increases,  business and economic risks
it may face include:

-    unfavorable foreign currency exchange;

-    difficulties in staffing and managing foreign operations;

-    seasonal reductions in business activity;

<PAGE>

-    competition from local and foreign-based consulting companies;

-    issues relating to  uncertainties  of laws and enforcement  relating to the
     protection of intellectual property;

-    unexpected changes in trading policies and regulatory requirements;

-    legal uncertainties inherent in transnational operations such as export and
     import regulations, tariffs and other trade barriers;

-    the impact of foreign laws, regulations, taxes and trade customs;

-    taxation issues;

-    operational  issues  such as longer  customer  payment  cycles and  greater
     difficulties in collecting accounts receivable;

-    language and cultural differences;

-    changes in foreign communications markets;

-    increased cost of marketing and servicing international clients;

-    general  political and economic  trends,  including the potential impact of
     terrorist attack or international hostilities; and

-    expropriations of assets,  including bank accounts,  intellectual  property
     and physical assets by foreign governments.

In addition, TMNG may not be able to successfully execute the Company's business
plan in  foreign  markets.  If TMNG is unable to achieve  anticipated  levels of
revenues from international  operations,  overall revenues and profitability may
decline.

TMNG IS DEPENDENT ON A LIMITED  NUMBER OF KEY  PERSONNEL,  AND THE LOSS OF THESE
INDIVIDUALS  COULD  HARM  THE  COMPANY'S   COMPETITIVE  POSITION  AND  FINANCIAL
PERFORMANCE

TMNG's business consists primarily of the delivery of professional services and,
accordingly, the Company's success depends upon the efforts, abilities, business
generation  capabilities and project execution of its executive officers and key
consultants. TMNG's success is also dependent upon the managerial,  operational,
marketing,  and  administrative  skills of any executive  officer,  particularly
Richard Nespola, the Company's Chairman,  President and Chief Executive Officer.
The loss of any executive officer or key consultant or group of consultants,  or
the failure of these individuals to generate business or otherwise perform at or
above historical  levels,  could result in a loss of customers or revenues,  and
could therefore harm the Company's financial performance.

IF TMNG  FAILS TO PERFORM  EFFECTIVELY  ON PROJECT  ENGAGEMENTS,  THE  COMPANY'S
REPUTATION,  AND THEREFORE  COMPETITIVE POSITION AND FINANCIAL PERFORMANCE COULD
BE HARMED

Many of the Company's  engagements  come from existing clients or from referrals
by  existing  clients.  Therefore,  the  Company's  growth is  dependent  on its
reputation and on client satisfaction. The failure to perform services that meet
a  client's  expectations  may  damage  the  Company's  reputation  and harm the
Company's  ability to attract new business.  Damage to the Company's  reputation
arising from client dissatisfaction could therefore harm the Company's financial
performance.

IF TMNG  FAILS  TO  DEVELOP  LONG-TERM  RELATIONSHIPS  WITH ITS  CUSTOMERS,  THE
COMPANY'S SUCCESS WOULD BE JEOPARDIZED

A  substantial  majority  of the  Company's  business  is  derived  from  repeat
customers.  Future  success  depends to a  significant  extent on the  Company's
ability  to  develop  long-term  relationships  with  successful  communications
providers who will give new and repeat  business.  Inability to build  long-term
customer  relations  would  result in declines  in the  Company's  revenues  and
profitability.  This may increasingly be the case with any further consolidation
or contraction in the industry.

THE  COMPANY   CLASSIFIES  A  LARGE  NUMBER  OF  SUBCONTRACTORS  AS  INDEPENDENT
CONTRACTORS FOR TAX AND EMPLOYMENT LAW PURPOSES, AND IF THESE FIRMS OR PERSONNEL
WERE TO BE  RECLASSIFIED  AS  EMPLOYEES,  THE  COMPANY  COULD BE SUBJECT TO BACK
TAXES, INTEREST, PENALTIES AND OTHER LEGAL CLAIMS

TMNG  provides  a  significant   percentage  of  consulting   services   through
independent contractors and, therefore, does not pay Federal or state employment
taxes or withhold  income taxes for such persons.  Further,  TMNG generally does
not include these  independent  contractors in its benefit plans. In the future,
the IRS and  state  authorities  may  challenge  the  status of  consultants  as
independent  contractors.  Independent contractors may also initiate proceedings
to seek  reclassification  as  employees  under  state law. In either  case,  if
persons  engaged  by  TMNG  as  independent  contractors  are  determined  to be
employees by the IRS or any state taxation department, TMNG would be required to
pay applicable Federal and state employment taxes and withhold income taxes with
respect to such contractors,  and could become liable for

<PAGE>

amounts required to be paid or withheld in prior periods along with interest and
penalties.  In addition,  the Company could be required on a going-forward basis
to include such contractors in benefit plans retroactively and going forward.

TMNG COULD BE SUBJECT TO CLAIMS FOR PROFESSIONAL LIABILITY, WHICH COULD HARM THE
COMPANY'S FINANCIAL PERFORMANCE

As a provider of professional services, TMNG faces the risk of liability claims.
A liability claim brought against TMNG could harm the Company's  business.  TMNG
may also be  subject  to claims by  clients  for the  actions  of the  Company's
consultants  and  employees   arising  from  damages  to  clients'  business  or
otherwise,  or clients may demand a reduction in fees because of dissatisfaction
with the Company's services.

In particular, the Company is currently a defendant in litigation brought by the
bankruptcy trustee of a former client. This litigation seeks to recover at least
$1.85 million for breach of contract, breach of fiduciary duties and negligence.
In addition,  this litigation  seeks to recover $320,000 in consulting fees paid
by the former client.

THE  MARKET  PRICE  OF  TMNG'S  COMMON  STOCK IS  VOLATILE,  AND  INVESTORS  MAY
EXPERIENCE INVESTMENT LOSSES

The  market  price  of  TMNG's   common  stock  is  volatile  and  has  declined
significantly  from its initial public offering price. The Company's stock price
could  continue  to decline or  fluctuate  in  response to a variety of factors,
including:

-    variations in quarterly operating results;

-    announcements of technological innovations that render talent outdated;

-    future trends in the communications industry;

-    acquisitions  or  strategic  alliances  by the  Company  or  others  in the
     industry;

-    failure to achieve  financial  analysts'  or other  estimates of results of
     operations for any fiscal period;

-    the  relatively  small public float and  relatively low volume at which the
     Company's stock trades;

-    changes  in  estimates  of  performance  or  recommendations  by  financial
     analysts;

-    any further reduction in the Company's  revenues or profits during 2004 and
     future years; and

-    continuing adverse market conditions in the communications industry and the
     economy as a whole.

In addition,  the stock market itself  experiences  significant price and volume
fluctuations.  These fluctuations  particularly  affect the market prices of the
securities of many high technology and communications  companies.  The Company's
stock price tends to track the stock price of  communications  companies,  which
have  declined  substantially  and may  continue to do so.  These  broad  market
fluctuations  could  continue to harm the market price of the  Company's  common
stock.  If the market  price of TMNG's  common stock  continues to decline,  the
Company may risk being  delisted from the NASDAQ  National Stock market on which
it trades.  The recent decline in TMNG's overall market  capitalization may also
discourage analysts and investors from following the Company.  Additionally, due
to the limited  float of the Company's  common  stock,  investors may find their
investment illiquid, and suffer losses.

THE  COMPANY'S  INABILITY TO PROTECT ITS  INTELLECTUAL  PROPERTY  COULD HARM THE
COMPANY'S COMPETITIVE POSITION AND FINANCIAL PERFORMANCE

Despite TMNG's efforts to protect  proprietary  rights from  unauthorized use or
disclosure,  parties, including former employees or consultants,  may attempt to
disclose,  obtain or use the Company's solutions or technologies.  The steps the
Company has taken may not prevent misappropriation of solutions or technologies,
particularly in foreign  countries  where laws or law enforcement  practices may
not protect  proprietary  rights as fully as in the United States.  Unauthorized
disclosure of the Company's proprietary information could make its solutions and
methodologies available to others and harm the Company's competitive position.

PRINCIPAL  STOCKHOLDERS,  EXECUTIVE  OFFICERS  AND  DIRECTORS  HAVE  SUBSTANTIAL
CONTROL OVER THE COMPANY'S VOTING STOCK

Executive officers,  directors and stockholders owning more than five percent of
the Company's  outstanding common stock (and their affiliates) own a majority of
the Company's outstanding common stock. If all such persons acted together, they
would have the ability to control all matters  submitted to the stockholders for
approval  (including  the  election  and  removal of  directors  and any merger,
consolidation or sale of all or substantially  all of the Company's  assets) and
to control TMNG's  management and affairs.  Concentration of ownership of TMNG's
common stock may have the effect of delaying,  deferring or  preventing a change
in  control,  impeding  a  merger,  consolidation,  takeover  or other  business
combination  involving  the Company or  discouraging  a potential  acquirer from
making a tender offer or otherwise  attempting to

<PAGE>

obtain  control of the Company.  TMNG's  officers and directors have a fiduciary
duty to act in the best interest of the Company's shareholders.

THE COMPANY USED TO BE TAXED UNDER  SUBCHAPTER "S" OF THE INTERNAL REVENUE CODE,
AND CLAIMS OF TAXING  AUTHORITIES  RELATED TO PRIOR  SUBCHAPTER "S"  CORPORATION
STATUS COULD HARM THE COMPANY

From  1993  through  1998,  TMNG was  taxed  as a  "pass-through"  entity  under
subchapter  "S" of the Internal  Revenue Code.  Since February 1998, the Company
has been taxed under  subchapter  "C" of the  Internal  Revenue  Code,  which is
applicable to most  corporations and treats the corporation as an entity that is
separate and distinct  from its  stockholders.  If the Company's tax returns for
the years in which TMNG was a subchapter "S"  corporation  were to be audited by
the  Internal  Revenue  Service  or  another  taxing  authority  and an  adverse
determination  was made during the audit,  the Company could be obligated to pay
back taxes,  interest and  penalties.  The  stockholders  of TMNG's  predecessor
entity  agreed,  at the time TMNG  acquired its  predecessor,  to indemnify  the
Company  against  negative  tax  consequences  arising  from  TMNG's  prior  "S"
corporation  status.  However,  this  indemnity  may not be  sufficient to cover
claims made by the IRS or other  taxing  authorities,  and any such claims could
result in additional costs and harm the Company's financial performance.

THE COMPANY MAY SEEK TO RAISE ADDITIONAL  FUNDS,  AND ADDITIONAL  FUNDING MAY BE
DILUTIVE TO STOCKHOLDERS OR IMPOSE OPERATIONAL RESTRICTIONS

Any additional equity financing, if available,  may be dilutive to the Company's
stockholders  and  debt  financing,   if  available,   may  involve  restrictive
covenants,  which may limit the Company's operating  flexibility with respect to
certain business matters. If additional funds are raised through the issuance of
equity  securities,  the Company's  stockholders may experience  dilution in the
voting  power or net  book  value  per  share of the  Company's  stock,  and any
additional equity securities may have rights,  preferences and privileges senior
to those of the holders of the Company's common stock.

ANTI-TAKEOVER  PROVISIONS AND THE COMPANY'S RIGHT TO ISSUE PREFERRED STOCK COULD
MAKE A THIRD PARTY ACQUISITION DIFFICULT

The Company's certificate of incorporation, bylaws, and anti-takeover provisions
of  Delaware  law could  make it more  difficult  for a third  party to  acquire
control,  even if a change in control would be beneficial  to  stockholders.  In
addition,  the  Company's  bylaws  provide for a  classified  board,  with board
members  serving  staggered   three-year   terms.  The  Delaware   anti-takeover
provisions and the existence of a classified board, in addition to the Company's
relatively small public float, could make it more difficult for a third party to
acquire the Company.

THE COMPANY MUST DOCUMENT AND MAINTAIN ADEQUATE SYSTEMS AND PROCEDURES TO COMPLY
WITH RECENT LEGAL REFORMS

Recent legal reforms,  including the  Sarbanes-Oxley  Act and related SEC rules,
have created new responsibilities for public company officers and directors. The
Company's  ability to comply with these new laws and regulations  will depend on
TMNG's ability to document and maintain  effective  systems and procedures,  but
the  Company  cannot  assure  that its  systems  and  procedures  will always be
adequate for this purpose.

FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS

For information about foreign and domestic operations, see Item 8, "Consolidated
Financial  Statements,"  Footnote 5 "Major  Customers,  Business  Customers  and
Significant Concentrations of Group Credit Risk."

ITEM 2. PROPERTY

The  Company's  principal  executive  offices are located in a 4,305 square foot
facility in Overland Park, Kansas. This facility houses the executive, corporate
and  administrative  offices and is under a lease, which expires in August 2005.
In addition to the  executive  offices,  the Company also leases an 8,175 square
foot facility in Bethesda,  Maryland for its TMNG Marketing and TMNG  Technology
subsidiaries,  which expires in June 2004,  and a 21,710 square foot facility in
Boston,  Massachusetts,  which expires in 2011. The Company is in the process of
negotiating a new five year lease  agreement to relocate its Bethesda,  Maryland
office to Tyson's  Corner,  Virginia  for similar  square  footage.  The Company
expects the new lease to be executed  during the first  quarter of fiscal  2004.
The Bethesda and Boston  locations  are  utilized by  primarily  management  and
consulting personnel.

ITEM 3. LEGAL PROCEEDINGS

The Company is  involved  in legal  proceedings  and  litigation  arising in the
ordinary course of business. In addition,  customer bankruptcies could result in
a claim on collected  balances for  professional  services  near the  bankruptcy
filing date.  While resolution of legal  proceedings,  claims and litigation may
have an impact on the financial  results for the period in which it is resolved,
the Company  believes  that the ultimate  disposition  of these matters will not
have a material adverse effect upon its consolidated results of operations, cash
flows or financial position.

In June 1998, the bankruptcy trustee of a former client,  Communications Network
Corporation,  sued TMNG for a total of $320,000 in the U.S.  Bankruptcy Court in
New York seeking recovery of $160,000 alleging an improper payment of consulting
fees paid by the former  client  during the  period  from July 1, 1996,  when an
involuntary  bankruptcy  proceeding  was  initiated  against the former  client,
through August 6, 1996,  when the former client agreed to an order for relief in
the bankruptcy  proceeding,  and $160,000 in consulting  fees paid by the former
client after August 6, 1996.

<PAGE>

The bankruptcy  trustee has also sued TMNG for at least $1.85 million for breach
of  contract,  breach of fiduciary  duties and  negligence.  Although  assurance
cannot be given as to the ultimate outcome of this proceeding, TMNG believes the
Company has meritorious  defenses to the claims made by the bankruptcy  trustee,
including  particularly  the claims for breach of contract,  breach of fiduciary
duty and  negligence,  and that the ultimate  resolution of this matter will not
materially harm the Company's business.

In 2002 and 2003, the Company received demands  aggregating  approximately  $1.2
million by the bankruptcy  trustees of several former clients in connection with
collected  balances  near the  customers'  respective  bankruptcy  filing dates.
During 2003, the Company settled $102,000 of such demands for $62,000.  Although
the Company  does not believe it received  any  preference  payments  from these
former clients and plans to vigorously defend the remaining claims,  the Company
has  reserves at January 3, 2004 of $854,000  which it believes  are adequate in
the event of loss or settlement on remaining outstanding claims.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of 2003.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

TMNG's  Common  Stock is quoted on the Nasdaq  National  Market under the symbol
TMNG.  The high and low  closing  price per share for the  Common  Stock for the
fiscal  years  ending  January 03, 2004 and December 28, 2002 by quarter were as
follows:



                                                 High           Low
     First quarter, fiscal year 2003            $ 1.90        $ 1.25
     Second quarter, fiscal year 2003           $ 2.02        $ 1.21
     Third quarter, fiscal year 2003            $ 2.82        $ 1.74
     Fourth quarter, fiscal year 2003           $ 3.53        $ 2.31





                                                 High           Low
     First quarter, fiscal year 2002            $ 7.00        $ 4.51
     Second quarter, fiscal year 2002           $ 5.38        $ 1.90
     Third quarter, fiscal year 2002            $ 2.12        $ 1.12
     Fourth quarter, fiscal year 2002           $ 2.08        $ 1.27



The above  information  reflects  inter-dealer  prices,  without retail mark-up,
markdown or commissions and may not necessarily represent actual transactions.

As of March 26, 2004 the closing price of the  Company's  Common Stock was $3.92
per share. At such date,  there were  approximately  98 holders of record of the
Company's Common Stock.

Holders of Common Stock are entitled to receive ratably such dividends,  if any,
as may be  declared by the Board of  Directors  out of funds  legally  available
therefor.  To date, TMNG has not paid any cash dividends on its Common Stock and
does not expect to declare or pay any cash or other dividends in the foreseeable
future.


EQUITY COMPENSATION PLAN INFORMATION

<TABLE>
<CAPTION>
<S>                                           <C>                         <C>                          <C>
                                                        (a)                                                       (c)
                                                     NUMBER OF                                            NUMBER OF SECURITIES
                                              SECURITIES TO BE ISSUED                                     REMAINING AVAILABLE
                                                 UPON EXERCISE OF                  (b)                     FOR FUTURE ISSUANCE
                                               OUTSTANDING OPTIONS           WEIGHTED AVERAGE           UNDER EQUITY COMPENSATION
                                              OR VESTING OF RESTRICTED       EXERCISE PRICE OF          PLANS (EXCLUDING SECURITIES
                                                       STOCK                OUTSTANDING OPTIONS         REFLECTED IN COLUMN (a))

PLANS APPROVED BY SECURITY HOLDERS
- 1998 Equity Incentive Plan - Stock Options         4,863,615                 $    5.18                          364,187
- 1998 Equity Incentive Plan - Restricted Stock        720,000                      n/a                           780,000
PLANS NOT APPROVED BY SECURITY HOLDERS
- 2000 Supplemental Stock Plan                       1,183,285                 $    4.78                        2,659,924

</TABLE>


<PAGE>

For an additional  discussion of the Company's  equity  compensation  plans, see
Item 8, "Consolidated  Financial  Statements," Footnote 9 "Stock Option Plan and
Stock Based Compensation."

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated  financial data presented below have been derived from
the Company's consolidated financial statements. The data presented below should
be read in  conjunction  with Item 7,  "Management's  Discussion and Analysis of
Financial Condition and Results of Operations," Item 8, "Consolidated  Financial
Statements"  and  Notes  thereto  and  other  financial   information  appearing
elsewhere in this Annual Report on Form 10-K.


<TABLE>
<CAPTION>
<S>                                                        <C>            <C>            <C>            <C>            <C>


                                                                                      FISCAL YEAR ENDED
                                                           -------------------------------------------------------------------------
                                                           January 1,     December 30,   December 29,   December 28,   January 03,
                                                              2000           2000          2001           2002            2004
                                                                           (IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:

Revenues ............................................       $ 50,322       $ 77,727      $ 54,832       $ 34,595       $  23,476
Cost of services:
  Direct cost of services ...........................         26,109         40,396        27,347         16,855          11,935
  Equity related charges ............................          2,780          5,519         2,322            721             (57)
                                                            --------       --------      --------       --------        --------
          Total cost of services ....................         28,889         45,915        29,669         17,576          11,878
                                                            --------       --------      --------       --------        --------
Gross profit ........................................         21,433         31,812        25,163         17,019          11,598

Operating expenses:
  Selling, general and administrative expenses ......          9,777         16,024        16,767         23,971          19,494
  Equity related charges ............................          1,998          1,564           843            353             142
  Goodwill and intangibles amortization .............                           621         1,996          2,887           2,343
  Goodwill and intangible asset impairment ..........                                                     25,165          19,484
                                                            --------       --------      --------       --------        --------
          Total operating expenses ..................         11,775         18,209        19,606         52,376          41,463
                                                            --------       --------      --------       --------        --------
Income (loss) from operations .......................          9,658         13,603         5,557        (35,357)        (29,865)

Other income (expense):
  Interest income ...................................            277          3,327         2,433            996             624
  Interest expense ..................................         (1,998)                         (14)           (63)            (51)
  Other, net ........................................            (68)          (152)           (8)            26
                                                            --------       --------      --------       --------        --------
          Total other income (expense) ..............         (1,789)         3,175         2,411            959             573
Income (loss) before income tax provision (benefit),
  extraordinary item and cumulative effect of a change
  in accounting principle ...........................          7,869         16,778         7,968        (34,398)        (29,292)
Income tax (provision) benefit ......................         (3,208)        (6,711)       (2,360)        12,135         (13,032)
                                                            --------       --------      --------       --------        --------
Income (loss) before extraordinary item and
  cumulative effect of a change in accounting principle        4,661         10,067         5,608        (22,263)        (42,324)
Extraordinary item, net of taxes ....................           (200)
Cumulative effect of a change in accounting principle,
  net of taxes                                                                                            (1,140)
                                                            --------       --------      --------       --------        --------
Net income (loss)....................................       $  4,461       $ 10,067      $  5,608       $(23,403)       $(42,324)
                                                            ========       ========      ========       ========        ========

Net income (loss) before extraordinary item and
  cumulative effect of a change in accounting principle
  per common share
  Basic .............................................       $   0.20       $   0.36      $   0.19       $(  0.68)       $ ( 1.26)
                                                            ========       ========      ========       ========        ========
  Diluted ...........................................       $   0.20       $   0.34      $   0.18       $(  0.68)       $ ( 1.26)
                                                            ========       ========      ========       ========        ========
Net income (loss) per common share
  Basic .............................................       $   0.19       $   0.36      $   0.19       $(  0.71)       $ ( 1.26)
                                                            ========       ========      ========       ========        ========
  Diluted ...........................................       $   0.19       $   0.34      $   0.18       $(  0.71)       $ ( 1.26)
                                                            ========       ========      ========       ========        ========
Weighted average common shares outstanding
  Basic .............................................         23,056         28,110        29,736         32,734          33,545
                                                            ========       ========      ========       ========        ========
  Diluted ...........................................         23,807         29,208        30,774         32,734          33,545
                                                            ========       ========      ========       ========        ========

</TABLE>


<TABLE>
<CAPTION>
<S>                                          <C>         <C>          <C>           <C>           <C>

                                                                    FISCAL YEAR ENDED
                                             ---------------------------------------------------------------
                                             January 1,  December 30, December 29,  December 28,  January 03,
                                               2000        2000         2001          2002          2004
                                             ---------   ---------   -----------   -----------   -----------
CONSOLIDATED BALANCE SHEET DATA:

Net working capital .....................    $ 61,419     $ 89,148     $ 94,569     $ 63,478       $57,231
Total assets ............................    $ 67,382     $119,429     $129,042     $125,459       $80,972
Total debt (including current debt) .....                              $    338     $    885       $   493
Total stockholders' equity  .............    $ 63,437     $111,472     $123,992     $115,726       $73,369

</TABLE>

<PAGE>

On November 22, 1999, the SEC declared TMNG's Registration Statement on Form S-1
(File No. 333-87383)  effective.  On November 23, 1999, TMNG closed its offering
of an  aggregate  of  4,615,000  shares  of TMNG  Common  Stock at an  aggregate
offering  price  of  $78.5  million.  Net  proceeds  to  TMNG,  after  deducting
underwriting  discounts and commissions of $5.5 million and offering expenses of
$1.6 million, were $71.6 million.

On November 29, 1999 TMNG used $22.3  million of the  proceeds  from its initial
public offering to repay all indebtedness.

On August 2, 2000, the SEC declared  TMNG's  Registration  Statement on Form S-1
(File No. 333-40864)  effective.  On August 2, 2000, TMNG closed its offering of
an aggregate of 3,000,000  shares of TMNG Common Stock at an aggregate  offering
price of $68.6  million.  Net  proceeds to TMNG,  after  deducting  underwriting
discounts and commissions of $1.1 million and offering expenses of $728,000 were
$20.9  million.  Proceeds  were  used for  working  capital,  general  corporate
purposes and as possible consideration for acquisitions.

On September 5, 2000,  the Company  completed its  acquisition of The Weathersby
Group,  a Maryland  corporation.  The  acquisition  resulted in a total purchase
price of approximately  $19.2 million  consisting of $11.2 million cash and $8.0
million in TMNG stock. Additionally,  TMNG incurred direct costs of $1.5 million
related to the acquisition.

On  September 5, 2001,  the Company  completed  its  acquisition  of Tri-Com,  a
Maryland  corporation.  The  acquisition,  recorded under the purchase method of
accounting,  included the purchase of all outstanding  shares of Tri-Com,  which
resulted in a total purchase price of approximately  $5.2 million for the equity
and assumption of liabilities.  Consideration consisted of $1.8 million cash and
490,417 shares of TMNG common stock valued at $3.0 million. TMNG incurred direct
costs of  approximately  $180,000  related to the  acquisition and recorded this
amount as an  increase  to purchase  price.  In addition to the  above-mentioned
costs, TMNG recorded  approximately $216,000 as an increase to purchase price in
connection  with the exchange of the  Company's  stock  options for vested stock
appreciation rights held by Tri-Com employees at the time of acquisition.

On March 6, 2002,  the Company  completed  its  acquisition  of CSMG, a Delaware
corporation. The acquisition resulted in a total purchase price of approximately
$46.5 million  consisting of $33.0 million cash and $13.5 million in TMNG stock.
Additionally,  TMNG  incurred  direct  costs  of  $2.3  million  related  to the
acquisition and recorded this amount as an increase to purchase price.

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following  discussion  should be read in conjunction  with the  Consolidated
Financial  Statements  and Notes thereto of the Company  included in this Annual
Report on Form 10-K. The forward-looking  statements included in this discussion
and  elsewhere  in this Form 10-K  involve  risks and  uncertainties,  including
anticipated  financial   performance,   business  prospects,   industry  trends,
shareholder returns and other matters,  which reflect management's best judgment
based on factors  currently  known.  Actual results and experience  could differ
materially from the anticipated results and other expectations  expressed in the
Company's forward-looking  statements and should be read in conjunction with the
disclosures and  information  contained in the sections of this Annual Report on
Form 10-K entitled  "Disclosures  Regarding  Forward Looking  Statements" and in
Item 1, "Business - Risk Factors."

EXECUTIVE FINANCIAL OVERVIEW

Included in Item 1, "Business",  is discussion that includes general overview of
the Company's Business, Market Overview, Business Strategy, Competition and Risk
Factors. The purpose of this executive overview is to complement the qualitative
discussion  of the  Business  from  Item 1,  with the  financial  impact  on the
Company.  As previously  noted,  the  communications  industry has experienced a
significant  economic recession from 2001 through 2003. TMNG is a consultancy to
the industry,  and as a result experienced a significant reduction in consulting
business  primarily due to the recession.  The Company  experienced  significant
revenue  declines  and  net  loss  from  2001  to 2003  (see  Item 6,  "Selected
Consolidated Financial Data").

As a result  of a  combination  of  significantly  lower  operating  results  of
reporting  units during fiscal years 2002 and 2003,  the  resignation of certain
key  personnel  and  revised  and  reduced  financial  projections,  the Company
recorded  goodwill and intangible  impairment  losses of $27.1 million and $19.5
million in fiscal 2002 and 2003, respectively.  In fiscal 2003, the Company also
recorded valuation reserves of $24.0 million in connection with the deferred tax
assets,  which were  generated  primarily  by  goodwill  impairment  and current
operating losses.

During  the  fourth  quarter  of  fiscal  year  2003,  the  Company  recorded  a
preliminary  charge of $13.4 million related to increasing the valuation reserve
in  connection  with its deferred  tax assets.  On February 12, 2004 the Company
released its fourth quarter and annual  financial  results which  reflected such
charge.  As  management  prepared  its Form 10-K and  continued  to  refine  the
estimates  utilized in the  analysis  and  critically  evaluated  all  availalbe
evidence in the context of SFAS No. 109 "Accounting for Income Taxes" ("SFAS No.
109"), management concluded it was appropriate to increase the valuation reserve
by approximately  $4.6 million.  The Company has a cumulative three year history
of operating  losses.  In accordance  with the  provisions of SFAS No. 109, such
history  presents   objectively   verifiable  negative  evidence  regarding  the
recoverabiilty of deferred tax asset balances.  Similar  objectively  verifiable
evidence would be required,  such as signed contracts  supporting 2004 projected
revenue to support the asset. TMNG is a managment consulting firm and as backlog
and signed  contracts do not normally  exceed six months,  management  deemed it
appropriate to fully reserve all deferred tax assets as of January 3, 2004.

The Company has  implemented  many  programs to size the business with its lower
revenue base. Such steps include staff reductions and other selling, general and
administrative  cost  cutting  measures  to  maintain  appropriate  pricing  and
utilization  metrics which are critical to a management  consultancy.  Such cost
reductions  also  enabled the Company to minimize  cash used in  operations.  In
fiscal 2003,  cash used in

<PAGE>

operations was $900,000,  compared with cash provided from  operations in fiscal
2002 and 2001 accumulating to $20.9 million.  However, cash used in operation in
2003 was  significantly  less  than it  would  have  been had such  cost-cutting
measures not been  adopted.  The Company also focused its  marketing  efforts on
large and  sustainable  clients to maintain a portfolio of business that is high
credit quality and thus reduce bad debt risks.

OPERATIONAL OVERVIEW

TMNG  reports its  financial  data on a  52/53-week  fiscal  year for  reporting
purposes.  Fiscal year 2003 was a 53 week fiscal year. For further discussion of
the Company's fiscal year end see Item 8, "Consolidated  Financial  Statements,"
Footnote 1  "Organization  and  Summary  of  Significant  Accounting  Policies,"
contained herein.

Revenues  typically  consist of consulting  fees for  professional  services and
related  expense  reimbursements.  A  significant  percentage  of the  Company's
consulting  services are  contracted on a time and materials  basis,  a time and
materials basis not to exceed  contract  price, or a fixed cost basis.  Contract
revenues  on  contracts  with a not to  exceed  contract  price or a fixed  cost
contract are recorded  under the  percentage  of  completion  method,  utilizing
estimates of project  completion under both of these types of contracts.  Larger
fixed price  contracts  have  recently  begun to  represent  a more  significant
component of the Company's revenue mix.

Generally a client relationship begins with a short-term  engagement utilizing a
few   consultants.   TMNG's  sales  strategy   focuses  on  building   long-term
relationships with both new and existing clients to gain additional  engagements
within existing accounts and referrals for new clients. Strategic alliances with
other  companies  are also  used to sell  services.  TMNG  anticipates  that the
Company  will  continue to do so in the  future.  Because  TMNG is a  consulting
company,  the Company experiences  fluctuations in revenues derived from clients
during  the  course of a project  lifecycle.  As a  result,  the  volume of work
performed for specific  clients  varies from period to period and a major client
from one  period  may not use TMNG  services  in another  period.  In  addition,
clients generally may end their engagements with little or no penalty or notice.
If a client  engagement  ends earlier than expected,  the Company must re-deploy
professional  service  personnel  as any  resulting  unbillable  time could harm
margins.

Cost  of  services  consists   primarily  of  client-related   compensation  for
consultants  who are  employees  and  amortization  of equity  related  non-cash
charges incurred in connection with pre-initial public offering grants of equity
securities and restricted stock awards primarily to consultants, as well as fees
paid to independent contractor organizations and related expense reimbursements.
Employee compensation includes certain unbillable time, training, vacation time,
benefits  and payroll  taxes.  Annual  gross  margins  have ranged from 40.9% to
49.40% during the period from 1999 to 2003.  Margins are  primarily  impacted by
the type of  consulting  services  provided,  the size of service  contracts and
negotiated  volume  discounts,  changes in TMNG  pricing  policies  and those of
competitors,  utilization  rates  of  consultants  and  independent  SME's;  and
employee  and  independent  contractor  organization  costs  associated  with  a
competitive labor market.

Operating expenses include selling,  general and administrative,  equity related
charges, goodwill and intangibles amortization, and intangible asset impairment.
Sales and marketing expenses consist primarily of personnel  salaries,  bonuses,
and related  costs for direct  client sales  efforts and  marketing  staff.  The
Company primarily uses a relationship sales model in which partners,  principals
and senior  consultants  generate  revenues.  In addition,  sales and  marketing
expenses   include  costs   associated   with  marketing   collateral,   product
development,  trade shows and advertising.  General and administrative  expenses
consist mainly of accounting and recruiting  personnel costs,  insurance,  rent,
and outside professional services incurred in the normal course of business. The
equity related  charges  consist of non-cash  amortization  charges  incurred in
connection with  pre-initial  public  offering  grants of equity  securities and
restricted stock awards,  primarily to principals and certain senior executives.
Goodwill and  intangibles  amortization  relates to amortization of identifiable
intangible  assets and goodwill  amortization  recorded prior to the adoption of
SFAS No. 142 "Accounting for Goodwill and Intangible Assets." Impairment relates
to the write down of goodwill  calculated in accordance  with the  provisions of
SFAS No. 142 and write down of other  intangibles  calculated in accordance with
the provisions of SFAS No. 144"Accounting for the Impairment on Disposal of Long
Lived Assets." Such  impairments  occur when the carrying amount of a long-lived
asset  (asset  group)  is not  recoverable  and  exceeds  its fair  value.  That
assessment  is based on the carrying  amount of the asset  (asset  group) at the
date it is tested for  recoverability,  whether in use or under development.  An
impairment  loss shall be measured as the amount by which the carrying amount of
a long-lived asset (asset group) exceeds its fair value.

CRITICAL ACCOUNTING POLICIES

The significant  accounting policies of TMNG are summarized in Footnote 1 to the
consolidated financial statements included in Item 8 of this report.

While the selection and  application of any  accounting  policy may involve some
level of subjective  judgments and estimates,  the Company believe the following
accounting  policies  are  the  most  critical  to  the  Company's  consolidated
financial statements, potentially involve the most subjective judgments in their
selection and application,  and are the most  susceptible to  uncertainties  and
changing conditions:

-    Allowance for Doubtful Accounts;

-    Fair Value Accounting of Acquired Businesses;

-    Impairment of Goodwill and Long-lived Intangible Assets;

<PAGE>

-    Revenue Recognition; and

-    Deferred Income Tax Assets.

Allowances  for  Doubtful   Accounts  -  Substantially   all  of  the  Company's
receivables are owed by companies in the communications  industry,  whose recent
adverse  conditions are described in Item 1,  "Business." The Company  typically
bills  customers  for services  after all or a portion of the services have been
performed and require  customers to pay within 30 days. The Company  attempts to
control credit risk by being diligent in credit  approvals,  limiting the amount
of credit  extended to customers and  monitoring  customers'  payment record and
credit status as work is being performed for them.

The Company recorded bad debt expense in the amounts of $575,000, $1,207,000 and
$812,000 for fiscal years 2003, 2002 and 2001,  respectively,  and the Company's
allowance for doubtful accounts totaled  $652,000,  $471,000 and $517,000 at the
end of fiscal years 2003, 2002 and 2001, respectively.  The calculation of these
amounts  is based on TMNG's  judgment  about  the  anticipated  default  rate on
receivables  owed to the  Company as of the end of the  reporting  period.  That
judgment was based on the  Company's  uncollected  account  experience  in prior
years and its  ongoing  evaluation  of the credit  status of  customers  and the
communications industry in general.

The  Company  has  endeavored  to  mitigate  credit  risk by  concentrating  its
marketing efforts on the largest and most stable companies in the communications
industry and by tightly  controlling the amount of credit provided to customers.
If TMNG is unsuccessful in these efforts,  or if more of the Company's customers
file for bankruptcy or experience  financial  difficulties,  it is possible that
the allowance for doubtful  accounts will be  insufficient  and the Company will
have a greater bad debt loss than the amount  reserved,  which  would  adversely
affect the Company's cash flow and financial performance.

Fair  Value  Accounting  of  Acquired  Businesses  -  TMNG  has  acquired  three
professional  service  organizations  over the last four  years.  A  significant
component  of the  value of these  acquired  businesses  has been  allocated  to
intangible assets. The Financial Accounting Standards Board ("FASB") issued SFAS
No.  141  "Accounting  for  Business  Combinations",   which  requires  acquired
businesses  to be recorded at fair value by the acquiring  entity.  SFAS No. 141
also requires that intangible assets that meet the legal or separable  criterion
be separately  recognized on the financial  statements at their fair value,  and
provides  guidance on the types of  intangible  assets  subject to  recognition.
Determining the fair value for these specifically  identified  intangible assets
involves significant professional judgment, estimates and projections related to
the valuation to be applied to intangible assets like customer lists, employment
agreements  and  tradenames.  Specifically,  the  FASB  issued  EITF  No.  02-17
"Recognition of Customer  Relationship  Intangible Assets Acquired in a Business
Combination"  in 2002 which  provided  an  expanded  definition  of how to value
customer  relationships and includes not only the current backlog of an acquired
entity,  but also the  expectations  of future  revenues  resulting from current
customer  relationships.  In accordance  with the  provisions of EITF No. 02-17,
management  has  made  estimates  and  assumptions  regarding  projected  future
revenues   resulting  from  the  customer   relationships   acquired  in  TMNG's
acquisitions.   The  subjective  nature  of  management's  assumptions  adds  an
increased risk associated with estimates  surrounding the projected  performance
of the acquired entity.  Additionally,  as the Company  amortizes the intangible
assets  over time,  the  purchase  accounting  allocation  directly  impacts the
amortization expense the Company records on its financial statements.

Impairment  of Goodwill and  Long-lived  Intangible  Assets - Goodwill and other
long-lived  intangible  assets  arising  from  the  Company's  acquisitions,  as
discussed above,  are subjected to periodic review for impairment.  SFAS No. 142
requires an annual  evaluation at the reporting  unit level of the fair value of
goodwill and compares the  calculated  fair value of the  reporting  unit to its
book value to  determine  whether an  impairment  has been deemed to occur.  Any
impairment   charge  would  be  based  on  the  most  recent  estimates  of  the
recoverability  of  the  recorded  goodwill  and  intangibles  balances.  If the
remaining book value assigned to goodwill and other  intangible  assets acquired
in an acquisition is higher than the amounts the Company  currently would expect
to  realize  based on  updated  financial  and cash  flow  projections  from the
reporting  unit,  there is a requirement  to write down these  assets.  Due to a
combination of significantly  lower operating  results of reporting units during
fiscal years 2002 and 2003, the  resignation  of key personnel,  and revised and
reduced financial  projections,  the Company recorded a goodwill impairment loss
in 2002 and 2003 in the amount of $27.1 million and $15.8 million, respectively,
in accordance with the provisions of SFAS No. 142. For an additional  discussion
see Item 8,  "Consolidated  Financial  Statements," and Footnote 3 "Goodwill and
Other  Intangibles." In accordance with FASB Statement No. 144,  "Accounting for
the  Impairment or Disposal of Long-Lived  Assets," the Company,  using its best
estimates  based upon reasonable and  supportable  assumptions and  projections,
reviews for impairment long-lived assets and certain identifiable intangibles to
be held and used whenever events or changes in  circumstances  indicate that the
carrying amount of its assets might not be recoverable.  During fiscal year 2003
management  identified  certain  events,  including  a  significant  decrease in
revenue from customers whose  relationships were valued in purchase  accounting.
The Company performed an impairment test, and determined that the carrying value
of  customer  relationships  exceeded  its fair  market  value and  recorded  an
aggregate  impairment loss of $3.7 million.  Fair value was based on an analysis
of projected  future cash flows.  The  impairment  loss has been  reflected as a
component  of  Loss  from   Operation  in  the  Statement  of   Operations   and
Comprehensive Income (Loss).

Revenue  Recognition - Historically,  most of the Company's  consulting practice
contracts have been on a time and material  basis, in which customers are billed
for time and  materials  expended in  performing  their  contracts.  The Company
recognized  revenue from customer contracts in the period in which services were
performed.  TMNG  has many  types of  contracts,  including  time and  materials
contracts,  time and  materials  with cap,  fixed  fee  contracts,  and  managed
services or outsourcing  contracts.  The Company recognizes revenues on time and
material  with cap and fixed fee  contracts  using the  percentage of completion
method.  Percentage of completion accounting involves calculating the percentage
of  service  provided  during  the  reporting  period  compared  with the  total
estimated  services to be provided over the duration of the contract.  Estimates
of total contract revenues and costs are continuously  monitored during the term
of the contract,  and recorded revenues and costs are subject to revision as the
contract progress. Such revisions may result in increase or decrease to revenues
and income and are reflected in the

<PAGE>

financial statements in the periods in which they are first identified.

Managed services or outsourcing  contracts  typically have longer contract terms
than  consulting  contracts.  The typical  length of the  Company's  outsourcing
contracts is two to five years. The Company  continuously reviews and reassesses
estimates  of  contract  profitability  for these types of  engagements.  If the
Company's  estimate  indicates a loss will occur,  a loss accrual is recorded in
the  consolidated   financial   statements  in  the  period  first   identified.
Circumstances  that could potentially result in contract losses over the life of
the contract include decreases in volumes of transaction or other inputs/outputs
on which the Company is paid, failure to deliver agreed benefits, variances from
planned  internal/external  costs to deliver the  Company's  service,  and other
factors affecting revenues and costs.

As TMNG continues to adapt to changes in the communications consulting industry,
the Company has elected to enter into more fixed fee  contracts in which revenue
is based upon delivery of services or solutions,  and  contingent fee contracts,
in which  revenue is  subject to  achievement  of savings or other  agreed  upon
results,  rather than time spent. Both of these types of contracts are typically
more  results-oriented  and are subject to greater risk  associated with revenue
recognition  and  overall  project   profitability  than  traditional  time  and
materials  contracts.  Due to  the  nature  of  fixed  fee  and  contingent  fee
contracts,  the  amount  and  timing of  revenue  recognized  may be  subject to
adjustment or deferral,  and additional costs and effort as compared to what was
originally  planned may need to be expended to fulfill delivery  requirements on
such  contracts,   which  could  adversely  affect  the  Company's  consolidated
financial position, results of operations and liquidity.

Deferred  Income Tax Assets - The Company  has  generated  substantial  deferred
income tax assets primarily from the accelerated  financial  statement write-off
of goodwill,  the charge to compensation  expense taken related to stock options
and net operating loss carry forwards. For the Company to realize the income tax
benefit of these assets,  it must generate  sufficient  income in future periods
when such deductions are allowed for income tax purposes. In assessing whether a
valuation  allowance is needed in connection with the Company's  deferred income
tax assets,  management  has  evaluated the ability of the Company to carry back
tax losses to prior years that reported  taxable income,  and the ability of the
Company to generate  sufficient  income in future periods to utilize the benefit
of the deferred  income tax assets.  Such  projections  of future income require
significant subjective judgments and estimates by the Company. As of January 03,
2004,  valuation  allowances  in the amount of $24.0  million  are  recorded  in
connection  with the deferred  income tax assets.  As part of its analysis,  the
impact of future  income has not been  included.  The  Company  did not  utilize
projections  of  estimated  future  income,  as the  provisions  of SFAS No. 109
"Accounting for Income Taxes" precludes such estimates when a cumulative history
of operating  losses  exists.  In the event the Company  continues to report net
operating losses for financial reporting, no tax benefit would be recognized for
those losses.

RESULTS OF OPERATIONS

FISCAL 2003 COMPARED TO FISCAL 2002

                                    REVENUES

Revenues decreased 32.1% to $23.5 million for fiscal 2003 from $34.6 million for
fiscal 2002. The decrease in revenues was primarily  associated with the decline
in  utilization  of  management  consulting  services by  communication  service
providers,  which correlates with significant layoffs of management personnel by
such  clients,  and  continuing  adverse  conditions  in the  communication  and
technology  industry.  In  addition,  there has been  continued  deferral of key
management  consulting pipeline  opportunities,  an increase in managed services
outsourcing  by  clients,  which  partially  displaces  what  were  historically
management consulting opportunities for TMNG, and the resignation of certain key
executives  of the Company  during  fiscal year 2003.  During  fiscal 2003,  the
Company  provided  services on 203 customer  projects,  compared to 239 projects
performed  in fiscal  2002.  Average  revenue per project was $116,000 in fiscal
2003 compared to $145,000 in fiscal 2002.  International  revenue base increased
to 9.9% of the  Company's  revenues for fiscal 2003,  from 7.3% for fiscal 2002,
due  primarily to the  Company's  decrease in domestic  revenue.  The  Company's
Management  Consulting  Services  segment  contains a portfolio  of  operations,
marketing and strategy consulting. A decline in revenues occurred in fiscal year
2003  compared  to  fiscal  year  2002 in each of  these  consulting  offerings.
Non-consulting revenues recognized represented 1.0% of consolidated revenues for
fiscal 2003  compared to 4.4% of  consolidated  revenues  for fiscal  2002,  and
related primarily to commissions received on hardware sales.  Effective March 4,
2004,  management  and the Board of Directors  elected to shut down all hardware
business  (for  a  further  discussion  see  Item  8,  "Consolidated   Financial
Statements,"   Footnote  14  "Subsequent  Event"  contained  herein).   Revenues
recognized by the Company in  connection  with fixed price  engagements  totaled
$6.4 million,  and represented 27.4% of consolidated revenue during fiscal 2003.
Included in revenues for fiscal 2003 was $0.7 million related to a customer take
or pay contract, representing the shortfall in consulting services utilized by a
customer in  connection  with annual  minimum usage  requirements  during fiscal
2003.

                                COST OF SERVICES

Direct  costs of  services  decreased  29.2% to $11.9  million  for fiscal  2003
compared  to $16.9  million  for fiscal  2002.  The  decrease  was  attributable
primarily to fewer consulting  engagements and corresponding  reductions made in
consulting  personnel  costs.  As a percentage of revenues,  the Company's gross
margin  based on direct cost of services  was 49.2% for fiscal 2003  compared to
51.3% for fiscal 2002.  The decrease in gross margin was primarily  attributable
to the impact of lower utilization of full time personnel.

Non-cash  stock based  compensation  charges or benefits  related to pre-initial
offering grants of stock options were fully amortized during fiscal year 2003.

<PAGE>

                               OPERATING EXPENSES

In total, operating expenses decreased by 20.8% to $41.5 million for fiscal year
2003,  from $52.4  million  for fiscal  year 2002.  Operating  expenses  include
selling,  general and administrative  costs, equity related charges,  intangible
amortization  and goodwill and intangible asset  impairment  charges.  The major
components   of  the  decrease  are  discussed  by  category  in  the  following
paragraphs.

The Company had a goodwill and intangible  impairment charge of $25.2 million in
fiscal year 2002 and $19.5 million in fiscal year 2003. The goodwill  impairment
charge is  attributable  to a combination  of the  resignation  of key executive
personnel  during  fiscal  2003 and lower  than  expected  operating  results of
reporting units during fiscal 2003 and 2002,  both of which  adversely  affected
future projections of operating results utilized in the impairment analysis. The
write down of goodwill and customer  relationships  was calculated in accordance
with the provisions of SFAS No. 142 and SFAS No. 144, respectively.

In  addition,  $4.5 million of the  decrease in  operating  expenses  relates to
selling,  general  and  administrative  expense  reductions  in fiscal year 2003
compared to fiscal year 2002.  $1.3 million of the  reductions  were  associated
with  reductions  of personnel  required to properly  size the business to lower
revenue volumes. Total selling and administrative headcount decreased from 45 at
December 28, 2002 to 34 at January 03, 2004,  representing a 24.4%  reduction in
the Company's selling and administrative personnel. Additionally, in fiscal year
2002 the Company  incurred  severance  charges of $1.9 million  compared to $0.4
million  in  fiscal  year  2003  related  to  involuntary   employee   turnover.
Additionally,  throughout fiscal year 2003,  management has implemented a number
of cost  reductions  within sales and marketing,  recruitment,  accounting,  and
systems as well as other administrative cost reductions. Management continues to
examine  cost-reduction  measures to enhance  the  Company's  profitability  and
manage operating expenses to better align them with the size of the Company.

Non-cash stock based compensation  charges were $0.1 million in fiscal year 2003
compared to $0.4 million for fiscal year 2002. Non-cash stock based compensation
charges or benefits related to pre-initial offering grants of stock options were
fully  amortized  during fiscal year 2003. In the fourth  quarter of fiscal year
2003, the Company granted restricted stock to select  executives.  The charge in
fiscal 2003 related to the restricted stock grants was $0.1 million.

                            OTHER INCOME AND EXPENSES

Interest  income was $0.6  million and $1.0  million  for fiscal  years 2003 and
2002,  respectively,  and  represented  interest  earned on  invested  balances.
Interest income decreased during fiscal year 2003 due to lower invested balances
resulting from a reduction in cash reserves and lower interest rate returns from
fiscal  year 2002 to fiscal  year  2003.  The  Company  invests  in  short-term,
high-grade investment instruments as part of its overall investment policy.

                                  INCOME TAXES

In general,  the Company records an income tax provision  (benefit) at a blended
Federal  and state  statutory  income  tax rate of 40.2%.  In fiscal  2003,  the
Company  recorded a valuation  allowance in the amount of $24.0 million  against
the deferred  income tax assets,  offsetting the income tax benefit from current
year operating losses and resulting in an income tax provision of $13.0 million.
The valuation  allowance was  calculated  utilizing the guidance of SFAS No. 109
"Accounting for Income Taxes" which requires an estimation of the recoverability
of the recorded  deferred income tax asset balances.  The income tax benefit for
fiscal 2002 as a percentage of pretax income (loss) was a benefit of 35.3%.  The
primary reason for the variance  between the effective and statutory  income tax
rates in 2002 relate to a portion of the reported goodwill impairment losses not
deductible for income tax purposes.


FISCAL 2002 COMPARED TO FISCAL 2001

                                    REVENUES

Revenues decreased 36.9% to $34.6 million for fiscal 2002 from $54.8 million for
fiscal  2001.  The  decrease in revenues  was due  primarily  to a reduction  in
management  consulting  demand by the  communications  and  technology  industry
resulting primarily from adverse macroeconomic events in this sector during 2001
and 2002,  including  reductions  in capital  funding,  business  failures,  and
industry  restructurings  and  reorganizations.  The industry was also adversely
affected  in 2002 by a  series  of  accounting  scandals  at  several  prominent
telecommunications  companies.  Our international revenue base decreased to 7.3%
of the Company's  revenues for fiscal 2002, down from 11.7% for fiscal 2001, due
to the additional  domestic revenue generated by the Company's recently acquired
subsidiaries,  TMNG Strategy and TMNG Technologies,  and the decline in services
provided to  international  customers  related to similar adverse  macroeconomic
events  in  those  markets.   TMNG  Strategy   revenues   represented  32.3%  of
consolidated revenues during fiscal 2002.  Non-consulting revenues recognized by
TMNG  Technologies  represented  4.4% of  consolidated  revenues for fiscal 2002
compared to 1.1% of consolidated revenues for fiscal 2001, and related primarily
to commissions received on hardware sales. Revenues recognized by the Company in
connection with fixed price engagements  totaled $11.9 million,  and represented
34.4% of consolidated revenue during fiscal 2002.

                                COST OF SERVICES

Direct  costs of  services  decreased  38.4% to $16.9  million  for fiscal  2002
compared  to $27.3  million  for fiscal  2001.  The  decrease  was  attributable
primarily  to fewer  consulting  engagements  and  corresponding  reductions  in
consulting  personnel  costs.  As a percentage of

<PAGE>

revenues,  the Company's gross margin based on direct cost of services was 51.3%
for fiscal 2002 compared to 50.1% for fiscal 2001.  The increase in gross margin
was primarily  attributable  to higher margins  associated  with the increase in
strategy  offerings  provided  during fiscal 2002 compared to the  corresponding
period in fiscal 2001.

Non-cash stock based compensation charges were $0.7 million and $2.3 million for
fiscal  years  2002 and 2001,  respectively.  The  primary  reasons  for the net
decrease  in  non-cash  stock  based  compensation  charges for fiscal year 2002
compared  to  fiscal  year  2001  were the  reduction  in  amortization  expense
recognized  on a warrant in the amount of $1.1 million and the net  reduction in
amortization  charges related to the pre-initial public offering grants of stock
options in the amount of $0.5 million. Non-cash stock based compensation charges
are recognized by the Company over a period of three or four years,  based on an
accelerated  vesting  schedule.  Substantially all of the options giving rise to
the equity  related  charges  are in their  respective  third of fourth  year of
vesting,  and therefore continue to have less impact on the Company's  Statement
of  Operations  and  Comprehensive  Income  (Loss).  The above warrant was fully
amortized by the Company  during the second  quarter of fiscal year 2002.  These
net charges  increased  costs of services as a percentage of revenue by 2.1% and
4.2% for fiscal years 2002 and 2001, respectively.

                               OPERATING EXPENSES

In total, operating expenses increased to $52.4 million for fiscal year 2002, or
167.1% from $19.6  million for fiscal year 2001.  This increase of $32.8 million
can be allocated to primarily  three cost  categories.  First,  and largest,  is
$26.1 million of additional operating expenses in 2002 associated with the $25.2
million  write-down  of  goodwill  and $0.9  million  of  amortization  of other
identified  intangibles  associated with acquired business units. The write-down
of goodwill was calculated in accordance with the provisions of SFAS No. 142 and
reflected the unanticipated continued decline in the Company's current financial
performance and projections of future operating results.

In  addition,   selling,   general  and  administrative  expenses  increased  by
approximately  $7.2 million in 2002  compared to 2001.  Of this  increase,  $2.8
million was related to cost reduction initiatives and sizing of the Company, and
$4.2 million was the result of absorbing the selling, general and administrative
costs of TMNG  Technology and TMNG Strategy.  During the second half of 2002 the
Company  implemented  a series of cost  reductions  to  properly  size  selling,
general and  administrative  costs to revenue  generation,  and  believes  these
initiatives will better position the selling,  general and  administrative  cost
structure in future  periods.  Management  continues  to examine  cost-reduction
measures to enhance the Company's profitability and manage operating expenses to
better align them with the size of the Company.

Non-cash stock based  compensation  charges of $0.4 million and $0.8 million for
fiscal year 2002 and fiscal year 2001, respectively, were recorded in connection
with stock options  granted to the Company's  partners,  principals  and certain
senior executives and non-employee  directors.  The net $0.4 million decrease in
non-cash  stock based  compensation  charges  for fiscal  year 2002  compared to
fiscal  year  2001 was a result  of the  reduction  in the  amortization  of the
deferred  compensation  charges recorded in connection with  pre-initial  public
offering grants of non-qualified  stock options based on the accelerated vesting
schedule  discussed  above  in  "Cost  of  Services."  These  charges  increased
operating  expenses as a percentage of revenue by 1.0% and 1.5% for fiscal years
2002 and 2001, respectively.

                            OTHER INCOME AND EXPENSES

Interest  income was $1.0  million and $2.4  million  for fiscal  years 2002 and
2001,  respectively,  and  represented  interest  earned on  invested  balances.
Interest income decreased during fiscal year 2002 due to lower invested balances
resulting from a reduction in cash reserves and lower interest rate returns from
fiscal year 2001 to fiscal year 2002.  TMNG  invests in  short-term,  high-grade
investment instruments as part of its overall investment policy.

                                  INCOME TAXES

In general,  the Company records an income tax provision  (benefit) at a blended
Federal  and state  statutory  income tax rate of 40.2%.  Income  tax  provision
(benefit) for fiscal 2002 and 2001 as a percentage of pretax income (loss) was a
benefit of 35.3% in fiscal 2002 and a  provision  of 29.6% in fiscal  2001.  The
primary reason for the variance  between the effective and statutory  income tax
rates in 2002 relate to a portion of the reported goodwill impairment losses not
deductible for income tax purposes.  The primary reason for the variance in 2001
was the earnings  reported on  short-term  investments  in Federally  tax-exempt
income securities not taxable for Federal income tax purposes.

                    CUMULATIVE CHANGE IN ACCOUNTING PRINCIPLE

A cumulative  change in  accounting  principle in the amount of $1.9 million was
recorded  during fiscal year 2002 in connection  with the Company's  estimate of
goodwill  impairment.  The  impairment  was  calculated in  accordance  with the
provisions of SFAS No. 142 and has been  reported on the Company's  Statement of
Operations and Comprehensive Income (Loss), net of tax benefit, in the amount of
$1.1 million.


SUMMARY OF QUARTERLY RESULTS OF OPERATIONS -- UNAUDITED

<PAGE>

<TABLE>
<CAPTION>
<S>                                                   <C>           <C>           <C>            <C>

                                                             (In thousands, except per share data)

                                                                          QUARTER ENDED
                                                      ----------------------------------------------------
                                                      MARCH 30,      JUNE 29,   SEPTEMBER 28,  DECEMBER 28,
                                                        2002           2002        2002           2002
                                                      --------      --------      --------       --------
Revenues .......................................      $  7,268      $  9,927      $  8,756       $  8,644
                                                      ========      ========      ========       ========
Gross profit ...................................      $  3,099      $  5,486      $  4,274       $  4,160
                                                      ========      ========      ========       ========
Loss before cumulative effect of a change in
 accounting principle ..........................      $ (1,665)     $ (1,822)     $   (648)      $(18,128)
                                                      ========      ========      ========       ========
Net loss........................................      $ (2,805)     $ (1,822)     $   (648)      $(18,128)
                                                      ========      ========      ========       ========
Basic and diluted loss before cumulative
 effect of a change in accounting principle per
 common share ..................................      $  (0.05)     $  (0.05)     $  (0.02)      $  (0.54)
                                                      ========      ========      ========       ========
Basic and diluted net loss per common share ....      $  (0.09)     $  (0.05)     $  (0.02)      $  (0.54)
                                                      ========      ========      ========       ========



                                                                          QUARTER ENDED
                                                      ----------------------------------------------------
                                                      MARCH 29,      JUNE 28,   SEPTEMBER 27,  January 03,
                                                        2003           2003        2003           2004
                                                      --------      --------      --------       --------
Revenues .......................................      $  7,406      $  5,020      $  4,691       $  6,359
                                                      ========      ========      ========       ========
Gross profit ...................................      $  3,744      $  2,380      $  2,194       $  3,280
                                                      ========      ========      ========       ========
Net loss........................................      $ (1,231)     $(18,737)     $ (2,653)      $(19,703)
                                                      ========      ========      ========       ========
Basic and diluted net loss per common share ....      $  (0.04)     $  (0.56)     $  (0.08)      $  (0.58)
                                                      ========      ========      ========       ========
</TABLE>


The Company reports its operating activities on a 52/53-week fiscal year and for
the fourth  quarter  ended  January 3, 2004,  the  Company's  financial  results
include  fourteen  weeks  compared to the thirteen weeks reported for the fourth
quarter ended December 28, 2002. The operating  results for the fiscal year 2003
report fifty-three weeks of activity compared to the fifty-two weeks of activity
reported in fiscal year 2002.

See  Footnote 7 "Income  Tax" for  discussion  of fourth  quarter  deferred  tax
charge.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in  operating  activities  was $0.9  million for fiscal year 2003,
compared  to net cash  provided  by  operating  activities  of $7,000  and $20.9
million  for fiscal  years 2002 and 2001,  respectively.  The  Company  incurred
negative cash flow from its operating  activities for fiscal year 2003 primarily
due to operating losses.  However,  these were substantially offset by effective
management of working capital and operating  assets and  liabilities  during the
year.

Net cash used in investing activities was $0.1 million,  $32.8 million, and $5.6
million  for fiscal  years 2003,  2002,  and 2001,  respectively.  Cash used for
acquisitions  was $32.5  million and $4.7 million in fiscal years 2002 and 2001,
respectively,  and relates to the Cambridge Strategic Management Group, Inc. and
Tri-Com Computer Services, Inc. acquisitions, respectively. Capital expenditures
of $0.1 million,  $0.3 million,  and $0.7 million,  respectively,  relate to the
capitalization of leasehold improvements, computer equipment and software by the
Company for fiscal years 2003, 2002, and 2001.

Net cash provided by financing  activities was $.09 million,  $0.12 million, and
$0.51  million for fiscal years 2003,  2002,  and 2001,  respectively.  Net cash
provided  in fiscal  years 2003,  2002,  and 2001  related to proceeds  from the
exercise of employee stock options as well as common stock issued by the Company
as part of its employee stock  purchase  program,  partially  offset by payments
made on long-term obligations.

<PAGE>

As of January 03, 2004,  the Company has the following  contractual  obligations
and commercial commitments by year (amounts in millions):


<TABLE>
<CAPTION>
<S>                        <C>     <C>      <C>      <C>      <C>      <C>         <C>

                                                                        Later
                                                                        Years
                                                                       Through
                           2004    2005     2006     2007     2008       2011      Total
                           ----    ----     ----     ----     ----     -------     -----
Capital leases             $0.3    $0.2                                            $ 0.5
Operating leases            1.8     1.6     $1.5     $1.6     $1.6       $3.7       11.8
                           ----    ----     ----     ----     ----       ----      -----
Total                      $2.1    $1.8     $1.5     $1.6     $1.6       $3.7      $12.3
                           ====    ====     ====     ====     ====       ====      =====

</TABLE>

The  Company  has met its cash  requirements  with a  combination  of  operating
revenues and the use of the Company's cash reserves.

At January  03,  2004,  TMNG had  approximately  $52.9  million in cash and cash
equivalents.  TMNG  believes it has  sufficient  cash to meet  anticipated  cash
requirements,  including  anticipated  capital  expenditures,  consideration for
possible  acquisitions,  and any continuing  operating losses,  for at least the
next 12 months.  The Company has  established  a flexible  model that provides a
lower fixed cost structure than most  consulting  firms,  enabling TMNG to scale
operating cost structures more quickly based on market conditions.  Although the
Company is well  positioned  because of its cash reserves to weather  continuing
adverse conditions in the  communications  industry for a period of time, if the
industry and demand for  consulting  services do not rebound in the  foreseeable
future and the Company  continues to experience  negative cash flow, the Company
could experience liquidity challenges.

TRANSACTIONS WITH RELATED PARTIES

During  fiscal  year 2001 a member  of the TMNG  board of  directors  was also a
director  of a  customer  for which  TMNG did  business,  and the  Company  also
performed  services  for one  customer  in which one member of the TMNG board of
directors owns a partial equity  interest.  Revenues earned from these customers
during  fiscal year 2001 were  approximately  $2.3  million.  During fiscal year
2002,  one member of the TMNG board of directors was also director of a customer
with which TMNG did  business.  Revenues  earned from the  customer  during 2002
totaled  approximately  $308,000.  No receivables  were outstanding by the above
customers as of December 29, 2001 and December 28, 2002, respectively.

During fiscal years 2001 and 2002, TMNG made payments of  approximately  $70,000
and  $190,000  to two legal  firms in which  two  members  of the TMNG  board of
directors own equity  interests.  Such payments were for legal services rendered
in connection with the Company's  equity offerings and for other matters arising
in the normal course of business. The costs associated with the equity offerings
were  classified as a component of  additional  paid-in  capital,  and the costs
associated  with business  matters arising in the normal course of business were
classified as selling, general and administrative in the consolidated statements
of income and comprehensive income.

During the third quarter of fiscal year 2001,  three  executive  officers of the
Company  received stock options at fair market value in lieu of receiving  their
cash base  compensation,  which  subsequently  resumed  in the first  quarter of
fiscal year 2002.  To assist in meeting the cash flow needs of the  officers who
reduced their compensation, the Company provided lines of credit, collateralized
by Company common stock held by such officers. In June 2002, one of the officers
retired from the Company,  and his line of credit was  cancelled.  In the second
quarter  of  fiscal  year  2003 the  Board  of  Directors  cancelled  one of the
remaining  officer's line of credit. At the time of the cancellation the officer
did not have any  outstanding  indebtedness  to the  Company.  As of January 03,
2004, there was one remaining line of credit between the Company and an officer.
The maximum  aggregate  amount available for borrowing under that remaining loan
agreement  was  reduced  from  $600,000  to  $300,000  during  2003.   Aggregate
borrowings against the lines of credit at December 28, 2002 and January 03, 2004
totaled  $300,000 for each period and are due in 2011.  In  accordance  with the
loan  provisions,  the  interest  rate  charged  on the  loans  is  equal to the
Applicable Federal Rate (AFR), as announced by the Internal Revenue Service, for
short-term  obligations  (with  annual  compounding)  in effect for the month in
which the advance is made, until fully paid. Pursuant to the Sarbanes-Oxley Act,
no further loan  agreements or draws against the line may be made by the Company
to, or arranged by the Company for its executive officers

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company does not invest excess funds in derivative financial  instruments or
other market rate sensitive  instruments for the purpose of managing its foreign
currency  exchange  rate risk.  The Company  invests  excess funds in short-term
investments, the yield of which is exposed to interest rate market risk.

The Company does not have material  exposure to market  related  risks.  Foreign
currency  exchange rate risk may become  material  given U.S.  dollar to foreign
currency  exchange  rate  changes and  significant  increases  in  international
engagements denominated in the local currency of the Company's clients.

<PAGE>


ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS

                          INDEPENDENT AUDITORS' REPORT

TO THE BOARD OF DIRECTORS OF

The Management Network Group, Inc.
Overland Park, Kansas

We have audited the accompanying  consolidated  balance sheets of The Management
Network Group,  Inc. and subsidiaries  (the  "Companies") as of January 03, 2004
and December 28, 2002 and the related consolidated  statements of operations and
comprehensive income (loss),  stockholders' equity and cash flows for the fiscal
years ended  January 03, 2004,  December 28, 2002 and December 29, 2001 (53, 52,
and 52 weeks,  respectively).  These financial statements are the responsibility
of the Companies'  management.  Our  responsibility  is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the  financial  position of the Companies as of January 03,
2004 and December 28, 2002,  and the results of their  operations and their cash
flows for the fiscal  years  ended  January  03,  2004,  December  28,  2002 and
December 29, 2001 in conformity with accounting principles generally accepted in
the United States of America.

As  discussed in Notes 1 and 3 to the  consolidated  financial  statements,  the
Companies  changed their method of accounting for goodwill and other  intangible
assets with the adoption of Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets", in 2002.






                           /S/ DELOITTE & TOUCHE LLP

                             KANSAS CITY, MISSOURI



                                 March 29, 2004


<PAGE>

                       THE MANAGEMENT NETWORK GROUP, INC.

                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

                                     ASSETS


<TABLE>
<CAPTION>
<S>                                                                         <C>              <C>


                                                                            DECEMBER 28,     January 03,
                                                                                2002             2004
                                                                            ------------     ------------
CURRENT ASSETS:
 Cash and cash equivalents ..........................................        $  53,786        $  52,875
 Receivables:
    Accounts receivable .............................................            5,597            5,376
    Accounts receivable -- unbilled .................................            4,232            2,140
                                                                             ---------        ---------
                                                                                 9,829            7,516
    Less: Allowance for doubtful accounts ...........................             (471)            (652)
                                                                             ---------        ---------
                                                                                 9,358            6,864
    Refundable income taxes  ........................................            4,277            1,557
    Prepaid and other assets ........................................            2,217              710
                                                                             ---------        ---------
         Total current assets .......................................           69,638           62,006
                                                                             ---------        ---------
Property and Equipment, net .........................................            2,285            1,558
Goodwill.............................................................           31,308           15,528
Customer relationships, net .........................................            5,092              541
Identifiable intangible assets, net..................................            2,362              937
Deferred tax asset ..................................................           14,272
Other assets ........................................................              502              402
                                                                             ---------        ---------
Total Assets ........................................................        $ 125,459        $  80,972
                                                                             =========        =========
CURRENT LIABILITIES:
 Trade accounts payable .............................................        $   1,170        $     635
 Accrued payroll, bonuses and related expenses ......................            2,105            1,251
 Other accrued liabilities ..........................................            1,964            2,104
 Unfavorable and capital lease obligations ..........................              921              785
                                                                             ---------        ---------
         Total current liabilities ..................................            6,160            4,775
                                                                             ---------        ---------
Unfavorable and capital lease obligations ...........................            3,573            2,828

STOCKHOLDERS' EQUITY;
 Common stock:
    Voting -- $.001 par value, 100,000,000 shares authorized;
    33,347,228 shares issued and outstanding on
    December 28, 2002, 34,371,068 shares issued and
    outstanding on January 03, 2004 ................................               33               34
 Preferred stock -- $.001 par value, 10,000,000 shares
    authorized; no shares issued or outstanding
 Additional paid-in capital .........................................          155,509          157,292
Accumulated deficit.................................................           (39,866)         (82,190)
 Accumulated other comprehensive income --
  Foreign currency translation adjustment ...........................              113              176
 Unearned compensation ..............................................              (63)          (1,943)
                                                                             ---------        ---------
         Total stockholders' equity .................................          115,726           73,369
                                                                             ---------        ---------
Total Liabilities and Stockholders' Equity ..........................        $ 125,459        $  80,972
                                                                             =========        =========
</TABLE>


See notes to consolidated financial statements.

<PAGE>


                       THE MANAGEMENT NETWORK GROUP, INC.

      CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
<S>                                                          <C>           <C>             <C>


                                                                         FISCAL YEAR ENDED
                                                             ------------------------------------------
                                                             DECEMBER 29,  DECEMBER 28,    January 03,
                                                                 2001          2002            2004
                                                             -----------   -----------     -----------
Revenues.................................................      $ 54,832       $ 34,595       $ 23,476
Cost of services:
 Direct cost of services.................................        27,347         16,855         11,935
 Equity related charges .................................         2,322            721            (57)
                                                               --------       --------       --------
         Total cost of services .........................        29,669         17,576         11,878
                                                               --------       --------       --------
Gross profit.............................................        25,163         17,019         11,598
Operating expenses:
 Selling, general and administrative.....................        16,767         23,971         19,494
 Equity related charges .................................           843            353            142
 Goodwill and intangibles amortization ..................         1,996          2,887          2,343
 Goodwill and intangible asset impairment ...............                       25,165         19,484
                                                               --------       --------       --------
         Total operating expenses .......................        19,606         52,376         41,463
                                                               --------       --------       --------
Income (loss) from operations ...........................         5,557        (35,357)       (29,865)
Other income:
 Interest income ........................................         2,433            996            624
 Interest expense .......................................           (14)           (63)           (51)
 Other, net .............................................            (8)            26
                                                               --------       --------       --------
         Total other income..............................         2,411            959            573
                                                               --------       --------       --------
Income (loss) before income tax (provision) benefit
 and cumulative effect of a change in accounting
 principle ..............................................         7,968        (34,398)       (29,292)
Income tax (provision) benefit ..........................        (2,360)        12,135        (13,032)
                                                               --------       --------       --------
Income (loss) before cumulative effect of a change
 in accounting principle.................................         5,608        (22,263)       (42,324)
Cumulative effect of a change in accounting principle -
 goodwill impairment, net of tax benefit ................                       (1,140)
                                                               --------       --------       --------
Net income (loss) .......................................         5,608        (23,403)       (42,324)
Other comprehensive income (loss) --
 Foreign currency translation adjustment.................           (18)            96             63
                                                               --------       --------       --------
Comprehensive income (loss) .............................      $  5,590       $(23,307)      $(42,261)
                                                               ========       ========       ========
Income (loss) before cumulative effect of a change in
 accounting principle per common share
 Basic ..................................................      $   0.19       $  (0.68)      $  (1.26)
                                                               ========       ========       ========
 Diluted ................................................      $   0.18       $  (0.68)      $  (1.26)
                                                               ========       ========       ========
Cumulative effect of a change in accounting principle
 per common share
 Basic ..................................................                     $  (0.03)
                                                                              ========
 Diluted ................................................                     $  (0.03)
                                                                              ========
Net income (loss) per common share
 Basic ..................................................      $   0.19       $  (0.71)      $  (1.26)
                                                               ========       ========       ========
 Diluted ................................................      $   0.18       $  (0.71)      $  (1.26)
                                                               ========       ========       ========



Shares used in calculation of income (loss) before
 cumulative effect of a change in accounting principle
 and net income (loss) per common share
 Basic ..................................................        29,736         32,734         33,545
                                                               ========       ========       ========
 Diluted ................................................        30,774         32,734         33,545
                                                               ========       ========       ========

</TABLE>


See notes to consolidated financial statements.



<PAGE>


                       THE MANAGEMENT NETWORK GROUP, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
<S>                                                               <C>           <C>            <C>


                                                                              FISCAL YEAR ENDED
                                                                  -----------------------------------------
                                                                  DECEMBER 29,  DECEMBER 28,   January 03,
                                                                      2001          2002           2004
                                                                  ------------  ------------   ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss) ........................................       $  5,608      $ (23,403)    $  (42,324)
  Adjustments to reconcile net income (loss) to net cash
   provided by (used in) operating activities:
    Cumulative change in accounting principle ..............                         1,900
    Goodwill and intangible asset impairment ...............                        25,165         19,484
    Depreciation and amortization ..........................          2,543          3,835          3,197
    Equity related charges .................................          3,165          1,074             85
    Loss on retirement of assets ...........................                           205
    Income tax benefit (increase) realized upon
     exercise/forfeiture of stock options .................              (9)            22             45
    Deferred income taxes ..................................            111         (8,820)        14,066
    Other changes in operating assets and liabilities, net
      of business acquisitions:
      Accounts receivable ..................................          9,546          4,561            402
      Accounts receivable -- unbilled ......................          5,100           (367)         2,092
      Other assets .........................................           (659)           202          1,113
      Trade accounts payable ...............................         (1,592)           936           (535)
      Accrued (refundable) income taxes.....................             52         (4,583)         2,720
      Accrued liabilities ..................................         (2,969)          (720)        (1,286)
                                                                   --------       --------       --------
         Net cash provided by (used in) operating activities         20,896              7           (941)
                                                                   --------       --------       --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisition of business, net of cash acquired ............         (4,650)       (32,456)
  Acquisition of property and equipment, net................           (724)          (280)          (127)
  Loans to officers, net....................................           (200)          (100)
                                                                   --------       --------       --------
         Net cash used in investing activities .............         (5,574)       (32,836)          (127)
                                                                   --------       --------       --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of common stock ................ ................            221            164             70
  Payments made on long-term obligations ...................            (48)          (342)          (392)
  Exercise of stock options.................................            336            301            416
                                                                   --------       --------       --------
         Net cash provided by financing activities                      509            123             94
                                                                   --------       --------       --------
Effect of exchange rate on cash and cash equivalents .......            (18)            96             63
                                                                   --------       --------       --------
Net increase (decrease) in cash and cash equivalents .......         15,813        (32,610)          (911)
Cash and cash equivalents, beginning of period .............         70,583         86,396         53,786
                                                                   --------       --------       --------
Cash and cash equivalents, end of period ...................       $ 86,396       $ 53,786       $ 52,875
                                                                   ========       ========       ========
Supplemental disclosure of cash flow information:
  Cash paid during period for interest .....................       $     14       $     63       $     51
                                                                   ========       ========       ========
  Cash paid during period for taxes ........................       $  2,385       $    583       $    493
                                                                   ========       ========       ========
Supplemental disclosure of non-cash investing and financing
  transactions-

  Acquisition of business:
    Fair value of assets acquired ..........................       $  3,655       $ 53,840
    Liabilities incurred or assumed ........................       $ (1,652)      $ (7,377)
    Common stock issued ....................................       $  3,000       $ 13,480

</TABLE>


See notes to consolidated financial statements.

<PAGE>


                       THE MANAGEMENT NETWORK GROUP, INC.

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                        (In thousands, except share data)

<TABLE>
<CAPTION>
<S>                                                          <C>            <C>       <C>          <C>
                                                                 COMMON STOCK
                                                                  $.001 PAR
                                                                    VOTING            ADDITIONAL   RETAINED
                                                             ---------------------     PAID-IN     EARNINGS
                                                                SHARES      AMOUNT     CAPITAL     (DEFICIT)
                                                             ------------   ------    ----------   ---------
Balance, December 30, 2000                                     29,465,808   $   29    $  136,917   $ (22,071)
Exercise of options                                               196,433                    336
Cancellation of options                                                                     (954)
Amortization of warrant cost                                                               1,721
Employee stock purchase plan                                       52,261                    222
Stock compensation                                                                           (25)
Other comprehensive income -
    Foreign currency translation adjustment
Stock options issued in exchange for Tri-Com SAR's                                           244
Reduction of tax benefit due to exercise of stock options                                     (9)
Acquisition of subsidiary                                         490,417        1         2,999
Net income                                                                                             5,608
                                                             ------------   ------    ----------   ---------
Balance, December 29, 2001                                     30,204,919       30       141,451     (16,463)
Exercise of options                                               174,058                    301
Cancellation of options                                                                     (526)
Amortization of warrant cost                                                                 623
Employee stock purchase plan                                       75,451                    164
Stock compensation                                                                            (4)
Other comprehensive income -
    Foreign currency translation adjustment
Tax benefit due to exercise of stock options                                                  22
Acquisition of subsidiary                                       2,892,800        3        13,478
Net loss                                                                                             (23,403)
                                                             ------------   ------    ----------   ---------
Balance, December 28, 2002                                     33,347,228       33       155,509     (39,866)
Option grant                                                                                 189
Exercise of options                                               245,304                    416
Cancellation of options                                                                     (294)
Stock surrender                                                    (8,702)                   (12)
Employee stock purchase plan                                       67,238                     70
Stock
compensation
Restricted stock grant                                            720,000        1         2,069
Other comprehensive income -
    Foreign currency translation adjustment
Reduction of tax benefits due to exercise/forfeiture
 of stock options                                                                           (655)
Net loss                                                                                             (42,324)
                                                             ------------   ------    ----------   ---------
Balance, January 03, 2004                                      34,371,068   $   34    $  157,292   $ (82,190)
                                                             ============   ======    ==========   =========
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S>                                                              <C>                 <C>                <C>

                                                                  ACCUMULATED
                                                                     OTHER
                                                                 COMPREHENSIVE
                                                                     INCOME             UNEARNED
                                                                    (LOSSES)          COMPENSATION        TOTAL
                                                                 -------------       --------------     ---------
Balance, December 30, 2000                                       $          35       $       (3,438)    $ 111,472
Exercise of options                                                                                           336
Cancellation of options                                                                         954             -
Amortization of warrant cost                                                                                1,721
Employee stock purchase plan                                                                                  222
Stock compensation                                                                            1,469         1,444
Other comprehensive income -
    Foreign currency translation adjustment                                (18)                               (18)
Stock options issued in exchange for Tri-Com SAR's                                              (28)          216
Reduction of tax benefit due to exercise of stock options                                                      (9)
Acquisition of subsidiary                                                                                   3,000
Net income                                                                                                  5,608
                                                                 -------------       --------------     ---------
Balance, December 29, 2001                                                  17               (1,043)      123,992
Exercise of options                                                                                           301
Cancellation of options                                                                         526             -
Amortization of warrant cost                                                                                  623
Employee stock purchase plan                                                                                  164
Stock compensation                                                                              454           450
Other comprehensive income -
    Foreign currency translation adjustment                                 96                                 96
Tax benefit due to exercise of stock options                                                                   22
Acquisition of subsidiary                                                                                  13,481
Net loss                                                                                                  (23,403)
                                                                 -------------       --------------     ---------
Balance, December 28, 2002                                                 113                  (63)      115,726
Option grant                                                                                   (189)
Exercise of options                                                                                           416
Cancellation of options                                                                         294             -
Stock surrender                                                                                               (12)
Employee stock purchase plan                                                                                   70
Stock compensation                                                                               85            85
Restricted stock grant
(2,070)
Other comprehensive income -
    Foreign currency translation adjustment                                 63                                 63
Reduction of tax benefit due to exercise/forfeiture
(655)
 of stock options
Net loss                                                                                                  (42,324)
                                                                 -------------       --------------     ---------
Balance, January 03, 2004                                        $         176       $       (1,943)    $  73,369
                                                                 =============       ==============     =========

</TABLE>



See notes to consolidated financial statements.

<PAGE>


                       THE MANAGEMENT NETWORK GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of  Operations  -- The  Management  Network  Group,  Inc.  ("TMNG" or the
"Company")  was  formed  on  April  1,  1993  as a  management  consulting  firm
specializing in global  competitive  communications.  Primary  services  include
providing management consulting services to wireless and wireline communications
carriers,   and  the   technology   and   investment   firms  that  support  the
communications  industry.  A majority of the Company's revenues are to customers
in the United States, however the Company also provides services to customers in
Europe and other foreign countries.  The Company's corporate offices are located
in Overland Park, Kansas.

Principles of Consolidation -- The consolidated  statements include the accounts
of TMNG and its wholly-owned  subsidiaries,  The Management Network Group Europe
Ltd. ("TMNG-Europe"), formed on March 19, 1997, based in the United Kingdom; The
Management  Network Group Canada Ltd.  ("TMNG-Canada"),  formed on May 14, 1998,
based in Toronto,  Canada;  TMNG.com, Inc., formed in June 1999; TMNG Marketing,
Inc.,  acquired on  September  5, 2000;  TMNG  Technologies,  Inc.,  acquired on
September  5, 2001;  and TMNG  Strategy,  Inc.,  acquired on March 6, 2002.  All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.

Fiscal Year -- The Company reports its operating  results on a 52/53-week fiscal
year basis.  The fiscal year end is  determined as the Saturday  ending  nearest
December 31.  Fiscal year ended  January 3, 2004  reported  fifty three weeks of
operating  results  and  consisted  of three 13 weeks  quarters  and one 14 week
quarter.  The fiscal  years ended  December  28, 2002 and December 29, 2001 each
reported 52 weeks of operating  results and consisted of 4 equal  quarters of 13
weeks  each.  The fiscal  years  ended  January 3, 2004,  December  28, 2002 and
December  29, 2001 are  referred  to herein as fiscal year 2003,  2002 and 2001,
respectively.  TMNG Europe and TMNG Canada  maintain  year-end dates of December
31.

Revenue  Recognition  -- The Company has  historically  accounted for revenue in
connection with client service  engagements under primarily a time and materials
revenue model,  where time and materials service revenues and costs are recorded
in the period in which the service is  performed.  Beginning  in fiscal 2002 and
continuing  through  fiscal year 2003 the  Company has entered  into large fixed
price  contracts and time and material  contracts  with  guaranteed  maximums of
various  durations,  and  expects  this trend to continue  into the future.  The
Company  generally  records  revenue  in  connection  with  larger  fixed  price
contracts  under a percentage  of  completion  method when it has the ability to
make reasonably dependable estimates towards project completion.  This method of
accounting  results in the ratable  recognition  of revenue in proportion to the
related  costs over the client  service  engagement.  Estimates  are prepared to
monitor and assess the  Company's  progress on the  engagement  from the initial
phase of the  project  to  completion,  and  these  estimates  are  utilized  in
recognizing  revenue  in the  Company's  financial  statements.  If the  current
estimates of total  contract  revenues and contract  costs  indicate a loss, the
Company  records a provision for the entire loss on the  contract.  Revenues and
related costs of smaller fixed price  contracts  are generally  recognized  upon
contract  completion under the completed  contract method, and generally involve
immaterial amounts and are of a short duration.

In fiscal  year 2002 and  continuing  into  fiscal  year 2003 the  Company  also
entered into gain sharing contracts, where the Company's revenues are determined
on a success-based  revenue model.  Revenues  generated on such contracts result
from financial  success  recognized by the client utilizing agreed upon contract
measures and milestones between the two parties. Due to the contingent nature of
these gain-sharing  projects,  the Company recognizes costs as they are incurred
on the  project  and  defers  the  revenue  recognition  until  the  revenue  is
realizable and earned.

Cash and Cash Equivalents -- Cash and cash equivalents  include cash on hand and
short-term  investments  with  original  maturities of three months or less when
purchased.

Fair Value of  Financial  Instruments  -- The fair  value of  current  financial
instruments  approximates  the carrying  value because of the short  maturity of
these instruments.

Property  and  Equipment  --  Property  and  equipment  are  stated at cost less
accumulated  depreciation and amortization.  Maintenance and repairs are charged
to expense as incurred.  Depreciation is based on the estimated  useful lives of
the assets and is computed using the  straight-line  method,  and capital leases
are amortized on a straight-line  basis over the life of the lease.  Asset lives
range  from  three  to  seven  years  for  computers  and  equipment.  Leasehold
improvements are capitalized and amortized over the life of the lease.

Goodwill -- The  Company  had  previously  recorded  $18,652,000  of goodwill in
connection with the acquisition of The Weathersby  Group,  Inc.  ("TWG") and had
reported  the  goodwill  at  cost  less  accumulated   amortization   using  the
straight-line  method over ten years.  In fiscal year 2001 the Company  recorded
goodwill   amortization  expense  of  $1,865,000  in  connection  with  the  TWG
acquisition.  Additionally,  the Company has recorded  $6,001,000 of goodwill in
connection with the acquisition of Tri-Com Computer Services,  Inc.  ("Tri-Com")
and  $36,206,000  in  connection  with the  acquisition  of Cambridge  Strategic
Management  Group,  Inc.  ("CSMG").   The  Company  has  not  recorded  goodwill
amortization  during fiscal year 2002 or 2003, in accordance with the provisions
of Statement of Financial  Accounting Standards ("SFAS") No. 142 "Accounting for
Goodwill and Intangible  Assets." See Footnote 3 "Goodwill and Other  Intangible
Assets" for an additional discussion of the Company's goodwill

<PAGE>

Goodwill Impairment -- During fiscal year 2002 the Company adopted the provision
of SFAS No. 142, and recognized a goodwill  impairment  charge of  approximately
$1,140,000,  net of tax  benefit of  $760,000  in  connection  with its  initial
adoption of the  Statement.  This item was  reported  net of tax as a cumulative
change in  accounting  principle.  Subsequent  to its  initial  adoption  of the
Statement, the Company recognized goodwill impairment charges of $25,165,000 and
$15,780,000  in fiscal  years 2002 and 2003,  respectively.  These  amounts  are
reflected in the Company's  loss from  operations  included in the  Consolidated
Statement of  Operations  and  Comprehensive  Income  (Loss).  For an additional
discussion of the Company's  goodwill  impairment,  see Footnote 3 "Goodwill and
Other Intangible Assets" contained herein.

Identifiable  Intangibles -- Identifiable  intangible  assets are stated at cost
less accumulated amortization, and represent customer relationships,  employment
agreements  and  trade  names  acquired  in the CSMG and  Tri-Com  acquisitions.
Amortization is based on estimated useful lives of 3 to 60 months,  depending on
the nature of the intangible asset, and is recognized on a straight-line basis.

In connection  with SFAS No. 144  "Accounting  for the Impairment or Disposal of
Long-lived Assets" the Company, using its best estimates based on reasonable and
supportable  assumptions and  projections,  reviews for impairment of long-lived
assets and certain identifiable  intangibles to be held and used whenever events
or changes in  circumstances  indicate  that the  carrying  amount of its assets
might not be recoverable.

Income Taxes -- The Company recognizes a liability or asset for the deferred tax
consequences  of  temporary  differences  between  the tax  basis of  assets  or
liabilities and their reported amounts in the financial statements.  A valuation
allowance is provided when, in the opinion of management, it is more likely than
not that some portion or all of a deferred tax asset will not be realized.

Use of Estimates -- The  preparation of financial  statements in conformity with
accounting  principles  generally  accepted  in the  United  States  of  America
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.

Foreign  Currency  Transactions  and  Translation -- TMNG-Europe and TMNG-Canada
both conduct business primarily  denominated in their respective local currency.
Assets and liabilities  have been  translated to U.S.  dollars at the period-end
exchange rate. Revenue and expenses have been translated at exchange rates which
approximate the average of the rates prevailing during each period.  Translation
adjustments are reported as a separate component of other  comprehensive  income
in the consolidated  statements of stockholders' equity. Realized and unrealized
exchange gains and losses included in results of operations  were  insignificant
for all periods presented.

Stock-Based  Compensation -- The Company utilizes an intrinsic value methodology
in  accounting   for  stock  based   compensation   for  employees  and  certain
non-employee   directors  in  accordance   with  the  provisions  of  Accounting
Principles  Board  Opinion  ("APB")  No.  25,  "Accounting  for Stock  Issued to
Employees"   and  related   Interpretations,   and  accounts   for   stock-based
compensation for non-employees  utilizing a fair value methodology in accordance
with SFAS No. 123, "Accounting for Stock-Based  Compensation" as amended by SFAS
No. 148 "Accounting for Stock Based  Compensation - Transition and  Disclosure."
For an  additional  discussion  of the Company's  stock-based  compensation  see
Footnote 9 "Stock  Option Plan and Stock Based  Compensation."  If  compensation
cost for the  Company's  APB No. 25 grants,  restricted  stock  grants,  and the
employee stock purchase plan had been determined  under SFAS No. 123, based upon
the fair value at the grant  date,  consistent  with the  Black-Scholes  pricing
methodology  using the  assumptions  above,  the Company's net income for fiscal
year 2001, would have decreased by approximately $6.9 million,  and its net loss
for fiscal  years 2002 and 2003 would have  increased  by $3.3  million and $1.1
million,  respectively. For purposes of pro forma disclosures required under the
provisions of SFAS No. 123, as amended by SFAS No. 148, the estimated fair value
of options and  restricted  stock are  amortized  to pro forma  expense over the
vesting period.  The following  table contains pro forma  information for fiscal
years 2001, 2002 and 2003 (in thousands, except per share amounts):


<TABLE>
<CAPTION>
<S>                                                <C>           <C>           <C>

                                                    FISCAL        FISCAL        FISCAL
                                                     YEAR          YEAR          YEAR
                                                     2001          2002          2003
                                                   --------      --------      --------
Net income (loss), as reported:                    $  5,608      $(23,403)     $(42,324)
  Add: Stock-based employee compensation
   expense (benefit)included in reported
   net income (loss), net of related tax effects        882           273            85

  Deduct:  Total stock-based compensation
  (expense) benefit determined under fair value
   based method for all awards, net of related       (7,750)       (3,536)       (1,213)
   tax effects
                                                   --------      --------      --------
Pro forma net loss                                 $ (1,260)     $(26,666)     $(43,452)
                                                   ========      ========      ========

Loss) per share
  Basic, as reported                               $   0.19      $  (0.71)     $  (1.26)
                                                   ========      ========      ========
  Diluted, as reported                             $   0.18      $  (0.71)     $  (1.26)
                                                   ========      ========      ========
  Basic and Diluted, pro forma                     $  (0.04)     $  (0.81)     $  (1.30)
                                                   ========      ========      ========
</TABLE>

<PAGE>


Warrant Grant -- On October 29, 1999, the Company issued a significant  customer
a warrant to purchase  500,000  shares of common  stock at an exercise  price of
$2.00 per share. The estimated fair value of this warrant was approximately $5.2
million,  all of which has been recognized in the Company's financial statements
by December 28, 2002. Expense recognized in connection with the warrant was $1.7
million  and $0.7  million  for  fiscal  years 2001 and 2002  respectively.  The
warrant was fully  amortized  as of the end of fiscal year 2002.  On November 8,
2000, the customer exercised the warrant. Additionally on December 10, 1999, the
Company  entered into a consulting  services  agreement with this customer under
which  such  customer  committed  to  $22  million  of  consulting  fees  over a
three-year  period  commencing  January 1,  2000.  During  fiscal  year 2002 the
agreement was extended for two additional  years beyond the original term of the
agreement,  in exchange for an expanded  preferred  contractor  relationship and
immediate commitment to a significant consulting  arrangement.  As of January 3,
2004,  $16.3  million  of  cumulative  consulting  fees had been  recognized  in
connection with the agreement.  The agreement  provides for minimum annual usage
requirements  in  connection  with  consulting   services  performed  under  the
agreement,  and as of  January  3, 2004 a  shortfall  in  minimum  annual  usage
requirements  of  consulting  services  under the  agreement  was deemed to have
occurred.  As a result of such shortfall,  the Company  recognized an additional
$706,000 in revenues reflecting this shortfall,  which the customer is obligated
to pay under  the terms of the  agreement.  There can be no  certainty  that the
remaining  $5.0 million of consulting  services  will be purchased,  however the
agreement  does  contain a  termination  fee in the  amount of 25 percent of the
unused and committed consulting services.  In February 2004 after failure by the
customer  to cure a default in  payment in  connection  with the  contract,  the
Company  filed suit against the  customer  for breach of  contract.  The Company
cannot be  assured  that it will  prevail  in the  referenced  litigations,  but
believes its claims are meritorious.

Earnings (Loss) Per Share -- The Company calculates and presents earnings (loss)
per share using a dual  presentation  of basic and diluted  earnings  (loss) per
share. Basic earnings (loss) per share is computed by dividing net income (loss)
by the weighted  average  number of common  shares  outstanding  for the period.
Diluted  earnings per share  reflects the  potential  dilution of  securities by
adding  common stock  options in the weighted  average  number of common  shares
outstanding for a period, if dilutive. In accordance with the provisions of SFAS
No. 128 "Earnings Per Share",  the Company has not included the effect of common
stock options for fiscal year 2002 and 2003 as the Company  reported a loss from
continuing  operations for those periods. Had the Company reported net income in
fiscal year 2002 and 2003,  the  treasury  method of  calculating  common  stock
equivalents would have resulted in approximately  791,000 and 772,000 additional
diluted shares, respectively.

The reconciliation of weighted average common shares outstanding included in the
computation  of basic and  diluted  net income  (loss) per common  share for the
periods  indicated  is as  follows  (amounts  in  thousands,  except  per  share
amounts):


<TABLE>
<CAPTION>
<S>                                                                  <C>            <C>            <C>

                                                                      FISCAL         FISCAL         FISCAL
                                                                       YEAR           YEAR           YEAR
                                                                       2001           2002           2003
                                                                     --------       --------       --------
Net income (loss) for basic and diluted earnings (loss) per
  share:
  Income (loss) before taxes and cumulative effect of a
   change in accounting principle .............................      $  7,968      $ (34,398)     $ (29,292)
  Income tax (provision) benefit...............................        (2,360)        12,135        (13,032)
                                                                     --------       --------      ---------
  Income (loss) before cumulative effect of a change in
   accounting principle........................................         5,608        (22,263)       (42,324)
  Cumulative effect of a change in accounting principle........                       (1,140)
                                                                     --------       --------      ---------
  Net income (loss) ...........................................      $  5,608       $(23,403)     $ (42,324)
                                                                     ========       ========      =========

Weighted average shares of common stock outstanding:
  Weighted average shares of common stock outstanding for
     basic earnings (loss) per share...........................        29,736         32,734         33,545
  Effect of stock options .....................................         1,038
                                                                     --------       --------      ---------
  Weighted average shares of common stock outstanding for
    diluted earnings (loss) per share..........................        30,774         32,734         33,545
                                                                     ========       ========      =========
Basic earnings (loss) per share:
  Income (loss) before cumulative effect of a change in
    accounting principle ......................................      $   0.19       $  (0.68)     $   (1.26)
  Cumulative effect of a change in accounting principle........                        (0.03)
                                                                     --------       --------      ---------
  Net income (loss) ...........................................      $   0.19       $  (0.71)     $   (1.26)
                                                                     ========       ========      =========
Diluted earnings (loss) per share:
  Income (loss) before cumulative effect of a change in
   accounting principle .......................................      $   0.18       $  (0.68)     $   (1.26)
  Cumulative effect of a change in accounting principle........                        (0.03)
                                                                     --------       --------      ---------
  Net income (loss)............................................      $   0.18       $  (0.71)     $   (1.26)
                                                                     ========       ========      =========

</TABLE>

<PAGE>

New  Accounting  Standards  -- SFAS No. 150  "Accounting  for Certain  Financial
Instruments with  Characteristics  of both  Liabilities and Equity"  establishes
standards  for  how  an  issuer   classifies  and  measures  certain   financial
instruments with  characteristics  of both  liabilities and equity.  It requires
that an issuer  classify a  financial  instrument  that is within its scope as a
liability (or an asset in some  circumstances).  Many of those  instruments were
previously  classified  as equity.  This  statement is effective  for  financial
instruments  entered into or modified after May 31, 2003, and was adopted by the
Company  during  fiscal  year  2003.  The  Company  does not have any  financial
instruments  that are  within  the  scope of SFAS No.  150,  and  therefore  the
adoption of this  statement had no material  effect on the  Company's  financial
position, results of operations and cash flows.

FASB Financial  Interpretation No. 46 ("FIN 46") clarifies  Accounting  Research
Bulletin No. 51, "Consolidated  Financial Statements." If certain conditions are
met, this interpretation requires the primary beneficiary to consolidate certain
variable interest entities in which equity investors lack the characteristics of
a controlling  financial interest or do not have sufficient equity investment at
risk to permit the variable  interest  entity to finance its activities  without
additional   subordinated   financial   support   from   other   parties.   This
interpretation  is effective  immediately for variable interest entities created
or obtained  after January 31, 2003.  For variable  interest  entities  acquired
before  February 1, 2003, the  interpretation  is effective for the first fiscal
year or interim period beginning after June 15, 2003. The Company currently does
not  have  any  variable  interest  entities  that  would  be  subject  to  this
interpretation.

In  December  2003,  the FASB issued a revision  to FIN 46 which  addresses  new
effective  dates and certain  implementation  issues.  Among these issues is the
addition of a scope exception for certain entities that meet the definition of a
business, provided certain criteria are met.


2. BUSINESS COMBINATIONS

On March 6, 2002,  TMNG  purchased  the business  and primary  assets of CSMG, a
Delaware corporation, of Boston, Massachusetts.  CSMG provides high-end advisory
services to global communication  service and equipment providers and investment
firms that provide  capital to the industry.  CSMG's range of business  strategy
services include analyses of industry and competitive environments;  product and
distribution strategies; finance, including business case development, modeling,
cost analysis and benchmarking; and due diligence and risk assessment.

The acquisition, recorded under the purchase method of accounting, resulted in a
total purchase price of approximately $46.5 million.  Consideration consisted of
$33.0  million  cash  and  2,892,800  shares  of TMNG  Common  Stock  valued  at
approximately  $13.5 million.  Share  consideration was calculated in accordance
with  the  Asset  Purchase  Agreement  at a fixed  price  of  $4.66  per  share.
Additionally,  the Company incurred direct costs of  approximately  $2.3 million
related to the  acquisition  and recorded this amount as an increase to purchase
price.

An escrow was  established  as part of the  transaction,  consisting  of 566,502
shares and $4.0 million of cash  (collectively,  the "Escrowed  Property").  The
Escrowed  Property  is  subject  to  certain  claims  as set  forth in the Asset
Purchase  Agreement and is scheduled to be distributed to the Seller pro rata in
four  installments  over a  24-month  period.  In  accordance  with  the  Escrow
Agreement, the Company made the first three pro rata installment payments to the
Seller,  with the final payment scheduled to be released in the first quarter of
fiscal year 2004.

The transaction  was structured as a taxable  transaction for Federal income tax
purposes,  and  included  $5.4  million  in  cash  consideration  to the  Seller
representing  a sharing of tax  benefits  and  costs.  The  purchase  price also
included $5.2 million representing the working capital purchased from CSMG.

The operating  results of CSMG have been included in the Consolidated  Condensed
Statements of Operations  and  Comprehensive  Income (Loss) from the date of the
purchase.

The  following  table  summarizes  the final  purchase  price  allocation of the
estimated fair value of the assets  acquired and  liabilities  assumed as of the
date of  acquisition.  The  allocation  of the  purchase  price to  identifiable
intangible assets was determined by an independent valuation.


                                AT MARCH 6, 2002
                             (AMOUNTS IN THOUSANDS)



              Current assets                              $ 5,621
              Property, plant and equipment                 1,472
              Employment agreements                         3,200
              Customer relationships                        5,490
              Company tradename                               350
              Deferred taxes (non-current)                  1,501
              Goodwill                                     36,206
                                                          -------
              Total assets acquired                        53,840

              Current liabilities                           3,428
              Noncurrent liabilities                        3,949
                                                          -------
              Total liabilities assumed                     7,377
                                                          -------
              Net assets acquired                         $46,463
                                                          =======

<PAGE>

Of the $5,490,000 assigned to customer relationships, $420,000 was identified as
customer backlog,  with the remaining value based on the Company's  expectations
of future revenue  generated from the acquired customer base. As of December 28,
2002,  customer  backlog was fully amortized bv TMNG. The Company's  estimate of
future revenue  generated from the acquired customer base resulted in a customer
relationship value of $5,070,000 and is being amortized on a straight-line basis
over an estimated useful life of 60 months.

CSMG's  tradename  was valued at  $350,000.  CSMG's  tradename  has an estimated
useful life of 24 months and is amortized on a straight-line basis.

CSMG's  employment   agreements  were  valued  at  $3,200,000.   The  employment
agreements have a weighted  average useful life of  approximately  32 months and
are amortized on a straight-line basis.

As  part  of the  acquisition  of  CSMG,  the  Company  assumed  liabilities  of
approximately $889,000 related to capital leases.

On  September 5, 2001,  the Company  completed  its  acquisition  of Tri-Com,  a
Maryland  corporation.  Tri-Com  provides a full range of technology and systems
solutions to the communications  industry.  Consulting  services offered include
providing  end-to-end  operating  support system ("OSS"),  data center,  systems
solutions, data sourcing, legacy integration and middleware  implementation.  In
addition,  Tri-Com  periodically  receives  commissions  on hardware  purchases,
whereby customers utilize Tri-Com in procuring  computer hardware and equipment.
The  primary  reason  for the  acquisition  was for TMNG to  further  expand its
offering,  enabling  the  Company's  specialists  to  take  an  engagement  from
strategy, to marketing and operational definition, and to OSS enablement.

The acquisition,  recorded under the purchase method of accounting, included the
purchase  of all  outstanding  shares  of  Tri-Com,  which  resulted  in a total
purchase  price of  approximately  $5.2 million for the equity and assumption of
liabilities  exceeding  Tri-Com's  net assets.  Consideration  consisted of $1.8
million cash and 490,417  shares of TMNG common  stock  valued at $3.0  million.
TMNG incurred direct costs of approximately  $180,000 related to the acquisition
and recorded  this amount as an increase to purchase  price.  In addition to the
above-mentioned  costs, TMNG recorded  approximately  $216,000 as an increase to
purchase  price in connection  with the exchange of the Company's  stock options
for vested stock  appreciation  rights held by Tri-Com  employees at the time of
acquisition.  The  operating  results  of  Tri-Com  have  been  included  in the
Consolidated  Condensed Statements of Operations and Comprehensive Income (Loss)
from the date of acquisition.

The following unaudited pro forma result of operations assumes that the CSMG and
Tri-Com  acquisitions  occurred  at the  beginning  of the year  preceding  each
acquisition.  The pro forma results of operations  require  various  assumptions
including  an  assumption  that the same  amount  of  goodwill  would  have been
recognized had the transactions  occurred at the beginning of the year preceding
each acquisition  without regard to the then current levels of business activity
of CSMG and Tri-Com and without  regard to any operating  efficiencies  or other
synergies. Consequently, the pro forma results of operations are not necessarily
indicative of the operating  results,  which would have occurred if the business
combinations  had been in effect on the dates  indicated  or which may result in
the future.



                                                            (unaudited)
                                                   ---------------------------
                                                        Fiscal Year Ended
  (in thousands, except per share amounts)         December 29,   December 28,
                                                       2001           2002
                                                    ---------      ---------
Total revenues                                      $  80,918      $  36,822
Income (loss) before cumulative effect of
 a change in accounting principle                   $   4,484      $ (22,494)
Net income (loss)                                   $   4,484      $ (23,634)
Basic income (loss) before cumulative effect
 of a change in accounting principle per
 common share                                       $    0.14      $   (0.68)
Diluted income (loss) before cumulative effect
 of a change in accounting principle per
 common share                                       $    0.13      $   (0.68)
Basic net income (loss) per common share            $    0.14      $   (0.71)
Diluted net income (loss) per common share          $    0.13      $   (0.71)


Included in the pro forma information for fiscal year 2001 is approximately $1.4
million on a pre-tax basis in one-time  nonrecurring  severance
charges incurred by CSMG.  Excluding these charges,  pro forma basic and diluted
net income per share would have each been $0.16 for fiscal year 2001.

<PAGE>


3. GOODWILL AND OTHER INTANGIBLE ASSETS

Effective for the start of fiscal year 2002, the Company  adopted the provisions
of SFAS No. 142. In accordance  with  provisions of the Statement,  goodwill has
not been  amortized in fiscal years 2002 and 2003.  The Statement  requires that
goodwill be evaluated on an annual basis, or more  frequently if necessary.  The
Company  determines  fair value using the present value method of measurement of
future cash flows.  The present value method  includes the  estimation of a cash
flow stream,  applying a discount  rate.  The Company's  best estimate of future
cash flows is determined  using its internal  budgets as the basis. The discount
rate of between 20% to 25% is commensurate  with the risks  involved,  including
the  nature of the  business,  the time value of money,  expectations  about the
amount or timing of future cash flows, and factors affecting liquidity. Upon the
adoption  of SFAS No.  142,  the  Company  recorded a goodwill  impairment  loss
related to the Management  Consulting  Segment of approximately $1.9 million and
has reflected this amount as a cumulative change in accounting principle, net of
tax benefit,  in the Statement of Operations  and  Comprehensive  Income (Loss).
Subsequent  to the initial  transition  test,  the Company  performed its annual
impairment  test during fiscal year 2002,  and  established  the last day of the
first fiscal  month in the fourth  quarter as the annual  impairment  test date.
Based  on the  analysis  of  projected  future  cash  flows  and  utilizing  the
assistance of an outside  valuation  firm, the Company  determined in connection
with the annual  impairment test performed in fiscal year 2002 that the carrying
value of goodwill  exceeded its fair market value and recorded  impairment  loss
related to the Management Consulting Segment of approximately $24.4 million, and
an impairment loss related to All Other Segment of approximately $0.8 million.

During the second quarter of fiscal year 2003, the Company  performed an interim
test to  determine  whether  an  impairment  of  goodwill  had  occurred  at the
reporting   unit  level.   The  Company   performed  the  interim  test  due  to
significantly  lower  operating  results  of  CSMG,  compared  to the  projected
financial  results that were utilized in determining  the reporting  unit's fair
value in the annual goodwill  impairment  test performed in 2002.  Additionally,
during the second  quarter of 2003 an  executive  of a Company  acquired by TMNG
tendered his  resignation to the Company,  which also had the effect of lowering
the  financial  projections  for the entity.  Based on an analysis of  projected
future cash flows and utilizing the assistance of an outside valuation firm, the
Company  determined  that the  carrying  value of goodwill  acquired in the CSMG
acquisition  exceeded  the fair market  value and  recorded an  impairment  loss
related to the Management Consulting Segment of approximately $15.8 million. The
Company  subsequently  performed its annual  impairment test in October 2003 and
concluded  there was no additional  goodwill  impairment as the calculated  fair
values of its reporting units was higher than their respective  carrying values.
The goodwill  impairment  losses related to both the annual  impairment  test in
fiscal year 2002 and the interim  impairment  test in fiscal year 2003 have been
reflected  as a component of Loss from  Operation in the  Statement of Operation
and Comprehensive Income (Loss) in each respective year.

The changes in the  carrying  amount of  goodwill  as of  December  28, 2002 and
January 03, 2004 are as follows (amounts in thousands):



<TABLE>
<CAPTION>
<S>                                         <C>                      <C>           <C>

                                            Management Consulting    All Other
                                                   Segment            Segment       Total
                                            ---------------------    ---------     --------
Balance as of December 29, 2001                   $ 19,156           $   2,991     $ 22,147
Goodwill acquired during fiscal year 2002           36,216                  10       36,226
Impairment Loss                                    (26,227)               (838)     (27,065)
                                                  --------           ---------     --------
Balance as of December 28, 2002                     29,145               2,163       31,308

Impairment loss                                    (15,780)                         (15,780)
                                                  --------           ---------     --------
Balance as of January 03, 2004                    $ 13,365           $   2,163     $ 15,528
                                                  ========           =========     ========

</TABLE>


Goodwill  amortization  expense  for  fiscal  year  2001 was $1.9  million.  The
following  information  reconciles the net income (loss) and earnings (loss) per
share  reported  for fiscal  years 2001,  2002 and 2003 to  adjusted  net income
(loss) and  earnings  (loss) per share  exclusive of goodwill  amortization  and
compares  the  adjusted  information  to the current  year  results  (amounts in
thousands, except per share data):


<TABLE>
<CAPTION>
<S>                                               <C>                       <C>                       <C>

                                                  --------------------------------------------------------------------
                                                  FISCAL YEAR 2001          FISCAL YEAR 2002          FISCAL YEAR 2003
                                                  ----------------          ----------------          ----------------
Reported income (loss) before cumulative
 effect of change in accounting
 principle                                            $  5,608                  $(22,263)                 $(42,324)
Cumulative effect of change in accounting
 principle                                                                        (1,140)
                                                      --------                  --------                  --------
Reported net income (loss)                               5,608                   (23,403)                  (42,324)
Add back: Goodwill amortization, net of tax              1,119



<PAGE>

                                                      --------                  --------                  --------
Net income (loss), as adjusted                        $  6,727                  $(23,403)                 $(42,324)
                                                      ========                  ========                  ========
Basic income (loss) per share before
 cumulative effect of change in accounting
 principle                                            $   0.19                  $  (0.68)                 $  (1.26)
Cumulative effect of change in accounting
 principle                                                                         (0.03)
                                                      --------                  --------                  --------
Reported net income (loss) per share                      0.19                     (0.71)                    (1.26)
Add back: Goodwill amortization, net of tax               0.04
                                                      --------                  --------                  --------
Basic income (loss) per share, as adjusted            $   0.23                  $  (0.71)                 $  (1.26)
                                                      ========                  ========                  ========
Diluted income (loss) per share before
 cumulative effect of change in accounting
 principle                                            $   0.18                  $  (0.68)                 $  (1.26)
Cumulative effect of change in accounting
 principle                                                                         (0.03)
                                                      --------                  --------                  --------
Reported net income (loss) per share                      0.18                     (0.71)                    (1.26)
Add back: Goodwill amortization, net of tax               0.04
                                                      --------                  --------                  --------
Diluted income (loss) per share, as adjusted          $   0.22                  $  (0.71)                 $  (1.26)
                                                      ========                  ========                  ========

</TABLE>


Included in customer  relationships,  employment agreements and other intangible
assets, and other current assets are the following (amounts in thousands):



                             December 28, 2002        January 03, 2004
                            -------------------     ---------------------
                                   Accumulated                Accumulated
                            Cost   Amortization     Cost     Amortization
                            ----   ------------     ----     ------------
Customer relationships    $ 6,790    $(1,698)       $ 3,086     $(2,545)
Employment agreements       3,200     (1,042)         3,200      (2,292)
Tradename                     350       (146)           350        (321)
Covenant not to compete       203       (132)           203        (203)
                          -------    -------        -------     -------
Total                     $10,543    $(3,018)       $ 6,839     $(5,361)
                          =======    =======        =======     =======


During fiscal year 2003, in accordance  with the  provisions of SFAS No. 144 the
Company  determined that the carrying value of customer  relationships  exceeded
its fair market value and recorded an impairment  loss related to the Management
Consulting  Segment and All Other Segment of approximately $3.4 million and $0.3
million,  respectively.  These  impairment  losses  have  been  reflected  as  a
component  of  Loss  from   Operation  in  the  Statement  of   Operations   and
Comprehensive Income (Loss).

Intangible assets amortization  expense for fiscal years 2001, 2002 and 2003 was
$0.1  million,   $2.9  million  and  $2.3  million,   respectively.   Intangible
amortization  expense is estimated to be  approximately  $1.0 million for fiscal
year 2004,  $0.3  million in fiscal  year 2005 and $0.2  million in fiscal  year
2006.


4. CAPITAL STRUCTURE

On March 6, 2002,  the  Company  completed  its  acquisition  of CSMG and issued
2,892,800  shares of the Company's  voting  common stock in connection  with the
purchase.  The fair market  value of the issued  stock was  approximately  $13.5
million.

On September  5, 2001,  the Company  completed  its  acquisition  of Tri-Com and
issued  490,417 shares of the Company's  voting common stock in connection  with
the purchase.  The fair market value of the issued stock was approximately  $3.0
million.


5. MAJOR CUSTOMERS,  BUSINESS SEGMENTS AND SIGNIFICANT  GROUP  CONCENTRATIONS OF
CREDIT RISK

The Company has identified  its segments  based on the way management  organizes
the Company to assess  performance  and make operating  decisions  regarding the
allocation of resources.

Based on an analysis of the criteria in SFAS No. 131 "Disclosure  about Segments
of an Enterprise and Related Information," the Company has

<PAGE>

concluded it has five  operating  segments,  of which four are aggregated in one
reportable  segment,  the  Management   Consulting  Services  segment,  and  the
remaining segment in All Other. Management Consulting Services includes business
strategy and planning, marketing and customer relationship management, operating
system support, revenue assurance,  corporate investment services, networks, and
business  model   transformation.   All  Other  consists  of  computer  hardware
commissions and rebates  received in connection with the procurement of hardware
for third  parties.  The  accounting  policies  for the segments are the same as
those described in the summary of significant  accounting  policies.  Management
evaluates  segment   performance  based  upon  Income  (Loss)  from  Operations,
excluding  equity related charges,  goodwill and intangible asset  amortization,
and goodwill and intangible asset impairment. There are no inter-segment sales.

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

<TABLE>
<CAPTION>
<S>                               <C>                  <C>     <C>           <C>

                                      Management        All    Not Assigned
                                  Consulting Services  Other    to Segments   Total
                                  -------------------  ------  ------------  --------
FISCAL YEAR 2001

Net sales to external customers          $54,236       $  596                $ 54,832
Income(loss)from operations              $10,171       $  547    $ (5,161)   $  5,557
Total assets                             $11,111       $   40    $117,891    $129,042

FISCAL YEAR 2002

Net sales to external customers          $33,057       $1,538                $ 34,595
Income (loss) from operations            $(6,865)      $  634    $(29,126)   $(35,357)
Total assets                             $ 9,330       $  171    $115,958    $125,459

FISCAL YEAR 2003

Net sales to external customers          $23,245       $  231                $ 23,476
Income (loss) from operations            $(8,040)      $   87    $(21,912)   $(29,865)
Total assets                             $ 6,864                 $ 74,108    $ 80,972

</TABLE>

<PAGE>

As discussed in Note 14 "Subsequent  Event",  the Company has  discontinued  the
operations of its All Other segment subsequent to year end.

Segment  assets,  regularly  reviewed  by  management  as  part  of its  overall
assessment of the segments' performance,  include both billed and unbilled trade
accounts  receivable,  net of allowances,  and certain other assets.  Assets not
assigned to segments include cash and cash equivalents,  property and equipment,
goodwill and intangible assets and deferred tax assets,  excluding  deferred tax
assets recognized on accounts receivable  reserves,  which are assigned to their
respective segment.

Reconciling  information between reportable segments and the Company's totals is
shown in the following table (amounts in thousands):

<TABLE>
<CAPTION>
<S>                                                     <C>            <C>             <C>

                                                        FISCAL          FISCAL          FISCAL
                                                         YEAR            YEAR            YEAR
                                                         2001            2002            2003
                                                        -------         -------        --------
Total operating earnings (losses) for
 reportable segments                                    $10,718        $ (6,231)       $ (7,953)
Equity related charges                                   (3,165)         (1,074)            (85)
Goodwill and intangibles amortization                    (1,996)         (2,887)         (2,343)
Goodwill and intangible asset impairment                                (25,165)        (19,484)
                                                        -------         -------        --------
Income (loss) from operations                           $ 5,557        $(35,357)       $(29,865)
                                                        =======         =======        ========
</TABLE>


Major  customers in terms of  significance to TMNG's revenues (i.e. in excess of
10% of revenues) for fiscal years 2001,  2002 and 2003, and accounts  receivable
as of  December  28,  2002 and  January  03,  2004 were as follows  (amounts  in
thousands):

<TABLE>
<CAPTION>
<S>                       <C>            <C>           <C>         <C>            <C>

                                        REVENUES                       ACCOUNTS RECEIVABLE
                          ------------------------------------     ---------------------------
                           FISCAL        FISCAL        FISCAL
                            YEAR          YEAR          YEAR       DECEMBER 28,   January 03,
                            2001          2002          2003          2002           2004
                          --------       ------        ------      ------------   ------------
Customer A .........      $7,185         $4,392        $3,238        $2,345           $1,743

<PAGE>

Customer B .........      $6,220
Customer C .........                     $5,850                      $1,238
Customer D .........                                   $2,692                         $1,177

</TABLE>

Revenues  from  the  Company's  ten most  significant  customers  accounted  for
approximately 61%, 67% and 67% of revenues for fiscal years 2001, 2002 and 2003,
respectively.

Substantially  all of TMNG's  receivables  are  obligations  of companies in the
communications  industry.  The Company generally does not require  collateral or
other security on its accounts receivable.  The credit risk on these accounts is
controlled  through  credit  approvals,  limits and monitoring  procedures.  The
Company records bad debt expense based on judgment about the anticipated default
rate on  receivables  owed to TMNG  at the  end of the  reporting  period.  That
judgment is based on the Company's uncollected account experience in prior years
and the ongoing  evaluation  of the credit  status of TMNG's  customers  and the
communications  industry in general.  The changes in the Company's allowance for
doubtful accounts is as follows (amounts in thousands):


                           FISCAL          FISCAL        FISCAL
                            YEAR            YEAR          YEAR
                            2001            2002          2003
                          -------         --------      --------
Beginning balance         $   766         $    517      $    471
Bad debt expense              812            1,207           575
Account write-offs         (1,061)          (1,253)         (394)
                          -------         --------      --------
Ending balance            $   517         $    471      $    652
                          =======         ========      ========

Revenues earned in the United States and  internationally  based on the location
where the services are performed are as follows (amounts in thousands):

<TABLE>
<CAPTION>
<S>                         <C>           <C>           <C>           <C>           <C>         <C>

                                FISCAL YEAR 2001           FISCAL YEAR 2002            FISCAL YEAR 2003
                            -------------------------   ----------------------      ----------------------

                                                                      LOSS BEFORE
                                                                      INCOME TAX
                                                                      BENEFIT AND
                                                                      CUMULATIVE
                                           INCOME                     EFFECT OF A                   LOSS
                                           BEFORE                     CHANGE IN                    BEFORE
                                           INCOME                     ACCOUNTING                   INCOME
                            REVENUES        TAXES       REVENUES      PRINICIPLE    REVENUES       TAXES
                            --------      --------      --------      --------      --------       --------
United States ........      $ 48,402      $  7,034      $ 31,935      $(31,753)     $ 21,146    $   (26,385)
International:
  United Kingdom .....         5,546           806
  Canada .............           295            43            11           (11)           95           (119)
  Ireland ............           141            20           496          (493)           32            (39)
  Switzerland ........            56             8
  The Netherlands ....                                     1,990        (1,979)          964         (1,203)
  Portugal  ..........                                                                   451           (562)
  Belize .............                                                                   704           (879)
Other ..............             392            57           163          (162)           84           (105)

                            --------      --------      --------      --------      --------    -----------
          Total ......      $ 54,832      $  7,968      $ 34,595      $(34,398)     $ 23,476    $   (29,292)
                            ========      ========      ========      ========      ========    ===========

</TABLE>

No significant long-lived assets are deployed outside the United States.

<PAGE>

6. PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
<S>                                                         <C>           <C>

                                                            DECEMBER 28,  JANUARY 03,
                                                               2002          2004
                                                            ------------  ------------
                                                                      (000'S)
Furniture and fixtures.................................        $  896        $  908
Software and computer equipment........................         2,552         2,661

<PAGE>

Leasehold improvements.................................           711           711
                                                               ------        ------
                                                                4,159         4,280
Less: Accumulated depreciation and amortization........         1,874         2,722
                                                               ------        ------
                                                               $2,285        $1,558
                                                               ======        ======
</TABLE>


Depreciation   and   amortization   expense  on  property  and   equipment   was
approximately  $530,000,  $948,000 and $854,000 for fiscal years 2001,  2002 and
2003, respectively.

During fiscal year 2002, the Company recorded a loss of  approximately  $205,000
in connection with the retirement of office  furniture,  computer  equipment and
furniture and fixtures.  The Company did not receive any proceeds from the asset
retirements.


7. INCOME TAXES

For fiscal  years  2001,  2002 and 2003,  the income  tax  provision  (benefit),
exclusive  of the tax  associated  with the  cumulative  effect of the change in
accounting principle consists of the following (amounts in thousands):


                                          FISCAL         FISCAL         FISCAL
                                           YEAR           YEAR           YEAR
                                           2001           2002           2003
                                         --------       --------       --------
Federal
  Current ............................   $  1,267       $ (2,595)      $   (992)
  Deferred tax (benefit) expense .....        (12)        (7,717)        12,347
                                         --------       --------       --------
                                            1,255        (10,312)        11,355
State
  Current ............................        486           (817)
  Deferred tax (benefit) expense .....         (2)        (1,103)         1,764
                                         --------       --------       --------
                                              484         (1,920)         1,764
Foreign
  Current ............................        496             97            (87)
  Deferred tax (benefit) expense .....        125
                                         --------       --------       --------
                                              621             97            (87)
                                         --------       --------       --------
Total ................................   $  2,360       $(12,135)      $ 13,032
                                         ========       ========       ========


The  Company  has fully  reserved  its  deferred  tax  assets  with a  valuation
allowance as of January 3, 2004, in accordance  with the  provisions of SFAS No.
109  "Accounting  for Income  Taxes."  Realization  of the deferred tax asset is
dependent on generating  sufficient income in future periods.  In evaluating the
ability to recover its deferred tax assets,  the Company  considers all positive
and negative  evidence  including  the Company's  past  operating  results,  the
existence of cumulative  losses in the most recent fiscal year and the Company's
forecast  of future  income.  In  determining  future  income,  the  Company  is
responsible for assumptions  utilized including the amount of state, federal and
international  operating income,  the reversal of temporary  differences and the
implementation   of  feasible  and  prudent  tax  planning   strategies.   These
assumptions  require  significant  judgment about the forecasts of future income
and are  consistent  with the plans and estimates the Company is using to manage
the underlying business.

The Company has reassessed all  significant  estimates and judgments made in its
financial statements, considering all information current available. The Company
determined  that  the  underlying  assumptions  related  to  judgments  made  in
connection  with its previous  SFAS No. 109 analysis had changed.  In performing
the updated  analysis  of the  realizability  of its  deferred  tax assets,  the
Company considered  continuing market  uncertanties  including the impact of the
loss in the fourth quarter on the remaining planning periods underlying the SFAS
No. 109 analysis.  In light of this new  information  and after  considering all
available  evidence,  both positive and negative,  the Company concluded that an
increase  to the  valuation  allowance  for  deferred  tax assets was  required.
Accordingly,  based upon the Company's  best  estimate,  the Company  recorded a
non-cash  charge in the fourth  quarter of fiscal year 2003 of $18.0  million to
increase the valuation allowance.

<PAGE>


The following is a  reconciliation  between the  provision  (benefit) for income
taxes and the amounts computed at the statutory federal income tax rate (amounts
in thousands):

<TABLE>
<CAPTION>
<S>                                          <C>          <C>      <C>         <C>       <C>         <C>

                                                FISCAL YEAR          FISCAL YEAR            FISCAL YEAR
                                                    2001                 2002                   2003
                                             -----------------     -----------------     -----------------
                                              AMOUNT       %        AMOUNT       %        AMOUNT       %
                                             --------     ----     --------     ----     --------     ----
Computed expected federal income
 tax expense ..........................      $  2,789     35.0     $(12,039)   (35.0)    $(10,252)   (35.0)
State income tax expense, net of
 federal benefit ......................           316      4.0       (1,579)    (4.6)      (1,248)    (4.3)
Tax-exempt investment income ..........          (690)    (8.7)
Goodwill impairment....................                               1,536      4.5          217      0.7
Other .................................           (55)    (0.7)         (53)    (0.2)         316      1.1
Valuation allowance ...................                                                    23,999     82.0
                                             --------     ----     --------     ----     --------     ----
          Total .......................      $  2,360     29.6     $(12,135)   (35.3)    $ 13,032     44.5
                                             ========     ====     ========     ====     ========     ====

</TABLE>


<PAGE>

Items giving rise to the  provision for deferred  income taxes  (benefit) are as
follows (amounts in thousands):

<TABLE>
<CAPTION>
<S>                                                   <C>            <C>            <C>
                                                       FISCAL         FISCAL         FISCAL
                                                        YEAR           YEAR           YEAR
                                                        2001           2002           2003
                                                      --------       --------       --------
Goodwill .......................................      $   (249)      $ (7,988)      $ (4,961)
Bad debt reserve ...............................           441             13            (97)
Stock option compensation expense ..............          (133)             5             45
Change from cash to accrual tax basis accounting          (274)
Intangible assets ..............................                         (655)        (1,831)
Valuation allowance ............................                                      23,999
Net operating loss carryforward ................                                      (3,212)
Other ..........................................           326           (195)           168
                                                      --------       --------       --------
          Total ................................      $    111       $ (8,820)      $ 14,111
                                                      ========       ========       ========
</TABLE>

The significant components of deferred income tax assets and the related balance
sheet  classifications,  as of  December  28,  2002 and  January  3, 2004 are as
follows (amounts in thousands):


                                                       DECEMBER 28,  JANUARY 03,
                                                          2002          2004
                                                       ------------  -----------
Current deferred tax assets:
  Accounts receivable .............................    $      143     $     240
  Accrued expenses ................................           351           296
  Valuation allowance..............................                        (536)
                                                       ----------     ---------
          Current deferred tax asset ..............    $      494     $       0
                                                       ==========     =========


Non-current deferred tax assets:
  Goodwill ........................................    $    8,320     $  13,281
  Stock option compensation expense ...............         2,893         2,193
  Unfavorable lease liability......................         1,180         1,017
  Net operating loss carryover ....................           732         3,944
  Intangible assets................................           709         2,540
  Reserves ........................................           419           415
  Other ...........................................            19            73
  Valuation allowance .............................                     (23,463)
                                                       ----------     ---------
          Non-current deferred tax asset ..........    $   14,272     $       0
                                                       ==========     =========


<PAGE>

The net operating loss carryover as of January 3, 2004 is scheduled to expire as
follows (amounts in thousands):

                                                     Amount            Year
                                                     $1,831            2016
                                                      8,030            2023
                                                     ------
                                    Total            $9,861
                                                     ======

On March 6, 2002, the Company acquired  Cambridge  Strategic  Management  Group,
Inc. and recorded a deferred tax asset of approximately $1,501,000 in connection
with unfavorable leases assumed in the acquisition.


8. LEASE COMMITMENTS

The Company leases office facilities,  computer equipment, office furniture, and
an automobile  under various  operating and capital  leases  expiring at various
dates through May 2011.

Following is a summary of future minimum payments under  capitalized  leases and
operating  leases that have initial or remaining  noncancellable  lease terms in
excess of one year at January 03, 2004 (amounts in thousands):


                                          CAPITALIZED   OPERATING
FISCAL YEAR                                 LEASES        LEASES
---------------------------------------   -----------   ---------
2004                                       $     311    $   1,758
2005                                             191        1,591
2006                                              20        1,540
2007                                                        1,568
2008                                                        1,568
Later years through 2011                                    3,789
                                           ---------    ---------
Total minimum lease payments               $     522    $  11,814
Less amount representing interest                (29)
                                           ---------
Present value of minimum capitalized
 lease payments                                  493
Current portion                                 (289)
                                          ----------
Long-term capitalized lease obligations    $     204
                                          ==========


Operating  lease  minimum  payments  include  the  off-market  portion  of lease
payments  recorded through purchase  accounting in connection with the Company's
acquisition  of CSMG.  As of  January 3, 2004,  the  unamortized  balance of the
unfavorable lease was $3.0 million.

Assets  recorded  under capital leases are included in property and equipment as
follows (amounts in thousands):


                                    DECEMBER 28,  JANUARY 03,
                                        2002          2004
                                    ------------  ------------
Furniture and fixtures               $     220     $     220
Software and computer equipment            505           505
                                     ---------     ---------
                                           725           725
Less: Accumulated depreciation            (183)         (395)
                                     ---------     ---------
                                     $     542     $     330
                                     =========     =========

Total rental expense was approximately  $553,000,  $2,084,000 and $1,911,000 for
fiscal years 2001, 2002 and 2003, respectively.

<PAGE>


9. STOCK OPTION PLAN AND STOCK BASED COMPENSATION

The Company has 7,794,000  shares of the Company's  common stock  authorized for
issuance  under the Company's 1998 Equity  Incentive  Plan (the 1998 Plan).  The
1998 Plan, a shareholder  approved plan, provides the Company's common stock for
the  granting of  incentive  stock  options and  nonqualified  stock  options to
employees,  and nonqualified  stock options and restricted  shares to employees,
directors and  consultants.  Incentive  stock options are granted at an exercise
price of not less than fair value per share of the  common  stock on the date of
grant as determined by the board of directors.  Vesting and exercise  provisions
are  determined by the board of directors.  As of January 03, 2004,  all options
granted under the 1998 Plan were  non-qualified  stock options.  Options granted
under  the 1998  Plan  generally  become  exercisable  over a three to four year
period beginning on the date of grant.  Options granted under the 1998 Plan have
a maximum term of ten years.

A summary of the status of the  Company's  1998 Plan as of  December  29,  2001,
December 28, 2002 and January 03, 2004,  and changes  during the years ending on
those dates is presented below:

EXERCISE PRICE EQUALS FAIR MARKET VALUE AT GRANT DATE:


<TABLE>
<CAPTION>
<S>                                <C>            <C>               <C>         <C>                 <C>           <C>

                                            DECEMBER 29,                    DECEMBER 28,                      JANUARY 03,
                                                2001                            2002                             2004
                                   -------------------------------  ----------------------------    ------------------------------
                                                  WEIGHTED AVERAGE              WEIGHTED AVERAGE                  WEIGHTED AVERAGE
                                     SHARES        EXERCISE PRICE     SHARES     EXERCISE PRICE       SHARES       EXERCISE PRICE

Outstanding at beginning of year    1,717,434         $ 14.32       3,075,228       $   9.95        3,143,459          $  8.72
Granted                             1,577,212         $  5.09         592,100       $   2.05        1,967,500          $  2.07
Exercised                            (116,917)        $  1.48        (100,377)      $   1.52         (116,221)         $  1.43
Forfeited/cancelled                  (102,501)        $ 17.88        (423,492)      $  10.09         (761,042)         $ 10.17
                                    ---------                       ---------                       ---------
Outstanding at end of year          3,075,228         $  9.95       3,143,459       $   8.72        4,233,696          $  5.57
                                    =========                       =========                       =========

Options exercisable at year-end       841,454         $ 11.32       1,612,091       $   9.41        1,661,916          $  9.15
                                    =========                       =========                       =========
Weighted average fair value of
 options granted during the year                      $  4.16                        $  1.65                           $  1.60

</TABLE>

The following table summarizes information about stock options outstanding as of
January 03, 2004:

<TABLE>
<CAPTION>
<S>                  <C>                  <C>                 <C>                  <C>                <C>


                                                              WEIGHTED AVERAGE
                          NUMBER              WEIGHTED            REMAINING              NUMBER            WEIGHTED
    RANGE OF          OUTSTANDING AT          AVERAGE            CONTRACTUAL         EXERCISABLE AT        AVERAGE
EXERCISE PRICES      JANUARY 03, 2004     EXERCISE PRICE           LIFE            JANUARY 03, 2004   EXERCISE PRICE
----------------     -----------------     --------------     ----------------      -----------------   --------------
$ 0.00 to $  2.00        1,213,434             $ 1.45              8.17                  418,427           $ 1.56
$ 2.01 to $  6.00        2,174,612             $ 3.19              8.90                  616,089           $ 4.50
$ 6.01 to $ 20.00          407,000             $10.10              7.02                  257,375           $10.68
$20.01 to $ 35.00          438,650             $24.53              6.24                  370,025           $24.39
                         ---------             ------                                  ---------           ------
   TOTAL                 4,233,696             $ 5.57                                  1,661,916           $ 9.15
                         =========             ======                                  =========           ======

</TABLE>

EXERCISE PRICE LESS THAN FAIR MARKET VALUE AT GRANT DATE:


<TABLE>
<CAPTION>
<S>                                 <C>          <C>                   <C>         <C>                 <C>       <C>

                                             DECEMBER 29,                      DECEMBER 28,                   JANUARY 03,
                                                2001                              2002                           2004
                                    -----------------------------    ------------------------------    --------------------------
                                                 WEIGHTED AVERAGE                  WEIGHTED AVERAGE              WEIGHTED AVERAGE
                                      SHARES      EXERCISE PRICE       SHARES      EXERCISE PRICE      SHARES     EXERCISE PRICE
Outstanding at beginning of year    1,074,504       $  2.26            897,758        $  2.32          768,336        $  2.38
Granted                                                                                                 50,000        $  2.31
Exercised                             (86,734)      $  1.88            (54,088)       $  1.85          (84,667)       $  1.90
Forfeited/cancelled                   (90,012)      $  2.00            (75,334)       $  2.00         (103,750)       $  2.00
                                    ---------                        ---------                         -------
Outstanding at end of year            897,758       $  2.32            768,336        $  2.38          629,919        $  2.51
                                    =========                        =========                         =======

Options exercisable at year-end       428,625       $  2.30            606,084        $  2.32          579,919        $  2.52
                                    =========                        =========                         =======
Weighted average fair value of
 options granted during the year                                                                                      $  2.69

</TABLE>

The following table summarizes  information  about stock options  outstanding at
January 03, 2004:

<PAGE>


<TABLE>
<CAPTION>
<S>                <C>                <C>               <C>                <C>                <C>

                                                        WEIGHTED AVERAGE
                         NUMBER           WEIGHTED          REMAINING            NUMBER            WEIGHTED
    RANGE OF         OUTSTANDING AT       AVERAGE          CONTRACTUAL       EXERCISABLE AT        AVERAGE
 EXERCISE PRICES   JANUARY 03, 2004   EXERCISE PRICE         LIFE          JANUARY 03, 2004   EXERCISE PRICE
 ---------------   ----------------   --------------   ----------------    -----------------   --------------
$ 0.00 to $  1.75       119,167            $ 1.53            4.99                119,167            $ 1.53
$ 1.76 to $  2.00       373,252            $ 2.00            5.59                373,252            $ 2.00
$ 2.01 to $ 20.00       137,500            $ 4.73            7.34                 87,500            $ 6.11
                        -------            ------                                -------            ------
                        629,919            $ 2.51                                579,919            $ 2.52
                        =======            ======                                =======            ======

</TABLE>


During fiscal year 2003 the board of directors of TMNG  authorized  for issuance
1,500,000  shares  of the  Company's  common  stock  under the 1998 Plan for key
management  personnel.  The shares are subject to  restriction  based upon a two
year vesting  schedule where 30% of the shares vest on the first  anniversary of
the  grant  date  and  the  remaining  70%  of the  shares  vest  on the  second
anniversary.

A summary of the status of the restricted shares granted under the 1998 Plan and
changes during fiscal year 2003 is presented below.

RESTRICTED STOCK:


<TABLE>
<CAPTION>
<S>                                            <C>                             <C>                               <C>

                                               DECEMBER 29,                    DECEMBER 28,                      JANUARY 03,
                                                   2001                            2002                             2004
                                   -------------------------------  ----------------------------    ------------------------------

                                                 SHARES                          SHARES                           SHARES
Outstanding at beginning of year
Granted                                                                                                           720,000
Forfeited/cancelled
                                                ---------                     ---------                          ---------
Outstanding at end of year                                                                                        720,000
                                                =========                     =========                          =========

Weighted average fair value of
 Shares granted during the year                                                                                 $ 2.87

</TABLE>

The Company has 3,900,000  shares of the Company's  common stock  authorized for
issuance  under the 2000  Supplemental  Stock  Plan (the  2000  Plan).  The plan
provides  the  Company's  common stock for the  granting of  nonqualified  stock
options to employees  and is not subject to  shareholder  approval.  Vesting and
exercise  provisions are determined by the board of directors.  Options  granted
under the plan become exercisable over a period of up to four years beginning on
the date of grant and have a maximum term of ten years.

A summary of the status of the  Company's  2000 Plan as of  December  29,  2001,
December 28, 2002 and January 03, 2004,  and changes  during the years ending on
those dates is presented below:

EXERCISE PRICE EQUALS FAIR MARKET VALUE AT GRANT DATE:

<TABLE>
<CAPTION>
<S>                                  <C>         <C>               <C>          <C>                <C>          <C>

                                              DECEMBER 29,                   DECEMBER 28,                   JANUARY 03,
                                                  2001                           2002                           2004
                                     ----------------------------   ----------------------------   -----------------------------
                                                 WEIGHTED AVERAGE               WEIGHTED AVERAGE                WEIGHTED AVERAGE
                                       SHARES     EXERCISE PRICE      SHARES     EXERCISE PRICE      SHARES      EXERCISE PRICE
Outstanding at beginning of year       295,000       $ 18.70        2 165,114      $   6.39         2,212,226       $   4.62
Granted                              2,109,642       $  5.03        1,316,750      $   2.97            10,000       $   1.77
Exercised                                                             (12,375)     $   4.00           (44,416)      $   1.85
Forfeited/cancelled                  (239,528)       $  9.54       (1,257,263)     $   5.95        (1,002,650)      $   4.53
                                     ---------                      ---------                      ----------
Outstanding at end of year           2,165,114       $  6.39        2,212,226      $   4.62         1,175,160       $   4.78
                                     =========                      =========                      ==========

Options exercisable at year-end        55,500        $ 19.05          458,433      $   6.29           527,545       $   5.62
                                     =========                      =========                      ==========
Weighted average fair value of
 options granted during the year                     $  4.11                       $   2.39                         $   1.37

</TABLE>

The following table summarizes  information  about stock options  outstanding at
January 03, 2004:

<TABLE>
<CAPTION>
<S>                    <C>                 <C>                 <C>                   <C>                <C>


                                                               WEIGHTED AVERAGE
                            NUMBER             WEIGHTED            REMAINING              NUMBER             WEIGHTED
    RANGE OF             OUTSTANDING AT        AVERAGE           CONTRACTUAL           EXERCISABLE AT        AVERAGE
 EXERCISE PRICES       JANUARY 03, 2004    EXERCISE PRICE          LIFE              JANUARY 03, 2004   EXERCISE PRICE
----------------       -----------------    --------------     ----------------       -----------------   --------------
$ 0.00 to $  3.50            388,875         $  2.91                8.38                     88,352         $  3.07
$ 3.51 to $  5.00            480,910         $  4.02                7.27                    243,858         $  4.02
$ 5.01 to $  7.00            251,875         $  5.77                7.79                    155,210         $  5.72
$ 7.01 to $ 21.00             53,500         $ 20.52                6.68                     40,125         $ 20.52
                           ---------          ------                                        -------          ------
   TOTAL                   1,175,160         $  4.78                                        527,545         $  5.62
                           =========          ======                                        =======          ======

</TABLE>

<PAGE>



EXERCISE PRICE LESS THAN FAIR MARKET VALUE AT GRANT DATE:

<TABLE>
<CAPTION>
<S>                                   <C>       <C>                 <C>       <C>                <C>       <C>

                                             DECEMBER 29,                   DECEMBER 28,                 JANUARY 03,
                                                 2001                           2002                         2004
                                      --------------------------    --------------------------    -------------------------
                                                WEIGHTED AVERAGE              WEIGHTED AVERAGE             WEIGHTED AVERAGE
                                      SHARES     EXERCISE PRICE     SHARES     EXERCISE PRICE     SHARES    EXERCISE PRICE
Outstanding at beginning of year                                    53,200        $  5.50         23,537       $ 5.50
Granted                               53,200        $  5.50
Exercised
Forfeited/cancelled                                                (29,663)       $  5.50        (15,412)      $ 5.50
                                      ------                        ------                       -------
Outstanding at end of year            53,200        $  5.50         23,537        $  5.50          8,125       $ 5.50
                                      ======                        ======                       =======

Options exercisable at year-end                                      5,884        $  5.50          8,125       $ 5.50
                                      ======                        ======                       =======
Weighted average fair value of
 options granted during the year                    $  4.61

</TABLE>

The following table summarizes  information  about stock options  outstanding at
January 03, 2004:

<TABLE>
<CAPTION>
<S>                   <C>                <C>                 <C>                  <C>                <C>

                                                             WEIGHTED AVERAGE
                           NUMBER            WEIGHTED            REMAINING             NUMBER            WEIGHTED
                       OUTSTANDING AT        AVERAGE            CONTRACTUAL         EXERCISABLE AT        AVERAGE
EXERCISE PRICE        JANUARY 03, 2004   EXERCISE PRICE           LIFE            JANUARY 03, 2004   EXERCISE PRICE
--------------        -----------------   --------------     -----------------     -----------------   --------------
   $5.50                  8,125              $ 5.50               7.71                   8,125             $ 5.50
                         ------              ------                                      -----             ------
                          8,125              $ 5.50                                      8,125             $ 5.50
                         ======              ======                                      =====             ======

</TABLE>

At January 03, 2004, the Company had outstanding a total of 6,046,900 options to
acquire  shares with a weighted  average  exercise price of $5.09 and a weighted
average  remaining  contractual life of 7.89 years. Of these options,  2,777,500
were  exercisable at January 03, 2004 with a weighted  average exercise price of
$7.08.

The Company  follows APB No. 25 to account for the employee  stock purchase plan
and  for  employee  and  certain  non-employee   directors'  stock  options.  In
connection  with APB No.  25  grants  made in fiscal  years  2001 and 2003,  the
Company recorded  unearned  compensation of  approximately  $29,000 and $58,000,
respectively, for representing the difference between the exercise price and the
fair value of the common  stock on the dates such stock  options  were  granted.
Such amounts are being  amortized by charges to operations  on a graded  vesting
method  over  the  corresponding  vesting  period  of  each  respective  option,
generally  three to four years.  All option  grants in 2002 were issued with the
exercise price of the option equal to the market price of the Company's stock as
of the grant date,  and therefore  the Company did not recognize any  additional
unearned compensation in 2002.

The Company also follows APB No. 25 to account for restricted  stock grants made
to key management personnel.  In connection with restricted stock granted during
fiscal year 2003 the Company  recorded  unearned  compensation of  approximately
$2,070,000  representing  the fair  value of the  common  stock on the date such
restricted  stock  grants  were made.  The  compensation  cost  associated  with
restricted stock is being amortized by charges to operations on a graded vesting
schedule over a period of two years from the date of grant.

The Company recognizes compensation cost over the vesting periods. These options
and restricted  shares have resulted in equity related  charges to operations of
approximately $1.4 million, $0.5 million and $0.1 million for fiscal years 2001,
2002 and 2003,  respectively.  These expenses have been allocated  among various
expense categories.

During fiscal year 2000,  the Company  initiated an employee stock purchase plan
for all eligible employees. Under the plan, shares of the Company's common stock
may be purchased  at six-month  intervals at 85% of the lower of the fair market
value  on the  first  day of the  enrollment  period  or on the last day of each
six-month  period.  Employees may purchase  shares  through a payroll  deduction
program having a value not exceeding 15% of their gross  compensation  during an
offering period.  During fiscal years 2001, 2002 and 2003,  52,261,  75,451, and
67,238 shares were purchased under the plan, respectively.  At January 03, 2004,
65,000 shares were reserved for future  issuance.  The employee  stock  purchase
plan is classified as a non-compensatory plan under APB No. 25.

The Company  accounts for its stock option awards to independent  subject matter
experts and other  non-employees  in accordance with the fair value  measurement
provision of SFAS No. 123. Under SFAS No. 123, stock options are valued at grant
date  using  the  Black-Scholes  option  pricing  model,  and  this  expense  is
recognized ratably over the vesting period.  Consequently,  the expense of these
options is recognized in the current and future  reporting  periods based on the
fair value at the end of each period. The fair value of each option grant during
fiscal  years 2001,  2002 and 2003 was  estimated on the date of grant using the
Black-Scholes option pricing model with the following assumptions:

<PAGE>

<TABLE>
<CAPTION>
<S>                                <C>                 <C>                    <C>

                                   FISCAL YEAR 2001    FISCAL YEAR 2002         FISCAL YEAR 2003
                                   ----------------    -----------------      ---------------------
Expected volatility factor.....          114%                 111%                     104%
Risk-free interest rate........      1.98% - 4.22%       1.34% - 5.00%             1.037% - 3.435%
Expected life of options.......         5 years             5 years                 5 years
Expected life of stock issued
 under employee stock purchase
 plan..........................     0.5 - 2.0 years     0.5  - 2.0 years      0.5 years - 2.0 years
Expected dividend rate.........            0%                   0%                       0%

</TABLE>

10. LOANS TO OFFICERS

During the third quarter of fiscal year 2001,  three  executive  officers of the
Company  received stock options at fair market value in lieu of receiving  their
cash base  compensation,  which  subsequently  resumed  in the first  quarter of
fiscal year 2002.  To assist in meeting the cash flow needs of the  officers who
reduced their compensation, the Company provided lines of credit, collateralized
by Company common stock held by such officers. In June 2002, one of the officers
retired from the Company,  and his line of credit was  cancelled.  In the second
quarter  of  fiscal  year  2003 the  Board  of  Directors  cancelled  one of the
remaining  officer's line of credit. At the time of the cancellation the officer
did not have any  outstanding  indebtedness  to the  Company.  As of January 03,
2004, there was one remaining line of credit between the Company and an officer.
The maximum  aggregate  amount available for borrowing under that remaining loan
agreement  was  reduced  from  $600,000  to  $300,000  during  2003.   Aggregate
borrowings against the lines of credit at December 28, 2002 and January 03, 2004
totaled $300,000 for each period and are due in 2011. These amounts are included
in other  assets in the  non-current  assets  section of the balance  sheet.  In
accordance with the loan  provisions,  the interest rate charged on the loans is
equal to the Applicable Federal Rate (AFR), as announced by the Internal Revenue
Service, for short-term  obligations (with annual compounding) in effect for the
month  in  which  the  advance  is  made,  until  fully  paid.  Pursuant  to the
Sarbanes-Oxley  Act, no further loan agreements or draws against the line may be
made by the Company to, or arranged by the Company for its executive officers.


11. LETTER OF CREDIT

In March 2002, the Company  entered into a $1.0 million standby letter of credit
("LOC")  facility  with a  financial  institution  in  connection  with the CSMG
acquisition. The LOC was required as part of the assignment of the leased office
space from CSMG to the Company.  The Company  collateralized the LOC with a $1.0
million cash deposit to the above  financial  institution.  The LOC provides for
reductions dates of the amount deposited with the financial  institution  during
the LOC term as follows (amounts in thousands):


                         Reduction Date           Amount
                        -----------------        -------
                        5/15/03 - 5/15/04        $   633
                        5/15/04 - 5/15/05        $   380
                        5/15/05 - 2/28/11        $   273

The Company would be required to perform under the agreement in the event it was
to default on balances due and owing the landlord on the leased office space.

This  amount  is  included  in "Cash  and  Cash  Equivalents"  on the  Company's
consolidated  condensed  balance  sheet as of January 3, 2004 and  December  28,
2002.  An obligation  has not been  recorded in  connection  with the LOC on the
Company's  consolidated  condensed  balance  sheet  as of  January  3,  2004 and
December 28, 2002.


12. RELATED PARTY TRANSACTIONS

During  fiscal  year 2001 a member  of the TMNG  board of  directors  was also a
director  of a  customer  for which  TMNG did  business,  and the  Company  also
performed  services  for one  customer  in which one member of the TMNG board of
directors owns an equity  interest.  Revenues earned from these customers during
fiscal year 2001 were approximately  $2.3 million.  During fiscal year 2002, one
member of the TMNG board of directors was also director of a customer with which
TMNG did  business.  Revenues  earned  from the  customer  during  2002  totaled
approximately $308,000. No receivables were outstanding from the above customers
as of December 28, 2002 and January 3, 2004.  Such  relationships  did not exist
with the Company during fiscal year 2003.

During fiscal years 2001 and 2002, TMNG made payments of  approximately  $70,000
and  $190,000  to two legal  firms of which  two  members  of the TMNG  board of
directors own partial  equity  interest.  Such payments were for legal  services
rendered in connection with the Company's equity offerings and for other matters
arising in the normal course of business.  The costs  associated with the equity
offerings were classified as a component of additional paid-in capital,  and the
costs  associated with business matters arising in the normal course of business
were  classified  as selling,  general and  administrative  in the  consolidated
statements of operations and comprehensive income. The Company did not make such
payments in fiscal year 2003.

<PAGE>


13. CONTINGENCIES

In June 1998, the bankruptcy trustee of a former client,  Communications Network
Corporation,  sued TMNG for a total of $320,000 in the U.S.  Bankruptcy Court in
New York seeking recovery of $160,000 alleging an improper payment of consulting
fees paid by the former  client  during the  period  from July 1, 1996,  when an
involuntary  bankruptcy  proceeding  was  initiated  against the former  client,
through August 6, 1996,  when the former client agreed to an order for relief in
the bankruptcy  proceeding,  and $160,000 in consulting  fees paid by the former
client after August 6, 1996.

The bankruptcy  trustee also has sued TMNG for at least $1.85 million for breach
of  contract,  breach of fiduciary  duties and  negligence.  Although  assurance
cannot be given as to the ultimate outcome of this proceeding, TMNG believes the
Company has meritorious  defenses to the claims made by the bankruptcy  trustee,
including  particularly  the claims for breach of contract,  breach of fiduciary
duty and  negligence,  and that the ultimate  resolution of this matter will not
materially harm the Company's business.

In 2002, the Company received demands aggregating  approximately $1.2 million by
the bankruptcy  trustees of several former clients in connection  with collected
balances near the customers'  respective  bankruptcy filing dates. As of January
03, 2004 the  remaining  demands for such  collected  balances  aggregated  $1.1
million.  Although  the  Company  does not believe it  received  any  preference
payments from these former clients and plans to vigorously  defend its position,
the Company has established reserves of $854,000, which it believes are adequate
in the event of loss or settlement on such claims.

The Company  may become  involved in various  legal and  administrative  actions
arising in the normal course of business. These could include actions brought by
taxing authorities  challenging the employment status of consultants utilized by
the  Company.  In addition,  customer  bankruptcies  could result in  additional
claims on  collected  balances for  professional  services  near the  bankruptcy
filing date.  While the resolution of any such actions,  claims,  or the matters
described  above may have an impact on the  financial  results for the period in
which it is resolved,  the Company  believes  that the ultimate  disposition  of
these  matters  will not have a material  adverse  effect upon its  consolidated
results of operations, cash flows or financial position.


14. SUBSEQUENT EVENT

On March 4, 2004, management and the Board of Directors elected to shut down the
Company's  hardware  business.  The Company  concluded  that this segment of the
business  does not align well with the strategic  focus of the Company.  Charges
related to the shutdown of the hardware  business are expected to range  between
$2.2 million and $2.5 million and relate  primarily to goodwill  impairment  and
severance  charges.  These charges will be reported as a discontinued  operation
and prior  periods will be restated and recorded in the  Company's  Statement of
Operations for the first quarter of fiscal 2004. For business segment  reporting
purposes (see Footnote 5), the hardware business was classified as "All Other."


15. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

In  management's   opinion,   the  interim  financial  data  below  reflect  all
adjustments  necessary  to  fairly  state the  results  of the  interim  periods
presented.  Adjustments are of a normal  recurring  nature  necessary for a fair
presentation of the information for the periods presented. Results of any one or
more quarters are not  necessarily  indicative  of annual  results or continuing
trends.

<PAGE>


<TABLE>
<CAPTION>
<S>                                               <C>            <C>          <C>             <C>

                                                               (AMOUNTS IN THOUSANDS)
                                                                 2003 QUARTERS ENDED
                                                  --------------------------------------------------------
                                                  March 29,      June 28,     September 27,   January 03,
                                                  --------       --------     -------------   ------------
Revenues ...................................      $  7,406       $  5,020     $    4,691      $    6,359
Cost of Services:
  Direct cost of services...................         3,682          2,724          2,506           3,023
  Equity related charges....................           (20)           (84)            (9)             56
                                                  --------       --------       --------        --------
          Total cost of services............         3,662          2,640          2,497           3,079
                                                  --------       --------       --------        --------
Gross Profit ...............................         3,744          2,380          2,194           3,280
Operating Expenses:
  Selling, general and administrative.......         4,880          5,073          4,255           4,432
  Depreciation and amortization.............           945            869            711             672
  Equity related charges....................            11             (8)             7             132
  Goodwill impairment                                              18,942                            542
                                                  --------       --------       --------        --------
          Total operating expenses..........         5,836         24,876          4,973           5,778
                                                  --------       --------       --------        --------

Loss From Operations........................        (2,092)       (22,496)        (2,779)         (2,498)
Other Income:

  Interest income...........................           177            161            136             150
  Other, net................................           (17)           (15)           (10)             (9)
                                                  --------       --------       --------        --------
          Total other income................           160            146            126             141
                                                  --------       --------       --------        --------
Loss Before Income Tax Benefit                      (1,932)       (22,350)        (2,653)         (2,357)

Income tax (provision) benefit                         701          3,613                        (17,346)
                                                  --------       --------       --------        --------
Net Loss                                            (1,231)       (18,737)        (2,653)        (19,703)

  Foreign currency translation adjustment...           (14)            23             12              42
                                                  --------       --------       --------        --------
Comprehensive Loss ................               $ (1,245)     $ (18,714)    $   (2,641)    $   (19,661)
                                                  ========       ========       ========        ========
Net Loss Per Common Share
  Basic.....................................      $  (0.04)      $  (0.56)      $  (0.08)       $  (0.58)
                                                  ========       ========       ========        ========
  Diluted...................................      $  (0.04)      $  (0.56)      $  (0.08)       $  (0.58)
                                                  ========       ========       ========        ========

Shares Used in Calculation of Net Loss Per
 Common Share
  Basic ....................................        33,347         33,372         33,458         33,972
                                                  ========       ========       ========       ========
  Diluted ..................................        33,347         33,372         33,458         33,972
                                                  ========       ========       ========       ========

</TABLE>

For the fourth  quarter ended January 3, 2004, the Company's  financial  results
include  fourteen  weeks  compared to the thirteen weeks reported for the fourth
quarter  ended  December 28, 2002.  The  operating  results for fiscal year 2003
report fifty-three weeks of activity compared to the fifty-two weeks of activity
reported in fiscal year 2002.

See  Footnote 7 "Income  Tax" for  discussion  of fourth  quarter  deferred  tax
charge.

<PAGE>

<TABLE>
<CAPTION>
<S>                                               <C>            <C>          <C>             <C>

                                                               (AMOUNTS IN THOUSANDS)
                                                                 2002 QUARTERS ENDED
                                                  --------------------------------------------------------
                                                  March 30,      June 29,     September 28,   December 28,
                                                  --------       --------     -------------   ------------
Revenues ...................................      $  7,268       $  9,927       $  8,756        $  8,644
Cost of Services:
  Direct cost of services ..................         3,674          4,264          4,372           4,545
  Equity related charges ...................           495            177            110             (61)
                                                  --------       --------       --------        --------
          Total cost of services ...........         4,169          4,441          4,482           4,484
                                                  --------       --------       --------        --------
Gross Profit ...............................         3,099          5,486          4,274           4,160
Operating Expenses:
  Selling, general and administrative ......         5,510          7,507          4,737           5,269
  Depreciation and amortization ............           581            989            739           1,526
  Equity related charges ...................           163            117             32              41
  Goodwill Impairment ......................                                                      25,165
                                                  --------       --------       --------        --------
          Total operating expenses .........         6,254          8,613          5,508          32,001
                                                  --------       --------       --------        --------
Loss From Operations .....................          (3,155)        (3,127)        (1,234)        (27,841)
Other Income:
  Interest income ..........................           310            212            243            231
  Other, net ...............................           (11)            (4)            (8)           (14)
                                                  --------       --------       --------       --------
          Total other income ...............           299            208            235            217
                                                  --------       --------       --------       --------
Loss Before Income Tax Benefit
 And Cumulative Effect of a change
 in Accounting Principle ...................        (2,856)        (2,919)          (999)       (27,624)
Income Tax Benefit .........................         1,191          1,097            351          9,496
                                                  --------       --------       --------       --------
Loss Before Cumulative Effect of a
 Change in Accounting Principle ............        (1,665)        (1,822)          (648)       (18,128)
Cumulative Effect of Change in Accounting

Principle, Net of Tax Benefit of $760 ......        (1,140)
                                                  --------       --------       --------       --------
Net Loss   .................................        (2,805)        (1,822)          (648)       (18,128)
Other Comprehensive Income (Loss)
  Foreign currency translation adjustment ..           (33)            15            108              6
                                                  --------       --------       --------       --------
Comprehensive Loss   .......................      $ (2,838)      $ (1,807)      $   (540)      $(18,122)
                                                  ========       ========       ========       ========
Loss Before Cumulative Effect of
 A Change in Accounting Principle Per
 Common Share
  Basic ....................................      $  (0.05)      $  (0.05)      $  (0.02)      $  (0.54)
                                                  ========       ========       ========       ========
  Diluted ..................................      $  (0.05)      $  (0.05)      $  (0.02)      $  (0.54)
                                                  ========       ========       ========       ========
Cumulative Effect of a Change in Accounting
 Principle Per Common Share
 Basic ....................................       $  (0.04)
                                                  ========
 Diluted ..................................       $  (0.04)
                                                  ========
Net Loss Per Common Share
 Basic ....................................       $  (0.09)      $ (0.05)      $  (0.02)      $  (0.54)
                                                  ========       ========       ========       ========
 Diluted ..................................       $  (0.09)      $ (0.05)      $  (0.02)      $  (0.54)
                                                  ========       ========       ========       ========
Shares Used in Calculation of Net Loss Per
 Common Share
  Basic ....................................        31,032         33,259         33,297         33,329
                                                  ========       ========       ========       ========
  Diluted ..................................        31,032         33,259         33,297         33,329
                                                  ========       ========       ========       ========

</TABLE>

<PAGE>

ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

A review and evaluation was performed by the Company's management, including the
Company's Chief Executive  Officer (the "CEO") and Chief Financial  Officer (the
"CFO"),  of the  effectiveness  of the design  and  operation  of the  Company's
disclosure  controls and  procedures as of the end of the period covered by this
annual  report.  Based  on that  review  and  evaluation,  the CEO and CFO  have
concluded that the Company's  current  disclosure  controls and  procedures,  as
designed and implemented, were effective. There have been no significant changes
in the Company's internal controls or in other factors that could  significantly
affect  the  Company's  internal  controls  subsequent  to  the  date  of  their
evaluation.  There were no  significant  material  weaknesses  identified in the
course of such review and evaluation and, therefore, no corrective measures were
taken by the Company.


                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Company's  definitive Proxy Statement for its Annual Meeting of Shareholders
to be held in June 2004 (the "Proxy  Statement")  contains,  under the  captions
"Election of  Directors,"  "Officers" and "Section  16(a)  Beneficial  Ownership
Reporting  Compliance"  the  information  required by Item 10 of this Form 10-K,
which information is incorporated herein by this reference.

ITEM 11. EXECUTIVE COMPENSATION

The  Proxy  Statement  contains  under the  captions  "Election  of  Directors,"
"Executive   Compensation,"   "Compensation   Committee   Report"  and  "Company
Performance"  the  information  required  by Item 11 of this  Form  10-K,  which
information is incorporated herein by this reference.

ITEM 12.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The Proxy Statement  contains under the caption  "Security  Ownership of Certain
Beneficial  Owners and Management and Related  Stockholder  Matters" and "Equity
Compensation Plan Information" the information  required by Item 12 of this Form
10-K, which information is incorporated herein by this reference.

<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Proxy  Statement  contains  under the  caption  "Certain  Relationships  and
Transactions  with Related Persons" the information  required by Item 13 of this
Form 10-K, which information is incorporated herein by this reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Proxy Statement  contains under the caption  "Ratification of Appointment of
Independent  Auditors"  the  information  required  by Item 14 of this Form 10-K
which information is incorporated herein by this reference.

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) The  following  documents  are filed as part of this  Annual  Report on Form
10-K:

(1) The  response  to this  portion of Item 15 is set forth in Item 8 of Part II
hereof.

(2)  Schedules  for  which  provision  is  made  in  the  applicable  accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.

(3) Exhibits

See accompanying Index to Exhibits. The Company will furnish to any stockholder,
upon written request,  any exhibit listed in the accompanying  Index to Exhibits
upon  payment  by such  stockholder  of the  Company's  reasonable  expenses  in
furnishing any such exhibit.

(b) Reports on Form 8-K

The  Company  filed a Form 8-K on  February  13,  2004 with the  Securities  and
Exchange  Commission in connection with its earnings  release dated February 12,
2004.

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this  Report on Form 10-K to be
signed on its behalf by the undersigned,  thereunto duly authorized, in the City
of Overland Park, State of Kansas, on the 31st day of March 2004.

                       THE MANAGEMENT NETWORK GROUP, INC.




                           BY: /S/ RICHARD P. NESPOLA
                      ------------------------------------
                               RICHARD P. NESPOLA
                             CHAIRMAN OF THE BOARD,
                               PRESIDENT AND CHIEF
                                EXECUTIVE OFFICER



                                POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE  PRESENTS,  that each person whose  signature  appears
below   hereby   constitutes   and   appoints   Richard   P.   Nespola   as  his
attorney-in-fact,  each with full power of  substitution,  for him or her in any
and all capacities,  to sign any and all amendments to this Report on Form 10-K,
and to file the same,  with exhibits  thereto and other  documents in connection
therewith,  with the Securities and Exchange  Commission,  hereby  ratifying and
confirming  our signatures as they may be signed by our said attorney to any and
all amendments to said Report.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
on Form 10-K has been signed by the following  persons in the  capacities and on
the dates indicated:

<PAGE>


            SIGNATURE                        TITLE                   DATE
            ---------                        -----                   ----
    /s/ RICHARD P. NESPOLA          Chairman of the Board,      March 31, 2004
-------------------------------      President and Chief
        Richard P. Nespola            Executive Officer
                                    (Principal executive
                                            officer)

    /s/ DONALD E. KLUMB          Chief Financial Officer and    March 31, 2004
-------------------------------       Treasurer (Principal
        Donald E. Klumb               financial officer and
                                      principal accounting
                                            officer)

    /s/ MICKY K. WOO                       Director             March 31, 2004
-------------------------------
        Micky K. Woo

    /s/ GRANT G. BEHRMAN                   Director             March 31, 2004
-------------------------------
        Grant G. Behrman

    /s/ WILLIAM M. MATTHES                 Director             March 31, 2004
-------------------------------
        William M. Matthes

   /s/ Robert J. Currey                    Director             March 31, 2004
-------------------------------
        Robert J. Currey

    /s/ ANDREW LIPMAN                      Director             March 31, 2004
-------------------------------
        Andrew Lipman

    /s/ ROY A. WILKENS                     Director             March 31, 2004
-------------------------------
        Roy A. Wilkens

    /s/ FRANK SISKOWSKI                    Director             March 31, 2004
-------------------------------
        Frank Siskowski


                                INDEX TO EXHIBITS

The following is a list of exhibits filed as part of this report.


EXHIBIT
NUMBER                       DESCRIPTION OF DOCUMENT
-------                      -----------------------

  3.1*     Certificate of Incorporation of the registrant

  4.1*     Specimen Common Stock Certificate

  4.2*     Warrant dated October 29, 1999 issued to Williams
           Communications Group

 10.1*     Registration Rights Agreement dated January 7, 1998 among
           the registrant and certain investors

 10.2*     Form of Indemnification Agreement between the registrant and
           each of its Directors and Officers

<PAGE>

 10.3*     1998 Equity Incentive Plan and form of agreements thereunder

 10.4*     1999 Employee Stock Purchase Plan and form of agreements
           thereunder

 10.5*     Consulting Services Agreement between the registrant and
           Williams Communications Group, Inc. dated November 5, 1997

 10.6*     Credit Agreement, including revolving credit notes and term notes,
           dated February 12, 1998 among the registrant and certain guarantors,
           lenders and agents

 10.7*     Lease between Lighton Plaza L.L.C. and the registrant dated April 23,
           1998

 10.8*     Noncompetition Agreement between the registrant and certain parties
           dated February 12, 1998.

 10.9*     Employment Agreement between the registrant and Richard Nespola dated
           February 12, 1998.

10.10*     Employment Agreement between the registrant and Micky Woo dated
           February 12, 1998.

10.11*     Employment Agreement between the registrant and Ralph Peck dated
           February 12, 1998.

10.12*     Employment Agreement between the registrant and Donald Klumb dated
           September 9, 1999

10.13*     Amended Lease Agreement between Lighton Plaza L.L.C. and the
           registrant dated December 21, 2000

10.14*     Lease between The American Occupational Therapy Association, Inc. and
           The Weathersby Group, Inc. dated January 18, 1999

10.15*     Amended Lease Agreement between The American Occupational Therapy
           Association, Inc. and TWG Marketing, Inc. dated December 5, 2000

10.16*     2000 Supplemental Stock Plan and form of agreements thereunder

10.17*     Lease  between  HANSON  PALMER II  ASSOCIATES LIMITED PARTNERSHIP and
           Tri-Com Computer Services, Inc. dated January 20, 1998

10.18*     Amended Lease Agreement between Hanson Palmer II Associated Limited
           Partnership and Tri-Com Computer Services, Inc. dated April 15, 1999

10.19      Employment Agreement between the registrant and Richard Nespola dated
           January 5, 2004

10.20      Employment  Agreement  between the  registrant and Donald Klumb dated
           December 19, 2003

 21.1      List of subsidiaries of TMNG, Inc.

 23.1      Consent of Deloitte & Touche LLP

 24.1      Power of attorney (see page 53)

 31.1      Certifications of Chief Executive Officer pursuant to Section 302 of
                the Sarbanes - Oxley Act

 31.2      Certification of Chief Financial Officer pursuant to Section 302 of
           the Sarbanes - Oxley Act

<PAGE>

 32.1      Certifications furnished pursuant to Section 906 of the Sarbanes
           - Oxley Act


* Previously filed