<PAGE>

--------------------------------------------------------------------------------
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-Q

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

               For the quarterly period ended December 31, 2000

                                      OR

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

                For the transition period from ______ to ______

                        Commission file number 0-23946

                      PEDIATRIC SERVICES OF AMERICA, INC.
            (Exact name of Registrant as specified in its charter)

               Delaware                                  58-1873345

          (State or other jurisdiction of             (I.R.S. Employer
          incorporation or organization)            Identification No.)

                 310 Technology Parkway, Norcross GA 30092-2929
         (Address of principal executive offices, including zip code)

                                (770) 441-1580
             (Registrant's telephone number, including area code)

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

                               Yes [X]    No [_]

As of February 1, 2001, the Registrant had 6,658,680 shares of Common Stock,
$0.01 Par Value, outstanding.

--------------------------------------------------------------------------------
                                  Page 1 of 26
                          Index of Exhibits on page 17
<PAGE>

                                   FORM 10-Q
                      PEDIATRIC SERVICES OF AMERICA, INC.


                                     INDEX

<TABLE>
<CAPTION>
                                                                           Page
                                                                          Number
                                                                          ------
<S>                                                                       <C>
PART I    FINANCIAL INFORMATION

ITEM 1:   Financial Statements

          Condensed Consolidated Balance Sheets as of
                 December 31, 2000 and September 30, 2000...................   3

          Condensed Consolidated Statements of Operations for
                 the three months ended December 31, 2000 and 1999..........   5

          Condensed Consolidated Statements of Cash Flows for
                 the three months ended December 31, 2000 and 1999..........   6

          Notes to Condensed Consolidated Financial
                 Statements.................................................   7

ITEM 2:   Management's Discussion and Analysis of Financial Condition
                 and Results of Operations..................................  10

ITEM 3:   Quantitative and Qualitative Disclosures about Market Risk........  14

PART II   OTHER INFORMATION

ITEM 1:   Legal Proceedings.................................................  14

ITEM 6:   Exhibits and Reports on Form 8-K..................................  15

          Signatures........................................................  16

          Index of Exhibits.................................................  17
</TABLE>

                                       2
<PAGE>

                        PART I - FINANCIAL INFORMATION


Item 1.  Financial Statements


                      PEDIATRIC SERVICES OF AMERICA, INC
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In thousands)

<TABLE>
<CAPTION>
                                                                      December 31,     September 30,
                                                                         2000              2000
                                                                      ------------     -------------
                                                                      (Unaudited)
<S>                                                                   <C>              <C>
Assets
Current assets:
    Cash and cash equivalents....................................     $ 13,694         $ 14,912
    Accounts receivable, less allowances for doubtful
      accounts of $8,055 and $7,628, respectively................       34,262           35,389
    Prepaid expenses.............................................          834              656
    Deferred income taxes........................................        1,069            3,792
    Other current assets.........................................        3,421            3,057
                                                                      --------         --------
Total current assets.............................................       53,280           57,806

Property and equipment:
    Home care equipment held for rental..........................       27,667           27,831
    Furniture and fixtures.......................................       10,327           10,226
    Vehicles.....................................................          729              751
    Leasehold improvements.......................................        1,045            1,039
                                                                      --------         --------
                                                                        39,768           39,847
    Accumulated depreciation and amortization....................      (28,958)         (27,999)
                                                                      --------         --------
                                                                        10,810           11,848
Other assets:
    Goodwill, less accumulated amortization of
      $7,943 and $7,386, respectively...........................        33,376           33,933
    Certificates of need, less accumulated amortization of
      $430 and $404, respectively...............................           243              269
    Deferred financing fees, less accumulated
      amortization of $628 and $549, respectively...............         1,340            1,419
    Non-compete agreements, less accumulated amortization of
      $1,091 and $1,084, respectively...........................            69               76
    Deferred income taxes.......................................         1,747                -
    Other.......................................................           225              242
                                                                      --------         --------
                                                                        37,000           35,939
                                                                      --------         --------
Total assets....................................................      $101,090         $105,593
                                                                      ========         ========
</TABLE>

See accompanying notes.

                                       3
<PAGE>

                      PEDIATRIC SERVICES OF AMERICA, INC.
              CONDENSED CONSOLIDATED BALANCE SHEETS--(Continued)
                                (In thousands)

<TABLE>
<CAPTION>
                                                                                     December 31,     September 30,
                                                                                         2000            2000
                                                                                    --------------   ---------------
                                                                                      (Unaudited)
<S>                                                                                 <C>              <C>
Liabilities and stockholders' equity
Current liabilities:
 Accounts payable...............................................................       $  4,746          $  5,477
 Accrued compensation...........................................................          3,884             5,513
 Income taxes...................................................................            434               610
 Accrued insurance..............................................................          5,093             5,002
 Other accrued liabilities......................................................          5,144             6,179
 Deferred revenue...............................................................            568               618
 Current maturities of long-term obligations to related parties.................             25                50
 Current maturities of long-term obligations....................................             17                18
                                                                                       --------          --------
Total current liabilities.......................................................         19,911            23,467


Long-term obligations to related parties, net of current
 maturities.....................................................................             25                50
Long-term obligations, net of current maturities................................         45,436            45,439
Deferred income taxes...........................................................              -             1,106

Stockholders' equity:
 Preferred stock, $.01 par value, 2,000 shares
   authorized, no shares issued and outstanding.................................              -                 -
 Common stock, $.01 par value, 80,000 shares
   authorized, 6,659 and 6,658 shares issued and outstanding at December 31,
   2000 and September 30, 2000, respectively....................................             67                67
 Additional paid-in capital.....................................................         48,363            48,362
 Retained deficit...............................................................        (12,712)          (12,898)
                                                                                       --------          --------
Total stockholders' equity......................................................         35,718            35,531
                                                                                       --------          --------
Total liabilities and stockholders' equity......................................       $101,090          $105,593
                                                                                       ========          ========
</TABLE>

See accompanying notes.

                                       4
<PAGE>

                      PEDIATRIC SERVICES OF AMERICA, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                                                               Three Months Ended
                                                                                                  December 31,
                                                                                           2000                   1999
                                                                                         -------                -------
                                                                                                  (Unaudited)
<S>                                                                                      <C>                    <C>
Net revenue................................................................              $45,561                $48,104
Costs and expenses:
 Operating salaries, wages and employee benefits...........................               20,650                 22,658
 Other operating costs.....................................................               16,414                 17,651
 Corporate, general and administrative.....................................                4,453                  4,752
 Provision for doubtful accounts...........................................                  958                  2,344
 Depreciation and amortization.............................................                1,899                  2,064
                                                                                         -------                -------
         Total costs and expenses..........................................               44,374                 49,469
                                                                                         -------                -------
Operating income (loss)....................................................                1,187                 (1,365)
Interest income............................................................                 (220)                     -
Interest expense...........................................................                1,221                  2,967
                                                                                         -------                -------
Income (loss) from continuing operations...................................                  186                 (4,332)

Discontinued operations
Gain on disposal of discontinued operations................................                    -                 24,314
                                                                                         -------                -------
Net income.................................................................              $   186                $19,982
                                                                                         =======                =======

Basic net income per share data:
Income (loss) from continuing operations...................................              $  0.03                $ (0.65)
Gain on disposal of discontinued operations................................                    -                   3.65
                                                                                         -------                -------
Net income.................................................................              $  0.03                $  3.00
                                                                                         =======                =======

Diluted net income per share data:
Income (loss) from continuing operations...................................              $  0.03                $ (0.65)
Gain on disposal of discontinued operations................................                    -                   3.65
                                                                                         -------                -------
Net income.................................................................              $  0.03                $  3.00
                                                                                         =======                =======

Weighted average shares outstanding:
Basic......................................................................                6,659                  6,652
                                                                                         =======                =======
Diluted....................................................................                6,892                  6,652
                                                                                         =======                =======
</TABLE>

See accompanying notes.

                                       5
<PAGE>

                      PEDIATRIC SERVICES OF AMERICA, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In thousands)

<TABLE>
<CAPTION>
                                                                                   Three Months Ended December 31,
                                                                                      2000               1999
                                                                                    -------            --------
                                                                                            (Unaudited)
<S>                                                                                <C>                 <C>
Operating activities
Income (loss) from continuing operations..............................              $   186            $ (4,332)
Adjustments to reconcile income (loss) from continuing operations to
 net cash used in operating activities:
  Depreciation and amortization.......................................                1,899               2,064
  Provision for doubtful accounts.....................................                  958               2,344
  Amortization of deferred financing fees.............................                   79                 412
  Deferred income taxes...............................................                 (130)                  -
  Changes in operating assets and liabilities:
    Accounts receivable...............................................                  169               3,230
    Prepaid expenses..................................................                 (178)                (31)
    Other assets......................................................                 (369)             (1,626)
    Accounts payable..................................................                 (731)             (1,906)
    Income taxes......................................................                 (176)                 (5)
    Accrued liabilities...............................................               (2,623)             (4,582)
                                                                                    -------            --------
Net cash used in operating activities of continuing
 operations...........................................................                 (916)             (4,432)
Net cash used in operating activities of discontinued
 operations...........................................................                    -              (1,087)
                                                                                    -------            --------
Net cash used in operating activities.................................                 (916)             (5,519)
Investing activities
Purchases of property and equipment...................................                 (249)               (255)
Proceeds from sale of division........................................                    -              77,869
Other, net............................................................                    -                  64
                                                                                    -------            --------
Net cash (used in) provided by investing activities of continuing                      (249)             77,678
 operations...........................................................
Net cash used in investing activities of discontinued operations......                    -                 (24)
                                                                                    -------            --------
Net cash (used in) provided by investing activities...................                 (249)             77,654
Financing activities
Principal payments on long-term debt..................................                  (54)            (63,247)
Deferred financing fees...............................................                    -                (205)
Proceeds from exercise of stock options...............................                    1                   -
                                                                                    -------            --------
Net cash used in financing activities.................................                  (53)            (63,452)
                                                                                    -------            --------
(Decrease) increase in cash and cash equivalents......................               (1,218)              8,683
Cash and cash equivalents at beginning of period......................               14,912               8,361
                                                                                    -------            --------
Cash and cash equivalents at end of period............................              $13,694            $ 17,044
                                                                                    =======            ========
Supplemental disclosure of cash flow information
Cash paid for interest................................................              $ 2,350            $  4,446
                                                                                    =======            ========
Cash paid for taxes...................................................              $   358            $     12
                                                                                    =======            ========
</TABLE>

See accompanying notes.

                                       6
<PAGE>

                      PEDIATRIC SERVICES OF AMERICA, INC.
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Unaudited


1.   Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements of
     Pediatric Services of America, Inc. (the "Company") and its majority-owned
     subsidiaries have been prepared in accordance with accounting principles
     generally accepted in the United States for interim financial information
     and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
     Accordingly, they do not include all information and notes required by
     generally accepted accounting principles for complete financial statements.
     In the opinion of management, all adjustments (consisting only of normal
     recurring accruals) considered necessary for a fair presentation have been
     included.  Results of operations for the three months ended December 31,
     2000 are not necessarily indicative of the results to be expected for the
     entire fiscal year ending September 30, 2001.  These condensed consolidated
     financial statements should be read in conjunction with the Company's
     audited consolidated financial statements for the year ended September 30,
     2000 included in the Company's Annual Report on Form 10-K for such year
     filed with the Securities and Exchange Commission.  Principal accounting
     policies are set forth in the Company's 2000 Annual Report.

2.   Description of Business

     The Company provides a broad range of pediatric health care services and
     equipment including nursing, respiratory therapy,  rental and sale of
     durable medical equipment, pharmaceutical services and infusion therapy
     services.  In addition, the Company provides pediatric rehabilitation
     services, day treatment centers for medically fragile children, pediatric
     well care services and special needs educational services for pediatric
     patients.  The Company also provides case management services in order to
     assist the family and patient by coordinating the provision of services
     between the insurer or other payor, the physician, the hospital and other
     health care providers.  The Company's services are designed to provide a
     high quality, lower cost alternative to prolonged hospitalization for
     medically fragile children.  As a complement to its pediatric respiratory
     and infusion therapy services, the Company also provides respiratory and
     infusion therapy and related services for adults.

3.   Use of Estimates

     The preparation of the condensed consolidated financial statements in
     conformity with accounting principles generally accepted in the United
     States requires management to make estimates and assumptions that affect
     the reported amounts of assets and liabilities and the disclosure of
     contingent assets and liabilities at the date of the financial statements
     and the reported amount of net revenue and expenses during the reporting
     period.  Actual results could differ from those estimates and the
     differences could be material.  Due to the nature of the industry and the
     reimbursement environment in which the Company operates, certain estimates
     are required in recording net revenue and determining the provision for
     doubtful accounts.  Inherent in these estimates is the risk that they will
     have to be revised or updated as additional information becomes available
     to management.

4.   Accounts Receivable

     Accounts receivable include approximately $7.8 million and $7.7 million for
     which services have been rendered but the amounts were unbilled as of
     December 31, 2000 and September 30, 2000, respectively.  Such unbilled
     amounts are primarily a result of the time required to obtain and reconcile
     information from field locations in order to process bills for services
     rendered.

                                       7
<PAGE>

                      PEDIATRIC SERVICES OF AMERICA, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Unaudited - (Continued)

5.   Concentration of Credit Risk

     The Company's principal financial instruments subject to potential
     concentration of credit risk are cash and cash equivalents and accounts
     receivable.  Cash and cash equivalents are held primarily in one financial
     institution.  The Company performs periodic evaluations of the relative
     credit standing of this financial institution.  The concentration of credit
     risk with respect to accounts receivable, which are primarily health care
     industry related, represent a risk to the Company given the current health
     care environment.  The risk is somewhat limited due to the large number of
     payors including Medicare and Medicaid, insurance companies, and
     individuals and the diversity of geographic locations in which the Company
     operates.

6.   Reclassifications

     Certain amounts for prior periods have been reclassified to conform to the
     current year presentation.

7.   Discontinued Operations

     The paramedical testing operations are reflected as a discontinued
     operation and the condensed consolidated financial statements of the
     Company for all periods presented have been restated to reflect the
     discontinued operations.

     Certain liabilities were not assumed by Hooper Holmes, Inc. in the sale of
     the paramedical testing division.  These liabilities include accounts
     payable, additional accrued compensation and other accrued liabilities
     which totaled approximately $1.0 million at December 31, 2000.

8.   Income Taxes

     The Company has recorded a partial valuation allowance against the net
     deferred tax assets as of December 31, 2000 and September 30, 2000. In
     recording the valuation allowance, management considered whether it is more
     likely than not that some or all of the deferred tax assets will be
     realized. This analysis includes considering scheduled reversal of deferred
     tax liabilities, projected future taxable income, carryback potential and
     tax planning strategies.

     In the three months ended December 31, 2000, the Company had a current
     income tax expense of $0.2 million which was offset by the reduction of the
     valuation allowance related to the net deferred tax asset resulting in zero
     income tax expense.

                                       8
<PAGE>

                      PEDIATRIC SERVICES OF AMERICA, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Unaudited - (Continued)


9.   Long-Term Borrowing Arrangements

     Subject to the terms and conditions of the Amended and Restated Loan
     Security Agreement, the Lender made available a total credit facility of up
     to $30.0 million.  At December 31, 2000, the calculated availability was
     $24.0 million.  The total credit facility is comprised of a revolving line
     of credit up to the available limit, consisting of Loans and Letters of
     Credit.  As of December 31, 2000, the Company had no outstanding borrowings
     under the Amended and Restated Loan Security Agreement.

10.  Basic and Diluted Net Income Per Share

     Basic net income per share is computed using the weighted average number of
     shares of common stock outstanding during the period.  Diluted net income
     per share is computed using the weighted average number of shares of common
     stock outstanding and the dilutive effect of common equivalent shares
     (calculated using the treasury stock method).  The dilutive effect of the
     weighted average options included in the diluted earnings per share is
     232,872 for the three months ended December 31, 2000.  For the three months
     ended December 31, 1999, weighted average shares outstanding for continuing
     operations for basic and diluted computations are the same since the impact
     of common equivalent shares on earnings per share is anti-dilutive.

11.  Subsequent Event

     On January 31, 2001, the Company completed a transaction to repurchase a
     total of $10.0 million of the $45.4 million 10% Senior Subordinated Notes
     due 2008 for $7.1 million cash plus accrued interest. The pre-tax gain (net
     of the write-off of the related deferred financing fees) of $2.7 million
     will be reflected as an extraordinary item in the condensed consolidated
     statements of operations for the three and six months ending March 31,
     2001.

                                       9
<PAGE>

                      PEDIATRIC SERVICES OF AMERICA, INC.


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

Forward-Looking Statements

This Form 10-Q contains certain forward-looking statements (as such term is
defined in the Private Securities Litigation Reform Act of 1995) relating to
future financial performance of Pediatric Services of America, Inc. (the
"Company").  When used in this Form 10-Q, the words "may," "could," "should,"
"would," "believe," "feel," "expects," "anticipate," "estimate," "intend,"
"plan" and similar expressions may be indicative of forward-looking statements.
These statements by their nature involve substantial risks and uncertainties,
certain of which are beyond the Company's control.  The Company cautions that
various factors, including the factors described hereunder and those discussed
in the Company's filings with the Securities and Exchange Commission, as well as
general economic conditions, industry trends, the Company's ability to collect
for equipment sold or rented, assimilate and manage previously acquired field
operations, collect accounts receivable, including receivables related to
acquired businesses and receivables under appeal, hire and retain qualified
personnel and comply with and respond to billing requirements issues, including
those related to the Company's billing and collection system could cause actual
results or outcomes to differ materially from those expressed in any forward-
looking statements of the Company made by or on behalf of the Company.  Any
forward-looking statement speaks only as of the date on which such statement is
made, and the Company undertakes no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of an unanticipated
event.  New factors emerge from time to time, and it is not possible for
management to predict all of such factors.  Further, management cannot assess
the impact of each such factor on the business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements.

The following discussion should be read in conjunction with the unaudited
condensed consolidated financial statements of the Company included in this
quarterly report.

Recent Developments

   During the first quarter of fiscal year 2001, the Company continued its Plan
of leveraging its opportunities in its core competencies.  The pediatric revenue
as a percentage of total revenue continues to increase as the Company continues
to focus upon its competitive advantages.  The Company expects that its ongoing
investment in sales and marketing resources will produce the future revenue
growth in these core competencies.  The Company continues to meet its cash
collection targets which has enabled it to repurchase on January 31, 2001, $10
million of its Senior Subordinated Notes for approximately $7.1 million, plus
accrued interest.  In addition, the Company has been aggressively working with
multiple governmental payors in an effort to increase rates for our core
products and services.

   The Company is also aware that proposed legislative reductions in average
wholesale pricing (AWP) in respiratory medications and other pharmaceuticals, if
enacted, may have an adverse effect on profitability.  In addition, the Health
Care Financing Administration's ("HCFA") use of inherent reasonableness to
further reduce Medicare pricing for HME and an expansion of HCFA's competitive
bidding projects may also have an adverse effect on the Company, to the extent
that it provides Medicare services to patients in those areas involved.

   The Company continues to be impacted by high levels of unstaffed nursing
hours.  In response, the Company has hired full time nurse recruiting
specialists in an attempt to provide centralized support and direction for local
recruiting initiatives.  In addition, the Company adopted a modified benefit
program for selected full time nursing positions and made selected wage rate
increases where appropriate.

   Although the Company has delivered positive results to date, there can be no
assurance that the Company will be able to achieve the expected future results
from the Plan without negatively impacting operations.

                                       10
<PAGE>

   On December 21, 2000, the Company executed an Amendment to its Shareholder
Rights Agreement, dated September 22, 1998 (the "Amendment"), which enables an
institutional investor, the D3 Family Fund, L.P. (the "Fund") to acquire 15% or
more, but less than 20% of the Company's Common Stock.  In addition, the Fund
agreed to a Standstill Agreement that, among other things, requires the Fund not
to acquire any additional securities of the Company for a period of 2 years and
gives the Company the right of first refusal on shares to be sold or transferred
by the Fund.  The foregoing is not a complete description of the terms of the
Amendment and the Standstill Agreement, and is subject to and qualified in its
entirety by reference to the Amendment and the Standstill Agreement, copies of
which are filed as Exhibit 2.4 and 10.22,  respectively, to this Quarterly
Report.

Results of Operations

Due to the nature of the industry and the reimbursement environment in which the
Company operates, certain estimates are required in recording net revenue.
Inherent in these estimates is the risk that net revenue will have to be revised
or updated, with the changes recorded in subsequent periods as additional
information becomes available to management.

The following table is derived from the Company's unaudited condensed
consolidated statements of operations for the periods indicated and presents
results of continuing operations as a percentage of net revenue and the
percentage change in the dollar amounts of each item from the comparative prior
period:

<TABLE>
<CAPTION>
                                                                                                   Period-to-Period
                                                                      Percentage of                   Percentage
                                                                       Net Revenue               Increase (Decrease)
                                                                       -----------               -------------------
                                                                       Three Months                  Three Months
                                                                          Ended                         Ended
                                                                       December 31,                  December 31,
                                                                       ------------                  ------------
                                                                   2000            1999                 2000
                                                                  -----           -----                 ----
<S>                                                              <C>               <C>           <C>
Net revenue...........................................            100.0%          100.0%                 (5)%
Operating salaries, wages and employee benefits.......             45.3            47.1                  (9)
Other operating costs.................................             36.0            36.7                  (7)
Corporate, general and administrative.................              9.8             9.9                  (6)
Provision for doubtful accounts.......................              2.1             4.9                 (59)
Depreciation and amortization.........................              4.1             4.3                  (8)
                                                                  -----           -----                ----
Operating income (loss)...............................              2.7            (2.9)               (187)
Interest income.......................................              0.5               -                 100
Interest expense......................................              2.7             6.2                 (59)
                                                                  -----           -----                ----
Net income (loss) from continuing operations..........              0.5%           (9.1)%               (99)%
                                                                  =====           =====                ====
</TABLE>


                                       11
<PAGE>

The following table sets forth for the periods indicated the net revenue
breakdown by service: (in thousands)

<TABLE>
<CAPTION>
                                                                                            Three Months
                                                                                                Ended
                                                                                             December 31,
                                                                                        2000             1999
                                                                                      -------          -------
<S>                                                                                   <C>              <C>
Pediatric Home Health Care
  Nursing......................................................................       $21,204          $20,972
  Respiratory Therapy Equipment................................................         3,711            4,781
  Home Medical Equipment.......................................................           332              514
  Pharmacy and Other...........................................................         9,924            8,526
                                                                                      -------          -------
       Total Pediatric Home Health Care........................................        35,171           34,793
                                                                                      -------          -------

Adult Home Health Care:
  Nursing......................................................................         2,820            2,947
  Respiratory Therapy Equipment................................................         3,980            4,865
  Home Medical Equipment.......................................................           708            1,224
  Pharmacy and Other...........................................................         2,882            4,275
                                                                                      -------          -------
       Total Adult Home Health Care............................................        10,390           13,311
                                                                                      -------          -------
       Total Net Revenue.......................................................       $45,561          $48,104
                                                                                      =======          =======
</TABLE>

Three Months Ended December 31, 2000 Compared to Three Months Ended December 31,
1999

  Net revenue decreased $2.5 million, or 5%, to $45.6 million in the three
months ended December 31, 2000 from $48.1 million in the three months ended
December 31, 1999.  The reduction in revenue reflects the continued efforts  to
reduce non-core and/or non-profitable products and services consistent with the
Plan.  Pediatric health care net revenue increased slightly by $0.4 million.
Adult health care net revenue decreased $2.9 million for the three months ended
December 31, 2000, primarily as a result of the reduction in non-core services
to the pharmacy and respiratory therapy/home medical equipment patients.   In
the three months ended December 31, 2000, the Company derived approximately 48%
of its net revenue from commercial insurers and other private payors, 45% from
Medicaid and 7% from Medicare.

  Operating salaries, wages and employee benefits consist primarily of branch
office employee costs.  Operating salaries, wages and employee benefits
decreased $2.0 million, or 9%, to $20.7 million in the three months ended
December 31, 2000 from $22.7 million in the three months ended December 31,
1999.  Labor costs have decreased across all services primarily as a result of
headcount reductions.  As a percentage of net revenue, operating salaries, wages
and employee benefits for the three months ended December 31, 2000 decreased to
45% from 47% for the three months ended December 31, 1999.

  Other operating costs include medical supplies, branch office rent, utilities,
vehicle expenses, allocated insurance costs and cost of sales.  Cost of sales
consists primarily of the costs of pharmaceuticals and related services.  Other
operating costs decreased $1.3 million, or 7%, to $16.4 million in the three
months ended December 31, 2000, from $17.7 million in the three months ended
December 31, 1999.  As a percentage of net revenue, other operating costs for
the three months ended December 31, 2000 decreased to 36% from 37% for the three
months ended December 31, 1999.

  Corporate, general and administrative costs decreased $0.3 million, or 6%, to
$4.4 million in the three months ended December 31, 2000, from $4.7 million in
the three months ended December 31, 1999.  As a percentage of net revenue,
corporate, general and administrative costs for the three months ended December
31, 2000, decreased slightly compared to the three months ended December 31,
1999.

  Provision for doubtful accounts decreased $1.3 million, or 59%, to $1.0
million in the three months ended December 31, 2000, from $2.3 million in the
three months ended December 31, 1999. Cash collections as a percentage of net
revenue were 100% and 104% for the three months ended December 31, 2000 and
1999,

                                       12
<PAGE>

respectively. The Company continues to experience strong cash collections and
these provision levels were deemed to be appropriate.

  Depreciation and amortization decreased $0.2 million, or 8%, to $1.9 million
in the three months ended December 31, 2000 from $2.1 million in the three
months ended December 31, 1999. As a percentage of the Company's net revenue,
depreciation and amortization costs for the three months ended December 31, 2000
decreased slightly compared to the three months ended December 31, 1999.

  Interest expense decreased $1.8 million, or 59%, to $1.2 million in the three
months ended December 31, 2000, from $3.0 million in the three months ended
December 31, 1999.  The Company's average debt outstanding decreased $51.9
million as the amount outstanding under the Credit Agreement was paid down to
zero on November 1, 1999 and the Company completed a series of transactions to
repurchase $29.6 million of the $75.0 million Notes during the three months
ended June 30, 2000.

  Interest income increased $0.2 million in the three months ended December 31,
2000.  The Company invested its excess cash balances in highly liquid
investments.

Liquidity and Capital Resources

  Subject to the terms and conditions of the Amended and Restated Loan Security
Agreement, the Lender shall make available a total credit facility of up to
$30.0 million.  At December 31, 2000, the calculated availability was $24.0
million.  The total credit facility shall be comprised of a revolving line of
credit up to the available limit, consisting of Loans and Letters of Credit.  As
of the date of this Report, the Company has no outstanding borrowings under the
Amended and Restated Loan Security Agreement.

  At December 31, 2000, total borrowings under the 10% Senior Subordinated Notes
due 2008 (the "Notes") were approximately $45.4 million. On January 31, 2001,
the Company completed a transaction to repurchase a total of $10.0 million of
the Notes for $7.1 million cash plus accrued interest. The pre-tax gain (net of
the write-off of the related deferred financing fees) of $2.7 million will be
reflected as an extraordinary item in the condensed consolidated statements of
operations for the three and six months ended March 31, 2001.

  Cash collections as a percentage of net revenue for the three months ended
December 31, 2000 and 1999 were 100% and 104%, respectively.  The organizational
restructuring of the Company's reimbursement process continues and indications
of progress to date are positive.  While management anticipates that continued
implementation of the Plan will achieve the desired results, there can be no
assurance that this will result in the Company realizing operating improvements
and improved cash flow.

  The Company's investments in property and equipment are attributable largely
to purchases of medical equipment rented to patients and computer equipment.
Capital expenditures for computer equipment and software development, have been
substantially completed.

  Management currently believes that its liquidity position will be more than
adequate to satisfy the Company's working capital requirements for the
foreseeable future.

Quarterly Operating Results and Seasonality

  The Company's quarterly results may vary significantly depending primarily on
factors such as rehospitalizations of patients, the timing of new branch office
openings and pricing pressures due to legislative and regulatory initiatives  to
contain health care costs.  The Company's operating results for any particular
quarter may not be indicative of the results for the full fiscal year.


                                       13
<PAGE>

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk

  The Company's principal financial instruments subject to potential
concentration of credit risk are cash and cash equivalents and accounts
receivable.  Cash and cash equivalents are held primarily in one financial
institution.  The Company performs periodic evaluations of the relative credit
standing of this financial institution.  The concentration of credit risk with
respect to accounts receivable, which are primarily health care industry
related, represent a risk to the Company given the current health care
environment.  The risk is somewhat limited due to the large number of payors
including Medicare and Medicaid, insurance companies, and individuals and the
diversity of geographic locations in which the Company operates.



                          PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings.

   On March 11, 1999, a putative class action complaint was filed against the
Company in the United States District Court for the Northern District of
Georgia.  The Company and certain of its then current officers and directors
were named as defendants.  To the Company's knowledge, no other putative class
action complaints were filed within the 60-day time period provided for in the
Private Securities Litigation Reform Act.  The plaintiffs and their counsel were
appointed lead plaintiffs and lead counsel, and an amended complaint was filed
on or about July 22, 1999.  In general, the plaintiffs allege that prior to the
decline in the price of the Company's Common Stock on July 28, 1998, there were
violations of the Federal Securities Laws arising from misstatements of material
information in and/or omissions of material information from certain of the
Company's securities filings and other public disclosures principally related to
its reporting of accounts receivable and the allowance for doubtful accounts.
The amended complaint purports to expand the class to include all persons who
purchased the Company's Common Stock during the period from July 29, 1997
through and including July 29, 1998.  On October 8, 1999, the Company and the
individuals named as defendants moved to dismiss the amended complaint on both
substantive and procedural grounds.  On March 30, 2000, the Court denied the
Company's motion to dismiss.  On May 15, 2000, the Company and the individuals
named as defendants filed their answer, denying liability.

   On October 15, 2000, the Company and the individuals named as Defendants
filed a Brief in Opposition to Plaintiffs' Motion for Class Certification, which
was filed in June, 2000.  The Court has not yet ruled on that Motion.  Discovery
in the case is proceeding.  The Company and the individuals named as defendants
deny that they have violated any of the requirements or obligations of the
Federal Securities Laws.

   On July 28, 1999, a civil action was filed against the Company and certain of
its current and former officers and directors in the United States District
Court for the Middle District of Tennessee.  The action was filed by Phyllis T.
Craighead and Healthmark Partners, LLC, as well as a liquidating trust
apparently established to wind up the business affairs of their corporation,
Kids & Nurses, Inc.  In the original complaint, in general, the plaintiffs
alleged that the defendants violated Federal and Tennessee Securities Laws and
committed common law fraud in connection with the Company's purchase of Kids and
Nurses, Inc. in November, 1997.  The plaintiffs seek actual damages in an amount
between $2.5 million and $3.5 million, plus punitive damages and the costs of
litigation, including reasonable attorneys' fees.  On September 24, 1999, the
defendants filed a motion to dismiss the complaint on both substantive and
procedural grounds.  On December 20, 1999, the plaintiffs filed an amended
complaint in which they withdrew their claims under the Federal securities laws,
and added claims under Georgia's securities laws.  The plaintiffs also filed a
brief in response to the Company's motion to dismiss.  On February 1, 2000, the
defendants filed an amended motion to dismiss addressing the allegations of the
amended complaint.  The motion to dismiss is currently pending before the Court.
The Company and the individuals named as defendants deny that they have violated
any of the requirements or obligations of any applicable Federal or State
securities laws, or any other applicable law.

   In the opinion of the Company's management, the ultimate disposition of these
two lawsuits should not have a material adverse effect on the Company's
financial condition or results of operations, however, there can be no assurance
that the Company will not sustain material liability as a result of or related
to these lawsuits.

                                       14
<PAGE>

ITEM 6.  Exhibits and Reports on Form 8-K.

  (a)    Exhibits
         --------

         The following exhibits are filed as part of this Report.

         2.4    First Amendment to Rights Agreement, dated December 21, 2000, by
                and between Mellon Investor Services, LLC and the Company, filed
                herewith.

         10.22  Standstill Agreement dated December 21, 2000, by and among
                Pediatric Services of America, Inc., the D3 Family Fund, L.P.,
                Haredale, Ltd., and David Nierenberg, filed herewith.

         27     Financial Data Schedule

         99.1   Press Release, dated December 21, 2000, announcing the Board of
                Directors' approval of the Waiver to the Rights Agreement, filed
                herewith.

         99.2   Press Release, dated January 31, 2001, announcing the repurchase
                by the Company of an additional $10 million of its 10% Senior
                Subordinated Notes due 2008.

  (b)    Reports on Form 8-K
         -------------------

         The Company did not file a Current Report on Form 8-K during the
         quarter ended December 31, 2000.

                                       15
<PAGE>

SIGNATURES

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


                                    PEDIATRIC SERVICES OF AMERICA, INC.
                                              (Registrant)



Date: February 2, 2001        By:   /s/ James M. McNeill
                                    ----------------------
                                    James M. McNeill
                                    Senior Vice President,
                                    Chief Financial Officer,
                                    Treasurer and Secretary
                                    (Duly authorized officer and
                                    Principal Financial Officer)

                                       16
<PAGE>

                               INDEX OF EXHIBITS

<TABLE>
<CAPTION>
                                                        Page
                                                         No.
                                                         ---
<S>                                                     <C>
Exhibit 2.4.   First Amendment to Rights Agreement.....    18

Exhibit 10.22. Standstill Agreement....................    20

Exhibit 27.    Financial Data Schedule.................    24

Exhibit 99.1.  Press Release...........................    25

Exhibit 99.2.  Press Release...........................    26
</TABLE>

                                       17