<PAGE>

================================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

                                   FORM 10-Q

(Mark One)
   [X]           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934
                 For the Quarterly Period ended June 30, 1999

                                      or

   [ ]          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934
     For the transition period from ________________ to __________________

                         Commission File No. 000-23711
                         -----------------------------

                                  Acsys, Inc.
            (Exact name of registrant as specified in its charter)

          Georgia                                          58-2299173
          -------                                          ----------
         (State or other jurisdiction of                (IRS Employer
       incorporation or organization)            Identification Number)

              75 Fourteenth Street, Suite 2200, Atlanta, GA 30309
                   (Address of principal executive offices)


                                 404-817-9440
                                 ------------
             (Registrant's telephone number, including area code)

     Indicate by check X 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 _____
                                -----

The number of outstanding shares of the registrant's Common Stock on August 6,
1999 was 14,488,636.

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<PAGE>

                                  ACSYS, INC.

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
Item No.                                                                                     Page
--------                                                                                     ----
<S>                                                                                         <C>
          PART I - FINANCIAL INFORMATION

  1.      Condensed Consolidated Financial Statements (Unaudited):
            Condensed Consolidated Balance Sheets as of
              June 30, 1999 and December 31, 1998.........................................     3
            Condensed Consolidated Statements of Operations
              For the Three Months Ended June 30, 1999 and 1998
              For the Six Months Ended June 30, 1999 and 1998.............................     4
            Condensed Consolidated Statements of Cash Flows
              For the Six Months Ended June 30, 1999 and 1998.............................     5
            Notes to Condensed Consolidated Financial Statements..........................     6

  2.        Management's Discussion and Analysis of Financial Condition and Results of
            Operations....................................................................    11

  3.        Quantitative and Qualitative Disclosures About Market Risk....................    18

            PART II - OTHER INFORMATION

  2.        Changes in Securities and Use of Proceeds.....................................    19

  4.        Submission of Matters to a Vote of Security Holders...........................    19

  6.        Exhibits and Reports on Form 8-K..............................................    21
</TABLE>

                                       2
<PAGE>

                                    PART I
                             FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS.

                         ACSYS, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (In thousands-except share data)

<TABLE>
<CAPTION>
                                                                                     June 30,                 December 31,
                                                                                      1999                       1998
                                                                            -----------------------     --------------------
<S>                                                                         <C>                         <C>
ASSETS
 CURRENT ASSETS:
      Cash and cash equivalents                                                             $     -                  $ 1,777
      Accounts receivable, (net of allowances of $1,156 and $958 at
      June 30, 1999 and December 31, 1998, respectively)                                     26,520                   22,836
      Prepaid expenses and other                                                              2,683                    2,073
                                                                            -----------------------     --------------------
           Total current assets                                                              29,203                   26,686
 PROPERTY AND EQUIPMENT, net                                                                  6,308                    4,979
 GOODWILL AND OTHER INTANGIBLE ASSETS, net                                                   54,577                   54,366
 OTHER ASSETS                                                                                   329                      332
                                                                            -----------------------     --------------------
           Total assets                                                                     $90,417                  $86,363
                                                                            =======================     ====================

LIABILITIES AND SHAREHOLDERS' EQUITY
 CURRENT LIABILITIES:
      Bank overdrafts                                                                       $   542                  $ 1,206
      Current portion of long-term debt                                                          43                       44
      Accounts payable                                                                        1,378                    2,571
      Accrued liabilities                                                                     8,743                    7,086
      Deferred income taxes                                                                     413                      413
                                                                             -----------------------     --------------------
           Total current liabilities                                                         11,119                   11,320
                                                                             -----------------------     --------------------
 LONG-TERM DEBT                                                                              41,866                   38,276
                                                                             -----------------------     --------------------
 DEFERRED INCOME TAXES                                                                        2,771                    2,771
                                                                            -----------------------     --------------------
 OTHER LONG-TERM LIABILITIES                                                                    245                      293
                                                                            -----------------------     --------------------
 COMMITMENTS AND CONTINGENCIES
 SHAREHOLDERS' EQUITY:
    Preferred stock, no par value, 5,000,000 shares authorized,
       no shares issued or outstanding                                                            -                        -
    Common stock, no par value, 45,000,000 shares authorized
      14,488,636 and 14,452,466 issued and outstanding at
      June 30, 1999 and December 31, 1998, respectively                                      30,548                   30,499
    Retained earnings                                                                         3,868                    3,204
                                                                             -----------------------     --------------------
        Total shareholders' equity                                                           34,416                   33,703
                                                                            -----------------------     --------------------
        Total liabilities and shareholders' equity                                          $90,417                  $86,363
                                                                            =======================     ====================
</TABLE>

        The accompanying notes are an integral part of these statements

                                       3
<PAGE>

                         ACSYS, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands - except per share data)

<TABLE>
<CAPTION>
                                                        For the three months ended             For the six months ended
                                                                 June 30,                              June 30,
                                                ------------------------------------------   -------------------------------------
                                                      1999                     1998                1999                  1998
                                                -----------------       ------------------   ----------------    -----------------
<S>                                             <C>                     <C>                  <C>                 <C>
SERVICE REVENUES:
     Temporary staffing                                   $34,095                  $20,835            $67,608              $40,040
     Permanent placement                                    7,725                    6,546             16,278               11,757
                                                -----------------       ------------------   ----------------    -----------------
               Total service revenues                      41,820                   27,381             83,886               51,797
                                                -----------------       ------------------   ----------------    -----------------
DIRECT COST OF SERVICES, consisting of
     payroll, payroll taxes and benefit
      costs for temporary employees                        23,273                   14,469             46,396               28,053
                                                -----------------       ------------------   ----------------    -----------------
               Gross profit                                18,547                   12,912             37,490               23,744
SELLING, GENERAL AND ADMINISTRATIVE
     EXPENSES                                              14,731                   10,730             30,489               20,535
AMORTIZATION AND DEPRECIATION                                 774                      303              1,475                  557
COMBINATION EXPENSES                                            -                    1,730                  -                1,730
SEVERANCE AND OFFICE CLOSING COSTS                              -                      650              2,829                  650
                                                -----------------       ------------------   ----------------    -----------------
               Operating income (loss)                      3,042                     (501)             2,697                  272
OTHER INCOME (EXPENSE):
    Interest expense, net                                    (952)                       9             (1,653)                 (64)
    Other, net                                                234                        -                193                    -
                                                -----------------       ------------------   ----------------    -----------------
INCOME (LOSS) BEFORE INCOME TAXES                           2,324                     (492)             1,237                  208
    Income tax expense                                      1,069                      509                573                3,684
                                                -----------------       ------------------   ----------------    -----------------
NET INCOME (LOSS)                                         $ 1,255                  $(1,001)           $   664              $(3,476)
                                                =================       ==================   ================    =================
NET INCOME (LOSS) PER SHARE:
  Basic and diluted net income (loss) per share           $  0.09                  $ (0.07)           $  0.05              $( 0.26)
                                                =================       ==================   ================    =================
  Shares used in computing basic net
   income (loss) per share                                 14,481                   14,292             14,469               13,575
                                                =================       ==================   ================    =================
  Shares used in computing diluted net
   income (loss) per share                                 14,522                   14,292             14,510               13,575
                                                =================       ==================   ================    =================
 </TABLE>

        The accompanying notes are an integral part of these statements

                                       4
<PAGE>

                         ACSYS, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In thousands)

<TABLE>
<CAPTION>
                                                                                   For the Six Months Ended
                                                                                            June 30,
                                                                           ------------------------------------------
                                                                                 1999                     1998
                                                                           ------------------      ------------------
<S>                                                                        <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                                   $   664               $ (3,476)
  Adjustments to reconcile net income (loss) to net cash
   used in operating activities:
    Amortization and depreciation                                                       1,475                    509
    Imputed interest                                                                       32                      -
    Deferred taxes                                                                          -                  2,529
  Changes in operating assets and liabilities, net of effect of purchase
   acquisitions:
    Accounts receivable, net                                                           (3,684)                (3,804)
    Prepaid expenses and other                                                           (610)                   151
    Other assets                                                                            3                   (148)
    Accounts payable                                                                   (1,193)                   720
    Accrued liabilities and other                                                       1,657                  1,192
    Other long-term liabilities                                                           (48)                    65
                                                                           ------------------      -----------------
         Net cash used in operating activities                                         (1,704)                (2,262)
                                                                           ------------------      -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Net cash paid for business acquisitions                                                   -                   (959)
  Capital expenditures                                                                 (2,061)                (1,479)
                                                                           ------------------      -----------------
         Net cash used in investing activities                                         (2,061)                (2,438)
                                                                           ------------------      -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from initial public offering                                                 -                 20,199
  Changes in bank overdrafts                                                             (664)                  (764)
  Net borrowings (repayments) of long-term debt                                         3,557                (11,064)
  Distributions to shareholders                                                             -                   (545)
  Deferred financing costs                                                               (954)                   (45)
  Proceeds from exercise of employee stock options                                         49                     72
                                                                           ------------------      -----------------
         Net cash provided by financing activities                                      1,988                  7,853
                                                                           ------------------      -----------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                   (1,777)                 3,153
CASH AND CASH EQUIVALENTS, beginning of period                                          1,777                    370
                                                                           ------------------      -----------------
CASH AND CASH EQUIVALENTS, end of period                                              $     -               $  3,523
                                                                           ==================      =================
</TABLE>

        The accompanying notes are an integral part of these statements

                                       5
<PAGE>

                         ACSYS, INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   Company Background

Acsys, Inc. ("the Company") is a specialty professional staffing firm that
operates approximately 40 offices serving 20 major metropolitan markets across
the United States with a more significant presence in the Eastern and Midwestern
United States. The Company has acquired several companies that provide temporary
and permanent placement staffing services primarily in the areas of accounting,
finance and information technology.

2.   Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and
have been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission (the "SEC"). Although the December 31, 1998
balance sheet was derived from audited financial statements, certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to SEC rules and regulations. The Company believes that the
financial statements include all adjustments of a normal and recurring nature
necessary to present fairly the results of operations, financial position and
cash flows for the periods presented. These financial statements should be read
in conjunction with the financial statements and notes thereto included in the
Company's annual report on Form 10-K. The condensed consolidated financial
statements include the accounts of the Company and its subsidiaries. All
material intercompany balances and transactions have been eliminated. Interim
results of operations are not necessarily indicative of results to be expected
for the entire year.

3.   Initial Public Offering

In February 1998, the Company completed its initial public offering ("IPO") of
2,842,500 shares of common stock at a price of $8.50 per share, generating net
cash proceeds of approximately $20.1 million after deducting underwriters'
discounts and offering costs of approximately $2.4 million.

In connection with the IPO, the Company terminated its S corporation status and
recorded in the first quarter of 1998 income tax expense and a corresponding net
deferred tax liability of approximately $3.0 million, representing the tax
effect of differences in bases in assets and liabilities for financial reporting
and income tax purposes.

                                       6
<PAGE>

4.   Debt

<TABLE>
<CAPTION>
                                                                                     June 30,                 December 31,
                                                                                       1999                       1998
                                                                              ----------------------    ---------------------
                                                                                              (In thousands)
<S>                                                                           <C>                       <C>
   Revolving Credit Facility.........................................                        $41,271                  $37,660
   Non-compete agreements with former shareholders of Infinity
       Enterprises, Inc., maturing February 2009.....................                            967                    1,017
   Other.............................................................                              -                        4
                                                                              ----------------------    ---------------------
                                                                                              42,238                   38,681
   Less--Unamortized discount........................................                           (329)                    (361)
                                                                              ----------------------    ---------------------
                                                                                              41,909                   38,320
   Less--Current portion.............................................                            (43)                     (44)
                                                                              ----------------------    ---------------------
                                                                                             $41,866                  $38,276
                                                                              ======================    =====================
</TABLE>

In April 1999, the Company amended its revolving credit facility (the "Credit
Facility") to increase the principal amount of money it could borrow from $40.0
million to $80.0 million.  At June 30, 1999, the Company had borrowed
approximately $41.3 million under the Credit Facility, none of which is
classified as current.  Borrowings under the Credit Facility have been used to
finance the Company's business acquisitions and for general corporate purposes.

Interest accrues at a variable rate indexed, at the Company's option, at the
bank's prime rate or the London Interbank Offered Rate ("LIBOR"), each plus an
applicable margin which varies based on certain leverage ratio requirements.
Accordingly, interest rates may vary from the prime rate to the prime rate plus
1.0% or from LIBOR plus 1.5% to LIBOR plus 2.5%, based on the Company's
Consolidated Leverage Ratio (as defined in the Credit Facility), provided,
however, that until the end of quarter ending September 30, 1999, the applicable
margin shall be 3.0%.

The Credit Facility contains customary affirmative covenants and certain
operating and financial covenants.  The financial covenants include, without
limitation, requirements to not exceed a certain consolidated leverage ratio, to
maintain a certain consolidated fixed charge coverage ratio and a consolidated
net worth, and to not exceed certain consolidated capital expenditures and
rental payments levels.  As of June 30, 1999, the Company was in compliance with
all financial and non-financial covenants.

5.   Mergers, Acquisitions, and Pro Forma Financial Information

Pooling Transaction

On May 22, 1998, the Company acquired all of the outstanding stock of ICON
Search and Consulting, Inc. ("ICON"), an Atlanta-based information technology
staffing company, in a stock-for-stock merger. This transaction was accounted
for as a pooling of interests for accounting purposes and as a tax-free
reorganization. Under the terms of the merger agreement, ICON shareholders
received 2,820,360 shares of Common Stock in exchange for all of the equity
interests in ICON. In connection with the merger, the Company recorded a charge
for combination expenses of $1.7 million in 1998, including investment banking,
legal and accounting fees, and other transaction costs associated with the
merger.

                                       7
<PAGE>

Purchase Transactions

On July 1, 1998, the Company acquired all of the outstanding stock of KPD
Systems, Inc. ("KPD"), an information technology staffing firm located on Long
Island, New York. The Company accounted for this transaction under the purchase
method of accounting. The results of operations for KPD are included from the
date of acquisition.

On August 4, 1998, the Company acquired all of the outstanding stock of Staffing
Edge, Inc. ("Staffing Edge"), a specialty professional staffing firm with
offices throughout the Midwestern United States, for $22.5 million in cash,
81,766 shares of Common Stock with an estimated fair value of $838,000,
transaction costs of $2.1 million and assumption of debt of $7.0 million. The
Company has accounted for this transaction under the purchase method of
accounting. The excess of the purchase price over the estimated fair value of
net assets acquired, of approximately $32.5 million, was recorded as goodwill
and is being amortized on a straight line basis over forty years. The results of
operations for Staffing Edge are included from the date of acquisition.

The following unaudited pro forma consolidated results of operations assume that
all of the above purchases occurred on January 1, 1998, and that the Company
incurred incremental interest expense on debt presumed to be incurred to fund
the acquisitions. Additionally, these pro forma results reflect an adjustment to
officer and employee compensation based upon employment agreements entered into
upon the closing of certain of the Company's acquisitions.

Prior to February 5, 1998, the Company was an S corporation and not subject to
income taxes. These pro forma results include adjustments to reflect the Company
as a taxable entity during all periods presented:

<TABLE>
<CAPTION>
                                     Three Months ended June 30,              Six Months ended June 30,
                               -------------------------------------     -------------------------------------
                                    1999                   1998                1999                 1998
                               ---------------        --------------     ---------------      ----------------
                               (In thousands, except per share data)     (In thousands, except per share data)
<S>                            <C>                    <C>                <C>                  <C>
Pro forma revenue                      $41,820              $35,895              $83,886              $67,349
Pro forma net income (loss)              1,255                 (303)                 664                  (80)
Basic and diluted earnings
 (loss) per share                      $  0.09              $ (0.02)             $  0.05              $ (0.01)
Basic shares                            14,481               14,452               14,469               13,734
Diluted shares                          14,522               14,452               14,510               13,734
</TABLE>

6.   Severance and Closing Costs

During the first quarter of 1999, the Company announced plans to reduce future
selling, general and administrative costs.  These plans included the closure of
an under-performing office and the termination of certain former employees,
principally related to integration efforts. The charge taken in the first
quarter of 1999 related to these actions was $2.8 million, of which
approximately $2.4 million related to severance costs and $400,000 related to
office closing costs.  Approximately $500,000 of these severance and office
closing costs will be paid in periods after June 30, 1999.

                                       8
<PAGE>

7.   Supplemental Cash Flow Information

During the six months ended June 30, 1999 and 1998, the Company paid interest
expense of $1.4 million and $244,000, respectively.

During the six months ended June 30, 1999 and 1998, the Company paid income
taxes of $898,000 and $1.2 million, respectively.

8.   Segment and Related Information

The Company operates throughout major metropolitan markets in the United States.
Within each market, the Company offers a variety of placement services that
result in differing profit margins.  The Company has three reportable segments:
Permanent Placements, Temporary Services, and IT Contract Services.  While there
is cross selling, these segments are managed separately as each business
generally offers different services, has distinct candidate and client pools,
and requires different marketing strategies.

The Permanent Placements segment provides contingency-based placement services
for clients by identifying, evaluating and recommending qualified candidates.
The Permanent Placements segment generates revenue equal to a percentage of a
candidate's first-year annual salary.  The Temporary Services segment provides
professional and clerical employees to clients, generally billing clients on an
hourly basis.  The IT Contract Services segment provides clients on a
contracted or hourly basis to assist in enterprise resource planning software
implementation and other systems integration services.

The Company does not allocate depreciation expense or assets to each of the
segments due to the nature of the Company's service-based operations, which are
not capital intensive.  Depreciation expense is included in Corporate Overhead
Expense for each of the periods presented below.  The Company evaluates
performance based on profit or loss from operations before depreciation,
amortization, interest and income taxes.

The revenues and operating income (loss) for each of the three identifiable
business segments are as follows:

<TABLE>
<CAPTION>
                                        For the three months ended June,                 For the six months ended June,
                                  ------------------------------------------      ------------------------------------------
                                         1999                    1998                    1999                    1998
                                  ------------------      ------------------      ------------------      ------------------
Revenues:                                        (in thousands)                                  (in thousands)
<S>                               <C>                     <C>                     <C>                     <C>
 Permanent Placements                $         7,725           $       6,546           $      16,278           $      11,757
 Temporary Services                           20,450                  12,290                  40,204                  24,045
 IT Contract Services                         13,645                   8,545                  27,404                  15,995
                                  ------------------      ------------------      ------------------      ------------------
                                     $        41,820           $      27,381           $      83,886           $      51,797
                                  ==================      ==================      ==================      ==================

Operating Income (Loss):
 Permanent Placements                $         1,015           $         734           $       2,048           $       1,105
 Temporary Services                            2,688                   1,377                   5,059                   2,214
 IT Contract Services                          1,793                     958                   3,448                   1,488
 Corporate Overhead Expense                   (2,454)                 (1,190)                 (5,029)                 (2,155)
 Combination, Severance and
  Office Closing Costs                             -                  (2,380)                 (2,829)                 (2,380)
                                   ------------------      ------------------      ------------------      ------------------
                                     $         3,042           $        (501)          $       2,697           $         272
                                  ==================      ==================      ==================      ==================
</TABLE>

                                       9
<PAGE>

9.   Shareholder Rights Protection Rights Agreement

During the second quarter of 1999, we adopted a shareholder protection rights
agreement (the "Rights Plan") and issued Rights in connection with the Rights
Plan.  The Rights Plan provided that a dividend of one share purchase Right be
issued for each outstanding share of common stock to shareholders of record as
of the close of business on July 2,1999.  Generally, the Rights are exercisable
only if a person or group (other than certain existing shareholders) acquires
15% or more of our common stock or announces a tender offer.  Each Right
entitles shareholders to buy one one-thousandth of a share of a new series of
junior participating preferred stock at an exercise price of $25.

If we are acquired after a person has acquired 15% or more of our common stock,
each Right will entitle its holder to purchase, at the Right's then-current
exercise price, a number of shares of the acquiring company's common stock
having a market value of twice such price. Additionally, if we are not acquired,
a Rights holder (other than the person or group acquiring 15% or more) will be
entitled to purchase, at the Right's then-current exercise price, a number of
shares of our common stock having a market value of twice such price.

Following the acquisition of 15% or more of our common stock, but less than 50%
by any Person or Group, the Board may exchange the Rights (other than Rights
owned by such person or group) at an exchange ratio of one share of our common
stock for each Right.

                                       10
<PAGE>

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

This report contains "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended.  These statements relate to future economic
performance, plans and objectives of management for future operations and
projections of revenue and other financial items that are based on the beliefs
of our management, as well as assumptions made by, and information currently
available to, our management.  The words "expect," "estimate," "anticipate,"
"believe," "intend," and similar expressions are intended to identify forward-
looking statements. Such statements involve assumptions, uncertainties and
risks, such as the transactional nature of the permanent placement staffing
business, industry and economic conditions and other factors as discussed in
this and our other filings with the Securities and Exchange Commission,
including the "Risk Factors" section of the prospectus included in our
Registration Statement on Form S-1 (File number 333-67437), as declared
effective by the Securities and Exchange Commission on December 1, 1998. If one
or more of these risks or uncertainties materialize or underlying assumptions
prove incorrect, actual outcomes may vary materially from those indicated.

Introduction

We are a specialty professional staffing firm that operates approximately 40
offices serving 20 major metropolitan markets across the United States with a
more significant presence in the Eastern and Midwestern United States.  We have
acquired several companies that provide temporary and permanent placement
staffing services primarily in the areas of accounting, finance and information
technology.  The results of operations of KPD Systems, Inc. ("KPD") and Staffing
Edge, Inc. ("Staffing Edge") are included in the Company's consolidated results
of operations beginning July 1, 1998 and August 4, 1998, respectively.  As a
result, consolidated results may not be comparable to or indicative of future
performance. Our revenues and expenses may be significantly affected by the
number and timing of the acquisition of additional businesses, the opening of
additional offices or the introduction of new services. The timing of such
expansion activities may also affect period-to-period comparisons.

Results of Operations

Historical Results for the Three Months Ended June 30, 1999 Compared to
Historical Results for the Three Months Ended June 30, 1998

Service Revenues. Total service revenues increased $14.4 million, or 52.7%, to
$41.8 million for the three months ended June 30, 1999 from $27.4 million for
the corresponding period in 1998.  Temporary staffing service revenues,
excluding IT contract service revenue, increased $8.2 million, or 66.4%, to
$20.5 million for the three months ended June 30, 1999 as compared to $12.3
million for 1998.  Temporary staffing service revenues increased primarily due
to the impact of acquiring Staffing Edge after the second quarter of 1998.  IT
contract service revenue increased $5.1 million, or 59.7% to $13.6 million in
the three months ended June 30, 1999 as compared to $8.5 million in 1998 due to
the impact of acquiring KPD in July 1998 and to internal growth.  Permanent
placement service revenues increased $1.2 million, or 18.0%, to $7.7 million for
the three months ended June 30, 1999 from $6.5 million for the corresponding
period in 1998. Permanent placement service revenues increased primarily due to
the impact of the Staffing Edge acquisition.

Gross Profit. Gross profit increased $5.6 million, or 43.6%, to $18.5 million
for the three months ended June 30, 1999 from $12.9 million for the
corresponding period in 1998.  The increase in

                                       11
<PAGE>

permanent placement revenue contributed $1.2 million of the increase in gross
profit since the direct costs associated with these permanent placement revenues
are included in selling, general and administrative expenses. The remaining
gross profit increase is due principally to the gross profit margin on higher
temporary services revenue in the three months ended June 30, 1999 as compared
to the same period in 1998.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $4.0 million, or 37.3%, to $14.7 million for
the three months ended June 30, 1999 from $10.7 million for the three months
ended June 30, 1998 due to the impact of acquisitions after June 30, 1998 and to
a lesser extent due to the impact of higher direct costs for permanent placement
services related to increased permanent placement revenues in the three months
ended June 30, 1999.  As a percentage of revenues, selling, general and
administrative expenses were 35.2% for the three months ended June 30, 1999
compared with 39.2% for the corresponding period in 1998.  This decrease as a
percentage of revenues is primarily due to the favorable impact of spreading
these overhead costs over a substantially larger revenue base.

Amortization and Depreciation. Amortization and depreciation for the three
months ended June 30, 1999 increased $471,000 from the corresponding period in
1998 principally due to increased goodwill arising from acquisitions completed
after the second quarter of 1998 and the impact of increased capital
expenditures.

Combination Expenses. During the second quarter of 1998, we incurred $1.7
million in combination expenses related to the Icon Search & Consulting, Inc.
("ICON") stock for stock merger. These expenses included transaction costs of
our mergers, including investment banking, legal, accounting and other fees.

Severance and Office Closing Costs. During the second quarter of 1998, we
incurred $650,000 in severance and office closing costs.  The charge consisted
principally of severance resulting from the decision to consolidate our
corporate offices in Atlanta, Georgia.

Other Income (Expense). For the three months ended June 30, 1999, we recorded
net interest expense of $952,000 consisting principally of interest on
borrowings under our credit facility which arose from the acquisitions completed
after the second quarter of 1998.  Additionally, in the three months ended June
30, 1999, we realized other income of $270,000 from the sale of miscellaneous
assets.

Income Tax Expense. For the three months ended June 30, 1999, we recognized
income tax expense of $1.1 million on pre-tax income of $2.3 million.  For the
three months ended June 30, 1998, we recognized income tax expense of $509,000
on a pre-tax loss of $492,000 reflecting the unfavorable impact of nondeductible
business combination expenses.

Net Income (Loss). We recognized net income and net income per share of $1.3
million and $0.09 per share, respectively, in the second quarter of 1999.  In
the comparable period for 1998 we recognized a net loss and a net loss per share
of ($1.0) million and ($0.07), respectively.

                                       12
<PAGE>

Historical Results for the Six Months Ended June 30, 1999 Compared to Historical
Results for the Six Months Ended June 30, 1998

Service Revenues.  Total service revenues increased $32.1 million, or 62.0%, to
$83.9 million for the six months ended June 30, 1999 from $51.8 million for the
corresponding period in 1998.  Temporary staffing service revenues, excluding IT
contract service revenue, increased $16.1 million, or 67.1%, to $40.2 million
for the six months ended June 30, 1999 as compared to $24.0 million in 1998.
Temporary staffing service revenues increased primarily due to the impact of
Staffing Edge which was acquired after the second quarter of 1998.  IT contract
service revenue increased $11.4 million, or 71.4% to $27.4 million in 1999 as
compared to $16.0 million for the corresponding period in 1998 due to the
acquisition of KPD and to internal growth.  Permanent placement service revenues
increased $4.5 million, or 38.5%, to $16.3 million for the six months ended June
30, 1999 from $11.8 million for the corresponding period in 1998. Permanent
placement service revenues increased primarily due to the Staffing Edge
acquisition.

Gross Profit.  Gross profit increased $13.7 million, or 57.9%, to $37.5 million
for the six months ended June 30, 1999 from $23.7 million for the corresponding
period in 1998. The increase in permanent placement revenue contributed $4.5
million of the increase in gross profit since the direct costs associated with
these permanent placement revenues are included in selling, general and
administrative expenses.  The remaining gross profit increase is due principally
to the gross profit margin on higher temporary services revenue in the six
months ended June 30, 1999 as compared to the same period in 1998.

Selling, General and Administrative Expenses.  Selling, general and
administrative expenses increased $10.0 million, or 48.5%, to $30.5 million for
the six months ended June 30, 1999 from $20.5 million for the six months ended
June 30, 1998, principally due to acquisitions completed after the second
quarter of 1998 and to a lesser extent due to the impact of higher direct costs
for permanent placement services related to increased permanent placement
revenues in the six months ended June 30, 1999.  As a percentage of revenues,
selling, general and administrative expenses were 36.3% for the six months ended
June 30, 1999 compared with 39.6% for the corresponding period in 1998.  This
decrease as a percentage of revenues is primarily due to the favorable leverage
achieved from spreading these overhead costs over a substantially larger revenue
base.

Amortization and Depreciation.  Amortization and depreciation expense for the
six months ended June 30, 1999 increased $918,000 from the corresponding period
in 1998 principally due to the goodwill arising from the acquisitions accounted
for under the purchase method of accounting that were completed after the second
quarter of 1998 and the impact of increased capital expenditures.

Severance and Office Closing Costs.  During the first quarter of 1999, we
announced plans to reduce future selling, general, and administrative costs.
These plans included the closure of an under-performing office and the
termination of certain former employees, principally related to integration
efforts.  The charge taken in the first quarter of 1999 related to these actions
was $2.8 million, of which approximately $2.4 million related to severance costs
and $400,000 related to office closing costs.  Approximately $500,000 of these
severance and office closing costs will be paid in periods after June 30, 1999.

Other Income (Expense). For the six months ended June 30, 1999, we recorded net
interest expense of $1.7 million consisting principally of interest expense on
borrowings under our credit facility which arose from acquisitions made after
the first six months of 1998.  Additionally, in

                                       13
<PAGE>

the first six months of 1999 we realized other income of $270,000 from the sale
of miscellaneous assets.

Income Tax Expense.  For the six months ended June 30, 1999, we recognized
income tax expense of $573,000 on a pre-tax income of $1.2 million.  In the
second quarter of 1998, we recorded a tax liability of approximately $3.0
million, representing the tax effect of differences in bases in assets and
liabilities for financial reporting and income tax purposes. This liability will
be paid over a four-year period.

Net Income (Loss).  We recognized  net income and net income per share of
$664,000 and $0.05 per share, respectively, for the six months ended June 30,
1999. In the comparable period for 1998 we recognized a net loss and net loss
per share of ($3.5) million and ($0.26), respectively.

Liquidity and Capital Resources

For the six months ended June 30, 1999, net cash used for operating activities
was $1.7 million primarily due to an increase in accounts receivable and a
decrease in accounts payable that was partially offset by an increase in accrued
liabilities.  For the six months ended June 30, 1998, cash used in operations
was $2.3 million primarily due to an increase in accounts receivable which was
only partially offset by an increase in accrued liabilities.

For the six months ended June 30, 1999, net cash used in investing activities
was $2.1 million which related to capital expenditures.  For the six months
ended June 30, 1998, net cash used in investing activities was $2.4 million and
related to the impact of business acquisitions and capital expenditures.

For the six months ended June 30, 1999, net cash provided by financing
activities was $2.0 million, principally due to increases in our borrowings and
financing costs related to our credit facility.  For the six months ended June
30, 1998, net cash provided by financing activities was $7.9 million,
principally due to our IPO proceeds which was partially offset by repayments of
long-term debt.

On April 13, 1999, we amended and restated our credit facility with Bank of
America, N.A. (formally NationsBank, N.A.), as administrative agent (the
"Administrative Agent"), and the lenders party thereto from time to time (the
"Credit Facility"). The Credit Facility consists of an $80.0 million revolving
credit facility, including a subfacility for letters of credit in an amount of
$10.0 million and a subfacility for swing line loans in an amount of $5.0
million.  At June 30, 1999, we had borrowed approximately $41.3 million under
the Credit Facility.

Loans under the Credit Facility are evidenced by notes and mature on or before
April 13, 2002.  Proceeds of the Credit Facility may be used to finance working
capital and general corporate purposes, capital expenditures and permitted
acquisitions.

Interest accrues at a variable rate indexed, at our option, at the
Administrative Agent's prime rate or the London Interbank Offered Rate
("LIBOR"), each plus an applicable margin which varies based on certain leverage
ratio requirements.  Accordingly, interest rates may vary from the prime rate to
the prime rate plus 1.0% or from LIBOR plus 1.5% to LIBOR plus 2.5%, based upon
our Consolidated Leverage Ratio (as such term is defined in the Credit
Facility), provided, however, that until the end of quarter ending September 30,
1999, the applicable margin shall be 3.0%.

                                       14
<PAGE>

Our obligations under the Credit Facility are secured by a lien on substantially
all of our assets, including accounts receivable, inventory, equipment, general
intangibles and other property.  Additionally, the Credit Facility is secured by
a first priority pledge of the capital stock of our direct and indirect
subsidiaries, as well as any future subsidiary that we may organize or acquire.

The Credit Facility contains customary affirmative covenants and certain
operating and financial covenants.  The financial covenants include, without
limitation, requirements to not exceed a certain consolidated leverage ratio, to
maintain a certain consolidated fixed charge coverage ratio and a consolidated
net worth, and to not exceed certain consolidated capital expenditures and
rental payment levels.

The Nasdaq Stock Market has various requirements for continued listing on the
National Market including a requirement that the minimum bid price per share of
the listed capital stock of each listed company not fall below a certain price
for any 30-consecutive business day period.  After the 30-day period, the issuer
has 90 calendar days to achieve compliance by meeting the minimum bid price for
10 consecutive business days.  We have received notice from the Nasdaq National
Market that our Common Stock had not met the minimum bid requirement and that we
had until May 12, 1999 to achieve compliance.  We did not meet the minimum bid
price for the required number of days before the prescribed period ended.  On
July 1, 1999, we appeared at a de-listing hearing before the Nasdaq Review Panel
and presented a plan to achieve compliance with the Nasdaq National Market's
continued listing requirements. The Nasdaq Review Panel is currently reviewing
our plan, and we expect to receive a decision on our listing status during the
third quarter of 1999.  We have applied to transfer our listing from the Nasdaq
National Market to the American Stock Exchange ("Amex").  In the event of an
unfavorable decision by the Nasdaq Review Panel, we currently intend to pursue a
transfer to Amex.

Recent Trends and Developments

In the second quarter of 1999, we generated approximately 15.1% of our revenues
and 7.7% of our gross profit from the placement of contract professionals in
positions related to the implementation of the enterprise resource planning
software, or ERP, licensed by SAP AG.  SAP has announced that it has experienced
a slowdown in orders for its software.  SAP believes this slowdown is related to
its clients allocating resources away from ERP implementation in order to
address year 2000 and other resource allocation issues.  In the first quarter of
1999, we experienced a decrease in our SAP implementation staffing business.
This trend has continued into the second quarter of 1999.  We believe this
decrease is due to clients allocating their resources away from SAP
implementation to address year 2000 issues and thus, that the decrease will be
temporary.  Our belief that this trend is temporary is a forward-looking
statement that is subject to numerous risks and uncertainties.  Actual results
may differ materially from our estimate due to a variety of factors, including
continued decreased demand for SAP software and the attendant implementation
services.

Year 2000 Computer Issues

Introduction.  The Year 2000 issue refers to the problems that result from the
many existing computer software programs and operating systems that use only two
digits rather than four to define the applicable year in a date field. These
programs were designed and developed without considering the impact of the
upcoming change in the century.  If not corrected, many computer applications
could fail or create erroneous results by or at the Year 2000.

                                       15
<PAGE>

Acsys' State of Readiness.  We have assessed our major IT vendors and technology
providers and are in the process of testing our systems to determine Year 2000
compliance. In addition, we are also in the process of testing our non-IT
systems that utilize embedded technology such as micro-controllers and reviewing
them for Year 2000 compliance.

To operate our business, we rely upon government agencies, utility companies,
providers of telecommunication services, suppliers, and other third party
service providers ("Primary Service Providers"), over which we assert little
control. Our ability to conduct our core business depends upon the ability of
these Primary Service Providers to fix their Year 2000 issues and to the extent
they cannot or do not fix their Year 2000 issues, our financial condition could
be materially and adversely affected. In addition, our customers may experience
Year 2000 issues that could have a material adverse effect on their business and
their need for our services, which in turn could have a material adverse effect
on our business.

We use various software packages in conducting and accounting for our temporary
staffing, IT contract staffing, permanent placement and general accounting
operations. These packages, among other things, track and accumulate temporary
staff time and client billings, process staff payroll, and produce financial
statements and other financial data. We use software packages and hardware in
certain locations that may not be Year 2000 compliant.

We expect that our information systems integration efforts will enable us to be
fully Year 2000 compliant, although we cannot guarantee that software
represented by vendors as Year 2000 compliant will in fact be compliant.
Further, we use third-party payroll processing companies, and although we expect
that these companies will be Year 2000 compliant, no assurances can be given in
that regard. We could acquire an entity that is not Year 2000 compliant.
Depending on the size of the entity acquired, noncompliance could negatively
affect our results of operations.

Costs to Address Acsys' Year 2000 Issues.   We expense costs associated with
Year 2000 system changes as the costs are incurred except for system change
costs that we would otherwise capitalize in accordance with generally accepted
accounting principles. For the six months ended June 30, 1999, we incurred $2.1
million in capital expenditures.  The majority of these capital expenditures
related to system integration efforts that, in addition to increasing
efficiencies in conducting our business, will enable us to be Year 2000
compliant.  We expect to spend an additional $1.5 million to complete our system
integration and expect to be Year 2000 compliant by early fourth quarter of
1999.  We do not expect future costs to be material to our consolidated
financial position or results of operations. We cannot estimate the future costs
incurred as a result of Year 2000 issues suffered by our Primary Service
Providers and customers, and we cannot be assured that we will successfully
address the Year 2000 issues present in our own systems.

Risks Presented by Year 2000 Issues.   We have begun the system testing phase of
our Year 2000 Plan. As a result of system integration testing, we may identify
areas of our business that are at risk of Year 2000 disruption. The absence of
any such determination at this point represents only the current status in the
implementation of our Year 2000 Plan, and should not be construed to mean that
there is no area of our business which is at risk of a Year 2000 related
disruption. As noted above, many of our Primary Service Providers and customers
may not appropriately address their Year 2000 issues, the result of which could
have a material adverse effect on our financial condition and results of
operations.

Acsys' Contingency Plans. During the third quarter of 1999, we expect to develop
our contingency plan specific to a business disruption related to a Year 2000
event. We do maintain contingency plans, outside of the scope of the Year 2000
issue, designed to address various other

                                       16
<PAGE>

business interruptions. We are prepared for the possibility that system
integration testing may hereafter identify certain areas of business at risk. We
will develop specific Year 2000 contingency plans as needed for such areas of
business as and if such determinations are made.

The estimates and conclusions included in this discussion contain forward-
looking statements and are based on management's best estimates of future
events.  Acsys' expectations about risks, future costs and the timely completion
of its Year 2000 modifications may turn out to be incorrect and any variance
from these expectations could cause actual results to differ materially from
what has been discussed above.  Factors that could influence risks, amount of
future costs and the effective timing of remediation efforts include Acsys'
success in identifying and correcting potential Year 2000 issues and the ability
of third parties to appropriately address their Year 2000 issues.  The foregoing
Year 2000 discussion and the information contained herein is provided as a "Year
2000 Readiness Disclosure" as defined in the Year 2000 Information and Readiness
Disclosure Act of 1998 (Public Law 105-271, 112 Stat. 2386) enacted on October
19, 1998.

                                       17
<PAGE>

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Acsys does not engage in investing in or trading market risk sensitive
instruments.  We also do not purchase, for investment, hedging, or for purposes
"other than trading," instruments that are likely to expose Acsys to market
risk, whether interest rate, foreign currency exchange, commodity price or
equity price risk, except as discussed in the following paragraph.  We have not
entered into any forward or futures contracts, purchased any options or entered
into any interest rate swaps.  We currently do not have any foreign operations,
and thus we do not believe that we have any exposure to foreign currency
exchange rate risk.

We have interest rate risk under our Credit Facility.  A change in either our
lender's prime rate, the federal funds rate or the London Inter-Bank Offering
Rate (LIBOR) would affect the rate at which that we could borrow funds under our
existing credit agreement.  See Item 2. "Management's Discussion and Analysis of
Financial Condition and Results of Operations-Liquidity and Capital Resources"
for a further discussion of the terms of our Credit Facility.

                                       18
<PAGE>

                                    PART II
                               OTHER INFORMATION

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

Information with respect to our adoption of a Shareholder Protection Rights Plan
on June 20, 1999 may be found under Item 5 of our Current Report on the Form 8-K
dated June 20, 1999 (date of earliest event reported), filed with the Securities
and Exchange Commission on June 21, 1999.  Such information is incorporated
herein by reference.

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

At our Annual Meeting of Shareholders, on April 26, 1999, the shareholders
elected the following slate of nominees for election as director to serve until
the 2000 Annual Meeting of Shareholders and until their successors are duly
elected and qualified, with votes cast as follows (with no broker non-votes or
abstentions):

<TABLE>
<CAPTION>
                                                                     Votes
                                              -------------------------------------------------
Nominee:                                                For                Withheld Authority
------------------------------------------    ---------------------    ------------------------
<S>                                           <C>                      <C>
Barry M. Abelson                                         10,961,901                     604,233
Beth Monroe Chase                                        10,890,501                     675,633
David C. Cooper                                           9,966,680                   1,599,454
Paul J. Klaassen                                         10,961,601                     604,533
Robert M. Kwatnez                                        10,961,901                     604,233
Timothy Mann, Jr.                                         9,260,585                   2,305,549
William Porter Payne                                     10,961,901                     604,233
Harry J. Sauer                                           10,961,901                     604,233
</TABLE>


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

  (a) Exhibits.

Exhibit
Number    Description
-------   -----------
  3.1     Articles of Amendment of Amended and Restated Articles of
          Incorporation, as amended, filed with the Secretary of State of the
          State of Georgia on June 20, 1999.
  4.1     Shareholder Protection Rights Agreement, dated June 20, 1999, between
          the Company and SunTrust Bank, Atlanta, as Rights Agent (incorporated
          herein by referenced to Exhibit 99.1 of the Company's Current Report
          on Form 8-K dated June 20, 1999, and filed with the Commission on June
          21, 1999).
   27     Financial Data Schedule.

  (b) Reports on Form 8-K

        On June 21, 1999, we filed a current report on Form 8-K dated June 20,
      1999 (date of earliest event reported). Under Item 5, Other Events, we
      described our adoption of a Shareholder Protection Rights Plan. We did not
      file any other Current Reports on Form 8-K during the quarter ended June
      30, 1999.

                                       19
<PAGE>

                                  SIGNATURES

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

                                                   Acsys, Inc.
                                     -----------------------------------------
                                                  (registrant)


     Date: August 9, 1999                       /s/ Brady W. Mullinax, Jr.
           --------------            -----------------------------------------
                                                 Brady W. Mullinax, Jr.
                                                Chief Financial Officer
                                       (the registrant's principal financial and
                                         chief accounting officer, who is duly
                                            authorized to sign this report)

                                       20
<PAGE>

                                 EXHIBIT INDEX

Exhibit
Number    Description
-------   -----------
  3.1     Articles of Amendment of Amended and Restated Articles of
          Incorporation, as amended, filed with the Secretary of State of the
          State of Georgia on June 20, 1999.
  4.1     Shareholder Protection Rights Agreement, dated June 20, 1999, between
          the Company and SunTrust Bank, Atlanta, as Rights Agent (incorporated
          herein by referenced to Exhibit 99.1 of the Company's Current Report
          on Form 8-K dated June 20, 1999, and filed with the Commission on June
          21, 1999).
   27     Financial Data Schedule.

                                       21