UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

(Mark One)

[X]      Quarterly report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934.
   
         For the quarterly period ended September 30, 1997

[ ]      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. 000-20068

                             PRECISION SYSTEMS, INC.
             (Exact name of registrant as specified in the charter)

          DELAWARE                                     41-1425909
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

              11800 30TH COURT NORTH, ST. PETERSBURG, FLORIDA 33716
                    (Address of principal executive offices)

                                 (813) 572-9300
              (registrant's telephone number, including area code)

                                 NOT APPLICABLE
              (Former name, former address and former fiscal year,
                          if changed since last report)

      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 [ ]

      APPLICABLE ONLY TO REGISTRANTS TO CORPORATE  ISSUERS:  Indicate the number
of shares  outstanding of each of the issuer's classes of common stock as of the
latest practicable date.

     Total number of shares of outstanding common stock as of November 14, 1997:

         Common Stock........................................    17,773,088



<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements


                    Precision Systems, Inc. and Subsidiaries
          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
<TABLE>
<CAPTION>

                                            Three Months Ended September 30,  Nine Months Ended September 30,
                                            --------------------------------  -------------------------------
                                                   1997            1996             1997            1996
                                               ------------    ------------    ------------    ------------
<S>                                            <C>             <C>             <C>             <C>         
REVENUES
  Contract revenue                             $  2,168,944    $  1,331,105    $  8,191,554    $  8,350,448
  Service and support                             6,270,975       5,342,503      17,655,180      11,311,939
  License fees                                    2,880,284       2,025,544       7,615,266       4,800,932
                                               ------------    ------------    ------------    ------------
                                                 11,320,203       8,699,152      33,462,000      24,463,319
                                               ------------    ------------    ------------    ------------
COST OF SALES                                     3,832,281       2,626,727      11,580,591       7,587,339
                                               ------------    ------------    ------------    ------------
GROSS MARGIN                                      7,487,922       6,072,425      21,881,409      16,875,980
                                               ------------    ------------    ------------    ------------
OPERATING EXPENSES
  Selling, general and administrative             6,438,515       9,062,036      20,168,057      21,145,524
  Research, engineering and development             734,268       1,434,505       2,144,097       3,369,071
  Depreciation and amortization                   1,699,246       1,469,419       5,164,107       4,505,883
  Purchased research and development                   --        19,500,000            --        19,500,000
  Goodwill write-down                                  --         3,829,424            --         3,829,424
                                               ------------    ------------    ------------    ------------
                                                  8,872,029      35,295,384      27,476,261      52,349,902
                                               ------------    ------------    ------------    ------------
Operating loss                                   (1,384,107)    (29,222,959)     (5,594,852)    (35,473,922)
Interest income (expense), net                       53,102         (31,973)         20,891         265,031
Gain on sale of marketable equity securities           --              --              --           371,218
                                               ------------    ------------    ------------    ------------
Loss before income taxes                         (1,331,005)    (29,254,932)     (5,573,961)    (34,837,673)
Income taxes                                           --              --              --              --
                                               ------------    ------------    ------------    ------------
NET LOSS                                         (1,331,005)    (29,254,932)     (5,573,961)    (34,837,673)
Preferred stock dividend requirements              (178,454)        (87,715)       (433,873)       (261,238)
                                               ------------    ------------    ------------    ------------
NET LOSS APPLICABLE TO COMMON STOCK            $ (1,509,459)   $(29,342,647)   $ (6,007,834)   $(35,098,911)
                                               ============    ============    ============    ============

LOSS PER SHARE

  Net loss                                     $       (.08)   $      (1.71)   $      (.32)    $      (2.20)
                                               ============    ============    ============    ============ 
  Net loss applicable to common stock          $       (.09)   $      (1.72)   $      (.34)    $      (2.22)
                                               ============    ============    ============    ============






















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

2

<PAGE>


                    Precision Systems, Inc. and Subsidiaries
                     CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                     September 30,     December 31,
                                                                                          1997             1996
                                                                                     -------------    -------------
                                                                                      (unaudited)
<S>                                                                                  <C>              <C>          
                                     ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                                          $   6,722,594    $   4,601,818
  Accounts and contracts receivable, net                                                 8,732,168       12,400,000
  Supplies and other current assets                                                      2,694,425        1,685,874
  Costs and earnings in excess of billings on uncompleted contracts                      6,933,157        3,064,978
                                                                                     -------------    -------------
    Total current assets                                                                25,082,344       21,752,670
                                                                                     -------------    -------------
PROPERTY, PLANT AND EQUIPMENT, NET                                                       8,483,781        8,824,858
INTANGIBLE ASSETS, NET                                                                  15,354,846       18,616,847
                                                                                     -------------    -------------
                                                                                     $  48,920,971    $  49,194,375
                                                                                     =============    =============


                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Current portion of long-term debt                                                  $     543,526    $   2,374,287
  Accounts payable                                                                       5,058,967        4,395,128
  Accrued expenses                                                                       6,066,512        8,152,294
  Billings in excess of costs and earnings on uncompleted contracts                      2,885,000        3,753,132
  Deferred revenue                                                                       1,824,478        2,689,044
                                                                                     -------------    -------------
    Total current liabilities                                                           16,378,483       21,363,885
                                                                                     -------------    -------------
LONG-TERM DEBT                                                                           6,256,766          369,377
                                                                                     -------------    -------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
  Non-redeemable preferred stock - $.01 par value; authorized 50,000 shares:
    Series A 6 percent Cumulative Convertible Preferred Stock; convertible
    at $4.76 per share, issued and outstanding 10,000 shares; liquidation preference
    $5,800,000                                                                                 100              100
    Series B 8 percent Cumulative Convertible Preferred Stock; convertible
    at $4.47 per share, issued and outstanding 4,500 shares; liquidation preference
    $4,500,000                                                                                  45             --
  Common stock - $.01 par value; authorized 30,000,000 shares, issued
    17,831,025 and 17,696,367 shares, respectively                                         178,311          176,964
  Additional paid-in capital                                                           113,950,471      109,643,293
  Deficit                                                                              (88,809,350)     (83,235,389)
  Treasury stock (132,937 shares) - at cost                                               (422,360)        (422,360)
  Accumulated preferred stock dividends                                                  1,496,747        1,062,874
  Cumulative foreign currency translation adjustment                                      (108,242)         355,748
  Unearned compensation                                                                       --           (120,117)
                                                                                     -------------    -------------
    Total stockholders' equity                                                          26,285,722       27,461,113
                                                                                     -------------    -------------
                                                                                     $  48,920,971    $  49,194,375
                                                                                     =============    =============










       The accompanying notes are an integral part of these condensed consolidated financial statements.
                                                                                                                    3
                  
</TABLE>

<PAGE>

                    Precision Systems, Inc. and Subsidiaries
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
<TABLE>
<CAPTION>
                                                             Nine Months Ended September 30,
                                                             -------------------------------
                                                                   1997            1996 
                                                               ------------    ------------
<S>                                                            <C>             <C>          
CASH FLOWS - OPERATING ACTIVITIES:
  Net loss                                                     $ (5,573,961)   $(34,837,673)
  Adjustments to reconcile net loss to net cash used
   in operating activities:
    Depreciation and amortization                                 5,164,107       4,505,883
    Purchased research and development                                 --        19,500,000
    Goodwill write-down                                                --         3,829,424
    Provision for losses on accounts receivable                     105,515         956,411
    Amortization of unearned compensation                           120,117         197,772
    Realization of deferred revenue                                    --        (1,031,553)
    Change in current assets and liabilities,
     net of business acquisitions:
      Accounts and contracts receivable                           3,601,397       4,653,251
      Costs and estimated earnings in excess of billings         (3,868,179)        (88,893)
      Supplies and other current assets                            (972,372)        731,736
      Accounts payable                                              663,839       1,026,766
      Accrued expenses                                           (1,968,743)     (3,489,226)
      Billings in excess of earnings on incomplete contracts       (868,132)        482,290
      Deferred revenue                                             (864,566)        409,091
                                                               ------------    ------------
        Net cash used in operating activities                    (4,460,978)     (3,154,721)
                                                               ------------    ------------
CASH FLOWS - INVESTING ACTIVITIES:
  Purchase of property, plant and equipment                      (1,969,522)     (1,576,809)
  Cash acquired in acquisition                                         --         4,403,000
                                                               ------------    ------------
       Net cash (used in) provided by investing activities       (1,969,522)      2,826,191
                                                               ------------    ------------
CASH FLOWS - FINANCING ACTIVITIES
  Proceeds from notes payable, net                                5,974,130            --
  Repayment of notes payable                                     (1,998,116)        (90,000)
  Capital contributions, net                                      4,400,000            --
  Proceeds from issuance of capital stock                           175,262         522,934
                                                               ------------    ------------
      Net cash provided by financing activities                   8,551,276         432,934
                                                               ------------    ------------
  Net increase in cash                                            2,120,776         104,404
  Cash at beginning of period                                     4,601,818      14,639,111
                                                               ------------    ------------
  Cash at end of period                                        $  6,722,594    $ 14,743,515
                                                               ============    ============






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







4

<PAGE>
<TABLE>
<S>   <C> 


1.   BASIS OF PRESENTATION

      The interim  condensed  consolidated  financial  statements  of Precision  Systems,  Inc. (the
"Company") are unaudited and should be read in conjunction with the audited financial statements and
notes  thereto as of and for the four month  transition  period ended  December 31, 1996 and for the
years ended August 31, 1996 and 1995.

      In the opinion of the Company,  all  adjustments  necessary  for a fair  presentation  of such
financial  statements have been included.  Such adjustments  consist only of normal recurring items.
Interim  results are not  necessarily  indicative of results for a full year. The interim  financial
statements and notes thereto are presented as permitted by the  Securities  and Exchange  Commission
and do not contain  information  included in the Company's  annual  financial  statements  and notes
thereto.

      Certain  amounts  for  previous  periods  have  been  reclassified  to  conform  with the 1997
presentation.

2.      LOSS PER SHARE

      Loss per share for the three and nine months  ended  September  30,  1997 and 1996,  have been
computed based upon the weighted average common shares  outstanding of 17,599,755 and 17,585,442 and
17,089,298 and 15,808,120, respectively. The loss per share calculation does not include convertible
securities  and stock  options,  which are common stock  equivalents,  as their  inclusion  would be
anti-dilutive.

3.      LONG-TERM DEBT
                                                                                      September 30,  December 31,
                                                                                           1997           1996
                                                                                       ------------   -----------
                                                                                        (unaudited)   
<S>                                                                                    <C>            <C>        
Note payable to shareholder, interest at 6 percent, repaid during October, 1997        $    250,199   $   698,127
Notes payable to shareholders, interest at 8 percent, unsecured and due January, 1999     6,000,000            --
Notes payable, interest at 5 percent, repaid during February, 1997                               --     1,269,475
Capital lease obligations, interest rates varying from 6 percent to 9 percent;
  collateralized by assets with net book value of approximately $500,000                    550,093       776,062
                                                                                       ------------   -----------
                                                                                          6,800,292     2,743,664
Less current portion                                                                       (543,526)   (2,374,287)
                                                                                       ------------   -----------
                                                                                       $  6,256,766   $   369,377
                                                                                       ============   ===========

      On  September  30,  1997,  the  Company  completed  a  $6,000,000  financing  with RMS Limited
Partnership ("RMS"), Vulcan Ventures,  Inc. ("Vulcan"),  and Mr. Didier Primat ("the Shareholders").
RMS and Vulcan are existing  shareholders  of the Company and Mr. Primat is the beneficial  owner of
shares of the Company's  stock held by Alta  Investissements  SA. In connection  with the financing,
each  Shareholder  invested  $2,000,000 and received a promissory note ("Note") for $2,000,000 and a
warrant to purchase  275,000  shares of common  stock.  The Notes will mature on January 1, 1999 and
bear interest from the issuance date on the unpaid  principal  amount until such amount is paid at a
rate per annum equal to 8%. Interest will be paid on September 30, 1998, and on the maturity date.

4.      BUSINESS ACQUISITIONS

      The Company  acquired  substantially  all of the capital stock of Vicorp,  N.V.  ("Vicorp") in
April 1996 by issuing  3,135,467  shares of newly issued  common  stock.  In  addition,  the Company
assumed certain  outstanding  obligations of Vicorp and converted options issued to Vicorp employees
into options to purchase the Company's stock.

      Vicorp  shareholders  received  29.46 shares of the  Company's  common stock for each share of
Vicorp stock they owned.  The  discounted  exchange value of the shares issued to Vicorp holders and
the  value of  options  issued  to Vicorp  employees,  together  with an  agreement  to pay  certain
obligations of Vicorp, equaled approximately  $31,000,000.  The acquisition was accounted for by the
purchase  method of accounting.  The purchase  price of $32,434,985  was comprised of Company common
stock valued at $29,521,577,  Company stock options with in-the-money value of $1,469,321, and other
direct acquisition costs totaling $1,444,087.

                                                                                                   5


<PAGE>

                    Precision Systems, Inc. and Subsidiaries
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

      The  purchase  price  allocation  among the assets  acquired  and  liabilities  assumed in the
acquisition of Vicorp are as follows:


               Cash ...................................   $  4,403,000
               Accounts receivable ....................     10,766,000
               Other current assets ...................        846,000
                                                          ------------
                  Total current assets ................     16,015,000
                                                          ------------
               Accounts payable .......................     (5,367,000)
               Accrued expenses .......................     (6,514,000)
               Other current liabilities ..............     (5,240,000)
                                                          ------------
                  Total current liabilities ...........    (17,121,000)
                                                          ------------
                  Net current liabilities .............     (1,106,000)
               Long-term assets .......................      5,386,000
               Long-term liabilities ..................     (3,749,000)
               Developed technology value .............      3,090,000
               Assembled work force value .............        890,000
               Purchased research and development .....     19,500,000
               Goodwill ...............................      8,423,985
                                                          ------------
                  Total purchase price ................   $ 32,434,985
                                                          ============

      The Company  acquired BFD  Productions,  Inc. ("BFD") in October 1996 in exchange for cash and
approximately  272,000  shares  of  newly  issued  common  stock  for  a  total  purchase  price  of
approximately  $3,400,000 in exchange for all of the capital stock of BFD. The  acquisition has been
accounted  for using the purchase  method of  accounting.  This  purchase  price of  $3,394,749  was
comprised  of  $1,500,000  in cash,  Company  common stock  valued at  $1,655,833,  and other direct
acquisition costs totaling $238,916.


      The  purchase  price  allocation  among the assets  acquired  and  liabilities  assumed in the
acquisition of BFD are as follows:


               Current assets .........................   $   697,000
               Current liabilities ....................    (1,392,000)
                                                          -----------
               Net current liabilities ................      (695,000)
               Long-term assets .......................       832,000
               Long-term liabilities ..................      (337,000)
               Goodwill ...............................     3,594,749
                                                          -----------
                  Total purchase price ................   $ 3,394,749
                                                          ===========


5.      STOCKHOLDERS' EQUITY

      During  April,  1997,  the  Company  completed  a  $4,500,000  financing  with  three  of  its
shareholders,  RMS Limited  Partnership,  Vulcan  Ventures,  Inc.  and Primwest  Holding N.V.  ("the
Shareholders").  In connection with the financing, each Shareholder invested $1,500,000 and received
1,500 shares of a newly  designated class of preferred stock. The Series B Preferred Stock carries a
cumulative 8% dividend.  Each  Shareholder  will be entitled to convert the Series B Preferred Stock
into common stock after  December 31, 1998,  at  approximately  $4.47 per share.  In addition to the
Series B Preferred Stock, each of the Shareholders  received a warrant to purchase 150,000 shares of
common stock.  The warrants will be  exercisable  for a five year period  beginning  April,  1998 at
approximately  $6.09. The Company granted the Shareholders  certain  registration and  anti-dilution
rights in connection with the transaction.



6

<PAGE>

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

      Precision  Systems,  Inc.  ("PSI"),  is a global  company  which  together with its direct and
indirect  wholly-owned and controlled  subsidiaries  (the "Company"),  collectively  delivers proven
solutions to telecommunications service providers and major corporations. The Company's software and
hardware products support calling cards, prepaid cards, enhanced toll-free /freephone services, call
center  solutions,  and service  bureau  services.  In addition,  the Company  supports its products
through maintenance contracts.

     The following table sets forth for the periods indicated (i) the percentage
of total revenues  represented  by certain items in the financial  statements of
the Company,  and (ii) the percentage  change in the dollar amount of such items
from period to period.
 Percentage
  Increase
                                                                                                        (Decrease)
                                                                                                    Three         Nine
                                                Percentage of Revenue    Percentage of Revenue      Months       Months
                                                 Three Months Ended        Nine Months Ended        Ended         Ended
                                                    September 30,            September 30,              September 30,
                                                ---------------------      ------------------       --------------------
                                                                                                     1997          1997
                                                                                                      vs.           vs.
                                                  1997          1996        1997         1996        1996          1996
                                                ---------------------      ------------------       --------------------
<S>                                               <C>           <C>         <C>          <C>         <C>          <C>   
Revenues:
  Contract revenue                                19.2%         15.3%       24.4%        34.1%       62.9%        (1.9)%
  Service and support                             55.4%         61.4%       52.8%        46.2%        1.3%         56.1%
  License fee                                     25.4%         23.3%       22.8%        19.7%       42.2%         58.6%
                                                 -----         -----       -----        -----         
       Total revenues                            100.0%        100.0%      100.0%       100.0%       30.1%         36.8%
Cost of sales                                     33.9%         30.2%       34.6%        31.0%       45.9%         52.6%
Gross margin                                      66.1%         69.8%       65.4%        69.0%       23.3%         29.7%
Operating expenses:
  Selling, general, and administrative expenses   56.9%        104.2%       60.3%        86.4%      (29.0)%        (4.6)%
  Research, engineering and development            6.5%         16.5%        6.4%        13.8%      (48.8)%       (36.4)%
  Depreciation and amortization                   15.0%         16.9%       15.4%        18.4%       15.6 %        14.6%
  Purchased research and development               0.0%        224.2%        0.0%        79.7%     (100.0)%      (100.0)%
  Goodwill write-down                              0.0%         44.0%        0.0%        15.7%     (100.0)%      (100.0)%
                                                 -----         -----       -----        -----         
Operating Loss                                   (12.3)%      (336.0)%     (16.7)%     (145.1)%     (95.3)%       (84.2)%
Interest income (expense)                          0.5%         (0.3)%       0.0%         1.1%     (266.1)%       (92.1)%
Gain on sale of marketable equity securities       0.0%          0.0%        0.0%         1.6%        0.0%       (100.0)%
                                                 -----         -----       -----        -----         
Loss before income taxes                         (11.8)%      (336.3)%     (16.7)%     (142.4)%     (95.5)%       (84.0)%
Net Loss                                         (11.8)%      (336.3)%     (16.7)%     (142.4)%     (95.5)%       (84.0)%


      Since the Vicorp and the BFD  acquisitions  were  accounted  for as  purchases,  the Company's
consolidated statements of operations include the operations of Vicorp since its acquisition date in
April,  1996, and the operations of BFD since its acquisition date in October,  1996.  Consequently,
some of the increases  shown above for the three and nine month  periods  ended  September 30, 1997,
compared to the same periods in 1996, are due to these acquisitions.

THREE MONTHS ENDED SEPTEMBER 30, 1997, COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1996

TOTAL REVENUES

      Total revenues increased to $11,320,203 for the three months ended September 30, 1997 compared
to  $8,699,152  for the three months ended  September  30, 1996.  The various  components of revenue
fluctuated as explained below.

CONTRACT REVENUE

      Contract  revenue  increased  to  $2,168,944  for the three months  ended  September  30, 1997
compared to $1,331,105  during the same period in 1996. The increase in contract  revenue during the
three months ended  September  30, 1997 versus 1996 is primarily  due to increased  hardware  sales,
which is partially  offset by certain ESP product sales to MCI completed in 1996 which did not recur
during the same period in 1997.

SERVICE AND SUPPORT

      Service and support  revenue  increased to $6,270,975 for the three months ended September 30,
1997, compared to $5,342,503 for the three months ended September 30, 1996.

      Service and support provided to MCI decreased  slightly to $498,383 for the three months ended
September 30, 1997, compared to $526,767 for the three months ended September 30, 1996.

                                                                                                   7

<PAGE>

      Service and support  provided to HSN decreased to $0 for the three months ended  September 30,
1997,  in comparison  to $364,388 for the three months ended  September 30, 1996.  The Company's HSN
maintenance agreement ended December 31, 1996.

      Service and support  revenue for Vicorp  BETEX  products was  $4,965,929  for the three months
ended  September  30, 1997,  compared to $4,422,527  for the three months ended  September 30, 1996.
Vicorp's service and support revenue includes  maintenance and custom development  services provided
to its customers.

      Service and support  revenue for BFD was $785,207 for the three  months  ended  September  30,
1997. BFD's service and support revenue primarily includes interactive voice response service bureau
activity.

LICENSE FEES

      License fee revenue  increased to  $2,880,284  for the three months ended  September 30, 1997,
compared to $2,025,544  for the three months ended  September 30, 1996.  License fee revenue for the
three months  ended  September  30, 1997,  relating to its BETEX  product  line was  $2,670,559  and
$209,725 for the UniPort  product line.  The primary  reason for the increase in license fee revenue
for the three months ended  September  30, 1997 relates to a higher level of BETEX  products sold in
the European market versus previous periods.  The Company anticipates  generating future license fee
revenue for its  UniPort and BETEX  products,  although  no  assurance  can be given for such future
revenue.

COST OF SALES AND GROSS MARGIN

      Cost of sales increased to $3,832,281 for the three months ended September 30, 1997,  compared
to $2,626,727  for the three months ended  September  30, 1996.  Additionally,  the Company's  gross
margin  increased to  $7,487,922  (66% of revenue) for the three  months ended  September  30, 1997,
compared to $6,072,425  (70% of revenue) for the three months ended  September 30, 1996. The primary
reason for the increase in the Company's  gross margin dollar amount is an increase in the Company's
total revenue.  The decrease in the Company's gross margin percentage is primarily associated with a
change in product  mix. A greater  portion  of the  Company's  revenue  for the three  months  ended
September  30, 1997  related to lower  margin  hardware  sales  versus the same period in 1996.  The
Company  anticipates that its hardware sales will continue to increase during the remainder of 1997,
as compared to the previous year's activity.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

      Selling,  general and  administrative  expenses  decreased to $6,438,515  for the three months
ended September 30, 1997,  compared to $9,062,036 for the three months ended September 30, 1996. The
decrease in selling,  general and  administrative  expenses for the three months ended September 30,
1997 is primarily due to the Company's efforts at managing and controlling costs in order to improve
the alignment of cost outlays against potential revenue opportunities. Specific cost savings include
payroll and related costs due to consolidation and elimination of certain functions and reduction in
advertising and trade show expenditures. Also, during August 1996, the Company accrued $1,093,341 in
restructuring  charges which related  primarily to termination  benefits,  including  severance pay.
Offsetting these decreases were the selling, general and administrative expenses associated with the
BFD  acquisition  of  approximately  $858,000.   Considering  the  impact  of  the  Vicorp  and  BFD
acquisitions, the Company expects its total selling, general and administrative expenses to increase
in the future.

RESEARCH, ENGINEERING AND DEVELOPMENT

      Research,  engineering  and  development  expenses  decreased to $734,268 for the three months
ended September 30, 1997,  compared to $1,434,505 for the three months ended September 30, 1996. The
decrease in research,  engineering and development  expenses  primarily  relates to the reduction in
required  development work associated with the Company's  UniPort product.  However,  resources will
continue to be directed toward product  improvements and enhancements for future purchased  releases
of the Company's products. Additionally, the Company will continue to evaluate its different product
lines to maximize the impact of the research, engineering and development expenditures.

      The Company believes it operates in a highly competitive  market;  and, in order to maintain a
competitive position,  the Company's existing products must be continually improved and new products
must be  developed.  The  amount  and  timing  of  future  research,  engineering,  and  development
expenditures  will depend upon,  among other factors,  future new contract revenue and the Company's
ability to fund these costs from future operating cash flow and bank or other forms of financing.

8

<PAGE>

DEPRECIATION AND AMORTIZATION

      Depreciation and amortization increased to $1,699,246 for the three months ended September 30,
1997,  compared to  $1,469,419  for the three  months  ended  September  30,  1996.  The increase is
primarily due to  amortization  expense  associated  with  intangible  assets  acquired with the BFD
acquisition.

PURCHASED RESEARCH AND DEVELOPMENT

      Purchased research and development expense of $19,500,000 for the three months ended September
30, 1996,  represents the purchase price allocation to in-process research and development  acquired
through the Company's acquisition of Vicorp.

GOODWILL WRITE-DOWN

      During the three months ended September 30, 1996, the Company reevaluated the realizability of
the goodwill associated with its fiscal 1994 acquisition of The Renaissance Group ("TRG").  Based on
a review of the expected future discounted cash flows of TRG, the Company determined that a material
impairment of the TRG associated  goodwill  existed.  Consequently,  a $3,829,424  write-down of the
goodwill balance was recorded during the three months ended September 30, 1996.

INCOME TAX EXPENSE

      The Company uses the asset and liability  method to account for deferred  income taxes.  Under
the asset and liability  method,  deferred  income taxes are recognized for the tax  consequences of
"temporary  differences"  by applying  enacted  statutory  tax rates  applicable  to future years to
differences  between the financial  statement  carrying amounts and the tax basis of existing assets
and  liabilities.  The effect on deferred  taxes of a change in tax rates is recognized in income in
the period that includes the enactment date.

INTEREST INCOME (EXPENSE)

      For the three  months ended  September  30, 1997,  net  interest  income  increased to $53,102
compared  to  $(31,973)  during the same period in 1996.  The  increase  in net  interest  income is
primarily due to a lower level of interest expense associated with the Company's debt due to certain
repayments of such debt.

NINE MONTHS ENDED SEPTEMBER 30, 1997, COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1996

TOTAL REVENUES

      Total revenues  increased to $33,462,000 for the nine months ended September 30, 1997 compared
to  $24,463,319  for the nine months ended  September  30, 1996.  The various  components of revenue
fluctuated as explained below.

CONTRACT REVENUE

      Contract revenue decreased to $8,191,554 for the nine months ended September 30, 1997 compared
to $8,350,448  during the same period in 1996.  The decrease is primarily due to certain ESP product
sales to MCI  completed in 1996 which did not recur during the same period in 1997.  Offsetting  the
overall decrease in ESP product sales is an increase in contract  revenues  associated with Vicorp's
BETEX products of $6,030,221 for the nine months ended September 30, 1997 compared to $1,463,569 for
the same period in 1996. Since the Vicorp acquisition was accounted for as a purchase, the Company's
consolidated  statements of operations  include the operations of Vicorp since the acquisition date,
in April,  1996.  The  Company  expects  the revenue  generated  from the sale of BETEX  products to
increase during 1997.

SERVICE AND SUPPORT

      Service and support  revenue  increased to $17,655,180 for the nine months ended September 30,
1997, compared to $11,311,939 for the nine months ended September 30, 1996.

      Service and  support  provided  to MCI  decreased  to  $1,519,218  for the nine  months  ended
September 30, 1997,  compared to  $1,698,036  for the nine months ended  September  30, 1996.  While
maintenance  revenue  increased due to additional MCI ESP equipment that is subject to the Company's
maintenance  services,  the overall decrease is due to certain  non-recurring  development  projects
delivered to MCI which occurred during the first nine months of 1996.

                                                                                                   9

<PAGE>
      Service and support  provided to HSN  decreased to $0 for the nine months ended  September 30,
1997, in comparison to $1,092,294  for the nine months ended  September 30, 1996.  The Company's HSN
maintenance agreement ended December 31, 1996.

      Service and support  revenue for Vicorp  BETEX  products was  $13,399,798  for the nine months
ended September 30, 1997,  compared to $8,668,527 for the same period in 1996.  Vicorp's service and
support revenue  includes  maintenance and custom  development  services  provided to its customers.

      Service and support  revenue for BFD was  $2,675,461  for the nine months ended  September 30,
1997.  BFD's service and support  revenue  primarily  includes  interactive  voice response  service 
bureau activity.

LICENSE FEES

      License fee revenue  increased  to  $7,615,266  for the nine months ended  September  30, 1997
compared to $4,800,932  for the nine months ended  September  30, 1996.  License fee revenue for the
nine months  ended  September  30,  1997,  relating to its BETEX  product  line was  $6,237,450  and
$1,377,816 for the UniPort  product line. The primary reason for the increase in license fee revenue
for the nine months ended  September 30, 1997 relates to a higher level of BETEX product sold in the
American and European  markets  versus prior  periods.  The Company  anticipates  generating  future
license fee revenue for its UniPort and BETEX products,  although no assurance can be given for such
future revenue.

COST OF SALES AND GROSS MARGIN

      Cost of sales increased to $11,580,591 for the nine months ended September 30, 1997,  compared
to $7,587,339 for the nine months ended September 30, 1996. Additionally, the Company's gross margin
increased to $21,881,409 (65% of revenue) for the nine months ended September 30, 1997,  compared to
$16,875,980  (69% of revenue) for the nine months ended  September 30, 1996.  The primary reason for
the increase in the  Company's  gross margin  dollar  amount is an increase in the  Company's  total
revenue. The decrease in the Company's gross margin percentage is primarily associated with a change
in product mix. A greater  portion of the Company's  revenue for the nine months ended September 30,
1997 related to lower margin hardware sales versus the same period in 1996. The Company  anticipates
that its hardware  sales will continue to increase  during the remainder of 1997, as compared to the
previous year's activity.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

      Selling,  general and  administrative  expenses  decreased to $20,168,057  for the nine months
ended September 30, 1997,  compared to $21,145,524 for the nine months ended September 30, 1996. The
decrease is primarily due to the  Company's  efforts at managing and  controlling  costs in order to
improve the alignment of cost outlays against potential revenue opportunities. Specific cost savings
include payroll and related costs due to  consolidation  and elimination of certain  functions (i.e.
sales and marketing,  product  management,  customer service) and reduction in advertising and trade
show  expenditures.  Also,  during August 1996,  the Company  accrued  $1,093,341  in  restructuring
charges,  which related primarily to termination benefits,  including severance pay. The decrease in
selling, general and administrative expenses is offset by the following increases:

      *     Selling,  general and administrative  expenses associated with the acquisition of Vicorp
            was  approximately  $12,093,000 for the nine months ended September 30, 1997 compared to
            $9,279,812 for the period in 1996 that Vicorp was included in the Company's consolidated
            statement of operations.

      *     Selling,  general and  administrative  expenses  associated with the BFD acquisition was
            approximately $2,426,000.

RESEARCH, ENGINEERING AND DEVELOPMENT

      Research,  engineering  and development  expenses  decreased to $2,144,097 for the nine months
ended  September 30, 1997,  compared to $3,369,071 for the nine months ended September 30, 1996. The
decrease in research,  engineering and development  expenses  primarily  relates to the reduction in
required  development work associated with the Company's  UniPort product.  However,  resources will
continue to be directed toward product  improvements and enhancements for future purchased  releases
of the Company's products. Additionally, the Company will continue to evaluate its different product
lines to maximize the impact of the research, engineering and development expenditures.

      The Company believes it operates in a highly competitive  market;  and, in order to maintain a
competitive position,  the Company's existing products must be continually improved and new products
must be  developed.  The  amount  and  timing  of  future  research,  engineering,  and  development
expenditures  will depend upon,  among other factors,  future new contract revenue and the Company's
ability to fund these costs from future operating cash flow and bank or other forms of financing.
10

<PAGE>
DEPRECIATION AND AMORTIZATION

      Depreciation and amortization  increased to $5,164,107 for the nine months ended September 30,
1997, compared to $4,505,883 for the nine months ended September 30, 1996. The increase is primarily
due to  amortization  expense  associated  with  intangible  assets acquired with the Vicorp and BFD
acquisitions.

PURCHASED RESEARCH AND DEVELOPMENT

      Purchased research and development  expense of $19,500,000 for the nine months ended September
30, 1996,  represents the purchase price allocation to in-process research and development  acquired
through the Company's acquisition of Vicorp.

GOODWILL WRITE-DOWN

      During the nine months ended September 30, 1996, the Company  reevaluated the realizability of
the goodwill associated with its fiscal 1994 acquisition of The Renaissance Group ("TRG").  Based on
a review of the expected future discounted cash flows of TRG, the Company determined that a material
impairment of the TRG associated  goodwill  existed.  Consequently,  a $3,829,424  write-down of the
goodwill balance was recorded during the nine months ended September 30, 1996.

INCOME TAX EXPENSE

      The Company uses the asset and liability  method to account for deferred  income taxes.  Under
the asset and liability  method,  deferred  income taxes are recognized for the tax  consequences of
"temporary  differences"  by applying  enacted  statutory  tax rates  applicable  to future years to
differences  between the financial  statement  carrying amounts and the tax basis of existing assets
and  liabilities.  The effect on deferred  taxes of a change in tax rates is recognized in income in
the period that includes the enactment date.

INVESTMENT GAIN ON MARKETABLE EQUITY SECURITIES

      For the nine months ended  September 30, 1996, the Company had an investment  gain of $371,218
relating to its sale of marketable equity securities.  No such transaction  occurred during the same
period in 1997.

INTEREST INCOME

      For the nine months ended  September  30, 1997,  net interest  income was $20,891  compared to
$265,031  during the same period in 1996.  The decrease in net interest  income is primarily  due to
certain interest  expense  associated with debt assumed by the Company in connection with the Vicorp
and BFD acquisitions.  Additionally, the Company's interest bearing cash and cash equivalent amounts
decreased.

LITIGATION

      The Company is subject to certain  legal  actions  arising in the normal  course of  business.
After taking into  consideration  legal counsel's  evaluation of such actions,  management is of the
opinion that their final resolution will not have any significant  adverse effect upon the Company's
business  or its  consolidated  financial  statements.  Reference  is made to the legal  proceedings
described at Part 1, Item 3, in the Company's December 31, 1996, Form 10-K. The following represents
an update of certain of these proceedings.

      INTERVOICE,  INC. V. PRECISION SYSTEMS,  INC. AND VICORP INTERACTIVE SYSTEMS, INC. On June 13,
1997, the Company filed a Motion for Summary  Judgment of Patent  Invalidity and Non Infringement of
the  Intervoice  '305,  '643  and '500  Patents,  and a  Partial  Motion  for  Summary  Judgment  on
Intervoice's allegation of False Advertising by the Company. A hearing on these Motions is pending.

On August 27, 1997,  Intervoice  filed a new Complaint  against the Company in the Federal  District
Court  for the  Northern  District  of Texas  (Dallas)  alleging  infringement  of U.S.  Patent  No.
5,644,631.  This  Patent was  awarded to  Intervoice  on July 1, 1997 and is a  continuation  of its
earlier '500 Patent.  Upon Agreed Motion,  this new action has been  consolidated  into the original
action,  and the trial  date on all counts has been  extended  to March 2, 1998,  so as to allow the
parties time to conduct additional discovery.

      DANIEL  SCHULTZ  V.  PRECISION  SYSTEMS,  INC.,  ET AL. The  company  has filed its Answer and
Affirmative  Defenses  with the  Circuit  Court of the Sixth  Judicial  Circuit in and for  Pinellas
County, Florida, and is vigorously defending this action.

      DANIEL  GILBERT  SCHULTZ V. ALTA  INVESTISSEMENTS,  S.A.  ET AL. The Court of First  Instance,
Curacao,  Netherlands  Antilles has ruled  against Mr.  Schultz on all Claims.  Mr.  Schultz did not
appeal this judgment, and the time for appeal has expired.

FINANCIAL POSITION, LIQUIDITY, AND CAPITAL RESOURCES

      At September 30, 1997, the Company had net working capital of $8,703,861  compared to $388,785
at December 31, 1996. The increase in net working capital is primarily due to the net $4,400,000 and
$5,974,130 of funding that was received from  shareholders  during the second and third  quarters of
1997,  respectively.  The Company  expects that with the  acquisition of Vicorp and BFD, its working
capital requirements will increase significantly over prior periods and that it will be able to fund
its operating and investing activities for the remainder of 1997.
                                                                                                  11

<PAGE>

      The Company's  accounts and contracts  receivable  decreased to $8,732,168 as of September 30,
1997,  from  $12,400,000  as of December 31, 1996.  The decrease is primarily  due to  collection of
certain large receivables outstanding at December 31, 1996.

      The Company's  supplies and other current  assets  increased to $2,694,425 as of September 30,
1997, from $1,685,874 as of December 31, 1996. The increase is primarily due to the replenishment of
inventory which was sold prior to the end of 1996.

      The Company's costs and earnings in excess of billings on uncompleted  contracts  increased to
$6,933,157  as of  September  30, 1997,  from  $3,064,978  as of December 31, 1996.  The increase is
primarily  associated  with  certain of  Vicorp's  product  delivery  contracts  in process  for its
customers. Such amounts as of September 30, 1997, are expected to be fully billed by Vicorp by March
31, 1998.

      The  Company's  current  portion of long-term  debt  decreased to $543,526 as of September 30,
1997, from $2,374,287 as of December 31, 1996. The decrease is primarily due to certain debt re-paid
by the Company  during the nine months  ended  September  30, 1997.  The  Company's  long-term  debt
increased  to  $6,256,766  as of  September  30, 1997,  from  $369,377 as of December 31, 1996.  The
increase is primarily due to the Company's  issuance of three promissory notes of $2,000,000 each in
September, 1997.

      The  Company's  accounts  payable  increased  to  $5,058,967  as of September  30, 1997,  from
$4,395,128 as of December 31, 1996.  The increase is primarily  due to the timing of certain  vendor
payments.

      The  Company's  accrued  expenses  decreased  to  $6,066,512  as of September  30, 1997,  from
$8,152,294 as of December 31, 1996.  The decrease is primarily due to payments made during the first
three quarters of 1997.

      The Company's billings in excess of costs and earnings on uncompleted  contracts  decreased to
$2,885,000  as of  September  30, 1997,  from  $3,753,132  as of December 31, 1996.  The decrease is
primarily  associated  with the completion and billing of certain of Vicorp's  software  development
contracts.

      The Company's  deferred revenue balance decreased to $1,824,478 as of September 30, 1997, from
$2,689,044 as of December 31, 1996. The Company's  deferred  revenue  balance  primarily  represents
prepaid maintenance contracts for services to be provided to its customers.

      The Company incurred  approximately $908,000 and $1,970,000 in expenditures for capital assets
during the three and nine months ended  September 30, 1997.  Future  levels of capital  expenditures
will be dependent upon cash  availability from operating  activities and additional  sources of bank
funding or other forms of financing which may or may not be available to the Company upon acceptable
terms and conditions.

      During  April,  1997,  the  Company  completed  a  $4,500,000  financing  with  three  of  its
shareholders,  RMS Limited  Partnership,  Vulcan  Ventures,  Inc.  and Primwest  Holding N.V.  ("the
Shareholders").  In connection with the financing, each Shareholder invested $1,500,000 and received
1,500 shares of a newly  designated class of preferred stock. The Series B Preferred Stock carries a
cumulative 8% dividend.  Each  Shareholder  will be entitled to convert the Series B Preferred Stock
into common stock after  December 31, 1998,  at  approximately  $4.47 per share.  In addition to the
Series B Preferred Stock, each of the Shareholders  received a warrant to purchase 150,000 shares of
common stock.  The warrants will be  exercisable  for a five year period  beginning  April,  1998 at
approximately  $6.09. The Company granted the Shareholders  certain  registration and  anti-dilution
rights in connection with the transaction.

      On  September  30,  1997,  the  Company  completed  a  $6,000,000  financing  with RMS Limited
Partnership ("RMS"), Vulcan Ventures,  Inc. ("Vulcan"),  and Mr. Didier Primat ("the Shareholders").
RMS and Vulcan are existing  shareholders  of the Company and Mr. Primat is the beneficial  owner of
shares of the Company's  stock held by Alta  Investissements  SA. In connection  with the financing,
each  Shareholder  invested  $2,000,000 and received a promissory note ("Note") for $2,000,000.  The
Notes  will  mature on  January  1, 1999 and bear  interest  from the  issuance  date on the  unpaid
principal amount until such amount is paid at a rate per annum equal to 8%. Interest will be paid on
September 30, 1998,  and on the maturity  date. In addition to the Notes,  each of the  Shareholders
received a warrant to purchase  275,000 shares of common stock. The warrants will be exercisable for
a five year period beginning October,  1998, at $4.00. The Company granted the Shareholders  certain
registration rights with respect to the shares of common stock underlying the warrants.

12


<PAGE>

      Management is exploring  additional  opportunities for financing sources.  Although management
feels that the Company will be able to fund its  operating  and  investing  activities  through 1997
through the use of its current  working  capital,  including  the  collection  of existing  accounts
receivables  and the  generation  of  future  revenues,  additional  sources  of  capital  are being
investigated for future requirements.  However,  there is no assurance that the Company will be able
to obtain  additional  financing on acceptable  terms and  conditions  or that its existing  working
capital will be sufficient to fund its operating and investing activities for 1998.

FORWARD-LOOKING INFORMATION

      The foregoing  discussion in "Management's  Discussion and Analysis of Financial Condition and
Results of Operations" contains  forward-looking  statements that reflect management's current views
with respect to future  events and the  financial  performance  and  condition of the Company.  Such
statements involve risks and uncertainties, and there are certain important factors that could cause
actual results to differ materially from those anticipated. Some of the important factors that could
cause actual results to differ materially from those anticipated include:

      *     The Company competes in an industry marked by frequent  technological changes which will
            force the Company to expend funds to develop new products and implement new technologies

      *     The various markets into which the Company sells its products are undergoing significant
            changes with increasing demands for product innovations

      *     The Company must be successful in competing against many competitors, many of which have
            significantly greater assets than the Company

      *     The Company will be required to properly estimate costs under fixed price contracts

      *     Increased  risk of  litigation  in the  Company's  industry  resulting  from  aggressive
            prosecutions of intellectual property claims

      *     The Company's ability to retain its larger customers, including MCI

      *     Availability of certain hardware and software components which are incorporated with the
            Company's products and are purchased from a limited number of vendors

      *     The Company's ability to hire and retain qualified personnel

      *     Legislative  changes affecting the Company's markets,  including the  Telecommunications
            Act of 1996

      *     Given the  Company's  acquisition  of Vicorp  and its large  presence  in  international
            markets,  regulatory,  monetary  and  inflationary  factors  can  negatively  impact the
            Company's operations in the future.

      Many of such uncertainties are outside the Company's control and  could  postpone,  delay,  or
eliminate  potential  sales  opportunities  and, therefore,  affect the Company's operations. Due to
such  uncertainties  and risk, readers are  cautioned not to place undue  reliance on such  forward-
looking statements, which speak only as of the date hereof.

INFLATION

     Inflation has not had a significant impact on the Company's operations.













                                                                                               13

<PAGE>
                                 PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS

      The Company is subject to certain  legal  actions  arising in the normal  course of  business.
After taking into  consideration  legal counsel's  evaluation of such actions,  management is of the
opinion that their final resolution will not have any significant  adverse effect upon the Company's
business  or its  consolidated  financial  statements.  Reference  is made to the legal  proceedings
described at Part 1, Item 3, in the Company's December 31, 1996, Form 10-K. The following represents
an update of certain of these proceedings.

      INTERVOICE,  INC. V. PRECISION SYSTEMS,  INC. AND VICORP INTERACTIVE SYSTEMS, INC. On June 13,
1997, the Company filed a Motion for Summary  Judgment of Patent  Invalidity and Non Infringement of
the  Intervoice  '305,  '643  and '500  Patents,  and a  Partial  Motion  for  Summary  Judgment  on
Intervoice's allegation of False Advertising by the Company. A hearing on these Motions is pending.

On August 27, 1997,  Intervoice  filed a new Complaint  against the Company in the Federal  District
Court  for the  Northern  District  of Texas  (Dallas)  alleging  infringement  of U.S.  Patent  No.
5,644,631.  This  Patent was  awarded to  Intervoice  on July 1, 1997 and is a  continuation  of its
earlier '500 Patent.  Upon Agreed Motion,  this new action has been  consolidated  into the original
action,  and the trial  date on all counts has been  extended  to March 2, 1998,  so as to allow the
parties time to conduct additional discovery.

      DANIEL  SCHULTZ  V.  PRECISION  SYSTEMS,  INC.,  ET AL. The  company  has filed its Answer and
Affirmative  Defenses  with the  Circuit  Court of the Sixth  Judicial  Circuit in and for  Pinellas
County, Florida, and is vigorously defending this action.

      DANIEL  GILBERT  SCHULTZ V. ALTA  INVESTISSEMENTS,  S.A.  ET AL. The Court of First  Instance,
Curacao,  Netherlands  Antilles has ruled  against Mr.  Schultz on all Claims.  Mr.  Schultz did not
appeal this judgment, and the time for appeal has expired.

ITEM 2 - CHANGES IN SECURITIES

      On April 7, 1997, the Company issued 4,500 shares of Series B Convertible Redeemable Preferred
Stock and  warrants  to purchase up to 450,000  shares of common  stock to RMS Limited  Partnership,
Vulcan Ventures, Inc., and Primwest Holding N.V. ("the Shareholders") for aggregate consideration of
$4,500,000.  The Company  relied upon the Section 4 (2) exemption  under the Securities Act of 1933.
The Series B Preferred Stock carries a cumulative 8% dividend.  Each shareholder will be entitled to
convert the Series B Preferred  Stock into common stock after  December 31, 1998,  at  approximately
$4.47 per share. In addition to the Series B Preferred Stock,  each of the  Shareholders  received a
warrant to purchase 150,000 shares of common stock. The warrants will be exercisable for a five year
period beginning April,  1998 at approximately  $6.09. The Company granted the Shareholders  certain
registration and anti-dilution rights in connection with the transaction.

      On September 30, 1997, the Company issued  promissory  notes and warrants to purchase  825,000
shares of common stock to RMS Limited  Partnership,  Vulcan  Ventures,  Inc.,  and Mr. Didier Primat
("the Shareholders") for aggregate consideration of $6,000,000.  The Company relied upon the Section
4 (2) exemption  under the Securities Act of 1933. The warrants will be exercisable  for a five year
period beginning October,  1998, at $4.00. The Company granted the Shareholders certain registration
rights with respect to the shares of common stock underlying the warrants.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

      None

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

      None

ITEM 5 - OTHER INFORMATION

      None

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          Exhibit 27 - Financial Data Schedule (for SEC use only)

     (b)  Reports on Form 8-K

          None
14

<PAGE>


                                             SIGNATURES

      Pursuant to the  requirements  of Section 13 or 15(d) of the Securities  Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the  undersigned,  hereunto
duly authorized.


                                                                  PRECISION SYSTEMS, INC.

                                                                  By:    /s/ KENNETH M. CLINEBELL
                                                                  ---------------------------------
                                                                             Kenneth M. Clinebell
                                                                             Chief Financial Officer

November 14, 1997

      Pursuant to the  requirements of the Securities and Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the capacities indicated on
November 14, 1997.

        Signature                                 Title
        ---------                                 -----

    /s/WILLEM HUISMAN                 Chairman of the Board, President and Chief Executive Officer 
--------------------------------     
       Willem Huisman


   /s/ KENNETH M. CLINEBELL           Chief Financial Officer
--------------------------------      (Principal Accounting Officer) 
       Kenneth M. Clinebell                    

































                                                                                                    15
</TABLE>