<PAGE>


================================================================================
 
                                 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 MARCH 31,1997


                                       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. 0-21107
                          ---------------------------


                          TELESPECTRUM WORLDWIDE INC.
                          ---------------------------
             (Exact name of registrant as specified in its charter)


       DELAWARE                                               23-2845501
       --------                                               ----------
       (State or other jurisdiction of                       (IRS Employer
       incorporation or organization)               Identification Number)

       443 SOUTH GULPH ROAD
       KING OF PRUSSIA, PENNSYLVANIA                             19406
       -----------------------------                             -----
       (Address of principal executive offices)              (ZIP Code)


                                  610-878-7400
                                  ------------
             (Registrant's telephone number, including area code)


Indicate by check mark whether the Registrant (1) has filed all reports to be
filed by Section 13 of 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, par value
$.01 per share, on May 12, 1997 was 25,210,984.

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

<PAGE>
 
                          TELESPECTRUM WORLDWIDE INC.
 
                               Table of Contents
                               -----------------
 
Item No.                                                             Page
--------                                                             ----
            PART I -- FINANCIAL INFORMATION

     1.     Financial Statements:
             Condensed Consolidated Results of Operations
              For the three months ended March 31, 1997                3
             Condensed Consolidated Balance Sheets
              March 31, 1997 and December 31, 1996                     4
             Condensed Consolidated Statement of Cash Flows -
              For the three months ended March 31, 1997                5
             Notes to Condensed Consolidated Financial Statements      6
 
     2.      Management's Discussion and Analysis of Financial
              Condition and Results of Operations                     11
 
            PART II - OTHER INFORMATION                               15

                                       2
<PAGE>
 
                 TELESPECTRUM WORLDWIDE INC. AND SUBSIDIARIES

                  CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
                                  (Unaudited)
              (Dollars in Thousands -- Except Per Share Amounts)

<TABLE>
<CAPTION>
                                          THREE MONTHS ENDED
                                            MARCH 31, 1997
                                          ------------------
<S>                                       <C>
Revenues                                        $49,154             
Operating Expenses:                                                      
  Cost of services                               34,082                  
  Selling, general and administrative             8,871                  
  Amortization of goodwill                        2,048                  
                                                -------                  
     Total operating expenses                    45,001               
                                                -------                  
     Operating income                             4,153               
Interest Income, net                                217                  
                                                -------                  
     Income before taxes                          4,370               
Income Taxes                                      1,672                  
                                                -------                  
Net Income                                      $ 2,698                  
                                                =======                  
Earnings Per Share                              $  0.11                  
                                                =======                  
Weighted average number of common                                        
 shares and equivalent shares             
 outstanding                                     25,308                   
                                                =======
</TABLE>

           SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
                                                                

                                       3
<PAGE>
 
                 TELESPECTRUM WORLDWIDE INC. AND SUBSIDIARIES
           

                     CONDENSED CONSOLIDATED BALANCE SHEET
              (Dollars in Thousands -- Except Per Share Amounts)

<TABLE>
<CAPTION> 
                                                    MARCH 31, 1997   DECEMBER 31, 1996
                                                    --------------   -----------------
                                                     (unaudited)
<S>                                                 <C>              <C>
ASSETS
Current Assets:
   Cash and cash equivalents                            $    786          $ 30,715   
   Accounts receivable                                    40,255            33,064     
   Prepaid expenses and other                              3,482             2,942     
                                                         --------          --------    
        Total current assets                              44,523            66,721     
Property and Equipment, net                               38,475            30,171     
Goodwill, net                                            203,327           200,187     
Other Assets                                               1,402             1,976     
                                                         --------          --------    
        Total Assets                                    $287,727          $299,055     
                                                         ========          ========    
LIABILITIES AND SHAREOWNERS' INVESTMENT                                                
Current Liabilities:                                                                   
   Current maturities of long-term debt                 $  1,595          $  1,768     
   Accounts payable                                        4,773             6,185     
   Accrued compensation                                    3,447             3,980     
   Other accrued expenses                                  5,086             5,042     
   Income taxes payable                                    1,152                --     
   Notes payable to sellers of businesses                    912            27,005     
   Deferred revenue                                        3,109             2,300     
   Other current liabilities                                                             
                                                           3,081             2,165     
                                                         --------          --------  
        Total current liabilities                         23,155            48,445     
                                                         --------          --------    
                                                                    
Deferred Income Taxes                                        814               655     
                                                         --------          --------    
Long-term Debt                                            16,903             4,199     
                                                         --------          --------    
Acquisition Related Liabilities                            3,218             4,810     
                                                         --------          --------    
Other Noncurrent Liabilities                                 482               435     
                                                         --------          --------    
Shareowners' Investment:                                                               
   Preferred Stock, $.01 par value,                                                    
   5,000,000 shares authorized,                              
   no shares issued or outstanding                            --                --                               
  Common Stock, $.01 par value,                                                        
  200,000,000 shares authorized,                             
   25,210,984 shares issued and                              
   outstanding                                               252               252                               
  Additional paid-in capital                             236,678           236,678     
Retained earnings                                          6,348             3,650     
Cumulative translation adjustment                           (123)              (69)    
                                                         --------          --------    
                                                         243,155           240,511     
                                                         --------          --------    
        Total Liabilities and Shareowners' Investment   $287,727          $299,055     
                                                         ========          ========     
</TABLE>

           SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       4
<PAGE>
 
                 TELESPECTRUM WORLDWIDE INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (Unaudited)
                            (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED
                                                         MARCH 31, 1997 
                                                       -------------------
<S>                                                    <C> 
Cash Flows From Operating Activities:
  Net income                                                      $  2,698
  Adjustments to reconcile net income to                
   net cash used in operating activities-               
     Depreciation and amortization                                   1,698
     Amortization of goodwill                                        2,048
     Provision for bad debts                                           (73)
     Provision for deferred taxes                                      159
     Imputed interest expense                                          221
     Changes in operating assets and liabilities-       
        Accounts receivable                                         (6,791)
        Prepaid expenses and other                                    (319)
        Accounts payable                                            (1,776)
        Accrued compensation                                          (328)
        Other accrued expenses                                         (17)
        Income taxes payable                                         1,512
        Deferred revenue                                               809
        Other liabilities                                             (104)
                                                                  --------
           Net cash used in operating activities                      (263)
                                                                  --------
Cash Flows From Investing Activities:                   
  Purchases of property and equipment                               (9,826) 
  Payments related to acquisition of                                
   Initial Operating Businesses                                    (27,076) 
  Acquisition of TeleSpectrum FX                                    (5,295)
                                                                  --------
                                                        
           Net cash used in investing activities                   (42,197) 
                                                                  --------
Cash Flows From Financing Activities:                   
  Borrowings on credit facility                                     13,000
  Repayments of long-debt                                             (116)
  Payments on capital lease obligations                               (353)
                                                                  --------
           Net cash provided by financing activities                12,531
                                                                  --------
Decrease in cash and cash equivalents                              (29,929)
                                                        
Cash and cash equivalents, beginning of  period                     30,715
                                                                  --------
Cash and cash equivalents, end of period                          $    786
                                                                  ========
</TABLE>
 
           SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       5
<PAGE>
 
                 TELESPECTRUM WORLDWIDE INC. AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1. COMPANY BACKGROUND

TeleSpectrum Worldwide Inc. and Subsidiaries ("TeleSpectrum" or "the Company")
was incorporated in Delaware on April 26, 1996.  On August 12, 1996, the Company
completed its initial public offering.  Simultaneous with the offering, the
Company began material operations with the acquisition of the businesses
(through the acquisition of substantially all of the assets and the assumption
of certain liabilities) of six companies engaged in telemarketing, market
research, and direct mail and fulfillment businesses (collectively, the "Initial
Operating Businesses").  Subsequent to the acquisition of the Initial Operating
Businesses, the Company completed the acquisitions of the TARP and PR Response
businesses (collectively, the "Fourth Quarter 1996 Acquisitions"), which were
acquired on October 1, 1996 and November 1, 1996, respectively.

During the three months ended March 31, 1997, the Company completed its
acquisition of the interactive voice response division of Voice FX Corporation.
The division, renamed (and referred to hereafter) TeleSpectrum FX, provides
interactive voice response solutions within the interactive promotion and direct
response marketplace.  The effective date of the TeleSpectrum FX acquisition was
March 1, 1997.

The Company provides inbound and outbound telemarketing, inbound customer
services, direct mail and fulfillment, market research, interactive promotion
and direct response and other services including strategic and database
marketing, consulting and training.  The Company currently operates 26 call
centers with approximately 2,900 workstations throughout the United States and
the provinces of Ontario and Manitoba, Canada.

2. BASIS OF PRESENTATION

The accompanying financial statements are unaudited and have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission (SEC).  The December 31, 1996 balance sheet was derived from audited
financial statements, but does not include all disclosures required by generally
accepted accounting principles.  In the opinion of management, these financial
statements include all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the results of operations, financial
position and cash flows.  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 such 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 Form 10-K for
the period from April 26, 1996 (Inception) to December 31, 1996.

The consolidated condensed financial statements include the accounts of
TeleSpectrum Worldwide Inc. and its subsidiaries.  All material intercompany
balances and transactions have been eliminated.  There have been no material
changes in accounting policies from those stated in the Company's Form 10-K for
the period from April 26, 1996 (Inception) to December 31, 1996.

As noted above, TeleSpectrum Worldwide Inc. was incorporated on April 26, 1996
and began material operations with the acquisition of the Initial Operating
Businesses. Accordingly, there are no comparable historical actual financial
results prior to April 26, 1996.

                                       6
<PAGE>
 
3. EARNINGS PER SHARE

Earnings per share (EPS) is based on the weighted average number of shares of
common stock and common stock equivalent shares (dilutive incremental shares
caused by stock options and warrants using the treasury stock method)
outstanding during the three months ended March 31, 1997.

The Company currently calculates EPS under the provisions of APB Opinion No. 15,
"Earnings Per Share" ("APB 15"). In February 1997, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standard No. 128,
"Earnings Per Share" ("SFAS 128"). SFAS 128 requires a dual presentation of
"basic" and "diluted" EPS on the face of the income statement. Basic EPS is
computed by dividing net income by the weighted average number of shares of
common stock outstanding for the period. Diluted EPS includes the effect, if
any, from the potential exercise or conversion of securities, such as stock
options, which would result in the issuance of shares of common stock. SFAS 128
is required to be adopted for December 31, 1997 year-end financial statements
(earlier application is not permitted). Based upon current facts and
circumstances, the Company does not expect the basic and diluted EPS computed
under SFAS 128 to be materially different than the EPS that would have been
computed under APB 15.

4. DEBT

In January 1997, the Company entered into a $50.0 million secured credit
facility. In May 1997, the credit facility was increased to $70.0 million. The
credit facility can be used for certain acquisitions, the satisfaction of
indebtedness, working capital, and certain other purposes. The credit facility
is secured by accounts receivable, equipment, and other assets of the Company
and contains financial covenants including the maintenance of certain financial
ratios, specified minimum levels of working capital and net worth, and
restrictions on the payment of distributions, among others. Advances under the
credit facility bear interest at optional borrowing rates of either the then
current prime rate plus 0.25% or the LIBOR rate plus a margin that ranges from
1.00% to 1.75%, depending upon certain conditions specified in the credit
facility agreement. The credit facility terminates in January 2001. As of March
31, 1997, the Company has borrowed $13.0 million under the credit facility,
which amount has been recorded as long-term debt in the March 31, 1997 balance
sheet.

5. SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid $71,000 of interest expense during the three months ended March
31, 1997. The Company did not pay any income taxes during the three months ended
March 31, 1997.

In March 1997, the Company settled the earn-out agreement with the seller of one
of the Initial Operating Businesses under which the Company paid $25.0 million
in March 1997 and agreed to pay $600,000 in twenty four equal installments
commencing in April 1997.

In connection with the TeleSpectrum FX acquisition, the financial statements
reflect acquired net assets of approximately $85,000, consisting primarily of
$327,000 of accounts receivable, $176,000 of property and equipment and $6,000
of other assets and the assumption of $424,000 of accounts payable and accrued
expenses. The $5,210,000 of purchase price in excess of the estimated fair value
of net assets acquired has been recorded as goodwill and is being amortized on a
straight-line basis over a twenty five year period.

                                       7
<PAGE>
 
7. PRO FORMA COMBINED SUMMARY RESULTS OF OPERATION

The following table summarizes the unaudited pro forma combined results of
operations for the three months ended March 31, 1996, assuming the Initial
Operating Business and TARP had been acquired on January 1, 1995 (for purposes
of this disclosure, PR Response and TeleSpectrum FX are not deemed material):

<TABLE>
<CAPTION>
                                                                  
                                               THREE MONTHS ENDED 
                                                 MARCH 31, 1996   
                                                   (unaudited)    
                                                   -----------
       <S>                                     <C>                
       Revenues                                $     29,241 
       Operating income                        $      2,093 
       Net Income                              $      1,174 
       Earnings Per Share                      $       0.05  
</TABLE>

8. PREDECESSOR COMPANY FINANCIAL INFORMATION

As noted above, simultaneous with the completion of the initial public offering
in August 1996, the Company acquired the Initial Operating Businesses,
including:

Somar, Inc. ("SOMAR"), provided outsourced telephone-based sales, marketing and
----------                                                                     
customer management services, to clients principally in the insurance, financial
service, telecommunications and consumer products industries.

NBG Services, Inc.. ("NBG"), was a provider of outbound telemarketing data
------------------                                                        
processing and fulfillment services in the financial services,
telecommunications and high-technology industries.

The Reich Group Companies. ("Reich"), provided telemarketing services to clients
-------------------------                                                       
in the  financial services, insurance, telecommunications and publishing
industries.

Telespectrum Inc. and Telespectrum Training Services Inc. ( together "TS: MD"),
---------------------------------------------------------                      
provided inbound and outbound telemarketing services and fulfillment to the
high-technology, pharmaceutical and healthcare and consumer industries.

The Response Center, Inc. and The Tab House, Inc. (collectively "TRC") provide
-------------------------------------------------                             
custom market research and analysis, principally to clients in the
telecommunications, financial services, pharmaceutical and healthcare
industries.

Harris Direct Marketing, Inc. and Harris Fulfillment Inc. (together, "Harris"),
---------------------------------------------------------                      
a regional vertically integrated direct mail and fulfillment organization
provided service to companies in the pharmaceutical, financial services and
insurance industries.

The Initial Operating Businesses' results of operations and statement of cash
flows for the three months ended March 31, 1996 are presented below. These
results are unaudited. However, in the opinion of management, they reflect all
normal and recurring adjustments necessary for a fair presentation of the
interim financial results. These results reflect the elimination of all
intercompany transactions. These results are not necessarily indicative of the
results to be expected for any other interim period.

These results should be read in conjunction with the more complete financial
statements of the Initial Operating Businesses contained in the Company's Form
10-K for the period from April 26, 1996 (Inception) to December 31, 1996.

                                       8
<PAGE>
 
8. PREDECESSOR COMPANY FINANCIAL INFORMATION (CONTINUED)


                             RESULTS OF OPERATIONS
                       THREE MONTHS ENDED MARCH 31, 1996
                                  (UNAUDITED)

<TABLE>
<CAPTION>
   (THOUSANDS)                                 SOMAR     NBG     REICH   TS: MD     TRC    HARRIS
                                               -----     ---     -----   ------     ---    ------
   <S>                                        <C>      <C>      <C>      <C>      <C>      <C>
   Revenues                                   $9,274   $3,960   $5,465   $3,725   $1,429   $2,617
   Operating Expenses:
   Cost of services                            7,931    2,752    3,165    2,483      786    1,324
   Selling, general and administrative         1,554      631      570      951      875      768
                                              ------   ------   ------   ------   ------   ------
    Total operating expenses                   9,485    3,383    3,735    3,434    1,661    2,092
                                              ------   ------   ------   ------   ------   ------
    Operating income (loss)                     (211)     577    1,730      291     (232)     525
   Interest Income                                 4       20        8       --       --       29
   Interest Expense                             (217)     (35)     (19)     (43)      --      (41)
                                              ------   ------   ------   ------   ------   ------
   Income (Loss)                              $ (424)  $  562   $1,719   $  248   $ (232)  $  513
                                              ======   ======   ======   ======   ======   ======
 
   Pro Forma Information
   (unaudited)
   Historical Income (loss)                   $ (424)  $  562   $1,719   $  248   $ (232)  $  513
   Pro Forma Income Taxes                        158     (230)    (701)     (98)      92     (231)
                                              ------   ------   ------   ------   ------   ------
   Pro Forma Net Income                       $ (266)  $  332   $1,018   $  150   $ (140)  $  282
                                              ======   ======   ======   ======   ======   ======
</TABLE>

                                       9
<PAGE>
 
8. PREDECESSOR COMPANY FINANCIAL INFORMATION (CONTINUED)

                           STATEMENTS OF CASH FLOWS
                       THREE MONTHS ENDED MARCH 31, 1996
                                  (UNAUDITED)

<TABLE>
<CAPTION>
(THOUSANDS)                                  SOMAR      NBG     REICH   TS: MD     TRC    HARRIS
                                            --------  -------  -------  -------  -------  -------
Operating Activities
<S>                                         <C>       <C>      <C>      <C>      <C>      <C>
   Net Income (Loss)                        $  (424)  $  562   $1,719    $ 248   $ (232)  $  513
   Adjustments to reconcile net income
    (loss) to net cash provided by
    (used in) operating activities:
     Depreciation and amortization              268      114       76       83       18      154
     Provision for bad debts                     --       15       --       --       --       16
     Changes in operating assets
      and liabilities, net                     (157)   1,222     (375)     160     (232)    (893)
                                            -------   ------   ------    -----   ------   ------
      Net cash provided by (used in)
       operating activities                    (313)   1,913    1,420      491     (446)    (210)
                                            -------   ------   ------    -----   ------   ------
 
Investing Activities
   Purchases of property and equipment         (187)     (71)    (559)    (162)     (91)     (77)
   Proceeds from short-term investments          --       40       --       --       --       --
   Advances to stockholder                     (119)      --       --       --       --       --
   Advances to affiliates                      (155)      --       --       --       --       --
                                            -------   ------   ------    -----   ------   ------
   Net cash used in investing activities       (461)     (31)    (559)    (162)     (91)     (77)
                                            -------   ------   ------    -----   ------   ------
 
Financing Activities
   Proceeds from borrowings                      --       --       --       50       --       --
   Repayments of borrowings                  (1,475)    (500)    (405)     (67)      --      (73)
   Payments of capital lease obligations       (212)     (94)      --                --       --
   Net borrowings on line of credit           2,404       --       --       75       --       --
   Borrowings from affiliates                    36       --       --       --       --       --
   Distributions to stockholder                  --       --       --       --       --     (248)
                                            -------   ------   ------    -----   ------   ------
   Net cash provided by (used in)
    financing activities                        753     (594)    (405)      58       --     (321)
                                            -------   ------   ------    -----   ------   ------
Increase (decrease) in cash
   and cash equivalents                         (21)   1,288      456      387     (537)    (608)
Cash at beginning of period                      25      700      220       15    1,178    2,919
                                            -------   ------   ------    -----   ------   ------
Cash at end of period                       $     4   $1,988   $  676    $ 402   $  641   $2,311
                                            =======   ======   ======    =====   ======   ======
</TABLE>

                                       10
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

COMPANY BACKGROUND

TeleSpectrum Worldwide Inc. ("TeleSpectrum" or "the Company") was founded in
April 1996 to create a premier provider of teleservice services.  To attain this
goal, the Company provides a single source for complete, integrated solutions to
clients' teleservices needs, including but not limited to, business acquisition,
customer activation/service/retention, consumer affairs, catalogue sales, help
desk services and reservations services.  The Company believes that its ability
to bundle teleservices enables its clients to more efficiently manage their
teleservice marketing efforts at a lower cost while delivering a unified and
consistent message.

On August 12, 1996, the Company completed its initial public offering,
generating net cash proceeds to the Company of approximately $162 million.
Simultaneous with the offering, the Company began material operations with the
acquisition of the businesses conducted by six companies engaged in
telemarketing, market research, and direct mail and fulfillment businesses
(collectively, the "Initial Operating Businesses").

Subsequent to the acquisition of the Initial Operating Businesses, the Company
completed the acquisitions of TARP and PR Response (collectively, the "Fourth
Quarter 1996 Acquisitions"), which were acquired as of October 1, 1996 and
November 1, 1996, respectively.  The aggregate purchase price of these
acquisitions was $22.0 million in cash and stock.  The TARP acquisition expanded
the Company's customer care consulting capabilities.  The acquisition of PR
Response added two Canadian call centers, and represented the Company's initial
penetration into the Canadian teleservices market.

The Company currently operates 26 call centers with approximately 2,900
workstations throughout the United States and Canada; representing increases of
approximately 8% and 16%, respectively, from December 31, 1996.  The Company
expects to continue to expand its capacity and capabilities by investing in
additional call centers to support internal growth and to meet anticipated
demand for its services.  There can be no assurance, however, that such
anticipated demand will actually materialize, or if such demand does
materialize, that it can be sustained.

During the first quarter of 1997, the Company acquired the business and
substantially all of the assets and assumed certain liabilities of the
interactive voice response division of Voice FX Corporation (renamed and
referred to hereafter as "TeleSpectrum FX") for $5.3 million in cash.  The
Company believes that this acquisition enhances its ability to provide fully
integrated and bundled teleservice solutions.  The Company expects to continue
to pursue strategic acquisitions throughout 1997.  See "Liquidity and Capital
Resources".

                                       11
<PAGE>
 
Results of Operations

As discussed above, the Company was incorporated in April 1996, and did not
commence full-scale operations within the teleservices industry until August
1996, when it acquired the Initial Operating Businesses.  Accordingly, no
comparison of the historical actual results of operations for the three months
ended March 31, 1997 to the three months ended March 31, 1996 is available.

Based upon the Company's unique means of entry into the teleservices industry,
for purposes of comparing the results of the Initial Operating Businesses,
management has presented the actual unaudited results of operations for the
three months ended March 31, 1997 to the Supplemental Pro Forma/1/ unaudited
results of operations for the three months ended March 31, 1996.

<TABLE>
<CAPTION>
                                                                     Supplemental Pro Forma
                                       Results of Operations         Results of Operations
                                        Three Months Ended             Three Months Ended
                                          March 31, 1997                 March 31, 1996
                                       ---------------------         ----------------------
                                                      % of                           % of
<S>                                    <C>          <C>               <C>          <C> 
Revenues                               $ Millions   Revenue           $ Millions   Revenue
                                       -----------  --------         ------------  --------
   Direct marketing                         $36.5        74               18.7         71
   Customer care                              7.8        16                3.8         14
   Market research, direct mail                              
    and fulfillment                           4.9        10                4.0         15
                                            -----       ---              -----
Total Revenue                                49.2       100               26.5        100
                                                             
Cost of services                             34.1        69               18.4         69
Selling, general and administrative           8.9        18                5.3         20
Amortization of Goodwill                      2.0         4                1.6          6
                                            -----       ---              -----        ---
                                             45.0        91               25.3         95
                                            -----       ---              -----        ---
Operating Income                              4.2         9                1.2          5
Interest income (expense), net                0.2         -               (0.1)         1
                                            -----       ---              -----        ---
Income before taxes                           4.4         9                1.1          4
Income taxes                                  1.7         3                0.5          2
                                            -----       ---              -----        ---
Net income                                  $ 2.7         6              $ 0.6          2
                                            =====       ===              =====        ===
</TABLE>

Revenues-Overall, revenues increased 86% during the three months ended March 31,
1997 when compared to the three months ended March 31, 1996.  Direct marketing,
customer care and market research, direct mail and fulfillment revenues
increased 95%, 105% and 23%, respectively, when compared to the same prior year
period.

The significant increase in Direct Marketing revenues is directly attributable
to increased capacity and more effective capacity utilization.  When viewed on a
combined basis at March 31, 1996, the Initial Operating Businesses operated 16
call centers with 1,300 workstations.  At March 31, 1997, the Company operated
26 call centers with 2,900 workstations.

The 105% increase in customer care revenues is attributable to revenues from
TARP (which was acquired as of October 1, 1996) combined with increased
capacity.

The increase in market research and direct mail and fulfillment revenue is
attributable to increased and expanded demand for these services.

                                      12


/1/ The Supplemental Pro Forma results of operations include only the results of
    the Initial Operating Businesses for the three months ended March 31, 1996
    and exclude the first quarter results of operations of the Fourth Quarter
    1996 Acquisitions as well as those of TeleSpectrum FX.

<PAGE>
 
Cost of Services-Cost of Services increased by 85% during the three months ended
March 31, 1997 when compared to the same prior year period.  As a percentage of
total revenues, these costs were consistent during the three months ended 1997
and 1996.  Included within the 1996 results are certain start-up costs
associated with additional capacity.  The Company believes that as it continues
to expand both the number of its teleservice call centers and the number of
workstations within existing call centers, the cost of services as a percentage
of revenue will decrease, although there can be no assurance that the Company
will be able to achieve these anticipated cost savings.

Selling, General and Administrative Expenses-Selling, general and administrative
expenses increased 68% during the three months ended March 31, 1997 when
compared with the three months ended March 31, 1996.  As a percentage of
revenue, these costs decreased from 20% of revenues to 18%, primarily the result
of the spreading of expenses over increasing revenues, partially offset by
increased administrative expenses associated with operating as a public company.
The Company anticipates that selling, general, and administrative expenses will
continue to increase in the aggregate as a result of the growth and integration
of its businesses.  However, the Company believes that, as it achieves
anticipated economies of scale, and as it spreads these costs over an increasing
base of revenues, selling, general, and administrative expenses as a percentage
of revenues will decrease. However, there can be no assurance that the Company
will actually be able to achieve the desired economies of scale. Such a failure
could have a negative impact on the future performance of the Company.

Amortization of goodwill - The Company has recorded the purchase price in excess
of estimated fair value of the net assets of the acquired businesses (i.e. the
Initial Operating Businesses, TARP, PR Response and TeleSpectrum FX) as
goodwill. These amounts are being amortized on a straight-line basis over a
twenty five year period.

Amortization expense for the three months ended March 31, 1997 represents three
months of amortization of goodwill related to the acquisitions of the Initial
Operating Businesses, TARP, and PR Response plus one month of amortization of
goodwill related to the TeleSpectrum FX acquisition.  Amortization expense for
the three months ended March 31, 1996 represents three months of amortization of
goodwill related to the Initial Operating Businesses only.

As a percentage of revenue, amortization expense decreased from 6% to 4% during
the three months ended March 31, 1997 when compared with the three months ended
March 31, 1996.  This decrease was principally the result of the substantial
revenue growth period over period, while amortization expense (excluding the
amortization of goodwill related to TARP, PR Response and TeleSpectrum FX)
remained constant.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 1997, the Company had cash and cash equivalents of $0.8 million. At
December 31, 1996, the Company had cash and cash equivalents of $30.7 million.

In January 1997, the Company entered into a $50.0 million secured credit
facility agreement ("credit facility").  The credit facility can be used for
certain acquisitions, the satisfaction of indebtedness, working capital, and
certain other purposes.  The credit facility is secured by accounts receivable,
equipment, and other assets of the company and contains certain financial
covenants including restrictions on the payment of distributions, the sale of
assets, engaging in mergers and consolidations, among others.  Advances under
the credit facility bear interest at optional borrowing rates of either the then
current prime rate plus 0.25%, or the LIBOR rate plus a margin which ranges from
1.00% to 1.75%, depending upon certain conditions specified in the credit
facility agreement.  The credit facility terminates in January, 2001.  As of
March 31, 1997, the Company had borrowed $13.0 million under the credit
facility.  In May 1997, the credit facility was increased to $70.0 million.

The credit facility requires the Company to maintain certain financial ratios
and meet specified minimum levels of working capital and net worth.  The credit
facility also contains certain positive and negative covenants.  The Company
believes it is currently in compliance with all such material requirements.
Should the Company be declared in default however, and if such default is not
cured within the time permitted in the credit facility agreement, the Company
would be required to repay all amounts then currently outstanding.

                                       13
<PAGE>
 
During the three months ended March 31, 1997, the Company used $0.3 million to
fund operations, principally related to the funding of working capital.

During the three months ended March 31, 1997, the Company used $42.2 million for
investing activities.  Of this amount, $9.8 million was used to purchase
property and equipment related to the Company's call center expansion program
and $5.3 million was used to purchase the net assets of TeleSpectrum FX as
previously discussed above.  Additionally, the Company paid $25.0 million in
settlement of an earn-out obligation under the terms of the purchase agreement
of one of the Initial Operating Businesses, $1.2 million related to purchase
price adjustments under the terms of the Initial Operating Businesses' purchase
agreements, and $0.9 million related to accrued separation costs for certain
former owners of the Initial Operating Businesses.  As discussed above, the
Company is currently pursuing an internal growth strategy and is planning to
open a significant number of call centers in the United States and Canada.
These additional call centers will expand the Company's telemarketing capacity.
The Company believes that this additional capacity can be utilized in the
generation of additional revenues and expects to continue to invest heavily in
property and equipment, as well as to continue to pursue strategic acquisitions.

During the three months ended March 31, 1997, the Company obtained net cash from
financing activities of $12.5 million, which resulted from the $13.0 million of
proceeds related to borrowings under the credit facility discussed above and
paid $0.5 million of principal related to debt and capital lease obligations.

Management believes that the credit facility, anticipated cash flows from
operations, and shares of Common Stock available will provide sufficient
liquidity to execute the Company's internal growth and acquisitions plans
through the expiration of the credit facility.  Should the Company accelerate
its internal expansion and/or acquisition programs, the Company may need to seek
additional financing through the public or private sale of equity or debt
securities.  There can be no assurance that the Company could secure such
financing if and when it is needed or on the terms the Company deems acceptable.
Management plans to periodically reassess the adequacy of the Company's
liquidity position, taking into consideration current and anticipated operating
cash flow, anticipated capital expenditures and acquisition plans, in order to
ensure the Company's negotiated credit facilities are adequate to meet the
Company's needs on a short-term and long-term basis.

                                       14
<PAGE>
 
PART II - OTHER INFORMATION

       ITEM 1. LEGAL PROCEEDINGS

               None


       ITEM 2. CHANGES IN SECURITIES

               None


       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


               10.17  Loan and Security Agreement by and among TeleSpectrum
                      Worldwide Inc., TLSP Trademarks, Inc. and TLSP
                      Investments, Inc. with Mellon Bank, N.A., as agent, dated
                      January 24, 1997.

               10.18  First Amendment to Loan and Security Agreement dated as of
                      May 7, 1997.

               10.19  Consulting Agreement dated as of February 20, 1997 between
                      TeleSpectrum Worldwide Inc. and Mr. William F. Rhatigan.

               27     FINANCIAL DATA SCHEDULE

                                       15
<PAGE>
 
                                   SIGNATURES


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

 
                                              TELESPECTRUM WORLDWIDE INC.
                                         --------------------------------------
                                                      (Registrant)
 
 
Date: May 14, 1997                       \s\ Richard C. Schwenk, Jr.
      ------------                       --------------------------------------
                                                      Richard C. Schwenk, Jr.
                                                   TeleSpectrum Worldwide, Inc.
                                                   Executive Vice President and
                                                      Chief Financial Officer

                                       16