<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 June 30, 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 August 12, 1997 was 25,210,984.




================================================================================
<PAGE>
 
                           TeleSpectrum Worldwide Inc.
<TABLE> 
<CAPTION> 

                                Table of Contents
                                -----------------

Item No.                                                                    Page
--------                                                                    ----
       PART I -- FINANCIAL INFORMATION
   <S>                                                                      <C> 
   1.  Financial Statements (unaudited):
        Condensed Consolidated Results of Operations
          For the Three Months Ended June 30, 1997 and
          For the Period from April 26, 1996 (Inception) to June 30, 1996     3
        Condensed Consolidated Results of Operations 
          For the Six Months Ended June 30, 1997 and
          For the period from April 26, 1996 (Inception) to June 30, 1996     4
        Condensed Consolidated Balance Sheets
          June 30, 1997 and December 31, 1996                                 5
        Condensed Consolidated Statement of Cash Flows
          For the Six Months Ended June 30, 1997 and
          For the Period from April 26, 1996 (Inception) to June 30, 1996     6
        Notes to Condensed Consolidated Financial Statements                  7

   2.   Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                 14

         PART II - OTHER INFORMATION                                         19
</TABLE> 

                                       2
<PAGE>
 
                  TeleSpectrum Worldwide Inc. and Subsidiaries

                  Condensed Consolidated Results of Operations
                                   (Unaudited)
               (Dollars in Thousands -- Except Per Share Amounts)
<TABLE> 
<CAPTION> 

                                                                  Period From 
                                                 Three Months   April 26, 1996 
                                                    Ended       (Inception) to 
                                                June 30, 1997    June 30, 1996  
                                                -------------   --------------
<S>                                             <C>             <C> 
Revenues                                           $   54,622      $      --    
                                                                                
Operating Expenses:                                                             
  Cost of services                                     41,564             --    
  Selling, general and administrative                  11,584             419   
  Amortization of goodwill                              2,084             --    
                                                    ---------       ---------   
                                                                                
      Total operating expenses                         55,232             419   
                                                    ---------       ---------   
                                                                                
      Operating income (loss)                            (610)           (419)  
                                                                                
Interest (Expense), net                                  (391)            --    
                                                    ---------       ---------   
          (Loss) before tax benefit                    (1,001)           (419)  
                                                                                
Income Tax Benefit                                        383             --    
                                                                                
(Loss)                                             $     (618)     $     (419)  
                                                    =========       =========   
                                                                                
(Loss) Per Share                                   $    (0.02)     $    (0.05)  
                                                    =========       =========   
                                                                                
Weighted average number of common shares and                                    
  equivalent shares outstanding                        25,211           8,510   
                                                    =========       =========
</TABLE> 



            See Notes to Condensed Consolidated Financial Statements.

                                       3
<PAGE>
 
                  TeleSpectrum Worldwide Inc. and Subsidiaries

                  Condensed Consolidated Results of Operations
                                   (Unaudited)
               (Dollars in Thousands -- Except Per Share Amounts)
<TABLE> 
<CAPTION> 

                                                                  Period From
                                                   Six Months   April 26, 1996
                                                     Ended      (Inception) to
                                                June 30, 1997    June 30, 1996
                                                -------------   --------------
<S>                                             <C>             <C> 
Revenues                                           $  103,776      $       --

Operating Expenses:
  Cost of services                                     75,646              --
  Selling, general and administrative                  20,455             419
  Amortization of goodwill                              4,132               -
                                                    ---------       ---------

      Total operating expenses                        100,233             419
                                                    ---------       ---------

      Operating income (loss)                           3,543            (419)

Interest (Expense), net                                  (174)             --
                                                    ---------       ---------

      Income (Loss) before tax (expense)                3,369            (419)

Income Tax (Expense)                                   (1,289)             --
                                                    ---------       ---------

Net Income (Loss)                                  $    2,080      $     (419)
                                                    =========       =========

Net Income (Loss) Per Share                        $     0.08      $    (0.05)
                                                    =========       =========

Weighted average number of common shares and
  equivalent shares outstanding                        25,261           8,510
                                                    =========       =========
</TABLE> 





            See Notes to Condensed Consolidated Financial Statements.

                                       4
<PAGE>
 
                  TeleSpectrum Worldwide Inc. and Subsidiaries

                      Condensed Consolidated Balance Sheets
               (Dollars in Thousands -- Except Per Share Amounts)
<TABLE> 
<CAPTION> 
                                                                                         June 30, 1997     December 31, 1996
                                                                                         -------------     -----------------
                                                                                          (unaudited)
<S>                                                                                      <C>               <C> 

Assets

Current Assets:
    Cash and cash equivalents                                                         $            --      $        30,715
    Accounts receivable, net                                                                   48,237               32,373
    Prepaid expenses and other                                                                  3,712                3,633
                                                                                      ---------------      ---------------
         Total current assets                                                                  51,949               66,721

Property and Equipment, net                                                                    45,706               30,171

Goodwill, net                                                                                 205,760              200,187

Other Assets                                                                                    3,796                1,976
                                                                                      ---------------      ---------------
         Total Assets                                                                 $       307,211      $       299,055
                                                                                       ==============       ==============

Liabilities and Stockholders' Equity

Current Liabilities:
    Current maturities of long-term debt                                              $         1,525      $         1,768
    Accounts payable                                                                            3,389                6,185
    Accrued expenses                                                                            9,040                5,042
    Accrued compensation                                                                        4,959                3,980
    Notes payable to seller's of businesses                                                       452               27,005
    Deferred revenue                                                                            5,407                2,300
    Other current liabilities                                                                   2,775                2,165
                                                                                      ---------------      ---------------
         Total current liabilities                                                             27,547               48,445
                                                                                      ---------------      ---------------

Deferred Income Taxes                                                                             777                  655
                                                                                      ---------------      ---------------

Secured Credit Facility Debt                                                                   28,600                   --
                                                                                      ---------------      ---------------

Long-term Debt                                                                                  4,333                4,199
                                                                                      ---------------      ---------------

Acquisition Related Liabilities                                                                 2,756                4,810
                                                                                      ---------------      ---------------

Other Noncurrent Liabilities                                                                      659                  435
                                                                                      ---------------      ---------------

Stockholder's Equity:
    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                                                                           5,730                3,650
    Cumulative translation adjustment                                                            (121)                 (69)
                                                                                      ----------------     ----------------
                                                                                              242,539              240,511
                                                                                      ---------------      ---------------
         Total Liabilities and Stockholders' Equity                                   $       307,211      $       299,055
                                                                                       ==============       ==============
</TABLE> 

            See Notes to Condensed Consolidated Financial Statements.

                                       5
<PAGE>
 
                  TeleSpectrum Worldwide Inc. and Subsidiaries

                 Condensed Consolidated Statement of Cash Flows
                                   (Unaudited)
                             (Dollars in Thousands)

<TABLE> 
<CAPTION> 
                                                                                                                        Period From
                                                                                                                      April 26, 1996
                                                                                           Six Months Ended           (Inception) To
                                                                                             June 30, 1997             June 30, 1996
                                                                                             -------------             -------------
<S>                                                                                        <C>                        <C> 
Cash Flows From Operating Activities:
    Net income (loss)                                                                      $           2,080          $     (419)
    Adjustments to reconcile net income (loss) to net cash provided by (used in)
       operating activities:
         Depreciation and amortization                                                                 3,746                  --
         Amortization of goodwill                                                                      4,132                  --
         Provision for bad debts                                                                         176                  --
         Provision for deferred taxes                                                                    122                  --
         Other Items, net                                                                                191                  --
         Changes in operating assets and liabilities-
              Accounts receivable                                                                    (15,507)                 --
              Prepaid expenses and other                                                              (1,112)                 --
              Accounts payable                                                                        (2,984)                222
              Accrued compensation                                                                       732                  --
              Other accrued expenses                                                                   1,708                 216
              Deferred revenue                                                                         2,030                  --
              Other liabilities                                                                         (230)                 --
                                                                                           ------------------    ---------------
                                                                                           
                  Net cash provided by (used in) operating activities                                 (4,916)                 19
                                                                                           ------------------    ---------------
                                                                                           
Cash Flows From Investing Activities:                                                      
    Purchases of property and equipment                                                              (16,785)                (22)
    Payments related to acquisition of Initial Operating Businesses                                  (27,920)             (2,107)
    Acquisition of TeleSpectrum FX                                                                    (5,327)                 --
    Acquisition of FX Direct, Inc.                                                                    (4,211)                 --
                                                                                           ------------------    ---------------
                                                                                           
                  Net cash used in investing activities                                              (54,243)             (2,129)
                                                                                           ------------------    ----------------
                                                                                           
Cash Flows From Financing Activities:                                                      
    Capital contribution received                                                                         --               2,110
    Borrowings on credit facility                                                                     28,600                  --
    Borrowings of long-term debt                                                                         720                  --
    Payments on long-term debt                                                                          (208)                 --
    Payments on capital lease obligations                                                               (668)                 --
                                                                                           ------------------    ---------------
                                                                                           
                  Net cash provided by financing activities                                           28,444               2,110
                                                                                           -----------------     ---------------
                                                                                           
Decrease in cash and cash equivalents                                                                (30,715)                 --
                                                                                           
Cash and cash equivalents, beginning of period                                                        30,715                  --
                                                                                           -----------------     ---------------
                                                                                           
Cash and cash equivalents, end of period                                                   $              --     $            --
                                                                                           =================     ===============
</TABLE> 

            See Notes to Condensed Consolidated Financial Statements.

                                       6
<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. The acquisition of TARP expanded the
Company's customer care consulting capabilities. The acquisition of PR Response,
which operates three call centers in the Canadian provinces of Ontario and
Manitoba, represents the Company's penetration into the Canadian teleservices
market.

In March 1997, the Company completed its acquisition of the interactive voice
response division of Voice FX Corporation. The division, renamed (and referred
to hereafter as) 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.

In June 1997, the Company completed its acquisition of the business and
substantially all of the assets of FX Direct, Inc. This new division of the
Company (referred to as "FX Direct") creates, develops and implements product
sample programs, fulfillment services and direct mail and marketing programs.
The effective date of the FX Direct acquisition was June 30, 1997.

TeleSpectrum 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. As of June 30, 1997, the Company operated 31
call centers with approximately 3,800 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 condensed consolidated 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. Certain
reclassifications have been made to the December 31, 1996 condensed consolidated
balance sheet to conform to the presentation used in the current period.

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.

                                       7
<PAGE>
 
3. Earnings Per Share

Earnings per share (EPS) is calculated using 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 and six months ended June 30, 1997. Common stock
equivalent shares are only included in the EPS calculations to the extent their
inclusion would have an aggregate dilutive effect.

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

The Company maintains a $70.0 million secured credit facility. The credit
facility can be used for certain acquisitions, the satisfaction of indebtedness,
working capital requirements, 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, a maximum
level of purchases of fixed assets 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. At June 30, 1997, the weighted average interest
rate of borrowings under the credit facility was 7.0%. The credit facility
terminates in January 2001

                                       8
<PAGE>
 
5. Supplemental Cash Flow Information

During the six months ended June 30, 1997, the Company paid $344,000 of interest
expense (net of capitalized interest expense of $34,000) and $1,180,000 of
income taxes.

At June 30, 1997, the Condensed Consolidated Balance Sheet includes
approximately $3,000,000 of accrued property and equipment purchases.

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 over a two year period in equal
installments, of which the Company has paid $50,000 through June 30, 1997.

In connection with the TeleSpectrum FX acquisition, the financial statements
reflect acquired net assets of approximately $82,000, consisting primarily of
$327,000 of accounts receivable, $176,000 of property and equipment and $6,000
of other assets and the assumption of $427,000 of accounts payable and accrued
expenses. The $5,245,000 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.

In connection with the FX Direct, Inc. acquisition, the financial statements
reflect net liabilities assumed of approximately $559,000, consisting primarily
of $233,000 of accounts receivable, $475,000 of prepaid expenses, $280,000 of
property and equipment and $34,000 of other assets and the assumption of
$504,000 of accounts payable and accrued expenses, and $1,077,000 of deferred
revenue. The $4,770,000 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.

In May 1996 CRW Financial, Inc. (CRW) made an initial capital contribution to
the Company of $2.1 million. These proceeds represented borrowings by CRW under
subordinated notes issued to certain officers and directors of CRW and the
Company. As additional consideration, the lenders to CRW received warrants from
CRW to purchase 1,433,454 shares of the Company's Stock owned by CRW at $1.50
per share ("CRW Lender Warrants"). CRW also issued warrants to purchase 839,108
shares of the Company's Stock owned by CRW at $1.50 per share to certain
officers of CRW and the Company ("CRW Management Warrants"). The deemed value
for accounting purposes of $18.7 million of both the CRW Lender Warrants and CRW
Management Warrants was recorded as deferred acquisition costs and additional
paid-in capital in the June 30, 1996 consolidated balance sheet.


6. Pro Forma Combined Summary Results of Operation

The following table summarizes the unaudited pro forma combined results of
operations for the six months ended June 30, 1996, assuming the Initial
Operating Business and TARP had been acquired on January 1, 1996 (for purposes
of this disclosure, PR Response, TeleSpectrum FX and FX Direct, Inc. are not
deemed material):

<TABLE> 
<CAPTION> 
                                                       Six Months Ended
                                                         June 30, 1996
                                                          (unaudited)
                                                          -----------
         <S>                                      <C>    
         Revenues                                 $          62,906
         Operating income                         $           5,468
         Net Income                               $           3,070
         Earnings Per Share                       $            0.14
</TABLE> 

                                       9
<PAGE>
 
7. Concentrations of Risk

Financial Instruments which potentially subject the Company to concentrations of
credit risk consist principally of accounts receivable. The Company does not
require collateral or other securities to support customer receivables. The
Company performs periodic reviews of its clients' condition to reduce the
collection risk on accounts receivable.

The Company does not believe significant credit risk exists at June 30, 1997.
The Company had one customer which accounted for approximately 25% of total
revenues for the six months ended June 30, 1997 and 21% of total accounts
receivable at June 30, 1997. No other customer accounted for more than 10% of
the Company's revenues or accounts receivable.


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 for the three and six
months ended June 30, 1996 and statement of cash flows for the six months ended
June 30, 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.

                                       10
<PAGE>
 
8. Predecessor Company Financial Information (continued)

                              Results of Operations
                        Three Months Ended June 30, 1996
                                   (unaudited)
                             (Dollars in Thousands)

<TABLE> 
<CAPTION> 
                                              SOMAR          NBG        Reich       TS: MD        TRC        Harris
                                              -----          ---        -----       ------        ---        ------

   <S>                                      <C>           <C>          <C>          <C>        <C>           <C> 
   Revenues                                 $11,529       $4,964       $5,882       $4,309     $1,802        $2,750

   Operating Expenses:

     Cost of services                         8,957        3,243        3,527        2,807        904         1,438

     Selling, general and administrative      1,538          758          629        1,170        421           753
                                              -----          ---          ---        -----        ---           ---

       Total operating expenses              10,495        4,001        4,156        3,977      1,325         2,191
                                             ------        -----        -----        -----      -----         -----

       Operating income                       1,034          963        1,726          332        477           559

   Interest (Expense), net                    (231)          (7)         (20)         (76)         --          (21)
                                              -----          ---         ----         ----         --          ----

   Income                                      $803         $956       $1,706         $256       $477          $538
                                                ===          ===        =====          ===        ===           ===



   Pro Forma Information

   Historical Income                           $803         $956       $1,706         $256       $477          $538

   Pro Forma Income Tax (Expense)             (299)        (392)        (696)        (101)      (189)         (243)
                                              -----        -----        -----        -----      -----         -----

   Pro Forma Net Income                        $504         $564       $1,010         $155       $288          $295
                                                ===          ===        =====          ===        ===           ===
</TABLE> 

                                       11
<PAGE>
 
8. Predecessor Company Financial Information (continued)

                             Results of Operations
                        Six Months Ended June 30, 1996
                                  (unaudited)
                            (Dollars in Thousands)

<TABLE> 
<CAPTION> 
                                              SOMAR          NBG         Reich       TS:MD         TRC       Harris
                                              -----          ---         -----       -----         ---       ------
   <S>                                      <C>           <C>          <C>          <C>         <C>          <C> 
   Revenues                                 $20,803       $8,924       $11,347      $8,034      $3,231       $5,367
                                                                                                       
   Operating Expenses:                                                                                 
     Cost of services                        16,888        5,995         6,692       5,290       1,690        2,762
     Selling, general and administrative      3,092        1,389         1,199       2,121       1,296        1,521
                                              -----        -----         -----       -----       -----        -----
                                                                                                       
       Total operating expenses              19,980        7,384         7,891       7,411       2,986        4,283
                                             ------        -----         -----       -----       -----        -----
                                                                                                       
       Operating income (loss)                  823        1,540         3,456         623         245        1,084
                                                                                                       
   Interest (Expense), net                    (444)         (22)          (31)       (119)          --         (33)
                                              -----         ----          ----       -----          --         ----
                                                                                                       
   Income                                      $379       $1,518        $3,425        $504        $245       $1,051
                                                ===        =====         =====         ===         ===        =====
                                                                                                       
                                                                                                       
                                                                                                       
   Pro Forma Information                                                                               
                                                                                                       
   Historical Income                           $379       $1,518        $3,425        $504        $245       $1,051
                                                                                                       
   Pro Forma Income Tax (Expense)             (141)        (622)       (1,397)       (199)        (97)        (474)
                                              -----        -----       -------       -----        ----        -----
                                                                                                       
   Pro Forma Net Income                        $238         $896        $2,028        $305        $148         $577
                                                ===          ===         =====         ===         ===          ===
</TABLE> 

                                       12
<PAGE>
 
8. Predecessor Company Financial Information (continued)

                            Statements of Cash Flows
                         Six Months Ended June 30, 1996
                                   (unaudited)
                             (Dollars in Thousands)

<TABLE> 
<CAPTION> 
                                                SOMAR          NBG         Reich        TS:MD          TRC      Harris
                                                -----          ---         -----        -----          ---      ------
<S>                                             <C>         <C>           <C>           <C>           <C>       <C> 
Operating Activities

   Net Income                                    $379       $1,518        $3,425         $504         $245      $1,051

   Adjustments to reconcile net income

    to net cash provided by

    (used in) operating activities:

     Depreciation and amortization                593          230           180           99           35         309

     Provision for bad debts                       --           15            --           --           --          29

     Changes in operating assets

       and liabilities, net                   (1,692)          400       (1,279)        (773)        (562)     (1,640)
                                              -------          ---       -------        -----        -----     -------

      Net cash provided by (used in)

        operating activities                    (720)        2,163         2,326        (170)        (282)       (251)
                                               ------        -----         -----        -----        -----       -----

Investing Activities

   Purchases of property and equipment          (511)         (92)         (829)        (526)         (97)       (305)

   Proceeds from short-term investments            --           40            --           --           --          --

   Other, net                                      --           --            --           --          (2)          --

   Advances to stockholder                       (44)           --            --           --           --          --
                                                      
   Advances to affiliates                       (102)           --            --           --           --          --
                                                -----           --            --           --           --          --

      Net cash used in investing activities     (657)         (52)         (829)        (526)         (99)       (305)
                                                -----         ----         -----        -----         ----       -----

Financing Activities

   Payments of long-term debt                 (1,077)        (500)         (116)      (1,003)           --       (130)

   Payments of capital lease obligations        (468)        (232)            --                        --          --

   Net borrowings on line of credit             3,256           --            --        2,289           --          --

   Net repayments to affiliates                 (123)           --            --           --           --          --

   Net repayments to stockholder                   --           --         (500)           --           --          --

   Distributions to stockholder                 (232)        (120)         (730)           --         (53)     (1,356)
                                                -----        -----         -----           --         ----     -------

   Net cash provided by (used in)

     financing activities                       1,356        (852)       (1,346)        1,286         (53)     (1,486)
                                                -----        -----       -------        -----         ----     -------

Increase (decrease) in cash

   and cash equivalents                          (21)        1,259           151          590        (434)     (2,042)

Cash and cash equivalents, beginning of period     25          700           220           15        1,178       2,919
                                                   --          ---           ---           --        -----       -----

Cash and cash equivalents, end of period           $4       $1,959          $371         $605         $744        $877
                                                    =        =====           ===          ===          ===         ===
</TABLE> 

                                       13
<PAGE>
 
Item 2.    Management's Discussion and Analysis of Results of Operations
           and Financial Condition


Company Background

TeleSpectrum Worldwide Inc. ("TeleSpectrum" or "the Company") was founded in
April 1996 to create a premier provider of teleservice services by providing 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 registration services.

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").

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.

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 shares of the Company's Common 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.

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 (this business is
referred to hereafter as "TeleSpectrum FX") for $5.3 million in cash. The
Company's results of operation include TeleSpectrum FX as of March 1, 1997.

On June 30, 1997, the Company acquired substantially all of the assets and
assumed certain liabilities of FX Direct, Inc. ("FX Direct") for $4.2 million in
cash. The acquisition of FX Direct augments the Company's Fulfillment and Direct
Mail operations and represents the Company's entrance into the distribution of
consumer sample products. The Company's results of operations do not include
those of FX Direct for either the three or six months ended June 30, 1997.
FX Direct's operations are subject to seasonal fluctuations. The
majority of its operations and contribution to the Company's results of 
operations are confined to the months of July, August and September with
substantial activity related to the distribution of sample packages to colleges
and universities across the United States.

The Company believes that these acquisitions enhance its ability to provide
fully integrated and bundled teleservice solutions. See Liquidity and Capital
Resources.

                                       14
<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 with the acquisition of the Initial Operating Businesses.

For the period April 26, 1996 (Inception) to June 30, 1996, the Company incurred
a net loss of $0.4 million. This loss was attributable to general and
administrative expenses, including officers' salaries, executive placement fees
and other non-deferrable initial expenses.

For purposes of comparing the results of the Initial Operating Businesses,
management has presented the actual unaudited results of operations for the
three and six months ended June 30, 1997 to the Supplemental Pro Forma/1/
unaudited results of operations for the three and six months ended June 30,
1996.


                        Actual and Supplemental Pro Forma
                              Results of Operations

<TABLE> 
<CAPTION> 

                                                                 Three Months                           Six Months 
                                              Three Months           Ended                                 Ended
Dollars in thousands                              Ended          June 30, 1996    Six Months Ended     June 30, 1996
(Unaudited)                                  June 30, 1997       (Supplemental      June 30, 1997      (Supplemental     
                                                (Actual)          Pro Forma)          (Actual)           Pro Forma)
                                                --------          ----------          --------           ----------
<S>                                          <C>                 <C>              <C>                  <C>  
Revenues:
  Telemarketing                                       $40.8              $22.4              $77.3               $41.1  
  Customer Care                                         8.1                4.2               15.9                 8.0  
  Market Research, Direct Mail and                                                                                     
    Fulfillment                                         5.7                4.6               10.5                 8.6   
                                           -----------------------------------------------------------------------------
Total Revenue                                          54.6               31.2              103.7                57.7   
                                                                                                                        
Cost of services                                       41.5               20.9               75.6                39.3   
Selling, general and administrative                    11.6                5.6               20.5                10.9   
Amortization of goodwill                                2.1                1.5                4.1                 3.1   
                                           -----------------------------------------------------------------------------
                                                       55.2               28.0              100.2                53.3   
                                                                                                                        
Operating Income (Loss)                                (0.6)               3.2                3.5                 4.4   
Interest (expense), net                                (0.4)              (0.1)              (0.2)               (0.2)   
                                           -----------------------------------------------------------------------------
Income (Loss) before taxes                             (1.0)               3.1                3.3                 4.2   
Income Tax (Expense) Benefit                            0.4               (1.4)              (1.2)               (1.9)   
                                           -----------------------------------------------------------------------------
Net Income (Loss)                                     ($0.6)              $1.7               $2.1                $2.3   
                                           =============================================================================
</TABLE> 


--------
/1/  The Supplemental Pro Forma results of operations include only the results
     of the Initial Operating Businesses for the three and six months ended June
     30, 1996 and exclude the results of operations of the Fourth Quarter 1996
     Acquisitions, TeleSpectrum FX, and of FX Direct.

                                       15
<PAGE>
 
Comparison of the Actual results of operations for the three months ended June
--------------------------------------------------------------------------------
30, 1997 to the Supplemental Pro Forma results of operations for the three
--------------------------------------------------------------------------------
months ended June 30, 1996.
---------------------------

Revenues--Overall, revenues increased 75% during the three months ended June 30,
1997 when compared to the three months ended June 30, 1996. Telemarketing,
customer care and market research, direct mail and fulfillment revenues
increased 82%, 93% and 24%, respectively, when compared to the same period of
the prior year.

The 82% increase in telemarketing revenues is principally attributable to
increased calling volume and hours of production as a result of stronger demand 
from new and existing customers. When viewed on a combined basis as of June 30,
1996, the Initial Operating Businesses operated 19 call centers with
approximately 1,500 workstations; while at June 30, 1997, the Company operated
31 call centers with approximately 3,800 workstations.

The 93% increase in customer care revenues is attributable to revenues from TARP
(which was acquired as of October 1, 1996) combined with increased inbound
revenues due to both increased volume and pricing.

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

Cost of Services--Cost of Services increased by 98% during the three months
ended June 30, 1997 when compared to the same prior year period. As a percentage
of total revenues, cost of services were 76% and 67% for the three months ended
June 30, 1997 and 1996, respectively. The increase as a percentage of revenue is
attributable to the expansion of the company's capacity, the acceptance of less
profitable telemarketing contracts to utilize capacity, lower utilization of
telemarketing personnel, lower yields on performance based contracts and
additional costs of building the company's telemarketing infrastructure. 

Selling, General and Administrative Expenses--Selling, general and
administrative expenses increased 107% during the three months ended June 30,
1997 when compared with the three months ended June 30, 1996. As a percentage of
revenue, these costs increased to 21% from 18%, primarily as a result of the
expansion of the Company's infrastructure, combined with additional
administrative expenses associated with operating as a public company.

                                       16
<PAGE>
 
Amortization of goodwill - The Company has recorded the purchase price in excess
of the estimated fair value of the net assets acquired plus the net liabilities
assumed of the acquired businesses including the Initial Operating Businesses,
TARP, PR Response, TeleSpectrum FX and FX Direct, 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 June 30, 1997 represents three
months of amortization of goodwill related to its acquisitions of the Initial
Operating Businesses, TARP, PR Response, and TeleSpectrum FX. Amortization
expense for the three months ended June 30, 1996 represents three months of
amortization of goodwill related to the Initial Operating Businesses only.

As a percentage of revenue, amortization expense decreased to 4% from 5% during
the three months ended June 30, 1997 when compared with the three months ended
June 30, 1996. The decrease was principally the result of the substantial
revenue growth period over period.

Comparison of the Actual results of operations for the six months ended June 30,
--------------------------------------------------------------------------------
1997 to the Supplemental Pro Forma results of operations for the six months
---------------------------------------------------------------------------
ended June 30, 1996.
--------------------

Revenues--Overall, revenues increased 80% during the six months ended June 30,
1997 when compared to the six months ended June 30, 1996. Telemarketing,
customer care and market research, direct mail and fulfillment revenues
increased 88%, 99% and 22%, respectively, when compared to the same prior year
period.

The 88% increase in telemarketing revenues is principally attributable to
increased calling volume and hours of production as a result of stronger 
demand from new and existing customers.

Cost of Services--Cost of Services increased by 92% during the six months ended
June 30, 1997 when compared to the same prior year period. As a percentage of
total revenues, cost of services were 73% and 68% for the six months ended June
30, 1997 and 1996, respectively. The increase as a percentage of revenue is
attributable to the expansion of the Company's capacity, the acceptance of less
profitable telemarketing contracts to utilize capacity, lower utilization of
telemarketing personnel, lower yields on performance based contracts and
additional costs of building the Company's telemarketing infrastructure.

Selling, General and Administrative Expenses--Selling, general and
administrative expenses increased 88% during the six months ended June 30, 1997
as compared with the six months ended June 30, 1996. As a percentage of revenue,
these costs remained relatively constant at 20% and 19% for the six months ended
June 30, 1997 and June 30, 1996, respectively. 

Amortization of goodwill - Amortization expense for the six months ended June
30, 1997 represents six months of amortization of goodwill related to the
acquisitions of the Initial Operating Businesses, TARP, and PR Response plus
four months of amortization of goodwill related to the TeleSpectrum FX
acquisition. Amortization expense for the six months ended June 30, 1996
represents six months of amortization of goodwill related to the Initial
Operating Businesses only.

As a percentage of revenue, amortization expense decreased to 4% from 5% during
the six months ended June 30, 1997 when compared with the six months ended June
30, 1996. The decrease was principally the result of the substantial revenue
growth period over period.

                                       17
<PAGE>
 
While the Company expects to be able to increase its capacity utilization,
obtain and maintain higher revenue per hour business, maintain its relationships
with existing customers, obtain new customers, manage its costs effectively,
continue to grow its revenues, and return to profitability, there can be no
assurance that it will be able to meet any or all of these objectives.

The Company's agreements with its customers generally do not assure that the
Company will achieve a specific level of revenue and generally are terminable by
the customers on relatively short notice. Additionally, the amount of revenue
the Company generates from a particular customer is dependent upon a number of
factors, including, the ability of the Company to achieve marketing and sales
results desired by the customer and the results achieved by the Company as
compared to both the customers' in-house operations and/or other competing
outsource service providers. In addition to these factors noted above, numerous
agreements with its customers are also based on actual sales achieved.
Accordingly, the ability of the Company to achieve its desired results of
operations is also contingent upon its telephone sales representatives being
able to effectively and efficiently market the customer's products as well as
the quality of the lists provided by its customers.

The Company's outbound telemarketing operations are also subject to seasonal
variations. Customer's traditionally reduce direct marketing operations during
the summer months. There can be no assurance that the Company will be able to
predict or compensate for any such seasonal downturns.

Liquidity and Capital Resources

During the six months ended June 30, 1997, the Company used $4.9 million to fund
operations, principally related to the funding of working capital requirements.

During the six months ended June 30, 1997, the Company used $54.2 million for
investing activities. Of this amount, $16.8 million was used to purchase
property and equipment related to the Company's call center expansion and
infrastructure improvement programs discussed above. The Company also used $5.3
million and $4.2 for the acquisition of TeleSpectrum FX and FX Direct,
respectively, as discussed above. 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, $1.4 million related to accrued separation costs for certain former
owners of the Initial Operating Businesses, and $0.3 million of other payments
related to the acquisition of the Initial Operating Businesses. As a result of
the excess capacity discussed above and the limited closings of certain less
profitable call centers, the Company does not expect to continue its call center
expansion strategy for the remainder of 1997.

During the six months ended June 30, 1997, the Company obtained net cash from
financing activities of $28.4 million, which resulted from $28.6 million of net
proceeds related to borrowings under its credit facility discussed below and
$0.7 million under other long-term debt. The Company paid $0.9 million of
principal related to other debt and capital lease obligations.

The Company has a $70.0 million secured credit facility agreement ("credit
facility"). The credit facility can be used for certain acquisitions, the
satisfaction of indebtedness, working capital requirements, 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, a maximum level of purchases of fixed assets, engaging in
mergers and consolidations 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 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 June 30, 1997, the net borrowings under the
credit facility amounted to $28.6 million. At June 30, 1997, the weighted
average interest rate of borrowings under the credit facility was 7.0%.

The Company believes that cash to be generated from operations and the cash
available under its credit facility are sufficient to meet its on-going
operating requirements as well as expansion and business acquisition needs for
the foreseeable future.

                                       18
<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

                 At the Company's Annual Meeting of Shareholders held on May 28,
                 1997, the shareholders elected six directors, and approved an
                 amendment to the Company's 1996 Equity Compensation Plan. In
                 the election of the directors, 22,242,613 shares were voted in
                 the favor of J. Brian O'Neill and 77,165 shares voted against,
                 22,242,613 shares were voted in favor of the election of
                 Michael C. Boyd and 77,165 shares voted against, 22,248,813
                 shares were voted in favor of the election of Joseph Delraso
                 and 70,965 shares voted against, 22,242,313 shares were voted
                 in favor of the election of William F. Rhatigan and 77,465
                 shares voted against, 22,242,613 shares were voted in favor of
                 the election of Richard W. Virtue and 77,165 shares voted
                 against, and 22,249,813 shares were voted in favor of the
                 election of Kevin W. Walsh and 69,965 shares voted against.
                 16,669,773 shares were voted in favor of the ratification of
                 the amendment to the Company's 1996 Equity Compensation Plan,
                 4,228,801 shares voted against and 52,770 shares abstained.


     Item 5.     Other Information

                 None

     Item 6.     Exhibits and Reports on Form 8-K

                 (a)  Exhibits

                       10.20   Amendment to Amended and Restated Asset Purchase
                               Agreement dated as of April 14, 1997 by and among
                               TeleSpectrum Worldwide Inc., SOMAR, Inc., and
                               Richard W. Virtue

                       10.21   Warrant to purchase up to 1,500,000 shares of
                               Common Stock granted to SOMAR, Inc. dated as of
                               April 14, 1997.

                 (b)  Form 8-K

                             The Company filed a Current Report on Form 8-K on
                             June 25, 1997 announcing expected earnings for the
                             three months ended June 30, 1997.

                                       19
<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: August 14, 1997         /s/ Richard C. Schwenk, Jr.
               ---------------       -----------------------------------------
                                              Richard C. Schwenk, Jr.       
                                            TeleSpectrum Worldwide Inc.
                                            Executive Vice President and
                                               Chief Financial Officer

                                       20