<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, 2000

                                       or

 [   ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
      FOR THE TRANSITION PERIOD FROM ________________ TO __________________


                           Commission File 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 April 30, 2000 was 32,857,111.

================================================================================
<PAGE>

                  TeleSpectrum Worldwide Inc. and Subsidiaries


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

<TABLE>
<CAPTION>
Item No.                                                                             Page
----------                                                                         ---------
           PART I -- FINANCIAL INFORMATION
<S>        <C>                                                                     <C>
   1.      Financial Statements (unaudited):
           Condensed Consolidated Results of Operations
           For the Three Months Ended March 31, 2000 and
           For the Three Months Ended March 31, 1999.............................          3
           Condensed Consolidated Balance Sheets as of
           March 31, 2000 and December 31, 1999..................................          4
           Condensed Consolidated Statements of Cash Flows
           For the Three Months Ended March 31, 2000 and
           For the Three Months Ended March 31, 1999.............................          5
           Notes to Condensed Consolidated Financial Statements..................          6

   2.      Management's Discussion and Analysis of Results of Operations
           and Financial Condition...............................................         13

           PART II - OTHER INFORMATION...........................................         20
</TABLE>

           See Notes to Condensed Consolidated Financial Statements.
                                       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,     March 31,
                                                           2000          1999
                                                         --------      --------

<S>                                                      <C>           <C>
Revenues                                                 $ 78,680      $ 47,925
                                                         --------      --------
Operating Expenses:
 Cost of services                                          61,229        33,226
 Selling, general and administrative                       15,875         9,490
 Goodwill amortization                                      1,998           295
                                                         --------      --------
     Total operating expenses                              79,102        43,011
                                                         --------      --------
     Operating income                                        (422)        4,914

INTEREST EXPENSE, net                                      (3,487)         (172)
                                                         --------      --------
(LOSS)INCOME BEFORE INCOME TAXES                           (3,909)        4,742

INCOME TAXES                                                 --            --
                                                         --------      --------
NET (LOSS)INCOME                                         $ (3,909)     $  4,742
                                                         ========      ========

BASIC (LOSS)EARNINGS PER SHARE (Note 4)                  $   (.12)     $    .18
                                                         ========      ========
DILUTED (LOSS)EARNINGS PER SHARE (Note 4)                $   (.12)     $    .17
                                                         ========      ========
</TABLE>


           See Notes to Condensed Consolidated Financial Statements.

                                       3
<PAGE>

                  TeleSpectrum Worldwide Inc. and Subsidiaries
                      Condensed Consolidated Balance Sheets
                                  (Unaudited)
                 (Dollars in Thousands - Except Share Amounts)

<TABLE>
<S>                                                             <C>                 <C>
                                                                March 31,   December 31,
                                                                   2000         1999
                                                                ---------    ---------
                                     ASSETS
                                     ------
CURRENT ASSETS:
<S>                                                             <C>          <C>
 Cash and cash equivalents                                      $    --      $    --
 Accounts receivable, net                                          69,116       72,879
 Prepaid expenses and other                                         6,545        5,809
                                                                ---------    ---------
     Total current assets                                          75,661       78,688
PROPERTY AND EQUIPMENT, net                                        61,599       59,455
GOODWILL AND OTHER INTANGIBLES, net                               179,681      174,703
OTHER ASSETS                                                        5,268        5,561
                                                                ---------    ---------
     Total assets                                               $ 322,209    $ 318,407
                                                                =========    =========
  LIABILITIES AND STOCKHOLDERS' EQUITY
  ------------------------------------
CURRENT LIABILITIES:
 Current maturities of long-term debt                           $  16,824    $  16,411
 Accounts payable                                                   9,957        9,305
 Accrued expenses                                                  30,019       32,597
 Other current liabilities                                          3,117        6,463
                                                                ---------    ---------
     Total current liabilities                                     59,917       64,776

LONG-TERM DEBT                                                    119,689      113,846
                                                                ---------    ---------
OTHER NONCURRENT LIABILITIES                                        7,015          352
                                                                ---------    ---------
STOCKHOLDERS' 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,
  39,743,694 shares issued and 32,797,111 shares outstanding,
  at March 31, 2000, and 32,612,163 shares issued and
  outstanding at December 31, 1999                                    397          396
 Additional paid-in capital                                       338,897      338,848
 Common stock purchase warrants                                     7,840        7,840
 Treasury stock, 6,946,583 shares at cost                         (48,810)     (48,810)
 Accumulated deficit                                             (161,313)    (157,404)
 Due from stockholders                                               (952)        (952)
 Deferred compensation                                               (138)        (163)
 Cumulative currency translation adjustment                          (333)        (322)
                                                                ---------    ---------
     Total stockholders' equity                                   135,588      139,433
                                                                ---------    ---------
     Total liabilities and stockholders' equity                 $ 322,209    $ 318,407
                                                                =========    =========
</TABLE>

           See Notes to Condensed Consolidated Financial Statements.

                                       4
<PAGE>

                  TeleSpectrum Worldwide Inc. and Subsidiaries
                Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)
                             (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                        Three Months Ended
                                                                      --------------------
                                                                      March 31,   March 31,
                                                                        2000        1999
                                                                      --------    --------
<S>                                                                   <C>         <C>
Cash Flows From Operating Activities:
 Net (loss) income                                                    $ (3,909)   $  4,742
 Adjustments to reconcile net (loss) income to net cash
 flows from operating activities:
   Depreciation and amortization                                         4,087       2,238
   Goodwill amortization                                                 1,998         295
   Provision for bad debts                                                 742         300
   Non-cash compensation                                                    25          47
   Changes in operating assets and liabilities net of acquisitions:
    Accounts receivable                                                  3,089     (11,390)
    Prepaid expenses and other                                          (1,134)       (732)
    Accounts payable                                                       561       1,073
    Accrued expenses                                                    (2,592)      2,122
    Other liabilities                                                   (3,261)      1,523
                                                                      --------    --------
          Net cash (used in) provided by operating activities             (394)        218
                                                                      --------    --------
Cash Flows From Investing Activities:
 Purchases of property and equipment                                    (6,266)     (4,541)
 Net cash acquired in acquisition                                           71        --
 Payments of deferred transaction costs                                   --        (2,584)
 Payments of notes to sellers and acquisition liabilities                 --          (257)
                                                                      --------    --------
         Net cash used in investing activities                          (6,195)     (7,382)
                                                                      --------    --------
Cash Flows From Financing Activities:
 Net borrowings on secured credit facility                                --         6,665
 Exercise of stock options and sale of common stock                        606         350
 Payments of capital lease obligations                                    (208)       (159)
 Borrowings on long-term debt                                            8,500         117
 Payments on long-term debt                                             (2,309)        (83)
                                                                      --------    --------
          Net cash provided by financing activities                      6,589       6,890
                                                                      --------    --------
Net decrease in cash and cash equivalents                                 --          (274)
Cash and cash equivalents, beginning of period                            --           794
                                                                      --------    --------
Cash and cash equivalents, end of period                              $   --      $    520
                                                                      ========    ========
</TABLE>

           See Notes to Condensed Consolidated Financial Statements.

                                       5
<PAGE>

                 Telespectrum Worldwide Inc. and Subsidiaries
             Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)


1. BASIS OF PRESENTATION:

The accompanying financial statements are unaudited and have been prepared by
TeleSpectrum Worldwide Inc. and subsidiaries ("TeleSpectrum" or the "Company")
pursuant to the rules and regulations of the Securities and Exchange Commission
("SEC"). The December 31, 1999 balance sheet was derived from audited financial
statements, however, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to SEC rules and
regulations. The Company believes that the financial statements include all
adjustments of a normal and recurring nature necessary to present fairly the
results of operations, financial position and cash flows for the periods
presented. These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Form 10-K for
the year ended December 31, 1999.

The condensed consolidated financial statements include the accounts of the
Company and its subsidiaries. All material intercompany balances and
transactions have been eliminated. During the third quarter of 1999 the Company
changed its presentation of operating expenses in the Condensed Consolidated
Statements of Operations. Cost of services now represents all costs incurred at
the call centers. All remaining costs including account management, management
information systems and human resources are included in SG&A. This
reclassification has been made for all periods presented.

There have been no material changes in accounting policies from those stated in
the Company's form 10-K for the year ended December 31, 1999.

2. COMPANY BACKGROUND:

The Company was incorporated in Delaware on April 26, 1996 and on August 12,
1996, completed its initial public offering. Concurrent with the offering, the
Company began material operations with the acquisition of the assets of a number
of businesses. The Company provides services to its customers through its
business segments, Telemarketing, Customer Care and e-Satisfy.com. As discussed
further in Note 3, the Company completed mergers with International Data
Response Corporation ("IDRC") and CRW Financial, Inc. ("CRW") on June 30, 1999.

3. MERGERS AND ACQUISITION:

IDRC Merger

On January 14, 1999, TeleSpectrum and IDRC entered into a merger agreement which
was amended on February 26, 1999 and May 13, 1999 and consummated on June 30,
1999. Under this agreement, each of the holders of outstanding shares of IDRC
common stock, options and warrants to purchase IDRC common stock were entitled
to receive their pro rata portion of an aggregate of 9,200,000 shares of
TeleSpectrum common stock and warrants exercisable for 2,500,000 shares of
TeleSpectrum common stock. In addition, the IDRC preferred stock was exchanged
for $6,000,000 of cash, plus all accrued and unpaid dividends of $1,400,000. The
majority stockholders of IDRC invested the proceeds from the exchange of their
IDRC preferred stock of $4,873,000 for a term note with the Company. This note
is payable one year from the closing and bears interest at 10.0%. The merger was
accounted for as a purchase and, accordingly, the net tangible liabilities of
IDRC were included in the consolidated financial statements as of June 30, 1999.

                                       6
<PAGE>

                 TeleSpectrum Worldwide Inc. and Subsidiaries
             Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)


The total purchase price of IDRC was $58,700,000 which consisted of (in
thousands except share data):

<TABLE>
<S>                                                                                        <C>
Issuance of 8,269,101 shares of TeleSpectrum common stock, valued
 at $7.119 per share, with 6,449,349 shares discounted 10% due
to lock up and escrow restrictions of twelve and fifteen months..........................        $54,275
Issuance of options to purchase 930,903 shares of TeleSpectrum common stock, valued at
 between $2.300 and $5.320 per option with an average value of $5.141 (all options are
 discounted 10% due to lock up and escrow restrictions of twelve and fifteen months).....          4,307
Issuance of warrants to purchase 2,247,038 shares of TeleSpectrum
 common stock, valued at $3.136 per warrant..............................................          7,047
Issuance of warrants to purchase 252,962 shares of TeleSpectrum common stock, valued at
 $3.136 per warrant, to IDRC option holders..............................................            793
Value of shares and options held in escrow...............................................         (9,164)
Transaction costs........................................................................          1,442
                                                                                                 -------
         Total purchase price............................................................        $58,700
                                                                                                 =======
</TABLE>

Based on a preliminary allocation of the purchase price, the application of the
purchase method resulted in approximately $148,711,000 in excess purchase price
over the estimated fair value of the net tangible liabilities acquired of
$90,011,000, which includes accruals by IDRC in the second quarter related to
closed centers and bad debt reserves. A preliminary analysis completed by
TeleSpectrum, resulted in the excess purchase price being assigned to intangible
assets consisting of $1,002,000 for assembled workforce, $14,079,000 for
customer relationships, and $133,630,000 for goodwill. Intangible assets are
amortized on a straight-line basis over their estimated useful lives of 7 years
for assembled workforce, 15 years for customer relationships and 25 years for
goodwill.

The Company has substantially completed its plans to consolidate certain
facilities and departments and has estimated the costs of non-cancelable lease
commitments and severance of $1,539,000. This liability is reflected in the net
tangible liabilities acquired. During the first quarter of 2000, approximately
$1,243,000 was charged against this reserve. Upon completion of the integration,
any adjustments to the original estimates will be reflected as an adjustment to
the purchase price.

Of the shares of TeleSpectrum common stock issuable to the holders of IDRC
common stock and options, an aggregate 1,730,977 shares/options were placed in
escrow, as required by the merger agreement, to secure the indemnification
obligations of the IDRC security holders to TeleSpectrum. The term of the escrow
is for 15 months and is governed by an indemnity escrow agreement. These shares
represent "contingent consideration" and in accordance with APB No. 16 will not
be reflected as part of the purchase price until the contingency is
determinable. At closing, IDRC had a contingent liability related to a claim by
certain of its shareholders. On July 19, 1999, this claim was settled for
$1,907,000, the majority of which was satisfied with 275,153 shares being
released from the escrow.

CRW Merger
----------

On June 30, 1999, TeleSpectrum and CRW completed a merger agreement whereby
7,296,454 outstanding shares of CRW common stock were exchanged for 5,173,186
shares of TeleSpectrum common stock valued at $38,799,000. In addition, the
outstanding CRW options and warrants to purchase shares of CRW common stock were
exchanged for options to purchase 1,499,079 shares of TeleSpectrum common stock
valued at $9,820,000. Transaction costs related to this transaction amounted to
$191,000. For financial reporting purposes, the Company treated the exchange of
shares of TeleSpectrum common stock for shares of CRW common stock as a treasury
stock transaction. The transaction did not have an effect on TeleSpectrum net
income but did effect its net income per share.

Customer Insight Acquisition
----------------------------

                                       7
<PAGE>

                 TeleSpectrum Worldwide Inc. and Subsidiaries
             Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)

During January 2000, the Company placed all assets and liabilities specifically
related to TARP into a new wholly owned corporation called e-Satisfy.com. On
February 2, 2000, e-Satisfy.com acquired Customer Insites, Inc. ("CI") by
issuing 2,410,741 shares or 27.6% of e-Satisfy.com in exchange for all of the
issued and outstanding capital stock of CI. This acquisition was accounted for
as a purchase and accordingly, the net assets and results of operations of CI
have been included in the condensed consolidated financial statements commencing
February 2, 2000. The total purchase price paid for CI was valued at
approximately $6,200,000. Based upon a preliminary analysis the excess of the
purchase price over the fair value of the net tangible liabilities acquired
totaling approximately $6,478,000, has been recorded as goodwill and is being
amortized on a straight-line basis over twenty-five years. If the acquisition
had been in effect from January 1, 1999, unaudited pro forma net sales and net
earnings of the Company would have been substantially the same as those
reported.

Other

During October 1996, the Company acquired its consulting business Technical
Assistance Research Programs, Inc. ("TARP"). The agreement allowed for potential
earnouts to be paid to prior owners based upon future performance. During
October 1999 the Company signed an agreement to pay $3,200,000 in installments
ending July 2001 to settle these earnout provisions. This note was discounted to
$2,852,000 and is reflected as goodwill which is being amortized on a
straight-line basis over the remaining life of the original TARP goodwill.

4. EARNINGS PER SHARE:

The Company reports earnings per share in accordance with SFAS No. 128,
"Earnings Per Share," which requires a dual presentation of "basic" and
"diluted" EPS on the face of the income statement. Basic EPS is computed by
dividing net income (loss) 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 and
warrants, which would result in the issuance of shares of common stock.

The table below sets forth the reconciliation of the weighted average number of
shares outstanding used to compute basic and diluted earnings (loss) per share
(in thousands):

<TABLE>
<CAPTION>
                                                                                      Three Months Ended
                                                                                          March 31,
                                                                                    ---------------------
 <S>                                                                          <C>            <C>
                                                                                      2000           1999
                                                                                    ------         ------
Shares used in computing basic earnings (loss) per share...................         31,453         25,820
Dilutive effect of options and warrants....................................             --          2,720
                                                                                    ------         ------
Shares used in computing diluted earnings (loss) per share.................         31,453         28,540
                                                                                    ======         ======
</TABLE>

5. CAPITALIZED SOFTWARE DEVELOPMENT COSTS:

The Company capitalizes both acquired and internally developed or modified
software used as an integral part of the operations of the Company, in
accordance with Statement of Position 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." The Company
capitalizes certain internal and external costs directly associated with
developing or modifying the internal use software, which begins with the
application development stage and ends when the project is substantially
complete and ready for its intended use. Amounts capitalized as of March 31,
2000 and December 31, 1999 were $17,530,000 and $13,470,000, respectively, and
are included in the Condensed Consolidated Balance Sheets in property, plant and
equipment. Such costs are amortized on a straight-line basis over the estimated
useful life, usually 3-5 years.

6. CREDIT FACILITY:

                                       8
<PAGE>

                 TeleSpectrum Worldwide Inc. and Subsidiaries
             Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)

In connection with the mergers on June 30, 1999, the Company entered into $135.0
million in new credit facilities consisting of Term A, Term B, Term C and
working capital revolver facilities (the "Credit Facilities") incurring costs of
$5.0 million which are being amortized on a straight line basis over the life of
the Credit Facility. The Company borrowed $20.0 million under the Term A
facility, $20.0 million under the Term B facility and $50.0 million under the
Term C facility. In addition, the Company can borrow the lesser of $45.0 million
or 85% of eligible receivables, as defined, under its working capital revolver
facility. The working capital revolver facility also provides for the issuance
of letters of credit subject to certain borrowing limits, of which none were
outstanding at March 31, 2000. At March 31, 2000, the Company had $39.6 million
in outstanding borrowings and $5.4 million available under the working capital
revolver facility. The unused portion of the working capital revolver facility
is subject to an annual fee of 0.50%. The Term A facility matures December 31,
2001 and requires quarterly principal payments totaling $6.0 million for the
remainder of 2000 and $10.0 million in 2001. The Term B facility matures
December 31, 2002 and requires quarterly principal payments totaling $0.2
million for the remainder of 2000, $0.3 million in 2001, and a final payment of
$19.3 million in 2002. The Term C facility matures December 31, 2003 and
requires quarterly principal payments totaling $0.3 million for the remainder of
2000, $0.4 million in 2001, $0.9 million in 2002 and $48.0 million in 2003. All
outstanding principal is due under the working capital revolver facility on the
maturity date, December 31, 2001.

The Company can elect at the time it makes borrowings to pay interest quarterly
at prime plus 1.75% or LIBOR plus 3.25% for the Term A and working capital
revolver facilities; prime plus 2.25% or LIBOR plus 3.75% for the Term B
facility and prime plus 2.75% or LIBOR plus 4.25% for the Term C facility. At
March 31, 2000, the weighted average interest rate payable under the Credit
Facilities was 10.0%. Borrowings under the Credit Facilities are collateralized
by substantially all of the assets of the Company. The Credit Facilities require
interest rate caps (see Item 3) and contain covenants, the most restrictive of
which require the maintenance of certain financial ratios, restrict future
indebtedness, limit capital expenditures and prohibit cash dividends.

The proceeds from the Credit Facilities were used to refinance $98.0 million in
principal and interest outstanding under the IDRC credit facilities and $10.9
million in principal, interest and early termination fees outstanding under the
Company's April 14, 1998 Secured Credit Facility. The remaining Credit
Facilities proceeds were used in the mergers to repay certain notes including
accrued interest, redeem preferred stock and pay transaction fees aggregating
$9.7 million. During the three months ended March 31, 2000 and 1999, the
weighted average interest rate on borrowings under the Secured Credit Facility
was 10.1% and 8.25%, respectively.

During April 2000, the Company signed amendments to the Credit Facility that
modified the Company's debt covenants effective February 2000 including the
leverage ratio and the fixed charge coverage ratio and increased the working
capital revolver facility by $6.0 million to $51.0 million. In addition, the
annual limitation allowed for capital expenditures decreased for the year 2000
from $32,500,000 to $25,000,000.

                                       9
<PAGE>

                 TeleSpectrum Worldwide Inc. and Subsidiaries
             Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)

7. SUPPLEMENTAL CASH FLOWS INFORMATION:

The Company paid $3,000,000 and $118,000 in interest expense for the three
months ended March 31, 2000 and 1999, respectively. The Company did not pay any
income taxes during the three months ended March 31, 2000 and 1999.

8. COMMITMENTS AND CONTINGENCIES:

On March 18, 1998, the Company entered into an employment contract with its
former CEO and President which expires in March 2001. The contract provides for
annual compensation of $200,000 per year, plus potential bonuses. The Company
entered into a subscription agreement whereby this executive acquired 227,964
shares of the Company's common stock for $500,000 and was granted options to
purchase 2,000,000 shares of common stock at $3.29 per share. The options will
vest over three to five years with accelerated vesting for 500,000 options based
on the achievement of certain performance objectives, as defined. The Company
recorded compensation expense of $327,000, which represents the difference
between the stock purchase price and the fair market value of the stock on the
effective date of the stock subscription agreement. In addition, the Company
will record compensation expense of $670,000 over the vesting period of the
options to purchase 2,000,000 shares of common stock which represents the
difference between the fair market value of the stock on the grant date and the
option exercise price of $3.29.

The Company is party to various claims and other matters arising in the ordinary
course of business. In the opinion of management, the outcome of these matters
will not have a material adverse effect on the Company's financial position or
results of operations.

9. CONCENTRATIONS OF CREDIT:

The financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of accounts receivable.
Concentrations of credit risk with respect to accounts receivable are limited
due to the large number of customers comprising the Company's customer base, and
their dispersion across many different industries and geographies. The Company
does not require collateral or other securities to support customer accounts
receivable. The Company performs periodic reviews of its clients' condition to
reduce the collection risk.

The Company does not believe a significant credit risk exists at March 31, 2000.
The following table summarizes those customers with revenue or accounts
receivable in excess of 10% of total revenue for the three months ended March
31, 2000 and 1999 or total receivables as of March 31, 2000 and December 31,
1999, respectively:

<TABLE>
<CAPTION>
                                                                      Revenues                      Accounts
                                                              -------------------------            Receivable
                                                                    Three Months            ------------------------
                                                                   Ended March 31,          March 31,   December 31,
                                                              -------------------------     ---------   ------------
<S>                                                           <C>          <C>           <C>           <C>
                                                                    2000          2000        2000          1999
                                                                    ----          ----        ----          ----
Customer 1                                                          11.6%         15.9%       11.1%           --%
Customer 2                                                          10.1%           --%         --%         16.5%
</TABLE>

10. COMPREHENSIVE INCOME:

The Company has adopted SFAS No. 130, "Reporting Comprehensive Income," which is
effective for financial statements issued for fiscal years beginning after
December 15, 1997. The Company's comprehensive income includes net income (loss)
and unrealized gains and losses from foreign currency translation. Total
comprehensive income (loss) for the three months ended March 31, 2000 and 1999
was $(3,920,000) and $4,686,000, respectively.

11. RELATED-PARTY TRANSACTIONS:

CRW Financial, Inc.

                                       10
<PAGE>

                 Telespectrum Worldwide Inc. and Subsidiaries
             Notes to Condensed Consolidated Financial Statements
                                  (unaudited)

The Company subleases a 21,000 square foot office building in King of Prussia,
Pennsylvania, from CRW Financial, Inc., a former shareholder of the Company, and
as discussed in Note 3, was merged with the Company on June 30, 1999. The
sublease commenced on May 9, 1996, and requires monthly base rent payments
through September 30, 2004, of approximately $42,000. Total rent expense for the
three months ended March 31, 2000 and 1999 was approximately $130,000 and
$120,000, respectively.

12. SEGMENTS:

The Company classifies its continuing operations into three segments:
Telemarketing, Customer Care and e-Satisfy.com. The operating segments are
managed separately because each operating segment represents a strategic
business unit that offers different services. The business segments are
described in further detail below. Segment assets include amounts specifically
identified with Telemarketing, Customer Care and e-Satisfy.com segments.
Corporate assets consist primarily of property and equipment and the goodwill
and other intangibles related to the IDRC merger, which will be allocated to the
business segments after evaluations are completed by management.

The Telemarketing Segment provides both business-to-consumer and business-to-
business telemarketing services--primarily direct sales initiated by the Company
on behalf of its clients.

The Customer Care Segment provides customer service expertise to its clients.
The Company's customer service expertise includes the more traditional inbound
services of customer care support, typically through toll-free telephone
numbers, for activities such as responses to clients' customer service
inquiries, catalogue sales and electronic order processing and consulting
services to a wide range of clients. In addition, Customer Care includes Channel
-Care, our more recent strategic initiatives into multi-channel Customer
Relationship Management including Web-based sales and service, e-mail response,
Web telephony, Web chat and fax.

The e-Satisfy.com segment, a business-to-business internet company, measures,
monitors and improves the customer service experience.

Corporate operations include the selling, general and administrative functions
of the Company.

During 1999, the Company began reporting operating expenses differently from the
historical presentation in order to be more consistent with industry practices.
The principal change relates to the components of two line items--Cost of
Services and SG&A. Cost of Services now reflects only those costs that are
directly associated with the operation of a call center. All other costs
including account management, management information systems and human resources
are included in SG&A. This reclassification has been made for all periods
presented.

                                      11
<PAGE>

                 Telespectrum Worldwide Inc. and Subsidiaries
             Notes to Condensed Consolidated Financial Statements
                                  (unaudited)

Business segment information is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                       March 31,
                                                                             ------------------------------
<S>                                                                          <C>             <C>
                                                                                      2000            1999
                                                                                  --------        --------
Revenues:
 Telemarketing.............................................................       $ 51,014        $ 32,816
 Customer Care.............................................................         26,081          12,226
 e-Satisfy.com.............................................................          1,585           2,883
                                                                                  --------        --------
     Total.................................................................       $ 78,680        $ 47,925
                                                                                  ========        ========
Operating income (loss):
 Telemarketing.............................................................       $ 10,903        $  8,826
 Customer Care.............................................................          5,439           3,870
 e-Satisfy.com.............................................................            763           1,708
 Corporate.................................................................        (17,527)         (9,490)
                                                                                  --------        --------
     Total.................................................................       $   (422)       $  4,914
                                                                                  ========        ========
Total assets
 Telemarketing.............................................................       $ 83,057        $ 55,101
 Customer Care.............................................................         54,084          25,473
 e-Satisfy.com.............................................................         31,392          23,607
 Corporate.................................................................        153,676          14,170
                                                                                  --------        --------
     Total.................................................................       $322,209        $118,351
                                                                                  ========        ========
</TABLE>

                                      12
<PAGE>

                 Telespectrum Worldwide Inc. and Subsidiaries

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

This Management's Discussion and Analysis of Financial Condition and Results of
Operations and other sections of this Quarterly Report contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. These statements address, among other things, the Company's business
strategy, including its use of cash and cash equivalents; reliance on certain
customers; projected capital expenditures; liquidity; Year 2000 disclosure,
including statements regarding readiness, remediation, consequences and
contingency plans; increased sales in future periods; the continuation of
fluctuations in results of operations, as well as information contained
elsewhere in this Report where statements are preceded by, followed by or
include the words "believes," "expects," "anticipates," "plans" or similar
expressions. These statements are based on a number of assumptions concerning
future events, and are subject to a number of uncertainties and other factors,
many of which are outside the Company's control, that could cause actual results
to differ materially from such statements. The Company undertakes no obligation
to update or revise forward-looking statements, whether as a result of new
information, future events or otherwise.


Recent Developments and Overview
--------------------------------

IDRC Merger Agreement
---------------------

On January 14, 1999, we entered into a merger agreement with International Data
Response Corporation ("IDRC") and its majority stockholders. This agreement was
amended on February 26, 1999 and May 13, 1999 and consummated on June 30, 1999.
Under this agreement, the holders of outstanding shares of IDRC common stock,
options and warrants were entitled to receive their pro rata portion of an
aggregate of 9.2 million shares of TeleSpectrum common stock and warrants
exercisable for 2.5 million shares of TeleSpectrum common stock. In addition,
the IDRC preferred stock was exchanged for $6.0 million in cash, plus all
accrued and unpaid dividends of $1.4 million. The majority stockholders of IDRC
invested the proceeds from the exchange of their IDRC preferred stock of $4.9
million for a term note from us. This note is payable in one year and bears
interest at 10.0%. We accounted for the IDRC merger as a purchase pursuant to
Accounting Principles Board Opinion No. 16 "Business Combinations." Of the
shares of TeleSpectrum common stock issuable to the holders of IDRC common stock
and options, an aggregate 1,730,977 shares/options were placed in escrow, as
required by the merger agreement, to secure the indemnification obligations of
the IDRC security holders to TeleSpectrum. The term of the escrow is for 15
months and is governed by an indemnity escrow agreement. These shares represent
"contingent consideration" and in accordance with APB No. 16 will not be
reflected as part of the purchase price until the contingency is determinable.
At closing, IDRC had a contingent liability related to a claim by certain of its
shareholders. On July 19, 1999, this claim was settled for $1.9 million. 275,153
shares were initially released from the escrow to satisfy the majority of this
claim.

We received financing for a new $135.0 million senior debt facility (the "Credit
Facilities") which has been used to replace our current facility and to
refinance IDRC's long-term debt including accrued interest and repay certain
seller notes including accrued interest, redeem preferred stock, including
accrued dividends and pay transaction fees. The Credit Facilities consist of
three term notes in the aggregate of $90.0 million with maturities between 30
and 54 months and a revolving credit facility of $45.0 million due in 30 months.
The Credit Facilities allow for alternative interest rates. The Credit
Facilities require interest rate caps (see Item 3) and contain covenants, the
most restrictive of which require the maintenance of certain financial ratios,
restrict future indebtedness, limit capital expenditures and prohibit cash
dividends.

                                      13
<PAGE>

                 Telespectrum Worldwide Inc. and Subsidiaries

CRW Merger Agreement
--------------------

On September 3, 1998, we entered into a merger agreement with CRW Financial,
Inc. ("CRW"). This agreement was amended on December 30, 1998 and was
consummated on June 30, 1999. Under this agreement each outstanding share of CRW
common stock was exchanged for .709 of a share of TeleSpectrum common stock. In
addition, each outstanding option to purchase shares of CRW common stock was
exchanged for an option to purchase .709 of a share of TeleSpectrum common
stock. The warrants issued by CRW to purchase 0.7 million shares of our common
stock owned by CRW were unaffected by this merger. Immediately prior to the
merger, CRW did not have any continuing business operations and its only
significant asset was 6.9 million shares of our common stock. For financial
reporting purposes, we treated the exchange of our shares of common stock for
shares of CRW common stock as a treasury stock transaction. The transaction did
not have an effect on our net income or loss, but did effect our net income or
loss per share.

Strategic Initiatives
---------------------

During the first quarter of 2000 the Company retained an investment banker to
raise capital for e-Satisfy.com - a company formed by merging TARP, a wholly
owned subsidiary of the Company, and Customer Insites, Inc., a company acquired
in January 2000. The scope of the investment banker's engagement was then
expanded to raise additional capital to assist in the strategic initiatives of
ChannelCare, the Company's multi-channel CRM platform. In addition, the Company
is evaluating alternative business growth strategies in connection with multi-
channel CRM solutions including, but not limited to, independently operating and
raising capital relative to these businesses.

Customer Insight Acquisition
----------------------------

During January 2000, the Company placed all assets and liabilities specifically
related to TARP into a new corporation called e-Satisfy.com. On February 2,
2000, e-Satisfy.com acquired Customer Insites, Inc. ("CI") by issuing 2,410,741
shares or 27.6% of e-Satisfy.com in exchange for all of the issued and
outstanding capital stock of CI. This acquisition was accounted for as a
purchase and accordingly, the net assets and results of operations of CI have
been included in the condensed consolidated financial statements commencing
February 2, 2000. The total purchase price paid for CI was valued at
approximately $6,200,000. Based upon a preliminary analysis the excess of the
purchase price over the fair value of the net tangible liabilities acquired
totaling approximately $6,478,000, has been recorded as goodwill and is being
amortized on a straight-line basis over twenty-five years. If the acquisition
had been in effect from January 1, 1999, unaudited pro forma net sales and net
earnings of the Company would have been substantially the same as those
reported.

New President and CEO
---------------------

On April 27, 2000, Telespectrum entered into an employment agreement with Mr.
Vincent Ciavardini that provides that he be employed by Telespectrum as its
President and Chief Executive Officer through April 27, 2003. This position was
vacated by Mr. Keith Alessi, who has become Chairman.

Credit Facility Amendments
--------------------------

During April 2000, the Company signed amendments to the Credit Facility that
modified the Company's debt covenants effective February 2000, including the
leverage ratio and the fixed charge coverage ratio and increased the working
capital revolver facility by $6.0 million to $51.0 million. In addition, the
annual limitation regarding capital expenditures was lowered for the year 2000
from $32,500,000 to $25,000,000.

                                      14
<PAGE>

                 Telespectrum Worldwide Inc. and Subsidiaries

Results of Operations

The following discussions should be read in connection with the Condensed
Consolidated Financial Statements contained within this report on Form 10Q.
During the third quarter of 1999, the Company changed its presentation of
operating expenses in the Condensed Consolidated Statements of Operations. Cost
of services now represents all costs incurred at the call centers. All remaining
costs including account management, management information systems and human
resources are included in SG&A. This reclassification has been made for all
periods presented.

Comparison of the results of operations for the three months ended March 31,
2000 to the three months ended March 31, 1999.

<TABLE>
<CAPTION>
                                                                                  Results of Operations
                                                                                  (Dollars in Millions)
                                                      -----------------------------------------------------------------------------
<S>                                                   <C>                  <C>               <C>                  <C>
                                                        Three Months           As a              Three Months          As a
                                                            Ended           Percentage              Ended           Percentage
                                                          March 31,             of                March 31,            of
                                                            2000             Revenues               1999             Revenues
                                                      -----------------------------------------------------------------------------
Revenues:
 Telemarketing.............................              $51.0                  65%               $32.8                 68%
 Customer Care.............................               26.1                  33                 12.2                 26
 e-Satisfy.com.............................                1.6                   2                  2.9                  6
                                                         -----                 ---                -----                ---
Total revenue..............................               78.7                 100                 47.9                100
Cost of services:
  Telemarketing............................               40.1                  79                 24.0                 73
  Customer Care............................               20.5                  79                  8.2                 67
  e-Satisfy.com............................                0.6                  38                  1.0                 34
                                                         -----                 ---                -----                ---
Total cost of services.....................               61.2                  78                 33.2                 69
Total selling, general and administrative..               15.9                  20                  9.5                 20
Goodwill amortization......................                2.0                   3                   .3                  1
                                                         -----                 ---                -----                ---
Total operating expenses...................               79.1                 101                 43.0                 90
                                                         -----                 ---                -----                ---

Operating income...........................                (.4)                 (1)                 4.9                 10

Interest expense...........................               (3.5)                 (4)                (0.2)                --
                                                         -----                 ---                -----                ---
Income before taxes........................               (3.9)                 (5)                 4.7                 10

Income taxes...............................                 --                  --                   --                 --
                                                         -----                 ---                -----                ---
Net income.................................              $(3.9)                (5)%               $ 4.7                 10%
                                                         =====                 ===                =====                ===
</TABLE>

Revenues
--------

Our total revenues for the three months ended March 31, 2000 were $78.7 million,
representing an increase of 64% from $47.9 million for the three months ended
March 31, 1999. This increase is primarily the result of the merger with IDRC or
$32.3 million. Approximately 11.6% and 10.1% of total revenues for the three
months ended March 31, 2000 were generated by services provided on behalf of two
clients in the telecommunications industry and is reported predominantly in our
telemarketing and customer care segment, respectively.

Telemarketing Segment
---------------------

Our telemarketing segment revenues were $51.0 million for the three months ended
March 31, 2000. These revenues accounted for 65% of our total revenues and
represent an increase of $18.2 million or 55% from telemarketing revenues of
$32.8 million for the three months ended March 31, 1999. The increase in
telemarketing revenues is primarily attributable to the IDRC merger of $20.4
million, and revenue from

                                      15
<PAGE>

                 Telespectrum Worldwide Inc. and Subsidiaries

services initiated by new clients totaling $3.0 million offset by revenue from
lost or terminated clients of $3.7 million.

Customer Care Segment
---------------------

Our customer care segment revenues were $26.1 million for the three months ended
March 31, 2000. These revenues accounted for 33% of our total revenues and
increased by $13.9 million from the three months ended March 31, 1999. In
addition to $11.9 million in revenue gained through the IDRC merger, $2.0
million of this increase was attributable to the acquisition of one call center
in November 1999. Revenues generated from services initiated for new clients of
$.8 million were offset by lower volumes from existing clients.

e-Satisfy.com Segment
---------------------

Our e-Satisfy.com segment revenues were $1.6 million for the three months ended
March 31, 2000. These revenues accounted for 2% of total revenues and decreased
by $1.3 million or 45% from the three months ended March 31, 1999. The decrease
in revenue is attributable to the loss of three clients and a $0.2 million
reduction in revenue related to a settlement with a client during the first
quarter of 2000.

Cost of Services
----------------

Our cost of services were $61.2 million for the three months ended March 31,
2000, an increase of $28.0 million or 84% from cost of services of $33.2 million
for the three months ended March 31, 1999. As a percentage of total revenues,
cost of services were 78% and 69% for each of the three months ended March 31,
2000 and 1999.

Telemarketing Segment
---------------------

Our telemarketing segment cost of services for the three months ended March 31,
2000 were 79% of telemarketing revenues and increased by $16.1 million or 67%
from the three months ended March 31, 1999. Costs of services for the three
months ended March 31, 1999 were 73% of telemarketing revenues. The increase in
cost of services as a percentage of revenue is attributable to lower revenue per
hour due to competitive pricing pressures and lower capacity utilization of
existing seats.

Customer Care Segment
---------------------

Our customer care segment cost of services accounted for 79% of our customer
care revenues for the three months ended March 31, 2000 and increased by $12.3
million from the three months ended March 31, 1999. Cost of services for the
three months ended March 31, 1999 were 67% of customer care revenues. The
increase in cost of services as a percentage of revenues is due to lower volumes
and the associated lower capacity utilization, increased competitive pricing
pressures resulting in lower revenue per hour and increased costs associated
with ChannelCare initiatives, a change in the client mix, and an increase in
infrastructure to support higher volumes.

e-Satisfy.com Segment
---------------------

Our e-Satisfy.com segment cost of services accounted for 38% of our
e-Satisfy.com revenues for the three months ended March 31, 2000 and decreased
by $.4 million or 40% from the three months ended March 31, 1999. Cost of
services for the three months ended March 31, 1999 were 34% of e-Satisfy.com
revenues. The increase as a percentage of revenues is due to a change in the
client mix, lower volumes and the client settlement discussed above.

                                      16
<PAGE>

                 Telespectrum Worldwide Inc. and Subsidiaries

Selling, General and Administrative
-----------------------------------

SG&A expenses were $15.9 million for the three months ended March 31, 2000, an
increase of $6.4 million or 67% from the three months ended March 31, 1999. As a
percentage of total revenue, SG&A expenses were 20% for the three months ended
March 31, 2000 and 1999, respectively. The overall increase for the three months
ended March 31, 2000 related to costs associated with the IDRC merger including
$1.1 million for the Canadian operations, and a $1.4 million increase in the
customer care operations. $2.0 million of the $15.9 million for 2000 relates
directly to e-Satisfy.com which increased $0.7 million from the same quarter
last year. The remaining increase is due to the increased information technology
costs (related primarily to ChannelCare initiatives), increased facility
costs, bad debt expense and additional depreciation charges resulting from the
IDRC merger.

Goodwill Amortization
---------------------

Our goodwill amortization was $2.0 million, representing 3% of total revenues
for the three months ended March 31, 2000, and increased by $1.7 million from
the three months ended March 31, 1999. This increase is primarily attributable
to the IDRC merger.

Interest Expense, net
---------------------

We incurred net interest expense of $3.5 million for the three months ended
March 31, 2000, an increase of $3.3 million from the three months ended March
31, 1999. This increase in interest expense is primarily attributable to
increased debt levels from the IDRC merger and amortization of debt issuance
costs.

Liquidity and Capital Resources
-------------------------------

Cash flows provided by(used in) (dollars in thousands):

<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                       March 31,
<S>                                                                          <C>             <C>
                                                                                      2000            1999
                                                                                   -------         -------
Operating activities.......................................................        $  (394)        $  (218)
Investing activities.......................................................        $(6,195)        $(7,382)
Financing activities.......................................................        $ 6,589         $ 6,890
</TABLE>

For the three months ended March 31, 2000

The $0.4 million of cash used by operating activities consisted of a $3.9
million net loss offset by non cash items including depreciation and
amortization of $6.1 million and $0.7 million for bad debts. Working capital
requirements which positively effected cash flow included a decrease in accounts
receivable of $3.1 million offset by a $2.6 million decrease in accrued expenses
and a $3.3 million decrease in other liabilities.

The $6.2 million of cash used in investing activities primarily consisted of
property and equipment purchases attributable to maintaining and enhancing our
technology platforms particularly as it relates to ChannelCare.

The $6.6 million of net cash provided by financing activities consisted of $6.2
million of net borrowings related to long-term debt.

In connection with the mergers on June 30, 1999, the Company entered into $135.0
million in new credit facilities consisting of Term A, Term B, Term C and
working capital revolver facilities (the "Credit

                                      17
<PAGE>

                 Telespectrum Worldwide Inc. and Subsidiaries

Facilities") incurring costs of $5.0 million which are being amortized on a
straight line basis over the life of the Credit Facility. The Company borrowed
$20.0 million under the Term A facility, $20.0 million under the Term B facility
and $50.0 million under the Term C facility. In addition, the Company can borrow
the lesser of $45.0 million or 85% of eligible receivables, as defined, under
its working capital revolver facility. The working capital revolver facility
also provides for the issuance of letters of credit subject to certain borrowing
limits, of which none were outstanding at March 31, 2000. At March 31, 2000, the
Company had $39.6 million in outstanding borrowings and $5.4 million available
under the working capital revolver facility. The unused portion of the working
capital revolver facility is subject to an annual fee of 0.50%. The Term A
facility matures December 31, 2001 and requires quarterly principal payments
totaling $6.0 million for the remainder of 2000 and $10.0 million in 2001. The
Term B facility matures December 31, 2002 and requires quarterly principal
payments totaling $0.2 million for the remainder of 2000, $0.3 million in 2001,
and a final payment of $19.3 million in 2002. The Term C facility matures
December 31, 2003 and requires quarterly principal payments totaling $0.3
million for the remainder of 2000, $0.4 million in 2001, $0.9 million in 2002
and $48.0 million in 2003. All outstanding principal is due under the working
capital revolver facility on the maturity date, December 31, 2001.

The Company can elect at the time it makes borrowings to pay interest quarterly
at prime plus 1.75% or LIBOR plus 3.25% for the Term A and working capital
revolver facilities; prime plus 2.25% or LIBOR plus 3.75% for the Term B
facility and prime plus 2.75% or LIBOR plus 4.25% for the Term C facility. At
March 31, 2000, the weighted average interest rate payable under the Credit
Facilities was 10.0%. Borrowings under the Credit Facilities are collateralized
by substantially all of the assets of the Company. The Credit Facilities require
interest rate caps (see Item 3) and contain covenants, the most restrictive of
which require the maintenance of certain financial ratios, restrict future
indebtedness, limit capital expenditures and prohibit cash dividends.

The proceeds from the Credit Facilities were used to refinance $98.0 million in
principal and interest outstanding under the IDRC credit facilities and $10.9
million in principal, interest and early termination fees outstanding under the
Company's April 14, 1998 Secured Credit Facility. The remaining Credit
Facilities proceeds were used in the mergers to repay certain notes including
accrued interest, redeem preferred stock and pay transaction fees aggregating
$9.7 million. During the three months ended March 31, 2000 and 1999, the
weighted average interest rate on borrowings under the Secured Credit Facility
was 10.1% and 8.25%, respectively.

During April 2000, the Company signed an amendment to the Credit Facility that
modified the Company's debt covenants effective February 2000 including the
leverage ratio and the fixed charge coverage ratio and increased the working
capital revolver facility by $6.0 million to $51.0 million. In addition, the
annual limitation allowed for capital expenditures decreased for the year 2000
from $32,500,000 to $25,000,000.

We believe that our existing cash balances, and borrowings available under our
$135.0 million Credit Facilities will be sufficient to meet our operating and
capital needs through 2000. The amount of future capital expenditures will be
highly dependent on future revenue growth.

For the three months ended March 31, 1999

The $0.2 million of cash provided by operating activities consisted of $4.7
million of net income and noncash items including depreciation and amortization
of $2.5 million, offset by working capital requirements including a significant
increase in accounts receivable of $11.4 million, a $2.1 million increase in
accrued expenses and a $1.5 million increase in other liabilities.

The $7.4 million of cash used in investing activities primarily consisted of
$4.5 million of purchases of

                                      18
<PAGE>

                 Telespectrum Worldwide Inc. and Subsidiaries

property and equipment attributed to maintaining and enhancing our technology
platforms. In addition, $2.6 million consisted of deferred transaction co-
payments related to the IDRC and CRW mergers.

The $6.9 million of net cash provided by financing activities primarily
consisted of $6.7 million of net borrowings under our secured credit facility.

Year 2000 Issue

The Year 2000 issue results from the writing of computer programs using two
digits rather than four to define the applicable year. Because of this
programming convention, computer software, hardware or firmware may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
system failures, miscalculations or errors causing disruptions of operations or
other business problems, including, among others, a temporary inability to
process transactions or engage in other normal business activities.

Starting in 1998 and continuing in 1999 we undertook a comprehensive program,
including the hiring of an outside consulting firm, to address the Year 2000
issue.

As of March 31, 2000, we had spent approximately $1.6 million on the Year 2000
issue. Many of our systems that required Year 2000 remediation or replacement
also received performance upgrades or enhancements. Our costs do not include
costs related to these upgrades or enhancements. Because we have not experienced
material Year 2000 problems at the beginning of 2000 or any material leap year
issues after February 29, 2000, we do not expect future remediation costs to be
material to our consolidated position or results of operations.


Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk
------------------

In connection with the merger of IDRC on June 30, 1999, we refinanced $10.5
million of our $20.0 million Secured Credit Facility debt and acquired $118.6
million in senior debt under the new $135.0 million Credit Facilities. The
increased level of long-term debt increases our exposure to interest rate risk.

We pay interest to the Credit Facilities banks based on a floating interest
rate, either the prime rate or LIBOR. Based on the outstanding balance under the
Credit Facilities at March 31, 2000, we would be required to pay an additional
$1.2 million in interest annually for every 1.0% increase in the average prime
rate or LIBOR. To reduce the risk associated with a large increase in interest
rates, we have in place two derivative financial instruments known as interest
rate caps each with notional amounts of $29.5 million. Under the terms of the
interest rate cap agreements, we would receive quarterly cash payments when the
3-month LIBOR rate at the end of any quarter exceeded 7.5%. The payment would be
determined by multiplying the difference between the actual LIBOR rate and 7.5%
by the notional amounts of $29.5 million. The interest rate cap agreements
expire on September 30, 2002. These interest rate caps are required under the
terms of the $135.0 million Credit Facilities, which dictates that we establish
and maintain three-year interest rate caps at 200 basis points above the
three-month LIBOR rate with notional amounts not less than 66.0% of the term
loan balance. The three-month LIBOR interest rate was approximately 6.3% at
March 31, 2000.

                                      19
<PAGE>

                 Telespectrum Worldwide Inc. and Subsidiaries


Foreign Currency Risk
---------------------

We have subsidiaries in Canada and the United Kingdom, which are subject to
foreign currency fluctuations. As currency rates change, translation of income
statements of these subsidiaries from local currencies to U.S. dollars affects
year-over-year comparability of our operating results. Gains and losses on
translation are recorded as a separate component of stockholders' equity.

Approximately $22.0 million of the Credit Facilities proceeds have been loaned
to our Canadian subsidiary (acquired in the June 30, 1999 merger with IDRC). The
loan proceeds have been converted to Canadian dollars. Under the terms of the
Credit Facilities agreement, large principal payments due in the years 2002 and
2003 may require conversion of all or a portion of our Canadian dollar loan to
US dollars. An unfavorable change in the Canadian dollar exchange rate at the
time of the conversion could cause a foreign currency exchange loss. At this
time, we do not believe that such a conversion would be required. The other
foreign subsidiaries are limited in their operations and the level of investment
by the parent company so that risk of foreign currency fluctuations is not
expected to be material.


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.

         None

  Item 6.  Exhibits and Reports on Form 8-K

       (a)   Exhibits

                                      20
<PAGE>

                 Telespectrum Worldwide Inc. and Subsidiaries

          The following is a list of exhibits filed as part of this quarterly
          report on Form 10-Q. Where so indicated by footnote, exhibits which
          were previously filed are incorporated by reference. For exhibits
          incorporated by reference, the location of the exhibit in the previous
          filing is indicated in parentheses.

          3.01   Restated Certificate of Incorporation of TeleSpectrum Worldwide
                 Inc. is incorporated by reference to exhibit 3.01 of the
                 Company's Registration Statement on Form S-1 (File No. 333-
                 04349).

          3.02   Bylaws of TeleSpectrum Worldwide Inc. are incorporated by
                 reference to exhibit 3.02 of the Company's Registration
                 Statement on Form S-1 (File No. 333-04349).

          10.1   Employment Agreement dated as of April 27, 2000 between Vincent
                 J. Ciavardini and TeleSpectrum Worldwide Inc.

          10.2   Amendment No. 3 to Credit Agreement.

          10.3   Amendment No. 4 to Credit Agreement.

          27.01  Financial Data Schedule.

       (b)   Form  8-K

                None

                                      21
<PAGE>

                 Telespectrum Worldwide Inc. and Subsidiaries


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)

                                                 \s\  Vincent J. Ciavardini
                                               ----------------------------
                                                    Vincent J. Ciavardini
                                               TeleSpectrum Worldwide Inc.
                                            President & Chief Executive Officer

Date: May 15, 2000                                \s\  William Hoke
                                               ----------------------------
                                                     William Hoke
                                                TeleSpectrum Worldwide Inc.
                                              Interim Chief Financial Officer

                                      22