SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

---------------

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2000
Commission File No. 1-14126

UNIDIGITAL INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)

Delaware 13-3856672
- ------------------------------- ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)

Pier 40, W. Houston Street @ Hudson River, New York, New York 10014
-------------------------------------------------------------------
(Address of Principal Executive Offices)

(212) 989-3338
(Registrant's Telephone Number,
Including Area Code)

Check whether the Issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the Issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.

Yes: X No:
---- ----

Indicate the number of shares outstanding of each of the Issuer's classes
of common stock, as of June 30, 2000:

Class Number of Shares
- ----- ----------------
Common Stock, $.01 par value 6,352,463

Transitional Small Business Disclosure Format (check one):

Yes: No: X
----- -----

UNIDIGITAL INC. AND SUBSIDIARIES
TABLE OF CONTENTS
-----------------

Page
----

PART I FINANCIAL INFORMATION

Item 1. Financial Statements...........................................1

CONSOLIDATED BALANCE SHEETS
as of May 31, 2000 (unaudited)
and August 31, 1999 (audited).....................................2

CONSOLIDATED INCOME STATEMENTS
For the Three Months and Nine Months Ended
May 31, 2000 and May 31, 1999
(unaudited).......................................................3

CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended
May 31, 2000 and May 31, 1999
(unaudited).......................................................4

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)............................................5

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

General...........................................................13

Results of Operations.............................................13

Liquidity, Capital Resources and Other Matters....................17

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

PART II OTHER INFORMATION

Item 1. Legal Proceedings.............................................19

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

Item 3. Default Upon Senior Securities................................20

Item 5. Other Information.............................................20

Item 6. Exhibits and Reports on Form 8-K..............................21

SIGNATURES.................................................................22

-i-

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

-1-

UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------

May 31, August 31,
2000 1999
-------- ----------
(unaudited)

ASSETS

Current assets:
Cash and cash equivalents...................................... $ 363,000 $ 734,000
Accounts receivable (net allowance of $1,413,000 and
$744,000 at May 31, 2000 and August 31, 1999, respectively) 33,779,000 16,788,000
Building available for sale.................................... -- 1,488,000
Prepaid expenses............................................... 5,812,000 2,600,000
Deferred tax assets............................................ 1,730,000 2,000,000
Other current assets........................................... 3,016,000 2,356,000
------------- -------------
Total current assets....................................... 44,700,000 25,966,000

Property and equipment, net....................................... 17,548,000 15,920,000
Deferred tax asset............................................. 5,730,000 5,606,000
Deferred financing costs, net.................................. 4,617,000 1,550,000
Intangible assets, net............................................ 68,240,000 67,672,000
Other assets...................................................... 2,317,000 1,922,000
------------- -------------
Total assets............................................... $ 143,152,000 $ 118,636,000
============= =============
LIABILITIES

Current liabilities:
Accounts payable and accrued expenses.......................... $ 14,855,000 $ 16,198,000
Current portion of capital lease obligations................... 2,905,000 3,157,000
Current portion of long-term debt.............................. 98,781,000 1,384,000
Income taxes payable........................................... 1,468,000 1,065,000
Loans and notes payable to stockholders........................ 400,000 619,000
Other current liabilities...................................... -- 34,000
------------- -------------
Total current liabilities.................................. 118,409,000 22,457,000
Capital lease obligations, net of current portion................. 3,316,000 2,898,000
Long-term debt, net of current portion............................ 1,069,000 76,263,000
Other non-current liabilities..................................... 597,000 707,000
------------- -------------
Total liabilities.......................................... 123,391,000 102,325,000
STOCKHOLDERS' EQUITY

Preferred stock -- authorized 10,000,000 shares, $.01 par value
each; none issued or outstanding............................... -- --
Common stock -- authorized 25,000,000 shares, $.01 par value each;
6,173,476 and 5,926,618 shares issued and outstanding at May 31,
2000 and August 31, 1999, respectively......................... 62,000 59,000
Issuable common stock............................................. 800,000 1,450,000
Additional paid-in capital........................................ 26,304,000 21,729,000
Accumulated deficit............................................... (6,056,000) (6,585,000)
Accumulated other comprehensive loss.............................. (1,349,000) (342,000)
------------- -------------
Total stockholders' equity................................. 19,761,000 16,311,000
------------- -------------
Total liabilities and stockholders' equity................. $ 143,152,000 $ 118,636,000
============= =============

The Notes to Consolidated Financial Statements are made a part hereof.

-2-

UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED INCOME STATEMENTS
------------------------------
(unaudited)

Three Months Ended, Nine Months Ended,
---------------------------- --------------------------------
May 31, May 31, May 31, May 31,
2000 1999 2000 1999
---- ---- ---- ----

Revenues
Net sales......................... $ 27,022,000 $ 18,256,000 $ 73,798,000 $ 46,388,000
------------- ------------- ------------- -------------
Expenses
Cost of sales..................... 14,885,000 8,147,000 39,989,000 21,221,000
Selling, general and administrative
expenses........................ 8,637,000 6,119,000 23,162,000 16,435,000
Restructuring expenses............ -- -- -- 287,000
------------- ------------- ------------- -------------
Total operating expenses.......... 23,522,000 14,266,000 63,151,000 37,943,000
------------- ------------- ------------- -------------
Income from continuing operations. 3,500,000 3,990,000 10,647,000 8,445,000
Interest expense.................. (2,919,000) (1,631,000) (7,723,000) (4,100,000)
Interest expense - deferred
financing costs................. (212,000) (140,000) (525,000) (331,000)
Interest and other (expenses)
income.......................... (123,000) (88,000) (527,000) 108,000
------------- ------------- ------------- -------------
Income from continuing operations
before income taxes ............ 246,000 2,131,000 1,872,000 4,122,000
Provision for income taxes........ 568,000 788,000 1,343,000 1,703,000
------------- ------------- ------------- -------------
Net (loss) income from continuing
operations...................... (322,000) 1,343,000 529,000 2,419,000
Loss from operations of discontinued
segment (net of tax benefit of $321,000
and $444,000, respectively) -- 289,000 -- 527,000
------------- ------------- ------------- -------------
Net (loss) income before extraordinary (322,000) 1,054,000 529,000 1,892,000
item............................
Extraordinary item-loss on early
retirement of debt (net of tax benefit of
$460,000 at May 31, 1999)...... -- 542,000 -- 542,000
------------- ------------- ------------- -------------
Net (loss) income................. $ (322,000) $ 512,000 $ 529,000 $ 1,350,000
============= ============= ============= =============

Basic (loss) earnings per common share:
(Loss) earnings from continuing
operations before extraordinary item $ (0.05) $ 0.25 $ 0.09 $ 0.47
Loss from discontinued operations. -- (0.05) -- (0.10)
Extraordinary item................ -- (0.10) -- (0.10)
------------- ------------- ------------- -------------
Net (loss) income.................... $ (0.05) $ 0.10 $ 0.09 $ 0.26
============= ============= ============= =============

Diluted (loss) earnings per common share:
(Loss) earnings from continuing
operations...................... $ (0.05) $ 0.24 $ 0.08 $ 0.46
Loss from discontinued operations. -- (0.05) -- (0.10)
Extraordinary item................ -- (0.10) -- (0.10)
------------- ------------- ------------- ------------
Net (loss) income.................... $ (0.05) $ 0.09 $ 0.08 $ 0.26
============= ============= ============= ============

Shares used to compute net income per share:
Basic............................. 6,136,166 5,367,975 6,055,598 5,140,197
============= ============= ============= ============
Diluted........................... 6,343,596 5,461,352 6,254,786 5,242,682
============= ============= ============= ============

The Notes to Consolidated Financial Statements are made a part hereof.

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UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(unaudited)

Nine Months Ended,
------------------
May 31, May 31,
2000 1999
---- ----

Operating Activities
Net income......................................................... $ 529,000 $ 1,350,000
Adjustments to reconcile net income to
net cash provided by (used in) operating activities:
Depreciation and amortization............................... 7,032,000 5,447,000
Provision for deferred income taxes......................... 7,000 89,000
Provision for bad debts..................................... 529,000 315,000
(Gain) loss on sale of assets............................... 296,000 (191,000)
Extraordinary item.......................................... -- 1,002,000
Stock compensation.......................................... 15,000 --
Changes in assets and liabilities:
Accounts receivable......................................... (18,372,000) (5,258,000)
Prepaid expenses and other current assets................... (4,449,000) (480,000)
Other assets................................................ (1,013,000) (324,000)
Accounts payable and accrued expenses....................... (4,374,000) (4,711,000)
Income taxes payable........................................ 431,000 376,000
------------ ------------
Net cash used in operating activities.............................. (19,369,000) (2,385,000)
------------ ------------
Investing activities
Proceeds of sale of fixed assets................................... 1,814,000 945,000
Additions to property and equipment................................ (2,999,000) (1,032,000)
Business acquisitions.............................................. (1,367,000) (27,259,000)
------------ ------------
Net cash used in investing activities.............................. (2,552,000) (27,346,000)
------------ ------------
Financing activities
Net proceeds from bank borrowings.................................. 36,423,000 90,350,000
Payments of capital lease obligations.............................. (2,166,000) (2,091,000)
Payments of long-term debt......................................... (12,905,000) (58,413,000)
Stockholder loans.................................................. (120,000) (173,000)
Warrants exercised................................................. 241,000 --
Warrants issued in lieu of interest................................ 84,000 --
Common stock issued................................................ -- 92,000
------------ ------------
Net cash provided by financing activities.......................... 21,557,000 29,765,000
------------ ------------
Effect of foreign exchange rates on cash........................... (7,000) --
------------ ------------
Net (decrease) increase in cash and cash equivalents............... (371,000) 34,000
Cash and cash equivalents at beginning of period................... 734,000 287,000
------------ ------------
Cash and cash equivalents at end of period......................... 363,000 $ 321,000
============ ============
Supplemental disclosures
Interest paid...................................................... $ 6,663,000 $ 4,423,000
============ ============
Income taxes paid.................................................. $ 708,000 $ 438,000
============ ============
Noncash transactions:
Equipment acquired under capital lease obligations................. $ 1,993,000 $ 4,344,000
============ ============
Warrants issued for business acquisitions.......................... $ -- $ 931,000
============ ============
Warrants issued for additional financing (revised)................. $ 2,500,000 $ 308,000
============ ============
Business acquisitions (net of liabilities of $1,744,000 and
8,682,000, respectively)........................................... $ 406,000 $ 2,939,000
============ ============
Stock issued for business acquisitions............................. $ 140,000 $ 9,029,000
============ ============
Warrants issued in lieu of cash interest payments.................. $ 1,035,000 $ --
============ ============

The Notes to Consolidated Financial Statements are made a part hereof.

-4-

UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)

NOTE A - BASIS OF PRESENTATION:

The information presented for May 31, 2000, and for the three-month and the
nine-month periods ended May 31, 2000 and May 31, 1999, is unaudited, but, in
the opinion of the management of Unidigital Inc., its wholly-owned subsidiaries
and its and their subsidiaries, affiliated companies and predecessors
(collectively, the "Company"), the accompanying unaudited consolidated financial
statements contain all adjustments (consisting only of normal recurring
accruals) which the Company considers necessary for the fair presentation of the
Company's financial position as of May 31, 2000 and the results of its
operations and its cash flows for the three-month and the nine-month periods
ended May 31, 2000 and May 31, 1999.

The consolidated financial statements included herein have been prepared by
the Company in accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. These
consolidated financial statements should be read in conjunction with the
Company's audited financial statements for the year ended August 31, 1999, which
were included as part of the Company's Annual Report on Form 10-K, as amended.

The consolidated financial statements include the accounts of Unidigital
Inc. and its direct and indirect subsidiaries. All significant intercompany
balances have been eliminated.

Interim results are not necessarily indicative of results that may be
expected for the full fiscal year.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Business:

The Company is a media services company that provides large and grand
format digital image solutions combined with a full suite of digital "premedia"
(previously referred to as "prepress") services to advertising agencies,
retailers, publishers, graphic design firms, consumer product companies,
government agencies and marketing and communications firms in the United States
and Europe. During 1999, the Company began delivering its services through two
principal business divisions: (i) the Media Solutions division creates and
produces large and grand format images for out-of-home advertising and develops
new media concepts; and (ii) the Premedia Services division provides digital
premedia, including retouching and short-run digital printing services. During
1999, the various operating subsidiaries of the Company were grouped into the
aforementioned business divisions and the Company discontinued its on-demand
print and prepress business segment.

-5-

UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)

Foreign Currency Translation:

Balance sheet accounts of the Company's United Kingdom and German
subsidiaries are translated using year-end exchange rates. Statements of
operations accounts are translated at monthly average exchange rates. The
resulting translation adjustment is recorded in a separate component of
stockholders' equity called "Accumulated other comprehensive income (loss)" and
is included in determining comprehensive income (loss).

Earnings Per Share:

The following table sets forth the computation of basic and dilutive
earnings per share:

Three Months Ended, Nine Months Ended,
---------------------------------- ----------------------------------
May 31, May 31, May 31, May 31,
2000 1999 2000 1999
---- ---- ---- ----

Numerator for basic and diluted earnings per
share-net income available for common
stockholders............................... $ (322,000) $ 512,000 $ 529,000 $ 1,350,000
============ ============ ============ ============
Denominator:
Denominator for basic earnings per share-
weighted average shares.................... 6,136,166 5,367,975 6,055,598 5,140,197
Effect of dilutive securities:
Stock options.............................. -- 21,880 2,211 17,483
Warrants................................... 207,430 71,497 196,977 85,002
----------- ----------- ----------- ------------
Denominator for diluted earnings per
share-adjusted weighted-average shares and
assumed conversions........................ 6,343,596 5,461,352 6,254,786 5,242,682
=========== =========== ============ ============

The following securities have been excluded from the dilutive per share
computation as they are antidilutive:

Three Months Ended, Nine Months Ended,
--------------------------------------------------------------------------------
May 31, May 31, May 31, May 31,
2000 1999 2000 1999
----------------- ------------------ --------------------- ---------------------

Stock options........................ 1,108,902 564,999 1,028,902 564,999
Warrants............................. 1,854,239 342,000 1,854,239 342,000

-6-

UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)

Impact of Recently Issued Accounting Pronouncements:

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("Statement 133"). Statement 133 must first be applied
in the first quarter of fiscal years that begin after June 15, 2000. Statement
133 will require the Company to recognize all derivatives on the consolidated
balance sheets at fair value. Derivatives that are not hedges must be adjusted
to fair value through income. If the derivative is a hedge, depending on the
nature of the hedge, changes in the fair value of derivatives will either be
offset against the change in fair value of the hedged assets, liabilities or
firm commitments through earnings or recognized in other comprehensive income
until the hedged item is recognized in earnings. The ineffective portion of a
derivatives change in fair value will immediately be recognized in earnings.
Management has determined that Statement 133 will not have a significant effect
on the earnings and financial position of the Company.

Derivative Financial Instruments:

The Company has an interest rate collar agreement to modify the interest
characteristics of certain of its outstanding long-term debt. The interest rate
collar agreement is designated with all or a portion of the principal balance
and a term that does not coincide with the specific debt obligation.

NOTE C - STOCK OPTION PLANS:

Pursuant to the 1997 Equity Incentive Plan, as amended, the Company granted
options to purchase an aggregate of 50,000 shares of the Company's common stock,
$.01 par value per share, during the three months ended May 31, 2000. All
options were granted at their fair market value.

-7-

UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)

NOTE D - LONG-TERM DEBT:

Long-term debt consists of the following:

Facility Amount

Amount Outstanding
May 31, May 31, August 31,
2000 2000 1999
--------------------------------------------------

Revolving line of credit; interest at the prime rate or at
the Eurodollar Rate, as defined, plus an Applicable Margin,
as defined, ranging from 1.0% to 3.25%. $ 80,000,000 $ 76,850,000 $64,375,000
Term loan, matures October 2008; payable in 120 monthly
installments of (pound)1,250, which commenced November 1998.
Interest is charged at the bank's overdraft rate plus 3.00%.
The loan is secured by a bond and floating charge over the assets
of Colour Network. 225,000 177,000 --
Credit facility in the United Kingdom. Interest is charged at the
bank's overdraft rate plus 2.75%. Facility is secured by the
assets of Interface Graphics. 225,000 176,000 241,000
Credit facilities in the United Kingdom; interest at the bank's
overdraft rate plus 1.85%. Facility is secured by the accounts
receivable of Pre-Press Services. 599,000 555,000 621,000
Credit facilities in the United Kingdom; interest at the bank's
overdraft rate plus 2.00%. Facility is secured by the accounts
receivable of Big Bills. 449,000 443,000 236,000
Subordinated loan matures in March 2004; base interest of 12 1/2% plus
0.25% the first day after the first anniversary of the Note;
plus 0.25% following the last day of each 90-day period until payment
in full. -- -- 10,000,000
Subordinated loan matures in August 2006; base interest of 14%. 20,186,000 20,186,000 --
Notes payable for certain equipment, maturing on dates between October
1998 and September 2003, payable in monthly installments
of $22,000 until October 1998 and $14,000 thereafter, including
interest at 8.54% and 8.40%, respectively. -- 351,000 454,000
Notes payable for certain equipment, maturing on December 2004, each
payable in monthly installments of $9,000, including interest at
8.66% and 9.56%, respectively. -- 787,000 --
Senior subordinated note investment fee, due May 2001. -- -- 1,500,000
Other 397,000 325,000 220,000
------------------------------------------------
99,850,000 77,647,000
Less: current portion 98,781,000 1,384,000
------------------------------------------------
Long-term debt $ 1,069,000 $ 76,263,000
================================================

Bank credit facilities. On September 30, 1999, the Company's revolving line
of credit facility was increased to $80,000,000. As of May 31, 2000, the Company
had an outstanding balance of $76,850,000 under the revolving credit facility,
bearing interest at rates ranging from 9.44% to 11.50% per annum.

The Company has not met certain financial covenants under its credit
facility and has requested a waiver of such covenants from the lender. At May
31, 2000, the outstanding balance

-8-

UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)

under the revolving credit facility and the Subordinated Loan (as defined below)
has been classified as a short-term liability until such waiver is obtained.

In September 1999, upon prepayment of the Company's $10,000,000
subordinated loan, the lender opted to have the interest of such loan paid in
warrants to purchase Common Stock of the Company. As a result, the Company
issued warrants to purchase 208,150 shares of the Company's Common Stock at an
exercise price of $0.01 per share to such lender. Such amount approximated the
fair market value of the related accrued interest. Subject to certain
limitations, the Company has granted registration rights, including "demand"
registration rights, to such lender.

In September 1999, the Company borrowed a principal amount of $20,000,000
pursuant to another subordinated unsecured loan (the "Subordinated Loan"). The
Subordinated Loan matures in August 2006 and bears interest at 14% per annum.
The Company is permitted to defer the payment of up to 2/14ths of the amount of
interest due on any regularly scheduled interest payment date. Any such deferred
interest shall be deemed to be included in the principal amount of the
Subordinated Loan. The Company is obligated to prepay without premium the
greater of (i) $10,000,000 or (ii) one-half of the then outstanding principal
amount of the Subordinated Loan in August 2005. In addition, on any prepayments
of the Subordinated Loan made prior to September 1, 2002, the Company will incur
an additional premium equal to the Make Whole Amount, as defined. For
prepayments made after September 1, 2002, such additional premium shall be 3.0%.
Such additional premium shall be reduced by 100 basis points on each September 1
thereafter until September 1, 2005. In connection with the Subordinated Loan,
the Company issued seven-year warrants to the lender to purchase 690,134 shares
of the Company's Common Stock at an exercise price of $5.425 per share. Subject
to certain limitations, the Company granted registration rights, including
"demand" registration rights, to such lender. The warrants issued to the lender,
which were deemed to have a value of approximately $2,500,000, subject to an
independent appraisal, have been recorded as deferred financing costs, and are
being amortized on a straight-line basis over approximately seven years.

In October 1999, the Company entered into an interest rate collar agreement
on $35,000,000 of variable rate bank debt. Under this interest rate collar
agreement, the Company is required to pay interest at the higher of 6.12% or the
Company's current rate (7.05% at May 31, 2000), to a maximum of 7.80% per annum,
as defined. The interest rate collar agreement terminates on October 29, 2001.
The Company's estimated credit exposure related to the interest rate collar
agreement is summarized as follows:

Notional Credit
Amount Exposure
------ --------

Interest rate collar agreement $35,000,000 $3,000

The notional amount of the derivative does not represent the amount
exchanged by the parties, and is not a measure of the exposure of the Company
through its use of derivatives. The

-9-

UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)

amounts exchanged are calculated on the basis of the notional amounts and the
other terms of the derivatives, which relate to interest rates.

The Company is exposed to credit losses in the event of nonperformance by
counterparties to financial instruments, but it does not expect any
counterparties to fail to meet their obligations given their current credit
ratings.

NOTE E - SEGMENT INFORMATION:

The Company has two reportable segments: the Media Solutions division and
Premedia Services division. The segment information for the three-month and
nine-month periods ended May 31, 1999 have been restated to conform to the 2000
segment reporting format.

The Company evaluates performance and allocates resources based on
profit or loss from operations before income taxes. The accounting policies of
the reportable segments are the same as those described in the summary of
significant accounting policies. Intersegment sales and transfers are recorded
at the Company's cost; there is no intercompany profit or loss on intersegment
sales or transfers.

The following summarizes the operations by geographic segment for the three
months and nine months ended May 31, 2000 and May 31, 1999:

Three Months Ended Nine Months Ended
------------------ -----------------
May 31, 2000 May 31, 1999 May 31, 2000 May 31, 1999
----------------------------------------------------------------------------------------------------------
United United United United
States Europe States Europe States Europe States Europe
----------------------------------------------------------------------------------------------------------

Net sales $16,131,000 $10,891,000 $13,856,000 $4,400,000 $46,391,000 $27,407,000 $35,179,000 $11,209,000
Income from operations 1,693,000 1,807,000 2,715,000 1,275,000 6,533,000 4,114,000 6,861,000 1,584,000
Identifiable assets 122,688,000 20,714,000 106,157,000 8,302,000 122,688,000 20,714,000 106,157,000 8,302,000

The following summarizes operations by industry segment for the three
months and nine months ended May 31, 2000 and May 31, 1999:

Three Months Ended Nine Months Ended
------------------ -----------------
May 31, 2000 May 31, 1999 May 31, 2000 May 31, 1999
------------------------------------------------------------------------------------------------------------
Media Premedia Media Premedia Media Premedia Media Premedia
Solutions Services Solutions Services Solutions Services Solutions Services
------------------------------------------------------------------------------------------------------------

Net sales $14,682,000 $12,340,000 $8,286,000 $9,970,000 $40,185,000 $33,613,000 $19,583,000 $26,805,000
Income from operations 2,807,000 693,000 1,572,000 2,418,000 7,102,000 3,545,000 3,679,000 4,766,000
Identifiable assets 97,681,000 45,721,000 83,004,000 31,455,000 97,681,000 45,721,000 83,004,000 31,455,000

-10-

UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)

NOTE F - COMPREHENSIVE INCOME:

Comprehensive income consisted of the following:

Three Months Ended, Nine Months Ended,
------------------------------------------------------------------------
May 31, May 31, May 31, May 31,
2000 1999 2000 1999
------------------------------------------------------------------------

Net (loss) income $ (322,000) $ 512,000 $ 529,000 $ 1,350,000
Net change in foreign currency
translation adjustment (719,000) (115,000) (1,007,000) (415,000)
------------- ----------- ------------ ------------
Comprehensive (loss) income $ (1,041,000) $ 397,000 $ (478,000) $ 935,000

As of May 31, 2000 and May 31, 1999, the cumulative other comprehensive
loss consisted of the Company's foreign currency translation adjustment.

NOTE G - ACQUISITIONS:

In March 2000, the Company acquired a portion of the assets of Inlarge LLC,
a New York limited liability company located in Jersey City, New Jersey (the
"Inlarge Acquisition"). The initial purchase price was $125,000 plus possible
additional consideration pending a final determination of the net asset value of
the assets acquired.

In March 2000, the Company purchased all of the issued and outstanding
shares of Colour Network Limited (the "Colour Network Acquisition"), located in
Glasgow, Scotland. The purchase price was the issuance of 40,000 shares
(approximately $140,000) of restricted Common Stock of the Company.

In April 2000, the Company purchased all of the issued and outstanding
shares of Makom Media Ltd. and its wholly-owned subsidiaries Makom Media GmbH
and Makom Media Service France S.a.r.l (the "Makom Acquisition"). The initial
aggregate purchase price was $1,350,000, which included the issuance of 178,987
shares (approximately $800,000) of restricted Common Stock of the Company.

-11-

UNIDIGITAL INC. AND SUBSIDIARIES
--------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)

NOTE G - ACQUISITIONS (CONTINUED):

The following supplemental pro forma information is presented as if the
Company had completed the Inlarge Acquisition, the Colour Network Acquisition,
the Makom Acquisition and the acquisitions of Mega Art Corp., Hy Zazula
Associates, Inc., SuperGraphics Holding Company, Inc., Peter X(+C) Limited,
Progress Graphics, Inc. and Interface Graphics Limited as of September 1, 1999
and 1998, respectively.

Nine Months Ended May 31,

2000 1999
-------------------------
Net sales $76,915,000 $55,094,000
Income from operations 10,935,000 7,666,000
Net income 617,000 159,000
Net income per share - basic $0.10 $0.03
Net income per share - diluted $0.10 $0.03

-12-

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

GENERAL

The Company is a media services company that provides large and grand
format digital image solutions combined with a full suite of digital "premedia"
(previously referred to as "prepress") services to advertising agencies,
retailers, publishers, graphic design firms, consumer product companies,
government agencies and marketing and communications firms in both the United
States and Europe. During 1999, the Company began delivering its services
through two principal business divisions. The Media Solutions division creates
and produces large and grand format images for out-of-home advertising and
develops new media concepts. The Premedia Services division provides digital
premedia, including retouching and short-run digital printing services.

The statements contained in this Quarterly Report on Form 10-Q that are not
historical facts are forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995) that involve risks and
uncertainties. Such forward-looking statements may be identified by, among other
things, the use of forward-looking terminology such as "believes," "expects,"
"may," "will," "should" or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy that
involve risks and uncertainties. From time to time, the Company or its
representatives have made or may make forward-looking statements, orally or in
writing. Such forward-looking statements may be included in various filings made
by the Company with the Securities and Exchange Commission or press releases or
oral statements made by or with the approval of an authorized executive officer
of the Company. These forward-looking statements, such as statements regarding
anticipated future revenues, capital expenditures and other statements regarding
matters that are not historical facts, involve predictions. The Company's actual
results, performance or achievements could differ materially from the results
expressed in, or implied by, these forward-looking statements. Potential risks
and uncertainties that could affect the Company's future operating results
include, but are not limited to: (i) economic conditions, including economic
conditions related to the media services industry; (ii) the availability of
equipment from the Company's vendors at current prices and levels; (iii) the
intense competition in the markets for the Company's products and services; (iv)
the Company's ability to integrate acquired companies and businesses in a
cost-effective manner; (v) the Company's ability to effectively implement its
branding strategy; and (vi) the Company's ability to develop, market, provide,
and achieve market acceptance of new service offerings to new and existing
clients.

RESULTS OF OPERATIONS

The consolidated financial information includes both the Company's United
States operations and its European operations.

-13-

THREE MONTHS ENDED MAY 31, 2000 AND MAY 31, 1999

Net sales. Net sales for the three months ended May 31, 2000 ("Third
Quarter of Fiscal 2000") increased by 48%, or $8,766,000, to $27,022,000 from
$18,256,000 for the three months ended May 31, 1999 ("Third Quarter of Fiscal
1999"). Net sales for the Company's United States operations increased by 16%,
or $2,275,000, from $13,856,000 in the Third Quarter of Fiscal 1999 to
$16,131,000 in the Third Quarter of Fiscal 2000. Net sales for the Company's
European operations increased by 148%, or $6,491,000, from $4,400,000 in the
Third Quarter of Fiscal 1999 to $10,891,000 in the Third Quarter of Fiscal 2000.
Net sales for the Company's Media Solutions division increased by 77%, or
$6,396,000, from $8,286,000 in the Third Quarter of Fiscal 1999 to $14,682,000
in the Third Quarter of Fiscal 2000. This increase was attributable primarily to
an increase in net sales in the Company's Mega Art operations and resulting from
the Company's European acquisitions. Net sales for the Company's Premedia
Services division increased by 24%, or $2,370,000, from $9,970,000 in the Third
Quarter of Fiscal 1999 to $12,340,000 in the Third Quarter of Fiscal 2000. This
increase was attributable primarily to an increase in net sales resulting from
the Company's acquisitions in the United Kingdom.

Cost of sales. Cost of sales for the Third Quarter of Fiscal 2000 increased
by 83%, or $6,738,000, to $14,885,000 from $8,147,000 for the Third Quarter of
Fiscal 1999. As a percentage of net sales, cost of sales increased from 45% for
the Third Quarter of Fiscal 1999 to 55% for the Third Quarter of Fiscal 2000.
Cost of sales for the Company's United States operations increased as a
percentage of net sales from 45% for the Third Quarter of Fiscal 1999 to 54% for
the Third Quarter of Fiscal 2000. Cost of sales for the Company's European
operations increased as a percentage of net sales from 43% for the Third Quarter
of Fiscal 1999 to 57% for the Third Quarter of Fiscal 2000. Cost of sales for
the Company's Media Solutions division remained constant as a percentage of net
sales for such division at 50% in each of the Third Quarter of Fiscal 1999 and
the Third Quarter of Fiscal 2000. Cost of sales for the Company's Premedia
Services division increased as a percentage of net sales for such division from
41% in the Third Quarter of Fiscal 1999 to 62% in the Third Quarter of Fiscal
2000. Such increase was attributable to the change in product mix to include
more digital print services and higher expenses incurred in the United States
operations.

Selling, general and administrative expenses. Selling, general and
administrative expenses ("SG&A") increased by 41%, or $2,518,000, from
$8,637,000 for the Third Quarter of Fiscal 1999 to $8,387,000 for the Third
Quarter of Fiscal 2000. Such increase was attributable primarily to the
increased level of operations. As a percentage of net sales, SG&A decreased from
34% for the Third Quarter of Fiscal 1999 to 32% for the Third Quarter of Fiscal
2000. SG&A decreased as a percentage of net sales as a result of increased sales
volume.

Income from continuing operations. Income from continuing operations for
the Third Quarter of Fiscal 2000 decreased by 12%, or $490,000, to $3,500,000
from $3,990,000 for the Third Quarter of Fiscal 1999. Of this amount, $1,693,000
was contributed by the Company's United States operations and $1,807,000 by the
Company's European operations. In addition, of this amount, $2,807,000 was
contributed by the Company's Media Solutions division and $693,000 from the
Company's Premedia Services division.

-14-

Net interest expense. Net interest expense for the Third Quarter of Fiscal
2000 increased by 75%, or $1,395,000, to $3,254,000 from $1,859,000 for the
Third Quarter of Fiscal 1999. This increase resulted from increased interest
payments incurred in connection with the Subordinated Loan and borrowings under
the Company's credit facilities.

Income taxes. Income taxes for the Third Quarter of Fiscal 2000 decreased
by 28%, or $220,000, to $568,000 from $788,000 for the Third Quarter of Fiscal
1999.

Discontinued operations. In August 1999, the Company sold its New York
operations for on-demand print and prepress services. In addition, the San
Francisco and London on-demand print and prepress business ceased operations and
closed or reallocated their facilities to other segments, respectively, prior to
August 31, 1999. There were no remaining assets or liabilities related to the
discontinuance of the on-demand print and prepress business as of August 31,
1999. As a result, the Company incurred a loss of $289,000 on discontinued
operations for the Third Quarter of Fiscal 1999.

Extraordinary item. In connection with the refinancing of senior debt, the
Company recorded an extraordinary loss of $542,000, net of income tax benefit of
$460,000 related to the write-off of deferred financing costs in the Third
Quarter of Fiscal 1999.

Net income (loss). As a result of the factors described above, net income
for the Third Quarter of Fiscal 2000 decreased by 163%, or $834,000, to a net
loss of $322,000 as compared to net income of $512,000 for the Third Quarter of
Fiscal 1999.

Nine Months Ended May 31, 2000 and May 31, 1999
-----------------------------------------------

Net sales. Net sales for the nine months ended May 31, 2000 increased by
59%, or $27,410,000, to $73,798,000 from $46,388,000 for the nine months ended
May 31, 1999. Net sales for the Company's United States operations increased by
32%, or $11,212,000, from $35,179,000 for the nine months ended May 31, 1999 to
$46,391,000 for the nine months ended May 31, 2000. Net sales for the Company's
European operations increased by 145%, or $16,198,000, from $11,209,000 for the
nine months ended May 31, 1999 to $27,407,000 for the nine months ended May 31,
2000. Net sales for the Company's Media Solutions division increased by 105%, or
$20,602,000, from $19,583,000 for the nine months ended May 31, 1999 to
$40,185,000 for the nine months ended May 31, 2000. This increase was
attributable primarily to an increase in net sales in the Company's Mega Art
operations and resulting from the Company's European acquisitions. Net sales for
the Company's Premedia Services division increased by 25%, or $6,808,000, from
$26,805,000 for the nine months ended May 31, 1999 to $33,613,000 for the nine
months ended May 31, 2000. This increase was attributable primarily to an
increase in net sales resulting from the Company's acquisitions in the United
Kingdom.

Cost of sales. Cost of sales for the nine months ended May 31, 2000
increased by 88%, or $18,768,000, to $39,989,000 from $21,221,000 for the nine
months ended May 31, 1999. As a percentage of net sales, cost of sales increased
from 46% for the nine months ended May 31, 1999 to 54% for the nine months ended
May 31, 2000. Cost of sales for the Company's United States operations increased
as a percentage of net sales from 44% for the nine months ended May 31, 1999 to
53% for the nine months ended May 31, 2000. Cost of sales for the Company's

-15-

European operations increased as a percentage of net sales from 52% for the nine
months ended May 31, 1999 to 57% for the nine months ended May 31, 2000. Cost of
sales for the Company's Media Solutions division increased as a percentage of
net sales for such division from 49% for the nine months ended May 31, 2000 to
53% for the nine months ended May 31, 2000. The cost of sales for the nine
months ended May 31, 2000 were high due to the Company's preparation for
expansion of its large format business. Cost of sales for the Company's Premedia
Services division increased as a percentage of net sales for such division from
44% for the nine months ended May 31, 1999 to 56% for the nine months ended May
31, 2000. Such increase was attributable to the change in product mix to include
more digital print services and higher expenses incurred in the United States
operations.

Selling, general and administrative expenses. SG&A increased by 41%, or
$6,727,000, from $16,435,000 for the nine months ended May 31, 1999 to
$23,162,000 for the nine months ended May 31, 2000. Such increase was
attributable primarily to the increased level of operations. As a percentage of
net sales, SG&A decreased from 35% for the nine months ended May 31, 1999 to 31%
for the nine months ended May 31, 2000. SG&A decreased as a percentage of net
sales as a result of increased sales volume.

Restructuring expenses. During the nine months ended May 31, 1999, the
Company consolidated its United Kingdom financial printing operations. As a
result of such consolidation, the Company incurred restructuring expenses of
$287,000.

Income from continuing operations. Income from continuing operations for
the nine months ended May 31, 2000 increased by 26%, or $2,202,000, to
$10,647,000 from $8,445,000 for the nine months ended May 31, 1999. Of this
amount, $6,533,000 was contributed by the Company's United States operations and
$4,114,000 by the Company's European operations. In addition, of this amount,
$7,102,000 was contributed by the Company's Media Solutions division and
$3,545,000 by the Company's Premedia Services division.

Net interest expense. Net interest expense for the nine months ended May
31, 2000 increased by 103%, or $4,452,000, to $8,775,000 from $4,323,000 for the
nine months ended May 31, 1999. This increase resulted from increased interest
payments incurred in connection with the Subordinated Loan and borrowings under
the Company's credit facilities.

Income taxes. Income taxes for the nine months ended May 31, 2000 decreased
by 21%, or $360,000, to $1,343,000 from $1,703,000 for the nine months ended May
31, 1999.

Discontinued operations. In August 1999, the Company sold its New York
operations for on-demand print and prepress services. In addition, the San
Francisco and London on-demand print and prepress business ceased operations and
closed or reallocated their facilities to other segments, respectively, prior to
August 31, 1999. There were no remaining assets or liabilities related to the
discontinuance of the on-demand print and prepress business as of August 31,
1999. As a result, the Company incurred a loss of $527,000 on discontinued
operations for the nine months ended May 31, 1999.

-16-

Net income. As a result of the factors described above, net income for the
nine months ended May 31, 2000 decreased by 61%, or $821,000, to $529,000 as
compared to net income of $1,350,000 for the nine months ended May 31, 1999.

LIQUIDITY, CAPITAL RESOURCES AND OTHER MATTERS

Cash flow. Net cash used in operating activities was $19,369,000 for the
first nine months of fiscal 2000 and $2,385,000 for the first nine months of
fiscal 1999. Net cash used in investing activities for the acquisition of
property and equipment was $2,999,000 for the first nine months of fiscal 2000
and $1,032,000 for the first nine months of fiscal 1999. For the first nine
months of fiscal 2000 and fiscal 1999, the Company acquired equipment under
capital leases of $1,993,000 and $4,344,000, respectively, and made payments
under capital leases of $2,166,000 and $2,091,000, respectively. Net bank
borrowings provided funds of $23,518,000 for the first nine months of fiscal
2000 and $31,937,000 for the first nine months of fiscal 1999.

The Company anticipates that during the fourth quarter of fiscal 2000 that
it will require additional financing to satisfy its current capital lease
obligations and debt service payments. There can be no assurance that the
Company will be able to secure such additional financing on terms favorable to
the Company, if at all.

Working capital. The Company's working capital decreased by $77,218,000
from $3,509,000 at August 31, 1999 to a working capital deficit of $73,709,000
at May 31, 2000.

Acquisitions. In March 2000, the Company consummated the Inlarge
Acquisition. The initial purchase price was $125,000 plus possible further
consideration pending a final determination of the net asset value of the assets
acquired.

In March 2000, the Company consummated the Colour Network Acquisition. The
purchase price was the issuance of 40,000 shares (approximately $140,000) of
restricted Common Stock of the Company.

-17-

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Although the Company cannot accurately determine the precise effect thereof
on its operations, it does not believe inflation, currency fluctuations or
interest rate changes have historically had a material effect on revenues, sales
or results of operations. Inflation, currency fluctuations and changes in
interest rates have, however, at various times, had significant effects on the
economies of the United States and Europe and could adversely impact the
Company's revenues, sales and results of operations in the future. If there is a
material adverse change in the relationship between the Pound Sterling and other
European currencies and the United States Dollar, such change would adversely
affect the results of the Company's European operations as reflected in the
Company's financial statements. The Company has not hedged its exposure with
respect to this currency risk, and does not expect to do so in the future, since
it does not believe that it is practicable for it to do so at a reasonable cost.

On October 29, 1999, the Company entered into an interest rate collar
agreement on $35,000,000 of variable rate bank debt. Under this interest rate
collar agreement, the Company is required to pay interest at the higher of 6.12%
or the Company's current rate (7.05% at May 31, 2000), to a maximum of 7.80% per
annum, as defined. The interest rate collar agreement terminates on October 29,
2001. The Company's estimated credit exposure related to the interest rate
collar agreement is summarized as follows:

Notional Credit
Amount Exposure
------ --------

Interest rate collar agreement $35,000,000 $3,000

The notional amount of the derivative does not represent the amount
exchanged by the parties, and is not a measure of the exposure of the Company
through its use of derivatives. The amounts exchanged are calculated on the
basis of the notional amounts and the other terms of the derivatives, which
relate to interest rates.

-18-

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

On April 17, 2000, Mark Darlow and Sheldon Darlow (the "Plaintiffs"), the
sole shareholders of Cardinal Communications Group, Inc. ("Cardinal") and C-Max
Graphics, Inc. ("C-Max"), commenced a lawsuit against the Company in the Supreme
Court of the State of New York, County of New York, claiming, among other
things, that the Company was required to pay the Plaintiffs 50% of profits
earned from the sale of certain real property located at 545 West 45th Street,
New York, New York. The Plaintiffs seek damages of approximately $600,000. The
Company denies the Plaintiffs' allegations and has filed a counterclaim against
the Plaintiffs alleging that the Plaintiffs improperly converted certain trade
receivables. The Company is seeking damages of $150,000.

Subsequent to the end of the quarter, on June 21, 2000, Photobition New
York, Inc. ("Photobition") commenced a lawsuit against the Company, Unison (NY),
Inc., George Fanno, John DeAcutis and Anthony Loiero in the Supreme Court of the
State of New York, County of New York. With respect to the Company, Photobition
claimed that the Company was employing several former employees of Photobition
despite having knowledge of valid non-competition agreements between such
employees and Photobition that prevented such employees from accepting
employment with the Company. Photobition sought an injunction prohibiting the
Company from employing the named individual defendants. On July 7, 2000, the
Company and Photobition amicably resolved the dispute. The settlement is subject
to the approval of the court.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

On March 8, 2000, the Company agreed to issue 5,000 shares of restricted
Common Stock of the Company to Anthony Senatore in connection with Mr.
Senatore's employment with the Company.

On March 9, 2000, the Company agreed to issue 27,714 and 3,695 shares of
restricted Common Stock of the Company to Amit Primor and Jeffrey Rothman,
respectively, pursuant to a settlement agreement with the Company.

On March 22, 2000, the Company agreed to issue 32,000 and 8,000 shares of
restricted Common Stock of the Company to Robert Gray and James Gray,
respectively, as partial consideration for the Colour Network Acquisition.

On April 4, 2000, the Company agreed to issue 10,000 shares of restricted
Common Stock of the Company to Nadav Chen in connection with Mr. Chen's
employment with the Company.

Subsequent to the end of the quarter, on June 26, 2000, the Company agreed
to issue 178,987 shares of restricted Common Stock of the Company to Digitalis
Corporation N.V. as partial consideration for the Makom Acquisition.

No underwriter was employed by the Company in connection with the issuances
and sales of the securities described above. The Company believes that the
issuances and sales of all of the

-19-

foregoing securities were exempt from registration under either (i) Section 4(2)
of the Securities Act of 1933, as amended (the "Act"), as transactions not
involving a public offering, or (ii) in the case of the shares issued to the
employees, Rule 701 under the Act as a transaction made pursuant to a written
compensatory benefit plan or pursuant to a written contract relating to
compensation. No public offering was involved and the securities were acquired
for investment and not with a view to distribution. Appropriate legends have
been affixed to the stock certificates issued to all recipients of such shares.
All recipients had adequate access to information about the Company.

ITEM 3. DEFAULT UPON SENIOR SECURITIES.

The Company has not met certain financial covenants under its credit
facility and has requested a waiver of such covenants from the lender. At May
31, 2000, the outstanding balance under the revolving credit facility and the
Subordinated Loan has been classified as a short-term liability until such
waiver is obtained.

ITEM 5. OTHER INFORMATION.

In March 2000, the Company consummated the Inlarge Acquisition. The initial
purchase price was $125,000 plus possible further consideration pending a final
determination of the net asset value of the assets acquired. The Company
believes that the Inlarge Acquisition enhances its capacity to produce
grand-scale outdoor advertising displays.

In March 2000, the Company consummated the Colour Network Acquisition. The
Colour Network Acquisition continued the expansion of the Company's Premedia
Services division in the United Kingdom. The purchase price was the issuance of
40,000 shares (approximately $140,000) of restricted Common Stock of the
Company.

In April 2000, the Company consummated the Makom Acquisition. The initial
aggregate purchase price was $1,350,000, which included the issuance of 178,987
shares (approximately $800,000) of restricted Common Stock of the Company. The
Company believes that the Makom Acquisition enhanced its ability to develop and
promote its Media Solutions division concepts of large-format indoor and outdoor
advertising in Germany, France and other European countries.

During the Third Quarter of Fiscal 2000, the Company moved its principal
executive offices from 229 West 28th Street, New York, New York 10001 to Pier
40, W. Houston Street @ Hudson River, New York, New York 10014. The Company's
new telephone number is (212) 989-3338.

-20-

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

(a) Exhibits.

Exhibit No. Description of Exhibit
----------- ----------------------

4.1 Promissory Note dated March 9, 2000 made
by Unidigital Inc. in favor of Ehud
Aloni in the principal amount of
$550,000. (Incorporated by reference to
Exhibit 4.1 to the Company's Quarterly
Report on Form 10-Q for the quarter
ended February 29, 2000).

10.1 Settlement Agreement dated as of March
9, 2000 among Ehud Aloni, Sigal Primor,
Amit Primor, Nadav Chen, Jeffrey E.
Rothman, Inlarge LLC (a/k/a Enlarge
LLC), Unidigital Inc. and Mega Art Corp.
(Incorporated by reference to Exhibit
10.1 to the Company's Quarterly Report
on Form 10-Q for the quarter ended
February 29, 2000).

27.1 Financial Data Schedule.

(b) Reports on Form 8-K.

None.

-21-

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934,
the Issuer caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

UNIDIGITAL INC.

DATE: July 24, 2000 By: /s/William E. Dye
-----------------------------
William E. Dye,
Chief Executive Officer
(Principal Executive Officer)

DATE: July 24, 2000 By: /s/Mary Walling
-----------------------------
Mary Walling,
Chief Financial Officer
(Principal Financial and
Accounting Officer)

-22-