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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the three months ended June 30, 2004

Commission File Number 0-14371

COMPUCOM SYSTEMS, INC.

(Exact name of Registrant as specified in its charter)

Registrant’s telephone number, including area code: (972) 856-3600

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes  x    No  ¨

The number of shares of the Registrant’s common stock outstanding as of August 5, 2004 was 50,348,699 shares.

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COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

Index

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COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)

(unaudited)

See accompanying notes to condensed consolidated financial statements.

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COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(unaudited)

See accompanying notes to condensed consolidated financial statements.

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COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)

See accompanying notes to condensed consolidated financial statements.

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COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2004

(unaudited)

These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and the summary of significant accounting policies and notes thereto included in the 2003 Annual Report on Form 10-K for CompuCom Systems, Inc. (“CompuCom” or “the Company”). The information furnished is unaudited but reflects all adjustments, consisting only of normal recurring accruals, which are in the opinion of management necessary for a fair presentation of the results for these interim periods. Interim results are not necessarily indicative of results expected for future interim periods or for the year ending December 31, 2004.

On May 27, 2004, CompuCom entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CHR Holding Corporation (“Parent”) and CHR Merger Corporation (“Merger Subsidiary”) pursuant to which, on the effective date of the merger, each outstanding share of Company common stock would be converted into the right to receive $4.60 in cash, without interest, and each outstanding share of Company preferred stock would be converted into the right to receive $10.00 per share plus accumulated dividends. In addition, option holders with an exercise price less than $4.60 would be entitled to receive an amount equal to $4.60 minus the exercise price per share, multiplied by the number of shares subject to the option. Upon consummation of the merger, the Company would be a wholly owned subsidiary of Parent, which in turn is an affiliate of Platinum Equity, LLC (“Platinum”).

In connection with the proposed merger, the Company recorded a loss from impairment of goodwill of $33.4 million in the second quarter 2004 (see Footnote 6). This loss was related to a write-off of a portion of goodwill associated with the Company’s product business. In addition, in the second quarter 2004, the Company recognized fees and expenses associated with the proposed merger of $1.9 million.

On May 28, 2004, June 1, 2004 and June 10, 2004, three substantially similar complaints were filed in the Chancery Court of the State of Delaware by purported stockholders of the Company allegedly on behalf of a class of holders of the Company’s common stock. By order dated July 22, 2004, these three actions were consolidated for all purposes. On July 27, 2004, plaintiffs filed an amended class action complaint under the caption of one of the three actions (the “Amended Complaint”) that names as defendants the Company, its directors, and Safeguard Scientifics, Inc. (“Safeguard”). The Amended Complaint alleges that the Company, its directors, and Safeguard breached fiduciary duties in connection with the merger agreement described in the Company’s press release of May 28, 2004 and aided and abetted one another in the course of committing the alleged breach. Among other things, the Amended Complaint alleges that the defendants failed to obtain the best transaction reasonably available and diverted merger consideration from the Company’s minority stockholders to Safeguard and the Company’s directors and certain of its officers. It is also alleged that the Company failed to disclose, or only partially disclosed, certain matters in the Company’s proxy statement.

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COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

June 30, 2004

(unaudited)

The Amended Complaint seeks (i) an injunction against the proposed transaction, (ii) an order invalidating the proposed transaction in the event it is consummated, (iii) an order directing the Company’s directors to obtain a transaction that is in the best interests of all of its shareholders and to disclose all material information to shareholders in connection with any transaction; and (iv) the imposition of a constructive trust, in favor of plaintiffs, upon any benefits improperly received by defendants.

On July 27, 2004, plaintiffs filed a motion for expedited proceedings and discovery in connection with the injunctive relief sought and requested that a preliminary injunction hearing be held before August 19, 2004, the date of the special meeting of the stockholders of the Company. Defendants filed their opposition to the motion on July 28, 2004. On July 29, 2004, the Court denied the motion.

CompuCom is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, these matters are not material.

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 128, “Earnings Per Share,” basic earnings (loss) per common share have been computed based on net earnings (loss) after preferred stock dividend requirements and the weighted average number of common shares outstanding during each period. Diluted earnings (loss) per common share assumes conversion of dilutive convertible securities into common stock at the later of the beginning of the period or date of issuance and includes the add-back of related dividends, as required. Diluted earnings (loss) per common share also assumes the exercise of all options with an exercise price below the average market price of the Company’s stock, at the later of the beginning of the period or date of issuance, regardless of whether the options are vested or not. Earnings (loss) per common share have been computed as follows (in thousands, except per share amounts):

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