UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

     [X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                  For the Quarterly Period Ended March 31, 1999

                                       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 Number: 0-22737


                      Advanced Communication Systems, Inc.
             (Exact name of registrant as specified in its charter)


               Delaware                               54-1421222
    (State or other jurisdiction of        (I.R.S. Employer Identification No.)
     incorporation or organization)

                   10089 Lee Highway, Fairfax, Virginia 22030
              (Address of principal executive office and zip code)


                                 (703) 934-8130
               Registrant's telephone number, including area code:



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 [ ]

As of the close of business on April 30, 1999, the  registrant  had  outstanding
8,683,986 shares of Common Stock, par value $.01 per share.
<PAGE>


                      ADVANCED COMMUNICATION SYSTEMS, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                                      INDEX


                                                                         PAGE

PART I.   FINANCIAL INFORMATION

Item 1. Financial Statements:

        Condensed Consolidated Balance Sheets as of March 31, 1999
        and September 30, 1998                                             3

        Condensed Consolidated Statements of Operations for the Three
        Months and Six Months Ended March 31, 1999 and 1998                4

        Condensed Consolidated Statements of Cash Flows for the Six
        Months Ended March 31, 1999 and 1998                               5

        Notes to Condensed Consolidated Financial Statements               6

Item 2. Management's Discussion and Analysis of Financial Condition        7
          and Results of Operations

Item 3. Quantitative and Qualitative Disclosures About Market Risk        14


PART II.OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders               14
Item 6. Exhibits and Reports on Form 8-K                                  15

<PAGE>


                      ADVANCED COMMUNICATION SYSTEMS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                 (in thousands, except share and per share data)
                                   (Unaudited)

                                                  March 31       September 30
                                                    1999             1998
                                                  --------        ---------
                                     ASSETS
Current assets:
Cash and cash equivalents......................     $751            $2,457
Contract receivables...........................   65,143            54,059
Other receivables..............................      268               286
Prepaid expenses...............................    1,751               958
Inventories....................................      790               583
                                                 --------          --------
   Total current assets........................   68,703            58,343
                                                 --------          --------
Property and equipment, net....................    8,226             8,044
Other assets:
Other related party receivables................       87                88
Software development costs, net................    3,848             3,186
Intangibles, net (principally goodwill)........   54,182            49,726
Other non-current assets.......................      442               348
                                                 --------          --------
   Total other assets..........................   58,559            53,348
                                                 --------          --------
      Total assets............................. $135,488          $119,735
                                                 ========          ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt..............      $93               $87
Obligations under capital lease................      696             1,100
Accounts payable...............................    4,775             9,577
Accrued expenses and other current liabilities.   25,586            22,772
Billings in excess of revenue..................    1,328             1,208
Income taxes payable...........................    1,346             1,104
Deferred income tax liability..................    1,389             1,059
                                                 --------          --------
   Total current liabilities...................   35,213            36,907
Obligations under capital lease - long-term....       52               523
Deferred income tax liability - long-term......    1,520               858
Long-term debt.................................   50,141            36,564
                                                 --------          --------
   Total liabilities...........................   86,926            74,852
Stockholders' equity:
Preferred stock, $.01 par value, 1,000,000 
  shares authorized, no shares issued
  and outstanding..............................        -                 -
Common stock, $.01 par value, 40,000,000 shares 
  authorized,11,450,000 shares issued at                        
  March 31, 1999 and September 30, 1998........      115               115
Paid-in-capital................................   41,843            41,105
Retained earnings..............................    6,921             3,991
Less - Treasury stock, 2,766,014 shares at 
  March 31, 1999 and 2,854,887 shares at                                    
  September 30, 1998...........................     (317)             (328)
                                                 --------          --------
   Total stockholders' equity..................   48,562            44,883
                                                 --------          --------
                                                                          
    Total liabilities and stockholders' equity. $135,488          $119,735
                                                 =========         ========

   The accompanying notes are an integral part of these condensed consolidated
                             financial statements.

<PAGE>

                      ADVANCED COMMUNICATION SYSTEMS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                    Three Months Ended        Six Months Ended
                                                         March 31                 March 31
                                                     1999         1998       1999         1998
                                                   --------     --------   --------     --------
<S>                                                <C>          <C>         <C>         <C>    
Revenues.........................................  $51,312      $18,380     $98,836     $32,550

Direct costs.....................................   34,057       11,859      66,252      20,990
                                   
Indirect, general and 
 administrative expenses.........................   13,451        4,888      25,824       8,821
                                                   --------     --------    --------    --------
Income from operations...........................    3,804        1,633       6,760       2,739
                                            
Interest expense, net............................   (1,092)        (285)     (1,939)       (363)
                                                   --------     --------    --------    --------
Income before taxes..............................    2,712        1,348       4,821       2,376
                                          
Income tax expense...............................    1,065          505       1,901         879
                                                   --------     --------    --------    --------
                                                                   
Net income.......................................   $1,647         $843      $2,920      $1,497
                                                   ========     ========    ========    ========
                                                   
Net income per share - basic.....................    $0.19        $0.13       $0.34       $0.23
                                                   ========     ========    ========    ========
                                                                          
Net income per share - diluted...................    $0.19        $0.13       $0.33       $0.23
                                                   ========     ========    ========    ========
                                                                   
Weighted average shares outstanding - basic......    8,669        6,524       8,644       6,438
                                                   ========     ========    ========    ========
                                                                                
Weighted average shares outstanding - diluted....    8,831        6,636       8,758       6,558
                                                   ========     ========    ========    ========
</TABLE>
      

         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.

<PAGE>


                      ADVANCED COMMUNICATION SYSTEMS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (in thousands)
                                   (Unaudited)
                                                            Six Months Ended
                                                                March 31
                                                           1999          1998
                                                          ------        ------

 Cash flow from operating activities:
 Net income.............................................  $2,920        $1,497
 Adjustments to reconcile net income to net cash used
   in operating activities-
   Depreciation and amortization........................   1,771           549
   Deferred tax provision...............................     992           147
   Changes in assets and liabilities:
       Contract receivables............................. (11,084)       (2,249)
       Other receivables................................      18          (406)
       Prepaid expenses.................................    (793)          (94)
       Inventories......................................    (207)         (133)
       Other related party receivables..................       1           (66)
       Other assets.....................................     (94)          (27)
       Accounts payable.................................  (4,802)       (2,083)
       Accrued expenses and other current liabilities...   2,814        (1,010)
       Billings in excess of revenue....................     120            20
       Income taxes payable.............................     348           579
                                                         ---------    ---------
         Net cash used in operating activities..........  (7,996)       (3,276)
 Cash flows from investing activities:
 Acquisitions, net of cash acquired.....................       -       (19,748)
 Purchases of property and equipment....................  (1,214)         (765)
 Capitalized software development costs.................    (662)         (686)
 Increase in intangible assets, primarily acquisition
   earnouts.............................................  (5,185)         (101)
                                                         ---------    ---------
         Net cash used in investing activities..........  (7,061)      (21,300)
                                                         ---------    ---------
 Cash flows from financing activities:
 Net costs incurred in sale of common stock.............      (5)          (13)
 Net borrowings repaid..................................     (17)         (866)
 Net borrowings under line of credit....................  13,600        23,261
 Net repayments of obligations under capital leases.....    (875)            -
 Sale of treasury stock.................................     648           252
                                                         ---------    ---------
         Net cash provided by financing activities......  13,351        22,634
                                                         ---------    ---------
 Net decrease in cash...................................  (1,706)       (1,942)
 Cash and cash equivalents, beginning of period.........   2,457         2,744
                                                         ---------    ---------
 Cash and cash equivalents, end of period...............    $751          $802
                                                         =========    =========
                                                                             
 Income taxes paid......................................    $556          $155
                                                         =========    =========
 Interest paid..........................................  $2,027          $352
                                                         =========    =========
                                                                       
         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.

<PAGE>

                      ADVANCED COMMUNICATION SYSTEMS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 1999
                                   (Unaudited)

1.   Basis of Presentation

The accompanying  condensed  consolidated balance sheet as of March 31, 1999 and
the statements of operations and cash flows for all periods  presented have been
prepared by Advanced Communication  Systems, Inc. ("the Company"),  and have not
been audited. These financial statements, in the opinion of management,  include
all  adjustments,  consisting of normal recurring  adjustments,  necessary for a
fair  presentation  of the financial  position,  results of operations  and cash
flows  for  all  periods  presented.   These  condensed  consolidated  financial
statements should be read in conjunction with the financial statements and notes
thereto for the fiscal year ended  September  30, 1998 included in the Company's
Annual  Report on Form  10-K.  Interim  operating  results  are not  necessarily
indicative of operating results for the full year.

2.   Management's Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

3.       Acquisition

In June 1998, the Company  acquired all the outstanding  shares of SEMCOR,  Inc.
("SEMCOR")  for a  preliminary  purchase  price  of  $38.1  million  in cash and
additional  contingent  payments,  up to a  maximum  of  $5.0  million  for  the
six-month  period ended  December 31, 1998, and up to a maximum of $10.0 million
for the  twelve-month  period ending December 31, 1999, based on the achievement
of certain financial goals. SEMCOR successfully achieved the financial goals for
the six-month  period ended  December 31, 1998 as outlined in the stock purchase
agreement,  and  accordingly the selling  shareholders  were paid the maximum of
$5.0 million in February 1999. Such amount is being carried as intangible assets
(goodwill).

4.  Long-Term Debt

Notes payable and line of credit consist of the following:
<TABLE>
<CAPTION>
                                                                           March 31,        September 30,
                                                                             1999              1998
                                                                         -----------        -----------
                                                                          (Unaudited)
<S>                                                                      <C>                <C>    
Line of credit:
  $60,000,000 line of credit with a commercial bank ($45,000,000
  at September 30, 1998) expiring February 28, 2002....................     $48,600            $35,000
                                                                                                     

Notes payable:
  Note payable to bank, interest at 9.9%, due February
  2005, secured by a First Deed of Trust on an office building.........         957                964


  Note payable to Urban Business Development Corporation,  interest 
  at 8.575%,   due  January  2015,   guaranteed  by  the  Small  
  Business Administration and secured by a Second Deed of Trust
  on an office building................................................         677                687
                                                                           -----------       ------------
                                                                             50,234             36,651
  Less current maturities...............................................         93                 87
                                                                           -----------       ------------
                                                                            $50,141            $36,564
                                                                           ===========       ============
</TABLE>

As discussed in Item 2 below,  the Company's line of credit  arrangement  with a
commercial bank, consisting of two credit facilities,  was increased in February
1999 from $50 million to $60 million. The first facility, in an amount up to $30
million,  may be  used to  finance  acquisitions,  working  capital,  and  other
corporate  purposes,  and bears interest at either the bank's prime rate or at a
London  interbank  offered rate  ("LIBOR") for one, two or three month  periods,
plus a  percentage,  not more than 2.2%,  which  depends  on the  Company's
historical performance. The second facility, in an amount up to $30 million, may
be used to finance acquisitions and for other corporate purposes approved by the
lender,  and bears  interest at either the bank's  prime rate or at a LIBOR rate
plus a  percentage,  not  more  than  2.45%,  which  depends  on  the  Company's
historical  financial  performance.  Each facility expires on February 28, 2002.
The credit agreement  contains various  covenants  requiring the Company and its
subsidiaries,  on a consolidated  basis, to maintain certain  financial  ratios,
including debt to cash flow,  fixed charge  coverage and minimum net worth.  The
credit agreement also prohibits the payment of dividends.


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

The following  Management's  Discussion and Analysis of Financial  Condition and
Results of Operations contains forward-looking  statements based on management's
current  expectations,  estimates and projections about the Company's  industry,
management's   beliefs  and  certain  assumptions  made  by  management.   These
forward-looking  statements involve risks and uncertainties,  and actual results
may differ  materially from those  anticipated or expressed in such  statements.
Potential risks and uncertainties  include, among others, those set forth herein
and in the Company's  annual  report on Form 10-K, as filed with the  Securities
and Exchange  Commission.  Except as required by law, the Company  undertakes no
obligation to update any forward-looking  statement,  whether as a result of new
information, future events or otherwise.

Overview

The Company provides communications,  information systems and applied technology
services  and  solutions,  predominately  to U.S.  government  agencies and to a
lesser  extent  commercial  and  international   customers.  The  Company's  two
significant U.S. Navy  communication  services  contracts and programs accounted
for 18.0% of the  revenues  for the  six-month  period  ended  March  31,  1999.
Although the Company intends to expand its commercial and international sales, a
relatively  small  number of  contracts  are likely to continue to account for a
significant portion of the Company's future revenues.

Many of the Company's contracts are funded from year to year, based primarily on
the  procuring  agency's  fiscal  requirements.  There can be no assurance  that
Congress will appropriate funds or that procuring  agencies will commit funds to
the Company's  contracts for their  anticipated  terms. The Company's  business,
financial  condition and results of operations  could be materially  affected by
changes in procurement policies, a reduction in funds available for the services
provided by it and other risks  generally  associated  with  federal  government
contracts.

The Company's contracts with the government and its subcontracts with government
prime  contractors  are  subject  to  termination  for  the  convenience  of the
government; termination, reduction or modification in the event of change in the
government's requirements or budgetary constraints; and, when it participates as
a  subcontractor,  termination  for  the  failure  or  inability  of  the  prime
contractor  to perform its prime  contract.  In addition,  most of the Company's
government  contracts have a base term of one year and a number of option years,
and there can be no assurance that the government will extend a contract through
its  option  years.  Termination  of  any  of  the  Company's  large  government
contracts,  or failure of the government to extend such contracts,  could have a
material  adverse  effect on the  Company's  business,  financial  condition and
results of operations.

Many of the Company's  large  contracts  require the Company to supply  services
upon request,  and the Company  receives no payments under these contracts until
such  services are  requested  and  performed.  There can be no  assurance  that
cancellations  or scope  adjustments of these  contracts might not occur or that
the  Company's   services  under  these  contracts  will  be  requested  at  the
anticipated levels in the future.


Results of Operations

The  following  table sets  forth  certain  statement  of  operations  data as a
percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>

                                                 Three Months                    Six Months
                                                Ended March 31,                 Ended March 31,
                                          -------------------------       --------------------------
                                             1999           1998             1999            1998
                                          ----------     ----------       ----------      ----------
<S>                                       <C>            <C>              <C>             <C>   
Revenues..............................      100.0%          100.0%          100.0%           100.0%
                                              
Direct costs..........................       66.4            64.5            67.0             64.5
                                              
Indirect, general and administrative..       26.2            26.6            26.1             27.1
                                          ----------     ----------       ----------      ----------
Income from operations................        7.4             8.9             6.9              8.4
                                              
Interest expense, net.................       (2.1)           (1.6)           (2.0)            (1.1)
                                          ----------     ----------      ------------    ------------
Income before taxes...................        5.3             7.3             4.9              7.3
                                               
Provision for income taxes............        2.1             2.7             1.9              2.7
                                          ----------     ----------      ------------    ------------
Net income............................        3.2%            4.6%            3.0%             4.6%
                                          ==========     ==========      ============    ============

</TABLE>

Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998

Revenues  increased  179.2%,  or $32.9  million,  to $51.3 million for the three
months ended March 31, 1999, from $18.4 million for the same period in 1998. The
increase  was  principally  due to an increase in  revenues  resulting  from the
Company's  acquisition  of SEMCOR and an  increase  in systems  integration  and
communication  services revenues,  partially offset by a decrease in information
technology   services  revenues  from  federal  agency  information   technology
customers.

Direct costs include labor costs,  related fringe benefits,  subcontract  costs,
material  costs and other  non-overhead  costs  directly  related to a contract.
Direct  costs  increased  to $34.1  million for the three months ended March 31,
1999 from $11.9  million for the same period in 1998 due  primarily to increased
revenues from the acquisition of SEMCOR. Direct costs, expressed as a percentage
of  revenues,  increased to 66.4% for the three months ended March 31, 1999 from
64.5%  for  the  same  period  in  1998,  primarily  due to an  increase  in the
proportion  of revenues  resulting  from  systems  integration  services.  These
services have higher direct costs than the other  services the Company  provides
because  the  contracts  generally  require  the  Company to  purchase  hardware
components as part of the services.

Indirect, general and administrative expenses include fringe benefits, overhead,
selling  and  administrative  costs,  depreciation  and  amortization,  bid  and
proposal  costs  and  research  and  development  expenses.   Indirect  expenses
increased to $13.5 million for the three months ended March 31, 1999,  from $4.9
million for the same  period in 1998.  The  increase  was due  primarily  to the
higher level of revenues  discussed  above.  Indirect  expenses,  expressed as a
percentage of revenues, decreased to 26.2% from 26.6% for the three months ended
March 31, 1999 and 1998  respectively,  due to the higher  proportion of systems
integration  revenues,  which typically have lower associated indirect expenses,
partially  offest by an  increase  in the  amortization  of  intangible  assets,
principally goodwill, resulting from the acquisition of SEMCOR.

Income from operations  increased  132.9%,  to $3.8 million for the three months
ended March 31, 1999,  from $1.6 million for the same period in 1998,  primarily
due to increased  communication systems revenues and applied technology services
revenues from the  acquisition of SEMCOR and an increase in systems  integration
revenues. As a percentage of revenues,  income from operations decreased to 7.4%
for the three months ended March 31, 1999,  from 8.9% for the comparable  period
in the prior year, principally attributable to the traditionally lower operating
margins experienced by SEMCOR, the lower margins from federal agency information
technology  customers and from the  amortization of intangible  assets resulting
from the Company's acquisitions.

Interest  expense,  net,  consists of interest  expense  resulting from the debt
incurred to fund the Company's  acquisitions,  offset in part by interest income
from  short-term  deposits of cash and other  sources of  non-operating  income.
Interest expense was $1.1 million and $289,000 for the three-month periods ended
March 31, 1999 and 1998,  respectively.  Interest and other non-operating income
was  $51,000  and $4,000 for the three  months  ended  March 31,  1999 and 1998,
respectively.

The Company's effective income tax rate was 39.3% and 37.5% for the three months
ended March 31, 1999 and 1998, respectively.  This increase was primarily due to
higher effective state tax rates.




Six Months Ended March 31, 1999 Compared to Six Months Ended March 31, 1998

Revenues increased 203.6%, or $66.3 million, to $98.8 million for the six months
ended  March 31,  1999,  from $32.6  million  for the same  period in 1998.  The
increase  was  principally  due to an increase in  revenues  resulting  from the
Company's  acquisition  of SEMCOR,  and an increase in systems  integration  and
communication  services revenues,  partially offset by a decrease in information
technology services from federal agency information technology customers.

Direct costs increased to $66.3 million for the six months ended March 31, 1999,
from  $21.0  million  for the same  period in 1998 due  primarily  to  increased
revenues from the Company's acquisition of SEMCOR. Direct costs,  expressed as a
percentage  of  revenues,  increased to 67.0% for the six months ended March 31,
1999,  from 64.5% for the same period in 1998,  primarily  due to an increase in
the  proportion of revenues  derived from systems  integration  services.  These
services  have higher  direct  costs than other  services  the Company  provides
because  the  contracts  generally  require  the  Company to  purchase  hardware
components as part of the services.

Indirect expenses  increased to $25.8 million for the six months ended March 31,
1999  from  $8.8  million  for the same  period in 1998.  The  increase  was due
primarily to the higher level of revenues  discussed above.  Indirect  expenses,
expressed  as a percentage  of  revenues,  decreased to 26.1% for the six months
ended March 31, 1999, from 27.1% for the comparable period last year, due to the
higher  proportion of systems  integration  revenues,  that typically have lower
associated   indirect   expenses,   partially  offset  by  an  increase  in  the
amortization  of intangible  assets,  principally  goodwill,  resulting from the
acquisition of SEMCOR.

Income from  operations  increased  146.8%,  to $6.8  million for the six months
ended March 31, 1999,  from $2.7 million for the same period in 1998,  primarily
due to  increased  operating  results  from  communication  systems  and applied
technology  revenues  from the  acquisition  of SEMCOR and from the  increase in
systems integration operating results. As a percentage of revenues,  income from
operations  decreased to 6.9% for the six months ended March 31, 1999, from 8.4%
for the comparable  period in the prior year,  principally  attributable  to the
traditionally  lower operating margins  experienced by SEMCOR, the lower margins
from federal agency information  technology  customers and from the amortization
of intangible assets resulting from the Company's acquisitions.

Interest  expense,  net,  consists of interest  expense  resulting from the debt
incurred to fund the Company's  acquisitions,  offset in part by interest income
from  short-term  deposits of cash and other  sources of  non-operating  income.
Interest  expense was $2.0 million and $378,000 for the six-month  periods ended
March  31,  1999  and  1998,   respectively.   Interest  and  other  sources  of
non-operating  income was $89,000 and $15,000 for the six months ended March 31,
1999 and 1998, respectively.

The  Company's  effective  tax rate was 39.4% and 37.0% for the six months ended
March 31, 1999 and 1998, respectively. This increase was primarily due to higher
effective state income tax rates.


Liquidity and Capital Resources

The Company  used cash from  operating  activities  of $8.0  million for the six
months ended March 31, 1999,  resulting primarily from net income,  increases in
contract  receivables and decreases in accounts payable,  partially offset by an
increase in accrued expenses. The increase in contract receivables was due to an
increase in revenues recognized for the period. Included in contract receivables
at March 31, 1999, is a contractual  obligation  of the  Australian  Navy in the
amount of $1.7 million.  The Australian  Navy is contesting  this obligation and
the Company  continues to vigorously  pursue all  available  remedies to enforce
payment of such amount.  For the six months  ended March 31,  1998,  the Company
used cash from operating activities of $3.3 million resulting primarily from net
income,  increases in contract receivables and decreases in accounts payable and
accrued expenses.

The principal use of cash for investing activities has been for the purchases of
computers and equipment, the investment in software development costs and for an
earnout  payment of $5.0 million to the former  shareholders  of SEMCOR based on
SEMCOR's  achievement of certain  financial goals for the six-month period ended
December 31, 1998. The purchases of computers and equipment totaled $1.2 million
and  $765,000  for  the  six-month   period  ended  March  31,  1999  and  1998,
respectively.  Further the Company  invested  $662,000  and $686,000 in software
development costs in the six months ended March 31, 1999 and 1998, respectively.
During the  six-month  period ended March 31,  1998,  the Company used cash from
investing  activities for the acquisition of Advanced  Management,  Incorporated
for $19.7 million.

     In  February  1999,  the  Company's  line  of  credit  arrangement  with  a
commercial  bank,  consisting of two credit  facilities,  was increased from $50
million to $60 million. The first facility,  in an amount up to $30 million, may
be used to finance acquisitions,  working capital, and other corporate purposes,
and bears  interest at either the bank's  prime rate or at LIBOR for one, two or
three month periods, plus a percentage, not more than 2.2%, which depends on the
Company's historical  performance.  The second facility,  in an amount up to $30
million,  may be used to finance  acquisitions and for other corporate  purposes
approved by the lender, and bears interest at either the bank's prime rate or at
a LIBOR  rate plus a  percentage,  not more than  2.45%,  which  depends  on the
Company's  historical financial  performance.  Each facility expires on February
28, 2002. The credit agreement contains various covenants  requiring the Company
and its  subsidiaries,  on a consolidated  basis, to maintain certain  financial
ratios,  including  debt to cash flow,  fixed  charge  coverage  and minimum net
worth. The credit agreement also prohibits the payment of dividends. As of March
31, 1999 the outstanding  balance on the Company's  credit  facilities was $48.6
million.

The Company  currently  anticipates  that its  current  cash  balances,  amounts
available  under  its  credit  facilities  and net cash  provided  by  operating
activities   will  be  sufficient  to  meet  its  working  capital  and  capital
expenditure  requirements for at least the next twelve months. Inflation did not
have a material  impact on the Company's  revenues or income from operations for
the six months ended March 31, 1999 or 1998.


YEAR 2000 Disclosure

Overview

As is true for most companies, the Year 2000 computer problem creates a risk for
the Company. If systems do not correctly recognize the date information when the
year  changes  to  2000,  there  could be an  adverse  impact  on the  Company's
operations.  The risk exists  primarily in four areas;  the  Company's  internal
systems,  third  parties  with which the  Company  has a material  relationship,
Company  products and Company Year 2000  services.  In response to the Year 2000
problem and the  associated  risks,  the Company has  developed a  comprehensive
compliance  program to evaluate,  address and remedy the date  related  problems
with  respect to the  Company's  internal  systems,  third party  relationships,
Company  products  and  services.  The  compliance  program  is  managed  by the
Company's  Chief  Technical   Officer,   and  is  tailored  after  the  guidance
promulgated by the General Accounting Office ("GAO") in their publication, "Year
2000 Computing  Crisis:  An Assessment  Guide" and by the Department of the Navy
Year 2000 Action Plan. The Company has adopted the following five-phase approach
that was endorsed by the GAO and recognized by the U.S. Congress:

Awareness Phase. The Company's  management is familiarized with the scope of the
Year 2000 impact, the problem is defined,  compliance  standards are established
and an overall  strategy is  developed.  A Year 2000  program  team is formed to
organize and implement the Company's Year 2000 compliance program.

Assessment  Phase.  The Year 2000 team  determines  the impact on the  Company's
systems,  tools,  products and  contracts.  The team  creates an  inventory  and
evaluation  of systems  that  support  the core  business  sectors.  Third party
service  providers are contacted  concerning their compliance with the Year 2000
problem with regard to the products and  services  they  provide.  The team then
prioritizes the conversion or replacement of existing systems that are confirmed
to be Year 2000 non-compliant.

Renovation  Phase. The Year 2000 program team rectifies the problems  discovered
in the  assessment  phase by modifying  or replacing  systems that are Year 2000
non-compliant.

Validation Phase. The renovated or replaced systems,  applications and databases
are tested and certified as Year 2000 compliant.

Implementation  Phase. The renovated or replaced  systems are fully  implemented
and extensive testing is performed to insure coordination with other systems and
databases. Backup and recovery plans are put in place.

The Company  anticipates  that it will have all internal  mission  critical Year
2000 solutions in place by July 1, 1999.  Internal  mission  critical  solutions
include  local  and  wide  area   networks,   financial   systems  and  embedded
micro-controllers within facility, security, telephone and other systems.

The Company is also  confirming  that Company vendors and suppliers of essential
hardware, software and services are Year 2000 compliant.

The  Company is  assessing  the  status of its  products  and Year  2000-related
services.  The  Company  also  performs  Year  2000-related  services  for  both
government  and industry and is assessing the  potential  risk to the Company of
performing  these  services and is taking action to mitigate these risks as they
are identified.


Cost for Year 2000 Compliance

The Company has budgeted $550,000 for Year 2000 compliance. To date, the Company
has  spent  approximately  $239,000.  

Year 2000 Risks

 The Company believes that its Year 2000 compliance plan is a comprehensive one.
The  Company,  however,  may not be able to  identify  or  remedy  all Year 2000
compliance  issues with respect to its internal systems,  suppliers,  customers,
products and services. Company customers may choose to fund Year 2000 compliance
efforts in lieu of contracting  services to the Company.  As a result,  the Year
2000 problem could have a materially  adverse effect on the Company's  financial
condition or results of operations.

Contingency Plans

The Company currently is developing contingency plans. The Company will continue
to develop  contingency  plans as required to mitigate the effects of delays, if
any,  in  internal  systems  compliance,   third  party  business  interruption,
non-compliant   Company  products  and  risks  associated  with  providing  Year
2000-related services.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders

(a) The Company held its Annual Meeting of Stockholders on February 25, 1999.

(b) The  matters  voted  upon at the  meeting  and the votes  cast with  respect
    thereto were as follows:

    (1)  Election of Directors

                                                   Votes              Votes
                   Nominee for Director          Cast For           Withheld
                   ------------------------  -----------------  ----------------

                   George A. Robinson....        7,434,989           16,395
                                                    
                   Charles G. Martinache..       7,395,289           56,095
                                                    
                   Thomas A. Costello.....       7,435,189           16,195
                                                    
                   Wayne Shelton..........       7,433,789           17,595
                                                   
                   Charles R. Collins......      7,432,839           18,545

                   Vincent G. Vidas........      7,433,989           17,395
                                                   

    (2)           The amendment to the Company's 1997 Stock  Incentive Plan that
                  provides  for  automatic  increases  in the  number  of shares
                  reserved  for issuance  thereunder  by the lesser (i) of 2% of
                  the  total  number of shares  of the  Company's  common  stock
                  issued  and  outstanding  on  the  last  trading  day  of  the
                  preceding  December or (ii) 400,000  shares was approved  with
                  3,988,470  votes in favor,  787,457  votes  against and 28,977
                  abstentions.

    (3)           The Company's Employee Stock Purchase Plan was approved with 
                  4,681,335 votes in favor, 100,305 votes against and 23,264 
                  abstentions.

    (4)           The  ratification of the appointment of Arthur Andersen LLP as
                  the Company's  independent  accountants for the current fiscal
                  year ending  September  30, 1999 was ratified  with  7,430,450
                  votes in favor, 10,840 votes against and 10,094 abstentions.

Item 6.  Exhibits and Reports on Form 8-K

              (a) Exhibit 10.1  Amended and Restated Credit  Agreement, dated as
                  of February 3, 1999, between the Company and NationsBank, N.A.

                  Exhibit 11.1  Statement Regarding Computation of Per Share
                  Earnings 
                                      
                  Exhibit 27.1  Financial Data Schedule

              (b)   Reports on Form-8K -None

<PAGE>



                                   SIGNATURES


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




Date:  May 14, 1999                       ADVANCED COMMUNICATION SYSTEMS, INC.



                                               /S/ George A. Robinson
                                        ---------------------------------------
                                                  George A. Robinson
                                                  Chairman, President
                                              and Chief Executive Officer


                                                    /S/ Dev Ganesan
                                        ---------------------------------------
                                                     Dev Ganesan
                                            Executive Vice President, Chief
                                            Financial Officer and Treasurer
{"company-data": {"conformed-name": "ADVANCED COMMUNICATION SYSTEMS INC", "cik": "0001035104", "assigned-sic": "7373", "irs-number": "541421222", "state-of-incorporation": "DE", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-14652", "film-number": "99623009"}, "business-address": {"street1": "10089 LEE HIGHWAY", "city": "FAIRFAX", "state": "VA", "zip": "22030", "phone": "7039378130"}, "mail-address": {"street1": "10089 LEE HIGHWAY", "city": "FAIRFAX", "state": "VA", "zip": "22030"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

     [X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                  For the Quarterly Period Ended March 31, 1999

                                       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 Number: 0-22737

                      Advanced Communication Systems, Inc.
             (Exact name of registrant as specified in its charter)

               Delaware                               54-1421222
    (State or other jurisdiction of        (I.R.S. Employer Identification No.)
     incorporation or organization)

                   10089 Lee Highway, Fairfax, Virginia 22030
              (Address of principal executive office and zip code)

                                 (703) 934-8130
               Registrant's telephone number, including area code:

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 [ ]

As of the close of business on April 30, 1999, the  registrant  had  outstanding
8,683,986 shares of Common Stock, par value $.01 per share.
ADVANCED COMMUNICATION SYSTEMS, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                                      INDEX

                                                                         PAGE

PART I.   FINANCIAL INFORMATION

Item 1. Financial Statements:

        Condensed Consolidated Balance Sheets as of March 31, 1999
        and September 30, 1998                                             3

        Condensed Consolidated Statements of Operations for the Three
        Months and Six Months Ended March 31, 1999 and 1998                4

        Condensed Consolidated Statements of Cash Flows for the Six
        Months Ended March 31, 1999 and 1998                               5

        Notes to Condensed Consolidated Financial Statements               6

Item 2. Management's Discussion and Analysis of Financial Condition        7
          and Results of Operations

Item 3. Quantitative and Qualitative Disclosures About Market Risk        14

PART II.OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders               14
Item 6. Exhibits and Reports on Form 8-K                                  15
ADVANCED COMMUNICATION SYSTEMS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                 (in thousands, except share and per share data)
                                   (Unaudited)

                                                  March 31       September 30
                                                    1999             1998
                                                  --------        ---------
                                     ASSETS
Current assets:
Cash and cash equivalents......................     $751            $2,457
Contract receivables...........................   65,143            54,059
Other receivables..............................      268               286
Prepaid expenses...............................    1,751               958
Inventories....................................      790               583
                                                 --------          --------
   Total current assets........................   68,703            58,343
                                                 --------          --------
Property and equipment, net....................    8,226             8,044
Other assets:
Other related party receivables................       87                88
Software development costs, net................    3,848             3,186
Intangibles, net (principally goodwill)........   54,182            49,726
Other non-current assets.......................      442               348
                                                 --------          --------
   Total other assets..........................   58,559            53,348
                                                 --------          --------
      Total assets............................. $135,488          $119,735
                                                 ========          ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt..............      $93               $87
Obligations under capital lease................      696             1,100
Accounts payable...............................    4,775             9,577
Accrued expenses and other current liabilities.   25,586            22,772
Billings in excess of revenue..................    1,328             1,208
Income taxes payable...........................    1,346             1,104
Deferred income tax liability..................    1,389             1,059
                                                 --------          --------
   Total current liabilities...................   35,213            36,907
Obligations under capital lease - long-term....       52               523
Deferred income tax liability - long-term......    1,520               858
Long-term debt.................................   50,141            36,564
                                                 --------          --------
   Total liabilities...........................   86,926            74,852
Stockholders' equity:
Preferred stock, $.01 par value, 1,000,000 
  shares authorized, no shares issued
  and outstanding..............................        -                 -
Common stock, $.01 par value, 40,000,000 shares 
  authorized,11,450,000 shares issued at                        
  March 31, 1999 and September 30, 1998........      115               115
Paid-in-capital................................   41,843            41,105
Retained earnings..............................    6,921             3,991
Less - Treasury stock, 2,766,014 shares at 
  March 31, 1999 and 2,854,887 shares at                                    
  September 30, 1998...........................     (317)             (328)
                                                 --------          --------
   Total stockholders' equity..................   48,562            44,883
                                                 --------          --------
                                                                          
    Total liabilities and stockholders' equity. $135,488          $119,735
                                                 =========         ========

   The accompanying notes are an integral part of these condensed consolidated
                             financial statements.
ADVANCED COMMUNICATION SYSTEMS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)

                                   (Unaudited)
Three Months Ended        Six Months Ended
                                                         March 31                 March 31
                                                     1999         1998       1999         1998
                                                   --------     --------   --------     --------
Revenues.........................................  $51,312      $18,380     $98,836     $32,550

Direct costs.....................................   34,057       11,859      66,252      20,990
                                   
Indirect, general and 
 administrative expenses.........................   13,451        4,888      25,824       8,821
                                                   --------     --------    --------    --------
Income from operations...........................    3,804        1,633       6,760       2,739
                                            
Interest expense, net............................   (1,092)        (285)     (1,939)       (363)
                                                   --------     --------    --------    --------
Income before taxes..............................    2,712        1,348       4,821       2,376
                                          
Income tax expense...............................    1,065          505       1,901         879
                                                   --------     --------    --------    --------
                                                                   
Net income.......................................   $1,647         $843      $2,920      $1,497
                                                   ========     ========    ========    ========
                                                   
Net income per share - basic.....................    $0.19        $0.13       $0.34       $0.23
                                                   ========     ========    ========    ========
                                                                          
Net income per share - diluted...................    $0.19        $0.13       $0.33       $0.23
                                                   ========     ========    ========    ========
                                                                   
Weighted average shares outstanding - basic......    8,669        6,524       8,644       6,438
                                                   ========     ========    ========    ========
                                                                                
Weighted average shares outstanding - diluted....    8,831        6,636       8,758       6,558
                                                   ========     ========    ========    ========
The accompanying notes are an integral part of these condensed
                       consolidated financial statements.
ADVANCED COMMUNICATION SYSTEMS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (in thousands)
                                   (Unaudited)
                                                            Six Months Ended
                                                                March 31
                                                           1999          1998
                                                          ------        ------

 Cash flow from operating activities:
 Net income.............................................  $2,920        $1,497
 Adjustments to reconcile net income to net cash used
   in operating activities-
   Depreciation and amortization........................   1,771           549
   Deferred tax provision...............................     992           147
   Changes in assets and liabilities:
       Contract receivables............................. (11,084)       (2,249)
       Other receivables................................      18          (406)
       Prepaid expenses.................................    (793)          (94)
       Inventories......................................    (207)         (133)
       Other related party receivables..................       1           (66)
       Other assets.....................................     (94)          (27)
       Accounts payable.................................  (4,802)       (2,083)
       Accrued expenses and other current liabilities...   2,814        (1,010)
       Billings in excess of revenue....................     120            20
       Income taxes payable.............................     348           579
                                                         ---------    ---------
         Net cash used in operating activities..........  (7,996)       (3,276)
 Cash flows from investing activities:
 Acquisitions, net of cash acquired.....................       -       (19,748)
 Purchases of property and equipment....................  (1,214)         (765)
 Capitalized software development costs.................    (662)         (686)
 Increase in intangible assets, primarily acquisition
   earnouts.............................................  (5,185)         (101)
                                                         ---------    ---------
         Net cash used in investing activities..........  (7,061)      (21,300)
                                                         ---------    ---------
 Cash flows from financing activities:
 Net costs incurred in sale of common stock.............      (5)          (13)
 Net borrowings repaid..................................     (17)         (866)
 Net borrowings under line of credit....................  13,600        23,261
 Net repayments of obligations under capital leases.....    (875)            -
 Sale of treasury stock.................................     648           252
                                                         ---------    ---------
         Net cash provided by financing activities......  13,351        22,634
                                                         ---------    ---------
 Net decrease in cash...................................  (1,706)       (1,942)
 Cash and cash equivalents, beginning of period.........   2,457         2,744
                                                         ---------    ---------
 Cash and cash equivalents, end of period...............    $751          $802
                                                         =========    =========
                                                                             
 Income taxes paid......................................    $556          $155
                                                         =========    =========
 Interest paid..........................................  $2,027          $352
                                                         =========    =========
                                                                       
         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.
ADVANCED COMMUNICATION SYSTEMS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 1999
                                   (Unaudited)

1.   Basis of Presentation

The accompanying  condensed  consolidated balance sheet as of March 31, 1999 and
the statements of operations and cash flows for all periods  presented have been
prepared by Advanced Communication  Systems, Inc. ("the Company"),  and have not
been audited. These financial statements, in the opinion of management,  include
all  adjustments,  consisting of normal recurring  adjustments,  necessary for a
fair  presentation  of the financial  position,  results of operations  and cash
flows  for  all  periods  presented.   These  condensed  consolidated  financial
statements should be read in conjunction with the financial statements and notes
thereto for the fiscal year ended  September  30, 1998 included in the Company's
Annual  Report on Form  10-K.  Interim  operating  results  are not  necessarily
indicative of operating results for the full year.

2.   Management's Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

3.       Acquisition

In June 1998, the Company  acquired all the outstanding  shares of SEMCOR,  Inc.
("SEMCOR")  for a  preliminary  purchase  price  of  $38.1  million  in cash and
additional  contingent  payments,  up to a  maximum  of  $5.0  million  for  the
six-month  period ended  December 31, 1998, and up to a maximum of $10.0 million
for the  twelve-month  period ending December 31, 1999, based on the achievement
of certain financial goals. SEMCOR successfully achieved the financial goals for
the six-month  period ended  December 31, 1998 as outlined in the stock purchase
agreement,  and  accordingly the selling  shareholders  were paid the maximum of
$5.0 million in February 1999. Such amount is being carried as intangible assets
(goodwill).

4.  Long-Term Debt

Notes payable and line of credit consist of the following:
March 31,        September 30,
                                                                             1999              1998
                                                                         -----------        -----------
                                                                          (Unaudited)
Line of credit:
  $60,000,000 line of credit with a commercial bank ($45,000,000
  at September 30, 1998) expiring February 28, 2002....................     $48,600            $35,000
                                                                                                     

Notes payable:
  Note payable to bank, interest at 9.9%, due February
  2005, secured by a First Deed of Trust on an office building.........         957                964

  Note payable to Urban Business Development Corporation,  interest 
  at 8.575%,   due  January  2015,   guaranteed  by  the  Small  
  Business Administration and secured by a Second Deed of Trust
  on an office building................................................         677                687
                                                                           -----------       ------------
                                                                             50,234             36,651
  Less current maturities...............................................         93                 87
                                                                           -----------       ------------
                                                                            $50,141            $36,564
                                                                           ===========       ============
As discussed in Item 2 below,  the Company's line of credit  arrangement  with a
commercial bank, consisting of two credit facilities,  was increased in February
1999 from $50 million to $60 million. The first facility, in an amount up to $30
million,  may be  used to  finance  acquisitions,  working  capital,  and  other
corporate  purposes,  and bears interest at either the bank's prime rate or at a
London  interbank  offered rate  ("LIBOR") for one, two or three month  periods,
plus a  percentage,  not more than 2.2%,  which  depends  on the  Company's
historical performance. The second facility, in an amount up to $30 million, may
be used to finance acquisitions and for other corporate purposes approved by the
lender,  and bears  interest at either the bank's  prime rate or at a LIBOR rate
plus a  percentage,  not  more  than  2.45%,  which  depends  on  the  Company's
historical  financial  performance.  Each facility expires on February 28, 2002.
The credit agreement  contains various  covenants  requiring the Company and its
subsidiaries,  on a consolidated  basis, to maintain certain  financial  ratios,
including debt to cash flow,  fixed charge  coverage and minimum net worth.  The
credit agreement also prohibits the payment of dividends.

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

The following  Management's  Discussion and Analysis of Financial  Condition and
Results of Operations contains forward-looking  statements based on management's
current  expectations,  estimates and projections about the Company's  industry,
management's   beliefs  and  certain  assumptions  made  by  management.   These
forward-looking  statements involve risks and uncertainties,  and actual results
may differ  materially from those  anticipated or expressed in such  statements.
Potential risks and uncertainties  include, among others, those set forth herein
and in the Company's  annual  report on Form 10-K, as filed with the  Securities
and Exchange  Commission.  Except as required by law, the Company  undertakes no
obligation to update any forward-looking  statement,  whether as a result of new
information, future events or otherwise.

Overview

The Company provides communications,  information systems and applied technology
services  and  solutions,  predominately  to U.S.  government  agencies and to a
lesser  extent  commercial  and  international   customers.  The  Company's  two
significant U.S. Navy  communication  services  contracts and programs accounted
for 18.0% of the  revenues  for the  six-month  period  ended  March  31,  1999.
Although the Company intends to expand its commercial and international sales, a
relatively  small  number of  contracts  are likely to continue to account for a
significant portion of the Company's future revenues.

Many of the Company's contracts are funded from year to year, based primarily on
the  procuring  agency's  fiscal  requirements.  There can be no assurance  that
Congress will appropriate funds or that procuring  agencies will commit funds to
the Company's  contracts for their  anticipated  terms. The Company's  business,
financial  condition and results of operations  could be materially  affected by
changes in procurement policies, a reduction in funds available for the services
provided by it and other risks  generally  associated  with  federal  government
contracts.

The Company's contracts with the government and its subcontracts with government
prime  contractors  are  subject  to  termination  for  the  convenience  of the
government; termination, reduction or modification in the event of change in the
government's requirements or budgetary constraints; and, when it participates as
a  subcontractor,  termination  for  the  failure  or  inability  of  the  prime
contractor  to perform its prime  contract.  In addition,  most of the Company's
government  contracts have a base term of one year and a number of option years,
and there can be no assurance that the government will extend a contract through
its  option  years.  Termination  of  any  of  the  Company's  large  government
contracts,  or failure of the government to extend such contracts,  could have a
material  adverse  effect on the  Company's  business,  financial  condition and
results of operations.

Many of the Company's  large  contracts  require the Company to supply  services
upon request,  and the Company  receives no payments under these contracts until
such  services are  requested  and  performed.  There can be no  assurance  that
cancellations  or scope  adjustments of these  contracts might not occur or that
the  Company's   services  under  these  contracts  will  be  requested  at  the
anticipated levels in the future.

Results of Operations

The  following  table sets  forth  certain  statement  of  operations  data as a
percentage of revenues for the periods indicated:
Three Months                    Six Months
                                                Ended March 31,                 Ended March 31,
                                          -------------------------       --------------------------
                                             1999           1998             1999            1998
                                          ----------     ----------       ----------      ----------
Revenues..............................      100.0%          100.0%          100.0%           100.0%
                                              
Direct costs..........................       66.4            64.5            67.0             64.5
                                              
Indirect, general and administrative..       26.2            26.6            26.1             27.1
                                          ----------     ----------       ----------      ----------
Income from operations................        7.4             8.9             6.9              8.4
                                              
Interest expense, net.................       (2.1)           (1.6)           (2.0)            (1.1)
                                          ----------     ----------      ------------    ------------
Income before taxes...................        5.3             7.3             4.9              7.3
                                               
Provision for income taxes............        2.1             2.7             1.9              2.7
                                          ----------     ----------      ------------    ------------
Net income............................        3.2%            4.6%            3.0%             4.6%
                                          ==========     ==========      ============    ============
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998

Revenues  increased  179.2%,  or $32.9  million,  to $51.3 million for the three
months ended March 31, 1999, from $18.4 million for the same period in 1998. The
increase  was  principally  due to an increase in  revenues  resulting  from the
Company's  acquisition  of SEMCOR and an  increase  in systems  integration  and
communication  services revenues,  partially offset by a decrease in information
technology   services  revenues  from  federal  agency  information   technology
customers.

Direct costs include labor costs,  related fringe benefits,  subcontract  costs,
material  costs and other  non-overhead  costs  directly  related to a contract.
Direct  costs  increased  to $34.1  million for the three months ended March 31,
1999 from $11.9  million for the same period in 1998 due  primarily to increased
revenues from the acquisition of SEMCOR. Direct costs, expressed as a percentage
of  revenues,  increased to 66.4% for the three months ended March 31, 1999 from
64.5%  for  the  same  period  in  1998,  primarily  due to an  increase  in the
proportion  of revenues  resulting  from  systems  integration  services.  These
services have higher direct costs than the other  services the Company  provides
because  the  contracts  generally  require  the  Company to  purchase  hardware
components as part of the services.

Indirect, general and administrative expenses include fringe benefits, overhead,
selling  and  administrative  costs,  depreciation  and  amortization,  bid  and
proposal  costs  and  research  and  development  expenses.   Indirect  expenses
increased to $13.5 million for the three months ended March 31, 1999,  from $4.9
million for the same  period in 1998.  The  increase  was due  primarily  to the
higher level of revenues  discussed  above.  Indirect  expenses,  expressed as a
percentage of revenues, decreased to 26.2% from 26.6% for the three months ended
March 31, 1999 and 1998  respectively,  due to the higher  proportion of systems
integration  revenues,  which typically have lower associated indirect expenses,
partially  offest by an  increase  in the  amortization  of  intangible  assets,
principally goodwill, resulting from the acquisition of SEMCOR.

Income from operations  increased  132.9%,  to $3.8 million for the three months
ended March 31, 1999,  from $1.6 million for the same period in 1998,  primarily
due to increased  communication systems revenues and applied technology services
revenues from the  acquisition of SEMCOR and an increase in systems  integration
revenues. As a percentage of revenues,  income from operations decreased to 7.4%
for the three months ended March 31, 1999,  from 8.9% for the comparable  period
in the prior year, principally attributable to the traditionally lower operating
margins experienced by SEMCOR, the lower margins from federal agency information
technology  customers and from the  amortization of intangible  assets resulting
from the Company's acquisitions.

Interest  expense,  net,  consists of interest  expense  resulting from the debt
incurred to fund the Company's  acquisitions,  offset in part by interest income
from  short-term  deposits of cash and other  sources of  non-operating  income.
Interest expense was $1.1 million and $289,000 for the three-month periods ended
March 31, 1999 and 1998,  respectively.  Interest and other non-operating income
was  $51,000  and $4,000 for the three  months  ended  March 31,  1999 and 1998,
respectively.

The Company's effective income tax rate was 39.3% and 37.5% for the three months
ended March 31, 1999 and 1998, respectively.  This increase was primarily due to
higher effective state tax rates.

Six Months Ended March 31, 1999 Compared to Six Months Ended March 31, 1998

Revenues increased 203.6%, or $66.3 million, to $98.8 million for the six months
ended  March 31,  1999,  from $32.6  million  for the same  period in 1998.  The
increase  was  principally  due to an increase in  revenues  resulting  from the
Company's  acquisition  of SEMCOR,  and an increase in systems  integration  and
communication  services revenues,  partially offset by a decrease in information
technology services from federal agency information technology customers.

Direct costs increased to $66.3 million for the six months ended March 31, 1999,
from  $21.0  million  for the same  period in 1998 due  primarily  to  increased
revenues from the Company's acquisition of SEMCOR. Direct costs,  expressed as a
percentage  of  revenues,  increased to 67.0% for the six months ended March 31,
1999,  from 64.5% for the same period in 1998,  primarily  due to an increase in
the  proportion of revenues  derived from systems  integration  services.  These
services  have higher  direct  costs than other  services  the Company  provides
because  the  contracts  generally  require  the  Company to  purchase  hardware
components as part of the services.

Indirect expenses  increased to $25.8 million for the six months ended March 31,
1999  from  $8.8  million  for the same  period in 1998.  The  increase  was due
primarily to the higher level of revenues  discussed above.  Indirect  expenses,
expressed  as a percentage  of  revenues,  decreased to 26.1% for the six months
ended March 31, 1999, from 27.1% for the comparable period last year, due to the
higher  proportion of systems  integration  revenues,  that typically have lower
associated   indirect   expenses,   partially  offset  by  an  increase  in  the
amortization  of intangible  assets,  principally  goodwill,  resulting from the
acquisition of SEMCOR.

Income from  operations  increased  146.8%,  to $6.8  million for the six months
ended March 31, 1999,  from $2.7 million for the same period in 1998,  primarily
due to  increased  operating  results  from  communication  systems  and applied
technology  revenues  from the  acquisition  of SEMCOR and from the  increase in
systems integration operating results. As a percentage of revenues,  income from
operations  decreased to 6.9% for the six months ended March 31, 1999, from 8.4%
for the comparable  period in the prior year,  principally  attributable  to the
traditionally  lower operating margins  experienced by SEMCOR, the lower margins
from federal agency information  technology  customers and from the amortization
of intangible assets resulting from the Company's acquisitions.

Interest  expense,  net,  consists of interest  expense  resulting from the debt
incurred to fund the Company's  acquisitions,  offset in part by interest income
from  short-term  deposits of cash and other  sources of  non-operating  income.
Interest  expense was $2.0 million and $378,000 for the six-month  periods ended
March  31,  1999  and  1998,   respectively.   Interest  and  other  sources  of
non-operating  income was $89,000 and $15,000 for the six months ended March 31,
1999 and 1998, respectively.

The  Company's  effective  tax rate was 39.4% and 37.0% for the six months ended
March 31, 1999 and 1998, respectively. This increase was primarily due to higher
effective state income tax rates.

Liquidity and Capital Resources

The Company  used cash from  operating  activities  of $8.0  million for the six
months ended March 31, 1999,  resulting primarily from net income,  increases in
contract  receivables and decreases in accounts payable,  partially offset by an
increase in accrued expenses. The increase in contract receivables was due to an
increase in revenues recognized for the period. Included in contract receivables
at March 31, 1999, is a contractual  obligation  of the  Australian  Navy in the
amount of $1.7 million.  The Australian  Navy is contesting  this obligation and
the Company  continues to vigorously  pursue all  available  remedies to enforce
payment of such amount.  For the six months  ended March 31,  1998,  the Company
used cash from operating activities of $3.3 million resulting primarily from net
income,  increases in contract receivables and decreases in accounts payable and
accrued expenses.

The principal use of cash for investing activities has been for the purchases of
computers and equipment, the investment in software development costs and for an
earnout  payment of $5.0 million to the former  shareholders  of SEMCOR based on
SEMCOR's  achievement of certain  financial goals for the six-month period ended
December 31, 1998. The purchases of computers and equipment totaled $1.2 million
and  $765,000  for  the  six-month   period  ended  March  31,  1999  and  1998,
respectively.  Further the Company  invested  $662,000  and $686,000 in software
development costs in the six months ended March 31, 1999 and 1998, respectively.
During the  six-month  period ended March 31,  1998,  the Company used cash from
investing  activities for the acquisition of Advanced  Management,  Incorporated
for $19.7 million.

     In  February  1999,  the  Company's  line  of  credit  arrangement  with  a
commercial  bank,  consisting of two credit  facilities,  was increased from $50
million to $60 million. The first facility,  in an amount up to $30 million, may
be used to finance acquisitions,  working capital, and other corporate purposes,
and bears  interest at either the bank's  prime rate or at LIBOR for one, two or
three month periods, plus a percentage, not more than 2.2%, which depends on the
Company's historical  performance.  The second facility,  in an amount up to $30
million,  may be used to finance  acquisitions and for other corporate  purposes
approved by the lender, and bears interest at either the bank's prime rate or at
a LIBOR  rate plus a  percentage,  not more than  2.45%,  which  depends  on the
Company's  historical financial  performance.  Each facility expires on February
28, 2002. The credit agreement contains various covenants  requiring the Company
and its  subsidiaries,  on a consolidated  basis, to maintain certain  financial
ratios,  including  debt to cash flow,  fixed  charge  coverage  and minimum net
worth. The credit agreement also prohibits the payment of dividends. As of March
31, 1999 the outstanding  balance on the Company's  credit  facilities was $48.6
million.

The Company  currently  anticipates  that its  current  cash  balances,  amounts
available  under  its  credit  facilities  and net cash  provided  by  operating
activities   will  be  sufficient  to  meet  its  working  capital  and  capital
expenditure  requirements for at least the next twelve months. Inflation did not
have a material  impact on the Company's  revenues or income from operations for
the six months ended March 31, 1999 or 1998.

YEAR 2000 Disclosure

Overview

As is true for most companies, the Year 2000 computer problem creates a risk for
the Company. If systems do not correctly recognize the date information when the
year  changes  to  2000,  there  could be an  adverse  impact  on the  Company's
operations.  The risk exists  primarily in four areas;  the  Company's  internal
systems,  third  parties  with which the  Company  has a material  relationship,
Company  products and Company Year 2000  services.  In response to the Year 2000
problem and the  associated  risks,  the Company has  developed a  comprehensive
compliance  program to evaluate,  address and remedy the date  related  problems
with  respect to the  Company's  internal  systems,  third party  relationships,
Company  products  and  services.  The  compliance  program  is  managed  by the
Company's  Chief  Technical   Officer,   and  is  tailored  after  the  guidance
promulgated by the General Accounting Office ("GAO") in their publication, "Year
2000 Computing  Crisis:  An Assessment  Guide" and by the Department of the Navy
Year 2000 Action Plan. The Company has adopted the following five-phase approach
that was endorsed by the GAO and recognized by the U.S. Congress:

Awareness Phase. The Company's  management is familiarized with the scope of the
Year 2000 impact, the problem is defined,  compliance  standards are established
and an overall  strategy is  developed.  A Year 2000  program  team is formed to
organize and implement the Company's Year 2000 compliance program.

Assessment  Phase.  The Year 2000 team  determines  the impact on the  Company's
systems,  tools,  products and  contracts.  The team  creates an  inventory  and
evaluation  of systems  that  support  the core  business  sectors.  Third party
service  providers are contacted  concerning their compliance with the Year 2000
problem with regard to the products and  services  they  provide.  The team then
prioritizes the conversion or replacement of existing systems that are confirmed
to be Year 2000 non-compliant.

Renovation  Phase. The Year 2000 program team rectifies the problems  discovered
in the  assessment  phase by modifying  or replacing  systems that are Year 2000
non-compliant.

Validation Phase. The renovated or replaced systems,  applications and databases
are tested and certified as Year 2000 compliant.

Implementation  Phase. The renovated or replaced  systems are fully  implemented
and extensive testing is performed to insure coordination with other systems and
databases. Backup and recovery plans are put in place.

The Company  anticipates  that it will have all internal  mission  critical Year
2000 solutions in place by July 1, 1999.  Internal  mission  critical  solutions
include  local  and  wide  area   networks,   financial   systems  and  embedded
micro-controllers within facility, security, telephone and other systems.

The Company is also  confirming  that Company vendors and suppliers of essential
hardware, software and services are Year 2000 compliant.

The  Company is  assessing  the  status of its  products  and Year  2000-related
services.  The  Company  also  performs  Year  2000-related  services  for  both
government  and industry and is assessing the  potential  risk to the Company of
performing  these  services and is taking action to mitigate these risks as they
are identified.

Cost for Year 2000 Compliance

The Company has budgeted $550,000 for Year 2000 compliance. To date, the Company
has  spent  approximately  $239,000.  

Year 2000 Risks

 The Company believes that its Year 2000 compliance plan is a comprehensive one.
The  Company,  however,  may not be able to  identify  or  remedy  all Year 2000
compliance  issues with respect to its internal systems,  suppliers,  customers,
products and services. Company customers may choose to fund Year 2000 compliance
efforts in lieu of contracting  services to the Company.  As a result,  the Year
2000 problem could have a materially  adverse effect on the Company's  financial
condition or results of operations.

Contingency Plans

The Company currently is developing contingency plans. The Company will continue
to develop  contingency  plans as required to mitigate the effects of delays, if
any,  in  internal  systems  compliance,   third  party  business  interruption,
non-compliant   Company  products  and  risks  associated  with  providing  Year
2000-related services.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders

(a) The Company held its Annual Meeting of Stockholders on February 25, 1999.

(b) The  matters  voted  upon at the  meeting  and the votes  cast with  respect
    thereto were as follows:

    (1)  Election of Directors

                                                   Votes              Votes
                   Nominee for Director          Cast For           Withheld
                   ------------------------  -----------------  ----------------

                   George A. Robinson....        7,434,989           16,395
                                                    
                   Charles G. Martinache..       7,395,289           56,095
                                                    
                   Thomas A. Costello.....       7,435,189           16,195
                                                    
                   Wayne Shelton..........       7,433,789           17,595
                                                   
                   Charles R. Collins......      7,432,839           18,545

                   Vincent G. Vidas........      7,433,989           17,395
                                                   

    (2)           The amendment to the Company's 1997 Stock  Incentive Plan that
                  provides  for  automatic  increases  in the  number  of shares
                  reserved  for issuance  thereunder  by the lesser (i) of 2% of
                  the  total  number of shares  of the  Company's  common  stock
                  issued  and  outstanding  on  the  last  trading  day  of  the
                  preceding  December or (ii) 400,000  shares was approved  with
                  3,988,470  votes in favor,  787,457  votes  against and 28,977
                  abstentions.

    (3)           The Company's Employee Stock Purchase Plan was approved with 
                  4,681,335 votes in favor, 100,305 votes against and 23,264 
                  abstentions.

    (4)           The  ratification of the appointment of Arthur Andersen LLP as
                  the Company's  independent  accountants for the current fiscal
                  year ending  September  30, 1999 was ratified  with  7,430,450
                  votes in favor, 10,840 votes against and 10,094 abstentions.

Item 6.  Exhibits and Reports on Form 8-K

              (a) Exhibit 10.1  Amended and Restated Credit  Agreement, dated as
                  of February 3, 1999, between the Company and NationsBank, N.A.

                  Exhibit 11.1  Statement Regarding Computation of Per Share
                  Earnings 
                                      
                  Exhibit 27.1  Financial Data Schedule

              (b)   Reports on Form-8K -None
SIGNATURES

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

Date:  May 14, 1999                       ADVANCED COMMUNICATION SYSTEMS, INC.

                                               /S/ George A. Robinson
                                        ---------------------------------------
                                                  George A. Robinson
                                                  Chairman, President
                                              and Chief Executive Officer

                                                    /S/ Dev Ganesan
                                        ---------------------------------------
                                                     Dev Ganesan
                                            Executive Vice President, Chief
                                            Financial Officer and Treasurer