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

FORM 10-Q

(Mark One)

OR

Commission File Number: 000-24373

GLOBAL IMAGING SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

REGISTRANT’S TELEPONE NUMBER, INCLUDING AREA CODE: 813-960-5508

_____________________________________________________________________________________________
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)

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 o

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

The registrant had 21,195,197 shares of common stock, $.01 par value, outstanding as of November 6, 2002.

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INDEX

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PART I – FINANCIAL INFORMATION

GLOBAL IMAGING SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

See accompanying notes.

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GLOBAL IMAGING SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

See accompanying notes.

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GLOBAL IMAGING SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

See accompanying notes.

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GLOBAL IMAGING SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(IN THOUSANDS)

See accompanying notes.

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GLOBAL IMAGING SYSTEMS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)
(IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS)

See accompanying notes.

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GLOBAL IMAGING SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

NOTE 1.   BASIS OF PRESENTATION

         The accompanying consolidated balance sheet as of September 30, 2002, consolidated statements of operations for the three and six months ended September 30, 2002 and 2001, consolidated statements of cash flows for the six months ended September 30, 2002 and 2001, and the consolidated statement of stockholders’ equity for the six months ended September 30, 2002 are unaudited. In the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results which may be expected for the entire fiscal year. The consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in Global Imaging Systems, Inc.’s (together with its subsidiaries, “Global” or the “Company”) Annual Report for the year ended March 31, 2002. Certain prior year amounts have been reclassified to conform to the current year presentation.

NOTE 2.   EARNINGS PER SHARE

         Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution from the exercise of stock options or the conversion of securities into common stock.

         The following table reconciles the numerators and denominators of the basic and diluted EPS computations (shares in thousands):

NOTE 3.   ACQUISITIONS

         During the six months ended September 30, 2002 the Company acquired five businesses that provide office-imaging solutions. Aggregate consideration, net of cash acquired, for these acquisitions was approximately $31,331 consisting of cash, 193,319 shares of the Company’s common stock (valued at $3,605, based on the fair value of the stock) and acquisition related expenses. The Company, in connection with these acquisitions, assumed liabilities totaling approximately $6,721. Goodwill of approximately $28,377 was recorded related to these acquisitions. These acquisitions were accounted for by the purchase method of accounting and accordingly are included in the results of operations from the date of acquisition.

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         During the six months ended September 30, 2002, the Company paid $500 in cash to the former owners of Lewan & Associates, Inc., one of its acquired businesses, to terminate and satisfy in full a $20,000 contingent payment (earnout) liability.

         The unaudited pro forma results presented below include the effects of the Company’s acquisitions for fiscal years 2003 and 2002 as if they had been consummated as of April 1, 2001. The unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisitions been consummated at the beginning of the year prior to acquisition.

NOTE 4.   STOCK OPTION PLANS

         In 1998, the Board of Directors adopted a stock option plan under which, as amended, 2,520,000 shares of the Company’s common stock may be sold pursuant to stock options granted or sold as restricted stock to directors, officers, employees and consultants to the Company. As of September 30, 2002, options to purchase 1,984,602 shares of the Company’s common stock were outstanding under the stock option plan. During the six months ended September 30, 2002, options to purchase an aggregate of 678,000 shares were granted under the 1998 stock option plan with exercise prices ranging from $17.88 to $20.00 per share. During the six months ended September 30, 2002, 62,500 restricted shares were granted for a purchase price of $.01 per share.

         On January 25, 2001, the Board of Directors adopted the Global Imaging Systems, Inc. 2001 Stock Option Plan under which Global may grant options to purchase up to 300,000 shares of Global’s common stock to employees of and service providers to Global, except for executive officers and directors. Stock options granted under the 2001 stock option plan have the same terms as those granted under the 1998 plan. As of September 30, 2002, options to purchase 267,640 shares were outstanding under the 2001 stock option plan. During the six months ended September 30, 2002, no options were granted under the 2001 stock option plan.

         In addition to options outstanding under Global’s stock option plans, 10,000 shares of Global’s common stock are issuable upon the exercise of an option granted outside Global’s stock option plans. This option is exercisable at a price of $12.00 per share.

NOTE 5.   DERIVATIVES

         On April 1, 2001, the Company adopted Statement of Financial Accounting Standard (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended. SFAS No. 133 requires the recognition of all derivative instruments as either assets or liabilities in the consolidated balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging

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relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based on the exposure being hedged, as either a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation.

         For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk, such as interest rate risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of the future cash flows of the hedged item, if any, is recognized in current earnings during the period of change.

         The Company had entered into interest rate swap agreements that effectively converted a portion of its floating-rate debt to a fixed-rate basis until September 2002, thus reducing the impact of interest-rate changes on past interest expense. During the quarter ended September 30, 2002, those interest rate swap agreements expired. There are no other interest rate swap agreements outstanding as of September 30, 2002. Under those swap agreements, the Company received an average variable rate of 2.0% and paid an average fixed rate of 6.6% during the six months ended September 30, 2002. The Company has recognized a gain, net of tax, of approximately $855 for the six months ended September 30, 2002 related to the portion of the hedging instrument included in the assessment of hedge effectiveness, which has been recorded in comprehensive income.

         The Company had entered into an interest rate cap agreement (cap) in the total notional amount of approximately $22,000, which was not designated as a hedging instrument. The cap expired in September 2002 and no payments were received under the cap. The cap limited the Company’s interest rate risk exposure to 9% for the related notional amount.

          The Company recently entered into a three-year swap agreement that will become effective November 12, 2002. This agreement will effectively convert $20,000 of our variable rate debt to fixed rate debt and reduce our exposure to changes in interest rates.

NOTE 6.   COMPREHENSIVE INCOME

         The following table presents a reconciliation of comprehensive income, comprised of net income, the cumulative effect of adopting SFAS No. 133 on April 1, 2001 and the unrealized gain (loss) on cash flow hedges.

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NOTE 7.   RECENT ACCOUNTING PRONOUNCEMENTS

         In June 2002, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities (“SFAS 146”). SFAS 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring), as liabilities for these costs are now recognized when incurred rather than at the date an entity commits to an exit plan. The provisions of SFAS 146 are effective, on a prospective basis, for exit or disposal activities initiated by the Company after December 31, 2002. The Company does not expect the adoption of this standard to have a material impact on its financial statements.

NOTE 8.   SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

         The Company has issued $100,000 of 10.75% Senior Subordinated Notes that are fully and unconditionally guaranteed on a joint and several basis by all the Company’s existing subsidiaries (the Guarantors), each of which is wholly owned, directly or indirectly, by the Company. The Company is a holding company all of whose operations are conducted by the Guarantors and the Company has no operations or assets separate from its investment in its subsidiaries.

         The following discussion and analysis should be read in conjunction with the accompanying financial statements and related notes included elsewhere in this Report on Form 10-Q and our annual report for the year ended March 31, 2002. The discussion in this section contains forward-looking statements, including statements relating to the pace of our future acquisitions and overall growth, the benefits that will be realized by businesses we have acquired or may acquire, our future product and service offerings, pace of borrowings and rate of internally generated cash flows and time frame for seeking additional financing. These forward-looking statements are based largely on management’s current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to risks, uncertainties and assumptions, which could cause our actual results to differ materially from the results suggested by these forward-looking statements. Some factors that may cause our results to differ materially from these statements are:

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         Information regarding many of these factors and other factors that may cause our actual results to differ materially from those contained in the forward-looking statements is presented in the “Risk Factors” section of our Annual Report on Form 10-K/A for the year ended March 31, 2002. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

         We are a leading provider of a number of office technology solutions. We sell and service automated office equipment, network integration solutions and electronic presentation systems. We offer solutions incorporating products from Konica, Canon, Ricoh, Sharp, Hewlett-Packard, IBM, Microsoft, InFocus, Sony and other leading companies. We also offer a variety of ongoing contract services, including service, supply, network management, technical support and training. We currently operate from 140 locations in 27 states and the District of Columbia. Since our founding in June 1994, we have acquired 57 businesses, all within the United States, and presently operate 15 core companies and 42 satellite companies. The first acquisition was completed in August 1994. We believe the businesses we have acquired and other businesses we acquire in the future will benefit from our various programs and operating strategies. These benefits include increased operating efficiencies, the support of experienced and professional senior management, expansion of the types of office imaging products and services offered, increased access to capital, and enhanced financial management.

         Our revenues come from two sources: (1) sales of equipment and supplies and (2) sales of complementary services and equipment rentals. The growth of equipment revenues and the complementary supplies, parts and service revenues depends on several factors, including the demand for equipment, our reputation for providing timely and reliable service, and general economic conditions. Revenues generated from the sale of equipment and complementary supplies, parts and services are affected by price, general economic conditions, service reputation, and competitors’ actions in the marketplace. Sales of complementary supplies, parts and services are affected by equipment sales and rental volumes.

         Gross profit as a percentage of revenues varies from period to period depending on a number of variables. Those variables include the mix of revenues from equipment, supplies, service and rentals; the mix of revenues among the markets served by us; and the mix of revenues of the businesses acquired by us. As we acquire businesses, the percentage of our revenues that comes from sales of equipment and supplies, as opposed to service and rentals, fluctuates depending on whether the businesses acquired are automated office equipment dealers or are network integrators or electronic presentation systems dealers. Automated office equipment dealers typically derive a higher percentage of their revenues from service and rentals, and a lower percentage from sales of equipment and supplies, than do network integrators or electronic presentation system dealers. Generally, sales of equipment and supplies have lower gross profit margins than revenues from service and rentals. In addition, equipment sales in the automated office equipment market generally have higher gross profit margins than equipment sales in the network integration or electronic presentation systems markets. While the focus of our acquisition strategy is to acquire businesses in the automated office equipment market, to the extent the network integration and electronic presentation markets grow faster than the automated office equipment market, over time a larger percentage of our revenues and gross profits may be derived from sales that have lower gross profit margins than our current gross profit margins.

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         Cost of goods sold consists primarily of the cost of new equipment, cost of supplies and parts, labor costs to provide services, rental equipment depreciation and other direct operating costs. We depreciate our rental equipment primarily over a three-year period on a straight-line basis.

Critical Accounting Policies and Estimates

         Management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. On an on-going basis, we evaluate these estimates, including those related to accounts receivable, inventories, vendor incentives, intangible assets and contingencies. Our estimates and judgments are based on currently available information, historical results and other assumptions we believe are reasonable. Actual results could differ materially from these estimates. We believe the following critical accounting policies affect the more significant judgments and estimates used in the preparation of our consolidated financial statements:

Accounts Receivable

         We maintain allowances for doubtful accounts for estimated losses arising from the inability of our customers to make required payments. Our estimate of losses is based upon prior collection experience, a review of specific customers and their ability to pay, and an overall appraisal of current economic conditions. If the financial condition of our customers were to deteriorate, resulting in a reduced ability to make payments, additional allowances may be required which would reduce net income.

Inventories

         Inventories are valued at the lower of cost (specific identification and/or average cost for equipment and average cost for related parts and supplies) or market value. We write down our inventories for estimated obsolescence equal to the difference between the cost of inventories and the estimated market values based upon an aging analysis of the inventories on hand, specifically known inventory-related risks and assumptions about future demand and market conditions. These write-downs are reflected in our cost of sales. If actual market conditions are less favorable than those projected by management, additional write-downs may be required which could have an adverse effect on our financial results.

Vendor Incentives

         We receive incentives from some of our vendors related to volume rebates, cooperative advertising allowances and other programs or agreements. We record unrestricted volume rebates received as a reduction of inventories and recognize the incentives as a reduction to cost of sales when the related inventories are sold. Cooperative advertising allowances are generally required by the vendor to be used by us exclusively for advertising or other marketing programs. These restricted cooperative advertising allowances are recognized as a reduction to selling, general and administrative expenses as the related marketing expenses are incurred. Amounts received or receivable from vendors that are not yet earned are deferred in the consolidated balance sheet.

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         In addition, we receive early payment discounts from certain vendors. We record early payment discounts received as a reduction of inventories and recognize the discount as a reduction to cost of sales when the related inventories are sold.

Intangible Assets

         We examine the carrying value of our excess of cost over fair value of acquired net assets (goodwill) and other intangible assets as current events and circumstances warrant to determine whether there are any impairment losses. For goodwill, we test the recorded amount annually, or more frequently if conditions change, for impairment by comparing the recorded value to estimated fair value. If indicators of impairment were present relating to other intangible assets and future cash flows were not expected to be sufficient to recover the assets’ carrying amount, an impairment loss would be charged to expense in the period identified. No event has been identified that would indicate an impairment of the value of goodwill recorded in the consolidated financial statements.

Contingencies

         We accrue for contingent obligations, including estimated legal costs, when the obligations are probable and the amounts are reasonably estimable. As facts concerning contingencies become known, we reassess our position and make appropriate adjustments to the financial statements. Estimates that are particularly sensitive to future charges include tax, legal and other regulatory matters which are subject to change as events evolve and as additional information becomes available during the administrative and litigation process.

RESULTS OF OPERATIONS

         The following table sets forth selected consolidated financial information as a percentage of total revenues.

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THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2001

         Total revenues for the three months ended September 30, 2002 increased to $173,410, 8.3% higher than total revenues of $160,122 for the same period in 2001. This was due to an increase in automated office equipment and electronic presentation systems revenues and the acquisition of businesses during fiscal years 2003 and 2002, partially offset by a decline in network integration solutions revenues.

         Equipment and supplies revenues for the three months ended September 30, 2002 increased to $130,284, 6.4% higher than equipment and supplies revenues of $122,426 for the same period in 2001. In fiscal years 2003 and 2002, we acquired businesses that added proportionately more equipment and supplies revenues than we had in our existing businesses. In addition, the increase was partially due to revenue growth of automated office equipment and electronic presentation systems equipment and supplies revenues, offset by a decline in network integration solutions equipment and supplies revenues.

         Service and rental revenues for the three months ended September 30, 2002 increased to $43,126, 14.4% higher than service and rental revenues of $37,696 for the same period in 2001. In fiscal years 2003 and 2002, we acquired businesses that added proportionately more service and rental revenues than we had in our existing businesses. In addition, the increase was partially due to revenue growth of automated office equipment and electronic presentation systems service and rental revenues, partially offset by a decline in network integration solutions service and rental revenues.

         Gross profit of $64,278 for the three months ended September 30, 2002 reflected a 12.0% increase over the same period in 2001. Expressed as a percent of total revenue, gross profit was 37.1% for the three months ended September 30, 2002 compared to 35.9% for the same period in 2001. Automated office equipment dealers typically derive a higher percentage of revenues and gross profit from service and rentals, while network integration solutions and electronic presentation systems dealers derive a higher percentage of revenues and gross profit from sales of equipment and supplies. For our existing businesses, the sales internal growth rate of the automated office equipment dealers was higher than that of the network integration solutions and electronic presentation systems dealers. The combined equipment and supplies gross profit as a percentage of combined equipment and supplies revenues increased to 32.9% for the three months ended September 30, 2002 from 32.2% for the same period one year ago. This was due mostly to automated office equipment revenues being a larger percentage of total equipment revenues.

         As a percentage of combined service and rental revenue, the combined service and rental gross profit margin increased to 49.7% for the three months ended September 30, 2002 from 47.7% for the same period one year ago. This was due to an increase in service and rental revenues and gross profit at both the automated office equipment and electronic presentation systems dealers.

         Selling, general and administrative, or SG&A, expenses for the three months ended September 30, 2002 increased to $44,982, 12.3% higher than SG&A expenses of $40,053 for the same period in 2001. This increase was primarily due to acquisitions of automated office equipment dealers during fiscal years 2003 and 2002, which typically incur higher SG&A expenses as a percentage of revenue than network integration solutions and electronic presentation systems dealers. Other SG&A expenses that increased are payroll wages and commissions, professional fees, insurance and occupancy expenses.

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         Intangible asset amortization was $156 for the three months ended September 30, 2002. During the same period in 2001, intangible asset amortization was $248. This amortization is for non-compete agreements.

         Income from operations for the three months ended September 30, 2002 was $19,140, 11.9% higher than $17,099 from the same period in 2001. This was due to an increase in gross profit as discussed above.

         Interest expense for the three months ended September 30, 2002 was $4,955, compared to $6,291 from the same period in 2001. The decrease in interest expense was due to a lower average level of borrowings and lower interest rates. Interest expense includes the amortization of financing fees incurred in connection with our current credit facility, the senior subordinated notes and ineffective hedging activities.

         The provision for income taxes for the three months ended September 30, 2002 was $5,689, 30.0% higher than $4,377 from the same period in 2001. The increase in income taxes was primarily due to higher pre-tax income in 2002, offset by the reduction in the effective income tax rate. The effective income tax rate was 40.1% for the three months ended September 30, 2002 and 40.5% for the same period in 2001. The effective income tax rate was higher than the federal statutory rate of 35% due to state and local taxes.

SIX MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO SIX MONTHS ENDED SEPTEMBER 30, 2001

         Total revenues for the six months ended September 30, 2002 increased to $327,072, 3.6% higher than total revenues of $315,571 for the same period in 2001. This was due to an increase in automated office equipment revenues and the acquisition of businesses during fiscal years 2003 and 2002, partially offset by declines in network integration solutions and electronic presentation systems revenues.

         Equipment and supplies revenues for the six months ended September 30, 2002 increased to $243,847, 2.0% higher than equipment and supplies revenues of $238,989 for the same period in 2001. In fiscal years 2003 and 2002, we acquired businesses that added proportionately more equipment and supplies revenues than we had in our existing businesses. In addition, the increase was partially due to internal growth of automated office equipment and supplies revenues, partially offset by a decline in network integration solutions and electronic presentation systems equipment and supplies revenues.

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         Service and rental revenues for the six months ended September 30, 2002 increased to $83,225, 8.7% higher than service and rental revenues of $76,582 for the same period in 2001. In fiscal years 2003 and 2002, we acquired businesses that added proportionately more service and rental revenues than we had in our existing businesses. In addition, the increase was partially due to revenue growth of automated office equipment and electronic presentation systems service revenues, partially offset by a decline in network integration solutions service revenues.

         Gross profit of $123,941 for the six months ended September 30, 2002 reflected an 8.8% increase over the same period in 2001. Expressed as a percent of total revenue, gross profit was 37.9% for the six months ended September 30, 2002 compared to 36.1% for the same period in 2001. Automated office equipment dealers typically derive a higher percentage of revenues and gross profit from service and rentals, while network integration solutions and electronic presentation systems dealers derive a higher percentage of revenues and gross profit from sales of equipment and supplies. For our existing businesses, the sales internal growth rate of the automated office equipment dealers was higher than that of the network integration solutions and electronic presentation systems dealers. The combined equipment and supplies gross profit as a percentage of combined equipment and supplies revenues increased to 33.8% for the six months ended September 30, 2002 from 32.5% for the same period one year ago. This was due mostly to automated office equipment revenues being a larger percentage of total equipment revenues.

         As a percentage of combined service and rental revenue, the combined service and rental gross profit margin increased to 50.0% for the six months ended September 30, 2002 from 47.2% for the same period one year ago. This was due to an increase in service revenues and gross profit at both the automated office equipment and electronic presentation systems dealers.

         Selling, general and administrative, or SG&A, expenses for the six months ended September 30, 2002 increased to $86,632, 8.4% higher than SG&A expenses of $79,900 for the same period in 2001. This increase was primarily due to acquisitions of automated office equipment dealers during fiscal years 2003 and 2002, which typically incur higher SG&A expenses as a percentage of revenue than network integration solutions and electronic presentation systems dealers. Other SG&A expenses that increased are payroll wages and commissions, professional fees, insurance and occupancy expenses.

         Intangible asset amortization was $350 for the six months ended September 30, 2002. During the same period in 2001, intangible asset amortization was $512. This amortization is for non-compete agreements.

         Income from operations for the six months ended September 30, 2002 was $36,959, 10.3% higher than $33,518 from the same period in 2001. This was due to an increase in gross profit as discussed above.

         Interest expense for the six months ended September 30, 2002 was $9,940, compared to $12,957 from the same period in 2001. The decrease in interest expense was due to a lower average level of

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borrowings and lower interest rates. Interest expense includes the amortization of financing fees incurred in connection with our current credit facility, the senior subordinated notes and ineffective hedging activities.

         The provision for income taxes for the six months ended September 30, 2002 was $10,835, 30.1% higher than $8,327 from the same period in 2001. The increase in income taxes was primarily due to higher pre-tax income in 2002, offset by the reduction in the effective income tax rate. The effective income tax rate was 40.1% for the six months ended September 30, 2002 and 40.5% for the same period in 2001. The effective income tax rate was higher than the federal statutory rate of 35% due to state and local taxes.

LIQUIDITY AND CAPITAL RESOURCES

         Historically, Global has financed its operations primarily through internal cash flow, sales of equity and debt securities and bank financing, including the financing facility described below. These sources of funds have been used to fund our growth both internally and through acquisitions. We are pursuing an acquisition strategy and expect to acquire more businesses. As we continue to acquire more businesses, it is likely we will incur additional debt and seek additional equity capital.

         Under the terms of two of our acquisition agreements, we may be required to make additional payments of up to $4,298 in cash over the next year to some of the former owners of the businesses we have acquired based on the profitability of those businesses since we acquired them. During the three months ended September 30, 2002, we paid $500 in cash to the former owners of Lewan & Associates, Inc., one of our acquired businesses, to terminate and satisfy in full a $20,000 contingent payment (earnout) liability.

         For the six months ended September 30, 2002 the net cash provided by operations was $24,184 and for the six months ended September 30, 2001 the net cash provided by operations was $14,650. For the six months ended September 30, 2002 and September 30, 2001 Global’s net cash used in investing activities was $37,368 and $9,583, respectively, primarily for property, equipment and rental equipment expenditures in 2002 and 2001 and the purchase of businesses in 2002. For the six months ended September 30, 2002 and the six months ended September 30, 2001, Global’s net cash provided by (used in) financing activities was $13,184 and $(5,067), respectively.

         As of September 30, 2002, we had $100,927 borrowing availability under our senior credit facility. This amount has been reduced by $700 to reflect the aggregate amount of an outstanding standby letter of credit issued under the credit facility to support our obligations incurred in the ordinary course of business. As of September 30, 2002, no amounts had been paid under this letter of credit.

         We believe that cash flows from future operations, together with funds available under our senior credit agreement, will be sufficient to fund our current and foreseeable operational needs and acquisition growth strategy.

         Our market risk is primarily limited to fluctuations in interest rates as it pertains to our borrowings under our senior credit agreement and the long-term note that bears a fixed rate. There have been no material changes, other than described below, to the information in the Item 7A disclosure made in Global’s Annual Report on Form 10-K/A for the fiscal year ended March 31, 2002.

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         On September 9, 2002, our interest rate swaps which effectively converted a portion of our variable rate debt to fixed rate debt expired. As a result, the $116,665 balance of our variable rate debt as of September 30, 2002 was exposed to changes in interest rates. We recently, however, entered into a three-year swap agreement that will effectively convert $20,000 of our variable rate debt to fixed rate debt and reduce our exposure to changes in interest rates going forward. This new swap agreement will become effective November 12, 2002.

         (a) Evaluation of disclosure controls and procedures. We maintain disclosure controls and procedures designed to ensure that we are able to collect and record the information we are required to disclose in the reports we file with the Securities and Exchange Commission (SEC), and to process, summarize and disclose this information within the time periods specified in the rules of the SEC. Based on their evaluation of our disclosure controls and procedures, which took place as of a date within 90 days of the filing date of this report, the chief executive officer and chief financial officer believe that these controls and procedures are effective to ensure that we are able to collect, process and disclose the information we are required to disclose in the reports we file with the SEC within the required time periods.

         (b) Changes in internal controls. There have been no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation of those controls by the chief executive officer and chief financial officer.

PART II - OTHER INFORMATION

         (c) On July 25, 2002 we issued 173,140 shares of our common stock to the stockholders of The Reed Group (“Reed”) as payment for 14% of the outstanding stock of Reed. The offer and sale of the common stock was made to accredited investors and was exempt from registration under the Securities Act of 1933, as amended, pursuant to Rule 506 thereunder.

         On August 30, 2002 we issued 8,460 shares of our common stock to the stockholders of NuLaser Combined Companies (“NuLaser”) as payment for 10% of the outstanding stock of NuLaser. The offer and sale of the common stock was made to accredited investors and was exempt from registration under the Securities Act of 1933, as amended, pursuant to Rule 506 thereunder.

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         At Global’s 2002 Annual Meeting of Stockholders held August 19, 2002, our stockholders approved the following items:

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SIGNATURE

         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.

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CERTIFICATIONS

I, Thomas S. Johnson, certify that:

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CERTIFICATIONS

I, Raymond Schilling, certify that:

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EXHIBIT INDEX
(Pursuant to Item 601 of Regulation S-K)

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