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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2005



or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
|- | --------------------------------------------------------------------------------------------



FOR THE TRANSITION PERIOD FROM  TO



Commission File Number: 000-24373



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GLOBAL IMAGING SYSTEMS, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|DELAWARE                                                       |  | 59-3247752                          
|(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) |  | (I.R.S. EMPLOYER IDENTIFICATION NO.)



|                                                    |  |           
|--------------------------------------------------- |  | ----------
|3820 Northdale Boulevard, Suite 200A Tampa, Florida |  | 33624     
|(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)            |  | (ZIP CODE)



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





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



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



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



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act.).    Yes ̈No  x



The registrant had 23,324,236 shares of common stock, $.01
par value, outstanding as of February 2, 2006.



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##### Table of Contents

INDEX



|                                                                                                                                          |  |     
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                          |  | Page
|PART I 
FINANCIAL INFORMATION                                                                                                            |  |     
|                                                                                                                                          | 
|ITEM 1  Consolidated Financial Statements                                                                                                |  |     
|                                                                                                                                          | 
|Condensed Consolidated Balance Sheets as of December 31, 2005 and March 31, 2005 (Unaudited)                                              |  | 3   
|                                                                                                                                          | 
|Condensed Consolidated Statements of Income for the three months ended December 31, 2005 and 2004 (Unaudited)                             |  | 4   
|                                                                                                                                          | 
|Condensed Consolidated Statements of Income for the nine months ended December 31, 2005 and 2004 (Unaudited)                              |  | 5   
|                                                                                                                                          | 
|Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2005 and 2004 (Unaudited)                          |  | 6   
|                                                                                                                                          | 
|Condensed Consolidated Statement of Stockholders Equity and Comprehensive Income for the nine months ended December 31, 2005 (Unaudited) |  | 7   
|                                                                                                                                          | 
|Notes to Condensed Consolidated Financial Statements (Unaudited)                                                                          |  | 8   
|                                                                                                                                          | 
|ITEM 2  Managements Discussion and Analysis of Financial Condition and Results of Operations                                            |  | 14  
|                                                                                                                                          | 
|ITEM 3  Quantitative and Qualitative Disclosures about Market Risk                                                                       |  | 23  
|                                                                                                                                          | 
|ITEM 4  Controls and Procedures                                                                                                          |  | 24  
|                                                                                                                                          | 
|PART II 
OTHER INFORMATION                                                                                                               |  |     
|                                                                                                                                          | 
|ITEM 6  Exhibits                                                                                                                         |  | 24  
|                                                                                                                                          | 
|SIGNATURE                                                                                                                                 |  | 25  
|                                                                                                                                          | 
|EXHIBIT INDEX                                                                                                                             |  | 26  



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##### Table of Contents

PART I  FINANCIAL INFORMATION



ITEM 1. Consolidated Financial Statements



GLOBAL IMAGING SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)



|                                                                                                                                                                                                           |  |                  |         |   |                |   |         |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ------- | - | -------------- | - | ------- | -
|                                                                                                                                                                                                           |  | December 31,2005 |         |   | March 31, 2005 |  
|ASSETS                                                                                                                                                                                                     |  |                  |         |   |                |   |         |  
|                                                                                                                                                                                                           |  |                 
|Current assets:                                                                                                                                                                                            |  |                  |         |   |                |   |         |  
|Cash and cash equivalents                                                                                                                                                                                  |  | $                | 21,272  |   |                | $ | 25,365  |  
|Accounts receivable, net of allowance for doubtful accounts ($2,837 and $3,074 at December 31, 2005 and March 31, 2005,
respectively)                                                                      |  |                  | 127,153 |   |                |   | 115,905 |  
|Inventories, net                                                                                                                                                                                           |  |                  | 100,759 |   |                |   | 93,376  |  
|Deferred income taxes                                                                                                                                                                                      |  |                  | 7,860   |   |                |   | 8,636   |  
|Prepaid expenses and other current assets                                                                                                                                                                  |  |                  | 7,293   |   |                |   | 4,234   |  
|                                                                                                                                                                                                           |  |                  |         |   |                |   |         |  
|Total current assets                                                                                                                                                                                       |  |                  | 264,337 |   |                |   | 247,516 |  
|Rental equipment, net                                                                                                                                                                                      |  |                  | 16,260  |   |                |   | 16,475  |  
|Property and equipment, net                                                                                                                                                                                |  |                  | 15,506  |   |                |   | 12,577  |  
|Other assets                                                                                                                                                                                               |  |                  | 1,961   |   |                |   | 2,734   |  
|Goodwill and other intangible assets, net                                                                                                                                                                  |  |                  | 549,397 |   |                |   | 537,615 |  
|                                                                                                                                                                                                           |  |                  |         |   |                |   |         |  
|Total assets                                                                                                                                                                                               |  | $                | 847,461 |   |                | $ | 816,917 |  
|                                                                                                                                                                                                           |  |                  |         |   |                |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                       |  |                  |         |   |                |   |         |  
|                                                                                                                                                                                                           |  |                 
|Current liabilities:                                                                                                                                                                                       |  |                  |         |   |                |   |         |  
|Accounts payable                                                                                                                                                                                           |  | $                | 53,250  |   |                | $ | 63,571  |  
|Accrued liabilities                                                                                                                                                                                        |  |                  | 12,821  |   |                |   | 10,328  |  
|Accrued compensation and benefits                                                                                                                                                                          |  |                  | 17,822  |   |                |   | 23,898  |  
|Accrued interest                                                                                                                                                                                           |  |                  | 845     |   |                |   | 1,205   |  
|Current maturities of long-term debt                                                                                                                                                                       |  |                  | 2,152   |   |                |   | 2,235   |  
|Deferred revenue                                                                                                                                                                                           |  |                  | 28,175  |   |                |   | 27,217  |  
|Income taxes payable                                                                                                                                                                                       |  |                  | 9,027   |   |                |   | 3,707   |  
|                                                                                                                                                                                                           |  |                  |         |   |                |   |         |  
|Total current liabilities                                                                                                                                                                                  |  |                  | 124,092 |   |                |   | 132,161 |  
|Deferred income taxes                                                                                                                                                                                      |  |                  | 38,980  |   |                |   | 34,466  |  
|Long-term debt, less current maturities                                                                                                                                                                    |  |                  | 261,239 |   |                |   | 262,847 |  
|Other long-term liabilities                                                                                                                                                                                |  |                  | 976     |   |                |   |        |  
|                                                                                                                                                                                                           |  |                  |         |   |                |   |         |  
|Total liabilities                                                                                                                                                                                          |  |                  | 425,287 |   |                |   | 429,474 |  
|Stockholders equity:                                                                                                                                                                                      |  |                  |         |   |                |   |         |  
|Preferred stock, $.01 par value: 20,000,000 shares authorized: no shares issued                                                                                                                            |  |                  |        |   |                |   |        |  
|Common stock, $.01 par value: 80,000,000 shares authorized: 23,911,474 and 23,521,827 shares issued and 23,322,636 and 23,521,827 shares
outstanding at December 31, 2005 and March 31, 2005, respectively |  |                  | 239     |   |                |   | 235     |  
|Common stock held in treasury, at cost: 588,838 and 0 shares at December 31, 2005 and March 31, 2005, respectively                                                                                         |  |                  | (19,133 | ) |                |   |        |  
|Additional paid-in capital                                                                                                                                                                                 |  |                  | 197,131 |   |                |   | 186,803 |  
|Retained earnings                                                                                                                                                                                          |  |                  | 246,680 |   |                |   | 200,669 |  
|Unearned stock-based compensation                                                                                                                                                                          |  |                  | (3,375  | ) |                |   | (629    | )
|Accumulated other comprehensive income                                                                                                                                                                     |  |                  | 632     |   |                |   | 365     |  
|                                                                                                                                                                                                           |  |                  |         |   |                |   |         |  
|Total stockholders equity                                                                                                                                                                                 |  |                  | 422,174 |   |                |   | 387,443 |  
|                                                                                                                                                                                                           |  |                  |         |   |                |   |         |  
|Total liabilities and stockholders equity                                                                                                                                                                 |  | $                | 847,461 |   |                | $ | 816,917 |  
|                                                                                                                                                                                                           |  |                  |         |   |                |   |         |  



See accompanying notes.



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GLOBAL IMAGING SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)



|                                               |  |                                |         |      |   |        
|---------------------------------------------- |  | ------------------------------ | ------- | ---- | - | -------
|                                               |  | Three Months EndedDecember 31,
|                                               |  | 2005                           |         | 2004
|Revenues:                                      |  |                                |         |      |   |        
|Equipment and supplies sales                   |  | $                              | 190,325 |      | $ | 173,321
|Service and rentals                            |  |                                | 66,519  |      |   | 60,201 
|                                               |  |                                |         |      |   |        
|Total revenues                                 |  |                                | 256,844 |      |   | 233,522
|Costs and operating expenses:                  |  |                                |         |      |   |        
|Cost of equipment and supplies sales           |  |                                | 119,889 |      |   | 111,384
|Service and rental costs                       |  |                                | 34,909  |      |   | 30,676 
|Selling, general and administrative expenses   |  |                                | 71,917  |      |   | 63,952 
|Intangible asset amortization                  |  |                                | 458     |      |   | 300    
|                                               |  |                                |         |      |   |        
|Total costs and operating expenses             |  |                                | 227,173 |      |   | 206,312
|                                               |  |                                |         |      |   |        
|Income from operations                         |  |                                | 29,671  |      |   | 27,210 
|Interest expense                               |  |                                | 3,631   |      |   | 3,129  
|                                               |  |                                |         |      |   |        
|Income before income taxes                     |  |                                | 26,040  |      |   | 24,081 
|Income taxes                                   |  |                                | 9,947   |      |   | 9,151  
|                                               |  |                                |         |      |   |        
|Net income                                     |  | $                              | 16,093  |      | $ | 14,930 
|                                               |  |                                |         |      |   |        
|Net income per common share:                   |  |                                |         |      |   |        
|Basic                                          |  | $                              | .70     |      | $ | .64    
|                                               |  |                                |         |      |   |        
|Diluted                                        |  | $                              | .64     |      | $ | .59    
|                                               |  |                                |         |      |   |        
|Weighted average number of shares outstanding: |  |                                |         |      |   |        
|Basic                                          |  |                                | 23,071  |      |   | 23,168 
|Diluted                                        |  |                                | 25,968  |      |   | 26,187 



See accompanying notes.



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GLOBAL IMAGING SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)



|                                               |  |                               |         |      |   |        
|---------------------------------------------- |  | ----------------------------- | ------- | ---- | - | -------
|                                               |  | Nine Months EndedDecember 31,
|                                               |  | 2005                          |         | 2004
|Revenues:                                      |  |                               |         |      |   |        
|Equipment and supplies sales                   |  | $                             | 567,825 |      | $ | 508,731
|Service and rentals                            |  |                               | 194,159 |      |   | 170,327
|                                               |  |                               |         |      |   |        
|Total revenues                                 |  |                               | 761,984 |      |   | 679,058
|Costs and operating expenses:                  |  |                               |         |      |   |        
|Cost of equipment and supplies sales           |  |                               | 361,650 |      |   | 325,217
|Service and rental costs                       |  |                               | 101,334 |      |   | 87,346 
|Selling, general and administrative expenses   |  |                               | 212,876 |      |   | 186,678
|Intangible asset amortization                  |  |                               | 1,347   |      |   | 1,051  
|                                               |  |                               |         |      |   |        
|Total costs and operating expenses             |  |                               | 677,207 |      |   | 600,292
|                                               |  |                               |         |      |   |        
|Income from operations                         |  |                               | 84,777  |      |   | 78,766 
|Loss on early extinguishment of debt           |  |                               |        |      |   | 1,655  
|Interest expense                               |  |                               | 10,402  |      |   | 8,623  
|                                               |  |                               |         |      |   |        
|Income before income taxes                     |  |                               | 74,375  |      |   | 68,488 
|Income taxes                                   |  |                               | 28,364  |      |   | 26,070 
|                                               |  |                               |         |      |   |        
|Net income                                     |  | $                             | 46,011  |      | $ | 42,418 
|                                               |  |                               |         |      |   |        
|Net income per common share:                   |  |                               |         |      |   |        
|Basic                                          |  | $                             | 1.99    |      | $ | 1.86   
|                                               |  |                               |         |      |   |        
|Diluted                                        |  | $                             | 1.82    |      | $ | 1.69   
|                                               |  |                               |         |      |   |        
|Weighted average number of shares outstanding: |  |                               |         |      |   |        
|Basic                                          |  |                               | 23,077  |      |   | 22,851 
|Diluted                                        |  |                               | 25,972  |      |   | 25,878 



See accompanying notes.



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GLOBAL IMAGING SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(IN THOUSANDS)



|                                                                                                        |  |                               |         |   |      |   |          |  
|------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ------- | - | ---- | - | -------- | -
|                                                                                                        |  | Nine Months EndedDecember 31, |        
|                                                                                                        |  | 2005                          |         |   | 2004 |  
|OPERATING ACTIVITIES:                                                                                   |  |                               |         |   |      |   |          |  
|Net income                                                                                              |  | $                             | 46,011  |   |      | $ | 42,418   |  
|Adjustments to reconcile net income to net cash provided by operating activities:                       |  |                               |         |   |      |   |          |  
|Depreciation                                                                                            |  |                               | 12,254  |   |      |   | 11,369   |  
|Amortization                                                                                            |  |                               | 1,347   |   |      |   | 1,051    |  
|Amortization of financing fees                                                                          |  |                               | 823     |   |      |   | 766      |  
|Tax benefit of stock option exercises and vested restricted stock                                       |  |                               | 1,978   |   |      |   | 3,926    |  
|Loss on early extinguishment of debt                                                                    |  |                               |        |   |      |   | 1,655    |  
|Deferred income tax expense                                                                             |  |                               | 5,631   |   |      |   | 3,262    |  
|Unearned stock-based compensation expense                                                               |  |                               | 1,261   |   |      |   | 353      |  
|Changes in operating assets and liabilities, net of amounts acquired in purchase business combinations: |  |                               |         |   |      |   |          |  
|Accounts receivable                                                                                     |  |                               | (9,822  | ) |      |   | (8,318   | )
|Inventories                                                                                             |  |                               | (6,289  | ) |      |   | (3,056   | )
|Prepaid expenses and other current assets                                                               |  |                               | (1,888  | ) |      |   | 14       |  
|Other assets                                                                                            |  |                               | 807     |   |      |   | (959     | )
|Accounts payable                                                                                        |  |                               | (10,556 | ) |      |   | (10,300  | )
|Accrued liabilities, compensation and benefits and interest                                             |  |                               | (5,519  | ) |      |   | (6,278   | )
|Deferred revenue                                                                                        |  |                               | (371    | ) |      |   | (1,574   | )
|Income taxes payable                                                                                    |  |                               | 5,320   |   |      |   | 3,494    |  
|Other long-term liabilities                                                                             |  |                               | 976     |   |      |   |         |  
|                                                                                                        |  |                               |         |   |      |   |          |  
|Net cash provided by operating activities                                                               |  |                               | 41,963  |   |      |   | 37,823   |  
|INVESTING ACTIVITIES:                                                                                   |  |                               |         |   |      |   |          |  
|Proceeds from related party notes receivable                                                            |  |                               |        |   |      |   | 400      |  
|Purchases of property, equipment and rental equipment, net of proceeds from disposals                   |  |                               | (14,761 | ) |      |   | (11,486  | )
|Purchases of businesses, net of cash acquired                                                           |  |                               | (13,879 | ) |      |   | (147,591 | )
|                                                                                                        |  |                               |         |   |      |   |          |  
|Net cash used in investing activities                                                                   |  |                               | (28,640 | ) |      |   | (158,677 | )
|FINANCING ACTIVITIES:                                                                                   |  |                               |         |   |      |   |          |  
|Payments on long-term debt                                                                              |  |                               | (1,691  | ) |      |   | (1,057   | )
|Proceeds from issuance of long-term debt                                                                |  |                               |        |   |      |   | 70,000   |  
|Financing fees paid                                                                                     |  |                               | (19     | ) |      |   | (1,419   | )
|Purchases of treasury stock                                                                             |  |                               | (20,000 | ) |      |   |         |  
|Stock options exercised                                                                                 |  |                               | 4,294   |   |      |   | 6,889    |  
|                                                                                                        |  |                               |         |   |      |   |          |  
|Net cash (used in) provided by financing activities                                                     |  |                               | (17,416 | ) |      |   | 74,413   |  
|                                                                                                        |  |                               |         |   |      |   |          |  
|Net decrease in cash and cash equivalents                                                               |  |                               | (4,093  | ) |      |   | (46,441  | )
|Cash and cash equivalents, beginning of period                                                          |  |                               | 25,365  |   |      |   | 47,266   |  
|                                                                                                        |  |                               |         |   |      |   |          |  
|Cash and cash equivalents, end of period                                                                |  | $                             | 21,272  |   |      | $ | 825      |  
|                                                                                                        |  |                               |         |   |      |   |          |  
|Non-cash investing activities:                                                                          |  |                               |         |   |      |   |          |  
|Stock issued for business purchases                                                                     |  | $                             | 920     |   |      | $ | 31,409   |  
|                                                                                                        |  |                               |         |   |      |   |          |  



See accompanying notes.



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GLOBAL IMAGING SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY

AND COMPREHENSIVE INCOME (Unaudited)

(IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS)



|                                                                                               |  |                 |   |  |           |     |                         |   |         |                          |  |                  |         |                                 |   |         |                                     |   |        |   |  |   |     |  |   |         |  
|---------------------------------------------------------------------------------------------- |  | --------------- | - |  | --------- | --- | ----------------------- | - | ------- | ------------------------ |  | ---------------- | ------- | ------------------------------- | - | ------- | ----------------------------------- | - | ------ | - |  | - | --- |  | - | ------- | -
|                                                                                               |  | Common Stock    |   |  |           |     |                         |   |         |                          |  |                  |         |                                 |  
|                                                                                               |  | Number ofShares |   |  | Par Value |     | Held inTreasury,at Cost |   |         | AdditionalPaid-inCapital |  | RetainedEarnings |         | UnearnedStock-basedCompensation |   |         | AccumulatedOtherComprehensiveIncome |   | Total  |  
|Balances at March 31, 2005                                                                     |  | 23,521,827      |   |  | $         | 235 |                         | $ |        |                          |  | $                | 186,803 |                                 | $ | 200,669 |                                     | $ | (629   | ) |  | $ | 365 |  | $ | 387,443 |  
|                                                                                               |  |                 |   |  |           |     |                         |  
|Comprehensive income:                                                                          |  |                 |   |  |           |     |                         |   |         |                          |  |                  |         |                                 |   |         |                                     |   |        |   |  |   |     |  |   |         |  
|Net income                                                                                     |  |                |   |  |           |    |                         |   |        |                          |  |                  |        |                                 |   | 46,011  |                                     |   |       |   |  |   |    |  |   | 46,011  |  
|Unrealized gain on derivative instruments                                                      |  |                |   |  |           |    |                         |   |        |                          |  |                  |        |                                 |   |        |                                     |   |       |   |  |   | 267 |  |   | 267     |  
|                                                                                               |  |                 |   |  |           |     |                         |   |         |                          |  |                  |         |                                 |   |         |                                     |   |        |   |  |   |     |  |   |         |  
|Total comprehensive income                                                                     |  |                 |   |  |           |     |                         |   |         |                          |  |                  |         |                                 |   |         |                                     |   |        |   |  |   |     |  |   | 46,278  |  
|                                                                                               |  |                 |   |  |           |     |                         |  
|Stock options exercised, including income tax benefit                                          |  | 272,647         |   |  |           | 3   |                         |   |        |                          |  |                  | 6,144   |                                 |   |        |                                     |   |       |   |  |   |    |  |   | 6,147   |  
|Repurchases of common stock                                                                    |  | (615,528        | ) |  |           |    |                         |   | (20,000 | )                        |  |                  |        |                                 |   |        |                                     |   |       |   |  |   |    |  |   | (20,000 | )
|Treasury stock issued in conjunction with acquisitions                                         |  | 26,690          |   |  |           |    |                         |   | 867     |                          |  |                  | 53      |                                 |   |        |                                     |   |       |   |  |   |    |  |   | 920     |  
|Common stock issued under restricted stock plan, including income tax benefit of vested shares |  | 117,000         |   |  |           | 1   |                         |   |        |                          |  |                  | 4,131   |                                 |   |        |                                     |   | (4,007 | ) |  |   |    |  |   | 125     |  
|Amortization of unearned stock-based compensation                                              |  |                |   |  |           |    |                         |   |        |                          |  |                  |        |                                 |   |        |                                     |   | 1,261  |   |  |   |    |  |   | 1,261   |  
|                                                                                               |  |                 |   |  |           |     |                         |   |         |                          |  |                  |         |                                 |   |         |                                     |   |        |   |  |   |     |  |   |         |  
|Balances at December 31, 2005                                                                  |  | 23,322,636      |   |  | $         | 239 |                         | $ | (19,133 | )                        |  | $                | 197,131 |                                 | $ | 246,680 |                                     | $ | (3,375 | ) |  | $ | 632 |  | $ | 422,174 |  
|                                                                                               |  |                 |   |  |           |     |                         |   |         |                          |  |                  |         |                                 |   |         |                                     |   |        |   |  |   |     |  |   |         |  



See accompanying notes.



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GLOBAL IMAGING SYSTEMS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)



NOTE 1. BASIS OF PRESENTATION



The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles
generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation have been included herein. The results of operations
for the three- and nine-month periods ended December 31, 2005 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2006.



The condensed consolidated balance sheet at March 31, 2005 has been derived from the audited consolidated financial
statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.



The condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements and the notes thereto included in Global Imaging Systems, Inc.s Annual Report on Form 10-K for the year ended March 31, 2005.



NOTE 2. STOCK OPTION PLANS



In 1998, the Board of Directors adopted a stock option plan under which, as amended to date, 3,320,000 shares of our common
stock may be issued pursuant to stock options granted or sold as restricted stock to directors, officers, and employees of and consultants to Global Imaging Systems, Inc. (Global or the Company). As of December 31, 2005,
options to purchase 1,708,484 shares of our common stock were outstanding under the 1998 stock option plan, and 1,468,561 shares of our common stock have been issued under the 1998 plan upon the exercise of stock options granted under the plan.
There were 40,455 shares of our common stock available to be issued under the 1998 plan as of December 31, 2005. In addition, we have also issued 102,500 shares of restricted stock under the 1998 plan, none of which were issued during the nine
months ended December 31, 2005. During the nine months ended December 31, 2005, 10,000 options were granted under the 1998 stock option plan with an exercise price of $34.66, the market value at date of grant.



On January 25, 2001, the Board of Directors adopted the Global Imaging
Systems, Inc. 2001 Stock Option Plan under which we may grant options to purchase up to 300,000 shares of our common stock to employees of and service providers to Global, except for our 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 December 31, 2005, options to purchase 126,375 shares were outstanding under the 2001 stock option plan, and 159,425 shares of our common stock have been
issued under the 2001 plan upon the exercise of stock options granted under the plan. There were 14,200 shares of our common stock available to be issued under the 2001 stock option plan as of December 31, 2005. During the nine months ended
December 31, 2005, 23,000 options were granted under the 2001 stock option plan with an exercise price of $31.55, the market value at date of grant.



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On August 16, 2004, our shareholders approved the Global Imaging Systems, Inc. 2004 Omnibus Long
Term Incentive Plan (the 2004 Plan) under which we may grant options to purchase up to 600,000 shares of our common stock to directors, officers, and employees of Global. On August 8, 2005, our shareholders approved an amendment to
the 2004 Plan to increase the total shares available for grant to 1,450,000. As of December 31, 2005, options to purchase 477,750 shares were outstanding under the 2004 Plan, and no shares of our common stock have been issued under the 2004
Plan upon the exercise of stock options granted under the plan. There were 855,250 shares of our common stock available to be issued under the 2004 Plan as of December 31, 2005. During the nine months ended December 31, 2005, 452,250
options were granted under the 2004 Plan with exercise prices ranging from $31.55 to $35.46 per share, the market values at dates of grant. Additionally, during the nine months ended December 31, 2005, 117,000 shares of restricted stock were
issued at $.01 per share under the 2004 Plan.



In addition to
options outstanding under our stock option plans, 10,000 shares of our common stock are issuable upon the exercise of an option granted outside of our 1998, 2001 and 2004 stock option plans. This option is exercisable at a price of $12.00 per share
and may be exercised until July 31, 2008.



We have adopted
the disclosure provisions of Statement of Financial Accounting Standards (SFAS) No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure  an amendment of FASB Statement No. 123. SFAS No. 148
allows for continued use of recognition and measurement principles of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for grants to directors, officers
and employees under plans. We apply the intrinsic value recognition and measurement principles of APB Opinion No. 25 and related interpretations in accounting for those grants. No stock-based employee compensation expense related to our stock
option grants is reflected in net income as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant.



The following table illustrates the effect on net income and earnings per share if we had applied the fair value recognition
provisions to stock-based employee compensation. Such disclosure is not necessarily indicative of the fair value of stock options that could be granted by us in future fiscal years or of the value of all options currently outstanding.



|                                                                                                                                            |  |                                |        |   |                               |   |        |      |  |   |        |   |  |   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ------ | - | ----------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                                                                            |  | Three Months EndedDecember 31, |        |   | Nine Months EndedDecember 31, |  
|                                                                                                                                            |  | 2005                           |        |   | 2004                          |   |        | 2005 |  |   | 2004   |  
|Net income, as reported                                                                                                                     |  | $                              | 16,093 |   |                               | $ | 14,930 |      |  | $ | 46,011 |   |  | $ | 42,418 |  
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax
effects |  |                                | (1,172 | ) |                               |   | (890   | )    |  |   | (3,372 | ) |  |   | (2,699 | )
|                                                                                                                                            |  |                                |        |   |                               |   |        |      |  |   |        |   |  |   |        |  
|Pro forma net income                                                                                                                        |  | $                              | 14,921 |   |                               | $ | 14,040 |      |  | $ | 42,639 |   |  | $ | 39,719 |  
|                                                                                                                                            |  |                                |        |   |                               |   |        |      |  |   |        |   |  |   |        |  
|Earnings per share:                                                                                                                         |  |                                |        |   |                               |   |        |      |  |   |        |   |  |   |        |  
|Basic  as reported                                                                                                                         |  | $                              | .70    |   |                               | $ | .64    |      |  | $ | 1.99   |   |  | $ | 1.86   |  
|                                                                                                                                            |  |                                |        |   |                               |   |        |      |  |   |        |   |  |   |        |  
|Basic  pro forma                                                                                                                           |  | $                              | .65    |   |                               | $ | .61    |      |  | $ | 1.85   |   |  | $ | 1.74   |  
|                                                                                                                                            |  |                                |        |   |                               |   |        |      |  |   |        |   |  |   |        |  
|Diluted  as reported                                                                                                                       |  | $                              | .64    |   |                               | $ | .59    |      |  | $ | 1.82   |   |  | $ | 1.69   |  
|                                                                                                                                            |  |                                |        |   |                               |   |        |      |  |   |        |   |  |   |        |  
|Diluted  pro forma                                                                                                                         |  | $                              | .59    |   |                               | $ | .55    |      |  | $ | 1.69   |   |  | $ | 1.59   |  
|                                                                                                                                            |  |                                |        |   |                               |   |        |      |  |   |        |   |  |   |        |  



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NOTE 3. EARNINGS PER SHARE



Basic earnings per share is computed by dividing net income by the weighted
average number of shares outstanding for the period. Diluted earnings per share reflects the potential dilution from the exercise of stock options and restricted stock, as well as the conversion of convertible notes into common stock.



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



|                                            |  |                                |        |                               |   |        |  |      |        |  |   |       
|------------------------------------------- |  | ------------------------------ | ------ | ----------------------------- | - | ------ |  | ---- | ------ |  | - | ------
|                                            |  | Three Months EndedDecember 31, |        | Nine Months EndedDecember 31,
|                                            |  | 2005                           |        | 2004                          |   | 2005   |  | 2004
|Numerator:                                  |  |                                |        |                               |   |        |  |      |        |  |   |       
|Numerator for basic earnings per share      |  | $                              | 16,093 |                               | $ | 14,930 |  | $    | 46,011 |  | $ | 42,418
|Effect of dilutive securities:              |  |                                |        |                               |   |        |  |      |        |  |   |       
|4% convertible notes                        |  |                                | 442    |                               |   | 442    |  |      | 1,326  |  |   | 1,328 
|                                            |  |                                |        |                               |   |        |  |      |        |  |   |       
|Numerator for diluted earnings per share    |  | $                              | 16,535 |                               | $ | 15,372 |  | $    | 47,337 |  | $ | 43,746
|                                            |  |                                |        |                               |   |        |  |      |        |  |   |       
|Denominator:                                |  |                                |        |                               |   |        |  |      |        |  |   |       
|Denominator for basic earnings per share    |  |                                | 23,071 |                               |   | 23,168 |  |      | 23,077 |  |   | 22,851
|Effect of dilutive securities:              |  |                                |        |                               |   |        |  |      |        |  |   |       
|4% convertible notes                        |  |                                | 2,407  |                               |   | 2,407  |  |      | 2,407  |  |   | 2,407 
|Employee stock options and restricted stock |  |                                | 490    |                               |   | 612    |  |      | 488    |  |   | 620   
|                                            |  |                                |        |                               |   |        |  |      |        |  |   |       
|Denominator for diluted earnings per share  |  |                                | 25,968 |                               |   | 26,187 |  |      | 25,972 |  |   | 25,878
|                                            |  |                                |        |                               |   |        |  |      |        |  |   |       



NOTE
4. ACQUISITIONS



During the nine months ended
December 31, 2005, we acquired four businesses that provide office-imaging solutions and related services. Aggregate consideration, net of cash acquired, for these acquisitions was approximately $15,144, consisting of cash paid to the sellers,
26,690 shares of Globals common stock, par value $.01 per share, that were previously held in treasury (valued at $920, based on the fair value of the stock on the date of issuance), and acquisition related expenses. Liabilities assumed in
connection with these acquisitions totaled approximately $2,531. The fair value of total assets acquired in these acquisitions consisted of approximately $2,908 of tangible assets, net of cash acquired, and approximately $14,767 of intangible
assets. During the three months ended December 31, 2005, we finalized valuations of the intangible assets acquired and have, accordingly, adjusted the fair values of customer relationships.



Effective May 1, 2004, we acquired all the issued and outstanding stock
of Imagine Technology Group, Inc. (ITG) pursuant to a Stock Purchase Agreement dated April 5, 2004, by and among Global, ITG Acquisition I Corporation, ITG and Imagine Technology Group, LLC and its members. As consideration for the
ITG stock, we paid ITGs shareholder and its creditors approximately $104,000 in cash, plus 813,464 shares of Globals common stock, par value $.01 per share, that were previously held in treasury (valued at $27,277, based on the fair
value of the stock on the date of issuance). The common stock issued to ITGs shareholder was registered for resale with the Securities and Exchange Commission using a registration statement on Form S-3.



All acquisitions have been accounted for using the purchase method of
accounting and, accordingly, are included in our results of operations from the effective date of acquisition.



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The unaudited pro forma results presented below include the effects of the current year and prior year
acquisitions as if they had been consummated at the beginning of the year prior to acquisition. 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.



|                             |  |                                |         |                               |   |         |  |      |         |  |   |        
|---------------------------- |  | ------------------------------ | ------- | ----------------------------- | - | ------- |  | ---- | ------- |  | - | -------
|                             |  | Unaudited Pro Forma           
|                             |  | Three Months EndedDecember 31, |         | Nine Months EndedDecember 31,
|                             |  | 2005                           |         | 2004                          |   | 2005    |  | 2004
|Revenues                     |  | $                              | 257,937 |                               | $ | 244,655 |  | $    | 771,799 |  | $ | 735,693
|Net income                   |  | $                              | 16,191  |                               | $ | 15,617  |  | $    | 46,633  |  | $ | 45,922 
|                             |  |                                |         |                               |   |         |  |      |         |  |   |        
|Net income per common share: |  |                                |         |                               |   |         |  |      |         |  |   |        
|Basic                        |  | $                              | .70     |                               | $ | .67     |  | $    | 2.02    |  | $ | 1.99   
|Diluted                      |  | $                              | .64     |                               | $ | .61     |  | $    | 1.85    |  | $ | 1.81   



NOTE
5. COMPREHENSIVE INCOME



The following table presents a
reconciliation of comprehensive income, comprised of net income and the unrealized gain on cash flow hedges.



|                                                |      |                                |        |                               |      |        |      |   |        |  |   |       
|----------------------------------------------- | ---- | ------------------------------ | ------ | ----------------------------- | ---- | ------ | ---- | - | ------ |  | - | ------
|                                                |      | Three Months EndedDecember 31, |        | Nine Months EndedDecember 31,
|                                                | 2005 |                                | 2004   |                               | 2005 |        | 2004
|Net income                                      |      | $                              | 16,093 |                               | $    | 14,930 |      | $ | 46,011 |  | $ | 42,418
|Unrealized gain on cash flow hedges, net of tax |      |                                | 147    |                               |      | 76     |      |   | 267    |  |   | 264   
|                                                |      |                                |        |                               |      |        |      |   |        |  |   |       
|Total comprehensive income                      |      | $                              | 16,240 |                               | $    | 15,006 |      | $ | 46,278 |  | $ | 42,682
|                                                |      |                                |        |                               |      |        |      |   |        |  |   |       



NOTE
6. DERIVATIVES



We enter into swap and interest rate cap
agreements to hedge the fluctuations in variable interest rates and do not use derivative instruments for speculative purposes.



In November 2002, we entered into a three-year interest rate swap agreement which we accounted for as a cash flow hedge. This agreement effectively
converted $20,000 of our variable-rate debt to fixed-rate debt and reduced our exposure to changes in interest rates. Under this swap agreement, we received an average variable rate of 3.38% and paid an average fixed rate of 2.74% for the period
from April 1, 2005 to November 14, 2005. The swap agreement expired November 14, 2005.



In December 2004, we entered into two forward swap agreements which we accounted for as cash flow hedges. The agreements effectively convert $40,000 of
our variable rate debt to fixed-rate debt, reducing the exposure to changes in interest rates. Under the first swap agreement, we received an average variable rate of 4.49% and paid an average fixed rate of 3.85% for the period from
December 14, 2005 to December 31, 2005. Under the second swap agreement, we received an average variable rate of 4.49% and paid an average fixed rate of 3.87% for the period from December 16, 2005 to December 31, 2005. Both
agreements are effective for a period of two years, beginning December 2005.



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In May 2005, we entered into a forward swap agreement which we accounted for as a cash flow hedge. The
agreement effectively converts $30,000 of our variable-rate debt to fixed-rate debt, reducing our exposure to changes in interest rates. Under the agreement, we received an average variable rate of 3.95% and paid a LIBOR fixed rate of 4.05% for the
period from September 12, 2005 to December 31, 2005. The agreement is effective for a period of two years, beginning September 2005.



We have recognized a gain, net of tax, of approximately $267 and $264 for the nine-month periods ended December 31, 2005 and 2004, respectively,
related to our interest rate swap agreements. These amounts have been recorded in comprehensive income.



In September 2003, we entered into three two-year interest rate cap agreements in notional amounts of $20,000 each. These three cap agreements expired in
September 2005. In July 2004, we entered into a two-year interest rate cap agreement in the notional amount of $25,000. In May 2005, we also entered into a two-year forward interest rate cap agreement in the notional amount of $30,000, effective
September 2005 (collectively, the Caps). These Caps are not designated as hedging instruments and as such are recorded on the consolidated balance sheet at their estimated fair value, with changes in the fair value being recorded in the consolidated
statement of income as interest expense during the period of change. The change in the Caps fair value resulted in additional interest expense of $32 and $112, before tax, for the nine-month periods ended December 31, 2005 and
December 31, 2004, respectively. The July 2004 cap limits our interest rate risk exposure for the related notional amounts to a 4.00% LIBOR rate plus the applicable margin. The September 2005 cap limits our interest rate risk exposure for the
related notional amount to a 5.50% LIBOR rate plus the applicable margin. No payments have been received under the Caps.



NOTE 7. STOCK REPURCHASE PROGRAM



On May 17, 2005, our Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $20,000 of Global common
stock. During the nine months ended December 31, 2005, we repurchased a total of 615,528 shares of common stock for an aggregate purchase price of $20,000.



NOTE 8. RECENT ACCOUNTING PRONOUNCEMENTS



On December 16, 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123 (revised 2004), Share-Based
Payment, which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation(Statement 123(R)). Statement 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and
amends FASB Statement No. 95, Statement of Cash Flows. Generally, the approach in Statement 123(R) is similar to the approach described in Statement 123. However, Statement 123(R) requires all share-based payments to employees, including
grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative.



Statement 123(R) is effective for annual years beginning after June 15, 2005. We are in the process of evaluating the use of certain option-pricing
models, as well as the assumptions to be used in such models. We expect to adopt the revised statement in our first quarter of fiscal year 2007, which begins on April 1, 2006.



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As permitted by Statement 123, the company currently accounts for share-based payments to employees using
Opinion 25s intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options. Accordingly, the adoption of Statement 123(R)s fair value method will have a significant impact on our results of
operations, although it will have no impact on our overall financial position. The impact of adoption of Statement 123(R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had
we adopted Statement 123(R) in prior periods, the impact of that standard would have approximated the impact of Statement 123 as described in the disclosure of pro forma net income and earnings per share in Note 2. Statement 123(R) also requires the
benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and
increase net financing cash flows in periods after adoption. While the company cannot estimate what those amounts will be in the future (because they depend on, among other things, when employees exercise stock options), the amount of operating cash
flows recognized for such excess tax deductions was $1,978 and $3,926 for the nine months ended December 31, 2005 and 2004, respectively.



In May 2005, the Financial Accounting Standards Board issued Statement No. 154, Accounting Changes and Error Corrections (SFAS
154). SFAS 154 replaces APB Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements. The statement requires a voluntary change in accounting principle to be
applied retrospectively to all prior period financial statements so that those financial statements are presented as if the current accounting principle had always been applied. APB 20 previously required most voluntary changes in accounting
principle to be recognized by including in net income of the period of change the cumulative effect of changing to the new accounting principle. In addition, SFAS 154 carries forward without change the guidance contained in APB 20 for reporting a
correction of an error in previously issued financial statements and a change in accounting estimate. SFAS 154 is effective for accounting changes and correction of errors made after January 1, 2006, with early adoption permitted.



NOTE 9. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION



We have issued $57,500 of 4% convertible senior subordinated
notes that are fully and unconditionally guaranteed on a joint and several basis by all our existing subsidiaries (the Guarantors), each of which we wholly own, directly or indirectly. We are a holding company and all of our operations are conducted
by the Guarantors; we have no significant operations or assets separate from our investment in our subsidiaries.



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

(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)



The following discussion and analysis should be read in conjunction with the accompanying condensed consolidated financial statements and related notes included elsewhere in this Report on Form 10-Q and our Annual
Report on Form 10-K for the year ended March 31, 2005. 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 future cash flows. 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:



| |  |  | the departure of one or more of our senior executives or a substantial number of our core company presidents could disrupt our operations, divert the attention of our management, or
otherwise adversely affect our revenues;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the highly competitive nature of the markets we serve may result in changes in our competitive climate, which could require us to lower prices and therefore would reduce our
revenues, as well as, lower gross margins;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our significant debt service obligations may exacerbate the effect on our cash flow if downturns in economic and business conditions hinder our ability to adjust to rapidly changing
market conditions;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | covenants in our senior credit facility impose operating and financial restrictions that limit our discretion on some business matters, which may affect our future financing plans
or our ability to enter into certain types of strategic transactions;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our dependence on our vendor relationships, the availability of products and our lease financing partners;
| | - |  | ----------------------------------------------------------------------------------------------------------



| |  |  | some or all of our substantial amount of goodwill and other intangible assets may become impaired, which would adversely affect our operating results;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | fewer than expected acquisition opportunities could slow our growth;
| | - |  | --------------------------------------------------------------------



| |  |  | recognition of unanticipated costs and delays associated with ongoing integration efforts;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | increases in borrowing rates and costs which could limit our acquisitions, cause us to reduce our pace of acquisitions or growth, or accelerate the time in which we need to obtain
new financing;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | technological developments that may reduce demand for the products and services we sell or result in us facing increased competition to sell those products and services; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to continue to comply with the provisions of the Sarbanes-Oxley Act of 2002.
| | - |  | ----------------------------------------------------------------------------------------



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 for the year ended March 31, 2005. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise.



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Overview



We are one of the leading providers of office technology solutions to middle-market businesses in the United States, selling and providing contract
services for automated office equipment, including copiers, facsimile machines and printers, print management solutions, network integration solutions and electronic presentation systems. We believe that the markets for our products and services are
converging as technology advancements and innovation produce increases in automated office equipment functionality and networking capabilities. Incorporating products from Konica Minolta, the Ricoh family of products, Sharp, Canon, Toshiba,
Hewlett-Packard, IBM, Microsoft, NEC, Hitachi, InFocus and other leading companies, we offer solutions for our customers from a network of more than 175 locations in 30 states and the District of Columbia. The contractual nature of our service and
supply business, tailored lease financing programs, high level of repeat equipment purchases and our emphasis on superior customer service generate stable and recurring revenue streams. Since our founding in June 1994, we have acquired more than 70
businesses, all within the United States, which we have organized as a network of 19 core companies with corresponding satellite businesses. We believe the businesses we have acquired and the 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 primarily come from two sources: sales of equipment and related supplies; and sales of complementary services and equipment rentals. The growth of our revenues depends on the demand for the equipment we offer, our reputation for providing
timely and reliable service, our competitors actions in the marketplace, and general economic conditions. Sales of complementary supplies, parts and services are affected by equipment sales and rental volumes. Most of our service revenue is
generated by contractual arrangements to service automated office equipment.



Our gross profit as a percentage of revenues varies from period to period depending on a number of variables including the mix of revenues from equipment, supplies, service and rentals; the mix of revenues among the
markets we serve; and the mix of revenues of the businesses we acquire. As we acquire businesses, the percentage of our revenues that come from sales of equipment and supplies, as opposed to service and rentals, fluctuates depending on whether the
businesses acquired are primarily 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 systems 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.



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 consolidated 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 ongoing basis, we evaluate these estimates, including those



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related to accounts receivable, inventories, vendor incentives, intangible assets and contingencies. Our judgments and estimates are based on currently
available information, historical results and other assumptions we believe to be 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. We evaluate the need for adjustments to our allowance for doubtful accounts at least quarterly. 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 or market value. For equipment, cost equals either the average cost of inventory or, in the case of some specifically identified equipment inventory, the actual cost of that equipment inventory. For parts and supplies, cost equals the
average cost of inventory. We evaluate the need for adjustments to our reserve for excess and slow-moving inventory at least quarterly. We write-down our inventories for estimated obsolescence by an amount equal to the difference between the cost of
the inventories and their 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 would reduce net income.



Vendor Incentives



We receive incentives from some of our vendors related to volume rebates, cooperative advertising allowances and other programs or agreements. These
incentive programs are generally for quarterly periods and historically have not varied significantly from quarter to quarter. There are also certain annual volume rebate programs offered by some of our vendors. We do not record any volume rebate
until it is probable that it will be earned and the amount can be reasonably estimated. 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 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.



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##### Table of Contents

Intangible Assets



As a result of our acquisition activity, we carry a substantial amount of goodwill, which is the excess of the cost of our acquired businesses over the
fair value of the acquired net assets. We examine the carrying value of our goodwill and our other intangible assets as current events and circumstances warrant to determine whether there are any impairment losses. For goodwill, we test the recorded
amount for impairment on the first day of the fourth quarter of our fiscal year, or more frequently if conditions change, by comparing the recorded value to the estimated fair value. If indicators of impairment were present relating to our 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. To date, we have not identified any event that would
indicate an impairment of the value of goodwill or other intangible assets recorded in our consolidated financial statements.



Contingencies



We accrue amounts for losses arising from 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 consolidated financial statements. Estimates that are particularly sensitive to future changes 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.



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RESULTS OF OPERATIONS



The following table sets forth our total revenues, revenues by type and our estimated internal growth rates for all revenues
during the periods indicated. We calculate the internal growth rate for each period by comparing total revenues earned by businesses that were part of our company during the entire subject period to the total revenues earned by those same businesses
during the corresponding period in the prior year. The growth rates provided are our best estimates of changes in total revenues that are not the result of business acquisitions during a particular period.



|                                             |  |                                |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|-------------------------------------------- |  | ------------------------------ | ------- | - | ----------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                             |  | Three Months EndedDecember 31, |         |   | Nine Months EndedDecember 31, |  
|                                             |  | 2005                           |         |   | 2004                          |   |         | 2005 |  |   | 2004    |  
|Revenues:                                    |  |                                |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Equipment revenues                           |  | $                              | 153,675 |   |                               | $ | 139,156 |      |  | $ | 456,948 |   |  | $ | 411,738 |  
|Supplies revenues                            |  |                                | 36,650  |   |                               |   | 34,165  |      |  |   | 110,877 |   |  |   | 96,993  |  
|                                             |  |                                |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Equipment and supplies revenues              |  |                                | 190,325 |   |                               |   | 173,321 |      |  |   | 567,825 |   |  |   | 508,731 |  
|                                             |  |                                |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Service revenues                             |  |                                | 62,649  |   |                               |   | 56,027  |      |  |   | 182,485 |   |  |   | 158,847 |  
|Rental revenues                              |  |                                | 3,870   |   |                               |   | 4,174   |      |  |   | 11,674  |   |  |   | 11,480  |  
|                                             |  |                                |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Service and rental revenues                  |  |                                | 66,519  |   |                               |   | 60,201  |      |  |   | 194,159 |   |  |   | 170,327 |  
|                                             |  |                                |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Total revenues                               |  | $                              | 256,844 |   |                               | $ | 233,522 |      |  | $ | 761,984 |   |  | $ | 679,058 |  
|                                             |  |                                |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Estimated internal growth rates for revenues |  |                                | 5.3     | % |                               |   | 4.9     | %    |  |   | 5.1     | % |  |   | 3.8     | %



The following table
sets forth our gross profit by revenue type and gross profit by revenue type as a percentage of revenue during the periods indicated:



|                                                         |  |                                |         |   |                               |   |        |      |  |   |         |   |  |   |         |  
|-------------------------------------------------------- |  | ------------------------------ | ------- | - | ----------------------------- | - | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                                         |  | Three Months EndedDecember 31, |         |   | Nine Months EndedDecember 31, |  
|                                                         |  | 2005                           |         |   | 2004                          |   |        | 2005 |  |   | 2004    |  
|Gross profit by revenue type:                            |  |                                |         |   |                               |   |        |      |  |   |         |   |  |   |         |  
|Equipment                                                |  | $                              | 53,025  |   |                               | $ | 45,865 |      |  | $ | 155,143 |   |  | $ | 137,377 |  
|Supplies                                                 |  |                                | 17,411  |   |                               |   | 16,072 |      |  |   | 51,032  |   |  |   | 46,137  |  
|Service                                                  |  |                                | 30,464  |   |                               |   | 27,947 |      |  |   | 89,150  |   |  |   | 78,936  |  
|Rental                                                   |  |                                | 1,146   |   |                               |   | 1,578  |      |  |   | 3,675   |   |  |   | 4,045   |  
|                                                         |  |                                |         |   |                               |   |        |      |  |   |         |   |  |   |         |  
|Total gross profit                                       |  | $                              | 102,046 |   |                               | $ | 91,462 |      |  | $ | 299,000 |   |  | $ | 266,495 |  
|                                                         |  |                                |         |   |                               |   |        |      |  |   |         |   |  |   |         |  
|Gross profit by revenue type as a percentage of revenue: |  |                                |         |   |                               |   |        |      |  |   |         |   |  |   |         |  
|Equipment                                                |  |                                | 34.5    | % |                               |   | 33.0   | %    |  |   | 34.0    | % |  |   | 33.4    | %
|Supplies                                                 |  |                                | 47.5    | % |                               |   | 47.0   | %    |  |   | 46.0    | % |  |   | 47.6    | %
|Service                                                  |  |                                | 48.6    | % |                               |   | 49.9   | %    |  |   | 48.9    | % |  |   | 49.7    | %
|Rental                                                   |  |                                | 29.6    | % |                               |   | 37.8   | %    |  |   | 31.5    | % |  |   | 35.2    | %
|                                                         |  |                                |         |   |                               |   |        |      |  |   |         |   |  |   |         |  
|Total gross profit as a percentage of revenue            |  |                                | 39.7    | % |                               |   | 39.2   | %    |  |   | 39.2    | % |  |   | 39.2    | %
|                                                         |  |                                |         |   |                               |   |        |      |  |   |         |   |  |   |         |  



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THREE MONTHS ENDED DECEMBER 31, 2005 COMPARED TO THREE MONTHS ENDED
DECEMBER 31, 2004



Revenues



Total revenues for the three months ended December 31, 2005 were
$256,844, which represents an increase of 10.0% over the same period in fiscal year 2005. The increase in revenues was due in part to growth from our existing companies. Our estimated combined internal growth rate for the three months ended
December 31, 2005 was 5.3%. The balance of the increase in revenues was due to revenues from four businesses acquired during the nine months ended December 31, 2005 and three businesses acquired in fiscal year 2005 that were not a part of
our business for the full quarter last year.



Equipment and
supplies revenues for the three months ended December 31, 2005 were $190,325, which represents an increase of 9.8% over the same period in fiscal year 2005. Equipment revenues increased 10.4% and supplies revenues increased 7.3%, with the
growth due to a combination of revenues from the businesses acquired and internal revenue growth.



Service and rental revenues for the three months ended December 31, 2005 were $66,519, which represents an increase of 10.5% over the same period in
fiscal year 2005. Service revenues increased 11.8%, with the growth due to a combination of revenues from the businesses acquired and internal revenue growth. Rental revenues decreased 7.3% primarily due to one of the core companies converting the
majority of its internal rentals to third-party leases as the rentals mature.



Gross Profit



Gross
profit for the three months ended December 31, 2005 totaled $102,046, reflecting an 11.6% increase over the same period in fiscal year 2005. The gross profit increase is due to the new business acquisitions and the growth in revenues from our
existing companies.



The gross profit margin for equipment
revenues for the three months ended December 31, 2005 increased 1.5 percentage points from the same period one year ago, which is primarily due to an increase in equipment gross profit margins of automated office equipment.



Supplies gross profit margin for the three months ended December 31,
2005 increased 0.5 percentage points as compared to the same period one year ago, which is primarily due to an increase in automated office equipment supply gross profit margins.



Service gross profit margin for the three months ended December 31, 2005 decreased 1.3 percentage points from the same
period one year ago, which is primarily due to a decrease in technology service gross profit margins. The gross profit margins in automated office equipment also declined slightly.



Selling, General and Administrative Expenses



Selling, general and administrative expenses, or SG&A expenses, increased 12.5% to $71,917 for the three months ended
December 31, 2005. This amount was 28.0% of total revenues compared to 27.4% of total revenues for the three months ended December 31, 2004. The overall increase in SG&A expenses was primarily due to increased payroll costs resulting
from increased revenues and gross profit from our existing companies and SG&A expenses related to newly acquired businesses. The increase in SG&A expenses as a percentage of revenues was primarily due to an increase in healthcare costs and
restricted stock compensation expense. Healthcare costs for the three months ended December 31, 2005 increased approximately $770 over the same period a year ago, excluding the effects of acquisitions.



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Intangible Asset Amortization



Intangible asset amortization was $458 for the three months ended December 31, 2005 compared to $300 for the same
period in fiscal year 2005. This amortization relates to non-compete agreements and customer relationships. The increase primarily relates to amortization resulting from newly acquired businesses.



Income From Operations



Income from operations was $29,671, or 11.6% of total revenues, for the
three months ended December 31, 2005 compared to $27,210, or 11.7% of total revenues, for the same period in fiscal year 2005.



Interest Expense



Interest expense increased 16.0% to $3,631 for the three months ended December 31, 2005 compared to $3,129 for the same period in fiscal year 2005.
The increase in interest expense is due to an increase in interest rates. Interest expense includes the amortization of financing fees incurred in connection with our senior credit facilities and the 4% convertible senior subordinated notes due
2008.



Income Taxes



The provision for income taxes was $9,947 for the three months ended
December 31, 2005 compared to $9,151 for the same period in fiscal year 2005. The effective income tax rate was 38.2% for the three months ended December 31, 2005, and 38.0% for the same period in fiscal year 2005.



NINE MONTHS ENDED DECEMBER 31, 2005 COMPARED TO NINE MONTHS
ENDED DECEMBER 31, 2004



Revenues



Total revenues for the nine months ended December 31, 2005 were
$761,984, which represents an increase of 12.2% over the same period in fiscal year 2005. The majority of the revenue growth was attributable to revenues from four businesses acquired during the nine months ended December 31, 2005 and six
businesses acquired in fiscal year 2005 that were not a part of our business for the full nine months last year. The balance of the increase in revenues was due to internal growth from our existing companies. Our estimated combined internal growth
rate for the nine months ended December 31, 2005 was 5.1%.



Equipment and supplies revenues for the nine months ended December 31, 2005 were $567,825, which represents an increase of 11.6% over the same period in fiscal year 2005. Equipment revenues increased 11.0% and supplies revenues
increased 14.3%, with the majority of the revenue growth due to the businesses acquired.



Service and rental revenues for the nine months ended December 31, 2005 were $194,159, which represents an increase of 14.0% over the same period in fiscal year 2005. Service revenues increased 14.9% and rental
revenues increased 1.7%, with the majority of the service revenue growth due to the businesses acquired.



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Gross Profit



Gross profit for the nine months ended December 31, 2005 totaled $299,000, a 12.2% increase over the same period in
fiscal year 2005. This gross profit increase is primarily due to the acquisition of automated office equipment dealers during the nine months ended December 31, 2005 and fiscal year 2005, and the internal revenue growth from existing companies.



The gross profit margin for equipment revenues for the nine
months ended December 31, 2005 increased 0.6 percentage points as compared to the same period one year ago. This is primarily due to a higher percentage of revenues from the automated office equipment business which has higher gross profit
margins than the network integration and electronic presentation businesses.



Supplies gross profit margin for the nine months ended December 31, 2005 decreased 1.6 percentage points as compared to the same period one year ago, which is primarily due to a decrease in automated office
equipment supply gross profit margins.



Service gross profit
margin for the nine months ended December 31, 2005 decreased 0.8 percentage points from the same period one year ago, which is primarily due to a decrease in technology service gross profit margins.



Selling, General and Administrative Expenses



Selling, general and administrative (SG&A) expenses totaled
$212,876 representing an increase of 14.0% over the prior year period. SG&A expenses were 27.9% of total revenues compared to 27.5% of total revenues for the nine months ended December 31, 2004. The overall increase in SG&A expenses was
primarily due to the acquisition of four businesses during the nine months ended December 31, 2005 and six businesses during fiscal year 2005 that were not a part of our business for the full nine months ended December 31, 2004. In
addition, healthcare costs for the nine months ended December 31, 2005 increased approximately $2,500 over the same period a year ago, excluding the effects of acquisitions.



Intangible Asset Amortization



Intangible asset amortization was $1,347 for the nine months ended December 31, 2005 compared to $1,051 for the same
period in fiscal year 2005. This amortization relates to non-compete agreements and customer relationships. The increase primarily relates to amortization resulting from newly acquired businesses.



Income From Operations



Income from operations was $84,777, or 11.1% of total revenues, for the nine
months ended December 31, 2005 compared to $78,766, or 11.6% of total revenues, for the same period in fiscal year 2005. The decrease in the percentage of total revenues is mainly due to the increases in SG&A expenses discussed above.



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Loss on early extinguishment of debt



During the nine months ended December 31, 2004, we incurred a loss on
early extinguishment of debt in the amount of $1,655 related to an amendment of our prior credit facility.



Interest Expense



Interest expense increased 20.6% to $10,402 for the nine months ended December 31, 2005 compared to $8,623 for the same period in fiscal year 2005.
The increase in interest expense was primarily due to higher interest rates as well as an increase in our average outstanding borrowings. Interest expense includes the amortization of financing fees incurred in connection with our senior credit
facilities and the 4% convertible senior subordinated notes due 2008.



Income Taxes



The provision for income taxes
was $28,364 for the nine months ended December 31, 2005 compared to $26,070 for the same period in fiscal year 2005. The effective income tax rate for both periods was 38.1%.



LIQUIDITY AND CAPITAL RESOURCES



Historically, we have financed our 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, we may incur additional debt and seek additional equity capital.



On May 16, 2003, we issued $57,500 of 4% convertible senior subordinated notes in a private placement to institutional investors. We used the net
proceeds of approximately $55,500 from the offering to repay a portion of the amount outstanding under our prior senior credit facility. The convertible notes bear interest at 4%, payable semi-annually, and are convertible into our common stock at
any time at the conversion rate of approximately 41.8550 shares per one thousand principal amount of the convertible notes. This is equivalent to a conversion price of $23.892 per share. The convertible notes may be redeemed on or after May 20,
2006, in whole or in part, at the following redemption prices expressed as percentages of the principal amount:



|                                  |  |            |  
|--------------------------------- |  | ---------- | -
|Redemption Period                 |  | Percentage |  
|May 20, 2006 through May 14, 2007 |  | 101.6      | %
|May 15, 2007 through May 14, 2008 |  | 100.8      | %
|May 15, 2008 and thereafter       |  | 100.0      | %



The convertible notes
are jointly and severally guaranteed by our current and certain of our future subsidiaries on a senior subordinated basis.



On May 10, 2004, in conjunction with our purchase of ITG, we entered into the second amendment of our senior credit facility. On March 11, 2005,
we entered into the third amendment of our senior credit facility which reduced the interest rate spreads on the term loan portion of the facility. We refer to the second and third amendments of our senior credit facility as our new senior credit
facility. Our new senior credit facility is with a group of banks and financial institutions, with Wachovia Bank, National Association serving as administrative agent. Our new senior credit facility is comprised of a $70,000 five-year revolving
credit line and a



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$208,950 six-year term loan. The revolving credit line of the new senior credit facility bears interest at rates ranging from 1.50% to 2.00% over LIBOR or
from .50% to 1.00% over a base rate related to the prime rate, and varies according to our ratio of total funded debt to earnings before interest, taxes, depreciation and amortization. The term loan bears interest at a rate of 1.50% over LIBOR or
..25% over a base rate related to the prime rate. The new senior credit facility provides for an unused commitment fee payable to the lenders and certain other fees payable by us and our material subsidiaries. The annual commitment fee rate is .50%
of the unused balance. Amounts borrowed under the new senior credit facility may be used to fund working capital and general corporate purposes, including acquisitions, subject to the lenders approval in the case of acquisitions with a cash
purchase price of over $50,000 or an aggregate purchase price (cash, stock or other consideration) of over $75,000. The terms of the new senior credit facility require compliance with numerous affirmative, negative, and financial covenants. In
addition, we are prohibited from paying cash dividends under the terms of our new senior credit facility. Amounts borrowed under the revolving credit line of the new senior credit facility may be repaid and borrowed over the life of the new senior
credit facility, with a final maturity date of May 10, 2009. As of December 31, 2005, we had $69,500 of additional borrowing availability under the revolving credit portion of our new senior credit facility. This amount has been reduced by
$500 to reflect the aggregate amount of an outstanding standby letter of credit issued under the new senior credit facility to support our obligations incurred in the ordinary course of business. As of December 31, 2005, no amounts had been
paid under this letter of credit.



Net cash provided by
operating activities totaled $41,963 for the nine months ended December 31, 2005 as compared to net cash provided by operating activities of $37,823 for the prior year period. The increase primarily relates to an increase in net income. Net
cash used in investing activities of $28,640 during the nine months ended December 31, 2005 was primarily for purchases of property, equipment and rental equipment, as well as four acquisitions. Net cash used in financing activities of $17,416
during the nine months ended December 31, 2005 was primarily for the purchase of common stock pursuant to the Companys stock repurchase program.



We believe that cash flows from future operations, together with funds available under our new senior credit facility, will be sufficient to fund our
operational needs and acquisition growth strategy for at least the next twelve months.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Our market risk is primarily limited to fluctuations in interest rates as it pertains to our borrowings under our new senior credit facility. There have
been no material changes, other than those described below, to the information in the Item 7A disclosure made in our Annual Report on Form 10-K for the fiscal year ended March 31, 2005.



In May 2005, we entered into a forward swap agreement which we accounted for
as a cash flow hedge. The agreement effectively converts $30,000 of our variable-rate debt to fixed-rate debt, reducing our exposure to changes in interest rates. Under the agreement, we will pay a LIBOR fixed rate of 4.05%. The agreement is
effective for a period of two years, beginning September 2005.



In May 2005, we also entered into a two-year forward interest rate cap agreement in the notional amount of $30,000, effective September 2005. The cap limits our interest rate risk exposure for the related notional amounts to a 5.50% LIBOR
rate plus the applicable margin.



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ITEM 4. CONTROLS AND PROCEDURES



(a) 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, the chief executive
officer and chief financial officer believe that these controls and procedures were effective, as of the end of the period covered by this report, 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 control over financial reporting. There have been no changes in our internal control over financial reporting during the period covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.



PART II - OTHER INFORMATION



ITEM 6. EXHIBITS



The Exhibit
Index filed herewith is incorporated herein by reference.



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##### Table of Contents

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.



|                 |  |                                                                                                                                             
|---------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------
|                 |  | Global Imaging Systems, Inc.                                                                                                                
|                 |  | (Registrant)                                                                                                                                
|                 | 
|February 7, 2006 |  | /s/ Raymond Schilling                                                                                                                       
|Date             |  | Raymond Schilling                                                                                                                           
|                 |  | On behalf of Global Imaging Systems and as Executive Vice President and Chief Financial Officer (Principal Financial and Accounting
Officer)



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##### Table of Contents

EXHIBIT INDEX



(Pursuant to
Item 601 of Regulation S-K)



|       |  |                                                                                                                                                          
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Exhibit                                                                                                                                                  
|3i.1   |  | Amended and Restated Certificate of Incorporation of Global Imaging Systems, Inc. (1)                                                                    
|       | 
|3i.2   |  | Certificate of Amendment of Certificate of Incorporation of Global Imaging Systems, Inc. (3)                                                             
|       | 
|3ii.1  |  | Amended and Restated Bylaws of Global Imaging Systems, Inc. (1)                                                                                          
|       | 
|3ii.2  |  | Amendment to Amended and Restated Bylaws of Global Imaging Systems, Inc. (2)                                                                             
|       | 
|4.1    |  | Form of 4% Convertible Senior Subordinated Notes Due 2008. (2)                                                                                           
|       | 
|31.1   |  | Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                  
|       | 
|31.2   |  | Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                  
|       | 
|32.1   |  | Written Statement of Chief Executive Officer and Chief Financial Officer furnished (not filed) pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

---

|(1) | Incorporated by reference to Globals Registration Statement on Form S-1, No. 333-48103, as filed with the SEC on May 8, 1998.
|--- | ------------------------------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to Globals Registration Statement on Form S-3/A, No. 333-107948, as filed with the SEC on October 7, 2003.
|--- | -------------------------------------------------------------------------------------------------------------------------------------

|(3) | Incorporated by reference to Globals Proxy Statement on Form DEF 14A, as filed with the SEC on July 19, 2004.
|--- | --------------------------------------------------------------------------------------------------------------



26