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

FORM 10-Q

|x                                                              | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|-------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|                                                               |                                                                                         
|For the quarterly period ended March 31, 2003                 
|                                                               |                                                                                         
|or                                                            
|                                                               |                                                                                         
|o                                                              | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|                                                               |                                                                                         
|For the transition period from ___________ to ___________.    
|                                                              
|Commission File Number: 001-16079                             
|                                                              
|PracticeWorks, Inc.                                           
|(Exact name of registrant as specified in its charter)        
|                                                               |                                                                                         
|Delaware                                                       |                                                                                         
|(State or other jurisdiction of incorporation or organization) |                                                                                         
|                                                               |                                                                                         
|1765 The Exchange, Suite 200 Atlanta, Georgia                  |                                                                                         
|(Address of principal executive offices)                       |                                                                                         
|                                                               |                                                                                         
|(770) 850-5006                                                
|(Registrants telephone number, including area code)          
|                                                               |                                                                                         

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

|Yes x | No o
|----- | ----

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

|Yes x | No o
|----- | ----

The number of outstanding shares of the
Registrants common stock, par value $.01 per share, was 17,788,770 as of May 1, 2003.

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PRACTICEWORKS, INC.

INDEX TO CONTENTS

DESCRIPTION OF CONTENTS

|PART I 
Financial Information
|------------------------------
|                              
|                              
|                              
|                              
|PART II 
Other Information   
|                              
|                              





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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PRACTICEWORKS, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (IN
THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

|                                                                                                                                                                                                                                                           |  | March 31, 2003 |         | December 31, 2002 |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------- | ----------------- | -
|                                                                                                                                                                                                                                                           |  |                |         |                   |  
|ASSETS                                                                                                                                                                                                                                                     |  |                |         |                   |  
|Current:                                                                                                                                                                                                                                                   |  |                |         |                   |  
|Cash and cash equivalents                                                                                                                                                                                                                                  |  | $              | 9,609   |                   | $
|Accounts receivable-trade, net of allowance of $622 and $530, respectively                                                                                                                                                                                 |  |                | 23,725  |                   |  
|Other receivables                                                                                                                                                                                                                                          |  |                | 1,472   |                   |  
|Inventory                                                                                                                                                                                                                                                  |  |                | 8,968   |                   |  
|Deferred income tax assets                                                                                                                                                                                                                                 |  |                | 300     |                   |  
|Prepaid expenses and other current assets                                                                                                                                                                                                                  |  |                | 1,557   |                   |  
|                                                                                                                                                                                                                                                           |  |                |         |                   |  
|Total current assets                                                                                                                                                                                                                                       |  |                | 45,631  |                   |  
|Property and equipment, net of accumulated depreciation of $8,664 and $8,065, respectively                                                                                                                                                                 |  |                | 8,378   |                   |  
|Goodwill                                                                                                                                                                                                                                                   |  |                | 74,565  |                   |  
|Capitalized software development costs, net of accumulated amortization of $7,983 and $6,876, respectively                                                                                                                                                 |  |                | 12,046  |                   |  
|Acquired developed technologies, net of accumulated amortization of $477 and $38, respectively                                                                                                                                                             |  |                | 17,617  |                   |  
|Other intangible assets, net of accumulated amortization of $1,185 and $739, respectively                                                                                                                                                                  |  |                | 16,270  |                   |  
|Deferred income tax assets                                                                                                                                                                                                                                 |  |                | 7,167   |                   |  
|Investment in and advances to affiliate                                                                                                                                                                                                                    |  |                | 4,532   |                   |  
|Other assets                                                                                                                                                                                                                                               |  |                | 1,419   |                   |  
|                                                                                                                                                                                                                                                           |  |                |         |                   |  
|                                                                                                                                                                                                                                                           |  | $              | 187,625 |                   | $
|                                                                                                                                                                                                                                                           |  |                |         |                   |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                                                                       |  |                |         |                   |  
|Current liabilities:                                                                                                                                                                                                                                       |  |                |         |                   |  
|Accounts payable                                                                                                                                                                                                                                           |  | $              | 13,045  |                   | $
|Foreign income tax payable                                                                                                                                                                                                                                 |  |                | 2,258   |                   |  
|Accrued expenses                                                                                                                                                                                                                                           |  |                | 14,803  |                   |  
|Accrued restructuring costs                                                                                                                                                                                                                                |  |                | 284     |                   |  
|Deferred revenue and customer deposits                                                                                                                                                                                                                     |  |                | 14,059  |                   |  
|Current portion of long-term debt                                                                                                                                                                                                                          |  |                | 9,364   |                   |  
|                                                                                                                                                                                                                                                           |  |                |         |                   |  
|Total current liabilities                                                                                                                                                                                                                                  |  |                | 53,813  |                   |  
|Long-term debt, less current portion                                                                                                                                                                                                                       |  |                | 31,157  |                   |  
|Deferred income tax liability                                                                                                                                                                                                                              |  |                | 6,921   |                   |  
|Other liabilities                                                                                                                                                                                                                                          |  |                | 713     |                   |  
|                                                                                                                                                                                                                                                           |  |                |         |                   |  
|Total liabilities                                                                                                                                                                                                                                          |  |                | 92,604  |                   |  
|                                                                                                                                                                                                                                                           |  |                |         |                   |  
|Commitments and contingencies                                                                                                                                                                                                                              |  |                |         |                   |  
|Preferred stock, $0.01 par value; 20,000,000 shares authorized:                                                                                                                                                                                            |  |                |         |                   |  
|Series B 6.0% convertible redeemable preferred; liquidation preference and redemption value $5,199; shares issued
and outstanding 955,779; carrying value includes accrued dividends of $536 and $451 and is net of $1,005 and $1,080 unamortized discount |  |                | 4,730   |                   |  
|                                                                                                                                                                                                                                                           |  |                |         |                   |  
|Series D preferred stock, no shares issued and outstanding                                                                                                                                                                                                 |  |                |        |                   |  
|                                                                                                                                                                                                                                                           |  |                |         |                   |  
|Stockholders equity:                                                                                                                                                                                                                                      |  |                |         |                   |  
|Common stock $0.01 par value, 100,000,000 authorized,17,768,451 and 17,687,872 issued and outstanding                                                                                                                                                      |  |                | 178     |                   |  
|Additional paid-in capital                                                                                                                                                                                                                                 |  |                | 118,101 |                   |  
|Deferred compensation                                                                                                                                                                                                                                      |  |                | (715    | )                 |  
|Accumulated deficit                                                                                                                                                                                                                                        |  |                | (29,233 | )                 |  
|Accumulated other comprehensive income                                                                                                                                                                                                                     |  |                | 1,960   |                   |  
|                                                                                                                                                                                                                                                           |  |                |         |                   |  
|Total stockholders equity                                                                                                                                                                                                                                 |  |                | 90,291  |                   |  
|                                                                                                                                                                                                                                                           |  |                |         |                   |  
|                                                                                                                                                                                                                                                           |  | $              | 187,625 |                   | $
|                                                                                                                                                                                                                                                           |  |                |         |                   |  

See accompanying notes to unaudited condensed consolidated financial
statements.

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PRACTICEWORKS, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)

|                                                                      |  | Three Months Ended March 31, |       
|--------------------------------------------------------------------- |  | ---------------------------- | ------
|                                                                      |  |                              |       
|                                                                      |  | 2003                         |       
|                                                                      |  |                              |       
|Revenues:                                                             |  |                              |       
|Support, e-services and subscription                                  |  | $                            | 15,407
|Software, equipment and related services                              |  |                              | 6,813 
|Manufactured products                                                 |  |                              | 21,621
|                                                                      |  |                              |       
|Total revenues                                                        |  |                              | 43,841
|                                                                      |  |                              |       
|Costs and operating expenses:                                         |  |                              |       
|Purchases for resale                                                  |  |                              | 3,686 
|Cost of manufactured products                                         |  |                              | 8,683 
|Selling, general and administrative                                   |  |                              | 21,132
|Research and development                                              |  |                              | 2,265 
|Depreciation and amortization                                         |  |                              | 2,673 
|                                                                      |  |                              |       
|Total costs and operating expenses                                    |  |                              | 38,439
|                                                                      |  |                              |       
|Operating income                                                      |  |                              | 5,402 
|Other (income) expense:                                               |  |                              |       
|Interest income                                                       |  |                              | (105  
|Interest expense                                                      |  |                              | 797   
|Equity in loss of affiliate                                           |  |                              | 105   
|                                                                      |  |                              |       
|Total other (income) expense                                          |  |                              | 797   
|                                                                      |  |                              |       
|Income (loss) before income taxes                                     |  |                              | 4,605 
|Provision for income taxes                                            |  |                              | 1,305 
|                                                                      |  |                              |       
|Net income (loss)                                                     |  |                              | 3,300 
|Accrued and accretive preferred stock dividends                       |  |                              | 160   
|                                                                      |  |                              |       
|Net income (loss) available to common stockholders                    |  | $                            | 3,140 
|                                                                      |  |                              |       
|Per share data:                                                       |  |                              |       
|Net income (loss):                                                    |  |                              |       
|Basic                                                                 |  | $                            | 0.19  
|Diluted                                                               |  | $                            | 0.18  
|Dividends:                                                            |  |                              |       
|Basic                                                                 |  |                              | (0.01 
|Diluted                                                               |  |                              | (0.01 
|Net income (loss) available to common stockholders:                   |  |                              |       
|Basic                                                                 |  | $                            | 0.18  
|Diluted                                                               |  | $                            | 0.17  
|Weighted average shares outstanding used in computing per share data: |  |                              |       
|Basic                                                                 |  |                              | 17,728
|                                                                      |  |                              |       
|Diluted                                                               |  |                              | 18,208
|                                                                      |  |                              |       
|Comprehensive income (loss):                                          |  |                              |       
|Net income (loss)                                                     |  | $                            | 3,300 
|Foreign currency translation adjustments                              |  |                              | 814   
|Hedging activities                                                    |  |                              | (16   
|                                                                      |  |                              |       
|Total comprehensive income (loss)                                     |  | $                            | 4,098 
|                                                                      |  |                              |       

See accompanying notes to unaudited condensed consolidated financial
statements.

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PRACTICEWORKS, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

|                                                                                     |  | Three Months Ended March 31, |       
|------------------------------------------------------------------------------------ |  | ---------------------------- | ------
|                                                                                     |  |                              |       
|                                                                                     |  | 2003                         |       
|                                                                                     |  |                              |       
|CASH PROVIDED BY OPERATING ACTIVITIES:                                               |  |                              |       
|Net income (loss)                                                                    |  | $                            | 3,300 
|Adjustments to reconcile net income (loss) to cash provided by operating activities: |  |                              |       
|Depreciation and amortization                                                        |  |                              | 2,963 
|Provision for doubtful accounts                                                      |  |                              | 96    
|Equity in loss of affiliate                                                          |  |                              | 105   
|Deferred taxes                                                                       |  |                              | (982  
|Other                                                                                |  |                              | (43   
|Changes in current assets and liabilities, net of acquisitions:                      |  |                              |       
|Trade and other receivables                                                          |  |                              | (309  
|Inventory, prepaid expenses and other current assets                                 |  |                              | (943  
|Accounts payable and accrued expenses                                                |  |                              | 2,768 
|Deferred revenue and customer deposits                                               |  |                              | (603  
|                                                                                     |  |                              |       
|Cash provided by operating activities                                                |  |                              | 6,352 
|                                                                                     |  |                              |       
|CASH USED IN INVESTING ACTIVITIES:                                                   |  |                              |       
|Cash paid for acquisitions                                                           |  |                              | (3,895
|Additional purchase price consideration                                              |  |                              | (167  
|Property and equipment expenditures                                                  |  |                              | (1,088
|Cash paid for intangible assets                                                      |  |                              | (679  
|Other                                                                                |  |                              | (51   
|                                                                                     |  |                              |       
|Cash used in investing activities                                                    |  |                              | (5,880
|                                                                                     |  |                              |       
|CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES:                                     |  |                              |       
|Principal payments on long-term debt                                                 |  |                              | (2,080
|Proceeds from exercise of stock options and warrants                                 |  |                              | 162   
|Payment of loan costs                                                                |  |                              | (33   
|Borrowings of long-term debt                                                         |  |                              |      
|                                                                                     |  |                              |       
|Cash (used in) provided by financing activities                                      |  |                              | (1,951
|                                                                                     |  |                              |       
|Effect of exchange rate changes on cash and cash equivalents                         |  |                              | 59    
|                                                                                     |  |                              |       
|Net decrease in cash and cash equivalents                                            |  |                              | (1,420
|Cash and cash equivalents, beginning of period                                       |  |                              | 11,029
|                                                                                     |  |                              |       
|Cash and cash equivalents, end of period                                             |  | $                            | 9,609 
|                                                                                     |  |                              |       
|NONCASH INVESTING AND FINANCING TRANSACTIONS:                                        |  |                              |       
|Issuance of PracticeWorks common stock to settle obligations                         |  | $                            | 453   
|Issuance of PracticeWorks common stock for acquisitions                              |  |                              |      
|Issuance of notes payable for acquisitions                                           |  |                              |      
|ADDITIONAL CASH FLOW INFORMATION:                                                    |  |                              |       
|Interest paid                                                                        |  | $                            | 513   
|                                                                                     |  |                              |       
|Income taxes paid                                                                    |  | $                            | 3,891 
|                                                                                     |  |                              |       

See accompanying notes to unaudited condensed consolidated financial
statements.

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PRACTICEWORKS, INC.NOTES TO UNAUDITED CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS

NOTE 1.   NATURE OF OPERATIONS AND BASIS OF PRESENTATION

The
Company is a provider of software-based information technology for dentists, orthodontists and oral and maxillofacial surgeons throughout the United States, and, on a more limited basis, in Europe, Canada and Australia.  The Companys
offerings include practice management applications, ongoing maintenance and support and training, electronic data interchange, or EDI, services and business-to-business e-commerce services and digital radiography and cosmetic imaging systems. 
These systems and services are designed to increase the quality and reduce the cost of providing care by allowing dentists and physicians to manage their practices more efficiently and reduce the administrative burdens created by an increasingly
complex healthcare environment.  On December 23, 2002, PracticeWorks completed the acquisition of Trex Medical France SA and its subsidiaries, principally Trophy Radiologie SA (Trophy).  Trophy develops, manufactures and
markets conventional x-ray and digital radiography imaging systems, primarily for the dental market.  Trophy markets its products worldwide.

The information presented at March 31, 2003 and for the three months ended March 31, 2003 and 2002, respectively, is unaudited, however,
in the opinion of management, it includes all normal recurring adjustments necessary for a fair presentation of the consolidated financial position, results of operations and cash flows of PracticeWorks for the periods presented.  All
significant intercompany balances and transactions have been eliminated in consolidation.  The results of operations for the three months ended March 31, 2003 are not necessarily indicative of the results to be expected for the full year. 
Certain information in footnote disclosures normally included in annual financial statements prepared in accordance with  accounting principles generally accepted in the United States has been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission.  The condensed consolidated financial statements, notes thereto and other information should be read in conjunction with the historical consolidated financial statements and related notes
thereto included in PracticeWorks Annual Report on Form 10-K for the year ended December 31, 2002 (the Form 10-K).  Certain prior period amounts have been reclassified to conform to the current
presentation.

NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

For information regarding significant accounting policies, see Note 2 to the Consolidated Financial Statements of the Company for
the year ended December 31, 2002, set forth in the Form 10-K.

DERIVATIVE INSTRUMENTS

The Company accounts for derivative instruments in accordance with Statement of Financial Accounting Standards (SFAS) No.
133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 137 and SFAS No. 138.  These statements require the Company to recognize all derivative instruments on the balance sheet at fair value. 
The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship.

For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging
instrument, based upon the exposure being hedged, as either a fair value hedge, cash flow hedge or a hedge of net investment in a foreign operation.  For derivative instruments that are designated and qualify as a fair value hedge, the gain or
loss on the derivative instrument as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in current earnings during the period of the change in fair values.  For derivative instruments that are
designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during
which the hedged transaction affects earnings.  The ineffective portion of the gain or loss on the derivative instrument is recognized in current earnings during the period of change.  For derivative instruments not designated as hedging
instruments, the gain or loss is recognized in current earnings during the period of change.

The Company
uses derivative financial instruments primarily to reduce its exposure to fluctuations in interest rates and foreign exchange rates.  For those derivative financial instruments that are designated and qualify as hedging instruments, the Company
formally designates and documents the financial instrument as a hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the hedge transaction.  Derivatives are recorded in the balance
sheet at fair value in either other assets or other liabilities.  The earnings impact resulting from the derivative instruments is recorded in the same line item within the statements of operations as the underlying exposure being hedged. 
The Company also formally

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assesses, both at the inception and at least quarterly thereafter, whether the financial instruments that are used in hedging transactions are effective at offsetting changes
in either the fair value or cash flows of the related underlying exposures.

Fair Value Hedging Strategy

In January 2003, the Company entered into fixed forward foreign exchange contracts to minimize exposure to fluctuations in the Japanese
Yen.  These contracts mature at various times through July 2003.  The Company did not designate these contracts as a hedge under SFAS No. 133.  Accordingly, the change in the fair value of the contracts have been recorded in
earnings immediately as other income (expense).  For the three months ended March 31, 2003, the loss recorded was immaterial.

Cash Flow Hedging Strategy

In March 2003, the Company entered into an interest rate swap agreement that effectively converted one-half of the term note of
the Credit Agreement from floating-rate debt to fixed-rate debt through December 23, 2005, thereby hedging against the impact of interest rate changes on future cash flows (interest expense).  The interest rate swap agreement has an initial
aggregate notional amount of $15.0 million maturing on December 23, 2005.  The interest rate swap fixes the base rate of the term note to 1.85%.  The variable rate was based on the three-month LIBOR rate, 1.29% as of March 31, 2003. 
The interest rate swap agreement is designated as a cash flow hedge, and the terms of the swap agreement and hedged item match such that the effectiveness can be measured using the short-cut method defined in SFAS No. 133.  The Company recorded
$4,000 of additional interest expense for the three months ended March 31, 2003 for the difference between the variable rate on the term note and fixed rate on the interest rate swap.  As of March 31, 2003, the fair value carrying amount of
this instrument, which is included in accrued expenses and other comprehensive income (loss), was a liability of $16,000.

STOCK BASED COMPENSATION

The Company accounts for its stock-based compensation plans under the provisions of Accounting Principles Board (APB)
Opinion No. 25, Accounting for Stock Issued to Employees.  SFAS No. 123, Accounting for Stock-Based Compensation requires companies that elect not to account for stock-based compensation as presecribed by that statement
to disclose, among other things, the pro forma effects on operations as if SFAS No. 123 had been adopted.  SFAS No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure provides for alternative methods of
transitioning to SFAS No. 123.  It also amends the disclosure provisions of SFAS No. 123 and APB No. 28, Interim Financial Reporting, to require disclosure in the summary of significant accounting policies of the effects of an
entitys accounting policy with respect to stock-based compensation on reported net income and earnings per share in annual and interim financial statements.  SFAS No. 148s amendment of the transition and annual disclosure
requirements are effective for fiscal years ending after December 15, 2002.  The amendment of disclosure requirements of APB Opinion No. 28 is effective for interim periods beginning after December 15, 2002.  The Company adopted this
standard effective December 31, 2002.  The Company will continue to use the intrinsic value method of accounting for stock-based compensation as allowed by SFAS No. 148.  No compensation expense for employee stock options is reflected in
net income (loss) available to common stockholders as all options granted under the plans had an exercise price equal to the market value of the common stock on the date of the grant.

For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options vesting
period.  The Companys pro forma information, based on the options held by the Companys employees, is as follows (in thousands, except per share data):

|                                                              |  | Three Months Ended March 31, |       
|------------------------------------------------------------- |  | ---------------------------- | ------
|                                                              |  |                              |       
|                                                              |  | 2003                         |       
|                                                              |  |                              |       
|Net income (loss) available to common stockholders:           |  |                              |       
|As reported                                                   |  | $                            | 3,140 
|Total stock-based compensation expense                        |  |                              | (1,766
|                                                              |  |                              |       
|Pro forma                                                     |  | $                            | 1,374 
|                                                              |  |                              |       
|Net income (loss) available to common stockholders per share: |  |                              |       
|As reported                                                   |  | $                            | 0.17  
|Pro forma                                                     |  |                              | 0.08  

NOTE 3.   BUSINESS COMBINATIONS

As reported in Form 10-K, the Company completed the acquistion of Trophy on December 23, 2002.  Trophy is a manufacturer of dental
radiology products which are highly complementary to the Companys information management products. The results of Trophys operations have been included in the consolidated financial statements since that date.  Trophy
develops,

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manufactures and markets conventional x-ray and digital radiography imaging systems primarily for the dental market.  Trophys products are marketed throughout the
world through a network of independent non-exclusive dental product re-sellers located in Europe and Japan and through PracticeWorks in the United States.  Total consideration for this transaction through March 31, 2003, was approximately $52.0
million and includes the agreed upon purchase price, a net working capital adjustment and transaction costs and is net of acquired cash.  During the first quarter of 2003, the Company paid $3.6 million of the total consideration.  The
acquisition was funded using cash on hand and the Credit Agreement.  Total goodwill recorded was $21.0 million, of which approximately $1.6 million is deductible for income tax purposes and is included in the Companys Manufactured
Products segment.

In addition, as reported in the Form 10-K, the Company completed three other
acquisitions in 2002.  The aggregate consideration for these acquisitions was approximately $11.3 million.  The purchase price was allocated based on a valuation of tangible and intangible assets, developed technologies and total
liabilities assumed.  The Company recorded total goodwill of approximately $6.7 million.

The
following unaudited pro forma information presents the results of operations of the Company as if the material acquisitions had occurred as of the beginning of the period presented.  The pro forma information is not necessarily indicative of
what would have occurred had the acquisitions been made as of such period, nor is it indicative of future results of operations. The pro forma amounts give effect to appropriate adjustments for the fair value of the assets acquired, amortization of
intangibles, interest expense and income taxes.

|(In thousands, except per share data)                                   |  | Three Months Ended March 31, 2002 |       
|----------------------------------------------------------------------- |  | --------------------------------- | ------
|                                                                        |  |                                   |       
|PRO FORMA AMOUNTS                                                       |  |                                   |       
|Revenues                                                                |  | $                                 | 31,994
|Net loss                                                                |  |                                   | (207  
|Net loss available to common stockholders                               |  |                                   | (1,650
|Net loss available to common stockholders per share - basic and diluted |  |                                   | (0.15 

NOTE 4.   RESTRUCTURING

As reported in the Form 10-K, the Company announced plans in the fourth quarter of 2001 to consolidate substantially all of its
domestic operations into one facility.  The plan entailed the closure of two facilities, reduction of scope of operations in a third facility and termination of approximately 110 employees company wide.  The Company added 50 employees in
Atlanta in the first quarter of 2002 to absorb the functions of the closed locations.  During the second quarter of 2002, the Company negotiated to terminate the lease of a closed facility and recorded a reduction in the restructuring reserve
of $220,000.  The remaining closed facilities have operating leases with various expiration dates through 2005.  The other costs of the restructuring were paid in the first half of 2002.  The following table sets forth changes in the
restructuring reserve during the three months ended March 31, 2003 (in thousands):

|                                   |  | Reserve Balance December 31, 2002 |     | Additions/ Adjustments To Reserve |   | Costs Applied Against Reserves |  | Reserve Balance March 31, 2003 |    
|---------------------------------- |  | --------------------------------- | --- | --------------------------------- | - | ------------------------------ |  | ------------------------------ | ---
|                                   |  |                                   |     |                                   |   |                                |  |                                |    
|Facility closure and consolidation |  | $                                 | 322 |                                   | $ |                               |  | $                              | (38

NOTE 5.   INVESTMENT IN AND ADVANCES TO AFFILIATE

As reported in the Form 10-K, in June 2002, the Company acquired a minority interest in PracticeWares, Inc.
(PracticeWares), a dental supply company, for $1.0 million.  Additionally, the Company advanced $3.5 million in the form of a loan, a portion of which the Company expects to be repaid when PracticeWares enters into a financing
arrangement with a senior lender during 2003.  The Company also has the option, under certain conditions, to acquire the remaining equity interest in PracticeWares it does not own.  The investment is being accounted for using the equity
method of accounting.  The Companys

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share of the results of operations for PracticeWares for the current period was approximately $105,000 and is recorded as equity in loss of affiliate.

In connection with the investment, the Company entered into a long-term distribution agreement with PracticeWares under which
PracticeWares is offering its dental supplies to PracticeWorks customers in exchange for royalty payments to the Company on these sales.  During the first quarter of 2003, royalties earned were immaterial.  PracticeWares also entered into
a long-term license agreement with the Company for the use of its e-commerce software.  The fee for the license agreement was recorded at its present value in other liabilities and is being recognized ratably over the life of the
agreement.

NOTE 6.   INVENTORIES

Inventories consist of the following (in thousands):

|                               |  | March 31, 2003 |       | December 31, 2002 |  
|------------------------------ |  | -------------- | ----- | ----------------- | -
|                               |  |                |       |                   |  
|Manufactured Products:         |  |                |       |                   |  
|Component and spare parts      |  | $              | 4,183 |                   | $
|Work-in-progress               |  |                | 773   |                   |  
|Finished goods                 |  |                | 3,529 |                   |  
|                               |  |                |       |                   |  
|                               |  |                | 8,485 |                   |  
|Purchases for resale and other |  |                | 536   |                   |  
|                               |  |                |       |                   |  
|                               |  |                | 9,021 |                   |  
|Reserve                        |  |                | (53   | )                 |  
|                               |  |                |       |                   |  
|                               |  | $              | 8,968 |                   | $
|                               |  |                |       |                   |  

NOTE 7.   STOCKHOLDERS EQUITY

EARNINGS PER SHARE

Basic earnings per share is computed on the
weighted-average number of common shares outstanding during each period.  Diluted earnings per share is based on the weighted-average number of shares outstanding plus net incremental shares arising out of stock options, warrants and
convertible securities outstanding.  The following table is a reconciliation of the weighted-average share amounts used in calculating earnings per share (in thousands):

|                                                     |  | Three Months Ended March 31, |       
|---------------------------------------------------- |  | ---------------------------- | ------
|                                                     |  |                              |       
|                                                     |  | 2003                         |       
|                                                     |  |                              |       
|Basic common shares outstanding                      |  |                              | 17,728
|Dilutive effect of common stock options and warrants |  |                              | 480   
|                                                     |  |                              |       
|Diluted common shares outstanding                    |  |                              | 18,208
|                                                     |  |                              |       

For
the three months ended March 31, 2003, approximately 3.7 million shares of common stock issuable under stock options and warrants were not included in the calculation of fully diluted earnings per share, because the exercise prices were above the
average market price.  Additionally, the diluted number of shares excludes approximately 158,000 shares of common stock issuable upon conversion of the series B preferred stock, because such inclusion was antidilutive.

For the three months ended March 31, 2002, approximately 4.1 million shares of common stock issuable under stock options and
warrants were not included in the calculation of fully diluted earnings per share, of which 335,000 were above the average market price.  Additionally, the diluted number of shares excludes approximately 1,017,000 shares of common stock
that

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were issuable upon conversion of the series A preferred stock, approximately 149,000 shares of common stock issuable upon conversion of the series B preferred stock and
approximately 495,000 shares of common stock issuable upon conversion of the series C preferred stock, because such inclusion was antidilutive.

NOTE 8.   SEGMENT
INFORMATION

SFAS No. 131 establishes standards for the way in which public companies are to
disclose certain information about operating segments in their financial reports.  It also establishes standards for related disclosures about products and services, geographic areas, and major customers.

The Company historically reported results from operations in two segments: recurring revenue and non-recurring revenue.  Concurrent
with the adoption of SFAS No. 141 and No. 142, the completion of several acquisitions in the United Kingdom in 2002 and the acquisition of Trophy in December 2002, the Company revised and restated the segment reporting to more closely
align with how the Company is now managed by the Chief Operating Decision Maker.  The results from operations are now reported using three segments:   Information Technology  United States (IT  United States)
and Information Technology  International (IT  International) and Manufactured Products.  The IT  United States and IT  International segments include the operations of our historical information technology
systems and related services including Trophy products sold by PracticeWorks sales representatives, broken down by geographic region, and the Manufactured Products segment includes the worldwide operations of Trophys traditional and digital
x-ray business, excluding sales made by Company sales representatives.  The IT  International segment consists primarily of operations in the United Kingdom and to a lesser extent, Sweden.  The Manufactured Products segment consists
primarily of operations in France.

The Companys Chief Operating Decision Maker evaluates performance
based on measures of segment revenues and operating results.

Information about the Companys
operations by operating segment follows (in thousands):

|                       |  | Three Months Ended March 31, |       
|---------------------- |  | ---------------------------- | ------
|                       |  |                              |       
|                       |  | 2003                         |       
|                       |  |                              |       
|IT - United States:    |  |                              |       
|Revenues               |  | $                            | 20,996
|Net income (loss)      |  |                              | 1,452 
|IT - International:    |  |                              |       
|Revenues               |  | $                            | 3,682 
|Net income             |  |                              | 225   
|Manufactured Products: |  |                              |       
|Revenues               |  | $                            | 19,163
|Net income             |  |                              | 1,623 
|Totals:                |  |                              |       
|Revenues               |  | $                            | 43,841
|Net income (loss)      |  |                              | 3,300 

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NOTE 9.   COMMITMENTS AND CONTINGENCIES

WARRANTY COSTS

The Company provides its Trophy customers a limited warranty, generally two years, with each Trophy product and provides for warranty
costs at the time of sale based upon historical claims experience.  Although historical warranty costs have been within expectations, there can be no assurance that future warranty costs will not exceed historical amounts.  If actual
warranty costs exceed historical amounts, additional allowances may be required, which could have a material adverse impact on the Companys operating results in future periods.  Actual warranty costs incurred are charged against the
accrual when paid.

The changes in the warranty reserve during the three months ended March 31, 2003 are
summarized as follows (in thousands):

|Balance at December 31, 2002      |  | $ | 2,754 | 
|--------------------------------- |  | - | ----- | 
|Additions  Charged to operations |  |   | 61    | 
|Additions  Currency fluctuations |  |   | 94    | 
|Deductions                        |  |   |      | 
|                                  |  |   |       | 
|Balance at March 31, 2003         |  | $ | 2,909 | 
|                                  |  |   |       | 

LEGAL PROCEEDINGS

Trophy has been a defendant in several legal matters arising from 1996 to August 2000 in Belgium, France, Germany, Israel, Italy, the
United Kingdom and the United States, caused by scissor arm defects on two of its products.  These defects forced Trophy in 2001 to initiate a recall of these products, which consists mostly of on-site reviews by Trophy technical personnel of
all products sold and, when deemed necessary, a free replacement for the defective products, or the implementation of a corrective kit.  Management estimates that the on-site technical reviews will be completed during 2003.  In connection
with the Trophy acquisition the Company received indemnifications, subject to amounts accrued in the opening balance sheet, applicable insurance proceeds and a deductible of approximately $1.125 million as well as certain other limits and
conditions, for product liability claims related to these defective products.  Such indemnification is capped at $7.5 million.  As of March 31, 2003, approximately $700,000 was accrued based on managements best estimate of the future
costs of the recall program related claims.  Management also considered the ability of Trophys former parent to satisfy the indemnification of the claims in its accrual of estimated future costs.  The Company believes that neither
the pending nor future claims nor legal proceedings related to the scissor arms will have a material impact on its financial condition, liquidity or operating results.

NOTE 10.  
RECENT ACCOUNTING PRONOUNCEMENTS

In August 2001, the FASB issued SFAS No. 143, Accounting for
Asset Retirement Obligations. SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated retirement costs.  SFAS No. 143 is effective for
fiscal years beginning after June 30, 2002.  The Company adopted this standard effective January 1, 2003.  The adoption of this standard did not have a material impact on our financial statements.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, and nullified
EITF Issue No. 94-3.  SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred, whereas EITF No 94-3 had recognized the liability at the commitment date to an exit
plan.  The Company is required to adopt the provisions of SFAS No. 146 effective for exit or disposal activities initiated after December 31, 2002.  The Company adopted this standard effective January 1, 2003.  The adoption of this
standard did not have a material impact on the financial statements.

In November 2002, the FASB issued
FASB Interpretation (FIN) No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.  FIN No. 45 requires that a liability be recorded in the
guarantors balance sheet upon issuance of a guarantee.  In addition, FIN No. 45 requires disclosures about the guarantees, including indemnifications, that an entity has issued and a rollforward of the entitys product warranty
liabilities.  The disclosure provisions of FIN No. 45 were effective for financial statements of interim periods or annual periods ending after December 15, 2002.  The Company adopted the disclosure provisions of FIN No. 45 effective
December 31, 2002 (see Note 9).  The adoption of these provisions did not have a material impact on the financial statements.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation  Transition and
Disclosure.  SFAS No. 148 amends SFAS No. 123.  Although it does not require the use of fair value method of accounting for stock-based employee compensation, it does provide alternative methods of transition.  It also amends
the disclosure provisions

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of SFAS No. 123 and APB No. 28, Interim Financial Reporting, to require disclosure in the summary of significant accounting policies of the effects of an
entitys accounting policy with respect to stock-based compensation on reported net income and earnings per share in annual and interim financial statements.  SFAS No. 148s amendment of the transition and annual disclosure
requirements are effective for fiscal years ending after December 15, 2002. The amendment of disclosure requirements of APB Opinion No. 28 are effective for interim periods beginning after December 15, 2002.  The Company will continue to use
the intrinsic value method of accounting as allowed under SFAS No. 148.  The Company adopted this standard effective December 31, 2002.  The adoption of this standard did not have a material impact on the financial statements (see Note
2).

In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative
Instruments and Hedging Activities.  SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities under SFAS No. 133.  This standard is effective for contracts entered into or modified after June 30, 2003.  The Company does not expect that the adoption of this standard will have a material impact
on the financial statements.

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

OVERVIEW

We provide software-based information technology systems for
dentists, orthodontists and oral and maxillofacial surgeons.  In addition, through our recently acquired Trophy subsidiary, we are the worlds leading manufacturer and distributor of radiology equipment for dental applications.

Significant Accounting Policies

We have five accounting
policies we believe are significant to our financial condition and results of operations that require judgments and estimates about matters.  These policies are:

Revenue
Recognition

We base our revenue recognition policies for sales of software on the provisions of
the American Institute of Certified Public Accountants Statement of Position (SOP) No. 97-2, Software Revenue Recognition, as amended.  Revenue from maintenance and support services and subscriptions, which
typically have contract terms varying from one to three years in length, is recognized ratably over the life of the contract. Revenue from electronic services is recognized as the service is provided.  Revenue from the sale of software licenses
is recognized when persuasive evidence of an arrangement exists; delivery has occurred or training has been provided, whichever is later; fees are fixed or determinable; and collectibility is probable. Revenue from hardware sales is recognized upon
product shipment, terms of which are typically FOB shipping point.  Revenue from training and implementation services is recognized as the service is provided.  Revenue from Trophy equipment sales is recognized when no significant vendor
obligation remains, title to the equipment passes (depending on terms, either upon shipment or delivery), and the customer has the intent and ability to pay in accordance with contract payment terms that are fixed and determinable.  Outside of
the United States, Trophy sells to a network of third party distributors.  Revenue is recognized at the time of delivery to the distributor as title passes and no right of return exists.  Amounts received from customers in advance of
product shipment or service periods are recorded as deposits or deferred revenue.

Capitalized Costs of Computer Software to be Sold, Leased or Otherwise Marketed

Costs incurred, such as planning, designing, coding and testing, for computer software to be sold, leased or otherwise marketed
are expensed as incurred prior to establishing the technological feasibility of a product.  Technological feasibility is generally achieved when the detailed program design or a working model has been completed.  For the period between the
establishment of technological feasibility and the time a product is available for general release, such costs are capitalized.  Capitalized software costs are amortized using the straight-line method over the estimated lives of the related
products (generally 48 months).  Capitalized costs for each project are reviewed periodically to determine that the estimated useful lives are appropriate and carrying values are recoverable based on estimated future cash flows and revisions to
estimated lives or impairment charges are recorded as necessary.

Goodwill and Other Intangible Assets

Goodwill represents the excess purchase price of net tangible and intangible assets acquired in business combinations over their
estimated fair value.  In 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets. SFAS No. 142 requires
goodwill and other acquired intangible assets that have an indefinite useful life to no longer be amortized; however, these assets must undergo an

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initial impairment test and be reviewed for impairment at least annually thereafter.  We adopted certain provisions of SFAS No. 142 effective July 1, 2001 and the
remaining provisions effective January 1, 2002.  Concurrent with the adoption effective January 1, 2002, we performed the initial impairment test using an income approach, the results of which yielded no impairment.  We also completed the
annual impairment test as of October 1, 2002 (the Measurement Date), the results of which indicated that there was no impairment of goodwill and other acquired intangible assets as of the Measurement Date.  Additionally, no events
have occurred subsequent to the Measurement Date that would indicate impairment.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses
during the reported periods.  Actual results could differ significantly from those estimates.

Derivative Instruments

We account for derivative instruments in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, as amended by SFAS No. 137 and SFAS No. 138.  These statements require that we recognize all derivative instruments on the balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument
depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship.

For those derivative instruments that are designated and qualify as hedging instruments, we must designate the hedging instrument, based
upon the exposure being hedged, as either a fair value hedge, cash flow hedge or a hedge of net investment in a foreign operation.  For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the
derivative instrument as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in current earnings during the period of the change in fair values.  For derivative instruments that are designated
and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the
hedged transaction affects earnings.  The ineffective portion of the gain or loss on the derivative instrument is recognized in current earnings during the period of change.  For derivative instruments not designated as hedging
instruments, the gain or loss is recognized in current earnings during the period of change.

We use
derivative financial instruments primarily to reduce our exposure to fluctuations in interest rates and foreign exchange rates.  For those derivative financial instruments that are designated and qualify as hedging instruments, we formally
designate and document the financial instrument as a hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the hedge transaction.  Derivatives are recorded in the balance sheet at fair
value in either other assets or other liabilities.  The earnings impact resulting from the derivative instruments is recorded in the same line item within the statements of operations as the underlying exposure being hedged.  We also
formally assess, both at the inception and at least quarterly thereafter, whether the financial instruments that are used in hedging transactions are effective at offsetting changes in either the fair value or cash flows of the related underlying
exposures.

Segment and Market Information

SFAS
No. 131 establishes standards for the way in which public companies are to disclose certain information about operating segments in their financial reports.  It also establishes standards for related disclosures about products and services,
geographic areas, and major customers.

We historically reported results from operations in two segments:
recurring revenue and non-recurring revenue.  Concurrent with the adoption of SFAS No. 141 and No. 142, the completion of several acquisitions in the United Kingdom in 2002 and the acquisition of Trophy in December 2002, we revised and restated
the segment reporting to more closely align with how our Chief Operating Decision Maker now manages the Company.  The results from operations are now reported using three segments: Information Technology  United States (IT 
United States), Information Technology  International (IT  International) and Manufactured Products.  The IT  United States and IT  International segments include the operations of our historic
information management technology systems and related services including Trophy products sold by PracticeWorks sales representatives, broken down by geographic region, and the Manufactured Products segment includes the worldwide operations of
Trophys traditional and digital x-ray business, excluding sales made by PracticeWorks sales representatives. The IT  International segment consists primarily of operations in the United Kingdom and to a lesser extent, Sweden. The
Manufactured Products segment consists primarily of operations in France.

Our Chief Operating Decision
Maker evaluates performance based on measures of segment revenues and operating results.

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Information about the Companys operations by operating segment follows (in
thousands):

|                       |  | Three Months Ended March 31, |       
|---------------------- |  | ---------------------------- | ------
|                       |  |                              |       
|                       |  | 2003                         |       
|                       |  |                              |       
|IT - United States:    |  |                              |       
|Revenues               |  | $                            | 20,996
|Net income (loss)      |  |                              | 1,452 
|IT - International:    |  |                              |       
|Revenues               |  | $                            | 3,682 
|Net income             |  |                              | 225   
|Manufactured Products: |  |                              |       
|Revenues               |  | $                            | 19,163
|Net income             |  |                              | 1,623 
|Totals:                |  |                              |       
|Revenues               |  | $                            | 43,841
|Net income (loss)      |  |                              | 3,300 

Consolidated Results of Operations

Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002

Revenues (Dollars in thousands)

|                                         |  | Three months ended March 31, |       
|---------------------------------------- |  | ---------------------------- | ------
|                                         |  |                              |       
|                                         |  | 2003                         |       
|                                         |  |                              |       
|Support, e-services and subscription     |  | $                            | 15,407
|Software, equipment and related services |  |                              | 6,813 
|Manufactured products                    |  |                              | 21,621
|                                         |  |                              |       
|Total                                    |  | $                            | 43,841
|                                         |  |                              |       

* not meaningful

Total Revenues.    Total revenues for the three months ended March 31, 2003 increased as a result of organic
growth of $4.8 million and revenues of $19.2 million attributable to the Trophy acquisition and $880,000 attributable to other acquisitions completed in the fourth quarter of 2002.

Support, E-services and Subscription Revenue.    Support, e-services and subscription revenue is derived from
contractual arrangements for maintenance and support services and subscriptions to our information technology software and related support and from electronic services.  For the three months ended March 31, 2003, these revenues increased
primarily as a result of increased subscription revenue of $892,000, maintenance revenue of $874,000, and electronic services revenue of $410,000.  The increases in subscriptions and electronic services revenues for the three months ended March
31, 2003 are largely volume related and include the effects of increased numbers of upgrade and new customers entering into subscription agreements and the expansion of e-services offered to existing customers.  The increase in maintenance
revenue is largely acquisition related.

Software, Equipment and Related Services
Revenue.    Software, equipment and related services revenue include one-time sales of licenses and systems, and fees for training and implementation services.  For the three months ended March 31, 2003, these revenues
increased primarily as a result of increased software license sales of $621,000, equipment sales of $520,000 and training and implementation revenue of $76,000.  These increases are attributable to growth in our basic business as existing and
new customers avail themselves of our new product offerings and continue to implement our core practice management applications.

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Manufactured Products Revenue.    Manufactured products
revenue includes sales of products manufactured by our recently acquired Trophy subsidiary.  For the three months ended March 31, 2003, this revenue increased by $21.4 million, of which $19.2 million was related to the Trophy acquisition, and
the remaining growth was attributable to the distribution arrangement entered into late in the first quarter of 2002.

Costs and Operating Expenses (Dollars in thousands)

|                                    |  | Three months ended March 31, |       
|----------------------------------- |  | ---------------------------- | ------
|                                    |  |                              |       
|                                    |  | 2003                         |       
|                                    |  |                              |       
|Purchases for resale                |  | $                            | 3,686 
|Cost of manufactured products       |  |                              | 8,683 
|Selling, general and administrative |  |                              | 21,132
|Research and development            |  |                              | 2,265 
|Depreciation and amortization       |  |                              | 2,673 
|Total other (income) expense        |  |                              | 797   
|Provision for income taxes          |  |                              | 1,305 

* not meaningful

Purchases for Resale.    Purchases for resale include costs of processing, forms and postage for EDI claims
and statements and other electronic services, purchases of hardware, outsourced hardware maintenance, third-party software and other items for resale in connection with the sales of new systems and software.  Purchases for resale for the three
months ended March 31, 2003, compared to the three months ended March 31, 2002, increased primarily due to increased costs related to the growth in electronic services.

Cost of Manufactured Products.    For the three months ended March 31, 2003, manufactured products include
production costs of worldwide Trophy product sales.  The existence of this expense category is attributable to the Trophy acquisition.  Costs for the prior period are related to purchases under the distribution agreement initiated late in
the first quarter of 2002.

Selling, General and Administrative, or
SG&A.    SG&A expense includes all operating costs excluding research and development and depreciation and amortization of other intangible assets.  SG&A expense for the three months ended March 31, 2003,
compared to the three months ended March 31, 2002, increased by $8.2 million, of which $6.1 million is related to the Trophy acquisition.  Of the remaining $2.1 million increase, approximately $1.0 million relates to increases in personnel
costs attributable to both acquisitions and growth in the business, $550,000 relates to increases in legal and professional fees primarily related to acquisitions, Sarbanes-Oxley compliance and HIPAA consulting assistance, and approximately $500,000
in increased marketing, promotion and travel expenses.

Research and
Development.    Research and development expense consists primarily of salaries and benefits, supplies, facilities and other administrative expenses associated with ongoing programs that have not yet reached technological
feasibility.  These programs focus on advancing our core practice management and other technologies, developing new products at our Trophy subsidiary and enhancing the quality and performance of our classic products.  Research and
development expense increased for the three months ended March 31, 2003, compared to the same period in 2002, primarily due to the Trophy acquisition, and to a lesser extent, an increase in the number of supported products resulting from
acquisitions.

Excluding acquired capitalized software costs, software costs capitalized totaled $426,000
and $390,000 for the three months ended March 31, 2003 and 2002, respectively.  We capitalize development costs incurred from the time a new product reaches technological feasibility until it is available for general release.  The
fluctuations of capitalized costs in 2003 compared to 2002 reflect the changes in the number of supported products and the state of development of a variety of projects, including new electronic services applications and major upgrade versions of
several practice management applications that are part of our core product offerings.

Depreciation and
Amortization.    Depreciation and amortization of other intangible assets increased for the three months ended March 31, 2003, compared to the three months ended March 31, 2002, due principally to increases of $748,000 in
amortization of acquired technology, capitalized software development costs and other intangibles, principally from acquisitions, and increases of $262,000 in depreciation of acquired and purchased fixed assets.

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Total Other (Income) Expense.    Total other (income)
expense includes interest income, interest expense and equity in loss of affiliate.  For the three months ended March 31, 2003, compared to the three months ended March 31, 2002, the increase in total other (income) expense is principally due
to our new Credit Agreement.  The equity in loss of affiliate was $105,000 for the three months ended March 31, 2003 and nil for the comparable period of 2002, as we did not acquire the minority interest until June 2002.

Provision for Income Taxes.    For the three months ended March 31, 2003, the provision for income
taxes relates primarily to income of our foreign businesses.  For the three months ended March 31, 2003, we generated domestic pre-tax income for financial reporting purposes of approximately $1.6 million and domestic taxable income of
approximately $690,000.  Our foreign taxes relate primarily to operations in France where the effective rate is approximately 36%.  The financial reporting results differ from those for tax purposes primarily due to book versus tax
differences in goodwill and other temporary differences.  Similarly, the effective income tax rate differed from the statutory rate due to the effect of state income taxes and the reduction of a valuation allowance.  For the three months
ended March 31, 2003, we used approximately $690,000 of our net operating loss (NOL) carryforwards to offset our domestic taxable income.  As of March 31, 2003, we have domestic NOL carryforwards totaling $27.0 million that
will be available to offset future taxable income, $1.5 million in tax deductions related to stock option exercises, the tax effect of which will be reflected as a credit to additional paid in capital when realized, and $383,000 in tax credits that
will be available to offset future tax liability.  The NOLs expire at various times beginning in 2021.

We reported net deferred tax assets at March 31, 2003 of approximately $7.5 million and long-term deferred tax liabilities of $6.9
million.  The deferred tax assets consist of gross NOLs of $27.0 million and temporary differences of $5.9 million.  As of March 31, 2003, we have recorded a valuation allowance of $8.4 million to reduce our deferred tax assets to the
amount that we believe is more likely than not to be realized.  We have prepared projections that indicate that our NOLs would be absorbed prior to their expiration.  However, we have not recorded the benefit of the NOL utilization in the
financial statements because projections over multiple years are inherently imprecise.  Management believes that it is more likely than not that the recorded deferred tax assets will be realized based on our financial projections, sales
backlog, historic quarter over quarter operational improvements in 2001, 2002 and 2003, and available tax strategies.  These factors indicate that we will generate taxable income within the next one to two years sufficient to realize the tax
benefits represented by these future deductible temporary differences.

Net Income
(Loss).    As a result of the foregoing, we had net income of $3.3 million for the three months ended March 31, 2003, compared to a net loss of $(238,000) for the three months ended March 31, 2002, respectively.

Accrued and Accretive Dividends on Preferred Stock.    For the three months ended March
31, 2003, we recorded accrued and accretive dividends related to the series B convertible redeemable preferred stock of $160,000 to recognize the 6.0% dividend and amortization of the $1.5 million estimated valuation discount, as compared
to $153,000 for the three months ended March 31, 2002.  For the three months ended March 31, 2002, we recorded accrued and accretive dividends of $1.1 million related to the series A convertible redeemable preferred stock and $220,000
related to the series C convertible redeemable preferred stock.  There were no shares outstanding of the series A and series C convertible redeemable preferred stock during the three month period ended March 31, 2003.

Liquidity and Capital Resources

Our principal capital requirements have been to
fund

| | acquisitions;                                              
|- | -----------------------------------------------------------
|  |                                                            
| | working capital;                                           
|  |                                                            
| | capital expenditures for furniture, fixtures and equipment;
|  |                                                            
| | software development costs; and                            
|  |                                                            
| | debt reduction.                                            

At March 31, 2003, we had total cash and cash equivalents of $9.6 million and a working capital deficit of $8.2 million (including the
effect of deferred revenue and customer deposits of $14.1 million).

Net cash provided by operating
activities was $6.4 million for the three months ended March 31, 2003, an improvement from $1.5 million provided in the comparable period in 2002.  The significant increase in operating cash flow for 2003 from 2002

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is a representation of the operating leverage of our business model.  In addition, cash flow has been assisted by the increasing number of recurring transactions that are
paid by credit card or automatic bank draft and from continued improvement in our accounts receivable collection effort, as evidenced by the significant decrease in days sales outstanding from 29 in the first quarter of 2002 to 25 in the first
quarter of 2003, excluding the effects of the Trophy acquisition. Including the Trophy acquisition, days sales outstanding were 49 and were due to the traditional longer payment habits of customers located outside the U.S.  We expect to
generate between $20 million and $25 million in operating cash flow during the remainder of 2003 and expect to continue to benefit from the utilization of approximately $27 million of net operating losses to offset any taxable income expected to be
generated during 2003.

For each of the periods presented, the majority of our cash used for investing has
been for acquisitions.  The remainder of our investing activities has consisted of capital expenditures for equipment, software development costs and other intangibles.  During 2003, we completed the final payments of the Trophy
acquisition of $3.6 million, consisting of a net worth adjustment and transaction costs.  During the comparable period in 2002, we completed a small acquisition for $2.2 million and funded a portion of the purchase price from proceeds of
borrowings.  We expect to incur capital expenditures of $4 million in 2003 related to property and equipment and $1 million for capitalized software, and we plan to fund these additions from operating cash flows.

During 2003, we commenced the amortization of the term loan portion of the Credit Facility.  During 2002, our financing activities
consisted primarily of a borrowing related to a small acquisition completed in January 2002 and, to a lesser extent, payments on notes payable.

As previously discussed in the Form 10-K, during 2001, Trophy initiated a recall on certain of its products related to defective scissor
arms.  In connection with the acquisition we received indemnifications from Trophys former parent for product liability claims related to the defective scissor arms.  We believe these indemnifications are adequate, and we do not
believe that any pending or future claims will have a material impact on our financial condition, operating results or liquidity.

Credit Facilities

To finance the acquisition of Trophy, we entered into a $45 million credit agreement consisting of a $30 million term loan and
a $15 million revolver, subject to availability based on inventory and accounts receivable.  As of March 31, 2003, $28.1 million was outstanding under the term loan and $9 million was outstanding under the revolver.  The credit agreement
has a three-year term and matures on December 23, 2005 and is collateralized by substantially all of the Companys real and personal property, 100% of the capital stock of the Companys domestic subsidiaries and 65% of the capital stock of
the Companys foreign subsidiaries.  Principal and interest payments under the term loan are due quarterly beginning March 31, 2003.  The revolver requires quarterly interest-only payments beginning March 31, 2003, with any
outstanding balance due at maturity.  The credit agreement contains certain restrictions and covenants, none of which are expected to materially affect our operations or ability to borrow under the facility.  Interest is calculated on
outstanding amounts under the credit agreement based on either (1) the higher of the federal funds rate plus 1⁄2 of 1% or (2) the prime rate or LIBOR, plus an applicable spread.  We select the functional interest rate and at March 31,
2003, the effective rate was LIBOR plus 400 basis points or, 5.29%.  During March 2003, as required by the credit agreement, we entered into a hedge arrangement whereby we fixed the base rate related to $15 million of the term note.  The
fixed base rate will be 1.85% for the remaining term of the credit agreement for that portion of the note.  We are also required to pay a quarterly commitment fee for any availability under the revolver at a rate .5% to .75%, depending on the
achievement of certain financial performance criteria.  After June 30, 2003, we have the ability to lower the applicable spread applied to the functional interest rate if certain financial performance criteria are met.  As of March 31,
2003, $6 million was available to borrow under the facility.

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Assuming our series B preferred stock issuance is not converted, our future
contractual cash obligations, excluding interest and dividends, are as follows (in thousands):

|                          |  | April   December 2003 |       | 2004 |   | 2005   |  | 2006 |        | 2007 and Thereafter |  
|------------------------- |  | ---------------------- | ----- | ---- | - | ------ |  | ---- | ------ | ------------------- | -
|                          |  |                        |       |      |   |        |  |      |        |                     |  
|Credit agreement          |  | $                      | 5,625 |      | $ | 10,000 |  | $    | 21,500 |                     | $
|Other long-term debt      |  |                        | 947   |      |   | 1,091  |  |      | 472    |                     |  
|Capital lease obligations |  |                        | 61    |      |   | 30     |  |      |       |                     |  
|Operating leases          |  |                        | 2,835 |      |   | 3,177  |  |      | 2,335  |                     |  
|Preferred stock           |  |                        |      |      |   |       |  |      |       |                     |  
|                          |  |                        |       |      |   |        |  |      |        |                     |  
|Total                     |  | $                      | 9,468 |      | $ | 14,298 |  | $    | 24,307 |                     | $
|                          |  |                        |       |      |   |        |  |      |        |                     |  

We
believe that cumulative cash flow from operations, borrowing capacity under our credit agreement and future financing opportunities will provide sufficient cash flow to meet any contractual cash and redemption obligations.  We intend to seek
refinancing for any amounts that we are unable to repay from operating cash flows.  New financing alternatives are routinely evaluated to determine their practicality and availability in order to provide the Company with sufficient and timely
funding at the least possible cost.  However, if refinancing is not available or available on favorable terms, we may not be able to increase our marketing and sales expenses and grow our businesses or effectively compete in any of our markets,
which could materially harm our business, financial condition and results of operations.

We believe that
our existing cash, anticipated future operating cash flows and borrowing capacity under our credit agreement will be sufficient to fund our cash requirements needs for working capital, capital investment, acquisition and other financing requirements
both in the short term, which means the next twelve months, and in the long term, which means a reasonable period of time thereafter.

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations.  SFAS No. 143
addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated retirement costs.  SFAS No. 143 is effective for fiscal years beginning after June 30, 2002.  We
adopted this standard effective January 1, 2003.  Our adoption of this standard did not have a material impact on our financial statements.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, and nullified
EITF Issue No. 94-3.  SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred, whereas EITF No 94-3 had recognized the liability at the commitment date to an
exit plan.  We are required to adopt the provisions of SFAS No. 146 effective for exit or disposal activities initiated after December 31, 2002.  We adopted this standard effective January 1, 2003.  Our adoption of this standard did
not have a material impact on our financial statements.

In November 2002, the FASB issued FASB
Interpretation (FIN) No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.  FIN No. 45 requires that a liability be recorded in the
guarantors balance sheet upon issuance of a guarantee.  In addition, FIN No. 45 requires disclosures about the guarantees, including indemnifications, that an entity has issued and a rollforward of the entitys product warranty
liabilities.  The disclosure provisions of FIN No. 45 were effective for financial statements of interim periods or annual periods ending after December 15, 2002.  We adopted the disclosure provisions of FIN No. 45 effective December 31,
2002.  The adoption of these provisions did not have a material impact on our financial statements.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure.
SFAS No. 148 amends SFAS No. 123.  Although it does not require the use of the fair value method of accounting for stock-based employee compensation, it does provide alternative methods of transition.  It also amends the disclosure
provisions of SFAS No. 123 and APB No. 28, Interim Financial Reporting, to require disclosure in the summary of significant accounting policies of the effects of an entitys accounting policy with respect to stock-based compensation
on reported net income and earnings per share in annual and interim financial statements.  SFAS No. 148s amendment of the transition and annual disclosure requirements are effective for fiscal years ending after December 15, 2002. 
The amendments of disclosure

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requirements of APB Opinion No. 28 are effective for interim periods beginning after December 15, 2002.  We will continue to use the intrinsic value method of accounting
as allowed under SFAS No. 148.  We adopted this standard effective December 31, 2002.  Our adoption of this standard did not have a material impact on our financial statements.

In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities.  SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging
activities under SFAS No. 133. This standard is effective for contracts entered into or modified after June 30, 2003.  We do not expect the adoption of this statement will have a material impact on our financial statements.

CAUTIONARY LANGUAGE REGARDING FORWARD-LOOKING STATEMENTS

This
discussion contains forward-looking statements that reflect managements current assumptions and estimates of future performance, the development and timing of PracticeWorks release of new applications and services, the rate of adoption
of its new applications and services by new and existing customers, its success in establishing business relationships, the growth of its business, and general economic conditions. You can find many of these statements by looking for words such as
believes, expects, anticipates, estimates, plans, intends or similar expressions. Any forward-looking statements are subject to risks, uncertainties and assumptions that may cause actual results and future trends to differ materially from those
projected, stated, or implied by the forward-looking statements. PracticeWorks results and the accuracy of the forward-looking statements could be affected by many factors, including, in particular, those discussed above and those discussed in
the section entitled Risk Factors and elsewhere in the Form 10-K.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Risks

Prior to the Trophy acquisition, we had historically conducted foreign operations in the United Kingdom, Sweden, Canada
and Australia, each of which conducted business in their local currency.  Trophys functional currency is the Euro and has customers around the world.  To mitigate exposure to foreign currency fluctuations, Trophy invoices customers
in four currencies: Euro, United States Dollar, Pound Sterling, and Japanese Yen.  For the three months ended March 31, 2003 and 2002, approximately 52% and 11% of total revenues, respectively, were earned outside the United States and
collected in the local currency.  Costs and operating expenses were also paid in such corresponding local currencies.

In January 2003, we entered into fixed-forward foreign exchange contracts to minimize exposure to fluctuations in the Japanese
Yen.  These contracts mature at various times through July 2003.  The Company did not designate these contracts as a hedge under SFAS No. 133.  Accordingly, the change in the fair value of the contracts are recorded in earnings
immediately.  As of March 31, 2003, we had open forward contracts totaling 340,000,000 Japanese Yen, or approximately $2.8 million U.S. Dollars.

The financial statements of our non-U.S. subsidiaries are translated into U.S. dollars using current rates of exchange, with gains or
losses included in the foreign currency translation adjustment account, a component of stockholders equity.  For intercompany debt denominated in a currency other than the functional currency, the remeasurement into the functional
currency is also included in stockholders equity as the amounts are considered to be of a long-term investment nature.  As of March 31, 2003 and December 31, 2002, we have recorded cumulative translation adjustments of $2.0 million and
$1.2 million, respectively.  The significant increase in 2003 relates primarily to fluctuations between the Euro and U.S. Dollar related to the Trophy acquisition.

Interest Rate
Risks

We are subject to interest rate risk based on fluctuations in interest rates and variability in
interest rate spread relationships, such as prime or LIBOR spreads.  Approximately, $23 million of our outstanding debt at March 31, 2003 related to indebtedness under our credit agreement with Bank of America and contains a floating interest
rate.  Thus, our interest rate is subject to market risk in the form of fluctuations in interest rates.  The effect of a hypothetical one percentage point increase across all maturities of variable debt would result in a decrease of
approximately $230,000 in our annual pre-tax income assuming no further changes in the amount of borrowings subject to variable rate interest from amounts outstanding at March 31, 2003.

In March 2003, as required by the credit agreement, we entered into an interest rate swap agreement that effectively converted one-half
of the term note from floating-rate debt to a fixed-rate debt through December 23, 2005, thereby hedging against the impact of interest rate changes on future cash flows (interest expense).  The interest rate swap agreement has an
initial

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aggregate notional amount of $15.0 million maturing on December 23, 2005.  The interest rate swap fixes the base rate of the term note to 1.85%.  The variable rate
was based on three-month LIBOR rate, or 1.29% as of March 31, 2003.  The interest rate swap agreement is designated as a cash flow hedge and the terms of the swap agreement and hedged item is such that the effectiveness can be measured using
the short-cut method defined in SFAS No. 133.  The Company recorded $4,000 of additional interest expense for the three months ended March 31, 2003 related to the swap.  As of March 31, 2003, the fair value carrying amount of this
instrument, which is included in accrued expenses and other comprehensive income (loss), was a liability of $16,000.

Other risks

We have no off-balance sheet arrangements, investments or guarantees, except as discussed above.

The traded price of our common stock influences the valuation of stock option grants and the effects these grants have on pro forma
earnings disclosed in our financial statements.  The stock price also influences the computation of the dilutive effect of outstanding stock options to determine diluted earnings per share.  The stock price also affects our employees
perceptions of various programs that involve our common stock.

ITEM 4.   CONTROLS AND PROCEDURES

The Company carried out an evaluation, under the supervision and with the participation of the Companys management, including the
Companys President and Chief Executive Officer along with the Companys Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures pursuant to Rule 13a-14 under the
Securities Exchange Act of 1934, as amended (the Exchange Act).  Based upon that evaluation, the Companys Chief Executive Officer along with the Companys Chief Financial Officer concluded that as of March 31, 2003 the
Companys disclosure controls and procedures (1) are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Companys periodic SEC filings
and (2) are adequate to ensure that information required to be disclosed by the Company in the reports filed or submitted by the Company under the Exchange Act is recorded, processed and summarized and reported within the time periods specified in
the SECs rules and forms.

There have been no significant changes in the Companys internal
controls or in other factors that could significantly affect internal controls subsequent to the date the Company carried out its evaluation.

PART II.   OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

From time to time, we are involved in various legal proceedings incident to the ordinary course of our business.  We are not a
party to any legal proceedings that we believe to be material, and we are unaware of any contemplated material actions against us.  Trophy has conducted recalls and other corrective actions, and experienced product liability claims for
generally minor property damage and personal injury, with respect to purported failures of scissor arms in conventional x-ray products manufactured by Trophy prior to 1998.  While the recalls and corrective actions have generally been
completed, certain claims and legal proceedings related to such purported failures are ongoing and still pending and the termination of the recalls and corrective actions do not preclude future product failures and additional claims for property
damage and/or personal injury.  We maintain insurance coverage related to product liability claims, and, in connection with the Trophy acquisition, Trophys former parent agreed to indemnify us, subject to certain limits and other
conditions, for product liability claims related to scissor arms manufactured prior to 1998.  As a result, our management believes that neither pending nor future claims or legal proceedings related to scissor arms manufactured prior to 1998
will have a material adverse effect on our financial condition, liquidity or operating results.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

| | 99.           Certification pursuant to 18 U.S.C. Section 1350.
| | ---------------------------------------------------------------

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|(b) Reports on Form 8-K:
|------------------------
|                        
|                        
|                        

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized on this 12th  day of May, 2003.

| | PRACTICEWORKS, INC.                                                                           
| | ----------------------------------------------------------------------------------------------
| |                                                                                               
| | /s/  JAMES K. PRICE                                                                           
| |                                                                                               
| | James K. Price                                                                                
| | President and Chief Executive Officer (Principal Executive Officer)                           
| |                                                                                               
| | /s/JAMES A. COCHRAN                                                                           
| |                                                                                               
| | James A. Cochran                                                                              
| | Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

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CERTIFICATIONS

I, James K. Price, Chief Executive Officer of PracticeWorks Inc., certify
that:

1.               I have reviewed this quarterly report on Form 10-Q of PracticeWorks, Inc.;

2.               Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.               Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.               The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a.               designed such disclosure
controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is
being prepared;

b.              evaluated the effectiveness of the registrants disclosure controls and procedures as of a
date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and

c.              
presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based upon our evaluation as of the Evaluation Date;

5.               The registrants other certifying officers and I have disclosed, based upon our most recent evaluation, to the registrants
auditors and the audit committee of the registrants board of directors (or persons performing the equivalent function):

a.               all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and

b.              any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal
controls; and

6.               The registrants other certifying officers and I have indicated in this quarterly report
whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

|Date: | May 12, 2003 | By:    | /s/ JAMESK. PRICE      
|----- | ------------ | ------ | -----------------------
|      |              |        |                        
|      |              | Title: | Chief Executive Officer

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CERTIFICATIONS

I, James A. Cochran, Chief Financial Officer of PracticeWorks Inc., certify
that:

1.               I have reviewed this quarterly report on Form 10-Q of PracticeWorks, Inc.;

2.               Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.               Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.               The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a.               designed such disclosure
controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is
being prepared;

b.              evaluated the effectiveness of the registrants disclosure controls and procedures as of a
date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and

c.              
presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based upon our evaluation as of the Evaluation Date;

5.               The registrants other certifying officers and I have disclosed, based upon our most recent evaluation, to the registrants
auditors and the audit committee of the registrants board of directors (or persons performing the equivalent function):

a.               all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and

b.              any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal
controls; and

6.               The registrants other certifying officers and I have indicated in this quarterly report
whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

|Date: | May 12, 2003 | By:    | /s/ JAMES A. COCHRAN   
|----- | ------------ | ------ | -----------------------
|      |              |        |                        
|      |              | Title: | Chief Financial Officer

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