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

Form 10-Q

|   |  |                                                                                                                                                         
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|þ  |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JULY 31, 2002                    
|   |  |                                                                                                                                                         
|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 No. 0-27694
_______________

SCB COMPUTER TECHNOLOGY, INC.(Exact Name of Registrant as Specified in its Charter)

|                                                                        |  |                                               
|----------------------------------------------------------------------- |  | ----------------------------------------------
|Tennessee(State or other Jurisdiction of
Incorporation or Organization) |  | 62-1201561(I.R.S. Employer Identification No.)

3800 Forest Hill-Irene Road, Suite 100
Memphis, Tennessee 38125(Address of Principal Executive Offices)

901-754-6577(Registrants Telephone Number, Including Area Code)

Not Applicable(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)

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

At September 3, 2002, there were 24,985,324 shares of common stock
outstanding.



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TABLE OF CONTENTS



|                                                 |                                                                                                        |  |  |  |  |  |  | 
|------------------------------------------------ | ------------------------------------------------------------------------------------------------------ |  |  |  |  |  |  | 
|CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS
|PART I  FINANCIAL INFORMATION                  
|                                                 | Item 1. Financial Statements                                                                          
|                                                 | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations         
|                                                 | Item 3. Quantitative and Qualitative Disclosures about Market Risks                                   
|PART II  OTHER INFORMATION                     
|                                                 | Item 1. Legal Proceedings                                                                             
|                                                 | Item 6. Exhibits and Reports on Form 8-K                                                              
|SIGNATURES                                      
|                                                 | CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
|                                                 | CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
|                                                 | CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
|                                                 | CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
|EXHIBIT INDEX                                   
|First Amendment to Loan & Security Agreement    



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SCB COMPUTER TECHNOLOGY, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

|                                                 |                                                                                                        |      |      |    | 
|------------------------------------------------ | ------------------------------------------------------------------------------------------------------ | ---- | ---- | -- | 
|                                                 |                                                                                                        |      | Page
|                                                 |                                                                                                        |      |     
|Cautionary Note About Forward-Looking Statements |                                                                                                        |      | 1    |   
|                                                 |                                                                                                        |      |      |   
|Part I  Financial Information                   |                                                                                                        |      |      |   
|                                                 |                                                                                                        |      |      |   
|                                                 | Item 1.  Financial Statements                                                                          |      |      | 2  | 
|                                                 |                                                                                                        |      |      |   
|                                                 | Item 2.  Managements Discussion and Analysis of Financial Condition
and Results of Operations         |      |      | 9  | 
|                                                 |                                                                                                        |      |      |   
|                                                 | Item 3.  Quantitative and Qualitative Disclosures About Market Risk                                    |      |      | 13 | 
|                                                 |                                                                                                        |      |      |   
|Part II  Other Information                      |                                                                                                        |      |      |   
|                                                 |                                                                                                        |      |      |   
|                                                 | Item 1.  Legal Proceedings                                                                             |      |      | 14 | 
|                                                 |                                                                                                        |      |      |   
|                                                 | Item 6.  Exhibits and Reports on Form 8-K                                                              |      |      | 14 | 
|                                                 |                                                                                                        |      |      |   
|Signatures                                       |                                                                                                        |      | 15   |   
|                                                 |                                                                                                        |      |      |   
|Certifications                                   |                                                                                                        |      |      |   
|                                                 |                                                                                                        |      |      |   
|                                                 | Certification of the Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 |      |      | 16 | 
|                                                 |                                                                                                        |      |      |   
|                                                 | Certification of the Chief Executive Officer Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 |      |      | 17 | 
|                                                 |                                                                                                        |      |      |   
|                                                 | Certification of the Chief Financial Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 |      |      | 18 | 
|                                                 |                                                                                                        |      |      |   
|                                                 | Certification of the Chief Financial Officer Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 |      |      | 19 | 
|                                                 |                                                                                                        |      |      |   
|Exhibit Index                                    |                                                                                                        | EI-1





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CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements. All statements made in
this report, other than statements of historical fact, are forward-looking
statements. They usually include, without limitation, the words believes,
anticipates, expects, estimates, projects, intends, plans, hopes,
future and words of similar phrasing and meaning. Forward-looking statements
reflect managements current assumptions, beliefs, and expectations and express
managements views of future performance and trends.

Forward-looking statements are subject to a number of risks and
uncertainties, including those discussed below, that could cause actual results
to differ materially from historical or anticipated results. These factors
include, but are not limited to, the potential for the Companys business
relationships with its significant customers to change or deteriorate; the
potential early termination of the Companys IT service contracts without
penalty; the potential for the Companys customers to reduce their IT services
outsourcing for various reasons, including state budgetary constraints; the
Companys potential liability to its customers in connection with the provision
of IT services; the Companys potential inability to attract, develop and
retain qualified IT employees; potential changes in the utilization and
productivity rates of the Companys IT employees; the Companys dependence on
key management personnel; the types and mix of IT services that the Company
performs during any particular period; potential changes in the Companys gross
profit due to a variety of factors, including increased wage and benefit costs
that are not offset by billed rate increases; the Companys potential inability
to finance, sustain and manage growth; the Companys potential inability to
develop or acquire additional IT service offerings; the Companys potential
inability to effectively identify, integrate and manage acquired businesses;
the potential effects of competition; the potential outcome of litigation and
investigations involving the Company; the Companys decision to focus on its
core competencies of IT outsourcing, consulting and professional staffing; and
potential deterioration in the condition of the U.S. economy and the IT
services industry.

The Company disclaims any intent and undertakes no obligation to publicly
release any revision to or update of any forward-looking statement contained in
this report to reflect events occurring or circumstances existing after the
date hereof or otherwise.





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PART I  FINANCIAL INFORMATION




Item 1. Financial Statements

SCB COMPUTER TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

|                                     |                                                                     |                                            |                      |         |               |        |                |         |        |        | 
|------------------------------------ | ------------------------------------------------------------------- | ------------------------------------------ | -------------------- | ------- | ------------- | ------ | -------------- | ------- | ------ | ------ | 
|                                     |                                                                     |                                            |                      |         | July 31, 2002 |        | April 30, 2002
|                                     |                                                                     |                                            |                      |         |               |        |               
|                                     |                                                                     |                                            |                      |         | (unaudited)   |        |                |         |       
|ASSETS                               |                                                                     |                                            |                      |         |               |        |                |        
|Current assets:                      |                                                                     |                                            |                      |         |               |        |                |        
|                                     | Cash and cash equivalents                                           |                                            | $                    | 455     |               |        | $              | 354     |       
|                                     | Accounts receivable, net of allowance of $92 and $165, respectively |                                            |                      | 11,873  |               |        |                | 14,412  |       
|                                     | Refundable income taxes                                             |                                            |                      | 2,347   |               |        |                | 3,088   |       
|                                     | Deferred income taxes                                               |                                            |                      | 1,106   |               |        |                | 1,106   |       
|                                     | Other current assets                                                |                                            |                      | 1,348   |               |        |                | 1,874   |       
|                                     |                                                                     |                                            |                      |         |               |        |                |        
|                                     |                                                                     |                                            | Total current assets |         |               | 17,129 |                |         |        | 20,834 | 
|Fixed assets:                        |                                                                     |                                            |                      |         |               |        |                |        
|                                     | Furniture, fixtures and equipment                                   |                                            |                      | 29,587  |               |        |                | 29,513  |       
|                                     | Accumulated depreciation                                            |                                            |                      | (21,667 | )             |        |                | (20,384 | )     
|                                     |                                                                     |                                            |                      |         |               |        |                |        
|                                     |                                                                     |                                            | Net                  |         |               | 7,920  |                |         |        | 9,129  | 
|Deferred income taxes  long-term    |                                                                     |                                            | 10,041               |         |               |        | 10,253         |        
|Other long-term assets               |                                                                     |                                            | 1,212                |         |               |        | 1,161          |        
|                                     |                                                                     |                                            |                      |         |               |        |                |        
|                                     |                                                                     | Total assets                               |                      | $       | 36,302        |        |                | $       | 41,377 |       
|                                     |                                                                     |                                            |                      |         |               |        |                |        
|LIABILITIES AND SHAREHOLDERS EQUITY |                                                                     |                                            |                      |         |               |        |                |        
|                                     |                                                                     |                                            |                      |         |               |        |                |        
|Current liabilities:                 |                                                                     |                                            |                      |         |               |        |                |        
|                                     | Accounts payable                                                    |                                            | $                    | 1,598   |               |        | $              | 1,578   |       
|                                     | Accrued expenses                                                    |                                            |                      | 4,782   |               |        |                | 5,990   |       
|                                     | Current portion of long-term debt                                   |                                            |                      | 6,600   |               |        |                | 6,585   |       
|                                     | Deferred revenue                                                    |                                            |                      | 949     |               |        |                | 1,066   |       
|                                     |                                                                     |                                            |                      |         |               |        |                |        
|                                     |                                                                     | Total current liabilities                  |                      |         | 13,929        |        |                |         | 15,219 |       
|                                     | Long-term debt                                                      |                                            |                      | 3,933   |               |        |                | 7,993   |       
|                                     | Other long-term liabilities                                         |                                            |                      |        |               |        |                | 50      |       
|                                     | Shareholders equity                                                |                                            |                      | 18,440  |               |        |                | 18,115  |       
|                                     |                                                                     |                                            |                      |         |               |        |                |        
|                                     |                                                                     | Total liabilities and shareholders equity |                      | $       | 36,302        |        |                | $       | 41,377 |       
|                                     |                                                                     |                                            |                      |         |               |        |                |        

See accompanying notes to condensed consolidated financial statements.

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SCB COMPUTER TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for earnings per share)
(unaudited)

|                                                   |  |                             |        |      |  |   |        | 
|-------------------------------------------------- |  | --------------------------- | ------ | ---- |  | - | ------ | 
|                                                   |  | Three Months Ended July 31,
|                                                   |  |                            
|                                                   |  | 2002                        |        | 2001
|                                                   |  |                             |        |     
|Revenue                                            |  | $                           | 21,796 |      |  | $ | 28,626 | 
|Cost of services                                   |  |                             | 16,359 |      |  |   | 20,989 | 
|                                                   |  |                             |        |      |  |   |        | 
|Gross profit                                       |  |                             | 5,437  |      |  |   | 7,637  | 
|Selling, general and administrative
expenses       |  |                             | 4,725  |      |  |   | 6,429  | 
|                                                   |  |                             |        |      |  |   |        | 
|Income from operations                             |  |                             | 712    |      |  |   | 1,208  | 
|Net interest expense                               |  |                             | 288    |      |  |   | 584    | 
|Other income                                       |  |                             | 113    |      |  |   | 419    | 
|                                                   |  |                             |        |      |  |   |        | 
|Income before income taxes                         |  |                             | 537    |      |  |   | 1,043  | 
|Income tax expense                                 |  |                             | 212    |      |  |   | 412    | 
|                                                   |  |                             |        |      |  |   |        | 
|Net income                                         |  | $                           | 325    |      |  | $ | 631    | 
|                                                   |  |                             |        |      |  |   |        | 
|Net income per share  basic                       |  | $                           | 0.01   |      |  | $ | 0.03   | 
|                                                   |  |                             |        |      |  |   |        | 
|Net income per share  diluted                     |  | $                           | 0.01   |      |  | $ | 0.03   | 
|                                                   |  |                             |        |      |  |   |        | 
|Weighted average number of common
shares  basic   |  |                             | 24,985 |      |  |   | 24,985 | 
|                                                   |  |                             |        |      |  |   |        | 
|Weighted average number of common
shares  diluted |  |                             | 25,228 |      |  |   | 25,072 | 
|                                                   |  |                             |        |      |  |   |        | 

See accompanying notes to condensed consolidated financial statements.

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SCB COMPUTER TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

|                                                                                  |                                                           |                                        |     |                             |        |      |     |         |        |  
|--------------------------------------------------------------------------------- | --------------------------------------------------------- | -------------------------------------- | --- | --------------------------- | ------ | ---- | --- | ------- | ------ | -
|                                                                                  |                                                           |                                        |     | Three Months Ended July 31,
|                                                                                  |                                                           |                                        |     |                            
|                                                                                  |                                                           |                                        |     | 2002                        |        | 2001
|                                                                                  |                                                           |                                        |     |                             |        |     
|Operating Activities                                                              |                                                           |                                        |     |                             |        |      |     |        
|                                                                                  | Net income                                                |                                        | $   | 325                         |        |      | $   | 631     |       
|Adjustments to reconcile net income to net cash
provided by operating activities: |                                                           |                                        |     |                             |        |      |     |        
|                                                                                  | Provision (recovery) for bad debts                        |                                        |     | (72                         | )      |      |     | 19      |       
|                                                                                  | Depreciation                                              |                                        |     | 1,287                       |        |      |     | 2,306   |       
|                                                                                  | Amortization                                              |                                        |     | 60                          |        |      |     |        |       
|                                                                                  | Deferred income taxes                                     |                                        |     | 212                         |        |      |     | 450     |       
|                                                                                  | Gain on sale of assets                                    |                                        |     |                            |        |      |     | (346    | )     
|                                                                                  | Changes in operating assets and liabilities:              |                                        |     |                             |        |      |     |         |       
|                                                                                  |                                                           | Accounts receivable                    |     |                             | 2,611  |      |     |         | 1,956  |  
|                                                                                  |                                                           | Refundable income taxes                |     |                             | 741    |      |     |         | (186   | )
|                                                                                  |                                                           | Prepaid expenses and other assets      |     |                             | 443    |      |     |         | (975   | )
|                                                                                  |                                                           | Accounts payable                       |     |                             | 19     |      |     |         | 467    |  
|                                                                                  |                                                           | Accrued expenses and other liabilities |     |                             | (1,375 | )    |     |         | (2,528 | )
|                                                                                  |                                                           |                                        |     |                             |        |      |     |        
|                                                                                  | Net cash provided by operating activities                 |                                        |     | 4,251                       |        |      |     | 1,794   |       
|                                                                                  |                                                           |                                        |     |                             |        |      |     |        
|Investing Activities                                                              |                                                           |                                        |     |                             |        |      |     |        
|                                                                                  | Purchases of fixed assets                                 |                                        |     | (105                        | )      |      |     | (92     | )     
|                                                                                  | Payments received from leasing activities                 |                                        |     |                            |        |      |     | 563     |       
|                                                                                  | Proceeds from sale of businesses, net of liabilities paid |                                        |     |                            |        |      |     | 9,420   |       
|                                                                                  |                                                           |                                        |     |                             |        |      |     |        
|                                                                                  | Net cash provided by (used in) investing activities       |                                        |     | (105                        | )      |      |     | 9,891   |       
|                                                                                  |                                                           |                                        |     |                             |        |      |     |        
|Financing Activities                                                              |                                                           |                                        |     |                             |        |      |     |        
|                                                                                  | Borrowings on long-term debt                              |                                        |     |                            |        |      |     | 14,967  |       
|                                                                                  | Payments on long-term debt                                |                                        |     | (1,929                      | )      |      |     | (31,318 | )     
|                                                                                  | Payments on non-recourse debt                             |                                        |     |                            |        |      |     | (1,212  | )     
|                                                                                  | Net borrowings (repayments) under revolving loan          |                                        |     | (2,116                      | )      |      |     | 6,253   |       
|                                                                                  |                                                           |                                        |     |                             |        |      |     |        
|                                                                                  | Net cash used in financing activities                     |                                        |     | (4,045                      | )      |      |     | (11,310 | )     
|                                                                                  |                                                           |                                        |     |                             |        |      |     |        
|Net increase in cash and cash equivalents                                         |                                                           |                                        | 101 |                             |        |      | 375 |        
|Cash and cash equivalents at beginning of period                                  |                                                           |                                        | 354 |                             |        |      | 575 |        
|                                                                                  |                                                           |                                        |     |                             |        |      |     |        
|Cash and cash equivalents at end of period                                        |                                                           | $                                      | 455 |                             |        | $    | 950 |        
|                                                                                  |                                                           |                                        |     |                             |        |      |     |        
|Supplemental Disclosures of Cash Flow                                             |                                                           |                                        |     |                             |        |      |     |        
|                                                                                  | Interest paid                                             |                                        | $   | 327                         |        |      | $   | 902     |       
|                                                                                  | Income taxes paid                                         |                                        | $   | 37                          |        |      | $   | 186     |       

See accompanying notes to condensed consolidated financial statements.

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SCB COMPUTER TECHNOLOGY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.  BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of
SCB Computer Technology, Inc. (the Company) have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. In the
opinion of management, the accompanying condensed consolidated financial
statements contain all adjustments (which consist of normal recurring
adjustments) considered necessary for the fair presentation of the financial
position of the Company as of July 31, 2002, and the results of operations and
cash flows for the three-month periods ended July 31, 2002 and July 31, 2001.
Operating results for the period ended July 31, 2002, are not necessarily
indicative of the results that may be expected for the fiscal year ending April

30, 2003. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Companys annual report on
Form 10-K for the fiscal year ended April 30, 2002, filed with the Securities
and Exchange Commission.

2.  EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted
earnings per share (in thousands, except net income per share):

|                           |                                                                                                       |   |                             |        |      |   |      |        | 
|-------------------------- | ----------------------------------------------------------------------------------------------------- | - | --------------------------- | ------ | ---- | - | ---- | ------ | 
|                           |                                                                                                       |   | Three Months Ended July 31,
|                           |                                                                                                       |   |                            
|                           |                                                                                                       |   | 2002                        |        | 2001
|                           |                                                                                                       |   |                             |        |     
|Numerator:                 |                                                                                                       |   |                             |        |      |   |      |       
|                           | Net income                                                                                            |   | $                           | 325    |      |   | $    | 631    | 
|                           |                                                                                                       |   |                             |        |      |   |      |       
|Denominator:               |                                                                                                       |   |                             |        |      |   |      |       
|                           | Denominator for basic earnings per share  weighted average shares                                    |   |                             | 24,985 |      |   |      | 24,985 | 
|                           | Effect of dilutive securities  employee stock options and warrants                                   |   |                             | 243    |      |   |      | 87     | 
|                           |                                                                                                       |   |                             |        |      |   |      |       
|                           | Denominator for diluted earnings per share  adjusted weighted average
shares and assumed conversions |   |                             | 25,228 |      |   |      | 25,072 | 
|                           |                                                                                                       |   |                             |        |      |   |      |       
|Basic earnings per share   |                                                                                                       | $ | 0.01                        |        |      | $ | 0.03 |       
|                           |                                                                                                       |   |                             |        |      |   |      |       
|Diluted earnings per share |                                                                                                       | $ | 0.01                        |        |      | $ | 0.03 |       
|                           |                                                                                                       |   |                             |        |      |   |      |       

3.  LONG-TERM DEBT

The Company has a five-year, $27.5 million credit facility with a
financial institution that consists of a $17.5 million revolving loan (the
revolving loan) and a $10.0 million term loan (the primary term loan). The
credit facility is secured by substantially all the Companys assets and
contains various financial and other covenants. The Company was in compliance
with these loan covenants at July 31, 2002. The Company also has a three-year,
$4.0 million term loan with another financial institution (the secondary term
loan).

The interest rate on borrowings under the revolving loan originally was
prime plus a margin of 1.25%. At July 31, 2002, the effective annual interest
rate under the revolving loan was 6.0%. Effective August 1, 2002, the interest
rate margin on the revolving loan was reduced to 1.0%, with the effect that as
of such date the effective annual interest rate under the revolving loan
decreased to 5.75%. At July 31, 2002, $3.5 million was outstanding on the
revolving loan. The amount available for borrowing under the revolving loan is
limited to 85% of billed accounts

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receivable plus 70% of unbilled accounts receivable. At July 31,
2002, $2.2 million was available for borrowing under the revolving loan.

The interest rate on borrowings under the primary term loan originally was
prime plus a margin of 2.75%. At July 31, 2002, the effective annual interest
rate under the primary term loan was 7.5%. Effective August 1, 2002, the
interest rate margin on the primary term loan was reduced to 2.25%, with the
effect that as of such date the effective annual interest rate under the
primary term loan decreased to 7.0%. The Company is amortizing the primary
term loan at the rate of $350,000 of principal plus accrued interest per month.
At July 31, 2002, $4.8 million was outstanding on the primary term loan.

The interest rate on borrowings under the secondary term loan is prime
plus a margin of 2.0%. At July 31, 2002, the effective annual interest rate
under the secondary term loan was 6.75%. The Company is amortizing the
secondary term loan at the rate of $70,000 of principal plus accrued interest
per month. At July 31, 2002, $2.2 million was outstanding on the secondary
term loan.

At July 31, 2002, the Company had $65,116 outstanding under a promissory
note that bears interest at 11.0% and is due in fiscal 2004. The loan is
secured by computer software.

4.  SEGMENT INFORMATION

Beginning with the second quarter of fiscal 2001, the Company operated
within two business segments as a result of certain strategic business
decisions made by management. The two business segments are (1) core
operations, which consist of IT outsourcing, consulting, and professional
staffing services, and (2) non-core operations, which consist of specialized
policy consulting, computer hardware and specialty software sales, enterprise
resource planning, and computer equipment leasing. Accordingly, the Company is
presenting the following summarized financial information concerning the
Companys operating segments at July 31, 2002 and 2001, and for each of the
fiscal quarters then ended (in thousands):

|                        |                         |   |                             |        |      |   |        |        |  
|----------------------- | ----------------------- | - | --------------------------- | ------ | ---- | - | ------ | ------ | -
|                        |                         |   | Three Months Ended July 31,
|                        |                         |   |                            
|                        |                         |   | 2002                        |        | 2001
|                        |                         |   |                             |        |     
|Revenue:                |                         |   |                             |        |      |   |        |       
|                        | Core operations         |   | $                           | 21,796 |      |   | $      | 25,771 |  
|                        | Non-core operations (a) |   |                             |       |      |   |        | 2,855  |  
|                        | Corporate               |   |                             |       |      |   |        |       |  
|                        |                         |   |                             |        |      |   |        |       
|                        |                         | $ | 21,796                      |        |      | $ | 28,626 |       
|                        |                         |   |                             |        |      |   |        |       
|Income from operations: |                         |   |                             |        |      |   |        |       
|                        | Core operations         |   | $                           | 3,177  |      |   | $      | 3,962  |  
|                        | Non-core operations (b) |   |                             |       |      |   |        | 40     |  
|                        | Corporate               |   |                             | (2,465 | )    |   |        | (2,794 | )
|                        |                         |   |                             |        |      |   |        |       
|                        |                         | $ | 712                         |        |      | $ | 1,208  |       
|                        |                         |   |                             |        |      |   |        |       



---

|(a) |  | Since all non-core operations have been disposed as of April 1, 2002, the
Company did not have any non-core operations during the first quarter of
fiscal 2003.                                                          
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | The non-core operations consist of the Enterprise Resource Planning,
Delta Software and Partners Capital Group business units that were
disposed of on June 20, 2001, February 28, 2002, and April 1, 2002,
respectively.

6



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##### Table of Contents



The following sets forth the assets and liabilities of the non-core
operations (in thousands):

|                                 |                              |   |                |   |      |   |       |       | 
|-------------------------------- | ---------------------------- | - | -------------- | - | ---- | - | ----- | ----- | 
|                                 |                              |   | As of July 31,
|                                 |                              |   |               
|                                 |                              |   | 2002           |   | 2001
|                                 |                              |   |                |   |     
|Investment in leasing activities |                              | $ |               |   |      | $ | 8,365 |      
|Other assets                     |                              |   |               |   |      |   | 12    |      
|                                 |                              |   |                |   |      |   |       |      
|                                 | Total assets                 |   | $              |  |      |   | $     | 8,377 | 
|                                 |                              |   |                |   |      |   |       |      
|Non-recourse debt                |                              | $ |               |   |      | $ | 8,514 |      
|Other liabilities                |                              |   |               |   |      |   | 217   |      
|Retained deficit                 |                              |   |               |   |      |   | (354  | )    
|                                 |                              |   |                |   |      |   |       |      
|                                 | Total liabilities and equity |   | $              |  |      |   | $     | 8,377 | 
|                                 |                              |   |                |   |      |   |       |      

The accounting policies of the reportable segments are the same as those
described in the summary of significant accounting policies. There are no
inter-segment sales. Long-term assets consist of goodwill and fixed assets.
Corporate services, consisting of general and administrative services, are
provided to the segments from a centralized location. In addition,
substantially all the sales and recruiting workforce are contained in the core
operations segment.

5.  RELATED-PARTY TRANSACTIONS

On July 16, 2001, the Company agreed to lend up to $192,000 to T. Scott
Cobb, the President and Chief Executive Officer and a director of the Company
(the first loan). The first loan bears interest at prime and originally had
a maturity date of April 30, 2002. On January 18, 2002, the Company and Mr.
Cobb modified the first loan by increasing the maximum available principal
amount to $313,755 and extending the maturity date to August 31, 2002, subject
to the requirement that Mr. Cobb prepay the first loan in certain
circumstances. The proceeds of the first loan were to be used by Mr. Cobb to
repay his personal indebtedness to a commercial bank. At July 31, 2002, the
outstanding principal balance of the first loan was $311,480 and the interest
accrued thereunder was $8,684. On August 28, 2002, the Company extended the
maturity date of the first loan for two months to October 31, 2002, in order to
provide Mr. Cobb with sufficient time to repay the first loan in its entirety.

On February 15, 2002, the Company agreed to lend an additional $500,000 to
Mr. Cobb (the second loan). The second loan bears
interest at prime, had a maturity date of January 31, 2003, and was secured by a pledge by Mr. Cobb to
the Company of 1,503,691 shares of the Companys common stock owned by Mr.
Cobb. The proceeds of the second loan were to be used by Mr. Cobb to repay his
personal indebtedness to a commercial bank. On June 14, 2002, Mr. Cobb repaid
the $500,000 principal balance of the second loan to the Company. At July 31,
2002, the interest accrued under the second loan was $9,125.

In the first quarter of fiscal 2003, the Company paid IT Resources
Solutions.net, Inc. (ITRS), a company owned by Kenneth J. Cobb, the son of T.
Scott Cobb, $19,500 for marketing management services in the northeastern
United States, $7,260 for the lease of an office to house an SCB sales account
representative and storage facilities which SCB uses to store furniture and
miscellaneous office items from a closed SCB office in New York, and $14,528
for contract labor used on the Companys projects.

6.  LEGAL PROCEEDINGS

On August 30, 2002, the Company settled an administrative proceeding
brought by the Securities and Exchange Commission (the SEC) following an
investigation that arose after the Company restated its financial results for
periods in its 1998-2000 fiscal years. The SEC investigation was focused on
the accounting policies of two Arizona-based companies that the Company
acquired in 1997. Following the acquisition, these subsidiaries were operated
as a stand-alone division within the Company and had an accounting operation
that was separate from that of the rest of the Company. The SEC concluded from
its investigation that these subsidiaries improperly accounted for certain
transactions, and that their flawed financial results were incorporated into
the Companys

7



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##### Table of Contents



consolidated financial statements, thereby rendering the Companys
reported financial results inaccurate. As a result, the SEC found that the
Company committed civil violations of the reporting, books and records, and
internal controls requirements of the federal securities laws and ordered the
Company to cease and desist from any future violations. The Company neither
admitted nor denied the SECs findings. The SEC did not make a finding of
fraud on the Companys part, and no monetary penalty or other sanction was
imposed against the Company beyond the cease-and-desist order. In reaching the
settlement, the SEC took into account the Companys prompt remedial actions and
its cooperation in the investigation. The matter is now completely resolved as
to the Company.

8



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##### Table of Contents






|        |  |                                                                                      
|------- |  | -------------------------------------------------------------------------------------
|Item 2. |  | Managements Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with the Companys
condensed consolidated financial statements, including the notes thereto, in
this report.

Overview

The Company is a leading provider of information technology (IT)
management and technical services to state and local governments and commercial
enterprises. The Companys services consist of (1) consulting, which entails
the evaluation, design and re-engineering of computer systems, management,
quality assurance and technical directions for IT projects, network planning
and implementation, and functional expertise and training; (2) outsourcing,
which involves system development and integration, maintenance, data center
management, help desk and technical services; and (3) professional staffing,
which includes providing skilled IT staff on an as-needed basis.

The Companys performance in the first quarter of fiscal 2003 reflects the
dramatic change in its strategic direction that occurred in fiscal 2001. The
Companys growth from fiscal 1997 through fiscal 2000 was driven largely
through acquisitions, diversification, and attempts at cross-selling services.
In fiscal 2001, the Company began to focus its operational, capital, and
management resources on its core competencies of providing information
technology (IT) consulting, outsourcing, and professional staffing services
(the core operations). In the first quarter of fiscal 2003, the Companys
revenue from core operations, on which the Companys management intends to
focus its future efforts, was $21.8 million. Professional staffing,
outsourcing, and consulting accounted for 75%, 15%, and 10%, respectively, of
the Companys revenue from core operations in the first quarter of fiscal 2003.

Beginning in fiscal 2001 and continuing through fiscal 2002, the Company
disposed of several under performing business units. These non-core business
units were engaged in specialized policy consulting, computer hardware and
specialty software sales, enterprise resource planning, and computer equipment
leasing (the non-core operations). The Company sold its Technology
Management Resources, Proven Technology, and Global Services business units in
fiscal 2001 and its Enterprise Resource Planning, Delta Software, and Partners
Capital Group business units in fiscal 2002. The Company completed the sale of
Partners Capital Group, its last non-core operation, on April 1, 2002, and thus
had no revenue from non-core operations in the first quarter of fiscal 2003.

The Companys fiscal year extends from May 1 through the following April 30.
The Company generally recognizes revenue as services are performed.

Results of Operations

Comparison of First Quarter of Fiscal 2003 to First Quarter of Fiscal 2002

Revenue and Income from Operations.The Companys operations in the first
quarter of fiscal 2003 consisted only of core operations, as all non-core
operations had been disposed of by April 1, 2002. Overall revenue decreased
24% to $21.8 million in the first quarter of fiscal 2003 from $28.6 million in
the first quarter of fiscal 2002. Overall income from operations decreased 41%
to $0.7 million in the first quarter of fiscal 2003 from $1.2 million in the
first quarter of fiscal 2002.

Revenue from core operations decreased 15% to $21.8 million in the first
quarter of fiscal 2003 from $25.8 million in the first quarter of fiscal 2002.
Professional staffing revenue decreased $2.5 million for the quarter due
primarily to a 15% decrease in average billable headcount and a three-day work
stoppage on the State of Tennessee project resulting from a temporary shutdown
of non-essential government services due to state budgetary constraints, which
were partially offset by a 3% increase in average billing rate. Revenue from
consulting and outsourcing declined $0.9 million and $0.5 million for the
quarter, respectively. Income from core operations decreased 20% to $3.2
million in the first quarter of fiscal 2003 from $4.0 million in the first
quarter of fiscal 2002.

9



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##### Table of Contents



Revenue from non-core operations decreased to zero in the first quarter of
fiscal 2003 from $2.9 million in the first quarter of fiscal 2002. The
revenue from non-core operations in the first quarter of fiscal 2002 consisted
of $1.7 million from the Enterprise Resource Planning business unit, which was
sold on June 20, 2001; $0.1 million from the Delta Software business unit,
which was sold on February 28, 2002; and $1.1 million from the Partners Capital
Group business unit, which was sold on April 1, 2002. Since April 1, 2002, the
Company has had no non-core operations and thus no revenue or income
attributable thereto.

In the first quarters of fiscal 2003 and 2002, the Company reported
certain unusual items that have significantly affected the comparability of its
financial results. These items include the professional fees relating to the
Companys recently concluded SEC investigation and the gains on the sales of
non-core operations. The Company believes that the exclusion of these unusual
items presents a clearer picture of the financial performance of the Company
during these periods. The following table shows the impact of the professional
fees for the SEC investigation and the gains on the sales of non-core
operations on the Companys net income (in thousands) in the first quarters of
fiscal 2003 and 2002:

|                                             |                     |   |                             |     |      |   |       |     | 
|-------------------------------------------- | ------------------- | - | --------------------------- | --- | ---- | - | ----- | --- | 
|                                             |                     |   | Three Months Ended July 31,
|                                             |                     |   |                            
|                                             |                     |   | 2002                        |     | 2001
|                                             |                     |   |                             |     |     
|Income before income taxes as reported       |                     | $ | 537                         |     |      | $ | 1,043 |    
|Add: Professional fees for SEC investigation |                     |   | 65                          |     |      |   | 212   |    
|Less: Gain on sales of non-core operations   |                     |   |                            |     |      |   | (346  | )  
|                                             |                     |   |                             |     |      |   |       |    
|Adjusted income before income taxes          |                     |   | 602                         |     |      |   | 909   |    
|Related income tax expense                   |                     |   | 238                         |     |      |   | 359   |    
|                                             |                     |   |                             |     |      |   |       |    
|                                             | Adjusted net income |   | $                           | 364 |      |   | $     | 550 | 
|                                             |                     |   |                             |     |      |   |       |    

As shown in the table, excluding these unusual items, the Companys
adjusted net income decreased 34% to $364,000 in the first quarter of fiscal
2003 from $550,000 in the first quarter of fiscal 2002.

Corporate Expenses.Corporate expenses decreased 11% to $2.5 million in
the first quarter of fiscal 2003 from $2.8 million in the first quarter of
fiscal 2002. The decrease in corporate expenses is due principally to
managements cost-reduction efforts, which primarily focused on salaries and
travel-related expenses, and reduced professional fees for the SEC
investigation.

Interest Expenses.Net interest expense decreased 51% to $0.3 million in
the first quarter of fiscal 2003 from $0.6 million in the first quarter of
fiscal 2002 due primarily to the reduction in the Companys bank debt and a
decline in interest rates.

Tax Rate.The effective tax rate for the first quarters of fiscal 2003
and 2002 was 39.5%.

Reliance Upon Government Contracting and Significant Customers

The Company performs IT services for customers in two distinct markets:
state and local governments, and commercial enterprises. In the first quarters
of fiscal 2003 and 2002, approximately 62% and 54%, respectively, of the
Companys revenue was attributable to state and local governments, with the
balance being attributable to commercial enterprises. The increase in the
percentage of revenue obtained from state and local governments is mainly due
to the disposition of the enterprise resource planning business unit, which was
highly concentrated in contracts with commercial enterprises, in the first
quarter of fiscal 2002. The Company is a leading provider of IT services to
state and local governments in the United States of America.

While the Company currently provides IT services for over 150 clients, it
earns a significant portion of its revenue from relatively few customers. The
Companys top five revenue-generating customers in the first quarter of fiscal
2003 accounted for 57% of its revenue, an increase from 48% in the first
quarter of fiscal 2002. In the first quarter of fiscal 2003, the following
customers accounted for 10% or more of the Companys revenue: State of
Tennessee (17%), State of Kentucky (15%), and Honeywell International Inc.
(12%). One customer, Honeywell International Inc., accounted for 81% of the
Companys revenue from outsourcing operations, a decrease from 87%

10



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##### Table of Contents



in the first quarter of fiscal 2002.
The foregoing concentrations expose the Company to a greater degree
of risk of loss than would be the case with greater diversification. Although the
Company from time to time has substantial accounts receivable from its top five
clients, the Company has not experienced any significant payment problems from
these clients. The Company believes that its length of tenure with and
historical renewal rates for its contracts with these top five customers help
to reduce the Companys risk of reliance upon significant customers. A
material decrease in the services provided to any of the largest clients,
however, would have an adverse impact on the Companys financial condition and
results of operations.

Liquidity and Capital Resources

Debt.During the first quarter of fiscal 2003, the Company reduced its
debt to $10.5 million at July 31, 2002, a 28% decrease from $14.6 million at
April 30, 2002, and a 65% decrease from $30.0 million at July 31, 2001. The
debt reduction reflects the Companys ongoing repayment of its funded debt as
well as the elimination of the Companys non-recourse debt associated with the
computer leasing business of its former Partners Capital Group business unit in
the fourth quarter of fiscal 2002.

The Company has a five-year, $27.5 million credit facility with a
financial institution that consists of a $17.5 million revolving loan (the
revolving loan) and a $10.0 million term loan (the primary term loan). The
credit facility is secured by substantially all the Companys assets and
contains various financial and other covenants. The Company was in compliance
with these loan covenants at July 31, 2002. The Company also has a three-year,
$4.0 million term loan with another financial institution (the secondary term
loan).

The interest rate on borrowings under the revolving loan originally was
prime plus a margin of 1.25%. At July 31, 2002, the effective annual interest
rate under the revolving loan was 6.0%. Effective August 1, 2002, the interest
rate margin on the revolving loan was reduced to 1.0%, with the effect that as
of such date the effective annual interest rate under the revolving loan
decreased to 5.75%. At July 31, 2002, $3.5 million was outstanding on the
revolving loan. The amount available for borrowing under the revolving loan is
limited to 85% of billed accounts receivable plus 70% of unbilled accounts
receivable. At July 31, 2002, $2.2 million was available for borrowing under
the revolving loan.

The interest rate on borrowings under the primary term loan originally was
prime plus a margin of 2.75%. At July 31, 2002, the effective annual interest
rate under the primary term loan was 7.5%. Effective August 1, 2002, the
interest rate margin on the primary term loan was reduced to 2.25%, with the
effect that as of such date the effective annual interest rate under the
primary term loan decreased to 7.0%. The Company is amortizing the primary
term loan at the rate of $350,000 of principal plus accrued interest per month.
At July 31, 2002, $4.8 million was outstanding on the primary term loan.

The interest rate on borrowings under the secondary term loan is prime
plus a margin of 2.0%. At July 31, 2002, the effective annual interest rate
under the secondary term loan was 6.75%. The Company is amortizing the
secondary term loan at the rate of $70,000 of principal plus accrued interest
per month. At July 31, 2002, $2.2 million was outstanding on the secondary
term loan.

At July 31, 2002, the Company had $65,116 outstanding under a promissory
note that bears interest at 11.0% and is due in fiscal 2004. The loan is
secured by computer software.

Capital Expenditures.The Companys capital expenditures primarily relate
to computer equipment purchases for use by the Companys professionals and on
outsourcing projects. Capital expenditures increased 12% to $105,000 in the
first quarter of fiscal 2003 from $92,000 in the first quarter fiscal 2002.
The Company does not expect to incur substantial capital expenditures in the
remainder of fiscal 2003 except to the extent required for new or revised
outsourcing engagements. The Company is currently negotiating the extension of
an outsourcing contract, which could result in a significant capital
expenditure of $6-11 million during the remainder of fiscal 2003. The Company
believes that this potential capital expenditure will be financed through
equipment leasing arrangements.

11



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Dispositions of Non-Core Operations.The Company began disposing of its
non-core operations in fiscal 2001 and completed the process in fiscal 2002.
The sales of non-core business units that occurred in fiscal 2002 are described
below.

On June 20, 2001, the Company sold substantially all the assets of its
Enterprise Resource Planning business unit for $9.1 million in cash plus the
assumption of certain related liabilities. The Company used $8.5 million of
the sale proceeds to reduce its debt and $0.6 million for working capital and
to pay expenses related to the transaction.

On February 28, 2002, the Company sold substantially all the assets of its
Delta Software business unit, which was engaged in specialty software sales,
for the assumption of certain related liabilities.

On April 1, 2002, the Company sold certain assets relating to its Partners
Capital Group business unit, which was engaged in computer equipment leasing,
for $60,000 in cash plus the assumption of certain related liabilities,
including $4.6 million of non-recourse debt.

Working Capital.At July 31, 2002, the Company had working capital of
$3.2 million (including $0.5 million in cash and cash equivalents), a 43%
decrease from $5.6 million at April 30, 2002. The decrease in working capital
is attributable primarily to the Companys use of available cash to reduce the
outstanding balance of the revolving loan.

The Company generated net cash from operating activities of $4.3 million
in the first quarter of fiscal 2003, a 124% increase from $1.8 million in the
first quarter of fiscal 2002. The increase in net cash provided by operating
activities was mainly attributable to an increase in payments received for
accounts receivable and income tax refunds, which were partially offset by a
decrease in accrued expenses.

Future Liquidity Requirements.Although it is difficult to predict the
Companys future liquidity requirements, the Company believes that its current
cash and cash equivalents, anticipated cash flows from operations, and
available borrowings under its credit facility will be sufficient for the
foreseeable future to fund the Companys working capital requirements and
operations, make required payments of principal and interest on its debt, and
permit anticipated capital expenditures. As discussed under Capital
Expenditures, the Company is currently negotiating an extension to an
outsourcing contract, which could result in a significant capital expenditure
of $6-11 million during the remainder of fiscal 2003. The Company believes
that this potential capital expenditure will be financed through equipment
leasing arrangements.

Significant Accounting Policies

The following accounting policies could have the most significant impact
on the Companys operations from period to period.

Revenue Recognition.The Company recognizes revenue as professional
services are performed. The Company is compensated for its services on either a
time and materials, fixed fee per month, or fixed fee per project basis.

Generally, the Companys contracts with its top ten clients, in accordance
with industry practice, are cancelable on short notice and without penalty
(except with respect to the Companys larger outsourcing contracts), provide
for the monthly payment of fees, and establish other basic terms such as the
hourly billing rates for each type of Company professional who performs work
pursuant to the contract. Some contracts specifically define the services to
be performed pursuant to the contract, while other contracts, particularly
professional staffing contracts, merely establish the basic parameters of the
work (i.e., the system to be evaluated, designed or maintained) and require
that additional work orders be submitted for services to be performed. The
Company is the exclusive service provider under certain contracts, while other
contracts, particularly professional staffing contracts, specifically allow the
client to engage other vendors for the projects covered by the contract.

12



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The majority of the Companys revenue is billed on a time and materials
basis. Some time and materials contracts contain a cap on the number of hours
to be worked, in which case the hours are monitored to help prevent exceeding
the cap.

Currently, less than 10% of the Companys revenue is performed on a fixed
fee per project basis. In instances where the Company accepts an engagement on
a fixed fee per project basis, the Company records revenue on a percentage of
completion basis. The Companys agreement with the client calls for the
billing of fees at specified increments not directly related to the timing of
costs incurred. The Company records deferred revenue for payments received
from certain customers on service contracts prior to the performance of
services required under the service contract. Estimated losses are recorded
when identified.

Income Taxes. The Company accounts for income taxes using the liability
method. Under the liability method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax basis. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in the period that includes the enactment date. Deferred tax assets
are reduced by a valuation allowance if, based on the weight of available
evidence, management determines that it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The deferred
tax asset valuation allowance is based primarily on managements calculations
of estimated probable future taxable income over the next several years.
Management considers income taxes to be one of the Companys significant
accounting policies because of the estimates and judgment required in
predicting probable future taxable income.




|        |  |                                                            
|------- |  | -----------------------------------------------------------
|Item 3. |  | Quantitative and Qualitative Disclosures about Market Risks

The Companys primary market risks include fluctuations in interest rates
and variability in interest rate spread relationships (i.e., prime or LIBOR
spreads). Substantially all of the Companys $10.5 million in outstanding debt
at July 31, 2002, relates to credit facilities with commercial lending
institutions. Interest on the outstanding balances is charged based on
variable rates related to the prime rate. The rates are incremented for
margins in the form of fluctuations in interest rates. The effect of a
hypothetical one percentage point increase across all maturities of variable
rate debt would result in a decrease of $105,000 in pre-tax net income assuming
no further changes in the amount of borrowings subject to variable rate
interest from the amounts outstanding at July 31, 2002. The Company does not
trade in derivative financial instruments.

13



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PART II  OTHER INFORMATION




|        |  |                  
|------- |  | -----------------
|Item 1. |  | Legal Proceedings

On August 30, 2002, the Company settled an administrative proceeding
brought by the Securities and Exchange Commission (the SEC) following an
investigation that arose after the Company restated its financial results for
periods in its 1998-2000 fiscal years. The SEC investigation was focused on
the accounting policies of two Arizona-based companies that the Company
acquired in 1997. Following the acquisition, these subsidiaries were operated
as a stand-alone division within the Company and had an accounting operation
that was separate from that of the rest of the Company. The SEC concluded from
its investigation that these subsidiaries improperly accounted for certain
transactions, and that their flawed financial results were incorporated into
the Companys consolidated financial statements, thereby rendering the
Companys reported financial results inaccurate. As a result, the SEC found
that the Company committed civil violations of the reporting, books and
records, and internal controls requirements of the federal securities laws and
ordered the Company to cease and desist from any future violations. The
Company neither admitted nor denied the SECs findings. The SEC did not make a
finding of fraud on the Companys part, and no monetary penalty or other
sanction was imposed against the Company beyond the cease-and-desist order. In
reaching the settlement, the SEC took into account the Companys prompt
remedial actions and its cooperation in the investigation. The matter is now
completely resolved as to the Company.

The Company from time to time is subject to various other claims and
lawsuits arising out of its operations in the ordinary course of business.
Management believes that the disposition of such other currently pending claims
and lawsuits will not have a material adverse affect on the Companys financial
condition or results of operations.




|        |  |                                 
|------- |  | --------------------------------
|Item 6. |  | Exhibits and Reports on Form 8-K



| | (a) |  | Exhibits
| | --- |  | --------

The exhibits listed in the Exhibit Index following the signature page
hereof are filed as part of this report or are incorporated herein by
reference.



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

The Company did not file any current reports on Form 8-K with the SEC
during the fiscal quarter ended July 31, 2002. Subsequent to the end of the
quarter, however, the Company has filed two current reports with the SEC. On
September 3, 2002, the Company filed a current report disclosing the settlement
of the SEC administrative proceeding. See Item 1. Legal Proceedings in Part
II  Other Information of this report for further information on this matter.
On September 11, 2002, the Company filed a current report disclosing that its
board of directors has approved a stock repurchase program that authorizes the
Company to repurchase up to $3 million of common stock.

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SIGNATURES

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

|                          |  |                              |                                                                                   
|------------------------- |  | ---------------------------- | ----------------------------------------------------------------------------------
|Date:  September 16, 2002 |  |                             
|                          |  | SCB COMPUTER TECHNOLOGY, INC
|                          |  |                             
|                          |  | By:                          | /s/ Michael J. Boling                                                             
|                          |  |                              |                                                                                   
|                          |  |                              | Michael J. Boling
Executive Vice President, Chief
Financial Officer, and Treasurer

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CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, T. Scott Cobb, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of SCB Computer
Technology, Inc. (the Company);                                                                                                                                                                                                                              
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|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; and
|  
|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 Company as of, and for, the periods presented in this
quarterly report.                          

|                          |  |     |                                                    
|------------------------- |  | --- | ---------------------------------------------------
|Date:  September 16, 2002 |  |    
|                          |  | By: | /s/ T. Scott Cobb                                  
|                          |  |     |                                                    
|                          |  |     | T. Scott Cobb
President and Chief Executive Officer

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CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002

I, T. Scott Cobb, certify pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that (1) this quarterly report on Form 10-Q of SCB Computer Technology,
Inc. (the Company) fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, and (2) the information contained
in this quarterly report fairly presents, in all material respects, the
financial condition and results of operations of the Company.

|                          |  |     |                                                    
|------------------------- |  | --- | ---------------------------------------------------
|Date:  September 16, 2002 |  |    
|                          |  | By: | /s/ T. Scott Cobb                                  
|                          |  |     |                                                    
|                          |  |     | T. Scott Cobb
President and Chief Executive Officer

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CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Michael J. Boling, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of SCB Computer
Technology, Inc. (the Company);                                                                                                                                                                                                                              
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|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; and
|  
|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 Company as of, and for, the periods presented in this
quarterly report.                          

|                          |  |     |                                                                                   
|------------------------- |  | --- | ----------------------------------------------------------------------------------
|Date:  September 16, 2002 |  |    
|                          |  | By: | /s/ Michael J. Boling                                                             
|                          |  |     |                                                                                   
|                          |  |     | Michael J. Boling
Executive Vice President, Chief
Financial Officer, and Treasurer

18



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##### Table of Contents






CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002

I, Michael J. Boling , certify pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that (1) this quarterly report on Form 10-Q of SCB Computer
Technology, Inc. (the Company) fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (2) the
information contained in this quarterly report fairly presents, in all material
respects, the financial condition and results of operations of the Company.

|                          |  |     |                                                                                   
|------------------------- |  | --- | ----------------------------------------------------------------------------------
|Date:  September 16, 2002 |  |    
|                          |  |    
|                          |  | By: | /s/ Michael J. Boling                                                             
|                          |  |     |                                                                                   
|                          |  |     | Michael J. Boling
Executive Vice President, Chief
Financial Officer, and Treasurer

19



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##### Table of Contents






EXHIBIT INDEX

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Number  |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|10*     |  | Loan and Security Agreement dated as of July 23, 2001, among the
Company, certain of its subsidiaries, and Foothill Capital Corporation,
as agent and lender (incorporated herein by reference to Exhibit 10.1 to
the Companys annual report on Form 10-K for the fiscal year ended April
30, 2001), as amended by First Amendment to Loan and Security Agreement
dated as of March 27, 2002, among the parties. Schedules and exhibits
have been omitted from this filing. The Company will furnish, as
supplementary information, copies of the omitted materials to the SEC
upon request.
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|11      |  | Computation of earnings per share (included in Note 2 of the Notes to
Condensed Consolidated Financial Statements (unaudited) in Item 1 of Part I
of this report)                                                                                                                                                                                                                                                                                                                                                                                                                            



---

|* |  | All or part of this exhibit is filed herewith.
|- |  | ----------------------------------------------

EI-1