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SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



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FORM 10-Q



|þ |  | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
|- |  | ------------------------------------------------------------

| | EXCHANGE ACT OF 1934
| | --------------------



For the quarterly period ended June 30, 2003



| ̈ |  | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
|- |  | -------------------------------------------------------------

| | EXCHANGE ACT OF 1934
| | --------------------



Commission File Number 333-49389



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Cooperative Computing, Inc.

(Exact name of Registrant as specified in its charter)



|Delaware                                                       |  | 94-2160013                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



|804 Las Cimas Parkway, Suite 200 Austin, Texas |  | 78746     
|---------------------------------------------- |  | ----------
|(Address of principal executive offices)       |  | (Zip Code)



(512) 328-2300

(Registrants telephone number, including area code)



---



Indicate by check 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.  Yesþ  No ̈



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



Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date:



|Class        |  | Outstanding at August 14, 2003
|------------ |  | ------------------------------
|Common Stock |  | 1,000 shares                  



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COOPERATIVE COMPUTING, INC.



INDEX



|                           |  |    |  |                                                                                                           |  | PAGE
|-------------------------- |  | -- |  | --------------------------------------------------------------------------------------------------------- |  | ----
|                           | 
|FORWARD-LOOKING STATEMENTS |  | 3 
|                           |  |    | 
|PART I                     |  |   |  | FINANCIAL INFORMATION                                                                                     |  | 4   
|                           |  |    | 
|                           |  |    |  | Note to Financial Information                                                                             |  | 4   
|                           |  |    | 
|ITEM 1.                    |  |   |  | FINANCIAL STATEMENTS                                                                                      |  | 5   
|                           |  |    | 
|                           |  |    |  | Consolidated Balance Sheets as of September 30, 2002 and June 30, 2003                                    |  | 5   
|                           |  |    | 
|                           |  |    |  | Consolidated Statements of Operations for the three and nine months ended June 30, 2002 and June 30, 2003 |  | 6   
|                           |  |    | 
|                           |  |    |  | Consolidated Statements of Cash Flows for the nine months ended June 30, 2002 and June 30, 2003           |  | 7   
|                           |  |    | 
|                           |  |    |  | Notes to Consolidated Financial Statements                                                                |  | 8   
|                           |  |    | 
|ITEM 2.                    |  |   |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                     |  | 21  
|                           |  |    | 
|ITEM 3.                    |  |   |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                |  | 27  
|                           |  |    | 
|ITEM 4.                    |  |   |  | CONTROLS AND PROCEDURES                                                                                   |  | 27  
|                           |  |    | 
|PART II                    |  |   |  | OTHER INFORMATION                                                                                         |  |     
|                           |  |    | 
|ITEM 1.                    |  |   |  | LEGAL PROCEEDINGS                                                                                         |  | 28  
|                           |  |    | 
|ITEM 2.                    |  |   |  | CHANGES IN SECURITIES AND USE OF PROCEEDS                                                                 |  | 28  
|                           |  |    | 
|ITEM 3.                    |  |   |  | DEFAULTS UPON SENIOR SECURITIES                                                                           |  | 28  
|                           |  |    | 
|ITEM 4.                    |  |   |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                       |  | 28  
|                           |  |    | 
|ITEM 5.                    |  |   |  | OTHER INFORMATION                                                                                         |  | 28  
|                           |  |    | 
|ITEM 6.                    |  |   |  | EXHIBITS AND REPORTS ON FORM 8-K                                                                          |  | 28  
|                           | 
|SIGNATURE                  |  | 30



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FORWARD-LOOKING STATEMENTS



INFORMATION SET
FORTH IN THIS QUARTERLY REPORT ON FORM 10-Q REGARDING EXPECTED OR POSSIBLE FUTURE EVENTS, INCLUDING STATEMENTS OF THE PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE GROWTH, OPERATIONS, PRODUCTS AND SERVICES AND STATEMENTS RELATING TO FUTURE ECONOMIC
PERFORMANCE, IS FORWARD-LOOKING AND SUBJECT TO RISKS AND UNCERTAINTIES. FOR THOSE STATEMENTS, THE COMPANY CLAIMS THE PROTECTION OF THE SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS PROVIDED FOR BY SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON ESTIMATES AND ASSUMPTIONS MADE BY MANAGEMENT OF THE COMPANY, WHICH, ALTHOUGH BELIEVED TO BE REASONABLE, ARE INHERENTLY UNCERTAIN. THEREFORE, UNDUE RELIANCE SHOULD NOT BE PLACED UPON SUCH
ESTIMATES AND STATEMENTS. NO ASSURANCE CAN BE GIVEN THAT ANY OF SUCH ESTIMATES OR STATEMENTS WILL BE REALIZED, AND IT IS LIKELY THAT ACTUAL RESULTS WILL DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS. FACTORS THAT MAY
CAUSE SUCH DIFFERENCES INCLUDE THE FOLLOWING: (1) INCREASED COMPETITION; (2) RAPID TECHNOLOGICAL CHANGE; (3) INCREASED COSTS; (4) RISKS ASSOCIATED WITH THE INTRODUCTION OF NEW PRODUCTS AND PRODUCT UPGRADES AND DEPENDENCE ON PROPRIETARY TECHNOLOGY;
(5) THE LOSS OR RETIREMENT OF KEY MEMBERS OF MANAGEMENT; (6) THE INABILITY OF THE COMPANY TO SUCCESSFULLY INTEGRATE BUSINESSES ACQUIRED IN THE FUTURE AND TO REALIZE ANTICIPATED REVENUE AND COST SAVINGS OPPORTUNITIES; (7) INCREASES IN THE
COMPANYS COST OF BORROWINGS OR UNAVAILABILITY OF ADDITIONAL DEBT OR EQUITY CAPITAL; AND (8) CHANGES IN GENERAL ECONOMIC CONDITIONS IN THE MARKETS IN WHICH THE COMPANY MAY, FROM TIME TO TIME, COMPETE. MANY OF SUCH FACTORS WILL BE BEYOND THE
CONTROL OF THE COMPANY AND ITS MANAGEMENT. IN ADDITION, OTHER FACTORS THAT COULD AFFECT THE FUTURE RESULTS OF THE COMPANY AND COULD CAUSE THOSE RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE FORWARD-LOOKING STATEMENTS ARE DISCUSSED AT
GREATER LENGTH UNDER MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND APPEAR ELSEWHERE IN THIS QUARTERLY REPORT. THESE RISKS, UNCERTAINTIES AND OTHER FACTORS SHOULD NOT BE CONSTRUED AS
EXHAUSTIVE, AND THE COMPANY DOES NOT UNDERTAKE, AND SPECIFICALLY DISCLAIMS ANY OBLIGATION TO UPDATE, ANY FORWARD-LOOKING STATEMENTS TO REFLECT OCCURRENCES OR UNANTICIPATED EVENTS OR CIRCUMSTANCES AFTER THE DATE OF SUCH STATEMENTS.



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|PART 1. |  | FINANCIAL INFORMATION
|------- |  | ---------------------



The consolidated financial statements filed on Form 10-K and Form 10-Q prior to September 30, 2002 included the accounts of Cooperative Computing Holding Company, Inc. (Holding) and its wholly owned
subsidiary Cooperative Computing, Inc. (CCITRIAD or the Company). Holding has no assets or liabilities other than (1) its wholly owned subsidiary CCITRIAD and (2) its Redeemable Class A Common Stock, the net proceeds of which
were contributed in full to CCITRIAD. The difference between the financial statements of Holding and those of CCITRIAD relate solely to the Class A Common Stock. The Class A Common Stock is an obligation of Holding and not of the registrant and the
registrant does not guarantee the Class A Common Stock. Prior years financial presentations resulted in the inclusion of the accretion of Holdings Redeemable Common Stock of $4.5 million and $12.5 million for the three and nine months
ended June 30, 2002, respectively, as well as its net loss to shareholders of $2.1 million and $6.1 million for the three and nine months ended June 30, 2002, respectively. Additionally, Holdings balances for the Redeemable Class A Common
Stock of $63.6 million as of June 30, 2002, and for stockholders deficit of $81.2 million as of June 30, 2002 were depicted. The cash flow for both companies was identical in each year presented. CCITRIAD, as the registrant, is presented in
the following unaudited interim financial statements.



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|Item 1. |  | Financial Statements.
|------- |  | ---------------------



COOPERATIVE COMPUTING, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)



|                                                                                                                                             |  | September 30,2002 |          |   | June 30,2003 |  
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | -------- | - | ------------ | -
|                                                                                                                                             |  |                   |          |   | (Unaudited)  |  
|ASSETS:                                                                                                                                      |  |                   |          |   |              |  
|Current assets:                                                                                                                              |  |                   |          |   |              |  
|Cash and cash equivalents                                                                                                                    |  | $                 | 398      |   |              | $
|Trade accounts receivable, net of allowance for doubtful accounts of $6,751 and $6,651 at September 30, 2002 and June 30, 2003,
respectively |  |                   | 29,013   |   |              |  
|Inventories, net                                                                                                                             |  |                   | 2,380    |   |              |  
|Investment in leases, net                                                                                                                    |  |                   | 2,820    |   |              |  
|Deferred income taxes                                                                                                                        |  |                   | 8,303    |   |              |  
|Prepaid income taxes                                                                                                                         |  |                   |         |   |              |  
|Prepaid expenses and other current assets                                                                                                    |  |                   | 4,122    |   |              |  
|                                                                                                                                             |  |                   |          |   |              |  
|Total current assets                                                                                                                         |  |                   | 47,036   |   |              |  
|Service parts, net                                                                                                                           |  |                   | 1,780    |   |              |  
|Property and equipment, net                                                                                                                  |  |                   | 6,480    |   |              |  
|Long-term investment in leases                                                                                                               |  |                   | 4,468    |   |              |  
|Capitalized computer software costs, net                                                                                                     |  |                   | 10,257   |   |              |  
|Databases, net                                                                                                                               |  |                   | 12,094   |   |              |  
|Goodwill                                                                                                                                     |  |                   | 87,159   |   |              |  
|Other assets                                                                                                                                 |  |                   | 16,513   |   |              |  
|                                                                                                                                             |  |                   |          |   |              |  
|Total assets                                                                                                                                 |  | $                 | 185,787  |   |              | $
|                                                                                                                                             |  |                   |          |   |              |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT):                                                                                              |  |                   |          |   |              |  
|Current liabilities:                                                                                                                         |  |                   |          |   |              |  
|Accounts payable                                                                                                                             |  | $                 | 8,095    |   |              | $
|Payroll related accruals                                                                                                                     |  |                   | 13,564   |   |              |  
|Deferred revenue                                                                                                                             |  |                   | 12,529   |   |              |  
|Current portion of long-term debt                                                                                                            |  |                   | 8,828    |   |              |  
|Accrued income taxes                                                                                                                         |  |                   | 3,969    |   |              |  
|Accrued expenses and other current liabilities                                                                                               |  |                   | 8,940    |   |              |  
|                                                                                                                                             |  |                   |          |   |              |  
|Total current liabilities                                                                                                                    |  |                   | 55,925   |   |              |  
|Long-term debt, net of discount                                                                                                              |  |                   | 129,169  |   |              |  
|Deferred income taxes and other liabilities                                                                                                  |  |                   | 15,546   |   |              |  
|                                                                                                                                             |  |                   |          |   |              |  
|Total liabilities                                                                                                                            |  |                   | 200,640  |   |              |  
|Stockholders equity (deficit):                                                                                                              |  |                   |          |   |              |  
|Common Stock:                                                                                                                                |  |                   |          |   |              |  
|Par value $0.01; authorized, issued and outstanding 1,000 shares at September 30, 2002 and June 30, 2003                                     |  |                   |         |   |              |  
|Additional paid-in capital                                                                                                                   |  |                   | 113,155  |   |              |  
|Retained deficit                                                                                                                             |  |                   | (127,236 | ) |              |  
|Other accumulated comprehensive income:                                                                                                      |  |                   |          |   |              |  
|Cumulative translation adjustment                                                                                                            |  |                   | (772     | ) |              |  
|                                                                                                                                             |  |                   |          |   |              |  
|Total stockholders equity (deficit)                                                                                                         |  |                   | (14,853  | ) |              |  
|                                                                                                                                             |  |                   |          |   |              |  
|Total liabilities and stockholders deficit                                                                                                  |  | $                 | 185,787  |   |              | $
|                                                                                                                                             |  |                   |          |   |              |  



See accompanying notes



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COOPERATIVE COMPUTING, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In thousands)



|                                        |  | Three Months EndedJune 30, |        |   | Nine months Ended June 30, |  
|--------------------------------------- |  | -------------------------- | ------ | - | -------------------------- | -
|                                        |  | 2002                       |        |   | 2003                       |  
|Revenues:                               |  |                            |        |   |                            |  
|Systems                                 |  | $                          | 14,408 |   |                            | $
|Services and finance                    |  |                            | 39,984 |   |                            |  
|                                        |  |                            |        |   |                            |  
|Total revenues                          |  |                            | 54,392 |   |                            |  
|Cost of revenues:                       |  |                            |        |   |                            |  
|Systems                                 |  |                            | 9,302  |   |                            |  
|Services and finance                    |  |                            | 19,120 |   |                            |  
|                                        |  |                            |        |   |                            |  
|Total cost of revenues                  |  |                            | 28,422 |   |                            |  
|                                        |  |                            |        |   |                            |  
|Gross margin                            |  |                            | 25,970 |   |                            |  
|Operating expenses:                     |  |                            |        |   |                            |  
|Sales and marketing                     |  |                            | 8,565  |   |                            |  
|Product development                     |  |                            | 4,397  |   |                            |  
|General and administrative              |  |                            | 5,835  |   |                            |  
|                                        |  |                            |        |   |                            |  
|Total operating expenses                |  |                            | 18,797 |   |                            |  
|                                        |  |                            |        |   |                            |  
|Operating income                        |  |                            | 7,173  |   |                            |  
|Interest expense                        |  |                            | (3,310 | ) |                            |  
|Expenses related to debt refinancing    |  |                            |       |   |                            |  
|Equity loss in affiliate                |  |                            | (200   | ) |                            |  
|Foreign exchange loss                   |  |                            | (24    | ) |                            |  
|Gain on disposal of assets              |  |                            | 211    |   |                            |  
|Other income, net                       |  |                            | 275    |   |                            |  
|                                        |  |                            |        |   |                            |  
|Income (loss) before income taxes       |  |                            | 4,125  |   |                            |  
|Income tax expense (benefit)            |  |                            | 1,671  |   |                            |  
|                                        |  |                            |        |   |                            |  
|Net income (loss)                       |  | $                          | 2,454  |   |                            | $
|                                        |  |                            |        |   |                            |  
|Comprehensive income:                   |  |                            |        |   |                            |  
|Net income (loss)                       |  | $                          | 2,454  |   |                            | $
|Foreign currency translation adjustment |  |                            | 486    |   |                            |  
|                                        |  |                            |        |   |                            |  
|Comprehensive income                    |  | $                          | 2,940  |   |                            | $
|                                        |  |                            |        |   |                            |  



See accompanying notes



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COOPERATIVE COMPUTING, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)



|                                                                                  |  | Nine months Ended June 30, |        
|--------------------------------------------------------------------------------- |  | -------------------------- | -------
|                                                                                  |  | 2002                       |        
|OPERATING ACTIVITIES                                                              |  |                            |        
|Net income                                                                        |  | $                          | 6,374  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                            |        
|Depreciation                                                                      |  |                            | 5,301  
|Amortization                                                                      |  |                            | 9,343  
|Deferred income taxes                                                             |  |                            | 2,500  
|Equity loss in affiliate                                                          |  |                            | 600    
|Equity gain from partnerships                                                     |  |                            | (130   
|Write-off of prior debt issuance costs                                            |  |                            |       
|Lease loss provision                                                              |  |                            | 2,635  
|Provision for doubtful accounts                                                   |  |                            | 8,016  
|Gain on sale of assets                                                            |  |                            | (211   
|Other, net                                                                        |  |                            | 649    
|Changes in assets and liabilities:                                                |  |                            |        
|Trade accounts receivable                                                         |  |                            | (1,964 
|Inventories                                                                       |  |                            | (374   
|Investment in leases                                                              |  |                            | 1,961  
|Prepaid expenses and other assets                                                 |  |                            | 1,973  
|Accounts payable                                                                  |  |                            | (906   
|Deferred revenue                                                                  |  |                            | 372    
|Accrued expenses and other current liabilities                                    |  |                            | 2,064  
|                                                                                  |  |                            |        
|Net cash provided by operating activities                                         |  |                            | 38,203 
|INVESTING ACTIVITIES                                                              |  |                            |        
|Purchase of property and equipment                                                |  |                            | (2,997 
|Property and equipment sale proceeds                                              |  |                            | 874    
|Capitalized computer software costs and databases                                 |  |                            | (5,279 
|Purchase of service parts                                                         |  |                            | (1,151 
|Equity distributions from partnerships                                            |  |                            | 100    
|Acquisition of other assets                                                       |  |                            |       
|                                                                                  |  |                            |        
|Net cash used in investing activities                                             |  |                            | (8,453 
|FINANCING ACTIVITIES                                                              |  |                            |        
|Proceeds from debt facility                                                       |  |                            | 1,500  
|Proceeds from long term debt                                                      |  |                            |       
|Debt issuance costs                                                               |  |                            |       
|Payment on debt facility                                                          |  |                            | (33,451
|Payment on long-term debt                                                         |  |                            | (750   
|Dividend to parent                                                                |  |                            |       
|                                                                                  |  |                            |        
|Net cash used in financing activities                                             |  |                            | (32,701
|                                                                                  |  |                            |        
|Net increase (decrease) in cash and cash equivalents                              |  |                            | (2,951 
|Cash and cash equivalents, beginning of period                                    |  |                            | 3,897  
|                                                                                  |  |                            |        
|Cash and cash equivalents, end of period                                          |  | $                          | 946    
|                                                                                  |  |                            |        
|Supplemental disclosures of cash flow information                                 |  |                            |        
|Cash paid during the period for:                                                  |  |                            |        
|Interest                                                                          |  | $                          | 7,750  
|                                                                                  |  |                            |        
|Income taxes                                                                      |  | $                          | 1,796  
|                                                                                  |  |                            |        



See accompanying notes



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COOPERATIVE COMPUTING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2003

(UNAUDITED)



|1. |  | BASIS OF PRESENTATION
|-- |  | ---------------------



The accompanying unaudited consolidated financial statements of CCITRIAD have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not
include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine months ended June 30, 2003 may not be indicative of the results for the full fiscal year ending September 30, 2003.



Certain amounts in the three and nine months ended June 30, 2002 have been reclassified to conform to the presentation for the three and
nine months ended June 30, 2003.



|2. |  | LEASE RECEIVABLES
|-- |  | -----------------



Activity in the following servicing and recourse obligation liability accounts (recorded in other liabilities in the Companys balance sheet) was as follows (in thousands):



|                              |  | LEASE SERVICINGOBLIGATION |      |   | RECOURSEOBLIGATION |  
|----------------------------- |  | ------------------------- | ---- | - | ------------------ | -
|Balance at September 30, 2002 |  | $                         | 439  |   |                    | $
|Newly-created liabilities     |  |                           | 3    |   |                    |  
|Recoveries                    |  |                           |     |   |                    |  
|Charges and lease write-offs  |  |                           | (238 | ) |                    |  
|                              |  |                           |      |   |                    |  
|Balance at June 30, 2003      |  | $                         | 204  |   |                    | $
|                              |  |                           |      |   |                    |  



|3. |  | INCOME TAXES
|-- |  | ------------



The Company recorded income tax expense for the nine months ended June 30, 2003 at an effective rate of 40.4%, which is based on the Companys anticipated results for the full fiscal year. The Companys
income tax expense differs from the amount computed by applying the statutory rate to income before income taxes due to the impact of permanent differences, such as meals and entertainment expense, and amortization of certain acquired intangibles.



|4. |  | COMMON STOCK OPTION PLAN
|-- |  | ------------------------



During the quarter ended June 30, 2003, Holding, the Companys parent company, approved the grant of 142,500 options to the employees of the Company at an exercise price equal to the then estimated fair market
value of $2.50 per share under the Cooperative Computing Holding Company, Inc. 2000 Stock Option Plan. Holding also approved the grant of 4,500 options to the employees of the Company at an exercise price equal to the then estimated fair market
value of $2.50 per share under the Cooperative Computing Holding Company, Inc. 2001 Stock Option Plan.



The Company uses the intrinsic value method in accounting for employee stock options. Because the exercise price of the employee stock options is greater than or equal to the market price of the underlying stock, as
determined by Holdings Board of Directors, on the date of grant, no compensation expense is recognized.



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The Companys pro forma information follows (amounts in thousands):



|                                                       |  | Three months endedJune 30, |       |      | Nine months endedJune 30,
|------------------------------------------------------ |  | -------------------------- | ----- | ---- | -------------------------
|                                                       |  | 2002                       |       | 2003 |                          
|Net income reported                                    |  | $                          | 2,454 |      | $                        
|Pro forma stock-based compensation expense, net of tax |  |                            | 83    |      |                          
|                                                       |  |                            |       |      |                          
|Pro forma net income (loss)                            |  | $                          | 2,371 |      | $                        
|                                                       |  |                            |       |      |                          



|5. |  | DEBT
|-- |  | ----



On June 27, 2003, the Company issued $157.0 million in Senior Notes, at a discount of $2.1 million, which bear interest at 10.5% per annum, payable semiannually in June and December, and mature in June 2011. With the proceeds from the
Senior Notes, the Company repurchased $82.5 million of its Senior Subordinated Notes, repaid its outstanding term loan facility of $33.0 million, issued a $30.0 million dividend to its parent company, and purchased outstanding common stock in
Internet Autoparts, Inc. (IAP) that was held by the Companys majority shareholder for $1.8 million. The Company now owns 47.5% of the outstanding common stock in IAP. Additionally, the Company replaced its revolving credit facility
with a new revolving credit facility that provides for maximum borrowings of $15.0 million (including letters of credit up to a maximum of $5.0 million) and matures in June 2006. As of June 30, 2003, the Company had no borrowings outstanding on the
new revolving credit facility. The new revolving credit facility includes restrictions on certain activities and financial covenant tests, which are no more restrictive than the covenants in the previous revolving credit facility.



|6. |  | RECENT ACCOUNTING PRONOUNCEMENTS
|-- |  | --------------------------------



In April 2002, the FASB issued SFAS No. 145, Recission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections(SFAS 145). The new statement requires sale-leaseback accounting for those lease modifications that have economic effects similar to sale-leaseback transactions. It also provides new guidance for debt extinguishment transactions that
are part of an entitys recurring operations. SFAS 145 is effective for fiscal years beginning after May 15, 2002. As a result, the Company no longer classifies debt extinguishment transactions as extraordinary items. These costs are now
included within other expenses in the statement of operations.



In June 2002,
the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, effective for exit or disposal activities initiated after December 31, 2002. The statement requires that a liability for a cost associated with an
exit or disposal activity be recognized when the liability is incurred. The Company does not anticipate any material impact from this statement on its financial position or results of operations.



In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation
 Transition andDisclosure, effective for fiscal years ending after December 15, 2002. This statement amends SFAS 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee compensation. The statement also requires prominent disclosures about the method of accounting for stock-based employee compensation and its effect on reported results. The
Company does not anticipate any material impact from this statement on its financial position or results of operations.



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In November 2002, the FASB issued Interpretation No. 45 (FIN 45) Guarantors Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. FIN 45 requires that the Company recognize the fair value for certain guarantee and indemnification arrangements issued or modified by the
Company after December 31, 2002. When the Company determines that a loss is probable, the estimable loss must be recognized as it relates to applicable guarantees and indemnifications. Some of the software licenses granted by the Company contain
provisions that indemnify customers of the Companys software from certain damages and costs resulting from claims alleging that the Companys software infringes the intellectual property rights of a third party. The Company records
resulting costs as incurred and historically, such costs have not been material. Accordingly, the Company has not recorded a liability related to these indemnification provisions.



In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46), which
clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements. FIN 46 requires variable interest entities (VIE) to be consolidated by a company if that company is subject to a majority of the risk of loss
from the VIE activities or entitled to receive a majority of the entitys residual returns or both. A company that consolidates a VIE is called the primary beneficiary of that entity. FIN 46 also requires disclosures about VIE that a company is
not required to consolidate but in which it has a significant variable interest. The provisions of this interpretation apply immediately to VIE created after January 31, 2003 and apply to existing VIE in the first fiscal year or interim period
beginning after June 15, 2003. The Company is currently assessing the application of FIN 46 as it relates to certain variable interests acquired before January 31, 2003, and any accounting impact will be reported in the fiscal 2003 financial
statements. We are continuing to review our variable interests and the outcome of this review will determine whether there is a need to consolidate additional entities.



In November 2002, the EITF reached a consensus on Issue No. 00-21, Revenue Arrangements with Multiple Deliverables. EITF
Issue No. 00-21 provides guidance on how to account for arrangements that involve the delivery or performance of multiple products, services and/or rights to use assets. The provisions of EITF Issue No. 00-21 will apply to revenue arrangements
entered into in fiscal periods beginning after June 15, 2003. We do not expect the adoption of EITF Issue No. 00-21 to have a material effect on our consolidated results of operations, financial condition or cash flows.



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|7. |  | SEGMENT REPORTING
|-- |  | -----------------



The Companys business operations are organized into two operating units, the Automotive group and the Hardlines and Lumber group, as shown below. Additionally, a breakdown by geographic area of total revenues
and total assets is disclosed. The Americas geographic area covers the United States and Canada. The Europe geographic area covers the United Kingdom, Ireland and France.



|                                             |  | (in thousands)              |        
|-------------------------------------------- |  | --------------------------- | -------
|                                             |  | Three Months Ended June 30, |        
|                                             |  | 2002                        |        
|Systems revenues:                            |  |                             |        
|Automotive                                   |  | $                           | 4,123  
|Hardlines and Lumber                         |  |                             | 10,285 
|                                             |  |                             |        
|Total systems revenues:                      |  |                             | 14,408 
|Services and finance revenues:               |  |                             |        
|Automotive                                   |  |                             | 24,653 
|Hardlines and Lumber                         |  |                             | 15,331 
|                                             |  |                             |        
|Total services and finance revenues:         |  |                             | 39,984 
|Systems costs of revenues:                   |  |                             |        
|Automotive                                   |  |                             | 3,275  
|Hardlines and Lumber                         |  |                             | 6,027  
|                                             |  |                             |        
|Total systems costs of revenues:             |  |                             | 9,302  
|Services and finance cost of revenues:       |  |                             |        
|Automotive                                   |  |                             | 11,492 
|Hardlines and Lumber                         |  |                             | 7,628  
|                                             |  |                             |        
|Total services and finance cost of revenues: |  |                             | 19,120 
|Sales and marketing:                         |  |                             |        
|Automotive                                   |  |                             | 4,025  
|Hardlines and Lumber                         |  |                             | 4,540  
|                                             |  |                             |        
|Total sales and marketing:                   |  |                             | 8,565  
|Product development:                         |  |                             |        
|Automotive                                   |  |                             | 3,501  
|Hardlines and Lumber                         |  |                             | 896    
|                                             |  |                             |        
|Total product development:                   |  |                             | 4,397  
|General and administrative                   |  |                             | 5,835  
|Interest expense                             |  |                             | (3,310 
|Expenses related to debt refinancing         |  |                             |       
|Other income (expense), net                  |  |                             | 262    
|                                             |  |                             |        
|Income (loss) before income taxes            |  | $                           | 4,125  
|                                             |  |                             |        
|Revenues:                                    |  |                             |        
|Americas                                     |  | $                           | 52,957 
|Europe                                       |  |                             | 1,435  
|                                             |  |                             |        
|Total revenues                               |  | $                           | 54,392 
|                                             |  |                             |        
|Assets:                                      |  |                             |        
|Americas                                     |  | $                           | 180,481
|Europe                                       |  |                             | 4,839  
|                                             |  |                             |        
|                                             |  | $                           | 185,320
|                                             |  |                             |        



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|8. |  | GUARANTOR CONSOLIDATION
|-- |  | -----------------------



The Senior Notes are guaranteed by the Companys existing, wholly-owned domestic subsidiaries Triad Systems Financial Corporation, Triad Data Corporation, CCI/TRIAD Gem, Inc., Triad Systems Corporation and
CCI/ARD, Inc. The Companys other subsidiaries, (the Non-Guarantors), are not guaranteeing the Senior Notes.



The following tables set forth consolidating financial information of CCITRIAD, the Guarantors and Non-Guarantors for the balance sheets as of September 30, 2002 and June
30, 2003, the statements of operations for the quarters and nine months ended June 30, 2002 and 2003, and the statements of cash flows for the nine months ended June 30, 2002 and 2003.



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CONSOLIDATING BALANCE SHEET AS OF SEPTEMBER 30, 2002

(in thousands)



|                                                                  |  | CCITRIAD |          |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | CooperativeComputing, Inc. |        
|----------------------------------------------------------------- |  | -------- | -------- | - | --------------------- | - | ------------------------- |  | - | ------------ | - |  | -------------------------- | -------
|ASSETS:                                                           |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Current assets                                                    |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Cash and cash equivalents                                         |  | $        | (157     | ) |                       | $ |                          |  | $ | 555          |   |  | $                          |       
|Trade accounts receivable, net of allowance for doubtful accounts |  |          | 26,555   |   |                       |   |                          |  |   | 2,458        |   |  |                            |       
|Inter company receivable                                          |  |          |         |   |                       |   | 49,245                    |  |   | 1,110        |   |  |                            | (50,355
|Inventories, net                                                  |  |          | 2,346    |   |                       |   |                          |  |   | 34           |   |  |                            |       
|Investment in leases, net                                         |  |          |         |   |                       |   | 2,686                     |  |   | 134          |   |  |                            |       
|Deferred income taxes                                             |  |          | 8,303    |   |                       |   |                          |  |   |             |   |  |                            |       
|Prepaid expenses and other current assets                         |  |          | 2,273    |   |                       |   | 1,637                     |  |   | 212          |   |  |                            |       
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Total current assets                                              |  |          | 39,320   |   |                       |   | 53,568                    |  |   | 4,503        |   |  |                            | (50,355
|Service parts, net                                                |  |          | 1,646    |   |                       |   |                          |  |   | 134          |   |  |                            |       
|Property and equipment, net                                       |  |          | 6,297    |   |                       |   |                          |  |   | 183          |   |  |                            |       
|Long-term investment in leases                                    |  |          |         |   |                       |   | 3,406                     |  |   | 1,062        |   |  |                            |       
|Capitalized computer software costs, net                          |  |          | 10,257   |   |                       |   |                          |  |   |             |   |  |                            |       
|Databases, net                                                    |  |          | 12,094   |   |                       |   |                          |  |   |             |   |  |                            |       
|Goodwill                                                          |  |          | 87,159   |   |                       |   |                          |  |   |             |   |  |                            |       
|Investment in subs                                                |  |          | 45,362   |   |                       |   |                          |  |   | 671          |   |  |                            | (46,033
|Other assets                                                      |  |          | 15,500   |   |                       |   | 969                       |  |   | 44           |   |  |                            |       
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Total assets                                                      |  | $        | 217,635  |   |                       | $ | 57,943                    |  | $ | 6,597        |   |  | $                          | (96,388
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT):                   |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Current liabilities:                                              |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Accounts payable                                                  |  | $        | 7,799    |   |                       | $ | 7                         |  | $ | 289          |   |  | $                          |       
|Inter company payables                                            |  |          | 82,103   |   |                       |   |                          |  |   | 2,055        |   |  |                            | (84,158
|Payroll related accruals                                          |  |          | 13,327   |   |                       |   |                          |  |   | 237          |   |  |                            |       
|Deferred revenue                                                  |  |          | 12,100   |   |                       |   | 296                       |  |   | 133          |   |  |                            |       
|Current portion of long-term debt                                 |  |          | 8,526    |   |                       |   | 302                       |  |   |             |   |  |                            |       
|Accrued income taxes                                              |  |          | 3,551    |   |                       |   |                          |  |   | 418          |   |  |                            |       
|Accrued expenses and other current liabilities                    |  |          | 7,714    |   |                       |   | 943                       |  |   | 283          |   |  |                            |       
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Total current liabilities                                         |  |          | 135,120  |   |                       |   | 1,548                     |  |   | 3,415        |   |  |                            | (84,158
|Long-term debt, net of discount                                   |  |          | 128,264  |   |                       |   | 905                       |  |   |             |   |  |                            |       
|Deferred income taxes and other liabilities                       |  |          | 11,963   |   |                       |   | 4,279                     |  |   | (696         | ) |  |                            |       
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Total liabilities                                                 |  |          | 275,347  |   |                       |   | 6,732                     |  |   | 2,719        |   |  |                            | (84,158
|Stockholders equity (deficit):                                   |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Common stock                                                      |  |          |         |   |                       |   | 104                       |  |   | 5,485        |   |  |                            | (5,589 
|Additional paid-in capital                                        |  |          | 113,155  |   |                       |   | 6,300                     |  |   | 3            |   |  |                            | (6,303 
|Retained earnings (deficit)                                       |  |          | (169,829 | ) |                       |   | 44,807                    |  |   | (1,876       | ) |  |                            | (338   
|Other accumulated comprehensive income:                           |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Cumulative translation adjustment                                 |  |          | (1,038   | ) |                       |   |                          |  |   | 266          |   |  |                            |       
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Total stockholders equity (deficit)                              |  |          | (57,712  | ) |                       |   | 51,211                    |  |   | 3,878        |   |  |                            | (12,230
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Total liabilities and stockholders equity (deficit)              |  | $        | 217,635  |   |                       | $ | 57,943                    |  | $ | 6,597        |   |  | $                          | (96,388
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        



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CONSOLIDATING BALANCE SHEET AS OF JUNE 30, 2003

(in thousands)



|                                                                  |  | CCITRIAD |          |   | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | CooperativeComputing, Inc. |        
|----------------------------------------------------------------- |  | -------- | -------- | - | --------------------- | - | ------------------------- |  | - | ------------ | - |  | -------------------------- | -------
|ASSETS:                                                           |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Current assets                                                    |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Cash and cash equivalents                                         |  | $        | 4,154    |   |                       | $ |                          |  | $ | 2,351        |   |  | $                          |       
|Trade accounts receivable, net of allowance for doubtful accounts |  |          | 29,221   |   |                       |   |                          |  |   | 3,325        |   |  |                            |       
|Inter company receivable                                          |  |          |         |   |                       |   | 46,648                    |  |   |             |   |  |                            | (46,648
|Inventories, net                                                  |  |          | 2,526    |   |                       |   |                          |  |   | 48           |   |  |                            |       
|Investment in leases, net                                         |  |          |         |   |                       |   | 2,061                     |  |   | 160          |   |  |                            |       
|Deferred income taxes                                             |  |          | 9,285    |   |                       |   |                          |  |   |             |   |  |                            |       
|Prepaid income taxes                                              |  |          | 2,981    |   |                       |   |                           |  |   | (79          | ) |  |                            |        
|Prepaid expenses and other current assets                         |  |          | 2,159    |   |                       |   | 1,194                     |  |   | 155          |   |  |                            |       
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Total current assets                                              |  |          | 50,326   |   |                       |   | 49,903                    |  |   | 5,960        |   |  |                            | (46,648
|Service parts, net                                                |  |          | 1,259    |   |                       |   |                          |  |   | 73           |   |  |                            |       
|Property and equipment, net                                       |  |          | 6,132    |   |                       |   |                          |  |   | 161          |   |  |                            |       
|Long-term investment in leases                                    |  |          |         |   |                       |   | 3,168                     |  |   | 687          |   |  |                            |       
|Capitalized computer software costs, net                          |  |          | 8,977    |   |                       |   |                          |  |   |             |   |  |                            |       
|Databases, net                                                    |  |          | 9,414    |   |                       |   |                          |  |   |             |   |  |                            |       
|Goodwill                                                          |  |          | 87,159   |   |                       |   |                          |  |   |             |   |  |                            |       
|Investment in subs                                                |  |          | 45,362   |   |                       |   |                          |  |   | 694          |   |  |                            | (46,056
|Other assets                                                      |  |          | 18,461   |   |                       |   | 530                       |  |   | 1,850        |   |  |                            | (1,820 
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Total assets                                                      |  | $        | 227,090  |   |                       | $ | 53,601                    |  | $ | 9,425        |   |  | $                          | (94,524
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|LIABILITIES AND STOCKHOLDERS EQUITY(DEFICIT):                    |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Current liabilities:                                              |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Accounts payable                                                  |  | $        | 7,326    |   |                       | $ | 13                        |  | $ | 117          |   |  | $                          |       
|Inter company payables                                            |  |          | 77,034   |   |                       |   |                          |  |   | 3,434        |   |  |                            | (80,468
|Payroll related accruals                                          |  |          | 13,050   |   |                       |   |                          |  |   | 178          |   |  |                            |       
|Deferred revenue                                                  |  |          | 14,257   |   |                       |   | 175                       |  |   | 457          |   |  |                            |       
|Current portion of long-term debt                                 |  |          |         |   |                       |   | 315                       |  |   |             |   |  |                            |       
|Accrued income taxes                                              |  |          |         |   |                       |   |                          |  |   |             |   |  |                            |       
|Accrued expenses and other current liabilities                    |  |          | 6,634    |   |                       |   | 40                        |  |   | 215          |   |  |                            |       
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Total current liabilities                                         |  |          | 118,301  |   |                       |   | 543                       |  |   | 4,401        |   |  |                            | (80,468
|Long-term debt, net of discount                                   |  |          | 172,424  |   |                       |   | 593                       |  |   |             |   |  |                            |       
|Deferred income taxes and other liabilities                       |  |          | 12,563   |   |                       |   | 4,403                     |  |   | (842         | ) |  |                            |       
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Total liabilities                                                 |  |          | 303,288  |   |                       |   | 5,539                     |  |   | 3,559        |   |  |                            | (80,468
|Stockholders equity (deficit):                                   |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Common stock                                                      |  |          |         |   |                       |   | 104                       |  |   | 7,305        |   |  |                            | (7,409 
|Additional paid-in capital                                        |  |          | 83,155   |   |                       |   | 6,300                     |  |   | 3            |   |  |                            | (6,303 
|Retained earnings (deficit)                                       |  |          | (159,208 | ) |                       |   | 41,658                    |  |   | (1,569       | ) |  |                            | (344   
|Other accumulated comprehensive income:                           |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Cumulative translation adjustment                                 |  |          | (145     | ) |                       |   |                          |  |   | 127          |   |  |                            |       
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Total stockholders equity (deficit)                              |  |          | (76,198  | ) |                       |   | 48,062                    |  |   | 5,866        |   |  |                            | (14,056
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        
|Total liabilities and stockholders equity (deficit)              |  | $        | 227,090  |   |                       | $ | 53,601                    |  | $ | 9,425        |   |  | $                          | (94,524
|                                                                  |  |          |          |   |                       |   |                           |  |   |              |   |  |                            |        



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CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2002

(in thousands)



|                                     |  | CCITRIAD |        |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | CooperativeComputing, Inc. |       
|------------------------------------ |  | -------- | ------ | - | --------------------- | - | ------ | ------------------------- |  | - | ------------ | - |  | -------------------------- | ------
|Revenues:                            |  |          |        |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Systems                              |  | $        | 14,005 |   |                       | $ |       |                           |  | $ | 405          |   |  | $                          | (2    
|Services and finance                 |  |          | 37,085 |   |                       |   | 557    |                           |  |   | 2,342        |   |  |                            |      
|                                     |  |          |        |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Total revenues                       |  |          | 51,090 |   |                       |   | 557    |                           |  |   | 2,747        |   |  |                            | (2    
|Cost of revenues:                    |  |          |        |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Systems                              |  |          | 9,008  |   |                       |   |       |                           |  |   | 294          |   |  |                            |      
|Services and finance                 |  |          | 18,183 |   |                       |   |       |                           |  |   | 1,432        |   |  |                            | (495  
|                                     |  |          |        |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Total cost of revenues               |  |          | 27,191 |   |                       |   |       |                           |  |   | 1,726        |   |  |                            | (495  
|                                     |  |          |        |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Gross margin                         |  |          | 23,899 |   |                       |   | 557    |                           |  |   | 1,021        |   |  |                            | 493   
|Operating expenses:                  |  |          |        |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Sales and marketing                  |  |          | 7,251  |   |                       |   | 925    |                           |  |   | 389          |   |  |                            |      
|Product development                  |  |          | 4,331  |   |                       |   |       |                           |  |   | 66           |   |  |                            |      
|General and administrative           |  |          | 5,790  |   |                       |   | 2,694  |                           |  |   | 139          |   |  |                            | (2,788
|                                     |  |          |        |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Total operating expenses             |  |          | 17,372 |   |                       |   | 3,619  |                           |  |   | 594          |   |  |                            | (2,788
|                                     |  |          |        |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Operating income                     |  |          | 6,527  |   |                       |   | (3,062 | )                         |  |   | 427          |   |  |                            | 3,281 
|Interest expense                     |  |          | (3,275 | ) |                       |   | (34    | )                         |  |   | (1           | ) |  |                            |      
|Expenses related to debt refinancing |  |          |       |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Equity loss in affiliate             |  |          | (175   | ) |                       |   |       |                           |  |   | (25          | ) |  |                            |      
|Foreign exchange gain (loss)         |  |          | (44    | ) |                       |   |       |                           |  |   | 20           |   |  |                            |      
|Gain on disposal of assets           |  |          | 211    |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Other income, net                    |  |          | 272    |   |                       |   |       |                           |  |   | 3            |   |  |                            |      
|                                     |  |          |        |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Income (loss) before income taxes    |  |          | 3,516  |   |                       |   | (3,096 | )                         |  |   | 424          |   |  |                            | 3,281 
|Income tax expense                   |  |          | 1,535  |   |                       |   |       |                           |  |   | 136          |   |  |                            |      
|                                     |  |          |        |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Net income (loss)                    |  | $        | 1,981  |   |                       | $ | (3,096 | )                         |  | $ | 288          |   |  | $                          | 3,281 
|                                     |  |          |        |   |                       |   |        |                           |  |   |              |   |  |                            |       



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CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2003

(in thousands)



|                                     |  | CCITRIAD |        |   | GuarantorSubsidiaries |   |       | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | CooperativeComputing, Inc. |       
|------------------------------------ |  | -------- | ------ | - | --------------------- | - | ----- | ------------------------- |  | - | ------------ | - |  | -------------------------- | ------
|Revenues:                            |  |          |        |   |                       |   |       |                           |  |   |              |   |  |                            |       
|Systems                              |  | $        | 15,941 |   |                       | $ |      |                           |  | $ | 551          |   |  | $                          |      
|Services and finance                 |  |          | 35,561 |   |                       |   | 347   |                           |  |   | 2,423        |   |  |                            |      
|                                     |  |          |        |   |                       |   |       |                           |  |   |              |   |  |                            |       
|Total revenues                       |  |          | 51,502 |   |                       |   | 347   |                           |  |   | 2,974        |   |  |                            |      
|Cost of revenues:                    |  |          |        |   |                       |   |       |                           |  |   |              |   |  |                            |       
|Systems                              |  |          | 9,390  |   |                       |   |      |                           |  |   | 297          |   |  |                            |      
|Services and finance                 |  |          | 17,637 |   |                       |   |      |                           |  |   | 1,292        |   |  |                            | (464  
|                                     |  |          |        |   |                       |   |       |                           |  |   |              |   |  |                            |       
|Total cost of revenues               |  |          | 27,027 |   |                       |   |      |                           |  |   | 1,589        |   |  |                            | (464  
|                                     |  |          |        |   |                       |   |       |                           |  |   |              |   |  |                            |       
|Gross margin                         |  |          | 24,475 |   |                       |   | 347   |                           |  |   | 1,385        |   |  |                            | 464   
|Operating expenses:                  |  |          |        |   |                       |   |       |                           |  |   |              |   |  |                            |       
|Sales and marketing                  |  |          | 8,299  |   |                       |   | (901  | )                         |  |   | 425          |   |  |                            |      
|Product development                  |  |          | 4,234  |   |                       |   |      |                           |  |   | 93           |   |  |                            |      
|General and administrative           |  |          | 7,147  |   |                       |   | 1,710 |                           |  |   | 349          |   |  |                            | (1,979
|                                     |  |          |        |   |                       |   |       |                           |  |   |              |   |  |                            |       
|Total operating expenses             |  |          | 19,680 |   |                       |   | 809   |                           |  |   | 867          |   |  |                            | (1,979
|                                     |  |          |        |   |                       |   |       |                           |  |   |              |   |  |                            |       
|Operating income                     |  |          | 4,795  |   |                       |   | (462  | )                         |  |   | 518          |   |  |                            | 2,443 
|Interest expense                     |  |          | (3,231 | ) |                       |   | (24   | )                         |  |   | 7            |   |  |                            |      
|Expenses related to debt refinancing |  |          | (6,045 | ) |                       |   |      |                           |  |   |             |   |  |                            |      
|Equity loss in affiliate             |  |          | (267   | ) |                       |   |      |                           |  |   |             |   |  |                            |      
|Foreign exchange gain (loss)         |  |          | (6     | ) |                       |   |      |                           |  |   | (20          | ) |  |                            |      
|Gain on disposal of assets           |  |          |       |   |                       |   |      |                           |  |   |             |   |  |                            |      
|Other income, net                    |  |          | 190    |   |                       |   |      |                           |  |   |             |   |  |                            |      
|                                     |  |          |        |   |                       |   |       |                           |  |   |              |   |  |                            |       
|Income (loss) before income taxes    |  |          | (4,564 | ) |                       |   | (486  | )                         |  |   | 505          |   |  |                            | 2,443 
|Income tax expense (benefit)         |  |          | (898   | ) |                       |   |      |                           |  |   | 221          |   |  |                            |      
|                                     |  |          |        |   |                       |   |       |                           |  |   |              |   |  |                            |       
|Net income (loss)                    |  | $        | (3,666 | ) |                       | $ | (486  | )                         |  | $ | 284          |   |  | $                          | 2,443 
|                                     |  |          |        |   |                       |   |       |                           |  |   |              |   |  |                            |       



16



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CONSOLIDATING STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30, 2002

(in thousands)



|                                     |  | CCITRIAD |         |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | CooperativeComputing, Inc. |       
|------------------------------------ |  | -------- | ------- | - | --------------------- | - | ------ | ------------------------- |  | - | ------------ | - |  | -------------------------- | ------
|Revenues:                            |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Systems                              |  | $        | 44,683  |   |                       | $ |       |                           |  | $ | 1,241        |   |  | $                          | (2    
|Services and finance                 |  |          | 111,362 |   |                       |   | 1,852  |                           |  |   | 6,834        |   |  |                            |      
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Total revenues                       |  |          | 156,045 |   |                       |   | 1,852  |                           |  |   | 8,075        |   |  |                            | (2    
|Cost of revenues:                    |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Systems                              |  |          | 28,635  |   |                       |   |       |                           |  |   | 851          |   |  |                            |      
|Services and finance                 |  |          | 53,325  |   |                       |   |       |                           |  |   | 4,288        |   |  |                            | (1,373
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Total cost of revenues               |  |          | 81,960  |   |                       |   |       |                           |  |   | 5,139        |   |  |                            | (1,373
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Gross margin                         |  |          | 74,085  |   |                       |   | 1,852  |                           |  |   | 2,936        |   |  |                            | 1,371 
|Operating expenses:                  |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Sales and marketing                  |  |          | 22,548  |   |                       |   | 2,775  |                           |  |   | 768          |   |  |                            |      
|Product development                  |  |          | 12,437  |   |                       |   |       |                           |  |   | 211          |   |  |                            |      
|General and administrative           |  |          | 19,305  |   |                       |   | 8,068  |                           |  |   | 1,063        |   |  |                            | (8,363
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Total operating expenses             |  |          | 54,290  |   |                       |   | 10,843 |                           |  |   | 2,042        |   |  |                            | (8,363
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Operating income                     |  |          | 19,795  |   |                       |   | (8,991 | )                         |  |   | 894          |   |  |                            | 9,734 
|Interest expense                     |  |          | (10,739 | ) |                       |   | (110   | )                         |  |   | (25          | ) |  |                            |      
|Expenses related to debt refinancing |  |          |        |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Equity loss in affiliate             |  |          | (600    | ) |                       |   |       |                           |  |   |             |   |  |                            |      
|Foreign exchange gain (loss)         |  |          | (107    | ) |                       |   |       |                           |  |   | (15          | ) |  |                            |      
|Gain on disposal of assets           |  |          | 211     |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Other income, net                    |  |          | 619     |   |                       |   |       |                           |  |   | 47           |   |  |                            |      
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Income (loss) before income taxes    |  |          | 9,179   |   |                       |   | (9,101 | )                         |  |   | 901          |   |  |                            | 9,734 
|Income tax expense                   |  |          | 3,994   |   |                       |   |       |                           |  |   | 345          |   |  |                            |      
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Net income (loss)                    |  | $        | 5,185   |   |                       | $ | (9,101 | )                         |  | $ | 556          |   |  | $                          | 9,734 
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       



17



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CONSOLIDATING STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30, 2003

(in thousands)



|                                     |  | CCITRIAD |         |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | CooperativeComputing, Inc. |       
|------------------------------------ |  | -------- | ------- | - | --------------------- | - | ------ | ------------------------- |  | - | ------------ | - |  | -------------------------- | ------
|Revenues:                            |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Systems                              |  | $        | 50,286  |   |                       | $ |       |                           |  | $ | 1,310        |   |  | $                          |      
|Services and finance                 |  |          | 108,445 |   |                       |   | 1,223  |                           |  |   | 7,271        |   |  |                            |      
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Total revenues                       |  |          | 158,731 |   |                       |   | 1,223  |                           |  |   | 8,581        |   |  |                            |      
|Cost of revenues:                    |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Systems                              |  |          | 28,790  |   |                       |   |       |                           |  |   | 781          |   |  |                            |      
|Services and finance                 |  |          | 50,924  |   |                       |   |       |                           |  |   | 4,383        |   |  |                            | (1,386
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Total cost of revenues               |  |          | 79,714  |   |                       |   |       |                           |  |   | 5,164        |   |  |                            | (1,386
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Gross margin                         |  |          | 79,017  |   |                       |   | 1,223  |                           |  |   | 3,417        |   |  |                            | 1,386 
|Operating expenses:                  |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Sales and marketing                  |  |          | 23,114  |   |                       |   | (829   | )                         |  |   | 1,075        |   |  |                            |      
|Product development                  |  |          | 11,876  |   |                       |   |       |                           |  |   | 267          |   |  |                            |      
|General and administrative           |  |          | 9,651   |   |                       |   | 5,122  |                           |  |   | 1,078        |   |  |                            | 4,719 
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Total operating expenses             |  |          | 44,641  |   |                       |   | 4,293  |                           |  |   | 2,420        |   |  |                            | 4,719 
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Operating income                     |  |          | 34,376  |   |                       |   | (3,070 | )                         |  |   | 997          |   |  |                            | (3,333
|Interest expense                     |  |          | (9,701  | ) |                       |   | (79    | )                         |  |   | 2            |   |  |                            |      
|Expenses related to debt refinancing |  |          | (6,313  | ) |                       |   |       |                           |  |   |             |   |  |                            |      
|Equity loss in affiliate             |  |          | (208    | ) |                       |   |       |                           |  |   |             |   |  |                            |      
|Foreign exchange gain (loss)         |  |          | 13      |   |                       |   |       |                           |  |   | (26          | ) |  |                            |      
|Gain on disposal of assets           |  |          |        |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Other income, net                    |  |          | 372     |   |                       |   |       |                           |  |   | 21           |   |  |                            |      
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Income (loss) before income taxes    |  |          | 18,539  |   |                       |   | (3,149 | )                         |  |   | 994          |   |  |                            | (3,333
|Income tax expense                   |  |          | 4,600   |   |                       |   |       |                           |  |   | 678          |   |  |                            |      
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Net income (loss)                    |  | $        | 13,939  |   |                       | $ | (3,149 | )                         |  | $ | 316          |   |  | $                          | (3,333
|                                     |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       



18



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CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED JUNE 30, 2002

(in thousands)



|                                                                                  |  | CCITRIAD |         |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | CooperativeComputing, Inc. |       
|--------------------------------------------------------------------------------- |  | -------- | ------- | - | --------------------- | - | ------ | ------------------------- |  | - | ------------ | - |  | -------------------------- | ------
|OPERATING ACTIVITIES                                                              |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Net income                                                                        |  | $        | 5,185   |   |                       | $ | (9,101 | )                         |  | $ | 556          |   |  | $                          | 9,734 
|Adjustments to reconcile net income to net cash provided by operating activities: |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Depreciation                                                                      |  |          | 5,221   |   |                       |   |       |                           |  |   | 80           |   |  |                            |      
|Amortization                                                                      |  |          | 9,343   |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Deferred income taxes                                                             |  |          | 2,529   |   |                       |   |       |                           |  |   | (29          | ) |  |                            |      
|Equity loss in affiliate                                                          |  |          | 600     |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Equity gain from partnerships                                                     |  |          | (209    | ) |                       |   |       |                           |  |   | 79           |   |  |                            |      
|Write off of prior debt issuance costs                                            |  |          |        |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Lease loss provision                                                              |  |          |        |   |                       |   | 2,635  |                           |  |   |             |   |  |                            |      
|Provision for doubtful accounts                                                   |  |          | 7,890   |   |                       |   |       |                           |  |   | 126          |   |  |                            |      
|Gain on sale of assets                                                            |  |          | (211    | ) |                       |   |       |                           |  |   |             |   |  |                            |      
|Other, net                                                                        |  |          | 690     |   |                       |   |       |                           |  |   | (41          | ) |  |                            |      
|Changes in assets and liabilities:                                                |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Trade accounts receivable                                                         |  |          | (1,973  | ) |                       |   |       |                           |  |   | 9            |   |  |                            |      
|Inventories                                                                       |  |          | (566    | ) |                       |   |       |                           |  |   | 192          |   |  |                            |      
|Investment in leases                                                              |  |          |        |   |                       |   | 1,383  |                           |  |   | 578          |   |  |                            |      
|Prepaid expenses and other assets                                                 |  |          | 32      |   |                       |   | 1,926  |                           |  |   | 15           |   |  |                            |      
|Inter company transactions                                                        |  |          | 5,728   |   |                       |   | 5,221  |                           |  |   | (1,215       | ) |  |                            | (9,734
|Accounts payable                                                                  |  |          | (607    | ) |                       |   | (126   | )                         |  |   | (173         | ) |  |                            |      
|Deferred revenue                                                                  |  |          | 597     |   |                       |   | (56    | )                         |  |   | (169         | ) |  |                            |      
|Accrued expenses and other current liabilities                                    |  |          | 3,709   |   |                       |   | (1,611 | )                         |  |   | (34          | ) |  |                            |      
|                                                                                  |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Net cash provided by operating activities                                         |  |          | 37,958  |   |                       |   | 271    |                           |  |   | (26          | ) |  |                            |      
|INVESTING ACTIVITIES                                                              |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Purchase of property and equipment                                                |  |          | (2,988  | ) |                       |   |       |                           |  |   | (9           | ) |  |                            |      
|Property and equipment sale proceeds                                              |  |          | 874     |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Capitalized computer software costs and databases                                 |  |          | (5,279  | ) |                       |   |       |                           |  |   |             |   |  |                            |      
|Purchase of service parts                                                         |  |          | (975    | ) |                       |   |       |                           |  |   | (176         | ) |  |                            |      
|Equity distributions from partnerships                                            |  |          | 100     |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Acquisition of other assets                                                       |  |          |        |   |                       |   |       |                           |  |   |             |   |  |                            |      
|                                                                                  |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Net cash used in investing activities                                             |  |          | (8,268  | ) |                       |   |       |                           |  |   | (185         | ) |  |                            |      
|FINANCING ACTIVITIES                                                              |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Proceeds from debt facility                                                       |  |          | 1,500   |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Proceeds from long term debt                                                      |  |          |        |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Debt issuance costs                                                               |  |          |        |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Payment on debt facility                                                          |  |          | (33,451 | ) |                       |   |       |                           |  |   |             |   |  |                            |      
|Payment on long-term debt                                                         |  |          | (479    | ) |                       |   | (271   | )                         |  |   |             |   |  |                            |      
|Dividend to parent                                                                |  |          |        |   |                       |   |       |                           |  |   |             |   |  |                            |      
|                                                                                  |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Net cash used in financing activities                                             |  |          | (32,430 | ) |                       |   | (271   | )                         |  |   |             |   |  |                            |      
|                                                                                  |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Net increase (decrease) in cash and cash equivalents                              |  |          | (2,740  | ) |                       |   |       |                           |  |   | (211         | ) |  |                            |      
|Cash and cash equivalents, beginning of period                                    |  |          | 2,888   |   |                       |   |       |                           |  |   | 1,009        |   |  |                            |      
|                                                                                  |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Cash and cash equivalents, end of period                                          |  | $        | 148     |   |                       | $ |       |                           |  | $ | 798          |   |  | $                          |      
|                                                                                  |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       



19



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CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED JUNE 30, 2003

(in thousands)



|                                                                                  |  | CCITRIAD |         |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | CooperativeComputing, Inc. |       
|--------------------------------------------------------------------------------- |  | -------- | ------- | - | --------------------- | - | ------ | ------------------------- |  | - | ------------ | - |  | -------------------------- | ------
|OPERATING ACTIVITIES                                                              |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Net income                                                                        |  | $        | 13,939  |   |                       | $ | (3,149 | )                         |  | $ | 316          |   |  | $                          | (3,333
|Adjustments to reconcile net income to net cash provided by operating activities: |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Depreciation                                                                      |  |          | 4,502   |   |                       |   |       |                           |  |   | 101          |   |  |                            |      
|Amortization                                                                      |  |          | 11,131  |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Deferred income taxes                                                             |  |          | (518    | ) |                       |   |       |                           |  |   | (130         | ) |  |                            |      
|Equity loss in affiliate                                                          |  |          | 208     |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Equity gain from partnerships                                                     |  |          | (192    | ) |                       |   |       |                           |  |   | (14          | ) |  |                            |      
|Write off of prior debt issuance costs                                            |  |          | 4,063   |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Lease loss provision                                                              |  |          |        |   |                       |   | (900   | )                         |  |   |             |   |  |                            |      
|Provision for doubtful accounts                                                   |  |          | 4,388   |   |                       |   |       |                           |  |   | 122          |   |  |                            |      
|Gain on sale of assets                                                            |  |          |        |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Other, net                                                                        |  |          | 916     |   |                       |   |       |                           |  |   | (166         | ) |  |                            |      
|Changes in assets and liabilities:                                                |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Trade accounts receivable                                                         |  |          | (7,054  | ) |                       |   |       |                           |  |   | (989         | ) |  |                            |      
|Inventories                                                                       |  |          | (180    | ) |                       |   |       |                           |  |   | (14          | ) |  |                            |      
|Investment in leases                                                              |  |          |        |   |                       |   | 1,763  |                           |  |   | 349          |   |  |                            |      
|Prepaid expenses and other assets                                                 |  |          | (2,081  | ) |                       |   | 882    |                           |  |   | 164          |   |  |                            |      
|Inter company transactions                                                        |  |          | (8,396  | ) |                       |   | 2,597  |                           |  |   | 2,466        |   |  |                            | 3,333 
|Accounts payable                                                                  |  |          | (473    | ) |                       |   | 6      |                           |  |   | (172         | ) |  |                            |      
|Deferred revenue                                                                  |  |          | 2,157   |   |                       |   | (121   | )                         |  |   | 324          |   |  |                            |      
|Accrued expenses and other current liabilities                                    |  |          | (4,772  | ) |                       |   | (779   | )                         |  |   | (561         | ) |  |                            |      
|                                                                                  |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Net cash provided by operating activities                                         |  |          | 17,638  |   |                       |   | 299    |                           |  |   | 1,796        |   |  |                            |      
|                                                                                  |  |          |         |   |                      
|INVESTING ACTIVITIES                                                              |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Purchase of property and equipment                                                |  |          | (2,636  | ) |                       |   |       |                           |  |   |             |   |  |                            |      
|Property and equipment sale proceeds                                              |  |          |        |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Capitalized computer software costs and databases                                 |  |          | (5,616  | ) |                       |   |       |                           |  |   |             |   |  |                            |      
|Purchase of service parts                                                         |  |          | (1,079  | ) |                       |   |       |                           |  |   |             |   |  |                            |      
|Equity distributions from partnerships                                            |  |          | 82      |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Acquisition of other assets                                                       |  |          | (2,203  | ) |                       |   |       |                           |  |   |             |   |  |                            |      
|                                                                                  |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Net cash used in investing activities                                             |  |          | (11,452 | ) |                       |   |       |                           |  |   |             |   |  |                            |      
|                                                                                  |  |          |         |   |                      
|FINANCING ACTIVITIES                                                              |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Proceeds from debt facility                                                       |  |          | 1,210   |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Proceeds from long term debt                                                      |  |          | 154,946 |   |                       |   |       |                           |  |   |             |   |  |                            |      
|Debt issuance costs                                                               |  |          | (7,509  | ) |                       |   |       |                           |  |   |             |   |  |                            |      
|Payment on debt facility                                                          |  |          | (38,297 | ) |                       |   |       |                           |  |   |             |   |  |                            |      
|Payment on long-term debt                                                         |  |          | (82,225 | ) |                       |   | (299   | )                         |  |   |             |   |  |                            |      
|Dividend to parent                                                                |  |          | (30,000 | ) |                       |   |       |                           |  |   |             |   |  |                            |      
|                                                                                  |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Net cash used in financing activities                                             |  |          | (1,875  | ) |                       |   | (299   | )                         |  |   |             |   |  |                            |      
|                                                                                  |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|                                                                                  |  |          |         |   |                      
|Net increase (decrease) in cash and cash equivalents                              |  |          | 4,311   |   |                       |   |       |                           |  |   | 1,796        |   |  |                            |      
|Cash and cash equivalents, beginning of period                                    |  |          | (157    | ) |                       |   |       |                           |  |   | 555          |   |  |                            |      
|                                                                                  |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       
|Cash and cash equivalents, end of period                                          |  | $        | 4,154   |   |                       | $ |       |                           |  | $ | 2,351        |   |  | $                          |      
|                                                                                  |  |          |         |   |                       |   |        |                           |  |   |              |   |  |                            |       



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



The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the unaudited historical consolidated
financial statements and notes thereto, which are included elsewhere herein.



General



We are a leading provider of
enterprise resource planning (ERP) systems and information services for the automotive aftermarket and hardlines and lumber industries. Our systems and services are designed to improve the operating efficiency and profitability of
manufacturers, distributors, retailers, and service providers through enhanced inventory management and database information. Our systems and services enable users to conduct computerized identification, location and selection of parts, to manage
inventory and to obtain sales history and point-of-sale information. Our systems offerings are enhanced by extensive information services featuring database products and by customer support and maintenance services. The automotive parts aftermarket
industry consists of the manufacturing, distribution, sale and installation of both new and remanufactured parts used in the maintenance and repair of automobiles and light trucks. This market is the 11thlargest industry in the United States, is believed to have generated approximately $185 billion in sales in 2002 and accounted for approximately 3% of all
jobs in the United States. The hardlines and lumber industry consists of the sale of products for residential and commercial building construction, maintenance and repair, lawn and garden, and agribusiness. We estimate that this industry, comprised
primarily of hardware retailers, home centers, lumber and building materials suppliers, agribusiness retailers, lawn and garden retailers and paint retailers, generated approximately $200 billion in revenues in 2002.



Our Automotive group develops, implements and supports industry leading technical solutions
for automotive manufacturers, wholesalers, retailers, service chains and service dealers in both North America and Europe. This market has several characteristics that drive significant inventory management challenges for its participants. We
provide systems and services that address these challenges and help our customers compete effectively.



Our Hardlines and Lumber group provides enterprise management systems and services to the hardlines, lumber and building materials, agribusiness, lawn and garden, and commercial and industrial markets. The hardlines
and lumber industry has been driven by several major market participants which have expanded their business throughout the United States by providing products and services using a mass merchandising format. In this environment, the other retailers
and wholesalers, which include over 60,000 stores in our target market, have been required to upgrade or replace their existing systems in order to reduce costs to improve service levels to maintain their market positions.



Historical Results of Operations



Three Months Ended June 30, 2003 Compared to Three Months ended June 30,
2002



Revenues for the three months ended June 30, 2003 were
$54.8 million, an increase of $0.4 million, or 1%, from the $54.4 million recorded in the prior years third quarter. Automotive group revenues for the period were $28.4 million, a decrease of $0.4 million, or 1%, as compared to the
quarter ended June 30, 2002, primarily due to a decrease in services and finance revenues. The Hardlines and Lumber groups revenues were $26.4 million for the three months ended June 30, 2003, an increase of $0.8 million, or 3%, from the $25.6
million recorded in the prior years third quarter, primarily due to an increase in systems revenues, offset by a decrease in services and finance revenues.



Systems revenues for the three months ended June 30, 2003 were $16.5 million, compared to $14.4 million for the three months ended June 30,
2002, an increase of $2.1 million, or 14%. Systems revenues for the Automotive group for the three months ended June 30, 2003 was consistent with the prior year. Systems revenues for the Hardlines and Lumber group for the three months ended June 30,
2003 increased $2.2 million to $12.4 million, or 21%, as compared



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to the three months ended June 30, 2002. The revenue increase was largely due to an increase of sales of add-on products to existing customers and an
increase in sales of large systems.



Services and finance revenues were $38.3
million for the three months ended June 30, 2003, compared to $40.0 million for the three months ended June 30, 2002, a decrease of $1.7 million, or 4%. For the three months ended June 30, 2003, services and finance revenues for the Automotive group
decreased $0.3 million, or 1%, to $24.3 million. The Automotive groups revenue decrease was predominantly due to lower customer support revenues. In the three months ended June 30, 2003, the Hardlines and Lumber groups services and
finance revenues decreased $1.4 million, or 9%, to $14.0 million, as compared to the three months ended June 30, 2002. The decrease was primarily due to lower information product sales to manufacturers as a result of a termination of certain primary
sources of point of sale data. We do not expect to be able to replace this point of sale data.



Cost of revenues was $28.1 million for the three months ended June 30, 2003, compared to $28.4 million for the three months ended June 30, 2002, a decrease of $0.3 million, or 1%. For the three months ended June 30,
2003, cost of revenues for the Automotive group decreased $0.9 million, or 6%, to $13.9 million. For the quarter ended June 30, 2003, cost of revenues for the Hardlines and Lumber group increased $0.6 million, or 4%, to $14.2 million, as compared to
the three months ended June 30, 2002. Cost of revenue as a percentage of revenues was 51% and 52% for the three months ended June 30, 2003 and 2002, respectively.



Cost of systems revenue was $9.7 million for the three months ended June 30, 2003, compared to $9.3 million for the three months ended June
30, 2002, an increase of $0.4 million, or 4%. Cost of systems revenues for the Automotive group for the three months ended June 30, 2003 decreased $0.2 million, or 5%, to $3.1 million compared to the three months ended June 30, 2002. The decrease in
cost of systems revenues was mainly due to lower personnel costs. Cost of systems revenues as a percentage of systems revenues for the Automotive group was 77% and 79% for the three months ended June 30, 2003 and 2002, respectively. The decreased
cost percentage was principally due to a more profitable systems mix being sold in the quarter ended June 30, 2003. Cost of systems revenues for the Hardlines and Lumber group for the three months ended June 30, 2003 increased $0.6 million to $6.6
million compared to the three months ended June 30, 2002, an increase of 9%. The increase in cost of systems revenue was mostly due to the increase in systems sales. Cost of systems revenue as a percentage of systems for the Hardlines and Lumber
group was 53% and 59% for the three months ended June 30, 2003 and 2002, respectively. The decreased cost percentage was primarily due to a more profitable product mix sold in the quarter ended June 30, 2003.



Cost of revenues for services and finance was $18.4 million for the three months ended June
30, 2003, compared to $19.1 million for the three months ended June 30, 2002, a decrease of $0.7 million, or 3%. Cost of revenues for services and finance for the Automotive group for the three months ended June 30, 2003 decreased $0.7 million, or
6%, to $10.8 million, compared to the three months ended June 30, 2002. Cost of revenues for services and finance for the Automotive group was down largely due to lower database amortization expense and to lower bad debt expense this year. As a
percentage of automotive services revenues, cost of revenues for services and finance for the Automotive group was 44% and 47% for the three months ended June 30, 2003 and 2002, respectively. The percentage fluctuations are primarily due to the mix
of products sold. Cost of revenues for services and finance for the Hardlines and Lumber group for the three months ended June 30, 2003 remained constant at $7.6 million, compared to the three months ended June 30, 2002. As a percentage of Hardlines
and Lumber group services revenues, cost of revenues for services and finance for the Hardlines and Lumber group was 55% and 50% for the three months ended June 30, 2003 and 2002, respectively.



Sales and marketing expense for the three months ended June 30, 2003 decreased $0.7 million,
or 9%, to $7.8 million, as compared to the three months ended June 30, 2002. Sales and marketing expense for the Automotive group for the three months ended June 30, 2003 decreased $0.4 million, or 10%, to $3.6 million, as compared to the three
months ended June 30, 2002. As a percentage of automotive revenue, sales and marketing expense for the Automotive group was 13% and 14% for the three months ended June 30, 2003 and 2002, respectively. Sales and marketing expense for the Hardlines
and Lumber group for the three months ended June 30, 2003 decreased $0.3 million to $4.2 million, as compared to the three months ended June 30, 2002. As a percentage of Hardlines and Lumber group revenue, sales and marketing expense for the
Hardlines and Lumber group was 16% and 18% for the three months ended June 30, 2003



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and 2002, respectively. The decrease in the sales and marketing expense for the Automotive group and the Hardlines and Lumber group was mainly related to
lower bad debt expense resulting from the outsourcing of lease activity.



Product development expenses for the three months ended June 30, 2003 decreased $0.1 million, or 2%, to $4.3 million, as compared to the three months ended June 30, 2002. As a percentage of revenue, product development expense remained
unchanged at 8% for the three months ended June 30, 2003 and June 30, 2002, respectively. Product development expenses for the Automotive group for the three months ended June 30, 2003 decreased $0.3 million, or 8%, to $3.2 million. The decrease was
principally due to a greater amount of capitalized software in the current year, due to certain projects being expensed in the prior year. As a percentage of Automotive group revenue, product development expenses for the Automotive group was 11% and
12% for the three months ended June 30, 2003 and 2002, respectively. Product development expenses for the Hardlines and Lumber group for the three months ended June 30, 2003 increased $0.2 million, or 24%, to $1.1 million for the three months ended
June 30, 2003. The increase was mainly due to a lower amount of capitalized software in the period ended June 30, 2003, as compared to the same quarter in the prior year. As a percentage of Hardlines and Lumber group revenue, product development
expense for the Hardlines and Lumber group was 4% and 3% for the three months ended June 30, 2003 and 2002.



General and administrative expense for the three months ended June 30, 2003 was $7.2 million, an increase of $1.4 million, or 24%, as compared to the three months ended June 30, 2002. The increase was largely due to a
credit related to facility expense in the three months ended June 30, 2002, increased expense related to an ERP implementation and increased bonus accruals in line with the Companys performance. As a percentage of revenues, general and
administrative expense was 13% and 11% for the three months ended June 30, 2003 and 2002, respectively.



Interest expense for the three months ended June 30, 2003 and 2002 remained unchanged at $3.3 million.



Expenses related to debt refinancing of $6.0 million for the three months ended June 30, 2003 relates to the write-off of $3.7 million of debt issuance costs incurred
from the prior issuance of debt which was repaid in June 2003, and $2.3 million of consent fees paid to the holders of the Senior Subordinated Notes for the tendering of such notes. See Liquidity and Capital Resources.



As a result of the above factors, the Company realized a net loss of $1.4 million for the
three months ended June 30, 2003, compared to net income of $2.5 million for the three months ended June 30, 2002, a decrease of $3.9 million.



Nine months Ended June 30, 2003 Compared to Nine months Ended June 30, 2002



Revenues for the nine months ended June 30, 2003 were $168.5 million, compared to $166.0 million for the nine months ended June 30, 2002, an
increase of $2.5 million, or 2%. For the nine months ended June 30, 2003, revenues for the Automotive group decreased $4.4 million, or 5%, to $86.5 million, as compared to the nine months ended June 30, 2002. For the nine months ended June 30, 2003,
revenues for the Hardlines and Lumber group increased $6.9 million, or 9%, to $82.0 million, as compared to the nine months ended June 30, 2002.



Systems revenues for the nine months ended June 30, 2003 were $51.6 million, compared to $45.9 million for the nine months ended June 30, 2002, an increase of $5.7
million, or 12%. Systems revenues for the Automotive group for the nine months ended June 30, 2003 decreased $3.5 million, or 21%, to $13.0 million, as compared to the nine months ended June 30, 2002. This decrease was mainly due to a higher number
of customer upgrades in the previous year. Systems revenues for the Hardlines and Lumber group for the nine months ended June 30, 2003 increased $9.2 million, or 31%, to $38.6 million as compared to the nine months ended June 30, 2002, principally
due to completion of contract development work, an increase in sales of add-on products to existing customers, and an increase in sales of large systems.



Services and finance revenues were $116.9 million for the nine months ended June 30, 2003, compared to $120.0 million for the nine months ended June 30, 2002, a decrease
of $3.1 million, or 3%. Services and finance revenues for the Automotive group for the nine months ended June 30, 2003 decreased $0.8 million, or 1%, to $73.6



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million, as compared to the nine months ended June 30, 2002. The decrease in automotive services and finance revenues was mainly due to lower customer
support revenues. Services and finance revenues for the Hardlines and Lumber group for the nine months ended June 30, 2003 decreased $2.3 million, or 5%, to $43.3 million, as compared to the nine months ended June 30, 2002. This decrease was
primarily due to lower information product sales to manufacturers as a result of a termination of certain primary sources of point of sale data . We do not expect to be able to replace this point of sale data.



Cost of revenues was $83.5 million for the nine months ended June 30, 2003, compared to $85.7
million for the nine months ended June 30, 2002, a decrease of $2.2 million, or 3%. For the nine months ended June 30, 2003, cost of revenues for the Automotive group decreased $5.6 million, or 12%, to $41.2 million, as compared to the nine months
ended June 30, 2002. For the nine months ended June 30, 2003, cost of revenues for the Hardlines and Lumber group increased $3.4 million, or 9%, to $42.3 million, as compared to the nine months ended June 30, 2002. Cost of revenues as a percentage
of revenues was 50% and 52% for the nine months ended June 30, 2003 and 2002, respectively.



Cost of systems revenues was $29.6 million for the nine months ended June 30, 2003, compared to $29.5 million for the nine months ended June 30, 2002, an increase of $0.1 million, or less than 1%. Cost of systems
revenues for the Automotive group for the nine months ended June 30, 2003 decreased $3.2 million, or 27%, to $8.9 million, as compared to the nine months ended June 30, 2002. The decrease was largely due to the decrease in systems sales. Cost of
systems revenues as a percentage of systems revenues for the Automotive group was 68% and 73% for the nine months ended June 30, 2003 and 2002, respectively. Cost of systems revenues for the Hardlines and Lumber group for the nine months ended June
30, 2003 was $20.7 million, compared to $17.4 million for the nine months ended June 30, 2002, an increase of $3.3 million, or 19%. The increase in cost of systems revenue was predominantly due to the increase in system sales. The cost of systems
revenues as a percentage of systems revenues for the Hardlines and Lumber group was 54% and 59% for the nine months ended June 30, 2003 and 2002, respectively. The changes in cost percentages for both the automotive and the Hardlines and Lumber
groups were chiefly due to a more profitable product mix sold in the period ended June 30, 2003.



Cost of revenues for services and finance was $53.9 million for the nine months ended June 30, 2003, compared to $56.2 million for the nine months ended June 30, 2002, a decrease of $2.3 million, or 4%. Cost of
revenues for services and finance for the Automotive group for the nine months ended June 30, 2003 decreased $2.4 million, or 7%, to $32.3 million, compared to the nine months ended June 30, 2002. Cost of revenues of services and finance for the
Automotive group decreased mainly due to greater database capitalization and lower bad debt expense. Cost of revenues of services and finance for the Hardlines and Lumber group for the nine months ended June 30, 2003 increased $0.1 million, or less
than 1%, to $21.6 million, compared to the nine months ended June 30, 2002. Cost of revenues of services and finance for the Hardlines and Lumber group increased mainly due to lower database capitalization. As a percentage of services revenues, cost
of revenues for services and finance for the Automotive group was 44% and 47% for the nine months ended June 30, 2003 and 2002, respectively. As a percentage of services revenues, cost of revenues for services and finance for the Hardlines and
Lumber group was 50% and 47% for the nine months ended June 30, 2003 and 2002, respectively.



Sales and marketing expense for the nine months ended June 30, 2003 decreased $2.7 million, or 10%, to $23.4 million, as compared to the nine months ended June 30, 2002. Sales and marketing expense for the Automotive
group for the nine months ended June 30, 2003 decreased $1.6 million, or 13%, to $10.5 million, as compared to the nine months ended June 30, 2002. As a percentage of automotive revenue, sales and marketing expense for the Automotive group was 12%
and 13% for the nine months ended June 30, 2003 and 2002, respectively. The decrease in automotive sales and marketing expense was related principally to lower bad debt expense resulting from the outsourcing of lease activity. Sales and marketing
expense for the Hardlines and Lumber group for the nine months ended June 30, 2003 decreased $1.1 million, or 8%, to $12.9 million, as compared to the nine months ended June 30, 2002. The decrease in sales and marketing expense in the Hardlines and
Lumber group was related primarily to lower bad debt expense resulting from the outsourcing of lease activity. As a percentage of Hardlines and Lumber group revenue, sales and marketing expense for the Hardlines and Lumber group was 16% and 19% for
the nine months ended June 30, 2003 and 2002.



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Product development expenses for the nine months ended June 30, 2003 decreased $0.5 million to $12.1 million, as compared
to the nine months ended June 30, 2002. Product development expenses for the Automotive group for the nine months ended June 30, 2003 decreased $0.9 million, or 9%, to $9.0 million. The decrease was largely due to greater software capitalization,
due to certain projects being expensed in the prior year. As a percentage of Automotive group revenue, product development expenses for the Automotive group were 10% and 11% for the nine months ended June 30, 2003 and 2002, respectively. Product
development expenses for the Hardlines and Lumber group for the nine months ended June 30, 2003 increased $0.4 million, or 14%, to $3.1 million. The increase was predominantly due to less software capitalized in the nine months ended June 30, 2003.
As a percentage of Hardlines and Lumber group revenue, product development expenses for the Hardlines and Lumber group remained constant at 4% for the nine months ended June 30, 2003 and 2002.



General and administrative expense for the nine months ended June 30, 2003 increased $0.5
million, or 2%, to $20.6 million, as compared to the nine months ended June 30, 2002. As a percentage of revenues, general and administrative expense remained constant at 12% for the nine months ended June 30, 2003 and 2002, respectively. The
increase was chiefly due to higher personnel costs.



Interest expense for the
nine months ended June 30, 2003 was $9.8 million compared to $10.9 million for the nine months ended June 30, 2002, a decrease of $1.1 million, or 10%. The decrease was due primarily due to a lower debt balance during the nine months ended June 30,
2003. See Liquidity and Capital Resources.



Expenses related
to debt refinancing of $6.3 million for the nine months ended June 30, 2003 related to the write-off of $0.3 million and $3.7 million of debt issuance cost incurred for the prior issuance of debt which was repaid in December 2002 and June 2003,
respectively, and $2.3 million of consent fee paid to the holders of the Senior Subordinated Notes for the tendering of such Notes.



As a result of the above factors, the Company realized net income of $7.8 million for the nine months ended June 30, 2003, compared to net income of $6.4 million for the
nine months ended June 30, 2002, an improvement of $1.4 million, or 22%.



Liquidity and Capital Resources



On June 27, 2003, the Company issued
$157.0 million in Senior Notes, at a discount of $2.1 million, which bear interest at 10.5% per annum, payable semiannually in June and December, and mature in June 2011. With the proceeds from the Senior Notes, the Company repurchased $82.5 million
of its Senior Subordinated Notes, repaid its outstanding term loan facility of $33.0 million, issued a $30.0 million dividend to its parent company, and purchased outstanding common stock in Internet Autoparts, Inc. (IAP) that was held
by the Companys majority shareholder for $1.8 million. The Company now owns 47.5% of the outstanding common stock in IAP. The Company engaged Houlihan, Lokey, Howard, & Zukin, financial advisors, to provide an opinion with respect to the
$30 million dividend. The Companys parent used the dividend proceeds to repurchase the common stock held by Glenn and Preston Staats. Additionally, the Company replaced its revolving credit facility with a new revolving credit facility that
provides for maximum borrowings of $15.0 million (including letters of credit up to a maximum of $5.0 million) and matures in June 2006. The new revolving credit facility includes restrictions on certain activities and financial covenant tests.



As of June 30, 2003, the Company had $173.3 million in outstanding
indebtedness, an increase of $35.3 million from September 30, 2002. The Companys outstanding indebtedness at June 30, 2003 included no borrowings on the Companys $15.0 million senior secured revolving credit facility, $17.4 million on
the Senior Subordinated Notes, and $155.0 million on the Senior Notes. The remaining $0.9 million was related to lease financing and the debt matures in varying amounts over the next four years. The new revolving credit facility bears interest at
floating rates; therefore, the Companys financial condition could be affected by changes in prevailing rates.



The Companys new credit agreement imposes certain restrictions on the Company, the most significant of which include limitations on additional indebtedness, liens,
guarantees, payment or declaration of dividends, sale of assets, investments, capital expenditures, and transactions with affiliates. Under the Companys Third Amended and Restated



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Credit Agreement, the Company is obligated to meet certain tests relating to certain financial amounts and ratios defined
in the new credit agreement. At June 30, 2003, the Company was in compliance with these covenants.



In addition to servicing its debt obligations, the Company requires substantial liquidity for capital expenditures and working capital needs. At June 30, 2003, working capital was $16.8 million compared to $(8.9)
million at September 30, 2002. The increase in working capital primarily relates to the refinancing of the current long term debt and to an increase in cash and cash equivalents due to increased sales and profitability. For the nine months ended
June 30, 2003, the Companys capital expenditures were $9.3 million, including $5.6 million for capitalized computer software and database costs.



The Company believes that cash flows from operations, together with the amounts available under its new credit agreement, will be sufficient to fund its working capital
and debt service requirements for the foreseeable future. The Companys ability to meet its working capital and debt service requirements, however, is subject to future economic conditions and to financial, business and other factors, many of
which are beyond the Companys control. If the Company is not able to meet such requirements, it may be required to seek additional financing. There can be no assurance that the Company will be able to obtain financing from other sources on
terms acceptable to the Company, if at all.



Contractual Obligations and
Commercial Commitments



Due to the impact of the new credit facility on the
Companys contractual obligations, the contractual obligations table has been revised as of June 30, 2003. The following table summarizes the Companys contractual obligations and payments due by fiscal period following June 30, 2003 (in
thousands):



|                                      |  | Payment Due or Expiration by Fiscal Year
|------------------------------------- |  | ----------------------------------------
|                                      |  | Total                                   
|Debt:                                 |  |                                         
|Senior notes                          |  | $                                       
|Senior subordinated notes             |  |                                         
|Revolving credit facility             |  |                                         
|Other (2)                             |  |                                         
|                                      |  |                                         
|Total debt                            |  |                                         
|Other lease financing obligations (2) |  |                                         
|Operating leases                      |  |                                         
|                                      |  |                                         
|Total                                 |  | $                                       
|                                      |  |                                         



(1) Fiscal 2003
represents the three months following June 30, 2003.



(2)
These obligations will be funded by amounts received from lessees party to these lease agreements. Furthermore, the Companys recourse obligation is limited to a percentage of the aggregate initial financing proceeds.



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



Reference is made to Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk in the Companys Annual Report on Form 10-K for
the fiscal year ended September 30, 2002. There have been no material changes in the quarter ended June 30, 2003.



|Item 4. |  | Controls and Procedures.
|------- |  | ------------------------



An evaluation was performed under the supervision and with the participation of the Companys management, including the Chief Executive Officer (CEO) and Principal Financial Officer (CFO), of the effectiveness of
the design and operation of the Companys disclosure controls and procedures within 90 days of the filing date of this quarterly report on Form 10-Q. Additionally, the internal controls were evaluated in conjunction with the year-end audit and
no material weaknesses were identified. Based on those evaluations, the Companys management, including the CEO, CFO, and Audit Committee, concluded that the Companys disclosure controls and procedures were effective. There have been no
significant changes in the Companys internal controls or in other factors that could significantly affect these internal controls subsequent to the date of their evaluation.



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|PART II. |  | OTHER INFORMATION
|-------- |  | -----------------



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



The Company is involved in litigation arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, although there can be no assurances, the Company does not
anticipate that the resolution of these matters will have a material adverse effect on the Companys results of operation or financial position.



The Company was a defendant in a lawsuit filed in the United States District Court for the Western District of Texas by former director Preston Staats. The suit alleged
that Mr. Staats was constructively terminated by the Company in violation of the Age Discrimination in Employment Act and that such alleged termination was a breach of contract. The dispute was settled and the lawsuit was dismissed with prejudice as
part of a Securities Repurchase Agreement between Mr. Staats, the Company, and Holding, in which Holding repurchased stock owned by Mr. Staats for $1.875 per share. The Company did not pay any separate financial compensation to Mr. Staats as part of
this settlement.



|Item 2. |  | Changes in Securities and Use of Proceeds.
|------- |  | ------------------------------------------



None



|Item 3. |  | Defaults Upon Senior Securities.
|------- |  | --------------------------------



None



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



None



|Item 5. |  | Other Information.
|------- |  | ------------------



None



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



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



4.3

Supplemental to Indenture dated as of February 28, 1998, as amended, dated as of June 27, 2003, between the Company and Wells Fargo Bank Minnesota, N.A. (1)4.4

Indenture, dated as of June 27, 2003, between the Company, the Guarantors and Wells Fargo Bank Minnesota, N.A. (1)10.41

Third Amended and Restated Credit Agreement among the Company, Holding, the several lenders and parties thereto and JPMorgan Chase Bank. (1)10.42

Stock Purchase Agreement, dated as of June 27, 2003, among the Company, Hicks, Muse, Tate & Furst Equity Fund III, L.P. and HM3 Coinvestors, L.P. (1)10.43

Securities Repurchase Agreement, dated as of June 5, 2003 among Holding, the Company, Glenn E. Staats, Preston W. Staats, Jr., Hicks, Muse, Tate & Furst Equity Fund III, L.P.,
HM3 Coinvestors, L.P, Hicks, Muse, Tate and Furst Incorporated and HMTF Operating, L.P. (1)10.44

Purchase Agreement dated June 13, 2003, between the Company and JPMorgan Securities Inc. *10.45

Exchange and Registration Rights Agreement dated as of June 27, 2003, between the Company and JPMorgan Securities Inc. *31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Michael A. Aviles.*








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31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Greg Petersen.*32.1

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Michael A. Aviles.*32.2

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Greg Petersen.*




* Filed herewith



(1) Incorporated by reference to Registrants Form 8-K
filed on July 2, 2003.



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



The Company filed Form 8-K on May 30, 2003, its press release announcing its plan to offer $175 million of senior notes due 2011, and its intention to
launch a tender offer for any and all of its $100 million outstanding 9% senior subordinated notes due 2008. No financial statements were filed with this Form 8-K.



The Company filed Form 8-K on June 5, 2003, its press release announcing it had commenced a tender offer for any and all of
its $100 million outstanding 9% senior subordinated notes due 2008 and related consent solicitation. No financial statements were filed with this Form 8-K.



The Company filed Form 8-K on June 25, 2003, its press release announcing an amendment to the tender offer for any and all of its $100 million
outstanding 9% senior subordinated notes due 2008 and related consent solicitation. No financial statements were filed with this Form 8-K.



The Company filed Form 8-K on July 2, 2003, its press release announcing the completion of its offering of $157 million senior notes and its tender offer
and consent solicitation for senior subordinated notes. The Supplemental Indenture, Indenture, Third Amended and Restated Credit Agreement, Stock Purchase Agreement, and Securities Repurchase Agreement were attached as exhibits to the Form 8-K.



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SIGNATURE



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on the 14th day of August 2003.



COOPERATIVE COMPUTING, INC.By:

/s/    GREG
PETERSENGreg Petersen Senior Vice President, Finance and Administration




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