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


Form 10-Q

(Mark one)



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002
OR | 
|- | ---------------------------------------------------------------------------------------------------------------------------------------- | 

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

For the transition period from _____________ to _____________.
 
Commission file number 0-20034

ELITE INFORMATION GROUP, INC.

(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 41-1522214                          
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

|                                                 |  |           
|------------------------------------------------ |  | ----------
|5100 West Goldleaf CircleLos Angeles, California |  | 90056     
|(Address of principal executive offices)         |  | (Zip code)

(323) 642-5200
(Registrants telephone number, including area code)




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

As of April 30, 2002 there were 8,186,070 shares of Common Stock, $.01 par
value, outstanding.






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Page 1 of 12




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TABLE OF CONTENTS



|                                |                                                                                               |                                            |  |  |  |  |  | 
|------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I  Financial Information:
|                                | Item 1. Financial Statements                                                                 
|                                |                                                                                               | Consolidated Statement of Operations      
|                                |                                                                                               | Consolidated Balance Sheet                
|                                |                                                                                               | Consolidated Statement of Cash Flows      
|                                |                                                                                               | Notes to Consolidated Financial Statements
|                                | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                | Item 3. Quantitative and Qualitative Disclosures about Market Risk                           
|PART II  Other Information    
|                                | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURE                      



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##### Table of Contents



Elite Information Group, Inc.
Table of Contents

|                                                                                              |                                                                                             |  |        |       | 
|--------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- |  | ------ | ----- | 
|                                                                                              |                                                                                             |  | Page  
|                                                                                              |                                                                                             |  | Number
|                                                                                              |                                                                                             |  |       
|Part I Financial Information:                                                                 |                                                                                             |  |        |      
|                                                                                             
|Item 1. Financial Statements                                                                  |                                                                                             |  |        |      
|                                                                                             
|                                                                                              | Consolidated Statement of Operations -
Three months ended March 31, 2002
and March 31, 2001 |  |        | 3     | 
|                                                                                             
|                                                                                              | Consolidated Balance Sheet -
March 31, 2002 and December 31, 2001                           |  |        | 4     | 
|                                                                                             
|                                                                                              | Consolidated Statement of Cash Flows -
Three months ended March 31, 2002 and
March 31, 2001 |  |        | 5     | 
|                                                                                             
|                                                                                              | Notes to Consolidated Financial Statements                                                  |  |        | 6 - 8 | 
|                                                                                             
|Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations |                                                                                             |  | 8 - 11 |      
|                                                                                             
|Item 3. Quantitative and Qualitative Disclosures about Market Risk                            |                                                                                             |  | 11     |      
|                                                                                             
|Part II Other Information:                                                                    |                                                                                             |  |        |      
|                                                                                             
|Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                             |  | 11     |      
|                                                                                             
|Signature                                                                                     |                                                                                             |  | 12     |      



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PRODUCTS MENTIONED IN THIS REPORT ARE USED FOR IDENTIFICATION PURPOSES ONLY AND
MAY BE TRADE NAMES OR TRADEMARKS OF ELITE INFORMATION GROUP, INC., ITS
SUBSIDIARIES OR THIRD PARTIES.



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PART I  Financial Information:




Item 1. Financial Statements




Elite Information Group, Inc.
Consolidated Statement of Operations
(In thousands, except per share data)
(Unaudited)

|                                    |                                                         |           |                          |       |                    |       |        |       |       |       | 
|----------------------------------- | ------------------------------------------------------- | --------- | ------------------------ | ----- | ------------------ | ----- | ------ | ----- | ----- | ----- | 
|                                    |                                                         |           |                          |       | Three months ended
|                                    |                                                         |           |                          |       | March 31,         
|                                    |                                                         |           |                          |       |                   
|                                    |                                                         |           |                          |       | 2002               |       | 2001  
|                                    |                                                         |           |                          |       |                    |       |       
|Net revenue                         |                                                         | $         | 18,367                   |       |                    | $     | 14,295 |      
|                                    | Cost of revenue                                         |           |                          | 8,833 |                    |       |        | 8,370 |      
|                                    |                                                         |           |                          |       |                    |       |        |      
|Gross profit                        |                                                         |           | 9,534                    |       |                    |       | 5,925  |      
|Operating expenses                  |                                                         |           |                          |       |                    |       |        |      
|                                    | Research and development                                |           |                          | 2,607 |                    |       |        | 1,466 |      
|                                    | Sales and marketing                                     |           |                          | 3,440 |                    |       |        | 2,904 |      
|                                    | General and administrative                              |           |                          | 2,254 |                    |       |        | 1,745 |      
|                                    | Amortization of goodwill and other acquired intangibles |           |                          | 190   |                    |       |        | 514   |      
|                                    |                                                         |           |                          |       |                    |       |        |      
|                                    |                                                         |           | Total operating expenses |       |                    | 8,491 |        |       |       | 6,629 | 
|                                    |                                                         |           |                          |       |                    |       |        |      
|Operating income (loss)             |                                                         |           | 1,043                    |       |                    |       | (704   | )    
|Interest income, net                |                                                         |           | 96                       |       |                    |       | 298    |      
|                                    |                                                         |           |                          |       |                    |       |        |      
|Income (loss) before income taxes   |                                                         |           | 1,139                    |       |                    |       | (406   | )    
|Income tax (provision) benefit      |                                                         |           | (433                     | )     |                    |       | 103    |      
|                                    |                                                         |           |                          |       |                    |       |        |      
|Net income (loss)                   |                                                         | $         | 706                      |       |                    | $     | (303   | )    
|                                    |                                                         |           |                          |       |                    |       |        |      
|Net income (loss) per share         |                                                         |           |                          |       |                    |       |        |      
|                                    |                                                         | - Basic   |                          | $     | 0.09               |       |        | $     | (0.04 | )    
|                                    |                                                         | - Diluted |                          | $     | 0.08               |       |        | $     | (0.04 | )    
|Weighted average shares outstanding |                                                         |           |                          |       |                    |       |        |      
|                                    |                                                         | - Basic   |                          |       | 8,166              |       |        |       | 8,059 |      
|                                    |                                                         | - Diluted |                          |       | 8,751              |       |        |       | 8,059 |      

The accompanying notes are an integral part of these consolidated financial statements



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Elite Information Group, Inc.
Consolidated Balance Sheet
(In thousands, except share and per share data)

|                                     |                                                                                                                 |                           |                            |        |             |        |              |        |        |        | 
|------------------------------------ | --------------------------------------------------------------------------------------------------------------- | ------------------------- | -------------------------- | ------ | ----------- | ------ | ------------ | ------ | ------ | ------ | 
|                                     |                                                                                                                 |                           |                            |        | March 31,   |        | December 31,
|                                     |                                                                                                                 |                           |                            |        | 2002        |        | 2001        
|                                     |                                                                                                                 |                           |                            |        |             |        |             
|                                     |                                                                                                                 |                           |                            |        | (Unaudited) |        |              |        |       
|Assets                               |                                                                                                                 |                           |                            |        |             |        |              |       
|Current assets                       |                                                                                                                 |                           |                            |        |             |        |              |       
|                                     | Cash and cash equivalents                                                                                       |                           | $                          | 24,120 |             |        | $            | 24,699 |       
|                                     | Receivables                                                                                                     |                           |                            | 22,385 |             |        |              | 22,601 |       
|                                     | Deferred income taxes                                                                                           |                           |                            | 2,286  |             |        |              | 3,612  |       
|                                     | Other current assets                                                                                            |                           |                            | 2,085  |             |        |              | 1,235  |       
|                                     |                                                                                                                 |                           |                            |        |             |        |              |       
|                                     |                                                                                                                 | Total current assets      |                            |        | 50,876      |        |              |        | 52,147 |       
|Property and equipment, net          |                                                                                                                 |                           | 2,350                      |        |             |        | 2,219        |       
|Software costs, net                  |                                                                                                                 |                           | 1,685                      |        |             |        | 1,827        |       
|Goodwill                             |                                                                                                                 |                           | 7,965                      |        |             |        | 7,965        |       
|Intangible assets, net               |                                                                                                                 |                           | 3,460                      |        |             |        | 3,654        |       
|Other assets                         |                                                                                                                 |                           | 86                         |        |             |        | 87           |       
|                                     |                                                                                                                 |                           |                            |        |             |        |              |       
|                                     |                                                                                                                 | $                         | 66,422                     |        |             | $      | 67,899       |       
|                                     |                                                                                                                 |                           |                            |        |             |        |              |       
|Liabilities and Stockholders Equity |                                                                                                                 |                           |                            |        |             |        |              |       
|Current liabilities                  |                                                                                                                 |                           |                            |        |             |        |              |       
|                                     | Accounts payable                                                                                                |                           | $                          | 3,832  |             |        | $            | 3,874  |       
|                                     | Accrued compensation                                                                                            |                           |                            | 2,502  |             |        |              | 4,170  |       
|                                     | Other accrued liabilities                                                                                       |                           |                            | 3,183  |             |        |              | 3,556  |       
|                                     | Deferred revenue                                                                                                |                           |                            | 17,110 |             |        |              | 17,031 |       
|                                     | Income taxes payable                                                                                            |                           |                            | 1,055  |             |        |              | 1,401  |       
|                                     |                                                                                                                 |                           |                            |        |             |        |              |       
|                                     |                                                                                                                 | Total current liabilities |                            |        | 27,682      |        |              |        | 30,032 |       
|                                     |                                                                                                                 |                           |                            |        |             |        |              |       
|Deferred income taxes                |                                                                                                                 |                           | 178                        |        |             |        | 246          |       
|                                     |                                                                                                                 |                           |                            |        |             |        |              |       
|Stockholders equity                 |                                                                                                                 |                           |                            |        |             |        |              |       
|                                     | Common stock, $.01 par value; Authorized 20,000,000 shares; Issued
9,477,643 and 9,458,052 shares, respectively |                           |                            | 95     |             |        |              | 95     |       
|                                     | Paid-in capital                                                                                                 |                           |                            | 39,493 |             |        |              | 39,387 |       
|                                     | Treasury stock, at cost, 1,303,406
and 1,329,819 shares, respectively                                           |                           |                            | (6,367 | )           |        |              | (6,496 | )     
|                                     | Accumulated earnings                                                                                            |                           |                            | 5,341  |             |        |              | 4,635  |       
|                                     |                                                                                                                 |                           |                            |        |             |        |              |       
|                                     |                                                                                                                 |                           | Total stockholders equity |        |             | 38,562 |              |        |        | 37,621 | 
|                                     |                                                                                                                 |                           |                            |        |             |        |              |       
|                                     |                                                                                                                 | $                         | 66,422                     |        |             | $      | 67,899       |       
|                                     |                                                                                                                 |                           |                            |        |             |        |              |       

The accompanying notes are an integral part of these consolidated financial statements



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Elite Information Group, Inc.
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)

|                                               |                                                                               |                                                     |                                        |      |                    |        |        |        |        |        |  
|---------------------------------------------- | ----------------------------------------------------------------------------- | --------------------------------------------------- | -------------------------------------- | ---- | ------------------ | ------ | ------ | ------ | ------ | ------ | -
|                                               |                                                                               |                                                     |                                        |      | Three months ended
|                                               |                                                                               |                                                     |                                        |      | March 31,         
|                                               |                                                                               |                                                     |                                        |      |                   
|                                               |                                                                               |                                                     |                                        |      | 2002               |        | 2001  
|                                               |                                                                               |                                                     |                                        |      |                    |        |       
|Cash flows from operating activities:          |                                                                               |                                                     |                                        |      |                    |        |        |       
|                                               | Net income                                                                    |                                                     | $                                      | 706  |                    |        | $      | (303   | )     
|                                               | Adjustments to reconcile net income to net cash
used in operating activities: |                                                     |                                        |      |                    |        |        |        |       
|                                               |                                                                               | Depreciation and amortization                       |                                        |      | 640                |        |        |        | 883    |       
|                                               |                                                                               | Deferred income taxes                               |                                        |      | 1,258              |        |        |        | (230   | )     
|                                               |                                                                               | Changes in current assets and liabilities:          |                                        |      |                    |        |        |        |        |       
|                                               |                                                                               |                                                     | Receivables                            |      |                    | 216    |        |        |        | (2,367 | )
|                                               |                                                                               |                                                     | Accounts payable                       |      |                    | (42    | )      |        |        | 360    |  
|                                               |                                                                               |                                                     | Accrued compensation                   |      |                    | (1,668 | )      |        |        | (486   | )
|                                               |                                                                               |                                                     | Deferred revenue and customer deposits |      |                    | 79     |        |        |        | 1,289  |  
|                                               |                                                                               |                                                     | Income taxes payable                   |      |                    | (346   | )      |        |        | (121   | )
|                                               |                                                                               |                                                     | Other, net                             |      |                    | (1,222 | )      |        |        | (401   | )
|                                               |                                                                               |                                                     |                                        |      |                    |        |        |       
|                                               |                                                                               | Net cash used in operating activities               |                                        |      | (379               | )      |        |        | (1,376 | )     
|                                               |                                                                               |                                                     |                                        |      |                    |        |        |       
|Cash flows from investing activities:          |                                                                               |                                                     |                                        |      |                    |        |        |       
|                                               | Purchase of Law Manager, Inc.                                                 |                                                     |                                        |     |                    |        |        | (2,148 | )     
|                                               | Purchase of property and equipment                                            |                                                     |                                        | (385 | )                  |        |        | (292   | )     
|                                               | Investment in software costs                                                  |                                                     |                                        | (50  | )                  |        |        | (252   | )     
|                                               |                                                                               |                                                     |                                        |      |                    |        |        |       
|                                               |                                                                               | Net cash used in investing activities               |                                        |      | (435               | )      |        |        | (2,692 | )     
|                                               |                                                                               |                                                     |                                        |      |                    |        |        |       
|Cash flows from financing activities:          |                                                                               |                                                     |                                        |      |                    |        |        |       
|                                               | Purchase of treasury stock                                                    |                                                     |                                        |     |                    |        |        | (139   | )     
|                                               | Proceeds from issuance of common stock                                        |                                                     |                                        | 235  |                    |        |        | 69     |       
|                                               |                                                                               |                                                     |                                        |      |                    |        |        |       
|                                               |                                                                               | Net cash provided by (used in) financing activities |                                        |      | 235                |        |        |        | (70    | )     
|                                               |                                                                               |                                                     |                                        |      |                    |        |        |       
|Net decrease in cash and cash equivalents      |                                                                               |                                                     | (579                                   | )    |                    |        | (4,138 | )     
|Cash and cash equivalents, beginning of period |                                                                               |                                                     | 24,699                                 |      |                    |        | 24,787 |       
|                                               |                                                                               |                                                     |                                        |      |                    |        |        |       
|Cash and cash equivalents, end of period       |                                                                               | $                                                   | 24,120                                 |      |                    | $      | 20,649 |       
|                                               |                                                                               |                                                     |                                        |      |                    |        |        |       

The accompanying notes are an integral part of these consolidated financial statements



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Notes to Consolidated Financial Statements
(Unaudited)

NOTE 1  Basis of Presentation

For the periods presented, the consolidated financial statements of Elite
Information Group, Inc. (Elite or the Company) reflect the results of
operations and financial position of the Company and its wholly owned
subsidiaries, Elite Information Systems, Inc. (EIS) and Law Manager Inc.
(LMI). All significant inter-company balances and transactions have been
eliminated in consolidation.

The unaudited consolidated financial statements of the Company include all
adjustments of a normal recurring nature which, in the opinion of management,
are necessary for a fair presentation of financial position as of March 31,
2002 and results of operations and cash flows for the interim periods
presented. The results of operations for the three months ended March 31, 2002
are not necessarily indicative of the results to be expected for the entire
year.

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, certain information and footnotes required by
generally accepted accounting principles in annual financial statements are not
included herein. These interim financial statements should be read in
conjunction with the consolidated financial statements and notes thereto for
the year ended December 31, 2001 as reported by the Company in its Annual
Report on Form 10-K.

Certain prior year amounts have been reclassified to conform to current year
presentation.

NOTE 2  Segment Information

The Companys two reportable segments are the businesses of its subsidiaries,
EIS and LMI. EIS customers are primarily comprised of law firms and other
professional services firms. LMI customers primarily include large corporate
legal departments and government agencies. The Company evaluates performance
of its segments and allocates resources to each based on revenue and earnings
before interest, taxes, depreciation, and amortization (EBITDA). The table
below presents this information for these reportable segments for the three
months ending March 31:

|            |  |      |        |      |  |       |       |     |  |     |        |       |  |   |        |  |  |   |      |   |  |   |        | 
|----------- |  | ---- | ------ | ---- |  | ----- | ----- | --- |  | --- | ------ | ----- |  | - | ------ |  |  | - | ---- | - |  | - | ------ | 
|            |  | 2002 |        | 2001
|            |  |      |        |     
|            |  | EIS  |        | LMI  |  | Total |       | EIS |  | LMI |        | Total
|            |  |      |        |      |  |       |       |     |  |     |        |      
|Net revenue |  | $    | 16,182 |      |  | $     | 2,185 |     |  | $   | 18,367 |       |  | $ | 13,332 |  |  | $ | 963  |   |  | $ | 14,295 | 
|EBITDA      |  | $    | 1,703  |      |  | $     | (20   | )   |  | $   | 1,683  |       |  | $ | 968    |  |  | $ | (789 | ) |  | $ | 179    | 

Below is a reconciliation of reported segment
EBITDA to consolidated income (loss) before income taxes:

|                                  |  |      |       |      |  |   |      |  
|--------------------------------- |  | ---- | ----- | ---- |  | - | ---- | -
|                                  |  | 2002 |       | 2001
|                                  |  |      |       |     
|Total EBITDA for all segments     |  | $    | 1,683 |      |  | $ | 179  |  
|Interest
income, net              |  |      | 96    |      |  |   | 298  |  
|Depreciation and amortization     |  |      | (640  | )    |  |   | (883 | )
|                                  |  |      |       |      |  |   |      |  
|Income (loss) before income taxes |  | $    | 1,139 |      |  | $ | (406 | )
|                                  |  |      |       |      |  |   |      |  



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NOTE 3  Earnings per Share

The Company computes earnings per share in accordance with Statement of
Financial Accounting Standards (SFAS) No. 128 Earnings per Share. SFAS No.
128 requires the presentation of basic and diluted earnings per share for all
periods presented. Basic earnings per share is computed on the basis of the
weighted average number of common shares outstanding. Diluted earnings per
share is computed on the basis of the weighted average number of common shares
outstanding combined with the weighted average outstanding common stock equivalents (principally
stock options) required to be included under the treasury stock method.
Options with exercise prices greater than the average market price of common
shares (or anti-dilutive options) were not included in the computation of
diluted earnings per share. There were approximately 100,000 weighted average
anti-dilutive options for the three-month period ended March 31, 2002 and
approximately 1.0 million weighted average anti-dilutive options for the
three-month period ended March 31, 2001.

The following is a reconciliation of the denominator for the basic and diluted
earnings per share (EPS) computation for the three months
ended March 31, 2002 and 2001:

|                                    |                                |                                          |  |       |     |  |  |       |   | 
|----------------------------------- | ------------------------------ | ---------------------------------------- |  | ----- | --- |  |  | ----- | - | 
|(In thousands)                      |                                | 2002                                     |  | 2001 
|                                    |                                |                                          |  |      
|Weighted average shares outstanding |                                |                                          |  |       |     |  |  |      
|                                    | Basic                          |                                          |  | 8,166 |     |  |  | 8,059 |  
|                                    |                                |                                          |  |       |     |  |  |      
|                                    | Effect of dilutive securities: |                                          |  |       |     |  |  |       |  
|                                    |                                | Options and employee stock purchase plan |  |       | 585 |  |  |       |  | 
|                                    |                                |                                          |  |       |     |  |  |      
|                                    | Diluted                        |                                          |  | 8,751 |     |  |  | 8,059 |  
|                                    |                                |                                          |  |       |     |  |  |      

NOTE 4  New Accounting Standards

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 141, (SFAS No. 141),
Business Combinations, which establishes new standards for accounting and
reporting requirements for business combinations and requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. Use of the pooling-of-interest method is prohibited.

On January 1, 2002, the Company adopted SFAS No. 142 and No. 144. SFAS No.
142, Goodwill and Other Intangible Assets, addresses how intangible assets
should be accounted for in the financial statements. This new standard
eliminates amortization for goodwill and intangible assets that have indefinite
useful lives and requires such assets to be tested annually for impairment, or
more frequently if events or changes in circumstances indicate that the related
assets might be impaired. Intangible assets that have finite useful lives
continue to be amortized over their useful lives and are subject to impairment
testing in accordance with current accounting standards. In accordance with
adoption of SFAS No. 142, on January 1, 2002, the Company ceased to amortize
goodwill and no impairment charge was recognized. Following is a reconciliation of
the reported net loss and net loss per share for the three months ended March 31,
2001 on a pro forma basis to exclude charges for goodwill amortization:

|                                      |                                 |      |   |       |  
|------------------------------------- | ------------------------------- | ---- | - | ----- | -
|(In thousands, except per share data) |                                 | 2001 |   |      
|                                      |                                 |      |   |      
|Net
loss:                             |                                 |      |   |      
|                                      | Reported net loss               |      | $ | (303  | )
|                                      | Add back: Goodwill amortization |      |   | 243   |  
|                                      |                                 |      |   |      
|                                      | Adjusted net loss               |      | $ | (60   | )
|                                     
|Basic and diluted net loss per share: |                                 |      |   |      
|                                      | Reported net loss               |      | $ | (0.04 | )
|                                      | Add
back: Goodwill amortization |      |   | 0.03  |  
|                                      |                                 |      |   |      
|                                      | Adjusted net loss               |      | $ | (0.01 | )



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SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
supercedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of. However, this statement retains
the fundamental provisions of SFAS No. 121 for recognizing and measuring the
impairment of long-lived assets to be held and used, as well as measuring
long-lived assets to be disposed of by sale. Adoption of this statement on
January 1, 2002 did not have a material impact on the Companys consolidated
results of operations and financial condition.

NOTE 5  Intangible Assets and Goodwill

At March 31, 2002 and December 31, 2001, goodwill and intangible asset balances
consisted of the following:

|                             |                                            |      |                |       |              |   |                |        |              |   |        |       |  |   |        |        |  
|---------------------------- | ------------------------------------------ | ---- | -------------- | ----- | ------------ | - | -------------- | ------ | ------------ | - | ------ | ----- |  | - | ------ | ------ | -
|(In thousands)               |                                            | 2002 |                | 2001 
|                             |                                            |      |                |      
|                             |                                            |      | Gross          |       | Accumulated  |   | Gross          |        | Accumulated 
|                             |                                            |      | Carrying Value |       | Amortization |   | Carrying Value |        | Amortization
|                             |                                            |      |                |       |              |   |                |        |             
|Amortized intangible assets: |                                            |      |                |       |              |   |                |        |              |   |        |       |  |   |        |       
|                             | Customer lists and maintenance contracts   |      | $              | 5,400 |              |   | $              | (2,666 | )            |   | $      | 5,400 |  |   | $      | (2,532 | )
|                             | Developed software acquired in
acquisition |      |                | 1,100 |              |   |                | (376   | )            |   |        | 1,100 |  |   |        | (321   | )
|                             | Other                                      |      |                | 34    |              |   |                | (32    | )            |   |        | 34    |  |   |        | (27    | )
|                             |                                            |      |                |       |              |   |                |        |              |   |        |       |  |   |        |       
|                             |                                            | $    | 6,534          |       |              | $ | (3,074         | )      |              | $ | 6,534  |       |  | $ | (2,880 | )     
|                             |                                            |      |                |       |              |   |                |        |              |   |        |       |  |   |        |       
|Goodwill                     |                                            | $    | 15,290         |       |              | $ | (7,325         | )      |              | $ | 15,290 |       |  | $ | (7,325 | )     
|                             |                                            |      |                |       |              |   |                |        |              |   |        |       |  |   |        |       

Intangible asset amortization expense for the three months ended March 31, 2002
was $194,000. Estimated amortization expense for the next five years is as
follows:

|                                  |  |   |     | 
|--------------------------------- |  | - | --- | 
|(In thousands)                    |  |   |     | 
|For the years ending December 31, |  |   |     | 
|                                 
|                                 
|                                 
|                                 
|2002                              |  | $ | 767 | 
|2003                              |  | $ | 760 | 
|2004                              |  | $ | 760 | 
|2005                              |  | $ | 659 | 
|2006                              |  | $ | 540 | 

At March 31, 2002 and December 31, 2001, goodwill associated with the Companys
reporting units, EIS and LMI, totaled $1,252,000 and $6,713,000, respectively.






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

Results of Operations

Elite is an international provider of a comprehensive suite of
financial and practice management systems for professional services firms,
based in Los Angeles, California. The Companys customers include legal and
other professional services organizations of all sizes such as accounting,
consulting, public relations, financial services, actuarial, software,
security, insurance, market research and systems integration firms, as well as
corporations and government. EIS software products are often sold with
related services to aid the customer in implementation, data conversion and
user training efforts. The Companys products can be licensed outright and
installed onsite at the customers location or are available through an ASP
hosting solution (e-Connect from Elite) where EIS maintains hardware and
software that is accessed remotely by the customer. Additionally, Internet-based applications and services are available to smaller professional
services companies. LMI provides software products including advanced case
management, calendar and docketing, records management and resource management,
as well as a full range of implementation services to large corporate legal
departments, law firms and government agencies.



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The Companys revenue for the first quarter ended March 31, 2002 totaled $18.4
million. This compares to revenue for the first quarter of 2001 of $14.3
million. Elites revenue growth for the first quarter of 2002 compared to the
first three months of last year is due mainly to higher EIS contract
revenue, consulting services billings and increased maintenance support revenue
reflecting its growing customer base. EIS revenues for the first quarter
of 2002 totaled $16.2 million, a $2.9 million increase or 22%, compared to
$13.3 million for the first quarter of 2001. LMI revenue of $2.2
million, increased $1.2 million compared to the first quarter of 2001,
supported by the growth in its consulting and implementation services
backlog.

The increase in contract revenue compared to the prior year was due
primarily to the Companys higher backlog of signed customer orders entering
the year. The Companys consolidated backlog at the beginning of 2002 totaled
$25.5 million compared to $18.2 million at the start of 2001. The Companys
consolidated backlog at March 31, 2002 totaled $29.4 million.

Gross profit for the three months ended March 31, 2002 was $9.5 million,
compared with $5.9 million for the same period of 2001. The Companys gross
profit margin was 52% for this years first quarter compared to 41% for the
first three months of last year. The Companys cost of revenue consists
primarily of expenses for deployable resources, such as implementation
personnel and contract labor, salaries and related expenses for the Companys
customer support department, and amounts paid to third party software vendors.

The Companys higher gross profit margin in 2002 was due primarily to an
increased gross profit margin at EIS of 54% compared to 44% for the same period
of 2001. The improved EIS gross profit margin can be attributed mainly to its
increase in revenues without the same corresponding increase in costs,
particularly reduced levels of software vendor royalty costs and expenses for
third party implementation services. There was also significant improvement in
the LMI gross profit margin for the first quarter of
2002.

Research and development expenses for this years first quarter of $2.6 million
(or 14% of revenue) increased from $1.5 million (or 10% of revenue) in 2001.
The Companys research and development expenses for the first quarter of last
year were reduced by the capitalization of approximately $252,000 of internally
developed software costs. Including capitalized costs, R&D expenses for the
first quarter of 2001 represented 12% of revenues. The Company expects
substantially lower software cost capitalization for 2002. The increase in
research and development spending for 2002 is due primarily to costs for the
further enhancement of Elites existing product line, combined with the
development of new products designed to broaden the Companys product suite to
meet the needs of its expanding customer base in the Professional Services
Automation (or PSA) markets.

Sales and marketing expenses totaled $3.4 million (or 19% of revenue) for the
first quarter of 2002 compared to $2.9 million (or 20% of revenue) in same
period of 2001. Sales and marketing expenses consist primarily of salaries,
commissions, travel, advertising and promotional expense. The increase in
first quarter 2002 sales and marketing expenses versus the prior year is a
reflection of added personnel costs and advertising to support sales of the
Companys new products and its expansion into new PSA markets.

General and administrative expenses were $2.3 million (or 12% of revenue) for
the first quarter of 2002 and totaled $1.7 million (or 12% of revenue) in the
first quarter of 2001. General and administrative expenses consist mainly of
salaries of corporate executive, legal, financial, information
systems and human resources
personnel, as well as professional fees and insurance costs. The increase in
expenses for 2002 primarily reflects added costs to support the Companys
higher revenues.

Amortization expense for goodwill and other acquired intangibles decreased to
$190,000 (or 1% of revenue) for the first quarter of 2002 from $514,000 (or 4%
of revenue) for the same period of 2001. This decrease is a reflection of the
adoption of SFAS No. 142, Goodwill and Other Intangible Assets on January 1,
2002, at which time the Company ceased amortization of goodwill.

The Company reported net interest income of $96,000 for the first quarter of
2002 compared to $298,000 for the first quarter of 2001. The reduced interest
income in the current year primarily reflects lower interest rates on the
balances available for investment.



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The income tax provision of $433,000 (or 38% of pre-tax income) for the first
three months of 2002 is slightly higher than the statutory rate due to state
income taxes. For the first three months of 2001, the Company had an income
tax benefit of $103,000 (or 25% of pre-tax), which was the direct result of the pre-tax loss,
offset in part, by the permanent difference of non-deductible goodwill
amortization and state income taxes.

Risks and Uncertainties

The Companys personnel and other operating expenses are based in part on its
expectations for work efforts needed to generate future revenue and are
relatively fixed in the short-term. If the Company is unable to generate
significant new engagements, or if there is any delay or cancellation of
engagements in a particular period, there could be a material adverse affect on
the Companys consolidated results of operations and financial condition.
Additionally, the Companys implementation personnel require significant
advanced training prior to servicing customers. Therefore, the Company could
face the short-term risk of having a shortage of experienced implementation
personnel capable of generating revenues in the event of a rapid ramp up in new
customer orders.

Management believes that the Company could experience significant fluctuations
in future operating results caused by several factors, including the size and
timing of customer engagements; the length of the sales cycle; market
acceptance of its software systems and services; technological changes in
computer systems and environments; changes in the Companys or its competitors
pricing policies; the Companys success in expanding to new markets combined
with added costs for such expansion efforts; the cost of new product
development; the mix of software systems and services and changes in general
economic conditions.

Liquidity and Capital Resources

The Companys cash and cash equivalents totaled $24.1 million at March 31, 2002
compared to $24.7 million at December 31, 2001. Working capital at March 31,
2002 was $23.2 million compared to $22.1 million at December 31, 2001.
Management believes that the Companys cash and cash equivalent balances,
anticipated cash flow from operations and other external sources of available
credit will be sufficient to meet the Companys cash requirements for the
foreseeable future.

On May 16, 2000, the Company entered into a two-year, $10 million revolving
credit agreement, as amended, with Mellon Bank, N.A. No borrowings were
outstanding under the credit facility at March 31, 2002 or December 31, 2001.
Borrowings under the credit facility will bear interest at the Companys choice
of an adjusted LIBOR or prime rate, as defined in the credit agreement. The
credit facility is collateralized by substantially all of the Companys
tangible and intangible assets and requires the Company to maintain an
aggregate of $5 million in a certificate of deposit as collateral with the
bank. Additionally, the credit agreement contains customary covenants that
require compliance with certain financial ratios and targets, and restricts the
incurrence of additional indebtedness, payment of dividends and acquisitions or
dispositions of assets, among other things. The credit facility, as amended,
expires in April 2003.

New Accounting Standards

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 141, (SFAS No. 141),
Business Combinations, which establishes new standards for accounting and
reporting requirements for business combinations and requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. Use of the pooling-of-interest method is prohibited.

In June 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets, which addresses how intangible assets should be accounted for in the
financial statements. This new standard eliminates amortization for goodwill
and intangible assets that have indefinite useful lives and requires such
assets to be tested annually for impairment, or more frequently if events or
changes in circumstances indicate that the related assets might be impaired.
Intangible assets that have finite useful lives continue to be amortized over
their useful lives and are subject to impairment testing in accordance with
current accounting standards.



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In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets, that supercedes SFAS No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of. However, this statement retains the fundamental provisions of
SFAS No. 121 for recognizing and measuring the impairment of long-lived assets
to be held and used, as well as measuring long-lived assets to be disposed of
by sale.

The Company adopted SFAS No. 142 and SFAS No. 144 on January 1, 2002. The
adoption of these statements did not have a material adverse impact on the
Companys consolidated results of operations and financial condition.

Forward Looking Statements

This Quarterly Report on Form 10-Q contains certain statements that are, or may
be, forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, and Section 27A of the Securities
Act of 1933, as amended, that represent the Companys expectations or beliefs
concerning future events, including the Companys future product initiatives,
sales and financial performance. For this purpose, any statements that are not
statements of historical fact may be deemed to be forward-looking statements.
Such forward-looking statements are about matters that are inherently subject
to risks and uncertainties.

Factors that could influence the matters discussed in, and cause actual results
to vary materially from any results expressed or implied by, such
forward-looking statements include the timing and amount of revenue that may be
recognized by the Company, continuation of current expense trends, unsuccessful
integration of acquired businesses, unforeseen changes in the Companys
markets, continued acceptance of the Companys existing services and products
in the Companys existing markets and the acceptance of these services and
products in new markets, the ability to timely complete the development of new
products and services at reasonable cost, customer acceptance of new products
and services and general changes in the economy. These factors of risk are
also detailed under Risks and Uncertainties in this Form 10-Q and from time to
time in the Companys SEC reports, including the Report on Form 10-K for the
year ended December 31, 2001 and the annual report to shareholders. There can
be no assurance that such future events or projected results will be achieved
and actual results could differ materially. The Company does not undertake any
obligation to update any forward-looking statements.




Item 3. Quantitative and Qualitative Disclosures about Market Risk

A portion of the Companys business is transacted in foreign currencies and the
Company may be exposed to financial market risk resulting from fluctuations in
foreign currency exchange rates. The Company monitors the volatility of
foreign currencies and may utilize hedging programs or other derivative
financial instruments commonly used to reduce financial market risks if deemed
appropriate. To date the Company has not utilized any derivative financial
instruments.

The Company has limited exposure to market risk for changes in interest rates
related to the Companys cash and cash equivalents. The Company maintains an
investment policy designed to ensure the safety and preservation of its cash
and cash equivalents by limiting default risk, market risk and reinvestment
risk by depositing its cash and cash equivalents in major financial
institutions.




PART II  Other Information




Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

None.

(b) Reports on Form 8-K

None.



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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

|                   |                                                                      |                     
|------------------ | -------------------------------------------------------------------- | --------------------
|                   | ELITE INFORMATION GROUP, INC.                                       
|                  
|Date: May 14, 2002 | By:                                                                  | /s/ Barry D. Emerson
|                   |                                                                     
|                   | Barry D. Emerson, Vice President,
Treasurer, Chief Financial Officer



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