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Global Imaging earnings increase by 61%

26 Jul, 2001

Global Imaging earnings increase by 61%

Global Imaging Systems' First Quarter EBITDA Up Nine Percent; First Quarter Revenues Up 13.5 Percent; EPS at High End of Estimated Range TAMPA, Fla., July 25 /PRNewswire/ -- Global Imaging Systems, Inc. (Nasdaq: GISX - news) today announced record-high first quarter revenues; earnings before interest, taxes, depreciation and amortization (EBITDA); net income and earnings per share for the three months ended June 30, 2001.

For the quarter, EBITDA increased nine percent to $19,863,000 compared with $18,191,000 for the corresponding period of the prior year. Net income amounted to $5,803,000 or 32 cents per basic and diluted share reflecting the adoption of Financial Accounting Standards Board (FASB) Statement No. 142, Goodwill and Other Intangible Assets. For the first quarter a year ago, the company reported net income of $3,557,000 or 19 cents per basic and diluted share. Revenues increased 13.5 percent to $155 million from $137 million in the first quarter last year.

The results for the quarter include the impact of adopting FASB No. 142 which Global plans to adopt prior to issuing its financial statements for the quarter ended June 30, 2001. Beginning with this quarter, Global will no longer amortize goodwill related to acquisitions. On a pro forma basis, if Global had been under the rules of FASB No. 142 during the corresponding quarter a year ago, earnings per basic and diluted share would have increased from the reported 19 cents to 27 cents compared to the 32 cents reported this year. Had the company elected not to adopt FASB No. 142, first quarter 2002 earnings per basic and diluted share would have been 22 cents, which is at the high end of the range of analysts' estimates, compared with 19 cents on the same basis a year ago.

Tom Johnson, president and CEO of Global Imaging Systems, said, ``By any measure, our employees delivered another strong quarterly performance in the face of difficult economic trends. The internal revenue growth on the copier side of our business continued at a strong nine percent. Our combined internal revenue growth rate slowed to eight percent as the technology solutions side of our business experienced the effects of our customers slowing down and extending their purchasing cycles. For all of fiscal 2002, we remain confident that we can meet or exceed our internal revenue growth rate goal of 10 percent for the fourth consecutive year.''

Mr. Johnson said he was pleased with the first quarter results and commended Global employees and managers for maintaining their focus on the healthy middle market while larger companies competing in other segments of the office imaging business continue to be challenged.

Looking forward, Mr. Johnson reiterated, ``The imaging industry middle market, where Global is focused, continues to perform well and presents ongoing opportunities for us. We will continue our conservative approach to acquisitions, looking to acquire additional satellite copier operations, funded out of cash flow from operations. While we are seeing some uncertainty in economic conditions, we are maintaining our guidance for fiscal 2002. However, the adoption of FASB No. 142 raises the range of earnings per share from $1.05 - $1.11 to $1.45 - $1.51. We still believe that earnings will be weighted more toward the second half of the year.''

Global Imaging Systems offers its middle-market customers a one-stop shop for office imaging solutions. The company provides a broad line of office imaging solutions including the sale and service of automated office equipment, network integration services, electronic presentation systems, and document imaging management systems. The company is a disciplined, profitable consolidator in the highly fragmented office imaging solutions industry.

This news release contains forward-looking statements and statements based on forward-looking information, including statements relating to Global's expected future earnings, future sales and growth rates, the pace of Global's acquisitions, future cash flows, the future performance of Global's market, and general economic conditions. These statements are based on numerous assumptions and are subject to uncertainties and risks. Actual results could differ materially. Factors that might cause Global's results to differ materially include risks relating to downturns in the economy; Global's substantial debt and debt service obligations; the challenge of integrating acquired businesses; the need for funding acquisitions; the need for skilled employees; rapid technological change in Global's industry; dependence on suppliers; and high levels of competition. Most of these risks are discussed in more detail under the caption 'Risk Factors' in Global's annual report on Form 10-K for the year ended March 31, 2001.

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