According to industry sources, information technology spending, including spending on systems and services by businesses with less than 1,000 employees is expected to grow approximately 8.0% in 2005, outpacing the growth in spending by larger enterprises. In addition, information technology spending by these small and medium-sized businesses in the retail and wholesale trade vertical markets ranged from approximately 1.5% to 2.0% of their total revenues in 2004.

To meet the challenges of today’s competitive environment, small and medium-sized businesses demand products and services designed to fulfill unique business needs within a particular vertical market.

The Company offers systems consisting of proprietary vertical-specific software applications, implementation and training and third-party hardware and peripherals. The Company’s systems provide in-store, retail, distributor and warehouse-based solutions with fully-integrated applications that manage the workflows and data relating to a customer’s typical sales transaction and, automate and streamline a customer’s inventory, sales and distribution operations. These applications include order management and fulfillment, barcode scanning and processing, inventory control, pricing, purchasing, accounts receivables and payables, special order processing, quote and bid processing, vendor and manufacturer communications, payroll, general ledger and credit and debit card authorization.

In addition, the Company offers productivity tools and add-on modules to its customers to enhance the capabilities of its systems. The modular design of the Company’s productivity tools and add-on modules, such as business intelligence, credit card signature capture and delivery tracking, provides its customers with flexibility to deploy or implement its offerings individually or incrementally. The Company primarily uses Dell Inc.’s industry standard server and workstation hardware to power of its software solutions. In addition, the Company offers hardware solutions from International Business Machines Incorporated and Hewlett-Packard Company for certain of its solutions.

The Company provides comprehensive maintenance and customer support for each of its systems. The Company’s customers are principally small and medium-sized businesses that require a high level of service, training and customer support to train users and to maintain their systems. The Company’s product support offerings include access to software updates, advice line support, nationwide hardware and networking specialists, and server and peripheral repair.

The Company has web-based product support that allows customers direct access to a call tracking system, on-line product training courses and an on-line knowledge base. These features allow customers to request support services, review specific calls or their entire call history, increase employee system knowledge through on-line coursework or search a knowledge base to obtain immediate answers to questions.

Total cost of revenues for the six months ended March 31, 2005, increased by $3.7 million, or 7.0%, to $28.6 million compared to $23.2 million for the six months ended March 31, 2004.

Total operating expenses increased by $3.3 million, or 9.4%, to $38.5 million for the six months ended March 31, 2005 compared to $35.2 million for the six months ended March 31, 2004.

Interest expense for the six months ended March 31, 2005 was $9.7 million, compared to $9.9 million for the six months ended March 31, 2004, a decrease of $0.2 million.