<PAGE>

                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549

                                      FORM 10-K

(Mark One)

/X/            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                     FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1998

                                       OR

/ /          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 0-13111

                           ANALYTICAL SURVEYS, INC.
            (Exact name of registrant as specified in its charter)

               Colorado                           84-0846389
     ------------------------------            -------------------
     State or other jurisdiction of            (I.R.S. Employer
     incorporation or organization             Identification No.)

       941 Meridian Street, Indianapolis, IN              46204
     ------------------------------------------------------------
     (Address or principal executive offices)          (Zip Code)

Registrant's telephone number, including area code   (317) 634-1000
                                                  -------------------

Securities registered pursuant to Section 12(b) of the Act:
     Title of each class           Name of each exchange on which registered

------------------------------     -----------------------------------------

         Securities registered pursuant to section 12(g) of the Act:
                               Common Stock
         ------------------------------------------------------------
                             (Title of class)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 
405 of Regulation SK is not contained herein, and will not be contained, to 
the best of registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-K or any 
amendment to this Form 10-K.  / /

The aggregate market value of the voting and non-voting common equity held by 
non-affiliates of the registrant is $139,433,000, based on the closing price 
of the Common Stock on December 15, 1998.

<PAGE>

The number of shares outstanding of the registrant's Common Stock, as of 
December 15, 1998, was 6,772,054.

                         DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated by reference into Part III of this 
Report: the Registrant's definitive proxy statement for its 1999 Annual 
Meeting of Shareholders. 

<PAGE>

                                 TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                             Page
<S>                                                                          <C>
                                      PART I.

Item 1.  Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1

Item 2.  Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14

Item 3.  Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . .  14

Item 4   Submission of Matters to a Vote of Security Holders. . . . . . . . .  14


                                      PART II.

Item 5.  Market for Common Equity and Related Stockholder Matters . . . . . .  14

Item 6.  Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . .  15

Item 7.  Management's Discussion and Analysis of Financial Condition and
          Results of Operations . . . . . . . . . . . . . . . . . . . . . . .  17

Item 7A. Quantitative and Qualitative Disclosures . . . . . . . . . . . . . .  24

Item 8.  Financial Statements and Supplementary Data. . . . . . . . . . . . .  24

Item 9.  Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure. . . . . . . . . . . . . . . . . . . . . . . .  24


                                     PART III.

The information required by Part III (Items 10, 11, 12 and 13) is 
incorporated by reference to the Company's  Proxy Statement for its 1999 
Annual Meeting of Shareholders in accordance with General Instruction G(3) of 
Form 10-K.


                                      PART IV.

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K . .  43

</TABLE>

<PAGE>

                                      PART I.

ITEM 1.   BUSINESS.

OVERVIEW

     Analytical Surveys, Inc. ("ASI" or the "Company") is a leading provider 
of customized data conversion and digital mapping services for the geographic 
information systems market. A geographic information system ("GIS") is a 
high-resolution, large-scale, richly detailed "intelligent map" that allows 
users to input, update, query, analyze and display detailed information about 
a geographic area. Geographic information systems are widely used by 
utilities, state and local governments, federal agencies and commercial 
businesses to manage massive infrastructures effectively, to improve 
operating efficiencies and to analyze future demand for facilities. The 
Company primarily targets utilities and state and local governments, and its 
current customers include but are not limited to the New York City Department 
of the Environment, Florida Power & Light, Niagra Mohawk Power Company, 
Entergy, Michigan Consolidated Gas, U S WEST and FirstEnergy Corp.

     The Company believes that the market for geographic information systems 
is experiencing growth due to numerous factors, including: growing awareness 
of the benefits of GIS technology; significant reductions in computer 
hardware prices; increased capability and reliability of hardware and 
software; deregulation and consolidation in the utility industry; and 
increased demand for geographic information systems in growing communities. 
In addition, the Company believes that GIS users are increasingly outsourcing 
their data conversion and other GIS services projects to third-party 
providers such as ASI. The Company provides its customers with a single 
source for all data conversion services necessary in the production of a 
customized GIS. 

     In 1995, ASI embarked on its current growth strategy, which includes 
consolidation of the fragmented GIS services industry. To date, the Company 
has completed four strategic acquisitions that have expanded the Company's 
geographical scope, capacity, customer base, product offerings, proprietary 
technology and operational expertise. The Company acquired Intelligraphics, 
Inc. ("Intelligraphics") located in Wisconsin in December 1995; Westinghouse 
Landmark GIS, Inc. ("ASI Landmark") located in North Carolina in July 1996, 
MSE Corporation ("MSE") located in Indiana in July 1997 and Cartotech, Inc. 
("Cartotech") located in Texas in June 1998.

     Through internal growth and acquisitions, the Company has increased its 
sales from $9.1 million for fiscal 1993 to $88.2 million for fiscal 1998, an 
annual compound average growth rate of 57.5%. In addition, the Company's net 
income has increased from $485,000 to $7.2 million over the same period, an 
annual compound average growth rate of 71.5%.  As of September 30, 1998, 
ASI's backlog, which represents the amount of revenue that has not been 
recognized on signed contracts, was $99.0 million,  up from $9.1 million at 
September 30, 1993. 

INDUSTRY BACKGROUND

     Large organizations, such as utility companies, local governments, 
federal agencies and businesses, often need tools with which they can monitor 
complex networks of assets and infrastructure, forecast trends, analyze 
present and future demands on facilities and manage daily operations. Central 
to many of these processes are the availability and integration of accurate 
geo-referenced information. 

     Historically, geo-referenced information, such as the location of 
utility facilities and infrastructure, tax data, property assessments and 
zoning restrictions, has been available only in paper-based form, such as 
maps, aerial photographs and property records, or in tabular databases. 
Geo-referenced information in these forms is difficult to integrate into 
useful information systems and offers few opportunities to leverage 
information into additional uses in a timely and effective manner. The advent 
of more powerful, reliable and less expensive computer hardware and software, 
greater standardization of operating systems such as Windows NT, and more 
cost-effective means of delivering a GIS, such as CD-ROM or electronic 
distributions via the Internet, have made geographic information 

                                       1

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systems an affordable and widely utilized tool in many organizations. As a 
result, more organizations are implementing geographic information systems in 
order to manage previously overwhelming amounts of information and are 
expanding both the access to and applications for geographic information 
systems. 

GEOGRAPHIC INFORMATION SYSTEMS

     A geographic information system is a high-resolution, large-scale (E.G., 
one inch = 100 feet), richly detailed "intelligent map" that allows users to 
input, update, query, analyze and display information about a geographic 
area. A GIS integrates database operations, such as query and statistical 
analyses, with the unique visualization and geographic analyses offered by 
paper maps. The capabilities of a GIS make it a valuable tool for a wide 
range of organizations for complex analysis and planning. 

     A GIS is produced by converting high-resolution aerial photography or 
paper maps into a digital form to create a digital base map. Once a digital 
base map has been created, additional geo-referenced data (E.G., water and 
sewer lines, power lines and property boundaries) are converted into digital 
form and added as additional layers of information onto the base map. The map 
can then be linked to existing or newly created tabular databases, such as 
property records and billing and usage history. The resulting GIS is used to 
perform the specific analyses and functions required by users. New or changed 
data can then be added easily, allowing users to maintain records that are 
more accurate, detailed and current than paper maps, and can be accessed 
simultaneously by multiple users within an organization. 

USERS OF GEOGRAPHIC INFORMATION SYSTEMS

     Geographic information systems are most widely used by utilities, state 
and local governments, federal agencies and commercial businesses to manage 
massive infrastructures more effectively, to improve operating efficiencies 
and to analyze future demand for facilities. Typical customers and 
applications for geographic information systems are illustrated below. 


CUSTOMER TYPE                         SAMPLE USES

Gas and electric utilities and        dispatch service crews
telephone companies                   monitor capital equipment replacement 
                                      and maintenance 
                                      evaluate and select rights-of-way 
                                      corridors 
                                      analyze environmental impacts

State and local governments           dispatch emergency vehicles 
                                      analyze crime or traffic patterns
                                      determine tax assessments
                                      analyze future demand for roads or 
                                      recreational facilities

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Federal agencies                      manage forests
                                      track soil and water pollution levels
                                      create and maintain navigation systems
                                      analyze population statistics to determine
                                      voting districts

Commercial businesses                 manage natural resources
                                      design civil engineering projects
                                      develop aircraft terrain avoidance systems

THE GIS MARKET

     Frost & Sullivan, an industry research firm, estimates that the global 
GIS market will grow from $4.5 billion in 1997 to $8.1 billion by 2002. Frost & 
Sullivan identifies five segments within the GIS market: software for 
personal computers; software for work stations; software for mainframes; 
data; and services (which includes consulting, systems integration, database 
design, data collection and data conversion). The Company competes primarily 
in the data conversion and collection segments of the GIS services industry. 
Frost & Sullivan estimates that the GIS services market, which represents 
approximately 70% of the global GIS market, will grow from $3.2 billion in 
1997 to $5.5 billion in 2002. 

     The GIS services business is very competitive and highly fragmented. 
Participants in the industry include small regional firms, large independent 
firms, large companies with GIS services divisions, in-house operations and 
international low-cost providers of data conversion services. The Company 
believes that many of the businesses in the GIS services industry do not have 
adequate access to capital for expansion, lack the capacity to complete 
large, long-term projects and do not have the technical expertise or 
experience that customers increasingly require of their GIS services vendors. 
As a result, the Company believes that the industry is poised for 
consolidation. 

FACTORS DRIVING MARKET GROWTH

     Several factors are driving the growth of the GIS services market: 

          INCREASED AWARENESS OF THE BENEFITS OF GIS. As GIS technology is
          implemented and becomes an integral part of the planning and
          decision-making processes throughout organizations, such as utilities
          and governments, an increased awareness of the benefits of geographic
          information systems is driving greater demand. 

          ADVANCES IN TECHNOLOGY. Significant reductions in computer hardware
          and software prices, as well as increased processing power and
          reliability of information systems, have made geographic information
          systems more technologically feasible and economically viable for
          organizations to implement and maintain. As a result, GIS technology
          is available for more users within organizations, thereby increasing
          access and applications for geographic information systems. 

          DEREGULATION AND CONSOLIDATION IN THE UTILITY INDUSTRY. Increased
          competition in the utility industry, brought about by deregulation and
          consolidation, has fueled demand for geographic information systems as
          utilities seek the benefits of geographic information systems in order
          to market more effectively, increase operating efficiencies and manage
          larger infrastructures. 

          NEEDS OF GROWING COMMUNITIES. Rapid population growth has increased
          the requirements of certain state and local governments for geographic
          information systems to assist in building and managing
          infrastructures, including resources such as roads, utilities and fire
          departments. 

                                       3

<PAGE>

          TREND TOWARDS OUTSOURCING. The Company believes that GIS users are
          increasingly outsourcing their data conversion and collection
          projects, recognizing the numerous benefits of leveraging the
          expertise and capacity of third-party vendors. In addition,
          outsourcing allows customers to continue to focus on their core
          businesses and avoid the significant investments in personnel and
          infrastructure required to implement and maintain a GIS. 

ANALYTICAL SURVEYS, INC.

     The Company serves as a single-source provider for all data conversion 
and collection services necessary to create a customized GIS. Through 
internal development and strategic acquisitions, the Company has developed 
significant resources and capacity to perform the wide range of data 
conversion and collection tasks necessary in the successful completion of 
large, complex projects for a wide range of industries.  The Company has also 
developed and acquired industry-leading expertise and proprietary technology 
essential to accurately and timely satisfy the unique requirements of each 
GIS project. In addition, ASI's completion of four strategic acquisitions 
since 1995 has established it as one of the industry's leading consolidators. 

STRATEGY

     The Company's objective is to maintain and enhance its leadership 
position in the data conversion and digital mapping industry. This objective 
is reflected in the Company's strategy: 

          EXPAND BUSINESS IN EXISTING MARKETS. The Company believes that there
          is significant potential within its existing customer base for
          expanded services and products and intends to add to the breadth of
          services it offers to such customers. The Company also intends to
          capitalize on the increasing number of GIS users in its core markets
          of utilities and state and local governments by marketing to new
          customers in these markets and increasing capacity in order to meet
          the demands of an expanded customer base. 

          CONSOLIDATE INDUSTRY EXPERTISE AND "BEST PRACTICES" THROUGH STRATEGIC
          ACQUISITIONS. In 1995, ASI embarked on a strategy to acquire companies
          with demonstrated records of performance, proven operating methods,
          solid management teams and complementary technologies and customer
          bases. To date, the Company has completed four strategic acquisitions
          that have expanded the Company's geographical scope, capacity,
          customer base, product offerings, proprietary technology and
          operational expertise. By retaining the core management teams at these
          acquired companies, the Company believes that it is able to take
          advantage of the "best practices" of each acquired company. The
          Company intends to continue consolidating the highly fragmented GIS
          services industry by targeting similar businesses for acquisition. See
          " Recent Acquisitions" and "Risk Factors Risks Associated with
          Acquisition Strategy." 

          CONTINUE TO MAINTAIN AND DEVELOP TECHNOLOGICAL AND OPERATIONAL
          LEADERSHIP. The Company believes that its past success has been
          largely due to its technological expertise and operating procedures.
          The Company has developed and acquired proprietary software and
          procedures that automate portions of otherwise labor-intensive data
          conversion processes, enabling the Company to provide cost-effective
          and high-quality services on a timely basis. The Company intends to
          continue its efforts to develop new technology and to improve its
          existing technology and procedures, thereby enhancing its ability to
          expand into additional markets and further improve its production
          capacity and productivity. See " Research and Development." 

          EXPAND INTO INTERNATIONAL MARKETS. In fiscal 1998, revenues from
          international sales represented approximately 8% of the Company's
          total revenues.  The Company intends to increase its share of the
          international GIS services market by targeting international GIS users
          within its core markets. The Company believes that alliances with
          local businesses or individuals may be important to successful entry
          into certain international markets. The Company intends to continue to
          seek out 

                                       4

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          such relationships and to continue to market directly to international
          GIS users. See " Sales and Marketing." 

ASI SERVICES

DESIGN OF A GIS PROJECT

     Data conversion and collection services comprise an important part of 
the process of developing a geographic information system. The development of 
a GIS typically involves multiple vendors, each of whom may participate in 
one or more portions of the overall project. Such vendors, which include 
consultants, hardware and software vendors and data conversion and collection 
providers, are generally evaluated on the basis of experience, expertise, 
reputation, production capacity and price. The typical phases of a GIS 
project are: planning/bidding; contract award; data collection; data 
conversion; and maintenance and updating.

     A description of the tasks performed during each phase of a typical 
project is set forth below. These tasks, from planning/bidding through data 
conversion, generally take between one to four years to complete. Services 
provided by the Company are highlighted in italicized boldface type. 

PROJECT PHASE           ACTIVITIES

Planning/Bidding        Select consultant, if desired
                        Conduct needs assessment
                        Determine scope and functions of GIS
                        Prepare technical specifications
                        Design database
                        Distribute requests for proposal

Contract Award          Select hardware and software vendors
                        Select data conversion vendor

Data Collection         CONVERT PAPER MAPS AND EXISTING COMPUTER 
                          BASED INFORMATION TO GIS DIGITAL FORMAT
                        OBTAIN AERIAL PHOTOGRAPHS
                        CONDUCT FIELD INVENTORY
                        OBTAIN OTHER DATA   PAPER OR DIGITAL
                        VERIFY ACCURACY OF DATA

Data Conversion         CREATE DIGITAL LAND-BASE MAP
                        -DIGITAL ORTHOPHOTOGRAPHY
                        -PHOTOGRAMMETRIC MAPPING
                        -CADASTRAL MAPPING
                        CONVERT OTHER GEO-REFERENCED DATA INTO DIGITAL FORM
                          TO CREATE INFORMATION "LAYERS"

Maintenance             GATHER AND CONVERT UPDATED DATA
  and Updating

                                       5

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SPECIALIZED SERVICES OF ASI

     The Company offers a full range of services to create the digital base 
maps and databases of related geo-referenced information used in geographic 
information systems. 

DIGITAL LAND BASE MAPS.  ASI uses specialized computers and internally 
developed proprietary software to create digital land base maps from paper 
maps, aerial photographs, land surveys and legal descriptions. The base maps 
are created using one of three technologies, depending on the needs of the 
customer: photogrammetric mapping, digital orthophotography or cadastral 
mapping. 

     PHOTOGRAMMETRIC MAPPING. Photogrammetric mapping produces a digital land
     base map using data that is extracted from aerial photographs. The process
     uses an analytical stereoplotter (a three-dimensional viewing and data
     recording device), specialized computer equipment and proprietary software
     and operating procedures to draw, with lines, a highly precise map of
     visible ground features. Photogrammetric mapping may include contour and
     elevation information. 
     
     DIGITAL ORTHOPHOTOGRAPHY. Digital orthophotography is used to create richly
     detailed digital maps that have the appearance of, and are based on, aerial
     photographs. Aerial photographs are scanned into a computer, and the
     resulting image is corrected (orthorectified) to delete distortions in
     order to produce a highly precise map. Vector lines can be superimposed
     onto the map to enable users to determine the precise location of any
     particular feature or to measure distances from one feature to another.
     Digital orthophotographs also can be used as base maps for the layering of
     additional geo-referenced data. 
     
     CADASTRAL MAPPING. Cadastral maps illustrate property lines and are
     prepared by digitizing existing paper maps or converting the legal property
     descriptions into map coordinates. 

OTHER GEO-REFERENCED INFORMATION.  Once the base map is produced, links to 
tabular databases are created, and other geo-referenced data, such as 
buildings, telephone poles and zoning restrictions, are collected, verified, 
converted into digital format and added to the base map to create a GIS. The 
Company provides an experienced field inventory staff to collect and verify 
information and uses computerized and manual techniques to verify and 
digitize data from paper sources. Once a GIS is completed, users can view the 
base map and any or all of the layers of data on a computer screen and can 
retrieve selected data concerning any desired location appearing on the 
screen or all data matching one or more variables.

RECENT ACQUISITIONS

     In 1995, the Company embarked on its current growth strategy, including 
consolidation of the fragmented GIS services industry. The Company acquired 
substantially all of the assets of Intelligraphics, based in Wisconsin, in 
December 1995. Intelligraphics, with over 200 employees, significantly 
expanded the Company's capacity to perform large projects, added utility 
industry expertise and established ASI's presence in the midwestern United 
States. The acquisition contributed over 25 new customers and $12.3 million 
in backlog to the Company. 

     In July 1996, the Company expanded its services to state and local 
governments by acquiring substantially all of the assets of ASI Landmark. 
Based in North Carolina, ASI Landmark's primary business is land base and 
cadastral mapping. Prior to this acquisition, ASI had utilized outside 
subcontractors for certain of these services. ASI Landmark also provided the 
Company with additional capacity for photogrammetry and a presence in the 
eastern and southeastern United States. The acquisition contributed 
approximately 20 new customers, $9.1 million in backlog and 105 employees to 
the Company. 

     The Company acquired MSE in July 1997. The acquisition of Indiana-based 
MSE gave the Company greater capacity to serve the utility market and further 
enhanced ASI's presence in the midwestern United States. In addition, the 
acquisition of MSE contributed over 200 new customers and $43.0 million of 
backlog to the Company. 

                                       6

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Over 325 employees joined the ASI workforce as a result of the MSE 
acquisition, including the Company's current Chief Operations Officer and 
Chief Administrative Officer. 

     The Company acquired Texas-based Cartotech in June 1998. The Cartotech 
acquisition extended ASI's presence in the utility market, enhanced the 
Company's field inventory operations and provided the Company with a strong 
presence in the southwestern United States. The Cartotech acquisition 
contributed over 50 new customers, 270 employees and backlog of $19.3 million 
to the Company. One of Cartotech's customers, FirstEnergy Corp. (formerly 
known as Ohio Edison), accounted for approximately 46.0% of Cartotech's 
revenues in 1997. 

     With all of its acquisitions to date, the Company has retained the core 
management teams (except for former owners) and most employees in order to 
capitalize on their understanding of their respective markets and to provide 
continuity with existing customer relationships. As a result, the acquired 
businesses continue to operate somewhat independently while the Company has 
taken steps to assimilate the businesses on a gradual basis. The Company 
believes that this approach avoids disrupting existing customer 
relationships, promotes initiative and responsibility by such management and 
personnel and avoids the disruption that can accompany rapid assimilation. 
This approach also enables the Company to promote use of the "best practices" 
of the acquired businesses throughout the Company in such areas as bid 
preparation, production processes and utilization of proprietary software. 

CUSTOMERS

     The Company derives its revenues primarily from two core markets, 
utilities and state and local governments, and also serves federal agencies 
and commercial businesses. From time to time, the revenues earned on a 
specific contract may exceed 10% of total Company revenues earned in a fiscal 
year. The only customer that accounted for more than 10% of the Company's 
revenues in fiscal 1996 was Southern New England Telephone, which accounted 
for approximately 10% of revenues in that year. No customer accounted for 
more than 10% of the Company's revenues in fiscal 1997 or fiscal 1998. See 
"Risk Factors Dependence on Certain Customer Markets." 

     Set forth below are certain of ASI's current and recent past customers 
in these markets.

UTILITIES
---------
Electric Power
Boston Edison Company
Central Illinois Power
Consolidated Natural Gas
Duke Power
FirstEnergy Corp. (formerly Ohio Edison)
Florida Power & Light
Helix Water District
Illinois Power Company

Michigan Consolidated Gas
MidAmerican Energy Corporation
Mississippi Power
Niagara Mohawk
Southern California Gas
Southern New England Telephone
U S WEST
UtiliCorp United
Virginia Power

COMMERCIAL BUSINESSES
---------------------
Allied Signal

                                       7

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Jeppesson Sanderson

STATE AND LOCAL GOVERNMENTS
---------------------------
Baltimore County, MD
Cambridge, MA
Capital Area Planning Council, Austin, TX
Davidson County, NC
DeKalb County, GA
Gwinnett County, GA
Greenwich, CT
Johnson County, KS
Knoxville, TN
Montgomery County, MD
New York City Department of Environment, NY
Norfolk, VA
Summit County, OH

INTERNATIONAL
-------------
Centra Gas Company (Ontario, Canada)
China Light & Power (Hong Kong)
Mercury Energy (New Zealand)
SaskPower (Saskatchewan, Canada)
Union Gas Company (Ontario, Canada)
Yorkshire Electricity Board (United Kingdom)

Federal Agencies
----------------
National Imagery Mapping Agency
U.S. Army Corps of Engineers
U.S. Geological Survey

Sales and Marketing

     The Company markets its products and services in its domestic and 
international markets primarily through an internal sales force. The Company 
augments its direct sales efforts by maintaining memberships in professional 
and trade associations and by actively participating in industry conferences. 

     A significant portion of the Company's sales is the result of referrals 
derived, either directly or indirectly, from consultants in the GIS industry. 
The Company believes that its continued success in the GIS services market is 
dependent, in part, on its ability to maintain current relationships and to 
cultivate additional relationships with other leading consultants. 

     The Company believes that alliances with local businesses or individuals 
may be important to successful entry into certain international markets and 
intends to continue to seek out such relationships and to market directly to 
international customers. The Company's sales cycle is generally lengthy, as 
customers normally take several months to go through the bidding/planning and 
award phases of a GIS project. Once awarded, it generally takes 30 to 60 days 
until the final contract is signed. Most contracts take from six to 48 months 
to complete. See "Risk Factors Dependence on Business Alliances."

                                       8

<PAGE>
SUBCONTRACTORS

     ASI employs certain selected subcontractors for tasks outside its 
expertise, such as aerial photography and ground survey. The Company also 
uses subcontractors when necessary to expand capacity, meet deadlines, reduce 
production costs, manage work load and encourage businesses owned by women 
and minorities. In May 1998, the Company acquired Interra Technologies, a 
280-employee India-based company, for $438,000.  Interra had been a provider 
of subcontractor services to the Company. See "Risk Factors Dependence on 
Subcontractors," and "Risk Factors Dependence on Offshore Operations" and 
"-Personnel." 

RESEARCH AND DEVELOPMENT

     The Company believes that its past success has been largely due to its 
technological expertise and operating procedures. The Company has developed 
and acquired proprietary software and procedures that automate portions of 
otherwise labor-intensive data conversion processes, enabling the Company to 
provide cost-effective and high-quality services on a timely basis. The 
Company intends to continue its efforts to develop new technology and to 
improve its existing technology and procedures, thereby enhancing its ability 
to expand into additional markets and further improve its production capacity 
and productivity. 

     The Company engages in several research and development activities. The 
majority of these activities occur as the Company develops software or 
designs a product for a particular contract, so that the costs of such 
efforts are included as an integral part of the Company's services. Such 
custom designed software can often be applied to projects for other 
customers. These amounts expended by the Company are not included in research 
and development expenses, although the Company retains ownership of such 
proprietary software or products. Approximately 50 employees are 
substantially engaged in research and development efforts including three in 
its Advanced Technology Division. The Company expended $283,872, $274,905 and 
$255,928 in its Advanced Technology Division for the fiscal years ended 
September 30, 1996, 1997 and 1998 respectively. See "Risk Factors Reliance on 
Technology; Limited Protection of Proprietary Rights." 

COMPETITION

     The GIS services business is competitive and highly fragmented. The 
Company's competitors include small regional firms, independent firms, large 
companies with GIS services divisions, customer in-house operations and 
international low-cost providers of data conversion services. Additionally, 
as the GIS services industry evolves, additional competitors with greater 
resources than the Company may enter the industry. Several large companies 
with substantial financial resources are in the process of launching 
satellites with imagery technology that provides much more detailed 
photographs than have been available with such technology in the past. 
Although current commercially available satellite imagery does not provide 
the degree of resolution required by most of the Company's customers, if such 
technology becomes commercially available, satellite companies may attempt to 
enter the GIS services business or could form strategic alliances with the 
Company's competitors, and thereby could pose a substantial competitive 
threat to the Company. In addition, other improvements in technology could 
provide competitors or customers with readily available tools to perform the 
services provided by the Company and lower the cost of entry into the GIS 
services industry. 

          ASI seeks to compete on the basis of the quality of its products 
and the accuracy, responsiveness and efficiency with which it can provide 
services to customers. The Company uses its internally-developed proprietary 
production software as well as commercially available software to automate 
much of the otherwise labor-intensive GIS production process. The Company 
believes that its automated approach enables it to achieve more consistent 
quality and greater efficiencies than it could if it used more 
manually-intensive methods. The Company also believes that the retention of 
highly qualified managers and executive officers is critical to its ability 
to compete in the GIS data conversion industry. See "Risk Factors 
Competition" and "-Dependence on Key Personnel."

PERSONNEL

     As of September 30, 1998, ASI had approximately 1,735 employees, 
virtually all of whom are full-time. ASI does not have a collective 
bargaining agreement with any of its employees and generally considers 
relations with its employees to be good.

                                       9
<PAGE>

                                    RISK FACTORS

IN ADDITION TO THE OTHER INFORMATION SET FORTH IN THIS FORM 10-K, THE ISSUES 
AND RISKS DESCRIBED BELOW SHOULD BE CONSIDERED CAREFULLY IN EVALUATING AN THE 
COMPANY'S OUTLOOK AND FUTURE.

RISKS ASSOCIATED WITH ACQUISITION STRATEGY

     A major component of the Company's strategy is the acquisition of 
complementary GIS services businesses. The Company acquired Intelligraphics 
in December 1995; ASI Landmark in July 1996; MSE in July 1997; and Cartotech 
in June 1998. Acquisitions involve a number of special risks, including, but 
not limited to, potential adverse short-term effects on the Company's 
operating results, diversion of management's attention, the loss of key 
personnel, risks associated with the assimilation of the operations and 
personnel of the acquired companies, unanticipated business problems or legal 
liabilities and amortization of acquired intangible assets. In addition, when 
the Company acquires another business, it assumes the obligation to complete 
the acquired company's contracts that are in process. The Company's results 
of operations following any acquisition will depend, in part, on the ability 
of the Company to profitably complete such contracts, which could be 
adversely affected by the acquired company's underestimation of the cost or 
amount of work required to complete the project as well as additional costs 
necessary to correct problems associated with the acquired company's prior 
performance.  There is no assurance that the Company will be able to 
integrate Cartotech or other acquired businesses into the Company without 
substantial costs, delays or other operational or functional difficulties, or 
to obtain the synergies expected from such acquisitions. Some or all of these 
risks could have a material adverse effect on the Company. In addition, there 
can be no assurance that the Company will be able to identify and acquire 
additional strategic businesses, and, to the extent that consolidation 
becomes more prevalent in the GIS services industry, the prices for 
attractive acquisition candidates may reach unacceptably high levels. The 
inability of the Company to implement and manage its acquisition strategy 
successfully for the reasons set forth above or for other reasons would have 
an adverse effect on the Company. See " Risks Associated with Terms of 
Customer Contracts."

ABILITY TO MANAGE GROWTH

     The Company has grown substantially since 1996 and, in particular, since 
its acquisition of MSE in July 1997 and Cartotech in June 1998. An integral 
part of the Company's strategy is to continue its growth, primarily as a 
result of acquisitions and increased sales by the Company to new and existing 
clients. To the extent that the Company is able to continue to grow, its 
ability to manage any such growth will be critical to its success. The 
Company's growth will require the establishment of financial controls and 
accounting procedures at the acquired companies and the control of 
acquisition-related overhead.   Such growth also will require the continued 
enhancement of operational, financial and information systems and the 
attraction and retention of additional management and trained personnel. 
There can be no assurance that the Company will be able to manage expanded 
operations effectively, and its failure to do so would have a material 
adverse effect on the Company. See " Risks Associated with Acquisition 
Strategy."

                                       10

<PAGE>

COMPETITION

     The GIS services business is very competitive and highly fragmented. The 
Company's competitors include small regional firms, independent firms, large 
companies with GIS services divisions, customer in-house operations and 
international low-cost providers of data conversion services. Additionally, 
as the GIS services industry evolves, additional competitors with greater 
resources than the Company may enter the industry. Several large companies 
with substantial financial resources are in the process of launching 
satellites with imagery technology that provides much more detailed 
photographs than have been available with such technology in the past. 
Although current commercially available satellite imagery does not provide 
the degree of resolution required by most of the Company's customers, if such 
technology becomes commercially available, satellite companies may attempt to 
enter the GIS services business or could form strategic alliances with the 
Company's competitors, and thereby could pose a substantial competitive 
threat to the Company. In addition, other improvements in technology could 
provide competitors or customers with tools to perform the services provided 
by the Company and lower the cost of entry into the GIS services industry. A 
number of the Company's competitors or potential competitors have 
capabilities and resources greater than those of the Company. See " 
Dependence on Business Alliances."

RISKS ASSOCIATED WITH TERMS OF CUSTOMER CONTRACTS

     Virtually all of the Company's revenue is earned under long-term, 
fixed-price contracts. The Company's contractual obligations typically 
include several large projects that will extend over one to four years. The 
Company's ability to estimate its costs accurately when negotiating the 
overall price of a project is critical to ensuring the profitability of such 
project. The Company must also control the costs of performance under such 
fixed-price contracts. As the Company increases its marketing efforts to 
obtain larger projects, the needs to estimate costs accurately and to control 
costs of performance become more important. Schedule delays resulting from a 
customer's lack of available funding or schedule compressions required by 
customers may place additional strains on management to hire and train the 
personnel required for project completion. The Company's contracts with its 
customers are generally terminable by the customer on relatively short 
notice, and customers may request that the Company slow down or scale back 
the scope of a project in order to satisfy the customer's budget or cash flow 
requirements. In addition, the Company could experience material contract 
terminations or slowdowns. Long-term, fixed-price contracts for larger 
projects generally increase the Company's risk due to inflation. 

FLUCTUATIONS IN QUARTERLY OPERATING RESULTS; VOLATILITY OF STOCK PRICE

     The Company has experienced and expects to continue to experience 
quarterly variations in sales and operating income as a result of many 
factors, including the effects of acquisitions, timing of customers' budget 
processes, slowdowns or acceleration of work by customers, the number of 
operating days in each quarter and the impact of weather conditions on the 
ability of subcontractors to obtain satisfactory aerial photography. In 
addition, the Company has in the past experienced lower sales in its first 
fiscal quarter (ended December 31) due to certain customers' year-end funding 
constraints, seasonal limitations on obtaining aerial photography and 
seasonal slowdowns associated with the year-end holidays. 

     The Common Stock has experienced, and is likely to continue to 
experience significant price and trading volume fluctuations. The trading 
price of the Common Stock has been and may continue to be subject to 
significant fluctuations in response to actual or anticipated variations in 
the Company's quarterly operating results and other factors, such as: the 
introduction of new services or technologies by the Company or its 
competitors; changes in other conditions in the GIS industry or in the 
industries of any of the Company's customers; changes in governmental 
regulation, government spending levels or budgetary procedures; changes in 
securities analysts' estimates of the future performance of the Company, its 
competitors or the industry generally; or general market conditions. The 
trading price of the Common Stock may vary without regard to the operating 
performance of the Company. General market price declines or market 
volatility in the future, or future declines or volatility in the prices of 
stock for companies in the GIS industry, also could affect the market price 
of the Common Stock. 

                                       11

<PAGE>

RELIANCE ON TECHNOLOGY; LIMITED PROTECTION OF PROPRIETARY RIGHTS

     The Company has devoted significant resources to developing and 
acquiring specialized data conversion hardware and software. In order to 
remain competitive, it will be necessary for the Company to continue to 
select, invest in, acquire and develop new and enhanced technology on a 
timely basis. There can be no assurance that the Company will be successful 
in these efforts or in anticipating developments in data conversion 
technology. Although the Company believes that its operating procedures and 
proprietary software have been important factors in its success, the 
technology used by the Company in developing its proprietary software is 
readily available to, or could legally be duplicated by, its competitors. The 
Company does not have any patent protection for its products or technology. 
Although the Company relies to a great extent on trade secret protection for 
much of its technology and has obtained confidentiality agreements from most 
of its employees, third parties could independently develop similar 
technology, obtain unauthorized access to the Company's proprietary 
technology or misappropriate technology to which the Company has granted 
access. 

DEPENDENCE ON CERTAIN CUSTOMER MARKETS

     The Company derives its revenues primarily from two core markets, 
utilities and state and local governments, and also serves federal agencies 
and commercial businesses. The ongoing consolidation of the utility industry 
could increase competition for the GIS services projects of the utilities 
that remain. Also, to the extent that utilities remain regulated, legal, 
financial and political considerations may constrain the ability of utilities 
to fund geographic information systems. Many state and municipal entities are 
subject to legal constraints on spending, and a multi-year contract with any 
such entity may be subject to termination in any subsequent year if the 
entity does not choose to appropriate funds for such contracts in that year. 
Moreover, fundamental changes in the business practices or capital spending 
policies of any of these customers, whether due to budgetary, regulatory, 
technological or other developments or changes in the general economic 
conditions in the industries in which they operate, could cause a material 
reduction in demand by such customers for the services offered by the 
Company. Any such reduction in demand could have a material adverse effect on 
the Company. 

DEPENDENCE ON INTERNAL LABOR FORCE

     The Company's business is labor-intensive and requires trained 
employees. In order to support additional growth, if any, the Company must 
increase production capacity by the addition of more employees. There can be 
no assurance that the Company will be able to continue to hire, train and 
retain sufficient numbers of qualified employees. A significant portion of 
the Company's costs consists of wages to hourly workers. An increase in 
hourly wages, costs of employee benefits or employment taxes could have a 
material adverse effect on the Company. Although the Company believes that 
its employee turnover rate is at an acceptable level, turnover could increase 
for any of several reasons, including the disruption that is sometimes 
associated with the acquisition of businesses and increased competition for 
labor in any geographic area where the Company operates. A higher turnover 
rate among the Company's employees would increase the Company's recruiting 
and training costs, could affect the Company's ability to perform services 
and earn revenues on a timely basis and could decrease operating efficiencies 
and productivity. 

DEPENDENCE ON SUBCONTRACTORS

     ASI employs certain selected subcontractors for tasks outside its 
expertise, such as aerial photography and ground survey. The Company also 
uses subcontractors for work similar to that performed by ASI employees in 
order to expand capacity, meet deadlines, reduce production costs, manage 
work load and encourage businesses owned by women and minorities. The 
inability to obtain the services of such subcontractors when needed or at all 
could have a material adverse effect on the Company. See "Business 
Subcontractors." 

                                       12

<PAGE>

RISKS RELATING TO INTERNATIONAL SALES

     In fiscal 1998, revenues from international sales represented 
approximately 8% of the Company's total revenues. The Company intends to 
continue expanding its operations outside the United States and to enter 
additional international markets, which will require management attention and 
financial resources. If foreign sales become a more significant component of 
the Company's net sales, the Company's business will become more vulnerable 
to the inherent risks of doing business internationally, including increased 
difficulties in collection of accounts receivable, unexpected changes in 
regulatory requirements, tariffs and other trade barriers, fluctuations in 
currency exchange rates, potentially adverse tax consequences and political 
instability. The existence or occurrence of any one of these factors could 
have a material adverse effect on the Company. 

DEPENDENCE ON BUSINESS ALLIANCES

     A significant portion of the Company's sales is the result of referrals 
derived, either directly or indirectly, from consultants in the GIS industry. 
The Company believes that its continued success in the GIS services market is 
dependent, in part, on its ability to maintain current relationships and to 
cultivate additional relationships with other leading consultants. Such 
consultants could acquire a GIS data collection or data conversion business 
or businesses or form other relationships with the Company's competitors. 
There can be no assurance that relationships with GIS consultants will 
continue to be a source of business for the Company. The inability of the 
Company to maintain such relationships or to form new relationships could 
have a material adverse effect on the Company. 

DEPENDENCE ON KEY PERSONNEL

     The success of the Company depends in large part upon the continued 
service of its executive officers and other key employees. While the Company 
has employment agreements with certain of its key personnel, there is no 
assurance that the Company will be able to retain the services of such key 
personnel. The Company does not maintain any key person life insurance 
policies. Moreover, in order to support additional growth, if any, the 
Company will be required to recruit, develop and retain additional qualified 
management personnel. The loss of key personnel or the inability to obtain 
additional key personnel could have a material adverse effect on the Company. 

DEPENDENCE ON OFFSHORE OPERATIONS

     The Company utilizes operations in Mumbai, India to perform certain data 
capture tasks at lower costs than could be achieved in the United States.  
These operations were acquired in May 1998.   These operations employ 
approximately 325 persons.  Although the Company believes that it could 
replace the personnel in India, and while the amounts paid for the 
performance of services overseas have not, to date, been material, the 
ability of the Company to perform services under some existing contracts on a 
profitable basis is dependent upon the continued availability of its overseas 
operations. In the past, India has experienced significant inflation as well 
as civil unrest and regional conflicts. India's recent testing of nuclear 
devices has resulted in the imposition of economic sanctions by the United 
States, and it is not known what effect these events might have on the 
attitude of the Indian government toward U.S. businesses in India. Moreover, 
the Indian government has exercised and continues to exercise significant 
influence over many aspects of the Indian economy. Events or governmental 
actions that would impede or prohibit the operations of the Company's Mumbai 
facility could have a material adverse effect on the Company. 

EFFECT OF PREFERRED STOCK PROVISIONS

     The Company's Articles of Incorporation allow the Board of Directors to 
issue up to 2,500,000 shares of preferred stock and to fix the rights, 
privileges and preferences of those shares without any further vote or action 
by the shareholders. The rights of the holders of Common Stock will be 
subject to, and may be adversely affected by, the rights of the holders of 
any preferred stock that may be issued by the Company in the future. Although 
the Company has no present intention to issue any preferred stock, any such 
issuance could be used to discourage an unsolicited acquisition proposal by a 
third party. 

                                       13

<PAGE>

For risks related to the Year 2000 problem, see "Management's Discussion and 
Analysis of Financial Condition and Results of Operations--Year 2000 Issues". 

ITEM 2.   PROPERTIES.

     The Company's office and production facilities are described in the 
table below. All properties are leased.

<TABLE>
<CAPTION>
     Location                      Square Footage      Lease Termination
<S>                                <C>                 <C>
     Colorado Springs, Colorado         43,100              2004
     Cary, North Carolina               23,500              2000
     Waukesha, Wisconsin                25,300              1999
     Indianapolis, Indiana             114,300              2002* 
     San Antonio, Texas                 23,500              2003
     Mumbai, India                       5,200              2001

</TABLE>

------------------------
* two five-year options available 

     The Company believes that these facilities are in generally good 
condition and adequate for its current needs.  ASI also operates sales 
offices in Denver, Colorado; Sterling, Virginia (near Washington, D.C.); Mt. 
Laurel, New Jersey (near Philadelphia, Pennsylvania); and West Palm Beach, 
Florida.

ITEM 3.   LEGAL PROCEEDINGS.

     Neither the Company nor any of its properties is the subject of any 
material pending legal proceedings.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     There were no matters submitted to a vote of the Company's shareholders 
during the fourth quarter of the year ended September 30, 1998.


                                      PART II.

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     The Company's Common Stock is traded publicly under the symbol "ANLT" on 
the Nasdaq National Market System. The table below sets forth the range of 
the per share high and low bid prices of the Common Stock for each quarterly 
period for the fiscal years ended September 30, 1997 and 1998 as reported by 
Nasdaq. These prices reflect inter-dealer quotations without adjustments for 
retail markup, markdown or commission, and do not necessarily represent 
actual transactions. 

<TABLE>
<CAPTION>
                                         High            Low
<S>                                     <C>            <C>
Fiscal Year Ended September 30, 1997
     First Quarter                      $12.75          $8.50
     Second Quarter                     $13.00          $9.50
     Third Quarter                      $14.00         $10.25

</TABLE>

                                       14

<PAGE>

<TABLE>
<S>                                     <C>            <C>
     Fourth Quarter                     $24.38         $13.50

Fiscal Year Ended September 30, 1998
          First Quarter                 $35.50         $18.75
          Second Quarter                $54.00         $29.75
          Third Quarter                 $52.94         $21.88
          Fourth Quarter                $39.00         $15.13

</TABLE>

     As of December 15, 1998 there were approximately 4,000 shareholders and 
6,772,054 shares of Common Stock outstanding, which includes investors 
holding stock in "street name."

     Holders of the Common Stock are entitled to receive dividends as and 
when they may be declared by the Company's Board of Directors.  No dividends 
have ever been paid with respect to the Common Stock, and the Company expects 
to retain earnings to finance the expansion and development of its business 
for the foreseeable future. In addition, the Company's current bank loans 
prohibit the payment of any dividends without the bank's consent. 

ITEM 6.   SELECTED FINANCIAL DATA.

     The following selected consolidated financial data as of and for the 
fiscal years ended September 30, 1994, 1995, 1996, 1997 and 1998 are derived 
from consolidated financial statements of the Company which have been audited 
by KPMG Peat Marwick LLP, independent accountants. The Company's historical 
consolidated financial statements  as of September 30, 1997 and 1998 and for 
the years ended September 30, 1996, 1997, and 1998 are contained elsewhere in 
this Report. The following selected consolidated financial data should be 
read in conjunction with the Company's consolidated financial statements and 
the related notes thereto and with Item 7 - Management's Discussion and 
Analysis of Financial Condition and Results of Operations included elsewhere 
in this Report.


                                       15

<PAGE>

<TABLE>
<CAPTION>

                                                           1994       1995       1996(1)(2)  1997(3)      1998(4)
                                                         -------     -------     ----------  -------      -------
<S>                                                      <C>         <C>         <C>         <C>          <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:

Sales                                                    $11,176     $13,538      $22,669    $40,799      $88,155
Cost and expenses:

Salaries, wages and related benefits                       4,475       5,247       10,501     19,792       42,953

Subcontractor costs                                        2,628       3,244        3,898      5,899       11,961

Other general administrative                               1,834       2,244        3,681      7,115       14,964

Depreciation and amortization                                759         784        1,184      1,780        3,860
                                                         -------     -------      -------    -------      -------
                                                           9,696      11,519       19,264     34,586       73,738
                                                         -------     -------      -------    -------      -------
Earnings from operations                                   1,480       2,019        3,405      6,213       14,417

Other expenses, net                                          184         119          339        770        2,292
                                                         -------     -------      -------    -------      -------
Earnings before income taxes                               1,296       1,900        3,066      5,443       12,125

Income tax expenses                                          492         716        1,153      2,112        4,894
                                                         -------     -------      -------    -------      -------
Net earnings                                                $804      $1,184       $1,913     $3,331       $7,231
                                                         -------     -------      -------    -------      -------
                                                         -------     -------      -------    -------      -------
Diluted earnings per share                                 $0.20       $0.27        $0.38      $0.60        $1.06
                                                         -------     -------      -------    -------      -------
                                                         -------     -------      -------    -------      -------
Weighted average common shares outstanding-diluted         4,010       4,408        5,033      5,562        6,819

CONSOLIDATED BALANCE SHEET DATA:

Working capital                                           $3,693      $5,738       $9,986    $21,085      $40,986

Total assets                                               8,016      10,048       21,988     50,146       94,540

Long-term debt, less current maturities                      391         408        4,528     14,145       29,920

Total stockholders' equity                                 4,597       6,654       10,926     23,831       44,463

</TABLE>

------------------------
(1)  In December 1995 the Company acquired Intelligraphics for $3.5 million in
     cash and 345,000 shares of restricted Common Stock valued at $891,000. 

(2)  In July 1996 the Company acquired ASI Landmark for $2.0 million in cash. 

(3)  In July 1997 the Company acquired MSE for $12.5 million in cash and 
     925,000 shares of restricted Common Stock valued at $7.3 million.

(4)  In June 1998 the Company acquired Cartotech for $8.1 million in cash and 
     354,167 shares of restricted common stock valued at $8.3 million. 

                                       16

<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

     THE DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF 
THE COMPANY SET FORTH BELOW SHOULD BE READ IN CONJUNCTION WITH THE 
CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES THERETO INCLUDED 
ELSEWHERE IN THIS FORM 10-K. THIS FORM 10-K CONTAINS FORWARD-LOOKING 
STATEMENTS THAT INVOLVE RISK AND UNCERTAINTIES. THE STATEMENTS CONTAINED IN 
THIS FORM 10-K THAT ARE NOT PURELY HISTORICAL ARE FORWARD-LOOKING STATEMENTS 
WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF 
THE EXCHANGE ACT. WHEN USED IN THIS FORM 10-K, OR IN THE DOCUMENTS 
INCORPORATED BY REFERENCE INTO THIS FORM 10-K, THE WORDS "ANTICIPATE," 
"BELIEVE," "ESTIMATE," "INTEND" AND "EXPECT" AND SIMILAR EXPRESSIONS ARE 
INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING 
STATEMENTS INCLUDE, WITHOUT LIMITATION, THE STATEMENTS IN ITEM 1 BUSINESS - 
RISK FACTORS AND STATEMENTS RELATING TO COMPETITION, FUTURE ACQUISITIONS, 
MANAGEMENT OF GROWTH, INTERNATIONAL SALES, THE COMPANY'S STRATEGY, FUTURE 
SALES, YEAR 2000 COMPLIANCE FUTURE EXPENSES AND FUTURE LIQUIDITY AND CAPITAL 
RESOURCES. ALL FORWARD-LOOKING STATEMENTS IN THIS FORM 10-K ARE BASED UPON 
INFORMATION AVAILABLE TO THE COMPANY ON THE DATE OF THIS FORM 10-K, AND THE 
COMPANY ASSUMES NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS. 
THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN 
THIS FORM 10-K. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES 
INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED BELOW, IN ITEM 1. 
BUSINESS--"RISK FACTORS" AND ELSEWHERE IN THIS FORM 10-K. 

OVERVIEW

     ASI, a leading provider of data conversion and digital mapping services 
to users of customized geographic information systems, was founded in 1981 by 
John A. Thorpe. From 1981 to 1990, the Company experienced steady growth in 
revenues with periodic fluctuations in financial results. After the hiring of 
the Company's current Chief Executive Officer and Chief Financial Officer in 
1990, the Company implemented a controlled growth strategy, including 
improving and standardizing operating controls and procedures, investing in 
infrastructure, upgrading the Company's proprietary software and establishing 
capital sources. 

     In 1995, the Company embarked on a more aggressive growth strategy, 
including consolidation of the fragmented GIS services industry. The Company 
acquired substantially all of the assets of Wisconsin-based Intelligraphics, 
Inc. ("Intelligraphics") in December 1995 for $3.5 million in cash and 
345,000 shares of restricted Common Stock valued at $891,000. 
Intelligraphics, with over 200 employees, significantly expanded the 
Company's capacity to perform large projects, added utility industry 
expertise, and established ASI's presence in the midwestern United States. 
The acquisition contributed over 25 new customers and $12.3 million in 
"backlog," which represents the amount of revenue that has not been 
recognized on signed contracts. 

     In July 1996, the Company expanded its services to state and local 
governments by acquiring substantially all of the assets of Westinghouse 
Landmark GIS, Inc. ("ASI Landmark") for $2.0 million in cash. Based in North 
Carolina, ASI Landmark's primary business is land base and cadastral mapping. 
Prior to this acquisition, ASI had utilized subcontractors for certain of 
these services. ASI Landmark also provided the Company with additional 
capacity for photogrammetry, and a presence in the eastern and southeastern 
United States. The acquisition contributed approximately 20 new customers, 
$9.1 million in backlog and 105 employees to the Company. 

     The Company acquired MSE Corporation ("MSE") in July 1997 for $12.5 
million in cash and 925,000 shares of restricted Common Stock valued at $7.3 
million. The acquisition of Indiana-based MSE gave the Company greater 
capacity to serve the utility market and further enhanced ASI's presence in 
the midwestern United States. In addition, the acquisition of MSE contributed 
over 200 customers and $43.0 million of backlog to the Company. Over 325 
employees joined the ASI workforce as a result of the MSE acquisition, 
including the Company's current Chief Operations Officer and Chief 
Administrative Officer. 

                                       17

<PAGE>

     The Company acquired Texas-based Cartotech, Inc. ("Cartotech") in June 
1998 for approximately $8.1 million in cash and 354,167 shares of restricted 
Common Stock valued at approximately $8.3 million. The Cartotech acquisition 
extended ASI's presence in the utility market, enhanced the Company's field 
inventory operations and provided the Company with a strong presence in the 
southwestern United States. The Cartotech acquisition contributed over 50 new 
customers, backlog of $19.3 million and 270 employees to the Company. One of 
Cartotech's customers, FirstEnergy Corp. (formerly known as Ohio Edison), 
accounted for approximately 46.0% of Cartotech's revenues in calendar 1997. 

     In conjunction with the above acquisitions, the Company has recorded 
goodwill, which represents the excess of the purchase price over the fair 
value of the net assets acquired in business combinations. As of September 
30, 1998, goodwill, net of accumulated amortization, was $25.3 million. The 
Company will amortize the value of the intangible assets acquired in its 
recent business acquisitions over a period of 15 years, representing the 
expected period of benefit from the acquisitions. The Company believes this 
amortization period to be appropriate based on the historical and forecasted 
operating results of the acquired businesses. 

     The Company recognizes revenue using the percentage of completion method 
of accounting on a cost-to-cost basis. For each contract, an estimate of 
total production costs is determined. At each accounting period and for each 
of the Company's contracts, the percentage of completion is based on 
production costs incurred to date as a percentage of total estimated 
production costs. This percentage is then multiplied by the contract's total 
value to calculate the sales revenue to be recognized. 

     Production costs consist of internal costs, primarily salaries and 
wages, and external costs, primarily subcontractor costs. Internal and 
external production costs may vary considerably among projects and during the 
course of completion of each project. As a result, the Company experiences 
yearly and quarterly fluctuations in production costs, in salaries, wages and 
related benefits and in subcontractor costs. These costs may vary as a 
percentage of sales from period to period. Since 1995 the Company has relied 
less on subcontractors and more on employees. The Company anticipates that, 
as a percentage of sales, salaries, wages and related benefits will continue 
to increase, with a corresponding decrease in subcontractor costs, due, in 
part, to the Company's May 1998 purchase of Interra Technologies, an 
India-based company that had been a provider of subcontractor services to the 
Company. The following table illustrates the relationship of salaries, wages 
and related benefits and subcontractor costs: 

<TABLE>
<CAPTION>

                                                   YEAR ENDED SEPTEMBER 30,
                                                   1996      1997      1998
                                                   ----      ----      ----
<S>                                                <C>       <C>       <C>
PERCENTAGE OF SALES:
Salaries, wages and related benefits               46.3%     48.5%     48.7%
Subcontractor costs                                17.2      14.5      13.6

     Total production costs                        63.5%     63.0%     62.3%

</TABLE>

     The Company recognizes losses on contracts in the period such loss is 
determined. From the beginning of fiscal 1995 through the end of fiscal 1998, 
the Company has recognized aggregate losses on contracts of approximately 
$910,000. Over the same period, the Company recognized sales of $165.2 
million. Sales and marketing expenses associated with obtaining contracts are 
expensed as incurred. 

     Backlog increases when new contracts are signed and decreases as revenue 
is recognized. As of September 30, 1998, backlog was $99.0 million. Recently, 
the number of large projects awarded to the Company has increased. Contracts 
for larger projects generally increase the Company's risk due to inflation

                                       18

<PAGE>

as well as changes in customer expectations and funding availability. The 
Company's contracts are generally terminable on short notice, and while in 
the Company's experience such termination is rare, there is no assurance that 
the Company will receive all of the revenue anticipated under signed 
contracts. See Item 1. Business--"Risk Factors Risks Associated with Terms of 
Customer Contracts" and "Customer Contracts." 

     The Company engages in research and development activities. The majority 
of these activities occur as the Company develops software or designs a 
product for a particular contract, so that the costs of such efforts are 
included as an integral part of the Company's services. Such custom-designed 
software can often be applied to projects for other customers. These amounts 
expended by the Company are not included in research and development 
expenses, although the Company retains ownership of such proprietary software 
or products. The Company, through its Advanced Technology Division, also 
engages in research and development activities independently of the Company's 
work on particular customer projects. For fiscal 1996, 1997 and 1998, the 
Company expended $283,872, $274,905 and $255,928, respectively on such 
independent research and development activities in the Advanced Technology 
Division. 

RESULTS OF OPERATIONS

     The following table sets forth, for the fiscal years ended September 30 
below, selected consolidated statement of operations data expressed as a 
percentage of sales: 

<TABLE>
<CAPTION>

                                               1996        1997       1998
                                              ------      ------     ------
<S>                                           <C>         <C>        <C>
PERCENTAGE OF SALES:

Sales                                         100.0%      100.0%     100.0%

Costs and expenses:
     Salaries, wages and related benefits      46.3        48.5       48.7
     Subcontractor costs                       17.2        14.5       13.6
     Other general and administrative          16.3        17.4       16.9
     Depreciation and amortization              5.2         4.4        4.4
                                              -----       -----      -----
Earnings from operations                       15.0        15.2       16.4
Other expense, net                              1.5         1.9        2.6
                                              -----       -----      -----
Earnings before income taxes                   13.5        13.3       13.8
Income tax expense                              5.1         5.1        5.6
                                              -----       -----      -----
Net earnings                                    8.4%        8.2%       8.2%
                                              -----       -----      -----
                                              -----       -----      -----

</TABLE>

FISCAL YEARS ENDED SEPTEMBER 30, 1998 AND 1997

SALES.  The Company's sales consist of revenue recognized for services 
performed. Sales increased $47.4 million to $88.2 million for fiscal 1998 
from $40.8 million for fiscal 1997. This increase was due to an increase in 
the number and size of customer contracts with the Company (including MSE and 
Cartotech) as well as the impact of the acquisition of MSE in July 1997 and 
Cartotech in June 1998. Prior to their acquisition by the Company, MSE's 
sales for fiscal 1996 were approximately $ 22.5 million and Cartotech's sales 
for fiscal 1997 were approximately $14.6 million. 

SALARIES, WAGES AND RELATED BENEFITS.  Salaries, wages and related benefits 
includes employee compensation for production, marketing, selling, 
administrative and executive employees. Salaries, wages and related 

                                       19

<PAGE>

benefits increased 117.0% to $43.0 million for fiscal 1998 from $19.8 million 
for fiscal 1997. This increase was primarily due to the addition of over 325 
employees as a result of the MSE acquisition in July 1997 and 270 employees 
as a result of the Cartotech acquisition in June 1998, as well as the hiring 
of additional employees to support the Company's increased business. As a 
percentage of sales, salaries, wages and related benefits increased to 48.7% 
for fiscal 1998 from 48.5% for fiscal 1997. This increase, and the 
corresponding decrease in subcontractor costs, was primarily attributable to 
the Company's increased capability to perform more tasks internally as well 
as a decrease in the number of projects which required subcontractor 
services. The Company anticipates that, as a percentage of sales, salaries, 
wages and related benefits will continue to increase, with a corresponding 
decrease in subcontractor costs, due, in part, to the Company's May 1998 
purchase of Interra Technologies, an India-based company that had been a 
provider of subcontractor services to the Company. 

SUBCONTRACTOR COSTS.  Subcontractor costs includes production costs incurred 
through the use of third parties for production tasks such as data conversion 
services to meet contract requirements, aerial photography and ground and 
airborne survey services. Subcontractor costs increased 102.8% to $12.0 
million for fiscal 1998 from $5.9 million for fiscal 1997, but decreased as a 
percentage of sales to 13.6% for fiscal 1998 from 14.5% for fiscal 1997. 

OTHER GENERAL AND ADMINISTRATIVE COSTS.  Other general and administrative 
costs includes rent, maintenance, travel, supplies, utilities, insurance and 
professional services. Such costs increased 110.3% to $15.0 million for 
fiscal 1998 from $7.1 million for fiscal 1997, primarily due to the 
acquisition of MSE and Cartotech.  As a percentage of sales, other general 
and administrative costs decreased to 16.9% for fiscal 1997 from 17.4% for 
fiscal 1997. 

DEPRECIATION AND AMORTIZATION.  Depreciation and amortization consists 
primarily of amortization of goodwill incurred in connection with the 
Company's acquisitions, as well as depreciation of certain of the Company's 
operating assets. For fiscal 1998, depreciation and amortization increased 
116.9% to $3.9 million from $1.8 million for fiscal 1997. This increase was 
primarily attributable to the increased goodwill recorded as a result of the 
MSE and Cartotech acquisitions. As a percentage of sales, depreciation and 
amortization was 4.4% for both fiscal 1998 and 1997.

OTHER EXPENSE, NET.  Other expense, net is comprised primarily of net 
interest expense. Net interest expense increased 179.3% to $2.2 million for 
fiscal 1998 from $772,000 for fiscal 1997. This increase was primarily due to 
increased term debt incurred in connection with the acquisition of MSE in 
July 1997 and Cartotech in June 1998 and increased utilization of the 
Company's lines of credit for working capital. 

INCOME TAX EXPENSE.  Income tax expense was $4.9 million for fiscal 1998 
compared to $2.1 million for fiscal 1997. The Company's effective income tax 
rate for fiscal 1998 was 40.4%, an increase from 38.8% for fiscal 1997, due 
to increases in state income taxes.

NET EARNINGS.  Due to the factors discussed above, net earnings increased 
117.1% to $7.2 million for fiscal 1998 from $3.3 million for fiscal 1997. 

FISCAL YEARS ENDED SEPTEMBER 30, 1997 AND 1996

SALES.  The Company's sales increased $18.1 million or 80.0% to $40.8 million 
for fiscal 1997 from $22.7 million for fiscal 1996. This increase was due to 
an increase in the number and size of customer contracts with the Company as 
well as the impact of the MSE acquisition in July 1997. MSE's sales from July 
2, 1997 (its date of acquisition) through September 30, 1997 were $6.8 
million. 

SALARIES, WAGES AND RELATED BENEFITS.  Salaries, wages and related benefits 
increased 88.5% to $19.8 million for fiscal 1997 from $10.5 million for 
fiscal 1996. As a percentage of sales, salaries, wages and related benefits 
increased to 48.5% in fiscal 1997 from 46.3% in fiscal 1996, primarily due to 
a greater proportion of production costs being incurred as salaries and wages 
as opposed to subcontractor costs in fiscal 1997. 

                                       20

<PAGE>

SUBCONTRACTOR COSTS.  Subcontractor costs increased 51.3% to $5.9 million for 
fiscal 1997 from $3.9 million for fiscal 1996 but decreased as a percentage 
of sales to 14.5% for fiscal 1997 from 17.2% for fiscal 1996. This shift in 
production expenses from subcontractor costs to salaries, wages and related 
benefits resulted from the normal fluctuation between internally and 
externally incurred production costs and from acquisitions. These 
acquisitions enabled the Company to perform more tasks internally and reduce 
its use of subcontractors. 

OTHER GENERAL AND ADMINISTRATIVE COSTS.  Other general and administrative 
costs increased 93.3% to $7.1 million for fiscal 1997 from $3.7 million for 
fiscal 1996. As a percentage of sales, other general and administrative costs 
increased slightly to 17.4% in fiscal 1997 from 16.3% for fiscal 1996, due 
primarily to increased travel and other expenses related to the integration 
of newly acquired businesses. 

DEPRECIATION AND AMORTIZATION.  Depreciation and amortization increased 50.3% 
to $1.8 million for fiscal 1997 from $1.2 million for fiscal 1996. This 
increase was primarily attributable to the increased goodwill recorded as a 
result of the MSE acquisition. As a percentage of sales, depreciation and 
amortization decreased slightly to 4.4% in fiscal 1997 from 5.2% in fiscal 
1996. 

OTHER EXPENSE, NET.  Net interest expense increased 120.0% to $772,000 for 
fiscal 1997 from $351,000 for fiscal 1996. This increase was primarily due to 
the increased term debt incurred in connection with the acquisition of MSE in 
July 1997, as well as increased utilization of the Company's lines of credit 
for working capital. 

INCOME TAX EXPENSE.  Income tax expense was $2.1 million in fiscal 1997 
compared to $1.2 million in fiscal 1996. The effective income tax rate for 
1997 was approximately 38.8%, an increase from 37.6% in 1996 due to the 
change in the mix of state tax rates as a result of the MSE acquisition in 
the fourth quarter of fiscal 1997. 

NET EARNINGS.  Due to the factors discussed above, net earnings increased 
74.1% to $3.3 million for fiscal 1997 from $1.9 million for fiscal 1996. 

LIQUIDITY AND CAPITAL RESOURCES

     Historically, the Company's principal source of liquidity has consisted 
of cash flow from operations supplemented by secured lines of credit. As of 
September 30, 1998, the Company's outstanding balance on its lines of credit 
was $5.8 million. During 1998, the Company replaced its existing lines of 
credit with a three-year, $21.0 million secured working capital line of 
credit and the Company refinanced $25.4 million of term debt. Borrowings 
under the new credit facilities bear interest at a rate per annum equal to, 
at the Company's option, (i) the agent bank's prime rate or (ii) an adjusted 
London Interbank Offering Rate (LIBOR) plus a margin ranging from 1.25% to 
2.25%. The effective borrowing rate was 7.14% on September 30, 1998.
 
     The Company's cash flow is significantly affected by three 
contract-related accounts: accounts receivable; revenues in excess of 
billings; and billings in excess of revenues. Under the percentage of 
completion method of accounting, an "account receivable" is created when an 
amount becomes due from a customer, which typically occurs when an event 
specified in the contract triggers a billing. "Revenues in excess of 
billings" occur when the Company has performed under a contract even though a 
billing event has not been triggered. "Billings in excess of revenues" occur 
when the Company receives an advance or deposit against work yet to be 
performed. These accounts, which represent a significant investment by ASI in 
its business, affect the Company's cash flow as projects are signed, 
performed, billed and collected. 

     Net cash provided by the Company's operating activities was $772,000, 
and $2.7 million for fiscal years 1996 and 1997, respectively. Net cash used 
by the Company's operating activities was $4.4 million in 

                                       21

<PAGE>

1998.  The change in operating cash flows is primarily attributable to normal 
fluctuations in the contract-related accounts described in the previous 
paragraph. At September 30, 1998, the working capital in contract-related 
accounts was equivalent to 182 days sales outstanding, up from 170 days at 
September 30, 1997. The Company believes that this level of investment is 
consistent with its normal operating range of days sales outstanding. 

     Cash used by investing activities for fiscal years 1996, 1997 and 1998 
was $6.4 million, $12.5 million and $12.2 million, respectively.  Such 
investing activities principally consisted of payments for net assets 
acquired in business combinations and purchases of equipment and leasehold 
improvements. 

     Cash provided by financing activities for fiscal years 1996, 1997 and 
1998 was $6.0 million, $10.3 million and $17.3 million, respectively.  
Financing activities consisted primarily of net borrowings and payments under 
lines of credit for working capital purposes and net borrowings and payments 
of long-term debt used for business combinations and the purchase of 
equipment and leasehold improvements. 

     The Company believes that funds available under its lending arrangements 
and cash flow from operations are adequate to finance its operations for at 
least the next 18 months. 

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1997, the Financial Accounting Standards Board ("FASB") issued 
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive 
Income." This statement requires that changes in comprehensive income be 
shown in a financial statement that is displayed with the same prominence as 
other financial statements. The statement will be effective for fiscal years 
beginning after December 15, 1997 (the Company's fiscal year beginning 
October 1, 1998). Reclassification for earlier periods is required for 
comparative purposes. The Company does not believe this statement will have a 
material impact on its financial statements, financial position or results of 
operations. 

     In June 1997, the FASB issued Statement of Financial Accounting 
Standards No. 131, "Disclosures About Segments of an Enterprise and Related 
Information." This statement supersedes Statement of Financial Accounting 
Standards No. 14, "Financial Reporting for Segments of a Business 
Enterprise." This statement includes requirements to report selected segment 
information quarterly and entity-wide disclosures about products and 
services, major customers, and the material countries in which the entity 
holds assets and reports revenues. The statement will be effective for fiscal 
years beginning after December 15, 1997 (the Company's fiscal year beginning 
October 1, 1998). Reclassification for earlier periods is required, unless 
impracticable, for comparative purposes. The Company believes that it 
operates one business segment, therefore this statement will have no effect 
on its financial statements, financial position or results of operations. 

     In June 1998, the FASB issued Statement No. 133, "Accounting for 
Derivative Instruments and Hedging Activities" (FAS 133), which is effective 
for fiscal quarters beginning after June 15, 1999.  FAS No. 133 requires 
companies to record derivatives on the balance sheet as assets or liabilities 
measured at fair value.  Gains or losses resulting from changes in the values 
of those derivatives would be accounted for depending on the use of the 
derivative and whether it qualifies under the standard for hedge accounting.  
The Company does not believe this statement will have a material impact on 
its financial statements, financial position or results of operations.

YEAR 2000 ISSUES

     The "Year 2000" issue is the result of computer programs using two 
digits, rather than four, to define the applicable year. The failure of such 
programs to recognize the year 2000 as such could result in systems failures 
and miscalculations.  The Company and the third parties with which it does 
business rely on numerous computer programs in their daily operations.  

                                       22

<PAGE>

     The Company is currently in the process of assessing the impact of the 
Year 2000 issues.  The Company expects that such assessment and any required 
action will be carried out solely by its employees.  Accordingly, the Company 
has not incurred material costs to date and does not believe that the costs 
associated with this process will be material.

     The Company has assessed its most critical systems, its proprietary 
operations software, and believes such software to be Year 2000 compliant.  
The Company is in the process of assessing its other internal systems, 
including financial and other operational systems for Year 2000 compliance, 
including information technology ("IT") and critical non-IT areas where Year 
2000 issues may exist. The majority of the personal computers used by the 
Company are running Microsoft's Windows 95 or Windows 98 or Microsoft NT 
operating systems, each of which the Company believes will be substantially 
Year 2000 compliant before 2000.  The Company expects that any personal 
computers that are not Year 2000 compliant will be upgraded or replaced prior 
to 2000.  Although the Company has not completed its assessment of internal 
systems readiness for Year 2000, the Company believes that the costs required 
to remedy internal Year 2000 issues will not be material. 

     The Company has not formally surveyed its relationships with its vendors 
or subcontractors.  Based on informal inquiries, the Company does not believe 
that any of its significant vendors or subcontractors is or is likely to 
present any significant exposure due to the Year 2000 issues.  If any such 
vendors or subcontractors or their products are not Year 2000 compliant and 
they suffer significant business interruptions or use of their products 
interfere with the Company's operations, the Company believes that 
alternative vendors and subcontractors will be available to provide the 
services and products provided by the Company's current vendors and 
subcontractors at comparable costs.

     The Company's customer contracts specify database designs, including 
date fields, and the Company's delivery of data conforms to such 
specifications. Accordingly, the Company has not formally evaluated the Year 
2000 issue as it relates to the computer systems used by its customers and 
potential customers. The Company faces risk to the extent its major customers 
do not comply with Year 2000 requirements in their own operations and suffer 
business disruptions as a result.  To the extent Year 2000 issues cause 
significant delays or cancellation of customer's GIS projects, the Company's 
financial position and results of operations could be materially adversely 
affected.

     Based on currently available information, the Company believes that it 
does not have material exposure to significant business interruption as a 
result of Year 2000 compliance issues.   However, the Company is planning to 
undertake a more formal review of its internal operational systems and its 
significant vendors and subcontractors, which it expects to complete by March 
31, 1999. However, there can be no assurances that the Company will not 
experience serious unanticipated negative consequences and/or material costs 
caused by undetected errors or defects in the systems used by the Company in 
its internal operations.

                                       23

<PAGE>

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company may from time to time employ risk management techniques such 
as interest rate swaps and foreign currency hedging transactions.  None of 
these techniques are used for speculative or trading purposes and the amounts 
involved are not considered material.

     Short term interest rate changes can impact the Company's interest 
expense on its variable interest rate debt.  Variable interest rate debt of 
$31 million was outstanding as of September 30, 1998.  Assuming September 30, 
1998 debt levels, an increase or decrease in interest rates of one percentage 
point would impact the Company's interest expense by $310,000.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.  

     The financial statements of the Company are filed under this item beginning
on page 25.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE.

     None.


                                       24

<PAGE>

                         INDEPENDENT AUDITORS' REPORT

THE BOARD OF DIRECTORS AND STOCKHOLDERS
ANALYTICAL SURVEYS, INC.:

We have audited the accompanying consolidated balance sheets of Analytical
Surveys, Inc. and subsidiaries as of September 30, 1997 and 1998, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the years in the three-year period ended September 30, 1998.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Analytical Surveys,
Inc. and subsidiaries as of September 30, 1997 and 1998, and the results of
their operations and their cash flows for each of the years in the three-year
period ended September 30, 1998 in conformity with generally accepted accounting
principles.

                                                     KPMG PEAT MARWICK LLP

Denver, Colorado
October 30, 1998


                                       25
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 1997 AND 1998

(In thousands)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
ASSETS (NOTE 4)                                                   1997         1998
---------------                                                   ----         ----
<S>                                                              <C>           <C>
Current assets:

    Cash                                                         $  1,559       2,243
    Accounts receivable, net of allowance for doubtful
       accounts of $164 and $161 in 1997 and 1998,
       respectively (notes 3 and 9)                                 8,991      17,501
    Revenue in excess of billings (note 3)                         21,613      39,316
    Deferred income taxes (note 6)                                    136         557
    Income taxes receivable                                          -            675
    Prepaid expenses and other                                        545         659
                                                                   ------      ------

              Total current assets                                 32,844      60,951
                                                                   ------      ------
Equipment and leasehold improvements, at cost:
    Equipment                                                       7,983      13,015
    Furniture and fixtures                                          1,151       1,594
    Leasehold improvements                                            499         817
                                                                   ------      ------
                                                                    9,633      15,426
    Less accumulated depreciation and amortization                 (5,483)     (7,470)
                                                                   ------      -------
                                                                    4,150       7,956
                                                                   ------      ------

Deferred income taxes                                                  41         134
Goodwill, net of accumulated amortization of $368 and
    $1,654 in 1997 and 1998, respectively (note 2)                 12,353      25,272
Other assets, net of accumulated amortization of $130 and          
    $549 in 1997 and 1998, respectively                               758         227
                                                                   ------      ------
              Total assets                                       $ 50,146      94,540
                                                                   ======      ======
</TABLE>
                                                                     (Continued)

                                       26

<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS, CONTINUED

(In thousands)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY                             1997           1998
------------------------------------                             ----           ----
<S>                                                           <C>              <C>
Current liabilities:
    Current portion of long-term debt (note 4)                 $  4,524         4,594
    Billings in excess of revenue (note 3)                          789         1,232
    Accounts payable and other accrued liabilities                3,693         8,229
    Accrued payroll and related benefits                          2,753         5,910
                                                                 ------        ------

              Total current liabilities                          11,759        19,965

Long-term debt, less current portion (note 4)                    14,145        29,920

Deferred compensation payable                                       411           192
                                                                 ------        ------

              Total liabilities                                  26,315        50,077
                                                                 ------        ------
Stockholders' equity (note 7):
    Preferred stock, no par value.  Authorized 2,500
       shares; none issued or outstanding                             -             -
    Common stock, no par value.  Authorized 100,000
       shares; 6,114 and 6,732 shares issued and
       outstanding in 1997 and 1998, respectively                15,269        28,670
    Retained earnings                                             8,562        15,793
                                                                 ------        ------
              Total stockholders' equity                         23,831        44,463
                                                                 ------        ------
Commitments and contingencies (notes 5 and 7)

              Total liabilities and stockholders' equity       $ 50,146        94,540
                                                                 ======        ======
</TABLE>

See accompanying notes to consolidated financial statements.


                                       27
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998

(In thousands, except per share amounts)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
                                                      1996         1997        1998
                                                      ----         ----        ----
<S>                                                <C>            <C>         <C>
Sales                                              $ 22,669       40,799      88,155
                                                     ------       ------      ------

Costs and expenses:
    Salaries, wages and benefits                     10,501       19,792      42,953
    Subcontractor costs                               3,898        5,899      11,961
    Other general and administrative                  3,681        7,115      14,964
    Depreciation and amortization                     1,184        1,780       3,860
                                                     ------       ------      ------
                                                     19,264       34,586      73,738
                                                     ------       ------      ------

         Earnings from operations                     3,405        6,213      14,417
                                                     ------       ------      ------

Other income (expense):
    Interest expense, net                              (351)        (772)     (2,156)
    Costs related to terminated stock offering            -            -        (300)
    Other                                                12            2         164
                                                     ------       ------      ------
                                                       (339)        (770)     (2,292)
                                                     ------       ------      ------

         Earnings before income taxes                 3,066        5,443      12,125

Income tax expense (note 6)                           1,153        2,112       4,894
                                                     -------      ------      ------

         Net earnings                              $  1,913        3,331       7,231
                                                     ======       ======      ======

Earnings per common share:
    Basic                                          $   .41           .64        1.14
    Diluted                                        $   .38           .60        1.06

Weighted average outstanding common shares:
    Basic                                            4,691         5,244       6,349
    Diluted                                          5,033         5,562       6,819

</TABLE>

See accompanying notes to consolidated financial statements.


                                       28
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998

(In thousands)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                                                               1996          1997          1998
                                                                               ----          ----          ----
<S>                                                                           <C>          <C>           <C>
Cash flows from operating activities:
    Net earnings                                                              $ 1,913        3,331         7,231
    Adjustments to reconcile net earnings to net cash provided by
       operating activities:
          Depreciation and amortization                                         1,184        1,780         3,860
          Gain on sale of assets                                                  (12)          (2)          (15)
          Deferred income tax benefit                                            (163)         (55)         (350)
          Tax benefit relating to exercise of stock options                       885        1,307         3,115
          Changes in operating assets and liabilities, net of effect of
              business combinations:
                 Accounts receivable, net                                        (481)         951        (6,907)
                 Revenue in excess of billings                                 (2,820)      (4,746)      (16,213)
                 Income taxes receivable                                            -            -          (675)
                 Prepaid expenses and other                                       (18)           9            15
                 Billings in excess of revenue                                    163         (302)          121
                 Accounts payable and other accrued liabilities                    (9)        (111)        3,434
                 Accrued payroll and related benefits                             130          555         1,963
                                                                                -----       ------        ------
                    Net cash provided (used) by operating activities              772        2,717        (4,421)
                                                                                -----       ------        ------
Cash flows from investing activities:
    Purchase of equipment and leasehold improvements                             (919)      (1,596)       (3,888)
    Proceeds from sale of equipment                                                12          159            15
    Payments for net assets acquired in business combinations, net             
        of cash acquired                                                       (5,541)     (11,092)       (8,337)
                                                                                -----       ------        ------ 
                    Net cash used by investing activities                      (6,448)     (12,529)      (12,210)
                                                                                -----       ------        ------
Cash flows from financing activities:
    Net borrowings (payments) under lines-of-credit with bank                     500       (2,027)        4,277
    Proceeds from issuance of long-term debt                                    5,765       12,714        29,072
    Principal payments on long-term debt                                         (815)      (1,292)      (18,051)
    Proceeds from exercise of stock options                                       583          954         2,017
                                                                                -----       ------        ------
                    Net cash provided by financing activities                   6,033       10,349        17,315
                                                                                -----       ------        ------
                    Net increase in cash                                          357          537           684

Cash at beginning of year                                                         665        1,022         1,559
                                                                                -----       ------        ------
Cash at end of year                                                           $ 1,022        1,559         2,243
                                                                                =====       ======        ======
Supplemental disclosures of cash flow information:
    Cash paid for interest                                                    $   344          815         2,113
                                                                                =====       =======       ======
    Cash paid for income taxes                                                $   376          888         2,643
                                                                                =====       ======        ======
    Common stock issued for net assets acquired in business
       combinations                                                           $   891        7,313         8,269
                                                                                =====       ======        ======
</TABLE>

     See accompanying notes to consolidated financial statements.


                                       29
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 1997, 1996 AND 1995
-------------------------------------------------------------------------------
(1)    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       (a)    BUSINESS AND BASIS OF FINANCIAL STATEMENT PRESENTATION

              Analytical Surveys, Inc. (ASI or the Company) is a Colorado
              corporation formed in 1981. ASI's primary business is the
              production of precision computerized maps and information files
              used in Geographic Information Systems (GIS). Federal, state and
              local government agencies and commercial companies use GIS to
              manage information relating to utilities, natural resources,
              streets, land use and property taxation.

              The consolidated financial statements include the accounts of the
              Company and its wholly and majority owned subsidiaries. All
              significant intercompany balances and transactions have been
              eliminated in consolidation.

              The preparation of the financial statements in conformity with
              generally accepted accounting principles requires management to
              make estimates and assumptions that affect the reported amounts of
              assets and liabilities and disclosure of contingent assets and
              liabilities at the date of the financial statements and the
              reported amounts of revenue and expenses during the reporting
              period. Actual results could differ from those estimates.

       (b)    EQUIPMENT AND LEASEHOLD IMPROVEMENTS

              Equipment and leasehold improvements are recorded at cost.
              Depreciation and amortization are provided using the straight-line
              method over the following estimated useful lives:

<TABLE>
<S>                                                 <C>
                      Equipment                     3 to 10 years
                      Furniture and fixtures        5 to 10 years
                      Leasehold improvements        5 to 10 years
</TABLE>

              Maintenance, repairs and renewals which do not add to the value of
              an asset or extend its useful life are charged to expense as
              incurred.

       (c)    REVENUE RECOGNITION

              The Company recognizes revenue using percentage of completion
              accounting based on the cost-to-cost method, whereby the
              percentage complete is based on costs incurred in relation to
              total estimated costs. Costs associated with obtaining contracts
              are expensed as incurred. The Company does not combine contracts
              for purposes of recognizing revenue and, generally, does not
              segment contracts.


                                       30
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
-------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

              Revenue in excess of billings represents revenue related to
              services completed but not billed. The Company bills customers
              based upon the terms included in the contracts, which are
              generally upon delivery of certain products or information, or
              achievement of milestones defined in the contracts. When billed,
              such amounts are recorded as accounts receivable. Billings in
              excess of revenue represent billings in advance of services
              performed.

              The Company recognizes losses on contracts in the period such
              losses are determined. The Company does not believe warranty
              obligations on completed contracts are significant.

       (d)    GOODWILL

              Goodwill represents the excess of the purchase price over net
              assets acquired in business combinations and is being amortized
              over a fifteen-year period using the straight-line method.

       (e)    INCOME TAXES

              The Company accounts for income taxes under the provisions of
              Statement of Financial Accounting Standards No. 109, ACCOUNTING
              FOR INCOME TAXES (SFAS 109). SFAS 109 requires the use of the
              asset and liability method of accounting for income taxes. Under
              the asset and liability method of SFAS 109, deferred tax assets
              and liabilities are recognized for the future tax consequences
              attributable to differences between the financial statement
              carrying amounts of existing assets and liabilities and their
              respective tax bases. Deferred tax assets and liabilities are
              measured using enacted tax rates expected to apply to taxable
              income in the years in which those temporary differences are
              expected to be recovered or settled. Under SFAS 109, the effect on
              deferred tax assets and liabilities of a change in tax rates is
              recognized in income in the period that includes the enactment
              date.

       (f)    IMPAIRMENT OF LONG-LIVED ASSETS

              The Company accounts for long-lived assets under the provisions of
              Statement of Financial Accounting Standards No. 121, ACCOUNTING
              FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS
              TO BE DISPOSED OF (SFAS 121) which requires that long-lived assets
              and certain identifiable intangibles, including goodwill, held and
              used by an entity be reviewed for impairment whenever events or
              changes in circumstances indicate that the carrying value of an
              asset may not be recoverable. An impairment loss is recognized
              when estimated undiscounted future cash flows expected to be
              generated by an asset are less than its carrying value.
              Measurement of the impairment loss is based on the fair value of
              the asset, which is generally determined using valuation
              techniques such as the discounted present value of expected future
              cash flows or independent appraisal.


                                       31
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
-------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

       (g)    STOCK-BASED COMPENSATION

              The Company accounts for its stock-based employee compensation
              plans using the intrinsic value based method prescribed by
              Accounting Principles Board Opinion No. 25, ACCOUNTING FOR STOCK
              ISSUED TO EMPLOYEES, and related interpretations (APB 25). The
              Company has provided pro forma disclosures of net earnings and
              earnings per share as if the fair value based method of accounting
              for the plans, as prescribed by Statement of Financial Accounting
              Standards No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION (SFAS
              123), had been applied. Pro forma disclosures include the effects
              of employee stock options granted during the years ended September
              30, 1998, 1997 and 1996.

       (h)    RESEARCH AND DEVELOPMENT COSTS

              The Company expenses research and development costs as they are
              incurred. Research and development costs, which are included in
              general and administrative expenses in the consolidated statements
              of operations, totaled $283,872, $274,905 and $255,928 for the
              years ended September 30, 1996, 1997 and 1998, respectively.

       (i)    EARNINGS PER SHARE

              Effective January 1, 1998, the Company adopted Statement of
              Financial Accounting Standards No. 128, EARNINGS PER SHARE (SFAS
              128) which requires that basic and diluted earnings per share
              (EPS) be presented in place of primary and fully diluted EPS.
              Basic EPS is computed by dividing income available to common
              shareholders by the weighted average number of common shares
              outstanding for the period. Diluted EPS includes the effects of
              the potential dilution of the Company's stock options, determined
              using the treasury stock method. SFAS 128 requires additional
              informational disclosures, makes certain modifications to
              applicable EPS calculations, and requires restatement of EPS for
              all prior periods reported. Fully diluted EPS was the same as
              diluted EPS for 1996 and 1997.

       (j)    FINANCIAL INSTRUMENTS

              The carrying amounts of the Company's financial instruments at
              September 30, 1997 and 1998 approximate estimated fair values. The
              fair value of a financial instrument is the amount at which the
              instrument could be exchanged in a current transaction between
              willing parties. The carrying amounts of cash, receivables,
              accounts payable and accrued liabilities approximate fair value
              due to the short maturity of these instruments. The carrying
              amounts of debt approximate fair value due to the variable nature
              of the interest rates of these instruments.


                                       32
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
-------------------------------------------------------------------------------
       (k)    RECLASSIFICATIONS

              Certain prior year amounts have been reclassified to conform to
              the 1998 presentation.

(2)    BUSINESS COMBINATIONS

       In June 1998, the Company, through its wholly owned subsidiary, Surveys
       Holdings, Inc. acquired all of the issued and outstanding common stock of
       Cartotech, Inc. (Cartotech) for cash of approximately $8,092,000 and
       354,167 shares of restricted common stock valued at approximately
       $8,269,000 for total consideration of approximately $16,362,000.

       In May 1998, the Company acquired all of the issued and outstanding
       common stock of Interra Technologies (India) Private Limited (Interra)
       for cash of approximately $438,000. Interra had previously been an
       exclusive subcontractor to the Company.

       In July 1997, the Company acquired all of the issued and outstanding
       common stock of MSE Corporation for cash of approximately $12,500,000 and
       925,000 shares of restricted common stock valued at approximately
       $7,313,000, for total consideration of approximately $19,813,000.

       In July 1996, the Company, through its wholly owned subsidiary, ASI
       Landmark, Inc., acquired substantially all of the assets and assumed
       certain liabilities of Westinghouse Landmark GIS, Inc. for cash of
       approximately $1,993,000.

       In December 1995, the Company acquired substantially all of the assets
       and assumed certain liabilities of Intelligraphics, Inc. for
       approximately $3,548,000 cash and 345,000 shares of restricted common
       stock valued at approximately $891,000, for total consideration of
       approximately $4,439,000.

       All of the acquisitions were accounted for using the purchase method of
       accounting and, accordingly, the accompanying consolidated financial
       statements include the results of operations of the acquired businesses
       since the date of acquisition. The aggregate purchase prices of the
       acquisitions were allocated based on fair values as follows (amounts in
       thousands):
<TABLE>
<CAPTION>
                                                    Year ended September 30,
                                                -------------------------------
                                                  1996        1997        1998
                                                 ------      ------     ------
           <S>                                  <C>          <C>        <C>
           Current assets                       $ 4,286      13,463      3,732
           Equipment                              1,245       1,500      1,950
           Other assets, including goodwill       3,022      10,996     14,048
           Current liabilities                   (2,121)     (5,526)    (2,930)
           Non-current liabilities                  -          (620)       -
                                                 ------      ------      -----
                                                $ 6,432      19,813     16,800
                                                  =====      ======     ======
</TABLE>


                                       33
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
-------------------------------------------------------------------------------
       The following unaudited pro forma information presents the results of
       operations of the Company as if the acquisitions had occurred on October
       1, 1996 (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                 Year ended September 30,
                                                 ------------------------
                                                    1997         1998
                                                  --------     --------
                 <S>                              <C>          <C>
                 Revenue                          $ 73,428     $ 99,614
                                                   =======      =======
                 Net earnings                     $  4,914     $  7,343
                                                   =======       ======
                 Diluted earnings per share       $    .74     $   1.04
                                                    ======       ======
</TABLE>

       The pro forma information is based on historical results and does not
       necessarily reflect the actual operating results that would have occurred
       nor is it necessarily indicative of future results of operations of the
       combined enterprises.

(3)    ACCOUNTS RECEIVABLE,  REVENUE IN EXCESS OF BILLINGS AND BILLINGS IN 
       EXCESS OF REVENUE

       At September 30, 1998, the estimated period to complete contracts in
       process ranges from one to thirty-nine months, and the Company expects to
       collect substantially all related accounts receivable and revenue in
       excess of billings within one year.

       The following summarizes contracts in process at September 30 (in 
       thousands):

<TABLE>
<CAPTION>
                                                                 1997         1998
                                                                 ----         ----
            <S>                                                <C>          <C>>
            Costs incurred on uncompleted contracts            $ 73,344      110,185
            Estimated earnings                                   30,911       46,779
                                                                -------      -------
                                                                104,255      156,964
            Less billings to date                               (83,431)    (118,880)
                                                                -------      -------

                                                               $ 20,824       38,084
                                                                =======      =======
            Included in the accompanying balance sheets
               as follows:

                   Revenue in excess of billings               $ 21,613       39,316
                   Billings in excess of revenue                   (789)      (1,232)
                                                                -------      -------
                                                               $ 20,824       38,084
                                                                =======      =======
</TABLE>


                                      34
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
-------------------------------------------------------------------------------
(4)    DEBT

       Long-term debt and lines-of-credit with bank consists of the following at
       September 30:
<TABLE>
<CAPTION>
                                                                                     1997               1998
                                                                                   --------           --------
                                                                                         (in thousands)
        <S>                                                                        <C>                <C>
        Lines-of-credit with bank providing for total borrowings of $21,000,000,
            with interest at LIBOR plus applicable margins ranging from 1.25% to
            1.75% (7.14% at September 30, 1998), collateralized by substantially
            all of the assets of the Company. Borrowings of $5,750,000 were
            outstanding under the line-of-credit as of September 30, 1998 and
            are due in June 2001. (a)                                                $  1,473           5,750

        Note payable to bank in quarterly  installments  with interest based
            on LIBOR plus applicable  margins ranging from 1.25% to 1.75% or
            prime rate (7.14% at September 30,  1998), with final payment in
            October  2003,  secured  by  substantially  all  assets  of  the
            Company. (a)                                                                    -          25,350

        Capital lease obligation under a $4,250,000 leasing facility, bearing
            interest at effective rates ranging from 7.37% to 10.00%, payable in
            monthly installments through November 2001.                                   595           2,809

        Notes payable to bank in monthly installments with interest ranging from
            8.09% to 9.00% at September 30, 1997, repaid in fiscal 1998.               16,226               -

        Other                                                                             375             605
                                                                                       ------          ------
                                                                                       18,669          34,514
                                                                                       (4,524)         (4,594)
                                                                                       ------          ------
                                                                                     $ 14,145          29,920
                                                                                       ======          ======
</TABLE>

       Maturities of long-term debt, exclusive of the lines-of-credit, as of
       September 30, 1998, are as follows (in thousands):

<TABLE>
                   <S>                                <C>
                   Years ending September 30:
                      1999                            $  4,594
                      2000                               5,986
                      2001                               6,142
                      2002                               5,570
                      2003                               5,860
                      Thereafter                           612
                                                         -----
                                                      $ 28,764
                                                        ======
</TABLE>


                                      35
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
-------------------------------------------------------------------------------
       (a)  These loan agreements contain restrictive covenants which require,
            among other things, the maintenance of certain financial ratios and
            include certain limitations on capital expenditures and dividend
            payments.

(5)    LEASES

       The Company leases its facilities and certain equipment under operating
       leases. Amounts due under noncancelable operating leases with terms of
       one year or more at September 30, 1998 are as follows (in thousands):

<TABLE>
                Years ending September 30:
                <S>                                                 <C>
                    1999                                            $  3,175
                    2000                                               2,753
                    2001                                               2,039
                    2002                                               1,705
                    2003                                                 723
                    Thereafter                                           376
                                                                      ------

                         Total minimum operating lease payments     $ 10,771
                                                                      ======
</TABLE>

       Rent expense totaled $535,203, $1,345,310 and $2,300,113 for the years 
       ended September 30, 1996, 1997 and 1998, respectively.

(6)    INCOME TAXES

       Income tax expense (benefit) for the years ended September 30 is as
       follows (in thousands):

<TABLE>
<CAPTION>
                                            1996       1997       1998
                                            ----       ----       ----
              <S>                          <C>         <C>        <C>
              Current:
                  Federal                  $ 1,148     1,847      4,244
                  State and local              168       320      1,000
                                             -----     -----      -----
                                             1,316     2,167      5,244
                                             -----     -----      -----
              Deferred:
                  Federal                     (141)      (42)      (270)
                  State and local              (22)      (13)       (80)
                                             -----     -----      -----
                                              (163)      (55)      (350)
                                             -----     -----      -----
                                           $ 1,153     2,112      4,894
                                             =====     =====      =====
</TABLE>

       The exercise of non-qualified stock options results in state and federal
       income tax deductions to the Company related to the difference between
       the market price at the date of exercise and the option exercise price.
       The benefit of such deductions is recorded as an increase to
       stockholders' equity and totaled approximately $885,000, $1,307,000 and
       $3,115,000 in 1996, 1997 and 1998, respectively.


                                      36
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
-------------------------------------------------------------------------------
(6)    INCOME TAXES (CONTINUED)

       Actual income tax expense differs from the amount computed using the
       federal statutory rate of 34% for the years ended September 30 as follows
       (in thousands):

<TABLE>
<CAPTION>
                                                        1996      1997      1998
                                                        ----      ----      ----
             <S>                                      <C>        <C>       <C>
             Computed "expected" income tax
                 expense                              $ 1,042    1,851     4,123
             State income taxes, net of federal
                 tax effect                                96      203       607
             Amortization of nondeductible
                 goodwill                                   -        -        84
             Other                                         15       58        80
                                                        -----    -----     -----

                       Actual income tax expense      $ 1,153    2,112     4,894
                                                        =====    =====     =====
</TABLE>

        The tax effects of temporary differences that give rise to significant
        portions of deferred tax assets and liabilities at September 30, are
        presented below (in thousands):

<TABLE>
<CAPTION>
                                                                   1997     1998
                                                                   ----     ----
        <S>                                                       <C>       <C>
        Current deferred tax assets and liabilities:
            Accounts receivable, primarily due to allowance for
               doubtful accounts                                  $  22       30
            Accrued liabilities, primarily due to accrued
               compensated absences for financial statement
               purposes                                             143      543
            Prepaid expenses, primarily due to marketing
               commissions expensed for income tax purposes         (34)     (16)
            Other                                                     5       -
                                                                    ---      --
                  Total net current deferred tax asset            $ 136      557
                                                                    ===      ===
        Noncurrent deferred tax assets:
            Deferred compensation accrued for financial
               statement purposes only                               24       16
            Equipment and leasehold improvements, primarily
               due to differences in depreciation                    17      118
                                                                    ---      ---
                  Total noncurrent deferred tax asset             $  41      134
                                                                    ===      ===
</TABLE>

        Management believes that it is more likely than not that future
        operations will generate sufficient taxable income to realize the
        deferred tax assets.


                                      37
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
-------------------------------------------------------------------------------
(7)     STOCKHOLDERS' EQUITY AND STOCK OPTIONS

        The Board of Directors may issue preferred stock with rates of
        dividends, voting rights, redemption prices, liquidation prices,
        liquidation premiums, conversion rights and other requirements without a
        vote of the shareholders.

        The Company currently has five nonqualified stock option plans. At
        September 30, 1998, approximately 66,000 shares were available for grant
        under the plan. The exercise price of the options is established by the
        Board of Directors on the date of grant. Employees may vest in their
        options either 100% on date of grant or 25% six months from date of
        grant and 25% on the anniversary of date of grant thereafter, as
        determined by the Board of Directors. The options are exercisable in
        whole or in part for a period of up to ten years from date of grant.

        As discussed in note 1, the Company applies APB Opinion 25 and related
        interpretations in accounting for its stock option plans. Accordingly,
        because the Company grants its options at or above market value at date
        of grant, no compensation cost has been recognized under the plans. Had
        compensation cost for the Company's stock-based compensation plans been
        determined based upon the fair value of options on the grant dates,
        consistent with the provisions of SFAS 123, the Company's pro forma net
        earnings and diluted earnings per share would have been as follows:

<TABLE>
<CAPTION>
                                             Year ended September 30,
                                           ---------------------------
                                             1996       1997     1998
                                             ----       ----     ----
           <S>                             <C>         <C>       <C>
           Net earnings                    $  1,754    2,798     4,743
           Diluted earnings per share      $    .35      .50       .70
</TABLE>

        The weighted average fair value of options granted during 1996, 1997 and
        1998 was $4.99, $5.49 and $17.93 per share, respectively. The fair value
        of each option granted was estimated at the date of grant using the
        Black-Scholes option-pricing model with the following assumptions: no
        expected dividends, expected life of the options of three years, 60%
        volatility, and a risk-free interest rate of 6% in 1996 and 1997 and 5%
        in 1998.

        The above pro forma disclosures are not necessarily representative of
        the effect on the historical net earnings for future periods because
        options vest over several years, and additional awards are made each
        year. In addition, compensation cost for options granted prior to
        October 1, 1995, which vest after that date has not been considered.


                                      38
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
-------------------------------------------------------------------------------
(7)     STOCKHOLDERS' EQUITY AND STOCK OPTIONS (CONTINUED)

        Stock option activity for the plans for the years ended September 30 are
        summarized as follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                                       Weighted average
                                                        Number of       exercise price
                                                         options          per share
                                                        ---------         ---------
               <S>                                      <C>               <C>
               Balance, October 1, 1995                  $  1,067             2.73
                    Granted                                   238            11.07
                    Exercised                                (295)            1.99
                    Canceled                                  (21)            3.17
                                                            -----

               Balance, September 30, 1996                    989             4.95
                    Granted                                   641            13.06
                    Exercised                                (302)            3.16
                    Canceled                                  (40)           10.64
                                                            -----

               Balance, September 30, 1997                  1,288             9.23
                    Granted                                   753            38.67
                    Exercised                                (264)            7.65
                    Canceled                                   (4)           23.58
                                                            -----            -----

               Balance, September 30, 1998               $  1,773            21.94
                                                            =====            =====
</TABLE>

A summary of the range of exercise prices and the weighted-average contractual
life of outstanding stock options at September 30, 1998 is as follows (shares in
thousands):

<TABLE>
<CAPTION>
                                              Options outstanding                        Options exercisable
                            -----------------------------------------------    ---------------------------------
                                Number                         Weighted            Number
                             outstanding      Weighted          average         exercisable         Weighted
         Range of           September 30,     average       remaining life     September 30,        average
      exercise prices            1998      exercise price       (years)             1998         exercise price
      ---------------            ----      --------------       -------             ----         --------------
 <S>                        <C>            <C>              <C>                <C>               <C>
 $    .01    -   $  10.00         320        $   3.27              6                 319           $   3.27
    10.01    -      20.00         703           12.54              8                 359              12.37
    20.01    -      40.00         295           27.95             10                   -               -
    40.01    -      45.88         455           45.69              9                 103              45.88
    -----    -      -----       -----           -----             --                 ---              -----
 $    .01    -   $  45.88       1,773        $  21.94              8                 781           $  13.12
    =====           =====       =====           =====             ==                 ===              =====
</TABLE>


                                      39
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
-------------------------------------------------------------------------------
(8)     EMPLOYEE BENEFIT PLAN

        The Company sponsors a qualified tax deferred savings plan in accordance
        with the provisions of section 401(k) of the Internal Revenue Code.
        Employees may defer up to 15% of their compensation, subject to certain
        limitations. The Company matches 50% of employee contributions up to 4%
        of their compensation. The Company contributed $65,756, $185,602 and
        $370,814 to the plan in 1996, 1997 and 1998, respectively.

(9)     CONCENTRATIONS OF CREDIT RISK

        Financial instruments which potentially expose the Company to
        concentrations of credit risk, as defined by Financial Accounting
        Standards Board's Statement No. 105, DISCLOSURE OF INFORMATION ABOUT
        FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND FINANCIAL
        INSTRUMENTS WITH CONCENTRATION OF CREDIT RISK, consist
        primarily of accounts receivable with the Company's various customers.

        Historically, the Company's customers have included cities, counties,
        engineering companies, utility companies and federal government
        agencies. Substantially more than 50% of revenues have historically been
        derived from state and local government contracts. In addition, a
        significant portion of the Company's revenues are generated from utility
        clients, both commercial and municipal.

        The Company's accounts receivable are due from a variety of
        organizations throughout the United States. The Company provides for
        uncollectible amounts upon recognition of revenue and when specific
        credit and collection issues arise. Management's estimates of
        uncollectible amounts have been adequate in prior years, and management
        believes that all significant credit and collection risks have been
        identified and adequately provided for at September 30, 1998.


                                      40
<PAGE>

                                 EXHIBIT INDEX

         The following exhibits are filed herewith or incorporated by reference
         herein (according to the number assigned to them in Item 601 of
         Regulation S-K), as noted:

<TABLE>
<CAPTION>
     EXHIBIT
      NUMBER                   DESCRIPTION
     --------                  -----------
     <S>          <C>
          3.1     Articles of Incorporation, as amended (incorporated by
                  reference to ASI's Registration Statement on Form S-18,
                  (Registration No. 2-93108-D).)

          3.2     By-Laws (incorporated by reference to ASI's Registration
                  Statement on Form S-18 (Registration No. 2-93108-D).

          3.3     Amendment to By-laws.

          4.      Form of Stock Certificate (incorporated by reference to ASI's
                  Registration Statement on Form S-18 (Registration No.
                  2-93108-D).)

          10.1    Employment Agreement dated June 27, 1994 between ASI and
                  Sidney V. Corder, Chief Executive Officer and President,
                  (incorporated by reference to ASI's Quarterly Report on Form
                  10-QSB for the quarter ended June 30, 1994.)

          10.2    Stock Option Plan dated December 17, 1987 and amended on
                  August 31, 1992 (incorporated by reference to ASI's Annual
                  Report on Form 10-K for the fiscal year ended September 30,
                  1992.)

          10.3    1991 Non-Qualified Stock Option Plan dated December 17, 1990,
                  as amended (incorporated by reference to ASI's Annual Report
                  on Form 10-K for fiscal year ended September 30, 1992.)

          10.4    1993 Non-Qualified Stock Option Plan dated December 11, 1992
                  (incorporated by reference to ASI's Proxy Statement dated
                  January 11, 1993.)

          10.5    Analytical Surveys, Inc. 401-K Plan dated October 1, 1988 and
                  amended and restated May 22, 1992 (incorporated by reference
                  to ASI's Annual Report on Form 10-K for Fiscal Year ended
                  September 30, 1992.)

          10.6    Analytical Surveys, Inc. Incentive Bonus Plan (incorporated by
                  reference to ASI's Annual Report on Form 10-K for fiscal year
                  ended September 30, 1992.)

          10.7    Employment Agreement dated September 20, 1995 between ASI and
                  Scott C. Benger (incorporated by reference to ASI's Annual
                  Report on Form 10-KSB for the fiscal year ended September 30,
                  1995.)

          10.8    1995 Non-Qualified Stock Option Plan dated August 22, 1995
                  (incorporated by reference to ASI's Annual Report on Form
                  10-KSB for the fiscal year ended September 30, 1995.)

          10.9    Real Estate Lease between MSE Realty, LLC and MSE Corporation,
                  dated July 2, 1997 (incorporated by reference to ASI's Annual
                  Report on Form 10-K for the fiscal year ended September 30,
                  1998.)
</TABLE>

                                       41
<PAGE>

<TABLE>
     <S>          <C>
          10.10   Employment Agreement dated July 2, 1997 between ASI and Randal
                  J. Sage (incorporated by reference to ASI's Annual Report on
                  Form 10-K for the fiscal year ended September 30, 1998.)

          10.11   Employment Agreement dated July 2, 1997 between ASI and John
                  J. Dillon III (incorporated by reference to ASI's Annual
                  Report on Form 10-K for the fiscal year ended September 30,
                  1998.)

          10.12   Consulting Agreement between ASI and John A. Thorpe, dated
                  June 27, 1997 (incorporated by reference to ASI's Annual
                  Report on Form 10-K for the fiscal year ended September 30,
                  1998.)

          10.13   Analytical Surveys, Inc. 1997 Incentive Stock Option Plan, as
                  amended and restated (incorporated by reference to Amendment
                  No. 1 to ASI's Quarterly Report on Form 10-Q for the quarter
                  ended December 31, 1998.)

          10.14   Credit Agreement between ASI and Bank One, Colorado, N.A..
                  dated June 3, 1998 (including Exhibits A-1, A-2, A-3, C, D and
                  E thereto) (incorporated by reference to ASI's Quarterly 
                  Report on Form 10-Q for the quarter ended June 30, 1998.)

          10.15   Amendment No. 1 to Credit Agreement between ASI and BankOne,
                  Colorado, N.A.. dated as of July 10, 1998.

          10.16   Amendment No. 2. To Credit Agreement between ASI and BankOne,
                  Colorado, N.A.. dated as of October 20, 1998.

          10.17   Amendment No. 3 to Credit Agreement between ASI and BankOne,
                  Colorado, N.A. dated as of November 24, 1998.

          10.18   Registration Rights Agreement dated July 2, 1997, between ASI
                  and Sol C. Miller (incorporated by reference to ASI's Current
                  Report on Form 8-K dated July 16, 1997, as amended on
                  September 9, 1997).

          10.19   Consulting and Non-Competition Agreement dated July 2, 1997,
                  between ASI and Sol C. Miller (incorporated by reference to
                  ASI's Current Report on Form 8-K dated July 16, 1997, as
                  amended on September 9, 1997).

          10.20   Amendment to Consulting and Non-Competition Agreement between
                  ASI and Sol C. Miller dated July 1, 1998.

          23.     Consent of KPMG Peat Marwick LLP.

          27.     Financial Data Schedule.
</TABLE>

                                       42
<PAGE>

PART IV.

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a)  (1) Financial Statements

     Included in Part II of this Report:

     Independent Auditors' Report

          Consolidated Balance Sheets, September 30, 1998 and 1997

          Consolidated Statements of Operations, Years Ended September 30,
               1998, 1997 and 1996

          Consolidated Statements of Stockholders' Equity, Years Ended
               September 30, 1998, 1997 and 1996

          Consolidated Statements of Cash Flows, Years
               Ended September 30, 1998, 1997 and 1996

          Notes to Consolidated Financial Statements, 
               September 30, 1998 and 1997

     (2)  Financial statement schedules

     Included in Part IV of this report:

               Financial statement schedules required to be filed have
          been omitted because they are not applicable, or the
          required information is set forth in the applicable
          financial statements or notes thereto.

     (3) Exhibits

     The following exhibits are filed herewith or incorporated by reference
     herein (according to the number assigned to them in Item 601 of Regulation
     S-K), as noted:


3.   Articles of Incorporation and By-Laws

<TABLE>
<S>       <C>
     3.1  Articles of incorporation as amended (incorporated by reference to
          ASI's Registration Statement on Form S-18, 
          (Registration No. 2-93108-D).)

     3.3  By-laws (incorporated by reference to ASI's Registration Statement on
          Form S-18 (Registration No. 2-93108-D).

     3.3  Amendment to By-laws.
</TABLE>

4.   Instruments defining the rights of Security Holders including Indentures

                                       43

<PAGE>

          Form of Stock Certificate (incorporated by reference to ASI's
          Registration Statement on Form S-18 (Registration No. 2-93108-D).)

10.  Material Contracts

<TABLE>
<S>         <C>
     10.1   Employment agreement dated June 27, 1994 between ASI and Sidney V.
            Corder, Chief Executive Officer and President, (incorporated by
            reference to ASI's Quarterly Report on Form 10-QSB for the quarter
            ended June 30, 1994.)

     10.2   Stock Option Plan dated December 17, 1987 and amended on August 31,
            1992 (incorporated by reference to ASI's Annual Report on Form 10-K
            for the fiscal year ended September 30, 1992.)

     10.3   1991 Non-Qualified Stock Option Plan dated December 17, 1990, as
            amended (incorporated by reference to ASI's Annual Report on 
            Form 10-K for fiscal year ended September 30, 1992.)

     10.4   1993 Non-Qualified Stock Option Plan dated December 11, 1992
            (incorporated by reference to ASI's Proxy Statement dated 
            January 11, 1993.)

     10.5   Analytical Surveys, Inc. 401-K Plan dated October 1, 1988 and 
            amended and restated May 22, 1992 (incorporated by reference to 
            ASI's Annual Report on Form 10-K for Fiscal Year ended 
            September 30, 1992.) 

     10.6   Analytical Surveys, Inc. Incentive Bonus Plan (incorporated by
            reference to ASI's Annual Report on Form 10-K for fiscal year ended
            September 30, 1992.)

     10.7   Employment agreement dated September 20, 1995 between ASI and 
            Scott C. Benger (incorporated by reference to ASI's Annual Report 
            on Form 10-KSB for the fiscal year ended September 30, 1995.)

     10.8   1995 Non-Qualified Stock Option Plan dated August 22, 1995
            (incorporated  by reference to ASI's Annual Report on Form 10-KSB 
            for the fiscal year ended September 30, 1995.)

     10.9   Real Estate Lease between MSE Realty, LLC and MSE Corporation, dated
            July 2, 1997 (incorporated by reference to ASI's Annual Report on 
            Form 10-K for the fiscal year ended September 30, 1998.)

     10.10  Employment Agreement dated July 2, 1997 between ASI and Randal J.
            Sage (incorporated by reference to ASI's Annual Report on Form 10-K
            for the fiscal year ended September 30, 1998.)

     10.11  Employment Agreement dated July 2, 1997 between ASI and John J.
            Dillon III (incorporated by reference to ASI's Annual Report on 
            Form 10-K for the fiscal year ended September 30, 1998.)

     10.12  Consulting Agreement between ASI and John A. Thorpe, dated June 27,
            1997 (incorporated by reference to ASI's Annual Report on Form 10-K
            for the fiscal year ended September 30, 1998.)

</TABLE>
                                       44

<PAGE>

<TABLE>
<S>         <C>
     10.13  Analytical Surveys, Inc. 1997 Incentive Stock Option Plan, as
            amended and restated (incorporated by reference to Amendment No. 1
            to ASI's Quarterly Report on Form 10-Q for the quarter ended 
            December 31, 1998.)

     10.14  Credit Agreement between ASI and Bank One, Colorado, N.A.. dated
            June 3, 1998 (including Exhibits A-1, A-2, A-3, C D and E thereto
            (incorporated by reference to ASI's Quarterly Report on  Form 10-Q 
            for the quarter ended June 30, 1998.)

     10.15  Amendment No. 1 to Credit Agreement between ASI and BankOne,
            Colorado, N.A.. dated as of July 10, 1998.

     10.16  Amendment No. 2. To Credit Agreement between ASI and BankOne,
            Colorado, N.A.. dated as of October 20, 1998.

     10.17  Amendment No. 3 to Credit Agreement between ASI and BankOne,
            Colorado, N.A.. dated as of November 24, 1998.

     10.18  Registration Rights Agreement dated July 2, 1997, between ASI and
            Sol C. Miller  (incorporated by reference to ASI's Current Report
            on Form 8-K dated July 16, 1997, as amended on September 9, 1997).

     10.19  Consulting and Non-Competition Agreement dated July 2, 1997,
            between ASI and Sol C. Miller  (incorporated by reference to ASI's
            Current Report on Form 8-K dated July 16, 1997, as amended on
            September 9, 1997).

     10.20  First Amendment to Consulting and Non-Competition Agreement
            between ASI and Sol C. Miller dated July 1, 1998.

</TABLE>

23.  Consent of Experts and Counsel:

            Consent of KPMG Peat Marwick LLP.

27.  Financial Data Schedule.

(b)  Reports on Form 8-K filed during the quarter ended September 30, 1998:

<TABLE>
<CAPTION>

            Date of Report      Items Reported      Financial Statements Filed
            --------------      --------------      --------------------------
<S>                             <C>                 <C>

            June 26, 1998       Item 2              Audited financial statements
                                                    of Cartotech, Inc. for fiscal
                                                    years ended December 31, 1997
                                                    and 1996.

                                                    Unaudited financial statements
                                                    of Cartotech, Inc. for the
                                                    five month period ended May 31, 1998.

                                                    Proforma statement of operations 
                                                    for the nine month period ended 
                                                    June 30, 1998.

</TABLE>

                                       45

<PAGE>

                                    SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

Analytical Surveys, Inc.

By: /s/ Sidney V. Corder                                 Date: December 22, 1998
    ---------------------------------------------------
    Sidney V. Corder, Chairman of the Board, President,
    Chief Executive Officer, and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this 
report has been signed below by the following persons on behalf of the 
registrant and in the capacities indicated and on the dates indicated.

Signature                                                  Date:

By:  /s/ Sidney V. Corder                                  December 22, 1998
   -----------------------------------------------
Sidney V. Corder, Director, Chairman of the Board,
President, Chief Executive Officer, and Director


By:  /s/ Scott C. Benger                                   December 22, 1998
   -----------------------------------------------
Scott C. Benger, Sr. Vice President Finance and Secretary/
Treasurer (chief financial officer and principal
accounting officer)


By:  /s/ Brian J. Yates                                    December 22, 1998
   -----------------------------------------------
Brian J. Yates, Controller


By:  /s/ Richard P. MacLeod                                December 22, 1998
   -----------------------------------------------
Richard P. MacLeod, Director


By:  /s/ James T. Rothe                                    December 22, 1998
   -----------------------------------------------
James T. Rothe, Director


By:  /s/ Robert H. Keeley                                  December 22, 1998
   -----------------------------------------------
Robert H. Keeley, Director


By:  /s/ John A. Thorpe                                    December 22, 1998
   -----------------------------------------------
John A. Thorpe, Director


By:  /s/ Willem H. J. Andersen                             December 22, 1998
   -----------------------------------------------
Willem H. J. Andersen, Director


By:  /s/  Sol C. Miller                                    December 22,1998
   -----------------------------------------------
Sol C. Miller, Director

                                       46