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

                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                 For the Fiscal Quarter Ended December 31, 1997,

                                       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: 0-26620

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

          Delaware                                              94-3055907
(State or other jurisdiction of                               (IRS Employer
 incorporation or organization)                           Identification Number)

                               1490 O'Brien Drive
                          Menlo Park, California 94025
                    (Address of principal executive offices)

               Registrant's telephone number, including area code:
                                 (650) 328-3818

     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 at least the past 90 days.

         Yes     X                                              No
               -----                                                 -----


         As of February 9, 1998,  6,675,039  shares of the  Registrant's  common
stock, $0.001 par value, were outstanding.



<PAGE>


<TABLE>
                                                    ACCOM, INC.

                                 FORM 10-Q For the Quarter Ended December 31, 1997

                                                       INDEX

<CAPTION>
                                                                                                             Page
<S>          <C>                                                                                              <C>
             Facing sheet                                                                                      1

             Index                                                                                             2

Part I.      Financial Information

Item 1.      a)  Condensed consolidated interim balance sheets at December 31, 1997 and September 30,
                 1997                                                                                          3

             b)  Condensed consolidated interim statements of operations for the three months
                 December 31, 1997 and December 28, 1996                                                       4

             c)  Condensed consolidated interim statements of cash flows for the three months
                 ended  December 31, 1997 and December 28, 1996                                                5

             d)  Notes to condensed consolidated interim financial statements                                  6


Item 2.      Management's Discussion and Analysis of Financial Condition and Results of Operations             8


Part II.     Other Information                                                                                13

             Signatures                                                                                       14

             Exhibit 27.1
                    Financial Data Schedule
</TABLE>

                                                       -2-

<PAGE>


<TABLE>
                                                    PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                                                             ACCOM, INC.
                                            CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
                                                (in thousands, except per share data)

<CAPTION>
                                                                                                                As of
                                                                                                             -----------
                                                                                                    December 31,       September 30,
                                                                                                        1997                1997
                                                                                                      -----------------------------
                                                                                                     (Unaudited)            (Note)
<S>                                                                                                   <C>                  <C>     
                                   Assets
Current assets:
     Cash and cash equivalents                                                                        $  5,640             $  5,317
     Accounts receivable, net                                                                            3,594                3,239
     Inventories                                                                                         1,289                  980
     Income tax refunds receivable                                                                         243                  621
     Deferred tax assets                                                                                    38                   38
     Prepaid expenses and other current assets                                                             401                  334
                                                                                                      -----------------------------
         Total current assets                                                                           11,205               10,529
Property and equipment, net                                                                              1,193                  967
Other assets                                                                                                49                   49
                                                                                                      -----------------------------
         Total assets                                                                                 $ 12,447             $ 11,545
                                                                                                      =============================

                    Liabilities and Stockholders' Equity

Current liabilities:
     Notes payable                                                                                    $     10             $     24
     Accounts payable                                                                                    2,046                1,476
     Accrued liabilities                                                                                 1,525                1,338
     Deferred revenue                                                                                      132                  141
                                                                                                      -----------------------------
         Total current liabilities and total liabilities                                                 3,713                2,979
                                                                                                      -----------------------------
Stockholders' equity:
     Preferred stock, $0.001 par value; 2,000 shares authorized;
         no shares issued and outstanding                                                                 --                   --
     Common stock, $0.001 par value; 20,233 shares authorized;
         6,660 and 6,627 shares issued and outstanding on
         December 31, 1997 and September 30, 1997, respectively                                         21,453               21,427
     Accumulated deficit                                                                               (12,719)             (12,861)
                                                                                                      -----------------------------
         Total stockholders' equity                                                                      8,734                8,566
                                                                                                      -----------------------------

         Total liabilities and stockholders' equity                                                   $ 12,447             $ 11,545
                                                                                                      =============================

<FN>
Note:    The  condensed  consolidated  balance  sheet at September  30, 1997 has been derived from the audited  annual  consolidated
         balance  sheet at that date but does not include all of the  information  and  footnotes  required  by  generally  accepted
         accounting principles for a complete consolidated balance sheet.

              The accompanying notes are an integral part of these condensed consolidated interim financial statements.
</FN>
</TABLE>

                                                                -3-

<PAGE>


<TABLE>
                                                             ACCOM, INC.
                                       CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
                                                (in thousands, except per share data)
                                                             (Unaudited)

<CAPTION>
                                                                                                           Three months ended
                                                                                                           ------------------
                                                                                                    December 31,        December 28,
                                                                                                        1997                1996
                                                                                                       ----------------------------
<S>                                                                                                    <C>                  <C>    
Net sales                                                                                              $ 4,133              $ 4,216

Cost of sales                                                                                            1,746                4,676
                                                                                                       ----------------------------
     Gross margin                                                                                        2,387                 (460)
                                                                                                       ----------------------------

Operating expenses:
     Research and development                                                                              784                  798
     Marketing and sales                                                                                 1,214                2,266
     General and administrative                                                                            299                  996
                                                                                                       ----------------------------
     Total operating expenses                                                                            2,297                4,060
                                                                                                       ----------------------------

Operating income (loss)                                                                                     90               (4,520)

     Interest and other income, net                                                                         53                   23
                                                                                                       ----------------------------

Income (loss) before provision for income taxes                                                            143               (4,497)

     Provision for income taxes                                                                              1                 --
                                                                                                       ----------------------------
Net income (loss)                                                                                      $   142              $(4,497)
                                                                                                       ============================

Net income (loss) per share:
   Basic                                                                                               $  0.02              $ (0.69)
                                                                                                       ============================
   Diluted                                                                                             $  0.02              $ (0.69)
                                                                                                       ============================

Shares used in computation of net income (loss) per share:
   Basic                                                                                                 6,638                6,561
                                                                                                       ============================
   Diluted                                                                                               7,034                6,561
                                                                                                       ============================

<FN>
              The accompanying notes are an integral part of these condensed consolidated interim financial statements.
</FN>
</TABLE>

                                                                -4-

<PAGE>


<TABLE>
                                                             ACCOM, INC.
                                       CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
                                                           (in thousands)
                                                             (Unaudited)

<CAPTION>
                                                                                                           Three Months Ended
                                                                                                           ------------------
                                                                                                       December 31,     December 28,
                                                                                                           1997             1996
                                                                                                        ---------------------------
<S>                                                                                                     <C>                 <C>     
                   Cash flows from operating activities:
Net income (loss)                                                                                       $   142             $(4,497)
Adjustments to reconcile net income (loss) to net cash provided by
  (used in) operating activities:
     Depreciation and amortization                                                                          118                 222
     Establishment of reserves against accounts receivable,
       inventories, property and equipment and accruals
       for streamlining operations                                                                         --                 3,995
     Changes in operating assets and liabilities,  net of effects of
       reserves to streamline operations:
         Accounts receivable                                                                               (355)                624
         Inventories                                                                                       (309)                754
         Income tax refunds receivable                                                                      378                --
         Prepaid expenses and other current assets                                                          (67)                 (7)
         Accounts payable                                                                                   570              (1,114)
         Accrued liabilities and customer deposits                                                          187                (111)
         Deferred revenue                                                                                    (9)                (75)
                                                                                                        ---------------------------
           Net cash provided by (used in) operating activities                                              655                (209)
                                                                                                        ---------------------------

                   Cash flows from investing activities:
Expenditures for property and equipment                                                                    (344)               (136)
                                                                                                        ---------------------------
           Net cash used in investing activities                                                           (344)               (136)
                                                                                                        ---------------------------

                   Cash flows from financing activities:
Repayments on notes payable                                                                                 (14)                (15)
Issuance of common stock                                                                                     26                  36
                                                                                                        ---------------------------
           Net cash provided by financing activities                                                         12                  21
                                                                                                        ---------------------------

Net increase (decrease) in cash and cash equivalents                                                        323                (324)
Cash and cash equivalents at beginning of period                                                          5,317               4,221
                                                                                                        ---------------------------
Cash and cash equivalents at end of period                                                              $ 5,640             $ 3,897
                                                                                                        ===========================

             Supplemental disclosure of cash flow information:
Interest paid                                                                                           $     1             $     2
                                                                                                        ===========================
Income taxes paid                                                                                       $     1             $  --

                Supplemental disclosure of noncash investing
                         and financing activities:
                                                                                                        ===========================
Reduction in accrued acquisition costs                                                                  $  --               $    43
                                                                                                        ===========================


<FN>
              The accompanying notes are an integral part of these condensed consolidated interim financial statements
</FN>
</TABLE>

                                                                -5-

<PAGE>


          NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1.  Basis of Preparation

         The  condensed  consolidated  interim  balance sheet as of December 31,
1997, and the condensed  consolidated  interim statements of operations and cash
flows for the three month periods ended  December 31, 1997 and December 28, 1996
have  been  prepared  by the  Company  and  are  unaudited.  In the  opinion  of
management, all adjustments (consisting of normal accruals) necessary to present
fairly  the  financial  position  as of  December  31,  1997 and the  results of
operations  and cash for the three month  periods  ended  December  31, 1997 and
December 28, 1996, have been made.

These condensed  consolidated interim financial statements should be reviewed in
conjunction with the audited  consolidated annual financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the fiscal year
ended  September 30, 1997.  The results of operations for the three month period
ended December 31, 1997 are not necessarily  indicative of the operating results
for any future period.


Note 2.  Inventories

         Inventories consist of the following (in thousands):

                                                  December 31,     September 30,
                                                     1997              1997
                                                 -------------------------------
Purchased parts and materials                       $  170            $  225
Work-in-process                                        386               204
Finished goods                                         189               182
Demonstration inventory                                544               369
                                                 -------------------------------
                                                    $1,289            $  980
                                                 ===============================


Note 3.  Bank Information

         The  Company has a revolving  line of credit  with  Comerica  Bank that
allows for  borrowings of up to $4.0  million,  subject to the level of accounts
receivable.  As of December  31, 1997,  the Company had $3.9  million  available
under the line with no borrowings  outstanding.  Indebtedness  under the line of
credit accrues  interest at the bank's base rate and is secured by substantially
all of the  Company's  assets.  The line of credit may be  terminated  by either
party upon 30 days' notice.  Borrowings  under the line of credit are subject to
certain financial  covenants.  The Company is currently in compliance with these
covenants.

                                      -6-

<PAGE>


Note 4.  Computation of Net Income (Loss)  Per Share

<TABLE>
At the start of the  current  fiscal  year,  the Company  adopted  new  required
accounting  guidelines  addressing the  computation and disclosure of net income
(loss) per share.  Net income (loss) per share and shares used in computation of
net income  (loss) per share have been  restated  for all periods  presented  to
comply with the new required accounting guidelines.

<CAPTION>
                                                                                                           Three Months Ended
                                                                                                           ------------------
                                                                                                    December 31,        December 28,
                                                                                                        1997                1996
                                                                                                       --------------------------
<S>                                                                                                    <C>                <C>     
Net income (loss)                                                                                      $   142            $(4,497)
                                                                                                       ==========================

Shares used in computation of net income (loss) per share:
  Basic:
     Weighted average shares of common stock outstanding                                                 6,638              6,561
                                                                                                       --------------------------
       Shares used in basic net income (loss) per share computation                                      6,638              6,561
                                                                                                       ==========================
  Diluted:
     Weighted average shares of common stock outstanding                                                 6,638              6,561
     Net effect of dilutive stock options                                                                  396               --
                                                                                                       --------------------------
       Shares used in diluted net income (loss) per share computation                                    7,034              6,561
                                                                                                       ==========================

Net income (loss) per share:
  Basic                                                                                                $  0.02            $ (0.69)
                                                                                                       ==========================
  Diluted                                                                                              $  0.02            $ (0.69)
                                                                                                       ==========================
</TABLE>


Note 5.  Other New Accounting Guidelines

In 1997,  two  additional  accounting  guidelines  were  issued  addressing  the
reporting of comprehensive income and revised disclosure of segment information,
both of which will be effective for the Company in fiscal 1999.

Note 6.  Special Charges 

Special  charges for the first  quarter of fiscal 1997 ended  December  31, 1996
represent  $4.0 million pretax to streamline  operations  and provide  valuation
reserves  against  inventories,  receivables and fixed assets.  The charges were
taken to  reflect  historic  changes  in  existing  product  support  as well as
anticipated changes due to future product development.


                                      -7-

<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

         The  following  Management's   Discussion  and  Analysis  of  Financial
Condition  and  Results of  Operations  should be read in  conjunction  with the
Company's  Consolidated  Financial  Statements as of September 30, 1997 and 1996
and for the three fiscal years ended  September 30, 1997, 1996 and 1995 included
in its Annual Report on Form 10-K for the fiscal year ended September 30, 1997.

         In addition, in order to take advantage of the "safe harbor" provisions
of the Private  Securities  Litigation  Reform Act of 1995,  the Company  hereby
notifies readers that the factors set forth in Item 1 under "Additional  Factors
That May Affect Future Results,"  included in its Annual Report on Form 10-K for
the fiscal year ended September 30, 1997, as well as other factors, could in the
future affect,  and in the past have affected,  the Company's actual results for
future periods to differ  materially from those expressed in any forward looking
statements  made by or on behalf of the Company,  including  without  limitation
those made in the discussion below.

Overview

         Accom  designs,  manufactures,  sells,  and supports a complete line of
digital video signal  processing,  editing,  and disk recording  tools,  and its
ELSET virtual set systems,  primarily for the  professional  worldwide video and
computer graphics production, post production and distribution marketplaces.

         The following table  summarizes the Company's  products and the primary
marketplaces they address.


--------------------------------------------------------------------------------
                           Primary Marketplaces / Products
      Production:
           ELSET(TM) Virtual Set
           Work Station Disk ("WSD(R)") 2Xtreme(TM)  Computer Graphics Digital 
               Disk Recorder

      Post Production:
           Signal Processors
           Editing:
               On-line Video Editors:
                    Axial(R) 2020 (first generation)
                    Axial(R) 2010 (lower cost first generation)
                    Axial(R) 3000 (second generation)
               Digital Disk Recorders:
                    Real Time Disk ("RTD(TM) ") 4224
                    Accom Professional Recorder ("APR(TM) ") Attache(TM)

      Distribution:
           Axess(TM) Digital News Graphic and Clip Server
--------------------------------------------------------------------------------


         The Company's  revenues are currently  derived  primarily  from product
sales.  The Company  generally  recognizes  revenue  upon product  shipment.  If
significant  obligations exist at the time of shipment,  revenue  recognition is
deferred until these obligations are met.

         The Company's gross margin has historically  fluctuated from quarter to
quarter. If the Company resells a Silicon Graphics,  Inc. ("SGI") workstation as
part of the ELSET Virtual Set, gross margins will decline.  Additionally,  gross
margins will be dependent on the mix of higher and lower-priced  products having
various gross margin percentages and the percentage of sales made through direct
and indirect distribution channels.

         Software development costs are recorded in accordance with Statement of
Financial  Accounting Standards No. 86. To date, the Company has expensed all of
its internal software development costs.

                                      -8-

<PAGE>


Results of Operations

Three Months Ended December 31, 1997 and December 28, 1996

<TABLE>
         The  following  table  presents the  Company's  Condensed  Consolidated
Interim  Statements of Operations  for the three months ended  December 31, 1997
and  December 28, 1996 as reported  and as  normalized  to remove the effects of
special  charges  incurred  during the first  three  months of fiscal 1997 ended
December 31, 1996 (dollar amounts in thousands, except per share data).

<CAPTION>
                                                                     Three Months Ended
                                                                   Dec. 31,         Dec. 28,              Increase (Decrease)
                                                                     1997             1996               Amount            Percent
                                                                   -------           -------            -------            -------
<S>                                                                <C>               <C>                <C>                  <C>   
Net sales
  Reported                                                         $ 4,133           $ 4,216            $   (83)             (2.0)%
  Normalized                                                         4,133             4,216                (83)             (2.0)%
Cost of sales
  Reported                                                           1,746             4,676             (2,930)            (62.7)%
  Normalized                                                         1,746             2,176               (430)            (19.8)%
                                                                   -----------------------------------------------------------------
     Gross margin
       Reported                                                      2,387              (460)             2,847              618.9%
       Normalized                                                    2,387             2,040                347               17.0%
                                                                   -----------------------------------------------------------------
Operating expenses:
  Research and development
     Reported                                                          784               798                (14)              (1.8)%
     Normalized                                                        784               798                (14)              (1.8)%
  Marketing and sales
     Reported                                                        1,214             2,266             (1,052)             (46.4)%
     Normalized                                                      1,214             1,421               (207)             (14.6)%
  General and administrative
     Reported                                                          299               996               (697)             (70.0)%
     Normalized                                                        299               346                (47)             (13.6)%
                                                                   -----------------------------------------------------------------
  Total operating expenses
     Reported                                                        2,297             4,060             (1,763)             (43.4)%
     Normalized                                                      2,297             2,565               (268)             (10.5)%
                                                                   -----------------------------------------------------------------
Operating income (loss)
  Reported                                                              90            (4,520)             4,610              102.0%
  Normalized                                                            90              (525)               615              117.0%
Interest and other income, net
  Reported                                                              53                23                 30              130.4%
  Normalized                                                            53                23                 30              130.4%
                                                                   -----------------------------------------------------------------
Loss before provision for income taxes
  Reported                                                             143            (4,497)             4,640              103.2%
  Normalized                                                           143              (502)               645              128.5%
Provision for income taxes
  Reported                                                               1              --                    1               --
  Normalized                                                             1              --                    1               --
                                                                   -----------------------------------------------------------------
Net income (loss)
  Reported                                                         $   142           $(4,497)           $ 4,639              103.2%
  Normalized                                                           142              (502)               644              128.3%
                                                                   =================================================================
Net income (loss) per share Reported:
     Basic                                                         $  0.02           $ (0.69)           $  0.71              102.9%
                                                                   =================================================================
     Diluted                                                       $  0.02           $ (0.69)           $  0.71              102.9%
                                                                   =================================================================
  Normalized:
     Basic                                                         $  0.02           $ (0.08)           $  0.10              125.0%
                                                                   =================================================================
     Diluted                                                       $  0.02           $ (0.08)           $  0.10              125.0%
                                                                   =================================================================
</TABLE>


         Note:  Special  charges  for the first  quarter  of fiscal  1997  ended
December 31, 1996  represent  $4.0 million  pretax to streamline  operations and
provide valuation  reserves against  inventories,  receivables and fixed assets.
The charges were taken to reflect  historic  changes in existing product support
as well as anticipated changes due to future product development.

                                      -9-

<PAGE>


<TABLE>
         The   following   table   presents  the  Company's   fiscal   Condensed
Consolidated  Interim  Statements  of  Operations  for the first three months of
fiscal 1998 and 1997 as a percentage of net sales, as reported and as normalized
to remove the effects of special  charges and  credits  incurred  during each of
those periods.

<CAPTION>
                                                                                     Three Months Ended
                                                                                     Dec. 31,   Dec. 28,   Increase
                                                                                       1997       1996    (Decrease)
                                                                                   ---------------------------------
<S>                                                                                    <C>        <C>          <C> 
Net sales
     Reported                                                                          100.0%     100.0%       0.0%
     Normalized                                                                        100.0%     100.0%       0.0%
Cost of sales
     Reported                                                                           42.3%     110.9%     (68.6)%
     Normalized                                                                         42.3%      51.6%      (9.3)%
                                                                                   ---------------------------------
           Gross margin
             Reported                                                                   57.8%    (10.9)%      68.7%
             Normalized                                                                 57.8%      48.4%       9.4%
                                                                                   ---------------------------------
Operating expenses:
     Research and development
        Reported                                                                        19.0%      18.9%       0.1%
        Normalized                                                                      19.0%      18.9%       0.1%
     Marketing and sales
        Reported                                                                        29.4%      53.8%     (24.4)%
        Normalized                                                                      29.4%      33.7%      (4.3)%
     General and administrative
        Reported                                                                         7.2%      23.6%     (16.4)%
        Normalized                                                                       7.2%       8.2%      (1.0)%
                                                                                   ---------------------------------
     Total operating expenses
        Reported                                                                        55.6%      96.3%     (40.7)%
        Normalized                                                                      55.6%      60.8%      (5.2)%
                                                                                   ---------------------------------
Operating income (loss)
     Reported                                                                            2.2%   (107.2)%     109.4%
     Normalized                                                                          2.2%    (12.5)%      14.7%
Interest and other income,  net
     Reported                                                                            1.3%       0.6%       0.7%
     Normalized                                                                          1.3%       0.6%       0.7%
                                                                                   ---------------------------------
Income (loss) before provision for income taxes
     Reported                                                                            3.5%   (106.7)%     110.2%
     Normalized                                                                          3.5%    (11.9)%      15.4
Provision for income taxes
     Reported                                                                             - %        - %        - %
     Normalized                                                                           - %        - %        - %
                                                                                   ---------------------------------
Net income (loss)
     Reported                                                                            3.4%   (106.7)%     110.1%
     Normalized                                                                          3.4%    (11.9)%      15.3%
                                                                                   =================================
</TABLE>


         Note:  Special  charges  for the first  quarter  of fiscal  1997  ended
December 31, 1996  represent  $4.0 million  pretax to streamline  operations and
provide valuation  reserves against  inventories,  receivables and fixed assets.
The charges were taken to reflect  historic  changes in existing product support
as well as anticipated changes due to future product development.

                                      -10-

<PAGE>


         The following  discussion of results of operations for the three months
ended December 31, 1997 and December 28, 1996 is based upon normalized  results,
without inclusion of the above noted special charges and credits incurred during
the first quarter of fiscal 1997, which ended December 28, 1996.

         Net sales. The decrease in net sales during the first quarter of fiscal
1998 from fiscal 1997 levels was primarily  due to decreased  sales in the video
post  production  marketplace.  That decrease was partially  offset by increased
sales in the  video  broadcasting  and  computer  graphics  production  and post
production marketplaces.

         International  sales for the first three months of fiscal 1998 and 1997
represented 48.6% and 45.8% of net sales, respectively.

<TABLE>
         The  following  table  presents net sales  dollar  volume for the three
months  ended  December  31,  1997 and  December  28, 1996 by market and related
percentages of total net sales (dollar amounts in thousands).


<CAPTION>
                                                                           Three Months Ended
                                                      --------------------------------------------------------------
                                                           December 31, 1997                 December 28, 1996
                                                           -----------------                 -----------------
                     Marketplace                         Amount        Percent             Amount         Percent
                     -----------                         ------        -------             ------         -------
<S>                                                      <C>            <C>                <C>             <C>   
Production                                               $2,389          57.8%             $1,406           33.3%
Post Production                                           1,040          25.1%              2,314           54.9%
Broadcasting                                                631          15.3%                450           10.7%
Other                                                        73           1.8%                 46            1.1%
                                                      -----------------------------    -----------------------------
                                                         $4,133         100.0%             $4,216          100.0%
                                                      =============================    =============================
</TABLE>

         Cost of sales. Normalized gross margin percentage for the first quarter
of fiscal 1998 increased over fiscal 1997 first quarter levels  primarily due to
a greater  portion of higher margin ELSET  software  sales included in the sales
mix.

         Research  and  development.  The  decrease in  normalized  research and
development expenses in the first quarter of fiscal 1998 from the same period in
fiscal  1997 was  primarily  a result of  decreases  in  headcount  and  related
overhead expenses.

         Marketing  and sales.  The decrease in  normalized  marketing and sales
expenses in the first quarter of fiscal 1998 from the same period in fiscal 1997
was   primarily  due  to  decreases  in   headcount,   demonstration   equipment
refurbishment costs, and commission expenses partially offset by increased trade
show expenses and increased expenses relating to the marketing of virtual sets.

         General and  administrative.  The  decrease in  normalized  general and
administrative  expenses  from fiscal 1997 levels was primarily due to decreased
overhead costs.

         Interest  and other  income,  net.  The  increase in interest and other
income,  net  during the first  quarter of fiscal  1998,  was  primarily  due to
increased average interest bearing cash and cash equivalent balances.

         Provision  for income  taxes.  In the first  quarter of fiscal 1998 and
1997, the Company was in a net operating loss carryforward position.

                                      -11-

<PAGE>


Liquidity and Capital Resources


         Since   inception,   the  Company  has  financed  its   operations  and
expenditures  for  property  and  equipment  through the sale of capital  stock,
borrowings under a bank line of credit and term loans, and cash from operations.
As of  December  31,  1997,  the  Company  had  $5.6  million  of cash  and cash
equivalents.

         Operating  activities  provided  $655,000  in net cash during the first
quarter of fiscal 1998 and used $209,000 in net cash during the first quarter of
fiscal  1997.  Net cash  provided  in the first  quarter of fiscal  1998 was due
primarily  to  decreases  in income tax  refunds  receivable  and  increases  in
accounts  payable and accrued  liabilities,  partially  offset by  increases  in
accounts receivable,  inventories,  and property and equipment. Net cash used in
the first  quarter of fiscal 1997 was due  primarily  to  increases  in accounts
payable  and  accrued  liabilities  partially  offset by  increases  in accounts
receivable and inventories.

         The  Company has a revolving  line of credit  with  Comerica  Bank that
allows for  borrowings  up to $4.0  million,  subject  to the level of  accounts
receivable.  As of December 31, 1997,  approximately  $3.9 million of borrowings
were available under this line of credit, of which the Company had no borrowings
outstanding.  Indebtedness  under the line of credit accrues at Comerica's  base
rate and is secured by substantially  all of the Company's  assets.  The line of
credit may be terminated by either party upon 30 days' notice.  Borrowings under
the line of credit are subject to certain financial  covenants , and the Company
was in compliance with all such covenants at December 31, 1997.

         The Company  believes  that its existing  cash,  cash  equivalents  and
credit  facilities will be sufficient to meet its cash requirements for at least
the next twelve  months.  Although  operating  activities  may  provide  cash in
certain  periods,  to the extent the Company grows in the future,  its operating
and investing activities may use cash and, consequently, such growth may require
the Company to obtain additional sources of financing. There can be no assurance
that any  necessary  additional  financing  will be  available to the Company on
commercially reasonable terms, if at all.


New Accounting Guidelines

         At the start of the  current  fiscal  year,  the  Company  adopted  new
required accounting  guidelines addressing the computation and disclosure of net
income  (loss)  per  share.  Net  income  (loss)  per share and  shares  used in
computation  of net income  (loss) per share have been  restated for all periods
presented to comply with the new required accounting guidelines.

         In 1997, two additional  accounting  guidelines were issued  addressing
the  reporting  of  comprehensive  income  and  revised  disclosure  of  segment
information, both of which will be effective for the Company in fiscal 1999.


Item 3.  Quantitative and Qualitative Disclosures About Market Risks

         Not Applicable.

                                      -12-

<PAGE>


                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings
None.


Item 2.  Changes in Securities and Use of Proceeds
None.


Item 3.  Defaults Upon Senior Securities
None.

Item 4.  Submission of Matters to a Vote of Security Holders
None.

Item 5.  Other Information
None.

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits.


27.1 Financial Data Schedule


(b)  Reports on Form 8-K.
None.

                                      -13-

<PAGE>


SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  Report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

         ACCOM, INC.



         By: /s/  Cal R. Hoagland
            ----------------------
         Vice President, Finance and Chief Financial Officer
         Principal Financial And Accounting Officer


         Date:  February 13, 1998

                                      -14-