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 March 31, 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: 0-26620

                                   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 May 5, 1998 6,675,164 shares of the Registrant's  common stock, $0.001 par
value, were outstanding.


<PAGE>


                                   ACCOM, INC.

                 FORM 10-Q For the Quarter Ended March 31, 1998

                                      INDEX

                                                                            Page

          Facing sheet                                                         1

          Index                                                                2

Part I.   Financial Information

          a) Item 1. Condensed consolidated interim balance sheets at March
             31, 1998 and September 30, 1997                                   3

          b) Condensed  consolidated  interim  statements of operations for
             the three and six months  ended  March 31,  1998 and March 29,
             1997                                                              4

          c) Condensed  consolidated  interim  statements of cash flows for
             the six months ended March 31, 1998 and March 29, 1997            5

          d) Notes to condensed interim consolidated financial statements      6

Item 2.   Management's  Discussion and Analysis of Financial  Condition and
          Results of Operation                                                 7


Part II.  Other Information                                                   15

          Signature                                                           16

          Exhibit 27.1                                                        17
                 Financial Data Schedule


                                    -2-

<PAGE>

                                            PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
<TABLE>
                                                     ACCOM, INC.
                                    CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
                                        (in thousands, except per share data)
<CAPTION>
                                                                                              As of
                                                                                             -------
                                                                                   March 31,        September 30,
                                                                                     1998               1997
                                                                                     ----               ----
                                                                                  (Unaudited)          (Note)

                                   Assets
<S>                                                                                    <C>                <C>
Current assets:
     Cash and cash equivalents                                                         $ 4,887            $ 5,317
     Accounts receivable, net                                                            2,716              3,239
     Inventories                                                                         1,897                980
     Income tax refunds receivable                                                         243                621
     Deferred tax assets                                                                    38                 38
     Prepaid expenses and other current assets                                             427                334
                                                                               ------------------ ------------------
         Total current assets                                                           10,208             10,529
Property and equipment, net                                                              1,209                967
Other assets                                                                                49                 49
                                                                               ------------------ ------------------
         Total assets                                                                  $11,466            $11,545
                                                                               ================== ==================

                    Liabilities and Stockholders' Equity
Current liabilities:
     Notes payable                                                                     $     -            $    24
     Accounts payable                                                                    1,706              1,476
     Accrued liabilities                                                                 1,489              1,338
     Deferred revenue                                                                      104                141
                                                                               ------------------ ------------------
         Total current liabilities and total liabilities                                 3,299              2,979
                                                                               ------------------ ------------------
Stockholders' equity:
     Common stock, $0.001 par value;  20,233 shares authorized;
         6,673 and 6,627 shares issued and outstanding on
         March 31, 1998 and September 30, 1997, respectively                            21,464             21,427
     Accumulated deficit                                                               (13,297)           (12,861)
                                                                               ------------------ ------------------
         Total stockholders' equity                                                      8,167              8,566
                                                                               ------------------ ------------------

         Total liabilities and stockholders' equity                                    $11,466            $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                      Six months ended
                                                   ------------------                      ----------------
                                                March 31,        March 29,             March 31,        March 29,
                                                  1998              1997                 1998              1997
                                                  ----              ----                 ----              ----
<S>                                              <C>               <C>                   <C>              <C>   
Net sales                                        $3,073            $4,234                $7,206           $8,450

Cost of sales                                     1,363             2,193                 3,109            6,869
                                         ---------------------------------------------------------------------------

Gross margin                                      1,710             2,041                 4,097            1,581
                                         ---------------------------------------------------------------------------

Operating expenses:
     Research and development                       835               839                 1,619            1,637
     Marketing and sales                          1,180             1,175                 2,394            3,441
     General and administrative                     306               334                   605            1,330
                                         ---------------------------------------------------------------------------

Total operating expenses                          2,321             2,348                 4,618            6,408
                                         ---------------------------------------------------------------------------

Operating loss                                     (611)             (307)                 (521)          (4,827)

     Interest and other income, net                  40                49                    93               72
                                         ---------------------------------------------------------------------------

Loss before provision for income                   (571)             (258)                 (428)          (4,755)
taxes

     Provision for income taxes                       5               -                       6              -
                                         ---------------------------------------------------------------------------

Net loss                                         $ (576)           $ (258)               $ (434)         ($4,755)
                                         ===========================================================================

Net loss per share - basic and diluted           $(0.09)           $(0.04)               ($0.07)          ($0.72)
                                         ===========================================================================

Shares used in computation of net loss
    per share - basic and diluted                 6,669             6,579                 6,651            6,570
                                         ===========================================================================
<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>
                                                                                        Six Months Ended
                                                                                  ---------------------------
                                                                                  March 31,          March 29,
                                                                                    1998               1997
                                                                                    ----               ----

                   Cash flows from operating activities:
<S>                                                                                  <C>                <C>
Net loss                                                                             $  (434)           $(4,755)
Adjustments to reconcile net loss to net cash provided by
  (used in) operating activities:
     Depreciation and amortization                                                       263                330
     Establishment of reserves against accounts receivable,
       inventories, and 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                                                             523              1,127
         Inventories                                                                    (917)             1,296
         Income tax refunds receivable                                                   378                -
         Prepaid expenses and other current assets                                       (93)                40
         Accounts payable                                                                230             (1,165)
         Accrued liabilities and customer deposits                                       149               (124)
         Deferred revenue                                                                (37)              (345)
                                                                              ------------------ ------------------
           Net cash provided in operating activities                                      62                399
                                                                              ------------------ ------------------

                   Cash flows from investing activities:
Expenditures for property and equipment                                                 (505)              (161)
Other assets                                                                             -                   (7)
                                                                              ------------------ ------------------
           Net cash used in investing activities                                        (505)              (168)
                                                                              ------------------ ------------------

                   Cash flows from financing activities:
Repayments on notes payable                                                              (24)               (29)
Issuance of common stock                                                                  37                 60
                                                                              ------------------ ------------------
           Net cash provided by financing activities                                      13                 31
                                                                              ------------------ ------------------

Net increase (decrease) in cash and cash equivalents                                    (430)               262
Cash and cash equivalents at beginning of period                                       5,317              4,221
                                                                              ------------------ ------------------
           Cash and cash equivalents at end of period                                $ 4,887            $ 4,483
                                                                              ================== ==================


<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 March 31, 1998,
and the condensed  consolidated  interim statements of operations and cash flows
for the three and six-month periods ended March 31, 1998 and March 29, 1997 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 March 31, 1998 and the results of operations  and cash
for the three and six-month periods ended March 31, 1998 and March 29, 1997, and
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 and  six-month  periods  ended  March 31,  1998,  are not  necessarily
indicative of the operating results for any future period.

Note 2.  Inventories

         Inventories consist of the following (in thousands):

                                       March 31,           September 30,
                                          1998                  1997
                                          ----                  ----

Purchased parts and materials             $  231                $  225
Work-in-process                              602                   204
Finished goods                               205                   182
Demonstration inventory                      859                   369
                              --------------------------------------------------
                                          $1,897                $  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 March 31, 1998, the Company had  availability of $2.5 million
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.

Note 4.  New Accounting Guidelines

         In fiscal  1999,  the Company  will be  required to adopt newly  issued
accounting  guidelines  addressing the reporting of  comprehensive  income.  The
adoption is expected to have no  significant  impact on the Company's net income
or shareholders'  equity. The guidelines require any unrealized gains and losses
on available-for-sale  securities or foreign currency translation adjustments to
be  included  in  other  comprehensive  income.  Prior  to  adoption  of the new
guidelines,  such items are reported as a separate  component  of  stockholders'
equity.

         Also in fiscal 1999, the Company will be required to adopt newly issued
accounting   guidelines   addressing   disclosures  about  segment  and  related
information.  As the Company  operates in one  segment,  the adoption of the new
guidelines is not expected to have a significant impact on the Company's results
of operations, financial position, or disclosure of segment information.


                                      -6-
<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.

         Additionally,  the following  Management's  Discussion  and Analysis of
Financial Condition and Results of Operations should be read in conjunction with
the  discussion  following  under  "Additional  Factors  That May Affect  Future
Results" and with "Item 1. Business - Additional  Factors That May Affect Future
Results"  included  in its Annual  Report on Form 10-K for the fiscal year ended
September  30, 1997 and  incorporated  by reference  in its  entirety  into this
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations.

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 Editor:
              Axial(R) 3000
         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 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.


                                      -7-
<PAGE>

Results of Operations

Three Months Ended March 31, 1998 and March 29, 1997
<TABLE>
         The  following  table  presents the  Company's  Condensed  Consolidated
Interim  Statements of Operations  for the three months ended March 31, 1998 and
March 29, 1997 as reported (dollar amounts in thousands, except per share data).
<CAPTION>
                                                               
                                                                  Three Months Ended   
                                                                  ------------------         Increase (Decrease)
                                                                March 31,     March 29,      --------------------
                                                                   1998         1997         Amount       Percent
                                                                   ----         ----         ------       -------

<S>                                                              <C>            <C>        <C>           <C>    
Net sales                                                        $ 3,073        $ 4,234    $ (1,161)      (27.4)%
Cost of sales                                                      1,363          2,193        (830)      (37.8)%
                                                               ------------- ------------ ------------- ------------
     Gross margin                                                  1,710          2,041        (331)      (16.2)%
Operating expenses:
  Research and development                                           835            839          (4)       (0.5)%
  Marketing and sales                                              1,180          1,175           5         0.4 %
  General and administrative                                         306            334         (28)       (8.4)%
                                                               ------------- ------------ ------------- ------------
  Total operating expenses                                         2,321          2,348         (27)       (1.1)%
                                                               ------------- ------------ ------------- ------------
Operating loss                                                      (611)          (307)       (304)      (99.0)%
Interest and other income, net                                        40             49          (9)      (18.4)%
                                                               ------------- ------------ ------------- ------------
Loss before provision for income taxes                              (571)          (258)       (313)     (121.3)%
Provision for income taxes                                             5              -           5           -
Net loss                                                          $ (576)       $  (258)       (318)     (123.3)%
                                                               ============= ============ ============= ============
Net loss per share - basic and diluted                            $(0.09)       $ (0.04)   $  (0.05)      125.0%
                                                               ============= ============ ============= ============

</TABLE>

         The   following   table   presents  the  Company's   fiscal   Condensed
Consolidated  Interim  Statements of Operations for the three months ended March
31, 1998 and March 29, 1997 as a percentage of net sales, as reported.


                                                Three Months Ended
                                                ------------------
                                               March 31,  March 29,   Increase
                                                  1998       1997     (Decrease)
                                                  ----       ----     ----------
Net sales                                          100.0 %     100.0 %     0.0 %
Cost of sales                                       44.4 %      51.8 %    (7.4)%
                                               ---------------------------------
           Gross margin                             55.6 %      48.2 %     7.4 %
Operating expenses:
     Research and development                       27.2 %      19.8 %     7.4 %
     Marketing and sales                            38.4 %      27.8 %    10.6 %
     General and administrative                     10.0 %       7.9 %     2.1 %
                                               ---------------------------------
     Total operating expenses                       75.5 %      55.5 %    20.0 %
                                               ---------------------------------
Operating loss                                     (19.9)%      (7.3)%   (12.6)%
Interest and other income,  net                      1.3 %       1.2 %     0.1 %
                                               ---------------------------------
Loss before provision for income taxes             (18.6)%      (6.1)%   (12.5)%
Provision for income taxes                           0.2 %          -      0.2 %
                                               ---------------------------------
Net loss                                           (18.7)%      (6.1)%   (12.6)%
                                               =================================



         The following  discussion of results of operations for the three months
ended March 31, 1998 and March 29, 1997 is based upon reported results.

         Net sales.  The  decrease  in net sales  during  the second  quarter of
fiscal 1998 from fiscal 1997 levels was primarily due to decreased  sales in the
post  production  marketplace.  International  sales for the  second  quarter of
fiscal 1998 and 1997 represented 50.5% and 48.1% of net sales, respectively.


                                      -8-

<PAGE>

<TABLE>
         The  following  table  presents net sales  dollar  volume for the three
months ended March 31, 1998 and March 29, 1997 by market and related percentages
of total net sales (dollar amounts in thousands).
<CAPTION>


                                                                           Three Months Ended
                                                      --------------------------------------------------------------
                                                             March 31, 1998                   March 29, 1997
                                                             --------------                   --------------
                     Marketplace                         Amount        Percent             Amount        Percent
                     -----------                         ------        -------             ------        -------
<S>                                                      <C>             <C>               <C>              <C>  
Production                                               $1,838          59.8%             $1,786           42.2%
Post Production                                             935          30.5%              2,017           47.6%
Broadcasting                                                 69           2.2%                230            5.4%
Other                                                       231           7.5%                201            4.8%
                                                      -----------------------------    -----------------------------
                                                         $3,073         100.0%             $4,234          100.0%
                                                      =============================    =============================
</TABLE>

         Cost of sales. Gross margin percentage for the second quarter of fiscal
1998 increased over levels in the second quarter of fiscal 1997 primarily due to
increased margins on disk-based  products and due to a greater portion of higher
margin ELSET software sales included in the sales mix.

         Research and  development.  Research and  development  expenses for the
second quarter of fiscal 1998 were essentially comparable to levels for the same
period in fiscal 1997.

         Marketing  and  sales.  Marketing  and sales  expenses  for the  second
quarter of fiscal 1998 were essentially comparable to levels for the same period
in fiscal 1997.

         General and administrative.  The decrease in general and administrative
expenses in the second quarter of fiscal 1998 from levels for the same period in
fiscal 1997 was primarily due to decreases in headcount.

         Interest and other income,  net. The decrease in net interest and other
income during the second quarter of fiscal 1998, was primarily due to a decrease
in other income partially  offset by an increase in net interest  resulting from
increased average interest bearing cash and cash equivalent balances.

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


                                      -9-
<PAGE>


Six Months Ended March 31, 1998 and March 29, 1997
<TABLE>
         The  following  table  presents the  Company's  Condensed  Consolidated
Interim  Statements  of  Operations  for the six months ended March 31, 1998 and
March 29, 1997 as reported  and as  normalized  to remove the effects of special
charges incurred during the first three months of fiscal 1997 (dollar amounts in
thousands, except per share data).
<CAPTION>


                                                               
                                                                   Six Months Ended     
                                                                   ----------------           Increase (Decrease)
                                                                March 31,     March 29,      --------------------
                                                                   1998         1997         Amount       Percent
                                                                   ----         ----         ------       -------
<S>                                                             <C>             <C>         <C>           <C>
Net sales
  Reported                                                      $  7,206        $ 8,450     $(1,244)      (14.7)%
  Normalized                                                       7,206          8,450      (1,244)      (14.7)%
Cost of sales
  Reported                                                         3,109          6,869      (3,760)      (54.7)%
  Normalized                                                       3,109          4,369      (1,260)      (28.8)%
                                                               ------------- ------------ ------------- ------------
     Gross margin
       Reported                                                    4,097          1,581       2,516       159.1 %
       Normalized                                                  4,097          4,081          16         0.4 %
                                                               ------------- ------------ ------------- ------------
Operating expenses:
  Research and development
     Reported                                                      1,619          1,637         (18)       (1.1)
     Normalized                                                    1,619          1,637         (18)       (1.1)
  Marketing and sales
     Reported                                                      2,394          3,441      (1,047)      (30.4)%
     Normalized                                                    2,394          2,596        (202)       (7.8)%
  General and administrative
     Reported                                                        605          1,330        (725)      (54.5)%
     Normalized                                                      605            680         (75)      (11.0)%
                                                               ------------- ------------ ------------- ------------
  Total operating expenses
     Reported                                                      4,618          6,408      (1,790)      (27.9)%
     Normalized                                                    4,618          4,913        (295)       (6.0)%
                                                               ------------- ------------ ------------- ------------
Operating loss
  Reported                                                          (521)        (4,827)      4,306        89.2 %
  Normalized                                                        (521)          (832)        311        37.4 %
Interest and other income, net
  Reported                                                            93             72          21        29.2 %
  Normalized                                                          93             72          21        29.2 %
                                                               ------------- ------------ ------------- ------------
Loss before provision for income taxes
  Reported                                                          (428)        (4,755)      4,327        91.0 %
  Normalized                                                        (428)          (760)        332        43.7 %
Provision for income taxes
  Reported                                                             6             -            6         -
  Normalized                                                           6             -            6         -
                                                               ------------- ------------ ------------- ------------
Net loss
  Reported                                                        $ (434)       $(4,755)    $ 4,321        90.9 %
  Normalized                                                        (434)          (760)        326        42.9 %
                                                               ============= ============ ============= ============
Net loss per share 
  Reported:
     Basic                                                        $(0.07)       $ (0.72)    $  0.65        90.3 %
                                                               ============= ============ ============= ============
     Diluted                                                      $(0.07)       $ (0.72)    $  0.65        90.3 %
                                                               ============= ============ ============= ============
  Normalized:
     Basic                                                        $(0.07)       $ (0.12)    $  0.05        41.7 %
                                                               ============= ============ ============= ============
     Diluted                                                      $(0.07)       $ (0.12)    $  0.05        41.7 %
                                                               ============= ============ ============= ============

<FN>
         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.
</FN>
</TABLE>


                                                        -10-
<PAGE>

         The   following   table   presents  the  Company's   fiscal   Condensed
Consolidated Interim Statements of Operations for the first six 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 the first
quarter of fiscal 1997.


                                                 Six Months Ended
                                                 ----------------
                                               March 31,  March 29,   Increase
                                                  1998       1997     (Decrease)
                                                  ----       ----     ----------
Net sales
     Reported                                      100.0 %    100.0 %      0.0 %
     Normalized                                    100.0 %    100.0 %      0.0 %
Cost of sales
     Reported                                       43.1 %     81.3 %    (38.2)%
     Normalized                                     43.1 %     51.7 %     (8.6)%
                                               --------------------------------
           Gross margin
             Reported                               56.9 %    18.7 %      38.2 %
             Normalized                             56.9 %    48.3 %       8.6 %
                                               --------------------------------
Operating expenses:
     Research and development
        Reported                                    22.5 %    19.4 %       3.1 %
        Normalized                                  22.5 %    19.4 %       3.1 %
     Marketing and sales
        Reported                                    33.2 %    40.7 %      (7.5)%
        Normalized                                  33.2 %    30.7 %       2.5 %
     General and administrative
        Reported                                     8.4 %    15.7 %      (7.3)%
        Normalized                                   8.4 %     8.0 %       0.4 %
                                               --------------------------------
     Total operating expenses
        Reported                                    64.1 %    75.8 %     (11.7)%
        Normalized                                  64.1 %    58.1 %       6.0 %
                                               --------------------------------
Operating loss
     Reported                                       (7.2)%   (57.1)%      49.9 %
     Normalized                                     (7.2)%    (9.9)%       2.7 %
Interest and other income,  net
     Reported                                        1.3 %     0.9 %       0.4 %
     Normalized                                      1.3 %     0.9 %       0.4 %
                                               --------------------------------
Loss before provision for income taxes
     Reported                                       (5.9)%   (56.3)%      50.4 %
     Normalized                                     (5.9)%    (9.0)%       3.1
Provision for income taxes
     Reported                                        0.1 %       - %       0.1 %
     Normalized                                      0.1 %       - %       0.1 %
                                               --------------------------------
Net loss
     Reported                                       (6.0)%   (56.3)%      50.3 %
     Normalized                                     (6.0)%    (9.0)%       3.0 %
                                               ================================

         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.


                                      -11-
<PAGE>

         The following  discussion  of results of operations  for the six months
ended  March 31,  1998 and  March 29,  1997 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 six months of
fiscal 1998 from levels for the same period in fiscal 1997 was  primarily due to
decreased  sales in the video post  production  marketplace.  That  decrease was
partially offset by increased sales in the computer graphics production and post
production marketplaces.  International sales for the first six months of fiscal
1998 and 1997 represented 49.4% and 46.9% of net sales, respectively.
<TABLE>
         The following table presents net sales dollar volume for the six months
ended March 31, 1998 and March 29,  1997 by market and  related  percentages  of
total net sales (dollar amounts in thousands).
<CAPTION>


                                                                            Six Months Ended
                                                      --------------------------------------------------------------
                                                             March 31, 1998                   March 29, 1997
                                                             --------------                   --------------
                     Marketplace                         Amount        Percent             Amount        Percent
                     -----------                         ------        -------             ------        -------
<S>                                                      <C>            <C>                <C>             <C>  
Production                                               $4,227          58.7%             $3,192           37.8%
Post Production                                           1,975          27.4%              4,331           51.3%
Broadcasting                                                699           9.7%                680            8.0%
Other                                                       305           4.2%                247            2.9%
                                                      -----------------------------    -----------------------------
                                                         $7,206         100.0%             $8,450          100.0%
                                                      =============================    =============================
</TABLE>

         Cost of sales.  Normalized  gross margin  percentage  for the first six
months of fiscal 1998  increased  over levels for the same period in fiscal 1997
primarily  due to a  greater  portion  of higher  margin  ELSET  software  sales
included in the sales mix and increased margins on disk-based products.

         Research  and  development.  The  decrease in  normalized  research and
development expenses in the first six months of fiscal 1998 from the same period
in fiscal 1997 was primarily a result of decreases in salary expenses.

         Marketing  and sales.  The decrease in  normalized  marketing and sales
expenses  in the first six months of fiscal  1998 from the same period in fiscal
1997  is  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  in the first six months of fiscal 1998 from levels for
the same period in fiscal 1997 was  primarily  due to  decreased  headcount  and
overhead costs.

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

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


                                      -12-
<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 As of March 31, 1998, the
Company had $4.9 million of cash and cash equivalents.

         Operating  activities provided $62,000 in net cash during the first six
months of fiscal  1998 and  $399,000  in net cash during the first six months of
fiscal 1997.  Net cash  provided by operations in the first six months of fiscal
1998 was due  primarily  to  decreases  in  accounts  receivable  and income tax
refunds  receivable and increases in accounts  payable and accrued  liabilities,
partially offset by the net loss and an increase in inventories.  This was fully
offset by net cash used in financing  activities for the acquisition of property
and equipment. Net cash provided by operations in the first six months of fiscal
1997 was due  primarily  to decreases in accounts  receivable  and  inventories,
partially  offset the net loss and by  decreases  in accounts  payable,  accrued
liabilities, and deferred revenue. This was partially offset by net cash used in
financing activities for the acquisition of property and equipment

         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 March 31, 1998, approximately $2.5 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.

         Based on current revenue levels, 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

         In fiscal  1999,  the Company  will be  required to adopt newly  issued
accounting  guidelines  addressing the reporting of  comprehensive  income.  The
adoption is expected to have no  significant  impact on the Company's net income
or shareholders'  equity. The guidelines require any unrealized gains and losses
on available-for-sale  securities or foreign currency translation adjustments to
be  included  in  other  comprehensive  income.  Prior  to  adoption  of the new
guidelines,  such items are reported as a separate  component  of  stockholders'
equity.

         Also in fiscal 1999, the Company will be required to adopt newly issued
accounting   guidelines   addressing   disclosures  about  segment  and  related
information.  As the Company  operates in one  segment,  the adoption of the new
guidelines is not expected to have a significant impact on the Company's results
of operations, financial position, or disclosure of segment information.

Additional Factors That May Affect Future Results

Accom desires to take  advantage of the "safe harbor"  provisions of the Private
Securities  Litigation Reform Act of 1995.  Specifically,  the Company wishes to
alert readers that certain important factors, as well as other factors, could in
the future affect,  and in the past have affected,  the Company's actual results
and could cause the  Company's  results  for future  years or quarters to differ
materially from those expressed in any forward looking  statements made by or on
behalf of the Company. A detailed  discussion of risk factors related to Accom's
business  is set forth in its  Annual  Report  on Form  10-K for the year  ended
September 30, 1997 under the heading  "Additional Factors That May Affect Future
Results."

In addition to the factors  discussed in the 10-K report,  the following factors
may also affect future results:

         Recent  Reduction in Sales. In the second quarter of fiscal 1998, ended
March 31, 1998,  the Company's  overall  revenues  declined by 27% from the same
period  from the 1997  fiscal  year.  The  Company  believes  that this


                                      -13-

<PAGE>

decline  resulted  from a decision by more than the usual number of customers in
the  distribution  / broadcast  marketplace to delay  purchases  until after the
second  quarter.  In  addition,  in the  Company's  production  marketplace,  it
appeared  customers took longer than anticipated to evaluate the Company's ELSET
virtual  set  product.  There can be no  assurance  that  these  customers  will
eventually  purchase the Company's  products or that the Company's  sales in the
distribution / broadcast and production marketplaces will improve.

         Effects of  Economic  Conditions  in Asia.  In the first half of fiscal
1998, the recent economic instability in certain Asian countries  contributed to
lower revenue results, particularly for the Company's core (non-ELSET) products.
Due to the continuing  economic  conditions in Asia,  the Company  believes that
lower  revenues  from Asia are likely to continue  for the  foreseeable  future,
which could adversely affect the Company's business,  financial  condition,  and
operating results.


Item 3.  Quantitative and Qualitative Disclosures About Market Risks

                  Not Applicable.




                                      -14-

<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

On February 17, 1998,  the Company held its annual meeting of  stockholders.  At
such meeting,  the Company's  stockholders  approved the following  items by the
following votes:

1. The Election of the following directors of the Company:

                           Nominee             For                     Withheld
                           -------             ---                     --------

  Junaid Sheikh                              4,983,925                 1,049,495
  Lionel M. Allan                            4,983,925                 1,049,495
  Thomas E. Fanella                          4,983,925                 1,049,495
  David A. Lahar                             4,983,925                 1,049,495

2. The  ratification  of the  appointment  of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending September 30, 1998.

For    6,029,278         Against     4,000        Abstain      142


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.



                                      -15-
<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:  May 15, 1998

                                      -16-