<PAGE>

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

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

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

                                     FORM 10-K

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

     FOR THE FISCAL YEAR 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: 000-20719

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

                             PRINTRAK INTERNATIONAL INC.
              (Exact name of registrant as specified in its charter)

                   DELAWARE                                33-0070547
         (State or other jurisdiction                   (I.R.S. Employer
        incorporation or organization)                 Identification No.)

   1250 NORTH TUSTIN AVENUE, ANAHEIM, CALIFORNIA              92807
     (Address of principal executive offices)               (Zip Code)

                                  (714) 238-2000
              (Registrant's telephone number, including area code)

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

          Securities registered pursuant to Section 12(b) of the Act: None

            Securities registered pursuant to Section 12(g) of the Act: 
                          Common Stock, $.0001 par value

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

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

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

     The aggregate market value of the Registrant's Common Stock held by 
non-affiliates on June 29, 1998 (based upon the average of the high and low 
sales prices of such stock on such date) was $25,472,659.  As of June 29, 
1998, 11,296,241 shares of the Registrant's common stock, par value $0.0001 
per share, were outstanding. 

------------------------------------------------------------------------------
------------------------------------------------------------------------------
<PAGE>

                       PRINTRAK  INTERNATIONAL  INC.

                                FORM 10-K
                                          
                  FOR THE FISCAL YEAR ENDED MARCH 31, 1998
                                          
                                  INDEX

<TABLE>
<S>                <C>
PART I
    Item  1.       Business
    Item  2.       Properties
    Item  3.       Legal Proceedings
    Item  4.       Submission of Matters to a Vote of Security Holders
    
PART II
    Item  5.       Market for the Registrant's Common Stock and Related
                   Stockholder Matters
    Item  6.       Selected Financial Data
    Item  7.       Management's Discussion and Analysis of Results of Operations
                   and Financial Condition
    Item  8.       Financial Statements and Supplementary Data
    Item  9.       Changes in and Disagreements with Accountants on Accounting and
                   Financial Disclosure
    
PART III 
    Item 10.       Directors and Executive Officers of the Registrant
    Item 11.       Executive Compensation
    Item 12.       Security Ownership of Certain Beneficial Owners and Management
    Item 13.       Certain Relationships and Related Transactions
    
PART IV
    Item 14.       Exhibits, Financial Statement Schedule, and Reports on Form 8-K
                   Signatures
</TABLE>


                                      -2-
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

GENERAL

     Printrak International Inc. (the "Company") is a worldwide supplier of 
integrated identification and information systems used primarily in criminal 
justice and public safety applications, as well as in emerging applications 
in civil markets such as welfare and immigration control.  The Company 
provides networked fingerprint, photo imaging, computer-aided dispatch and 
automated records management systems, as well as digital scanning devices.  
The Company's integrated systems serve approximately 700 national, state, 
county and municipal agencies in 36 countries.   

     The Company was originally formed in 1974 as a business unit of the 
Navigation Systems division of Rockwell International. The business and 
technology of the Company were acquired by Thomas De La Rue and Company 
Limited in 1981, and the Company was incorporated in California in December 
1984 as "De La Rue Printrak, Inc."  The Company was acquired by management in 
1991 and was renamed "Printrak International Incorporated."  The Company was 
reincorporated in Delaware in March 1996 under the name "Printrak 
International Inc."

     On May 7, 1997, the Company acquired all of the issued and outstanding 
capital stock of TFP Inc. ("TFP"), a South Carolina corporation. As a result 
of the transaction, TFP became a wholly-owned subsidiary of the Company. The 
business combination was accounted for by the pooling of interests method of 
accounting.  Founded in 1988, TFP is considered a premier supplier of digital 
mugshot systems used by law enforcement, jail and correctional agencies. 
TFP's software applications also include jail management systems.

     On July 21, 1997, the Company acquired a business unit of SCC 
Communications Corp. ("SCC") located in Boulder, Colorado, in a transaction 
accounted for under purchase accounting.  The Boulder business unit provides 
computer-aided dispatch systems and records management systems for law 
enforcement and fire and emergency medical services agencies.  As a result of 
the transaction, the business unit operates as a division of the Company (the 
"Boulder Division").

     On September 9, 1997, the Company acquired SunRise Imaging ("SunRise"), 
a California corporation, in a transaction accounted for under the purchase 
method of accounting.  As a result of the transaction, SunRise became a 
wholly-owned subsidiary of the Company.  SunRise is a leading developer and 
manufacturer of high performance systems which digitize microfilm and 
microfiche records.

     The Company commenced restructuring the operations of its TFP subsidiary 
and its SunRise subsidiary in the 3rd and 4th quarters, respectively, of 
fiscal 1998.  The restructuring plans included relocating TFP's headquarters 
from Greenville, South Carolina and SunRise's operations from Fremont, 
California to the Company's headquarters in Anaheim, California.  The 
restructuring of the business units further resulted in the integration of 
product development, marketing and sales and customer support.  The 
administrative functions of each of the two subsidiaries are being absorbed 
into the Company's Anaheim operations. The Company anticipates that the 
restructurings will be completed by September 30, 1998.

     The Company's fiscal year ends on March 31 and references to a fiscal 
year denote the calendar year in which the fiscal year ended; for example, 
"fiscal 1998" refers to the 12 months ended March 31, 1998. 

PRODUCTS

     The following hardware and software products represent the Company's 
current product offerings: 

     AUTOMATED FINGERPRINT IDENTIFICATION SYSTEMS.  The Company's automated 
fingerprint identification system ("AFIS") products represent a 
comprehensive, fully integrated architecture for the capture and input of 


                                     -3-
<PAGE>

fingerprint images, including image processing, search processing and overall 
database management. Each AFIS system is comprised of a number of components, 
including: 1) tenprint workstations which scan inked fingerprint cards and 
palmprints while performing quality control, data descriptor entry and 
fingerprint search initiation.  The tenprint workstations also perform search 
verification and disposition; 2) livescan stations, typically installed in a 
booking environment, to electronically capture and transmit fingerprints, 
mugshots and arrest information; 3) latent workstations which are used by 
latent fingerprint examiners to capture, enhance, encode, search, verify and 
dispose latent prints from a crime scene; 4) image processing technology that 
extracts the searchable features from raw fingerprint data; 5) scalable 
search processing technology that matches the extracted features of the 
search fingerprint against the agencies' fingerprint databases; 6) data 
storage and retrieval systems which encompass large databases that house the 
compressed fingerprint and palmprint images as well as the searchable 
fingerprint feature data; and 7) a NIST server which provides an open 
interface between the customer agency's Printrak AFIS system and outside 
agencies such as the FBI or state-wide AFIS network. Additionally, the 
Company provides software products which allow an agency to customize its 
workflow based on individual agency specifications. 

     Utilizing an individual's fingerprints, the Company's fully integrated 
AFIS system gives agencies the ability to quickly and automatically associate 
the individual with their previous criminal history data and also allows the 
agency to check for outstanding warrants.  This ability significantly 
increases the efficiency of the investigation, booking, suspect 
identification, incarceration and release functions.

     The Company's sixth generation system, the AFIS 2000 series, is based on 
UNIX open systems hardware and software.  Series 7 AFIS is the Company's 
latest generation of products, and certain Series 7 subsystems shipped for 
the first time in December 1997.  Series 7 products are PC-based applications 
incorporating a Microsoft Windows NT operating environment.

     The AFIS systems described above are usually used in law enforcement 
applications.  However, the Company's AFIS systems are also increasingly used 
in civil applications such as national ID card issuance, welfare fraud 
reduction and immigration control.

     DIGITAL PHOTO MUGSHOT.  The Company's InstantImage mugshot product line 
consists of the Multicapture product and the Investigative Search product. 
Multicapture is typically used in the law enforcement booking environment to 
digitally capture and store photo-images of mugshots, tattoos, scars and 
other distinguishing marks.  Investigative Search is the engine for searching 
criminal suspects based on demographic or physical attributes.  After 
identifying potential suspects who match the criteria, the software 
electronically creates and reviews photo lineups.   This mugshot system 
increases an agency's overall efficiency by automating photo taking, 
processing, storing, and viewing photo lineups.  

     A typical mugshot system consists of various hardware and software 
components including booking stations, which utilize high resolution video or 
digital cameras for the capturing of mugshots and viewing workstations for 
searching the mugshot database, as well as for creating and viewing photo 
lineups.  Additionally, the systems are interfaced to data storage and 
retrieval systems that store the compressed photographic images and 
searchable data.  The range of InstantImage mugshot installations encompasses 
stand-alone workstations to complex wide-area networks where multiple 
agencies share mugshot information.

     The digital photo mugshot system is fully integrated with the Company's 
Livescan station product.  A typical installation would utilize the livescan 
unit to capture mugshot images, along with fingerprints and booking 
information. The mugshots are then stored in the InstantImage system for 
searching, viewing, and lineup creation at a viewing workstation.

     JAIL MANAGEMENT.  The Company's jail management system assists jail 
administrators and staff in analyzing inmate populations and in developing 
the most effective jail policies. The system provides comprehensive inmate 
background information including past and present incarcerations, criminal 
histories, current offense and court status, and prior institutional 
behavior. By providing jail administrators the tools to identify potential 
problem inmates, house similar inmates together, and target direct 
supervision toward those inmates who require it most, problems can be


                                    -4-
<PAGE>

minimized. The Jail Manager software also includes statistical inmate 
reporting, calculates release dates, and provides software for inmate 
accounting. 

     COMPUTER AIDED DISPATCH.  The Company's computer aided dispatch ("CAD") 
application automates public safety agencies' call-taking and incident 
dispatching process by managing service calls and the patrol units that are 
assigned to each service incident.  The Company's system provides public 
safety agencies with a fully integrated and configurable computer aided 
dispatch system allowing call-takers and dispatchers to quickly and 
effectively handle incident information, thus increasing officer safety and 
the overall potential for saving lives. The CAD application supports, not 
only law enforcement agencies, but also fire and emergency medical service 
agencies.

     Because the CAD system provides mission critical information, the 
Company utilizes fault tolerant servers.  These high availability hardware 
platforms enable the Company to provide continuous availability and 
performance to support critical applications such as communications center 
operations 24 hours per day, 365 days a year.  Additionally, the Company 
provides configurable software which allows an agency to customize its 
workflow based on individual agency specifications.

     RECORDS MANAGEMENT.  The Company's records management system ("RMS") 
manages the recording, indexing, tracking, viewing and analyzing of data for 
law enforcement, fire and emergency medical service agencies.  The Law RMS 
provides complete records functionality for a law enforcement agency handling 
every phase of law enforcement activity from incident generation to assigning 
and tracking cases through arrest and booking.  The Fire RMS provides a 
comprehensive suite of functionality for managing Fire and EMS activities.  
Both the RMS and Fire RMS provide extensive functionality for capturing the 
data required for local, state and national law and fire agency reporting. 

     The Company's law and fire records systems are fully integrated with the 
Company's CAD product and operate on a Microsoft Windows NT platform.

     DIGITIZATION PRODUCTS.  The Company's SunRise Imaging division produces 
microfilm scanners capable of scanning the three commonly used microforms: 
roll film, microfiche and aperture cards.  Targeted to satisfy the conversion 
requirements of companies with large archival backfiles, the system provides 
high-speed throughput, image enhancement capabilities and quality control 
functionality which increases flexibility for microform scanning. The system 
is comprised of proprietary imaging hardware and software and is based on a 
Microsoft Windows NT platform.

     Additionally, the Company provides the following services to complement 
its product offerings: 

     FILE CONVERSION.  The file conversion function converts agencies' 
tenprint cards into an electronic format. This process includes capture of 
images, entry or download of descriptive data, automatic encoding and 
classification of prints, quality review, identification of duplicates, 
database creation synchronization, as well as database loading. Other 
services include the conversion of palm print and mug-shot records, and the 
conversion of data from existing databases on previous generation systems. 

     MAPPING.  Printrak's mapping product manages location, address and other 
relevant geofile data used by the CAD system to dispatch police, fire and 
emergency medical units.  It is also used in conjunction with CAD to provide 
a graphical map display for dispatchers to use to keep track of their 
assigned incidents.  This display provides both a spatially accurate map 
combined with user defined layers that allow for the designation of different 
jurisdictions, beats and zones.  Additionally, the interface between the CAD 
system and the mapping product provides for the automatic placement of icons 
on the map that corresponds with incidents recorded and tracked in CAD.  When 
used in conjunction with automated vehicle locator ("AVL"), the map also 
graphically displays the locations and status of units in service.

     SYSTEM MAINTENANCE.  The Company typically warrants its systems for a 
period of up to 12 months, such warranty includes full support and 
maintenance. In addition, the Company sells annual maintenance contracts to 
most of its customers, which provide for system maintenance, ongoing 
technical support, system documentation materials and user training. 


                                      -5-
<PAGE>

COMPETITION 

     The market for law enforcement information systems is highly competitive 
and is characterized by rapidly changing technology.  Historically, the 
principal competitors in the market for AFIS systems within the law 
enforcement information systems market have been Printrak, Nippon Electronics 
Corporation (NEC), and SAGEM Morpho, a large, privately held company based in 
France.  NEC and SAGEM Morpho each has the technological and market expertise 
to provide large scale AFIS solutions, and each has substantially greater 
financial resources than the Company. 

     In the ten fingerprint live-scan market, the Company's principal 
competitors are Identix Inc. and Digital Biometrics Incorporated, although 
other competitors are also present within the marketplace.  The nature of 
competition in this market is centered primarily on system functionality, 
image quality, price, service, and ease of integration into other systems 
within the customer's environment. 

     In civil and commercial applications encompassing fingerprint 
identification technologies, there are many market competitors including IBM, 
TRW, NRI, as well as others.  The Company competes in these markets on the 
basis of system functionality, price and customer service. 

     In the digital photo mugshot market, the Company's principal competitors 
are EPIC Solutions, Imageware, DDSI, and Dynamic Imaging.  A large number of 
minor competitors are also present in the marketplace.  The Company competes 
in the digital photo mugshot market on the basis of system functionality, 
image quality, ease of integration with other customer systems, price and 
customer service.  

     The market for computer aided dispatch and records management systems, 
like the AFIS market, is highly competitive and involves rapidly changing 
technology. The principal competitors in the CAD and RMS market have been and 
continue to be Intergraph, Tiburon, and PRC.  A significant number of 
secondary competitors are also present within the marketplace.  Each of the 
principal competitors has the expertise to provide large scale, integrated 
CAD and RMS solutions.  The nature of the competition is centered on 
functionality, reliability, ability to interface with the customer's mobile 
communication and in-vehicle systems, price, and service.

     The Company's subsidiary, SunRise continues to compete for the most part 
with Mekel and Photomatrix at the high end of the microfilm conversion 
segment of the micrographics industry. Companies at the lower end of the 
market such as Fuji and Wicks & Wilson are attempting to bid for the same 
business at a lower price point. SunRise competes in this marketplace based 
upon throughput, image quality and flexibility in that it markets the only 
scanner able to accept all three forms of film format - roll film,
fiche and aperture cards.

      Printrak has several competitors that offer some elements 
of enterprise-wide computing solutions for public safety agencies.  However, 
Printrak currently offers the most comprehensive solution, which may include 
any or all of the following:  AFIS, live scan, CAD, RMS, jail management, 
mugshot, and microfilm scanners.  No other single company owns such a broad 
array of public safety technologies.  However, certain competitors such as 
Tiberon and Intergraph do provide solutions which include both CAD and RMS 
technologies.

INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

     The Company currently holds five patents and has two patent applications 
pending in the United States, holds three patents in Europe and five in 
Canada. Although the Company has implemented these protective measures, 
policing unauthorized use of the Company's technology or products is 
difficult and there can be no assurance that these measures will be 
successful. In addition, the laws of certain foreign countries may not 
protect the Company's proprietary rights to the same extent as do the laws of 
the United States.  There can be no assurance that the Company's patents are 
or will be sufficiently broad to protect the Company's technology. There can 
be no assurance that additional U.S. or foreign patents will issue.  In 
addition, there can be no assurance that any patents that may be issued to 
the Company, or which the Company may license from third parties, will not be 
challenged, invalidated or circumvented, or that any rights granted would 
ultimately provide protection to the Company.  Further, there can be no 
assurance that others will not independently develop similar products or 
duplicate the Company's products.

RESEARCH AND PRODUCT DEVELOPMENT

     The Company considers research, development and engineering to be a 
vital part of its operating discipline and continues to make substantial 
investments in research, development and engineering to enhance the 
performance,


                                     -6-
<PAGE>

functionality and reliability of its hardware and software products, as well 
as to develop new product offerings.  During the fiscal years ended March 31, 
1996, 1997 and 1998, the Company invested 17.8% 16.6%, and 15.3%, 
respectively, of its revenues in research, development and engineering.

MANUFACTURING AND SOURCING PRODUCTS

     The Company's manufacturing operations consist primarily of the 
integration and testing of off the shelf components, such as computers and 
disks, and of subsystems and computer assemblies.  Substantially all 
assemblies are manufactured by outside vendors based on specifications 
provided by the Company. The Company's subsidiaries, TFP and SunRise, 
manufactured mugshot and digital scanning systems through fiscal year 1998, 
however, with the integration of TFP and SunRise into the Company's 
operations in Anaheim, this manufacturing is being outsourced to the same 
vendor from which the Company procures its AFIS assemblies.  The Company's 
CAD product is required to be fault tolerant and, as such, utilizes Tandem 
hardware which is purchased directly from the manufacturer.  

     The Company generally purchases major assemblies from a single vendor as 
this promotes higher quality, prompt delivery and aids cost savings.  The 
Company is dependent upon the ability of vendors to deliver these items in 
accordance with the Company's specifications and delivery schedules.  The 
failure of these suppliers to deliver on schedule could delay or interrupt 
the Company's delivery of products and thereby adversely affect the Company's 
operating results.  To date, the Company has not experienced any delays in 
deliveries from its suppliers that have had a major impact on its business. 

     As a turnkey supplier of digital justice solutions, the Company also 
provides file conversion services for its AFIS product line which allows the 
customer's existing database of hardcopy records to be electronically encoded 
prior to delivery of a Printrak AFIS system.  This file conversion service is 
performed at the Company's headquarters in Anaheim, California.  The 
Company's computer aided dispatch application requires significant data 
mapping of the geographic points included within an agency's service 
jurisdiction.  This data mapping is performed by a third party in Boulder, 
Colorado, and to date, the Company has not experienced any delays in the 
performance of service by this subcontractor. 

CUSTOMER SERVICE AND SUPPORT

     The Company believes that excellent customer service and support is 
essential to its success and has committed significant resources to these 
functions.  As part of the Company's warranty and maintenance service 
agreements, on-site maintenance service is provided for the Company's AFIS 
systems five days per week, eight hours per day, during normal working hours. 
The Company's CAD/RMS and mugshot products are supported via on-site 
maintenance service or on-call phone service, depending on the requirements 
of the customer's maintenance agreement.  Telephone support is provided for 
the Company's AFIS, mugshot, and CAD/RMS products twenty four hours per day, 
seven days per week.  The Company's customer support center is designed to 
provide focused hardware and software support to customer sites via a 
designated phone number.  The Company's service organization includes 
customer service engineers, who provide on-site support and maintenance, and 
product support engineers, who are primarily located in the Company's 
headquarters facility, the  Boulder, Colorado facility or in regional offices 
around the world.

     The Company sells annual maintenance service agreements to most of its 
customers, which provide for system maintenance, ongoing technical support, 
system documentation materials, and user training.  Typically, the price of 
AFIS, mugshot, and CAD/RMS systems include a 12 month warranty which includes 
full support and maintenance.  The Company provides a 90 day warranty with 
the sale of a SunRise Imaging scanner.  Individual components within any of 
the Company's product lines are typically warranted for 90 days. 

BACKLOG

     The Company measures its backlog of system revenues as orders for which 
contracts or purchase orders have been signed, but for which revenues have 
not been recognized.  In those instances where revenue is recognized on a 
percentage of completion basis, the Company includes in backlog contract 
revenue not recognized at the period end.  The Company typically delivers its 
products within six to nine months after receiving an order, however, in some 


                                      -7-
<PAGE>

instances, products are provided on a shorter delivery schedule, and 
occasionally, more time is required.  As of March 31, 1998, the Company's 
system revenue backlog was approximately $29.7 million, compared to $13.1 
million as of March 31, 1997. 

     Orders comprising the Company's backlog may include requirements for 
custom software development or file conversion that may require extensive 
resources to be completed prior to shipment.  Any failure of the Company to 
meet an agreed upon schedule could lead to the cancellation of the related 
order.  The Company believes that it is important for competitive reasons and 
to better satisfy customer requirements to reduce order lead times.  
Additionally, variations in the size, complexity and delivery requirements of 
customer orders may result in substantial fluctuations in backlog on a 
regular basis.  Accordingly, the Company believes that backlog is not a 
meaningful indicator of future financial performance. 

EMPLOYEES

     As of March 31, 1998, the Company employed 417 people on a full-time 
basis, 394 domestically and 23 internationally.  Of this total, 94 were in 
research, development and engineering, 140 in customer support, 59 in 
assembly, materials and file conversion services, 76 in sales and marketing, 
and 48 in finance, information technology and administration.  Printrak's 
success is highly dependent on its ability to attract and retain qualified 
employees.  Competition for employees is increasingly intense in the software 
industry, and the Company believes this competition will continue.  To date, 
the Company believes it has been successful in its efforts to recruit and 
retain qualified employees, but there is no assurance that it will continue 
to be as successful in the future. None of the Company's employees are 
subject to collective bargaining agreements. The Company believes that its 
relations with its employees are good. 

CERTAIN CONSIDERATIONS 

     The Company's future operating results, and stock price, may be affected 
by a number of factors that could cause actual results to differ from those 
stated herein.  These factors include the following: 

LENGTHY SALES AND COLLECTION CYCLE

     The sale of the Company's products is often subject to delays associated 
with the lengthy approval processes that typically accompany large capital 
expenditures.  The Company's total revenues depend in significant part upon 
the decision of a government agency to upgrade and expand existing 
facilities, alter workflows, and hire additional technical expertise in 
addition to procuring the Company's products, all of which involve a 
significant capital commitment as well as significant future support costs.  
The Company's systems therefore often have a lengthy sales cycle while the 
customer evaluates and receives approvals for the purchase of the Company's 
products, while existing workflows are augmented so as to properly assimilate 
the Company's system, and while the system is configured and shipped.  
Typically, the evaluation and execution of a customer contract may take one 
year.  Another six to nine months elapse while the system is configured, 
professional services are performed and the customer site is prepared.  As 
such, it is not uncommon for the sales cycle to approximate two years.  
During this time, the Company expends substantial resources yet may receive 
no associated revenue.  Any significant failure by the Company to execute a 
contract after expending such effort and funds could have a material adverse 
effect on its business, operating results and financial condition. 

     A customer contract typically provides payment terms associated with the 
achievement of certain contractual milestones.  Often, the contract provides 
for a customer deposit at contract signature, however, portions of the 
customer's payment may ultimately be associated with the delivery and final 
acceptance of the complete system.  Because the system configuration, file 
conversion, and system acceptance testing consumes a six to nine month time 
period, the Company's collection cycle is often quite lengthy.  As such, the 
Company expends substantial resources but may not receive payment from the 
customer until the completion of a substantial portion of the contract.  Any 
significant failure by the Company to perform to the requirements of a 
specific contract could have a material adverse effect on its business, 
operating results and financial condition. 


                                       -8-
<PAGE>
DEPENDENCE ON LARGE ORDERS; CUSTOMER CONCENTRATION

     In any given fiscal year, the Company's revenues have principally 
consisted, and will continue to consist, of large orders from a limited 
number of customers.  While the individual customer may vary from period to 
period, the Company is still dependent upon large orders for a significant 
portion of its total system revenues.  During fiscal year 1998, no sales 
exceeding 10% of total revenues existed.  During the fiscal year ended March 
31, 1997, revenues from the Royal Canadian Mounted Police and the Florida 
Department of Law Enforcement were $9.0 million, or 13.7%, and $6.9 million, 
or 10.5%, respectively, of the Company's total revenues.  During the fiscal 
year ended March 31, 1996, revenues from the State of Louisiana were $8.3 
million, or 15.9% of the Company's total revenues.  There can be no assurance 
that the Company will continue to obtain such large orders on a consistent 
basis, and as such, the Company's inability to obtain sufficient large orders 
would have a material adverse effect on the Company's business, operating 
results and financial condition.  Moreover, the timing and shipment of such 
orders may cause the operating results of the Company in any given quarter to 
differ from projections of securities analysts which could adversely affect 
the trading price of the Company's Common Stock. 

DEPENDENCE ON CAPITAL SPENDING BY PUBLIC AGENCIES

     Substantially all of the Company's revenues are derived from the sale 
and maintenance of products delivered to domestic and foreign governmental 
agencies.  The decision to purchase an AFIS, CAD, RMS, mugshot or jail 
management systems generally involves a significant commitment of capital and 
frequent delays are often associated with significant capital expenditures.  
The Company's future performance is directly dependent upon the capital 
expenditure budgets of its customers and the continued demand by such 
customers for the Company's products.  Many domestic and foreign governmental 
agencies have experienced budget deficits that have also led to significant 
reductions in capital expenditures.  The Company's operations in the future 
may be subject to period-to-period fluctuations as a consequence of such 
deficits or other negative factors affecting capital spending.  There can be 
no assurance that such factors will not have a material adverse effect on the 
Company's business, operating results and financial condition. 

RISKS ASSOCIATED WITH EXPANSION INTO ADDITIONAL MARKETS; RELIANCE ON TEAMING 
ARRANGEMENTS

     The Company believes that its future performance is, in part, dependent 
upon its ability to successfully market AFIS technology for use outside of 
the law enforcement market.  These markets include the detection of welfare 
fraud, voter registration and identification, verification of immigration 
status, drivers' license identification and verification of eligibility of 
pension or medical benefits.  Furthermore, the size of these contracts, when 
awarded, is significantly larger than contracts which the Company typically 
fulfills and often requires multiple contractors.  The requirements for a 
national ID system, for example, incorporate AFIS technology, but may also 
incorporate other technologies provided by other parties.  In order to 
successfully pursue civil and commercial applications, the Company has 
entered into and will continue to enter into, where appropriate, teaming 
arrangements with third party system integrators.  There can be no assurance 
regarding the performance of such third parties, or the overall success, if 
any, of such teaming arrangements. Additionally, there can be no assurance 
regarding the performance of other third parties associated with such large 
scale implementations,  and the Company has no control over this aspect of 
any installation.

     Although the Company has successfully performed on some of the largest 
AFIS installations in the world, the applications associated with national ID 
programs or other civil and commercial applications, typically are much 
larger. Although the Company is confident that it can successfully implement 
its technology in these markets, there can be no assurance that the Company 
will be successful.

RISKS ASSOCIATED WITH ACQUISITIONS

     An important element of the Company's strategy has been to expand its 
operations by acquiring companies with complementary product offerings in 
order to augment market coverage and strengthen technological capabilities.  
The Company has, in the last fiscal year, completed the acquisitions of TFP 
Inc., the CAD/RMS division of SCC Communications and SunRise Imaging, Inc., 
and the Company may make additional acquisitions of businesses, products or 
technologies in the future.  These acquisitions have, and may continue to, 
result in dilutive issuance of 
                                     -9-
<PAGE>

securities, the incurrence of debt and amortization expense related to 
goodwill or other intangible assets.  Any of these factors could adversely 
affect the Company's business, operating results and financial condition.  

     Acquisitions and their assimilation into the operations of the Company 
have presented and may continue to present the Company with numerous 
challenges. These challenges may include, but are not limited to, 
assimilating the technologies and products of acquired companies, locating 
qualified resources and incorporating separate geographic operations into the 
consolidated company. These challenges absorb and may continue to absorb 
significant management attention that would otherwise be available to the 
ongoing development of the Company's core AFIS business.  Moreover, there can 
be no assurance that the anticipated benefits of any acquisition, upon 
complete integration, will ultimately be realized.  If the Company's 
management does not effectively respond to these challenges, the Company's 
business, operating results and financial condition could be adversely 
impacted.

YEAR 2000 COMPLIANCE

     Many currently installed computer systems and software products are 
coded to accept only two digit entries in the date code field.  These date 
code fields will need to accept four digit entries, or be modified in some 
fashion, to distinguish 20th century dates.  This problem could force 
computers to either shut down or provide incorrect data.  As a result, 
computer systems and software used by many companies may need to be upgraded 
to comply with such "Year 2000" requirements.  The Company believes that 
certain of its internal systems are not Year 2000 compliant and is currently 
in the process of purchasing upgrades or transitioning to systems which the 
Company's vendors have represented as being Year 2000 compliant.  The Company 
anticipates that its internal systems will be Year 2000 compliant by June 30, 
1999.  While it is difficult to quantify the total cost to the Company of the 
Year 2000 compliance activities, the Company's best estimate of expenditures 
is between $200,000 - $300,000.  With regard to the Company's products, the 
Company believes that the current versions of all products are Year 2000 
compliant.  However, certain older products versions are not Year 2000 
compliant.  The Company is in the process of notifying its customers of 
potential Year 2000 compliance problems.  For customers with current systems 
under maintenance agreements, the Company intends to offer Year 2000 upgrades 
as part of the maintenance process.  Customers not under maintenance 
agreements or with older generation systems will be offered the opportunity 
to purchase upgrades.  The Company does not anticipate a material cost to 
upgrading its products to be Year 2000 compliant.  However, there can be no 
guarantee that Year 2000 issues will not have a material impact on the 
Company's business, operating results and financial condition.

OTHER MATTERS

     In October 1997, the AICPA issued SOP 97-2, "Software Revenue 
Recognition" which supersedes SOP 91-1 under which the Company currently 
recognizes revenue. The provisions of SOP 97-2 are effective for transactions 
entered into in fiscal years beginning after December 31, 1997.  The Company 
has historically recognized revenue on contracts with insignificant vendor 
obligations, as defined by SOP 91-1, when a system is shipped and has accrued 
for the estimated costs of the future obligations.  For those contracts which 
have been considered long-term contracts due to a significant amount of 
customization, the Company has historically recognized revenue on a 
percentage of completion basis.

     One of the provisions of SOP 97-2 eliminates the concept of 
insignificant vendor obligations and will require the Company to allocate 
revenue, based on vendor specific objective evidence, to individual elements 
of its contracts and recognize revenue on each element as it is delivered or 
as services are performed, assuming certain other specified criteria are met. 
In addition, SOP 97-2 provides revised guidance and clarification on numerous 
other topics related to the Company's revenue recognition policies.  The 
ultimate impact of SOP 97-2 on the Company will be dependent on the nature 
and timing of specific contracts entered into, as well as subsequent 
interpretations of this pronouncement by the Company, its independent 
auditors and the Securities Exchange Commission, but will likely result in 
delays in the recognition of revenue on some contracts.  In addition, the 
Company may elect to adopt changes in its licensing or services practices to 
conform to aspects of SOP 97-2, and such changes, if adopted, could result in 
delays or cancellations of potential sales of the Company's products.

                                     -10-
<PAGE>

ITEM 2.   PROPERTIES

     The Company leases an approximately 88,000 square foot facility in 
Anaheim, California from Kilroy Realty, L.P.  This building is used as the 
Company's headquarters and includes administration, engineering and 
development, marketing and sales, customer service, and manufacturing 
facilities.

     The Company leases office space in Greenville, South Carolina from Barry 
White, a former director and Vice President of Printrak.  Prior to the 
restructuring of the Company's subsidiaries and the relocation of TFP's 
operations to Anaheim, California, this facility was used as TFP's principal 
place of business.  Pursuant to an Amendment of Lease dated November 12, 
1997, the Company has provided Written Notice of its intent to terminate the 
lease effective August 7, 1998.  

     The Company leases an approximately 6,700 square foot facility in 
Fremont, California from Aetna Life Insurance Company.  Prior to the 
restructuring of the Company's subsidiaries and the relocation of SunRise's 
operations to Anaheim, California, the facility was used as SunRise's 
principal place of business.  The Company is actively pursuing a subtenant to 
sublease the premises through the remaining term of the lease.  Pursuant to 
the terms of the lease, the Company pays $10,598 per month, subject to 
periodic adjustments.  The term of the lease expires April 2002.

     The Company leases an approximately 21,800 square foot facility in 
Boulder, Colorado from Lookout, LLC for use by the Boulder Division.  Pursuant
to the terms of the lease, the Company pays $18,195 per month, subject to 
periodic adjustments.  The term of the lease expires in November 2002.

     Additionally, the Company leases office space in Basingstoke, England 
and in Queensland, Australia which are used for international sales and 
customer support services.

ITEM 3.   LEGAL PROCEEDINGS.

     From time to time, the Company may be involved in litigation relating to 
claims arising out of its operations in the normal course of business.  As of 
the date of this report, the Company is not a party to any legal proceedings, 
the adverse outcome of which, in management's opinion, individually or in the 
aggregate, would have a material adverse effect on the Company's results of 
operations or financial position.

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

     A special meeting of the stockholders was held on January 29, 1998.  Of 
the 11,236,483 shares of the Company's common stock issued and outstanding 
and entitled to vote at the meeting, there were present at the meeting, in 
person or by proxy, the holders of 9,062,599 common shares, representing 
80.65% of the total number of shares entitled to vote at the meeting.  This 
percentage represents a quorum.  

     At the meeting, the stockholders approved a proposal to amend the 
Company's 1996 Stock Incentive Plan to increase the number of shares issuable 
thereunder by 1,000,000 shares, bringing the total number of shares available 
for issuance thereunder to a total of 1,500,000.  The voting results were as 
follows:  For: 8,472,936; Against: 577,121; Abstain 12,542; and Broker 
Non-Vote: 0.

                                      PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

     The Company's common stock, par value $.0001 per share (the "Common 
Stock"), is traded on the Nasdaq National Market under the symbol "AFIS".  
The table below establishes the high and low sale prices for the Common Stock 
for the period from July 2, 1996 through March 31, 1998 (as reported on the 
Nasdaq National Market).  The last reported closing price of the Common Stock 
on the Nasdaq National Market on June 30, 1998 was $5.25. 


                                      -11-
<PAGE>

<TABLE>
<CAPTION>
     FISCAL QUARTER ENDED:

                                                                       HIGH           LOW
                                                                     --------       --------
     <S>                                                             <C>            <C>
     September 30, 1996 (commenced trading July 2, 1996) ........    $  10.63       $   6.38
     December 31, 1996 ..........................................       11.13           7.63
     March 31, 1997 .............................................       12.75           8.00
     June 30, 1997 ..............................................        9.63           8.63
     September 30, 1997 .........................................       11.75          11.13
     December 31, 1997 ..........................................       10.88          10.00
     March 31, 1998 .............................................       10.50           8.00
</TABLE>

     As of June 30, 1998, there were 117 holders of record based on the 
records of the Company's transfer agent which does not include beneficial 
owners of Common Stock whose shares are held in the names of various 
securities brokers, dealers and registered clearing agencies.  

     The terms of the Company's revolving credit agreement restrict the 
ability of the Company to pay dividends on the Common Stock.  Any payment of 
future dividends will be at the discretion of the Company's Board of 
Directors and depend upon, among other things, the Company's earnings, 
financial condition, capital requirements, extent of indebtedness, as well as 
any other contractual restrictions.  The Company does not anticipate paying 
cash dividends on the Common Stock in the foreseeable future. 

ITEM 6.  SELECTED FINANCIAL DATA

     The selected consolidated financial data set forth below for the periods 
and the dates indicated and summary consolidated financial data are derived 
from the audited consolidated financial statements of the Company.  The 
statement of operations data for each of the three fiscal years to the period 
ended March 31, 1998, and the balance sheet data at March 31, 1997 and 1998, 
are derived from the audited consolidated financial statements and notes 
thereto, which are included elsewhere in this report, and are qualified by 
reference to such financial statements and notes related thereto.  The data 
set forth below should be read in conjunction with "Management's Discussion 
and Analysis of Financial Condition and Results of Operations" and the 
Consolidated Financial Statements and Notes thereto included elsewhere in 
this report. 


                                     -12-
<PAGE>

<TABLE>
<CAPTION>
                                                                             YEAR ENDED MARCH 31,
                                                    --------------------------------------------------------------------
                                                      1994           1995           1996            1997          1998
                                                    --------       --------       --------        --------      --------
                                                                    (in thousands, except per share data)
<S>                                                  <C>            <C>            <C>            <C>            <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
  System. . . . . . . . . . . . . . . . . . . . .    $20,512        $22,036        $41,400        $54,728        $58,742
  Maintenance . . . . . . . . . . . . . . . . . .      8,580          9,607         10,667         10,855         13,134
                                                     -------        -------        -------        -------        -------
  Total revenues. . . . . . . . . . . . . . . . .     29,092         31,643         52,067         65,583         71,876
Cost of revenues(1) . . . . . . . . . . . . . . .     14,787         18,215         29,782         34,143         45,852
                                                     -------        -------        -------        -------        -------
Gross profit. . . . . . . . . . . . . . . . . . .     14,305         13,428         22,285         31,440         26,024
Operating expenses:
  Research, development and engineering . . . . .      3,907          4,867          9,274         10,859         11,002
  Selling, general and administrative . . . . . .      8,012          9,353         12,283         13,861         21,841
  In process research and development . . . . . .                                                                  5,900
  Merger related expenses . . . . . . . . . . . .                                                                    874
  Restructuring costs . . . . . . . . . . . . . .                                                                    987
                                                     -------        -------        -------        -------        -------
  Total operating expenses. . . . . . . . . . . .     11,919         14,220         21,557         24,720         40,604
Operating income (loss) . . . . . . . . . . . . .      2,386           (792)           728          6,720        (14,580)
Other income, net . . . . . . . . . . . . . . . .        976          1,315            848             53            185
                                                     -------        -------        -------        -------        -------
Income (loss) before provision for income taxes and 
 cumulative effect of accounting change . . . . .      3,362            523          1,576          6,773        (14,395)
Provision for income taxes. . . . . . . . . . . .      1,001            221            386          2,141             95
                                                     -------        -------        -------        -------        -------
Income (loss) before cumulative effect of 
 accounting change. . . . . . . . . . . . . . . .      2,361            302          1,190          4,632        (14,490)
Cumulative effect of accounting change(2) . . . .      5,750            -              -              -               -  
                                                     -------        -------        -------        -------       --------
Net income (loss) . . . . . . . . . . . . . . . .    $ 8,111        $   302        $ 1,190        $ 4,632       $(14,490)
                                                     -------        -------        -------        -------       --------
                                                     -------        -------        -------        -------        -------
Net income (loss) per share(3):
  Basic . . . . . . . . . . . . . . . . . . . . .                                  $  0.14        $  0.44       $  (1.30)
  Diluted . . . . . . . . . . . . . . . . . . . .                                  $  0.13        $  0.42       $  (1.30)
Weighted average common and common equivalent 
 shares outstanding(3):
  Basic . . . . . . . . . . . . . . . . . . . . .                                    8,620         10,425         11,151
  Diluted . . . . . . . . . . . . . . . . . . . .                                    9,085         10,963         11,151

BALANCE SHEET DATA:
Cash, cash equivalents and short-term 
 investments  . . . . . . . . . . . . . . . . . .     $1,816         $1,272         $3,625         $8,431         $4,864
Working capital . . . . . . . . . . . . . . . . .      5,736          5,475         10,130         24,842         18,315
Total assets. . . . . . . . . . . . . . . . . . .     25,649         29,964         34,657         49,558         58,595
Long-term liabilities . . . . . . . . . . . . . .      5,405          7,834          5,742          1,683         10,960
Total stockholders' equity. . . . . . . . . . . .     12,554         11,931         14,041         33,997         20,552
</TABLE>

---------------
(1)  Amount in 1996 includes additional amortization of $832,000 due to a 
     change in the estimated useful life of capitalized software development 
     costs.

(2)  Effective April 1, 1993, the Company adopted Statement of Financial 
     Accounting Standards (SFAS) No. 109, ACCOUNTING FOR INCOME TAXES.  The 
     cumulative effect of the adoption of this statement resulted in the 
     recognition of a $5,750,000 gain during the year ended March 31, 1994.

(3)  Effective December 31, 1997, the Company adopted SFAS No. 128, EARNING 
     PER SHARE.  Earnings per share information for prior periods has been 
     restated to reflect the adoption of this statement.

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

     This discussion contains certain forward-looking statements within the 
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the 
Securities Exchange Act of 1934 and the Company intends that such

                                     -13-
<PAGE>

forward-looking statements be subject to the safe harbors created thereby. 
Words such as "anticipates", "expects", "intends", "plans", "believes", 
"seeks", "estimates", variations of such words and similar expressions are 
intended to identify such forward-looking statements, which include (i) the 
existence and development of the Company's technical and manufacturing 
capabilities, (ii) anticipated competition, (iii) potential future growth in 
revenues and income, (iv) potential future decreases in costs, and (v) the 
need for, and availability of, additional financing. 

     The forward-looking statements included herein are based on current 
expectations that involve a number of risks and uncertainties.  These 
forward-looking statements are based on assumptions that the Company's 
markets will continue to grow, that the Company's products will remain 
accepted within their respective markets and will not be replaced by new 
technology, that competitive conditions within the Company's markets will not 
change materially or adversely, that the Company will retain key technical 
and management personnel, that the Company's forecasts will accurately 
anticipate market demand, and that there will be no material adverse change 
in the Company's operations or business.  Assumptions relating to the 
foregoing involve judgments with respect to, among other things, future 
economic, competitive and market conditions, and future business decisions, 
all of which are difficult or impossible to predict accurately and many of 
which are beyond the control of the Company.  In addition, the business and 
operations of the Company are subject to substantial risks which increase the 
uncertainty inherent in such forward-looking statements, including those 
discussed in Item 1, "Business -Certain Considerations".  In light of the 
significant uncertainties inherent in the forward-looking information 
included herein, the inclusion of such information should not be regarded as 
a representation by the Company or any other person that the objectives or 
plans of the Company will be achieved. 

     The following is management's discussion and analysis of certain 
significant factors which have affected the earnings and financial position 
of the Company during the period included in the accompanying consolidated 
financial statements. This discussion compares the year ended March 31, 1998 
with the year ended March 31, 1997 and the year ended March 31, 1997 is 
compared against the year ended March 31, 1996.  This discussion should be 
read in conjunction with the consolidated financial statements and associated 
notes to the financial statements.

FISCAL YEARS ENDED MARCH 31, 1998 AND 1997

     TOTAL REVENUES.  The Company's total revenues are comprised of system 
revenues, which include products, file conversion and data mapping services, 
and system installations; and maintenance revenues related to hardware and 
software support.

     Total revenues increased 9.6% to $71.9 million for the year ended March 
31, 1998, in comparison to revenues of $65.6 million for the year ended March 
31, 1997.  The overall increase in revenues is entirely attributable to the 
Company's acquisitions during the fiscal year.  Subsequent to completing the 
acquisition of the CAD/RMS division of SCC in July 1997, the Boulder Division 
contributed $8.2 million of total revenue while SunRise added $3.9 million in 
total revenues for the period of September 9, 1997 (date of acquisition) 
through March 31, 1998.  In addition, TFP contributed $10.3 million in total 
revenues, a 52.6% increase over prior year revenues of $6.7 million.  This 
increase is representative of a significant increase in mugshot installations 
to existing AFIS customers, as well as an expanding of TFP's overall customer 
base.  

     These increases were partially offset by a reduction in revenues from 
the AFIS division during the current year. The reduction is primarily due to 
revenues in fiscal 1997 being impacted by the sale of a large document 
storage system for approximately $8.5 million while no similar systems were 
sold in fiscal 1998. Revenues from core AFIS systems remained consistent 
between fiscal 1997 and 1998.

     Of total current year revenues of $71.9 million, system revenues 
comprised $58.8 million with maintenance revenues contributing the remaining 
$13.1 million.  For fiscal year 1997, system revenues equaled $54.7 million 
while maintenance revenues equaled $10.9 million.  The increase in 
maintenance revenues of $2.2 million from the prior year is primarily due to 
the Company's increased maintenance base due to acquisitions.  The Boulder 
Division and TFP

                                     -14
<PAGE>

contributed incremental maintenance revenue of $1.3 million and $0.8 million, 
respectively.  Anaheim's maintenance revenues of $9.5 million were generally 
consistent with previous year maintenance revenues of $9.7 million.

     COST OF REVENUES.  Cost of revenues primarily consists of purchased 
materials procured for use in the assembly of the Company's products, 
manufacturing or assembly labor and overhead, file conversion costs and data 
mapping costs, as well as maintenance expenses and estimated costs to 
complete systems installations.

     Overall gross profit decreased to $26.0 million for the year ended March 
31, 1998, down from $31.4 million for the year ended March 31, 1997.  As a 
percentage of sales, gross margin for fiscal year 1998 declined to 36.2% from 
47.9% for fiscal year 1997.  The gross profit for system revenues decreased 
$4.4 million to $22.2 million for the current year while the prior year's 
system gross profit equaled $26.6 million.  System margin as a percentage of 
sales declined as well, approximating 37.8% for the year ended March 31, 
1998, down from 48.6% for the year ended March 31, 1997.  Maintenance revenue 
gross profit equaled $3.8 million for the current year, versus a gross profit 
of $4.8 million for the previous fiscal year.  As a percentage of sales, 
gross profit on maintenance revenue approximated 29.1% for the year ended 
March 31, 1998 as compared to 44.4% for the year ended March 31, 1997.

     The decline in overall system margins is partially attributable to the 
Boulder Division's contracts yielding lower margins than typical AFIS 
contracts. This was due to numerous low margin  contracts acquired from SCC 
which the Company expended significant resources to complete. Additionally,
margins in the Boulder Division are inherently lower than in the rest of the 
Company since a significant proportion of sales relate to the delivery of 
special fault tolerant equipment the gross margin on which is much less than 
that of hardware sold with AFIS systems and since the cost of engineering the 
Boulder Division contracts is generally contract specific and therefore is 
charged to cost of revenues rather than research, development and engineering 
expenses. Also included within system cost of sales are approximately 
$882,000 of expenses associated with the restructuring of TFP and Sunrise 
into the Company's Anaheim operations. Additionally, the Company incurred 
higher than estimated costs in completing certain system installations.

     The decline in maintenance gross margin is partially attributable to TFP 
and the Boulder Division's cost in maintaining certain systems for which the 
Company had not yet received a maintenance contract from the customer.  This 
service was performed to encourage all customers to assign their contracts to 
the Company; however, in some instances, costs were incurred without 
receiving a maintenance contract during this transition period.  The decrease 
in margin for Anaheim is attributable to an increase in fixed maintenance 
support costs to support new contracts which were still under warranty in 
fiscal 1998 and without a corresponding increase in the price of existing
maintenance contracts.

     RESEARCH, DEVELOPMENT AND ENGINEERING.  Research, development and 
engineering expenses (RD&E) are comprised primarily of compensation paid to 
personnel engaged in research, development and engineering activities, 
amounts paid for outside services and consultants and the cost of materials 
used in the development of hardware and software products.

     RD&E expenses increased 1.3% to $11.0 for the year ended March 31, 1998, 
up from $10.9 million for the same period of the previous year.  RD&E 
expenses, as a percentage of revenue, decreased to 15.3% for the year ended 
March 31, 1998 from 16.6% for the year ended March 31, 1997.  One factor in 
the decline of RD&E expenses, as a percentage of revenue, is that the Boulder 
Division's investment in engineering expenses are more typically contract 
specific, and as such, are classified as cost of sales which lowers both the 
overall RD&E expenses, as a percentage of revenue, and lowers the Company's 
overall gross margin.

     Included within current year RD&E expense are $249,000 of expenses 
associated with the restructuring of the engineering operations of SunRise 
and TFP into the Company's corporate engineering organization.  The Company 
experienced a decrease in contract labor expense in comparison to prior year 
as a reduced number of outside contractors were utilized.  In the previous 
year, the Company had used significant contract labor to develop the 
Company's document storage.  This software application is now part of the 
AFIS family of products.

     SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and 
administrative (SG&A) expense consist principally of compensation paid to 
sales, marketing and administrative personnel, commissions paid to sales 
personnel, professional service fees, travel and related expenses, and other 
marketing expenses.

     For the year ended March 31, 1998, SG&A expenses increased to $21.8 
million for fiscal year 1998, up from $13.9 million for fiscal year 1997.  
This represented an increase of $8.0 million or 57.6%.  As a percentage of 
revenue, 

                                     -15-
<PAGE>

SG&A expenses approximated 30.4%, up from 21.1% in the prior year. 
Approximately $2.0 million of the increase was attributable to higher labor 
costs associated with additional personnel resulting primarily from the 
Company's acquisitions, as well as the implementation of a sales commission 
plan that resulted in incremental expense of approximately $1.0 million.  
Travel and marketing expenses also increased approximately $.8 million due to 
the acquisitions.  Furthermore, during the year, approximately $.5 million of 
international travel expense was incurred as the Company invested significant 
resources in marketing its civil applications for AFIS technology.  
Professional fees and insurance costs also incrementally increased due to the 
Company's three acquisitions during fiscal year 1998.


     Also included within SG&A are $1.1 million of expenses associated with 
the restructuring of the operations of TFP and SunRise to reduce duplication 
of resources.  These costs are primarily comprised of relocation and 
retention bonuses for certain employees, costs of relocating TFP and SunRise 
production facilities, and additional bad debt reserves due to employee 
transitions and changes in the customer base.

     IN-PROCESS RESEARCH & DEVELOPMENT EXPENSE.  The in-process research and 
development expense of $5.9 million was due to the allocation of a portion of 
the purchase price to technology acquired related to the SunRise acquisition. 
The purchase price was allocated based on management's estimates and 
projections of future cash flows using the discounted cash flow valuation 
method.

     MERGER EXPENSE.  Merger expenses of $.9 million were associated with the 
TFP Inc. acquisition.  The expenses primarily consisted of investment 
banking, legal and accounting fees associated with the pooling of interests 
transaction.

     RESTRUCTURING COSTS.  The restructuring expense of $1.0 million consists 
of expenditures for the termination of SunRise and TFP personnel, losses on 
the disposal of fixed assets and the estimated loss associated with the lease 
termination of SunRise's Fremont facility and TFP's Greenville facility.  The 
Company anticipates that the restructuring will be completed by September 30, 
1998.

     OTHER INCOME, NET.  Other income equaled $185,000 in the current year 
and was primarily comprised of interest income of approximately $629,000, 
offset, in part, by interest expense of $467,000 and foreign currency losses 
of $136,000.  In the previous year, other income totaled $53,000 and was 
principally associated with interest income of $364,000, interest expense of 
$450,000 and certain miscellaneous income items.

     PROVISION FOR INCOME TAXES.  Income tax expense for the year ended March 
31, 1998 equaled $95,000, versus $2.1 million for the year ended March 31, 
1997. The effective tax rate differs from the statutory rate principally due 
to the nondeductible in-process research and development expense and an 
increase in the valuation allowance on deferred tax assets.

FISCAL YEARS ENDED MARCH 31, 1997 AND 1996

     TOTAL REVENUES.  The Company's total revenues are comprised of system 
revenues, which include products, file conversion services, and system 
installation; and maintenance revenues related to hardware and software 
support. 

     Revenues increased 26.0% to $65.6 million for the year ended March 31, 
1997 from $52.1 million for the year ended March 31, 1996.  TFP contributed 
$368,000 or 2.7% of the revenue increase over the prior period.  System 
revenues experienced an increase of 32.2%, or $13.3 million, to $54.7 million 
for fiscal year 1997, up from $41.4 million for the previous fiscal year.  
The system revenue increase is primarily attributable to the sale of a large 
document storage system and an increasing number of AFIS 2000 system 
installations worldwide. 

     Maintenance revenues equaled $10.9 million for the year ended March 31, 
1997, up 1.8% from prior year revenues of $10.7 million.  Year-over-year, 
TFP's maintenance base increased, offsetting Printrak Anaheim's maintenance 
revenue decrease.  Anaheim's year-over-year decrease is the result of sales 
to existing customers, reducing maintenance revenue during the customer's 
warranty period.


                                     -16-
<PAGE>

      GROSS PROFIT.  Cost of revenues primarily consist of purchased 
materials procured for use in the assembly of the Company's products, 
manufacturing labor and overhead, file conversion costs and maintenance 
expenses. 

     Overall gross profit increased to $31.4 million for the year ended March 
31, 1997, up from $22.3 million for the same period of the previous year. 
Overall gross margin for fiscal year 1997 increased to 47.9% from 42.8% for 
fiscal year 1996.  The gross profit for system revenues increased to $26.6 
million for the year ended March 31, 1997 in comparison to $17.3 million for 
the year ended March 31, 1996.  Additionally, system gross margin equaled 
48.6% for the 1997 fiscal year, a significant increase from 41.8% for the 
previous fiscal year.  The gross margin associated with maintenance revenues 
declined to 44.4% for the year ended March 31, 1997 from 46.6% for the year 
ended March 31, 1996. Overall maintenance gross profit also declined and 
approximated $4.8 million for the year ended March 31, 1997, versus $5.0 
million for the prior year. 

     The overall increase in system gross margin to 48.6% is partially 
related to $2.2 million of software amortization, present in the prior year 
but absent in the current year because all capitalized software was fully 
amortized in the previous fiscal year.  Absent the software amortization in 
the prior year, the Company's system margin would have approximated 47.1%.  
Additionally, favorable order mix and favorable raw material prices resulted 
in an increase in the overall system margin.  The reduction in the Company's 
maintenance revenue margin is the result of increased maintenance support 
costs without a corresponding increase in the price of maintenance support 
service. 

     RESEARCH, DEVELOPMENT AND ENGINEERING.  Research, development and 
engineering expenses (RD&E) are comprised primarily of compensation paid to 
personnel engaged in research, development and engineering activities, 
amounts paid for outside services and consultants and the cost of materials 
used in the development of hardware and software products. 

     RD&E expenses increased 17.1% to $10.9 million for the year ended March 
31, 1997, up from $9.3 million for the year ended March 31, 1996.  The 
increase in RD&E expense is comprised of increased salary and contract labor 
expense related to additional personnel engaged in research, as well as 
engineering enhancement of existing products.  Depreciation expense also 
increased due to a higher amount of equipment used principally for 
development efforts.  RD&E expense, as a percentage of revenues, decreased to 
16.6% for the current year, down from 17.8% for the same period of the 
previous year, primarily due to the increased level of total revenues. 

     SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and 
administrative (SG&A) expenses consist principally of compensation paid to 
sales, marketing, and administrative personnel, professional service fees, 
travel and related expenses, and other marketing expenses. 

     For the year ended March 31, 1997, SG&A expenses increased to $13.9 
million from $12.3 million for the year ended March 31, 1996.  This reflects 
an overall SG&A expense increase of $1.6 million or 12.8%.  The increase in 
SG&A expenses results from increased sales and administrative salary expense 
to support the infrastructure of a higher level of revenues, increased travel 
costs, and increased professional service fees.  SG&A expenses, as a 
percentage of revenues, decreased to 21.1% for the current year, down from 
23.6% for the prior year, due primarily to the increased level of total 
revenues. 

     OTHER INCOME, NET.  Other income in the current year is primarily 
associated with interest income of $364,000 and other miscellaneous income 
items, offset, in part, by interest expense of $450,000.  For the previous 
year, other income is associated with the amortization of the deferred credit 
which became fully amortized in March 1996.  Approximately $1.2 million of 
this credit was amortized to income in 1996.  

     PROVISION FOR INCOME TAXES.  Income tax expense for the year ended March 
31, 1997 equaled $2.1 million in comparison to tax expense of $386,000 in the 
prior year.  This represents an overall increase in tax expense of 
approximately $1.8 million.  The Company's tax provision is based on the 
federal statutory rate of 35% and reflects the impact of state and foreign 
taxes and the changes in the deferred tax valuation allowance, primarily 
associated with net operating loss carryforwards. 


                                      -17-
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company finances its operations through the cash provided by its 
operations and the utilization of its revolving credit line.  The Company's 
operating activities used net cash of approximately $3.6 million for the year 
ended March 31, 1998, primarily as a result of the cash portion of the net 
loss and increases in accounts receivable, inventories, and prepaid expenses, 
offset by cash generated from increases in accrued liabilities and deferred 
revenue. The Company's operating activities used net cash of approximately 
$5.2 million for the year ended March 31, 1997 primarily as a result of an 
increase in accounts receivable, offset by net income and other changes in 
working capital.

     The Company's investing activities used net cash of approximately $7.7 
million for fiscal year 1998, due to capital expenditures of $1.5 million and 
business acquisitions of $9.6 million offset by the proceeds received from 
the sale of short term investments of $3.4 million.  The $9.6 million cash 
used for business acquisitions is related to the acquisition of the CAD/RMS 
division of SCC Communications and the acquisition of SunRise Imaging, net of 
cash received. For fiscal year 1997, the Company used net cash of $4.8 
primarily associated with short-term investment purchases of $4.2 million.  
Additionally in fiscal 1997, the Company expended $1.5 million, consistent 
with the current year, for capital expenditures and received approximately 
$900,000 from the collection of notes receivable.

     Financing activities provided net cash of approximately $11.2 million 
for the year ended March 31, 1998 while financing activities for the same 
period of the previous year generated net cash of $10.6 million.  For the 
current period, the Company increased its use of the revolving credit 
facility, and net borrowings exceeded repayments by $10.2 million.  
Furthermore, the Company collected approximately $1.0 million from the 
exercise of stock options and employees' participation in the employee stock 
purchase plan.  Net cash provided by financing activities for the year ended 
March 31, 1997 of $10.6 million is primarily due to net proceeds of 
approximately $14.4 million realized from exercise of stock options and the 
Company's initial public offering, proceeds of $1.0 million from exercise
of stock options and employees' participation in the Company's employee 
stock purchase plan offset by net debt repayments of $4.8 million.

     On July 7, 1998, the Company received a written commitment letter from 
its bank to refinance its debt into a $15.0 million revolving credit 
facility, expiring in July 1999 and a $4.0 million term loan payable in 
quarterly installments beginning November 1, 1998 and maturing February 1, 
2001.  As such, the Company believes that cash generated from operations, as 
well as the use of the revolving credit facility, will provide sufficient 
resources to fund the Company through at least fiscal year 1999.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial statements and supplementary data of the Registrant 
required by this Item 8 are set forth at the pages indicated at Item 14 (a) 
(1). 

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

     None. 

                                      PART III
                                          
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     DIRECTORS.  The following persons served as directors as of March 31, 1998:

     RICHARD M. GILES, 50, Chief Executive Officer, President and acting 
Chief Financial Officer, joined the Company as Chief Financial Officer in May 
1989, became President and Chief Executive Officer and a Director in June 
1990 and has served as Chairman of the Board since April 1991.  Mr. Giles is 
serving as acting Chief Financial Officer.  Prior to joining Printrak, from 
1988 to 1989, Mr. Giles served as Chief Financial Officer for subsidiaries of 
De La Rue, p.l.c., an international financial printing company.  From 1986 to 
1988 Mr. Giles served as Managing Director of Boardman Panels & Boards, a 
printed circuit board company in the United Kingdom.  From 1983 to 


                                     -18-
<PAGE>

1986, Mr. Giles served as Financial Controller and Finance Director of Racal 
Marine Radar Ltd., a manufacturer of defense electronics and marine radar 
equipment.  In 1994, Mr. Giles was named Entrepreneur of the Year in the 
turnaround category by Inc. Magazine for the Orange County, California 
region.  Mr. Giles received a first class honors degree in chemistry and 
mathematics from Bristol University.

     JOHN G. HARDY, 49, President of Products Division, joined the Company in 
October 1989 as Director of Software Engineering.  He has served as Vice 
President of Engineering since April 1990, as Chief Operating Officer of the 
Company since August 1996 and as a Director of the Company since June 1990.  
Mr. Hardy has recently been named President of Products Division.  Prior to 
joining Printrak, from 1985 to 1989, Mr. Hardy was employed as Senior Vice 
President of Engineering by Color Systems Technology, Inc., a company which 
converts black and white movies to color.  From 1978 to 1985, Mr. Hardy was 
employed by Technology Service Corporation, a manufacturer of image 
simulation products, as manager of its imaging systems business unit.  Prior 
to 1978, Mr. Hardy held various engineering positions with Xontech, Inc., a 
manufacturer of x-ray equipment, and with the radar systems division of 
Hughes Aircraft Company. Mr. Hardy received a B.S. in electrical engineering 
from the University of Utah in 1972 and a M.S. in electrical engineering from 
the University of Southern California in 1975.

     ALFRED CASTLEMAN, 60, joined the Company as Vice President, Chief 
Financial Officer and Director in December 1997.   From February 1994 to 
December 1997, Mr. Castleman served as Vice President and Chief Financial 
Officer of Smartflex Systems, Inc.  From February 1991 to September 1993, Mr. 
Castleman served as Vice President and Chief Financial Officer of Sherpa 
Corporation.  Mr. Castleman resigned from all positions with the Company in 
June 1998.

     CHARLES L. SMITH, 63, director, joined the Company as Director of 
Operations in August 1989, served as Vice President of Operations from 
January 1990 to March 1990, and served as the Company's Chief Operating 
Officer from April 1990 until his retirement in August 1996.  Mr. Smith 
became a Director of the Company in June 1990.  Prior to joining Printrak, 
Mr. Smith was employed for approximately two years as Vice President, 
Operations for EG&G Corporation, a manufacturer of defense related products.  
Prior to 1987, Mr. Smith was Executive Vice President of Dolphin Systems, a 
manufacturer of computer data storage devices, and held various positions, 
including Division General Manager, with Computer Automation, a manufacturer 
of mini computer systems.  Mr. Smith received a B.S. degree in Industrial 
Management from California State University, Long Beach.  

     KENNETH W. SIMONDS, 63, director, joined the Company as a Director in 
August 1996.  Prior to his retirement in 1992, Mr. Simonds was employed as 
Chief Executive Officer of Teradata Corp., a manufacturer of fault tolerant 
database management computer systems.  Previously, Mr. Simonds was an 
executive officer of Amdahl Corp. where he was responsible for domestic and 
international marketing, support and service operation, and three product 
divisions over a ten year period.  Mr. Simonds also served as Executive Vice 
President and Chairman of the Operating Committee during his ten years with 
Amdahl.  Previously, Mr. Simonds was employed by IBM in a number of sales, 
sales management, and technical management positions over an 18 year period.  
Mr. Simonds resigned from his position as a director in June 1998.

     ALBERT C. WONG, 49, director, joined the Company as a Director in 
November 1996.  Since 1989, Mr. Wong has been an executive officer and 
director of AMKLY Systems, a developer of PC and networking products.  Prior 
to 1989, Mr. Wong directed worldwide engineering and manufacturing operations 
of AST Computer which he co-founded in 1980.  Mr. Wong received a B.S. degree 
in Electrical Engineering from California State University, Fullerton.

     OTHER EXECUTIVE OFFICERS.  The following persons served as executive 
officers as of March 31, 1998:

     DANIEL J. DRISCOLL, 39,  President of Digital Justice Division, joined 
the Company as Director of Marketing in August 1993.  He served as Vice 
President of Engineering and Product Marketing since September 1995 and was 
recently named President of Digital Justice Division.  Prior to joining 
Printrak, from October 1992 to August 1993, Mr. Driscoll was employed as 
Director of Marketing and Product Development for the Hoskins division of 
Sheldahl, Inc., which division manufacturers aviation illumination systems.  
From 1989 to 1992, Mr. Driscoll was employed by Cymbolic Sciences 
International, a manufacturer of film recorders, as Vice President, Marketing 
and Product 

                                      -19-
<PAGE>

Development.  Prior to 1989, Mr. Driscoll was employed by Lincoln Laser 
Company, a manufacturer of laser scanning systems, as Vice President of its 
Systems Division, and by Intel Corporation as a Senior Industrial Engineer in 
its advanced manufacturing technology group.  Mr. Driscoll received a B.S. in 
industrial engineering from Arizona State University.  Mr. Driscoll was 
appointed to the Company's Board of Directors in June 1998.

     DAVID L. MCNEFF, 50, Executive Vice President of Sales, joined the 
Company in 1985 and served as Vice President, Worldwide Sales from November 
1991 to May 1998, as a Director from November 1991 to August 1997, as 
Director of North American Sales from 1990 to 1991, as Director, Systems 
Engineering, Proposals and Contracts from 1989 to 1990, and as Manager of 
Programs and Contracts from 1985 to 1989.  Prior to joining Printrak, from 
1978 to 1985, Mr. McNeff was employed as Program Manager for Magnavox 
Advanced Products and Systems Co., which develops and manufactures high speed 
chips and printed circuit boards for government agencies.  Mr. McNeff 
received his B.A.S. degree and two masters degrees from Biola University, all 
with highest honors.

     SUSANNA H. BENNETT, 44, Vice President of Finance, Treasurer, and 
Corporate Secretary, joined the Company in March 1987 and served as Vice 
President of Corporate Administration from July 1997 to June 1998, Vice 
President, Treasurer from April 1996 to July 1997, Vice President of Finance 
from April 1995 to March 1996, Controller from April 1989 to March 1995 and 
Finance Manager from March 1987 to April 1989.  Prior to joining Printrak, 
Ms. Bennett served in accounting and management positions, from 1985 to 1987 
at MDB Systems, and from 1984 to 1985 at Excel-O-Corp., a manufacturer of 
computer peripheral devices.  Ms. Bennett received a B.A. with honors in 
Accounting from California State University, Fullerton and an M.B.A. from 
Pepperdine University. 

     STEPHEN YEICH, 38,  Vice President, Worldwide Marketing, joined the 
Company as Director of Marketing in July 1991 and held such position until 
January 1993, served as Director of Business Development from January 1993 to 
April 1997, as Vice President of Marketing from April 1997 to May 1998 and 
was promoted to Vice President, Worldwide Marketing in May 1998.  Prior to 
joining Printrak, Mr. Yeich held consulting, marketing and sales positions 
with McKinsey & Company, IBM and GTE.  Mr. Yeich received a bachelor's degree 
from Pennsylvania State University and a master's degree with honors from 
Harvard Graduate School of Business Administration.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Based solely upon its review of the copies of Forms 3 and 4 and 
amendments thereto furnished to the Company, or written representations that 
no annual Form 5 reports were required, the Company believes that all filing 
requirements under Section 16(a) of the Securities Exchange Act of 1934, as 
amended (the "Exchange Act") applicable to its directors, officers and any 
persons holding 10% or more of the Company's Common Stock were made with 
respect to the Company's fiscal year ended March 31, 1998.


                                     -20-
<PAGE>

ITEM 11.    EXECUTIVE COMPENSATION 

     
The following table sets forth compensation earned during the three fiscal years
ended March 31, 1996, 1997 and 1998 by the Company's Chief Executive Officer and
the four other most highly compensated executive officers who were serving as
executive officers at March 31, 1998 and whose total salary and bonus during
such year exceeded $100,000 (collectively, the "Named Executive Officers").
                                          
                             SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                                  LONG TERM 
                                                          ANNUAL COMPENSATION    COMPENSATION
                                                         ---------------------   ------------
                                                                                    AWARDS
                                                                                 ------------
                                                                                  SECURITIES
                                                                                  UNDERLYING     ALL OTHER
  NAME AND PRINCIPAL POSITION            YEAR        SALARY ($)      BONUS ($)    OPTIONS (#)     COMP.(1)
-------------------------------          ----        ----------     ----------   -------------   ---------
<S>                                      <C>         <C>            <C>            <C>            <C>
Richard M. Giles                         1998        374,039        144,250(2)          --             --
  CEO, President and acting CFO          1997        403,077        153,000             --             --
                                         1996        500,000        500,000             --             --

Barry B. White                           1998        150,733(3)      20,156             --        100,000(4)
  Former Vice President

Daniel J. Driscoll                       1998        191,269         55,838(5)     127,000             --  
  President of Digital Justice           1997        151,955         53,550             --             --  
  Division                               1996        117,986         43,750         56,000             --  

John G. Hardy                            1998        179,157         53,918(6)      20,000             --  
  President of Products Division         1997        168,819         53,585             --             --  
                                         1996        148,706         37,177             --             --  

David L. McNeff                          1998        160,888         65,512(7)      75,000             --  
  Vice President of Sales                1997        152,877         53,585             --             --  
                                         1996        148,706         37,177         48,000             --  
</TABLE>

----------------
(1) Does not reflect certain personal benefits, which in the aggregate are 
    less than the lower of $50,000 or 10% of each Named Executive Officer's 
    annual salary and bonus.

(2) Includes $91,750 performance bonus paid in fiscal year 1998 related to 
    performance during fiscal year 1997.  The remaining bonus amount was 
    based on the executive officer's individual performance during fiscal 
    year 1998.

(3) Includes $14,866 paid by TFP prior to the Company's acquisition of TFP in 
    May 1997.

(4) Mr. White resigned on March 31, 1998 from all positions with the Company. 
    In connection with Mr. White's resignation, Mr. White was paid $100,000 
    severance.

(5) Includes $26,775 performance bonus paid in fiscal year 1998 related to 
    performance during fiscal year 1997.  The remaining bonus amount was 
    based on the executive officer's individual performance during fiscal 
    year 1998.

(6) Includes $26,793 performance bonus paid in fiscal year 1998 related to 
    performance during fiscal year 1997. The remaining bonus amount was 
    based on the executive officer's individual performance during fiscal 
    year 1998.

(7) Includes $26,803 performance bonus paid in fiscal year 1998 related to 
    performance during fiscal year 1997. The remaining bonus amount was 
    based on the executive officer's individual performance during fiscal 
    year 1998.



                                     -21-
<PAGE>

OPTION MATTERS

    OPTION GRANTS.  The following table sets forth certain information 
concerning grants of options to each of the Company's Named Executive 
Officers during the fiscal year ended March 31, 1998.

                         OPTION GRANTS IN LAST FISCAL YEAR
                                (INDIVIDUAL GRANTS)

<TABLE>
<CAPTION>
                                                                                                POTENTIAL REALIZABLE VALUE AT
                          NUMBER OF         % OF TOTAL                                          ASSUMED ANNUAL RATES OF STOCK
                          SECURITIES          OPTIONS                                               PRICE APPRECIATION FOR
                          UNDERLYING         GRANTED TO                                                 OPTION TERM(3)
                           OPTIONS         EMPLOYEES IN      EXERCISE PRICE       EXPIRATION   -----------------------------
       NAME               GRANTED (#)     FISCAL YEAR (1)       ($/SHARE)           DATE (2)        5% ($)         10% ($)
--------------------      -----------     ---------------     --------------       ----------   -------------    ------------
<S>                         <C>                 <C>                <C>              <C>             <C>          <C>
Richard M. Giles                 --             --                 --                  --                --             --  

Barry B. White                   --             --                 --                  --                --             --  

Daniel J. Driscoll           27,000              2.7%              11.63            05/08/07        197,370        500,580
                            100,000             10.1%               9.88            09/10/07         62,100      1,575,000

John G. Hardy                10,000              1.0%              11.63            05/08/07         73,100        185,400
                             10,000              1.0%               9.88            09/10/07          6,210        157,000

David L. McNeff              25,000              2.5%              11.63            05/08/07        182,750        463,500
                             50,000              5.0%               9.88            09/10/07         31,050        787,500
</TABLE>

---------------
(1)  Options to purchase an aggregate of 993,289 shares of Common Stock were
     granted to employees, including the Named Executive Officers, during the
     year ended March 31, 1998.

(2)  Options granted have a term of 10 years, subject to earlier termination in
     certain events related to termination of employment.  These  options vest
     in equal quarterly installments over five years.

(3)  Based on fair market value, in accordance with the rules and regulations of
     the Securities and Exchange Commission, such gains are based on assumed
     rates of annual compound stock appreciation of 5% and 10% from the date on
     which the options were granted over the full term of the options.  The
     rates do not represent the Company's estimate or projection of future
     Common Stock prices, and no assurance can be given that the rates of annual
     compound stock appreciation assumed will be achieved.
     
     
     OPTION EXERCISES.  No options were exercised by any of the Named Executive
Officers during the year ended March 31, 1998.  The following table sets forth
the fiscal year end options values for all options held by the Company's Named
Executive Officers.  The values for "in the money" options represent the
positive spread between the exercise prices of any such existing stock options
and the fiscal year end price of the Company's Common Stock ($8.38 per share).

                                     -22-
<PAGE>

                        FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
                         NUMBER OF SECURITIES UNDERLYING        VALUE OF UNEXERCISED
                                UNEXERCISED OPTIONS             IN-THE-MONEY OPTIONS
                              AT FISCAL YEAR END (#)          AT FISCAL YEAR END ($)(1)
                         -------------------------------   --------------------------------
      NAME               EXERCISABLE       UNEXERCISABLE    EXERCISABLE       UNEXERCISABLE
------------------       -----------       -------------    -----------       -------------
<S>                        <C>                <C>            <C>            <C>
Richard M. Giles                --                 --                --                  --
                                         
Barry B. White                  --                 --                --                  --
                                         
Daniel J. Driscoll          45,149            145,851        $   48,784             $37,696
                                         
John G. Hardy              273,500             16,500        $1,657,800                  --
                                         
David L. McNeff             46,450             92,550        $  105,536             $10,944
</TABLE>

-------------
(1)  On May 26, 1998, the Company repriced an aggregate of 452,000 options
     held by certain executive officers which had exercise prices greater
     than $7.50 per share, to $6.94 per share, the fair market value of the
     Company's Common Stock on the date of repricing.  The values stated
     above do not reflect such repricing.

EMPLOYMENT AND SEVERANCE AGREEMENTS

     The Company entered into an employment agreement with Richard M. Giles, 
effective July 2, 1996, for a term expiring July 1, 2002, pursuant to which 
he will serve as Chief Executive Officer and President of the Company.  The 
Employment Agreement provides for a base salary of $350,000 per year, with 
annual raises to be determined by the Compensation Committee.  On April 1, 
1997, Mr. Giles base salary was increased to $375,000.  Mr. Giles may earn a 
performance bonus based upon the attainment of certain operating goals of the 
Company.  For fiscal 1998, Mr. Giles' target performance bonus was $150,000. 
Such performance bonus may be increased or decreased depending on the 
Company's financial performance in relation to its operating income budget.  
Mr. Giles is also eligible to participate in incentive compensation and other 
employee benefit plans established by the Company from time to time.  Mr. 
Giles' employment agreement provides for a severance benefit equal to 
eighteen months' base salary in the event of termination of his employment by 
the Company under certain circumstances.

     The Company entered into an employment agreement with Barry B. White, 
effective May 7, 1997 for a term of two years, pursuant to which he would 
serve as President of TFP, and as a Vice President and director of the 
Company.  The Employment Agreement provided for a base salary of $150,000 per 
year, with annual raises to be determined by the Compensation Committee.  Mr. 
White resigned from all positions with the Company and its subsidiaries 
effective March 31, 1998. 

     The Company has agreements with a number of executive officers and 
several key employees which grant such officers and employees severance 
benefits upon termination by the Company.  Such benefits range in amount from 
six to twelve months' base salary.

DIRECTORS' FEES

     During fiscal 1998, the Company's outside directors received cash 
compensation for their services on the Company's Board of Directors. 
Accordingly, Mr. Smith, Mr. Simonds and Mr. Wong received $19,750, $18,000 
and $19,750, respectively, during fiscal year 1998.  All directors may be 
reimbursed for certain expenses incurred for meetings of the Board of 
Directors which they attended.  Mr. Smith received additional compensation of 
$16,622 for reimbursement of medical insurance costs.

     Pursuant to the Company's 1996 Stock Incentive Plan, each outside 
director shall receive an initial grant of 10,000 shares, vesting 25% 
immediately and the remaining 75% over the following three years, plus an 
annual grant of 


                                     -23-
<PAGE>

2,000 shares on each anniversary of such director's election, vesting 25% 
immediately and the remaining 75% over the following three years.  
Accordingly, in fiscal year 1998, Messrs. Simonds and Wong were each granted 
options to purchase 2,000 shares.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     The Company's Compensation Committee is comprised of three directors 
selected by the Board of Directors of the Company.  As of March 31, 1998, the 
members of the Compensation Committee were Charles Smith and Albert C. Wong.  
Charles Smith served as the Company's Chief Operating Officer from April 1990 
until his retirement in August 1996.  The functions of the Compensation 
Committee include advising the Board of Directors on officer and employee 
compensation.  The Board of Directors, based on input from the Compensation 
Committee establishes the annual compensation rates for the Company's 
executive officers.  The Compensation Committee met four times during the 
fiscal year ended March 31, 1998.

     The Company has entered into indemnification agreements with its 
directors, including the members of the Compensation Committee.  Such 
agreements require the Company to indemnify such individuals to the fullest 
extent permitted by Delaware law.

BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

     The following report is submitted by the Compensation Committee of the 
Board of Directors with respect to the executive compensation policies 
established by the Compensation Committee and recommended to the Board of 
Directors and compensation paid or awarded to executive officers for the 
fiscal year ended March 31, 1998.

     The Compensation Committee determines the annual salary, bonus and other 
benefits, including incentive compensation awards, of the Company's executive 
officers and recommends new employee benefit plans and changes to existing 
plans to the Company's Board of Directors.  The salary and performance bonus 
of Richard M. Giles, the Company's President and Chief Executive Officer, is 
determined in accordance with Mr. Giles' Employment Agreement with the 
Company (see "Employment and Severance Agreements," above).  The Compensation 
Committee met four times during fiscal year 1998.

COMPENSATION POLICIES AND OBJECTIVES

     The Company's executive compensation policy is designed to attract and 
retain exceptional executives by offering compensation for superior 
performance that is highly competitive with other well-managed organizations. 
The Compensation Committee measures executive performance on an individual 
and corporate basis.

     There are three components to the Company's executive compensation 
program, and each is consistent with the stated philosophy as follows:

     -    BASE SALARY.  Base salaries for executives and other key employees 
          are determined by individual financial and non-financial 
          performance, position in salary range and general economic 
          conditions of the Company.  For purposes of administering base pay, 
          all executive positions are evaluated and placed in appropriate 
          salary grades. Salary range midpoint levels are reviewed on an 
          annual basis to ensure competitiveness with a peer group of 
          comparable computer software and systems companies.  In 
          recommending salaries for executive officers, the Compensation 
          Committee (i) reviews the historical performance of the executives, 
          and (ii) formally reviews specific information provided by its 
          accountants and other consultants, as necessary, with respect to 
          the competitiveness of salaries paid to the Company's executives.
          
     -    ANNUAL BONUS.  Annual bonuses for executives and other key 
          employees are tied directly to the Company's financial performance 
          as well as individual performance.  The purpose of annual cash 
          bonuses are to reward executives for achievements of corporate, 
          financial and operational goals.  Annual cash bonuses are intended 
          to reward the achievement of outstanding performance.  When 


                                      -24-
<PAGE>

          certain objective and subjective performance goals are not met, 
          annual bonuses would be reduced or not paid.  The bonuses paid in 
          fiscal year 1998 were solely based upon each individual's 
          performance during the year.
          
     -    LONG-TERM INCENTIVES.  The purpose of these plans is to create an 
          opportunity for executives and other key employees to share in the 
          enhancement of stockholder value through stock options.  The 
          overall goal of this component of pay is to create a strong link 
          between the management of the Company and its stockholders through 
          management stock ownership and the achievement of specific 
          corporate financial measures that result in the appreciation of 
          Company share price. Stock options are awarded if the Company and 
          individual goals are achieved or exceeded.  The Compensation 
          Committee generally has followed the practice of granting options 
          quarterly on terms which provide that the options become 
          exercisable in cumulative monthly installments over a three to five 
          year period.  The Compensation Committee believes that this feature 
          not only provides an employee retention factor but also makes 
          longer term growth in share prices important for those receiving 
          options.

FISCAL YEAR 1998 COMPENSATION

     The Company is required to disclose its policy regarding qualifying 
executive compensation deductibility under Section 162(m) of the Internal 
Revenue Code of 1986, as amended, which provides that, for purposes of the 
regular income tax and the alternative minimum tax, the otherwise allowable 
deduction for compensation paid or accrued with respect to a covered employee 
of a public corporation is limited to no more than $1 million per year.  It 
is not expected that the compensation to be paid to the Company's executive 
officers for fiscal 1998 will exceed the $1 million limit per officer.  The 
Company's Executive Stock Option Plan, 1994 Stock Option Plan and 1996 Stock 
Incentive Plan are structured so that any compensation deemed paid to an 
executive officer when he exercises an outstanding option under the plan, 
with an exercise price equal to the fair market value of the option shares on 
the grant date, will qualify as performance-based compensation that will not 
be subject to the $1 million limitation.

                                   The Compensation Committee of the
                                   Board of Directors
                                   Charles Smith
                                   Albert C. Wong

     NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THE COMPANY'S 
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE 
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE 
FILINGS, INCLUDING THIS FORM 10-K, IN WHOLE OR IN PART, THE FOREGOING 
REPORT AND THE PERFORMANCE GRAPH ON PAGE 26 SHALL NOT BE INCORPORATED BY 
REFERENCE INTO ANY SUCH FILINGS. 


                                     -25-
<PAGE>

STOCK PERFORMANCE GRAPH

     Set forth below is a line graph comparing the cumulative stockholder 
return on the Company's Common Stock with the cumulative total return of the 
Russell 2000 Index and the SIC Code Index (Number 7373 - Computer Integrated 
Systems Design) for the period that commenced July 2, 1996, the date on which 
the Company's Common Stock was first registered under the Exchange Act, and 
ended on March 31, 1998.  The Performance Graph is not necessarily an 
indicator of future price performance.  The graph assumes the reinvestment of 
all dividends.

                      COMPARISON OF CUMULATIVE TOTAL RETURN*
                        AMONG PRINTRAK INTERNATIONAL INC.,
                             THE RUSSELL 2000 INDEX
                             AND THE SIC CODE INDEX

                             [PLOT POINTS FOR GRAPH]

<TABLE>
<CAPTION>
                             07/02/96    09/30/96    12/31/96    03/31/97    06/30/07    09/30/97    12/31/97    03/31/98
<S>                           <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
PRINTRAK INTERNATIONAL INC    100.00      121.88      106.25      143.75      118.75      145.31      135.94      103.13
SIC CODE INDEX                100.00       97.27       90.17       76.80       93.92      107.72      106.13      131.71
RUSSELL 2000 INDEX            100.00      100.34      105.56      100.10      116.33      133.62      129.14      142.13
</TABLE>

                       ASSUMES $100 INVESTED ON JUL. 02, 1998
                           ASSUMES DIVIDEND REINVESTED
                         FISCAL YEAR ENDING MAR. 31, 1998


                                     -26-
<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     Set forth below is certain information as of June 30, 1998 regarding the 
beneficial ownership of the Company's Common Stock by (i) any person who was 
known by the Company to own more than five percent (5%) of the voting 
securities of the Company, (ii) all directors and nominees, (iii) each of the 
Named Executive Officers identified in the Summary Compensation Table, and 
(iv) all current directors and executive officers as a group.

<TABLE>
<CAPTION>
                                                      AMOUNT AND NATURE OF  
                                                           BENEFICIAL            PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNERS (1)                 OWNERSHIP(2)           OF CLASS
-----------------------------------------             --------------------       --------
<S>                                                        <C>                    <C>
Richard M. Giles(3)                                        5,967,600              52.8%

Barry B. White(4)                                            732,179               6.5%

John G. Hardy(5)                                             374,375               3.2%

Charles L. Smith(6)                                          369,500               3.3%

Daniel Driscoll(7)                                            56,790               *

David L. McNeff(8)                                            50,506               *

Albert C. Wong(9)                                              7,330               *

All current executive officers and directors as a
    group (8 persons)(10)                                  6,884,955              58.7%
</TABLE>

--------------
* less than 1%

(1)  Unless otherwise indicated, the business address of such stockholder is 
     c/o Printrak International Inc., 1250 North Tustin Avenue, Anaheim, CA 
     92807.
     
(2)  Beneficial ownership is determined in accordance with the rules of the 
     Securities and Exchange Commission and generally includes voting or 
     investment power with respect to securities.  Shares of Common Stock 
     subject to options, warrants and convertible notes currently exercisable 
     or convertible, or exercisable or convertible within 60 days of June 30, 
     1998, are deemed outstanding for computing the percentage of the person 
     holding such options but are not deemed outstanding for computing the 
     percentage of any other person. Except as indicated by footnote, and 
     subject to community property laws where applicable, the persons named 
     in the table have sole voting and investment power with respect to all 
     shares of Common Stock shown as beneficially owned by them.

(3)  Includes 81,000 shares owned by the Alexander Giles Education Trust, 
     Richard Giles Trustee and his son as beneficiary; 6,400 shares owned by 
     Richard Giles' son, Alexander Giles; and 76,000 shares owned by The 
     Giles Family Foundation, a California non-profit public benefit 
     corporation, of which Richard Giles shares voting power with his spouse. 
     Mr. Giles disclaims beneficial ownership of the above-mentioned shares. 
     The remaining 5,804,200 shares are held by The Giles Living Trust.

(4)  Mr. White's business address is 213 Michaux Drive, Greenville, SC 29605.

(5)  The shares of Common Stock are held by John G. Hardy and Irene P. Hardy, 
     as co-trustees of the John G. Hardy and Irene P. Hardy, Family Trust, 
     July 24, 1996, of which Mr. Hardy has shared voting power. Includes 
     274,375 shares issuable upon the exercise of an option exercisable 
     within 60 days of June 30, 1998 by Mr. Hardy.

(6)  Such shares are held by Charles L. Smith and Janet Smith, as Trustees of 
     the Smith Family Trust, of which Mr. Smith has shared voting power.

(7)  Includes 56,790 shares issuable upon the exercise of an option 
     exercisable within 60 days of June 30, 1998.

(8)  Includes 50,506 shares issuable upon the exercise of an option 
     exercisable within 60 days of June 30, 1998.

(9)  Includes 6,000 shares issuable upon the exercise of an option 
     exercisable within 60 days of June 30, 1998.

(10) Includes an aggregate of 440,649 shares subject to options exercisable 
     within 60 days of June 30, 1998.


                                     -27-
<PAGE>
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     During the year ended March 31, 1998, the Company's Board of Directors, 
based upon the recommendations of the Compensation Committee, established the 
levels of compensation for the Company's executive officers, provided, 
however, the Company's Chief Executive Officer and President, Richard M. 
Giles, has an employment agreement with the Company and his compensation is 
determined in accordance with the terms and conditions of such agreement.  As 
of March 31, 1998, the Compensation Committee consisted of Charles Smith and 
Albert C. Wong.  

     On May 13, 1995, the Company sold its facility located at 1250 North 
Tustin Avenue, Anaheim, California (the "Property") to RICOL, LLC, a 
California limited liability company ("RICOL") which is controlled by Richard 
M. Giles, the Company's Chairman, President and Chief Executive Officer, for 
a total purchase price equal to $4,630,000, which was equal to the appraised 
fair market value of the Property plus $70,000, to cover certain closing 
costs.  Such purchase price was paid to the Company by delivery of cash in 
the amount of $3,400,000 and a promissory note in the principal amount of 
$1,230,000 (the "Note"), which Note bore interest at the rate of 10% per 
annum and principal on which Note was payable at the rate of $38,000 per year 
until fully paid.  Such purchase was financed by RICOL by borrowing 
$3,400,000 from Union Bank and executing a promissory note in the principal 
amount of $3,400,000 and a related deed of trust on the Property.  Pursuant 
to a Loan Guaranty dated May 12, 1995, the Company unconditionally guaranteed 
such obligations of RICOL to Union Bank. Such guarantee was terminated in May 
1996.  On July 11, 1996, in exchange for partial payment of the Note, the 
Note was amended and restated to reflect the remaining principal balance of 
$500,000 (the "Amended Note") and amended the interest rate to be equal to 
the prime interest rate charged by Union Bank of California.  Interest 
payments were due monthly until the entire principal balance was paid in 
full.  The outstanding principal and accrued interest was due in full on July 
11, 2003.  In April 1998, the Property was sold to an unaffiliated party, the 
unpaid principal and interest were paid in full, and the Amended Note was 
cancelled.

     In connection with the May 1995 real estate transaction, the Company and 
RICOL entered into a lease for the Property for a term of five years, 
expiring May 12, 2000, with rent of $58,930 per month.  Pursuant to the lease 
provision which provides for increases based on increases in the Consumer 
Price Index, not to exceed 6% or be less than 2% during any year of such 
term, the rent was increased to $60,109 per month beginning on May 12, 1996 
and was further increased to $61,311 per month beginning May 12, 1997.  On 
June 5, 1997, the Company, which had not previously paid the scheduled 
increase for the twelve months ending May 12, 1997, issued a check for 
$18,014 to cover the additional rent.  The Company believes the increased 
rent is comparable to rents being charged for similar properties at the time 
of such increase.  The Company believes that the transactions described above 
were on terms as favorable to the Company as they would have been if they had 
been with unrelated third parties. In connection with the sale of the 
Property in April 1998, the Company entered into a new lease for a term of 
six years, expiring April 30, 2004, with rent of $58,088 per month.

     From time to time, the Company has made loans to Mr. Giles, which have 
been evidenced by promissory notes.  During fiscal 1997, the principal amount 
outstanding equaled $50,000.  During fiscal 1996, the principal amount 
outstanding under such loans ranged from $23,000 to $147,000, and all of such 
loans had been repaid as of March 31, 1996.  In February 1996, the Company 
loaned $150,000 to Mr. Giles.  Such loan was collateralized by a pledge of 
150,000 of the shares of the Company's common stock owned by Mr. Giles, bore
interest at 5.5%, and principal and interest were due as of March 1, 1998.  
The principal amount along with accrued interest was repaid during fiscal 
year 1997. No loans were outstanding during fiscal year 1998.

     In February 1996, the Company loaned to John G. Hardy, President of 
Products Division, the sum of $310,000 to enable Mr. Hardy to exercise 
120,000 options to purchase shares of the Company's Common Stock which were 
held by Mr. Hardy and to pay certain tax obligations resulting from the 
exercise of such options.  Such loan bears interest at the rate of 5.5% per 
annum, and principal and accrued interest on such loan were originally due on 
March 1, 1998.  However, on March 1, 1998, the Company entered into a written 
agreement to extend the repayment date to March 1, 2000.

     In connection with the acquisition of TFP, the Company's consolidated 
liabilities reflect an obligation to make lease payments under that certain 
Lease Agreement dated July 23, 1996 and entered into between TFP and Barry B.

                                      -28-
<PAGE>

White, the then current President of TFP who later became a director and 
officer of Printrak.  Mr. White resigned from all positions of the Company 
and its subsidiaries effective March 31, 1998.  A Lease Amendment was 
executed in November 1997, providing among other things, (i) an increase in 
the monthly rental payment from $5,750 to $16,667 per month, and (ii) 
permitting for the termination of the lease upon 180 days notice, but in no 
event shall the termination occur prior to August 7, 1998.  The Company 
provided written notice of its intention to terminate the lease effective 
August 7, 1998.

     Any future transactions between the Company and its officers, directors 
or affiliates will either be on terms no less favorable to the Company than 
could be obtained from third parties, will be subject to approval by a 
majority of the Company's outside directors or will be consistent with 
policies approved by a majority of such outside directors. 

                                          
                                 PART IV

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

(a)  1.   Financial Statements:

          See Index to Financial Statements and Schedule on page F-1

     2.   Financial Statement Schedule:

          See Index to Financial Statements and Schedule on page F-1.

     3.   Exhibits.  The following exhibits are filed (or incorporated by
reference herein) as part of this Form 10K:

          2.1  Agreement and Plan of Reorganization and Merger, dated as of 
               April 7, 1997, between the Company, TFP Acquisition Corp., and 
               TFP Inc. (Incorporated by reference to Exhibit 10.1 of the 
               Company's Form 8-K as filed with the Securities and Exchange 
               Commission on April 17, 1997)

          2.2  Agreement and Plan of Reorganization and Merger, dated as of 
               August 29, 1997, between the Company, SunRise Acq. Corp., 
               SunRise Imaging and the principal shareholders of SunRise 
               Imaging (Incorporated by reference to Exhibit 2.1 of the 
               Company's Form 8-K as filed with the Securities and Exchange 
               Commission on September 24, 1997)

          3.1  Certificate of Incorporation of the Company (Incorporated by 
               reference to Exhibit 3.1 of the Company's Registration 
               Statement on Form S-1 as filed with the Securities and 
               Exchange Commission on May 3, 1996, File No. 333-4610)
          
          3.2  Amended and Restated Certificate of Incorporation of the 
               Company (Incorporated by reference to Exhibit 3.2 of Amendment 
               No. 2 the Company's Registration Statement on Form S-1 as 
               filed with the Securities and Exchange Commission on June 28, 
               1996, File No. 333-4610)
          
          3.3  Bylaws of the Company, as currently in effect (Incorporated by 
               reference to Exhibit 3.3 of the Company's Annual Report on 
               Form 10-K as filed with the Securities and Exchange Commission 
               on June 30, 1997)
     
          4.1  Form of Common Stock Certificate (Incorporated by reference to 
               Exhibit 4.1 of Amendment No. 2 to the Company's Registration 
               Statement on Form S-1 as filed with the Securities and 
               Exchange Commission on June 28, 1996, File No. 333-4610)
     
          10.1 * Printrak International Inc. Executive Stock Option Plan (the 
               "Executive Plan"), as amended (Incorporated by reference to 
               Exhibit 10.1 of the Company's Registration Statement on Form 
               S-1 as filed with the Securities and Exchange Commission on 
               May 3, 1996, File No. 333-4610)


                                      -29-
<PAGE>

   10.2   * Form of Nonqualified Stock Option Agreement pertaining to the
          Executive Plan (Incorporated by reference to Exhibit 10.2 of the
          Company's Registration Statement on Form S-1 as filed with the
          Securities and Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.3   * Printrak International Inc. 1994 Stock Option Plan (the "1994
          Plan")(Incorporated by reference to Exhibit 10.3 of the Company's
          Registration Statement on Form S-1 as filed with the Securities and
          Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.4   * Form of Nonqualified Stock Option Agreement pertaining to the 1994
          Plan (Incorporated by reference to Exhibit 10.4 of the Company's
          Registration Statement on Form S-1 as filed with the Securities and
          Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.5   * First Amended and Restated Printrak International Inc. 1996 Stock
          Incentive Plan (the "1996 Plan") (Incorporated by reference to Exhibit
          4.1 of the Company's Registration Statement on Form S-8 as filed with
          the Securities and Exchange Commission on February 27, 1998, File
          No. 333-47009)
          
   10.6   * Form of Stock Option Agreement pertaining to the 1996 Plan
          (Incorporated by reference to Exhibit 10.6 of the Company's
          Registration Statement on Form S-1 as filed with the Securities and
          Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.7   * Form of Restricted Stock Purchase Agreement pertaining to the 1996
          Plan (Incorporated by reference to Exhibit 10.7 of the Company's
          Registration Statement on Form S-1 as filed with the Securities and
          Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.8   * First Amended and Restated Printrak International Inc. Employee
          Stock Purchase Plan - 1996 (Incorporated by reference to Exhibit 4.1
          of the Company's Registration Statement on Form S-8 as filed with the
          Securities and Exchange Commission on October 10, 1997, File No. 
          333-38275)
          
   10.9   * Printrak International Inc. Voluntary Deferred Compensation Plan
          (Incorporated by reference to Exhibit 10.9 of the Company's
          Registration Statement on Form S-1 as filed with the Securities and
          Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.10  * Employment Agreement dated May 1, 1996 between the Company and
          Richard M. Giles (Incorporated by reference to Exhibit 10.10 of the
          Company's Registration Statement on Form S-1 as filed with the
          Securities and Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.11  Promissory Note dated March 1, 1996 by Richard M. Giles, in favor of
          the Company (Incorporated by reference to Exhibit 10.11 of the
          Company's Registration Statement on Form S-1 as filed with the
          Securities and Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.12  Stock Pledge Agreement dated March 1, 1996 between the Company and
          Richard M. Giles (Incorporated by reference to Exhibit 10.12 of the
          Company's Registration Statement on Form S-1 as filed with the
          Securities and Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.13  Promissory Note dated March 1, 1996 by John G. Hardy in favor of the
          Company (Incorporated by reference to Exhibit 10.13 of the Company's
          Registration Statement on Form S-1 as filed with the Securities and
          Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.14  Stock Pledge Agreement dated March 1, 1996 between the Company and
          John G. Hardy (Incorporated by reference to Exhibit 10.14 of the
          Company's Registration Statement on Form S-1 as filed with the
          Securities and Exchange Commission on May 3, 1996, File No. 333-4610)
          
                                         -30-

<PAGE>

   10.15  * Form of Severance Agreement between the Company and its executive
          officers (Incorporated by reference to Exhibit 10.15 of the Company's
          Registration Statement on Form S-1 as filed with the Securities and
          Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.16  Form of Indemnification Agreement for Officers and Directors of the
          Company (Incorporated by reference to Exhibit 10.16 of the Company's
          Registration Statement on Form S-1 as filed with the Securities and
          Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.17  Purchase and Sale Agreement dated May 12, 1995 between the Company and
          RICOL, LLC (Incorporated by reference to Exhibit 10.17 of the
          Company's Registration Statement on Form S-1 as filed with the
          Securities and Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.18  Promissory Note of RICOL, LLC, dated May 12, 1995 in favor of the
          Company (Incorporated by reference to Exhibit 10.18 of the Company's
          Registration Statement on Form S-1 as filed with the Securities and
          Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.19  Deed of Trust dated May 12, 1995 by RICOL, LLC in favor of the
          Company, as beneficiary (Incorporated by reference to Exhibit 10.19 of
          the Company's Registration Statement on Form S-1 as filed with the
          Securities and Exchange Commission on May 3, 1996, File No. 333-4610)
          
   10.20  Commercial Lease dated May 13, 1995 between the Company and RICOL, LLC
          (Incorporated by reference to Exhibit 10.20 of the Company's
          Registration Statement on Form S-1 as filed with the Securities and
          Exchange Commission on May 3, 1996, file No. 333-4610)
          
   10.21  First Amendment to Lease dated April 1, 1998 between the Company and
          Kilroy Realty, L.P.
          
   10.22  Loan Agreement between the Company and Union Bank dated August 12,
          1996 (Incorporated by reference to Exhibit 10.1 the Company's
          Quarterly Report on Form 10-Q for the quarter ended
          September 30, 1996, as filed with the Securities and Exchange
          Commission on November 13, 1996)
          
   10.23  Promissory Note between the Company and Union Bank of California dated
          January 30, 1997 (Incorporated by reference to Exhibit 10.1 the
          Company's Quarterly Report on Form 10-Q for the quarter ended
          December 31, 1996, as filed with the Securities and Exchange
          Commission on February 13, 1997)

   10.24  * TFP Stock Option Plan (Incorporated by reference to Exhibit 4.1 of
          the Company's Registration Statement on Form S-8 as filed with the
          Securities and Exchange Commission on October 20, 1997, File No. 
          333-38277)

   10.25  * Employment and Non-Competition Agreement between the Company and 
          Barry B. White, dated as of May 7, 1997 (Incorporated by reference to
          Exhibit 99.1 of Barry B. White's Schedule 13-D as filed with the 
          Securities and Exchange Commission on May 16, 1997)

   10.26  * Nonqualified Stock Option Agreement between the Company and Alfred
          Castleman, dated as of December 5, 1997 (Incorporated by reference to
          Exhibit 4.2 of the Company's Registration Statement as filed with the
          Securities and Exchange Commission on February 27, 1998, File No. 
          333-47009)


21     Significant Subsidiaries of the Company

   23.1   Consent of Independent Auditors, Deloitte & Touche LLP, dated July 13,
          1998
                                         -31-

<PAGE>

   27     Financial Data Schedule

     ---------------
     
     *    These exhibits are identified as management contracts or compensatory
          plans or arrangements of the Registrant pursuant to Item 14(a) of Form
          10-K
     
     
(b)  Reports on Form 8-K

     The Registrant filed a Form 8-K on January 9, 1998 to announce its plans to
     integrate the operations of SunRise Imaging, Inc. into the Registrant's
     principal operations in Anaheim, California.  

                                         -32-

<PAGE>

                                     SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized, in the City of Anaheim,
State of California, on July 13, 1998.

                                   PRINTRAK INTERNATIONAL INC.



                                   /s/ RICHARD M. GILES
                                   --------------------------------------------
                                   Richard M. Giles, Chairman of the Board, 
                                   Chief Executive Officer, acting Chief 
                                   Financial Officer and President


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


<TABLE>
<CAPTION>

          SIGNATURE                                TITLE                                          DATE
-------------------------------   ------------------------------------------------   -------------------------------
<S>                               <C>                                                  <C>
    
                                                                                       
    
/s/ RICHARD M. GILES
--------------------------------   Chairman of the Board, Chief Executive                July 13, 1998
Richard M. Giles                   Officer, acting Chief Financial Officer
                                   and President (Principal Executive Officer
                                   and Principal Financial Officer)
                                   
/s/ JOHN G. HARDY
--------------------------------  President of Products Division and Director            July 13, 1998
John G. Hardy


/s/ DANIEL J. DRISCOLL
--------------------------------  President of Digital Justice Division and Director     July 13, 1998
Daniel J. Driscoll                



/s/ CHARLES L. SMITH
-------------------------------   Director                                               July 13, 1998
Charles L. Smith



/s/ ALBERT WONG
-------------------------------   Director                                               July 13, 1998
Albert Wong
</TABLE>

                                              -33-

<PAGE>
             PRINTRAK INTERNATIONAL INC.
                                          
            INDEX TO FINANCIAL STATEMENTS
                                          

<TABLE>
<CAPTION>
                                                        PAGE
                                                        ----
<S>                                                      <C>
Independent Auditors' Report . . . . . . . . . . . . . . F-2
Consolidated Balance Sheets  . . . . . . . . . . . . . . F-3
Consolidated Statements of Operations  . . . . . . . . . F-4
Consolidated Statements of Stockholders' Equity  . . . . F-5
Consolidated Statements of Cash Flows. . . . . . . . . . F-6
Notes to Consolidated Financial Statements . . . . . . . F-8

</TABLE>
                                  F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors
Printrak International Inc.:

     We have audited the accompanying consolidated balance sheets of Printrak
International Inc. and subsidiaries (the Company) as of March 31, 1997 and 1998
and the related consolidated statements of operations, stockholders' equity and
cash flows for each of the three years in the period ended March 31, 1998.  Our
audits also included the financial statement schedule listed in the index at
14(a)(2).  These financial statements and schedule are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits.

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

     In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Printrak International Inc. and
subsidiaries as of March 31, 1997 and 1998 and the results of their operations
and their cash flows for each of the three years in the period ended March 31,
1998, in conformity with generally accepted accounting principles.  Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.

DELOITTE & TOUCHE LLP


June 19, 1998 (except as to the last paragraph of Note 9 for which the date is
July 7, 1998)
Costa Mesa, California

                                        F-2

<PAGE>

                            PRINTRAK INTERNATIONAL INC.
                            CONSOLIDATED BALANCE SHEETS
                           AS OF MARCH 31, 1997 AND 1998

<TABLE>
<CAPTION>

                                                                    1997          1998
                                                                -------------  -----------
                       ASSETS
<S>                                                             <C>            <C>
CURRENT ASSETS:
Cash and cash equivalents. . . . . . . . . . . . . . . . . .    $ 3,832,000    $ 3,763,000
Short-term investments . . . . . . . . . . . . . . . . . . .      4,599,000      1,101,000
Accounts receivable, net, (Notes 4 and 5). . . . . . . . . .     23,539,000     28,129,000
Inventories, net (Note 6). . . . . . . . . . . . . . . . . .      5,174,000      8,229,000
Prepaid expenses and other current assets. . . . . . . . . .        518,000      2,413,000
Deferred income taxes (Note 10). . . . . . . . . . . . . . .      1,058,000      1,763,000
                                                                -------------  -----------
  Total current assets . . . . . . . . . . . . . . . . . . .     38,720,000     45,398,000
NOTES RECEIVABLE FROM RELATED PARTIES (Note 14). . . . . . .        543,000        558,000
PROPERTY AND EQUIPMENT, net (Notes 7 and 9). . . . . . . . .      5,570,000      5,086,000
DEFERRED INCOME TAXES (Note 10). . . . . . . . . . . . . . .      2,867,000      2,243,000
OTHER LONG-TERM ASSETS . . . . . . . . . . . . . . . . . . .      1,858,000      2,475,000
GOODWILL AND OTHER INTANGIBLE ASSETS, net (Note 2) . . . . .                     2,835,000
                                                                -------------  -----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . .    $49,558,000    $58,595,000
                                                                -------------  -----------
                                                                -------------  -----------

            LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . . . . .    $ 4,431,000    $ 6,538,000
Accrued wages and employee benefits. . . . . . . . . . . . .      1,807,000      3,178,000
Other accrued liabilities (Note 8) . . . . . . . . . . . . .      2,843,000      7,194,000
Current portion of long-term debt (Notes 9 and 11) . . . . .        247,000      1,056,000
Deferred revenue . . . . . . . . . . . . . . . . . . . . . .      3,919,000      8,640,000
Income taxes payable (Note 10) . . . . . . . . . . . . . . .        631,000        477,000
                                                                -------------  -----------
     Total current liabilities . . . . . . . . . . . . . . .     13,878,000     27,083,000
LONG-TERM DEBT, less current portion (Notes 9 and 11). . . .      1,524,000     10,960,000
OTHER LONG-TERM LIABILITIES. . . . . . . . . . . . . . . . .        159,000               
                                                                -------------  -----------
     Total liabilities . . . . . . . . . . . . . . . . . . .     15,561,000     38,043,000
COMMITMENTS AND CONTINGENCIES (Note 11)
STOCKHOLDERS' EQUITY (Note 12):
Preferred stock, $0.0001 par value; 5,000,000 shares 
  authorized; no shares outstanding. . . . . . . . . . . . .
Common stock, $0.0001 par value; 20,000,000 shares 
  authorized; 11,075,202 (1997) and 11,269,203 (1998) 
  shares issued and outstanding . . . . . . . . . . . . . .           1,000          1,000
Additional paid-in capital . . . . . . . . . . . . . . . . .     16,756,000     17,850,000
Retained earnings. . . . . . . . . . . . . . . . . . . . . .     17,542,000      3,052,000
Note receivable from stockholder (Note 14) . . . . . . . . .       (300,000)      (300,000)
Unrealized gain on short-term investments. . . . . . . . . .         46,000         11,000
Cumulative foreign exchange translation adjustments. . . . .       ( 48,000)       (62,000)
                                                                -------------  -----------
     Total stockholders' equity. . . . . . . . . . . . . . .     33,997,000     20,552,000
                                                                -------------  -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . . . .    $49,558,000    $58,595,000
                                                                -------------  -----------
                                                                -------------  -----------
</TABLE>

          See accompanying notes to consolidated financial statements
                                                                     


                                          F-3

<PAGE>

                            PRINTRAK INTERNATIONAL INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE YEARS ENDED MARCH 31, 1996, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                    1996           1997           1998
                                                                ------------   ------------   ------------
<S>                                                             <C>            <C>            <C>
REVENUES (Note 5):
System . . . . . . . . . . . . . . . . . . . . . . . . . . .    $41,400,000    $54,728,000    $58,742,000
Maintenance. . . . . . . . . . . . . . . . . . . . . . . . .     10,667,000     10,855,000     13,134,000
                                                                ------------   ------------   ------------
  Total revenues . . . . . . . . . . . . . . . . . . . . . .     52,067,000     65,583,000     71,876,000
COST OF REVENUES:
System . . . . . . . . . . . . . . . . . . . . . . . . . . .     24,088,000     28,111,000     36,535,000
Maintenance. . . . . . . . . . . . . . . . . . . . . . . . .      5,694,000      6,032,000      9,317,000
                                                                ------------   ------------   ------------
  Total cost of revenues . . . . . . . . . . . . . . . . . .     29,782,000     34,143,000     45,852,000
                                                                ------------   ------------   ------------
GROSS PROFIT . . . . . . . . . . . . . . . . . . . . . . . .     22,285,000     31,440,000     26,024,000
OPERATING EXPENSES:
Research, development and engineering. . . . . . . . . . . .      9,274,000     10,859,000     11,002,000
Selling, general and administrative. . . . . . . . . . . . .     12,283,000     13,861,000     21,841,000
In-process research and development. . . . . . . . . . . . .                                    5,900,000
Merger expenses (Note 3) . . . . . . . . . . . . . . . . . .                                      874,000
Restructuring charges (Note 16). . . . . . . . . . . . . . .                                      987,000
                                                                ------------   ------------   ------------
  Total operating expenses . . . . . . . . . . . . . . . . .     21,557,000     24,720,000     40,604,000
                                                                ------------   ------------   ------------
INCOME (LOSS) FROM OPERATIONS. . . . . . . . . . . . . . . .        728,000      6,720,000    (14,580,000)
OTHER INCOME (EXPENSE):
Amortization of deferred credit (Note 2) . . . . . . . . . .      1,207,000
Foreign currency gain (loss) . . . . . . . . . . . . . . . .         67,000      (144,000)       (136,000)
Interest expense . . . . . . . . . . . . . . . . . . . . . .      (426,000)      (450,000)       (467,000)
Interest income. . . . . . . . . . . . . . . . . . . . . . .                      364,000         629,000
Other income . . . . . . . . . . . . . . . . . . . . . . . .                      283,000         159,000
                                                                ------------   ------------   ------------
  Total other income, net. . . . . . . . . . . . . . . . . .        848,000         53,000        185,000
                                                                ------------   ------------   ------------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES. . . . . . .      1,576,000      6,773,000    (14,395,000)
PROVISION FOR INCOME TAXES (Note 10). . . . . . . . . . . . .       386,000      2,141,000         95,000
                                                                ------------   ------------   ------------
NET INCOME (LOSS). . . . . . . . . . . . . . . . . . . . . .    $ 1,190,000    $ 4,632,000    (14,490,000)
                                                                ------------   ------------   ------------
                                                                ------------   ------------   ------------
NET INCOME (LOSS) PER COMMON SHARE:
  Basic. . . . . . . . . . . . . . . . . . . . . . . . . . .    $      0.14    $      0.44    $     (1.30)
                                                                ------------   ------------   ------------
                                                                ------------   ------------   ------------
  Diluted. . . . . . . . . . . . . . . . . . . . . . . . . .    $      0.13    $      0.42    $     (1.30)
                                                                ------------   ------------   ------------
                                                                ------------   ------------   ------------

WEIGHTED AVERAGE SHARES OUTSTANDING:
  Basic. . . . . . . . . . . . . . . . . . . . . . . . . . .      8,620,000     10,425,000     11,151,000
                                                                ------------   ------------   ------------
                                                                ------------   ------------   ------------
  Diluted. . . . . . . . . . . . . . . . . . . . . . . . . .      9,085,000     10,963,000     11,151,000
                                                                ------------   ------------   ------------
                                                                ------------   ------------   ------------
</TABLE>

              See accompanying notes to consolidated financial statements.
                                                                      
                                            F-4

<PAGE>
                              PRINTRAK INTERNATIONAL INC.
                  CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED MARCH 31, 1996, 1997 AND 1998

<TABLE>
<CAPTION>
                                                                                                          CUMULATIVE
                                 COMMON STOCK                                   NOTE     UNREALIZED GAIN   FOREIGN
                              -----------------    ADDITIONAL                RECEIVABLE        ON          EXCHANGE       TOTAL
                               NUMBER     PAR       PAID-IN      RETAINED       FROM       SHORT-TERM    TRANSLATION  STOCKHOLDERS'
                             OF SHARES   VALUE      CAPITAL      EARNINGS    STOCKHOLDER   INVESTMENTS    ADJUSTMENT     EQUITY
                            ----------   ------    ---------   -----------  ------------  ------------   -----------  -------------
<S>                        <C>           <C>     <C>          <C>           <C>           <C>           <C>           <C>
BALANCE, April 1, 1995      8,213,514    $1,000      $83,031  $11,771,000    $            $                 $76,000   $11,931,031  
Exercise of common stock                                                                                          
  options and receipt of                                                                                             
  note receivable from                                                                                               
  stockholder                 123,200                308,000                  (300,000)                                     8,000
Issuance of Common Stock      385,980                909,969                                                              909,969
                          
Unrealized gain on short                                                                                          
  term investments                                                                            41,000                       41,000
Foreign currency 
translation adjustment                                                                                      (39,000)      (39,000)
Net income                                                      1,190,000                                               1,190,000
                            ----------   ------    ---------   -----------  ------------  ------------   -----------  -------------

BALANCE, March 31, 1996     8,722,694     1,000    1,301,000   12,961,000     (300,000)       41,000         37,000    14,041,000
Exercise of common stock                                                                                          
  options                     151,944                432,000                                                              432,000
Issuance of common stock                                                                                          
  under employee stock                                                                                               
  purchase plan                79,564                541,000                                                              541,000
Issuance of common stock                                                                                          
  in initial public 
  offering                  2,121,000             14,432,000                                                           14,432,000
Unrealized gain on short                                                                                          
  term investments                                                                             5,000                        5,000
Foreign currency                                                                                                  
  translation adjustment                                                                                    (85,000)      (85,000)
Accretion of TFP                                                                                                  
  Preferred Stock Prior to                                                                                           
  Merger                                              50,000      (50,000)
Other                                                              (1,000)                                                 (1,000)
Net income                                                      4,632,000                                               4,632,000
                            ----------   ------    ---------   -----------  ------------  ------------   -----------  -------------
BALANCE, March 31, 1997    11,075,202     1,000   16,756,000   17,542,000     (300,000)       46,000        (48,000)   33,997,000
                                                                                                                  
Exercise of common stock                                                                                          
  options                     110,704                385,000                                                              385,000
Issuance of common stock                                                                                          
  under employee stock                                                                                               
  purchase plan                83,297                601,000                                                              601,000
Issuance of warrants in                                                                                           
  exchange for services                              108,000                                                              108,000
Unrealized loss on short                                                                                          
  term investments                                                                           (35,000)                     (35,000)
Foreign currency                                                                                                  
  translation adjustment                                                                                    (14,000)      (14,000)
 Net loss                                                     (14,490,000)                                            (14,490,000)
                           -----------   ------   ----------  ------------  ------------  ------------   -----------  -------------
BALANCE, March 31, 1998    11,269,203    $1,000  $17,850,000   $3,052,000    $(300,000)       $11,000       $(62,000)  $20,552,000
                           -----------   ------   ----------   -----------  ------------  ------------   -----------  -------------
                           -----------   ------   ----------   -----------  ------------  ------------   -----------  -------------

</TABLE>

        See accompanying notes to consolidated financial statements.

                                      F-5

<PAGE>
                            PRINTRAK INTERNATIONAL INC.
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED MARCH 31, 1996, 1997 AND 1998


<TABLE>
<CAPTION>
                                                                    1996           1997          1998
                                                                ------------   ------------  ------------
<S>                                                             <C>            <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss). . . . . . . . . . . . . . . . . . . . . .     $1,190,000     $4,632,000  $(14,490,000)
Adjustments to reconcile net income to net cash provided 
  by (used in) operating activities:
    Depreciation and amortization. . . . . . . . . . . . .        4,087,000      2,659,000      3,631,000
    Loss on disposal of assets . . . . . . . . . . . . . .                                        845,000
    In process research and development. . . . . . . . . .                                      5,900,000
    Amortization of deferred credit. . . . . . . . . . . .       (1,207,000)
    Deferred taxes . . . . . . . . . . . . . . . . . . . .          136,000      1,008,000
    Changes in operating assets and liabilities, net of the 
     effect of acquisitions:
      Accounts receivable, net. . . . . . . . . . . . . . . .    (4,874,000)   (11,824,000)    (1,028,000)
      Inventories, net. . . . . . . . . . . . . . . . . . . .    (2,463,000)       601,000     (1,859,000)
      Prepaid expenses and other assets . . . . . . . . . . .        57,000     (1,725,000)    (1,942,000)
      Accounts payable. . . . . . . . . . . . . . . . . . . .     2,512,000       (852,000)       440,000
      Accrued liabilities . . . . . . . . . . . . . . . . . .       978,000      1,061,000      5,071,000
      Deferred revenue. . . . . . . . . . . . . . . . . . . .     1,693,000       (899,000)     1,440,000
      Income taxes payable. . . . . . . . . . . . . . . . . .        58,000        397,000       (253,000)
      Other . . . . . . . . . . . . . . . . . . . . . . . . .        40,000       (254,000)    (1,309,000)
                                                                ------------   ------------  ------------
         Net cash provided by (used in) operating activities      2,207,000     (5,196,000)    (3,554,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures . . . . . . . . . . . . . . . . . . . .     (2,580,000)    (1,459,000)    (1,517,000)
Cash paid for acquisitions, net of cash acquired . . . . . .                                   (9,609,000)
Proceeds from sale of land and building, net . . . . . . . .      3,330,000
Sale and maturities of short term investments. . . . . . . .                                    3,463,000
Purchases of short-term investments. . . . . . . . . . . . .                    (4,235,000)
Notes receivable from related parties. . . . . . . . . . . .       (219,000)       888,000        (15,000)
                                                                ------------   ------------  ------------
      Net cash provided by (used in) financing activities. .        531,000     (4,806,000)    (7,678,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt . . . . . . . . . . . . . . . .      3,607,000      6,116,000     46,176,000
Principal payments on long-term debt . . . . . . . . . . . .     (4,681,000)   (10,878,000)   (35,979,000)
Net proceeds from issuance of redeemable preferred stock . .        690,000
Proceeds from common stock issuances . . . . . . . . . . . .          8,000     15,405,000        986,000
                                                                ------------   ------------  ------------
      Net cash (used in) provided by financing activities. .       (376,000)    10,643,000     11,183,000
EFFECT OF EXCHANGE RATE CHANGES ON CASH BALANCES. . . . . .         (50,000)       (70,000)       (20,000)
                                                                ------------   ------------  ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS. . . .       2,312,000        571,000        (69,000)
CASH AND CASH EQUIVALENTS, beginning of year. . . . . . . .         949,000      3,261,000      3,832,000
                                                                ------------   ------------  ------------
CASH AND CASH EQUIVALENTS, end of year. . . . . . . . . . .      $3,261,000     $3,832,000     $3,763,000
                                                                ------------   ------------  ------------
                                                                ------------   ------------  ------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION 

  Cash paid during the year for:

  Interest. . . . . . . . . . . . . . . . . . . . . . . . .        $565,000       $450,000       $470,000
                                                                ------------   ------------  ------------
                                                                ------------   ------------  ------------
  Income taxes. . . . . . . . . . . . . . . . . . . . . . .         $96,000       $833,000       $828,000
                                                                ------------   ------------  ------------
                                                                ------------   ------------  ------------
</TABLE>

NONCASH TRANSACTIONS:

For the years ended March 31, 1997 and 1998, the Company entered into capital
lease agreements for equipment amounting to $551,000 and $65,000, respectively. 

During the year ended March 31, 1998, the Company issued 20,000 warrants in
exchange for services received from a vendor valued at $108,000.

                                      F-6

<PAGE>

During the years ended March 31, 1997 and 1998, the Company capitalized
$3,391,000 and $1,104,000, respectively, of equipment and materials, previously
classified as inventory, into fixed assets. 

During the year ended March 31, 1996, the Company received a note for $1,230,000
from a related party in conjunction with the sale of land and a building, and
received a note of $300,000 from an officer for the exercise of stock options
(Note 13).


Detail of businesses acquired in purchase transactions:

<TABLE>
          <S>                                                    <C>
          Purchased in-process research and development . .      $ 5,900,000
          Fair value of assets acquired . . . . . . . . . .       10,645,000
          Liabilities assumed . . . . . . . . . . . . . . .       (6,936,000)
                                                                 -----------
          Cash paid for acquisitions, net of cash acquired       $ 9,609,000
                                                                 -----------
                                                                 -----------

</TABLE>

            See accompanying notes to consolidated financial statements.

                                        F-7

<PAGE>


                              PRINTRAK INTERNATIONAL INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED MARCH 31, 1996, 1997 AND 1998

1.   DESCRIPTION OF THE BUSINESS

     Printrak International Inc. ("the Company") is a worldwide supplier of 
integrated identification and information systems used primarily in criminal 
justice and public safety applications, as well as in emerging applications 
in civil markets such as welfare and immigration control.  The Company 
provides networked fingerprint, photo imaging, computer-aided dispatch and 
automated records management systems, as well as digital scanning devices.  
The Company's integrated systems serve approximately 700 national, state, 
county and municipal agencies in 36 countries.

     The Company primarily markets its products to national, regional and 
local law enforcement agencies around the world.  The Company's prospective 
customers are subject to public agency contract requirements which vary from 
jurisdiction to jurisdiction.  Public agency contracts typically contain 
provisions that permit cancellation in the event that funds are unavailable 
to the public agency. 

     In March 1996, the Company was reincorporated in the State of Delaware 
and established a par value of $0.0001 on its common and preferred stock. 
Concurrent with this reincorporation, the Company enacted a 1-for-2.5 reverse 
stock split.  The accompanying consolidated financial statements and notes 
thereto have been restated to reflect the reincorporation and stock split for 
all periods presented. 

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     PRINCIPLES OF CONSOLIDATION--The consolidated financial statements 
include the accounts of Printrak International Inc. and its wholly-owned 
subsidiaries, SunRise Imaging, TFP Inc. and TFP GmbH, Printrak Australia Pty. 
and Printrak Limited.  All significant intercompany balances and transactions 
have been eliminated.

     REVENUE RECOGNITION--Revenue is recognized for system sales with 
insignificant customer obligations when the system is shipped.  The Company 
records an accrual for any remaining obligations which typically consist of 
installation and warranty costs.  The Company's policy is to defer 
recognition of revenue if significant uncertainties exist with regard to 
customer acceptance until such uncertainties become insignificant.  Certain 
of the Company's system sales are considered long-term contracts due to a 
significant amount of custom modification to the basic system or to extended 
delivery terms.  Under these types of contracts, the Company recognizes 
revenue under the percentage of completion method principally based on units 
of delivery.  The Company's Boulder Division recognizes revenue on a 
percentage of completion basis, consistent with the achievement of contractual
milestones.  These contracts dictate percentage of completion accounting due 
to a higher content of customized software services. For all of the Company's 
divisions, if a loss on a contract becomes known, the entire amount of the 
estimated loss on the contract is accrued.  Revenue for file conversions is 
recognized as such services are performed.  Revenue for maintenance service 
contracts is recognized on a monthly basis ratably over the period of the 
contract.  Cash payments for systems sales or maintenance received in advance 
of revenue recognition are accounted for as deferred revenue.  

     The American Institute of Certified Public Accountants recently issued 
Statement of Position No. 97-2, SOFTWARE REVENUE RECOGNITION ("SOP 97-2") 
which supersedes SOP 91-1.  SOP 97-2 is effective for transactions entered 
into in fiscal years beginning after December 15, 1997.  Accordingly, the 
Company will recognize revenue in accordance with SOP 97-2 beginning April 1, 
1998.  The impact of SOP 97-2 will be dependent on the nature and timing of 
specific contracts entered into by the Company, but will likely result in 
delays in the recognition of revenue on some contracts.

     FOREIGN CURRENCY--The financial position and results of operations of the 
Company's foreign subsidiaries are measured using the local currency as the 
functional currency.  Assets and liabilities of these subsidiaries are 
translated at the exchange rate in effect at each year-end.  Income statement 
accounts are translated at the average rate of exchange prevailing during the 
year.  Translation adjustments arising from differences in exchange rates 
from period to 
                                        F-8
<PAGE>

period are included in the cumulative foreign currency translation
adjustments account in stockholders' equity.  Realized gains or losses from
foreign currency transactions are included in operations as incurred. 

     CASH EQUIVALENTS--Cash equivalents are deemed to be highly-liquid 
investments with an original maturity of three months or less. 

     SHORT-TERM INVESTMENTS--The Company accounts for its investments in 
accordance with Statement of Financial Accounting Standards (SFAS) No. 115, 
ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES.  Marketable 
equity and debt securities available for current operations are classified in 
the balance sheet as current assets.  Unrealized holding gains and losses, if 
any, are included as a component of stockholders' equity until realized.  At 
March 31, 1997 and 1998, short-term investments consist of common stock based 
mutual funds which have been categorized as available for sale and, as a 
result, are stated at fair value. 

     INVENTORIES--Inventories are stated at the lower of cost or market, with 
cost being determined on a first-in, first-out (FIFO) basis. 

     PROPERTY AND EQUIPMENT--Property and equipment are recorded at cost. 
Depreciation is computed using the straight-line method over the estimated 
useful lives of the assets, which range from three to five years.  Leasehold 
improvements are amortized over the shorter of the lease term or the useful 
lives of the related assets.  Maintenance, repairs and minor renewals are 
charged to expense, as incurred.  Additions and improvements are capitalized. 
 
     LONG LIVED ASSETS--The Company accounts for the impairment and 
disposition of long-lived assets in accordance with Statement of Financial 
Accounting Standards No. 121 (SFAS 121), ACCOUNTING FOR THE IMPAIRMENT OF 
LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF.  In accordance 
with SFAS 121, long-lived assets to be held are reviewed for events or 
changes in circumstances which indicate that their carrying value may not be 
recoverable.  The Company periodically reviews the carrying value of 
long-lived assets to determine whether or not an impairment to such value has 
occurred and has determined that there was no impairment at March 31, 1998.


     GOODWILL AND OTHER INTANGIBLES-- Goodwill represents the excess purchase 
cost over the net assets acquired and is amortized over 10 years using the 
straight-line method.  Other intangible assets include acquired workforce 
value and acquired technology which are being amortized using the 
straight-line methods over 36 and 42 months, respectively.  Accumulated 
amortization on goodwill and other intangible assets amounted to $542,000 as 
of March 31, 1998.  The Company periodically evaluates the recoverability of 
goodwill based on a profitability analysis related to its product sales and 
evaluates the recoverability of other intangible assets based on the 
requirements of SFAS 121.

     DEFERRED CREDIT--The deferred credit (negative goodwill) relates to the 
excess of the fair market value of current assets acquired and liabilities 
assumed over the purchase price of the Company in 1991 and was amortized on a 
straight-line basis over five years.  This credit was fully amortized in 
March 1996. 

     INCOME TAXES-- The Company accounts for income taxes under SFAS No. 
109, ACCOUNTING FOR INCOME TAXES which provides that deferred income taxes 
are recognized for the tax consequences in future years for differences 
between the tax basis of assets and liabilities (temporary differences) and 
their financial reporting amounts at each year-end based on enacted tax laws 
and statutory rates applicable to the periods in which the temporary 
differences are expected to affect taxable income.  Valuation allowances are 
established when necessary to reduce deferred tax assets to the amount 
expected to be realized. 

     SOFTWARE DEVELOPMENT COSTS--Development costs incurred in the research, 
development and engineering of new software products and enhancements to 
existing software products are expensed as incurred until technological 
feasibility has been established.  For the years ended March 31, 1996, 1997 
and 1998 software development was substantially completed concurrent with the 
establishment of technological feasibility due to the nature of the 


                                        F-9

<PAGE>

development effort and, accordingly, no costs were capitalized.  The Company 
considers technological feasibility to be established when all planning, 
designing, coding and testing has been completed according to design 
specifications.  After technological feasibility is established, any 
additional costs are capitalized in accordance with SFAS No. 86, ACCOUNTING 
FOR COSTS OF COMPUTER SOFTWARE TO BE SOLD, LEASED OR OTHERWISE MARKETED. 

     Prior to fiscal 1996, the Company capitalized software development costs 
related to the development of its AFIS 2000 system.  Such costs were being 
amortized over a three-year period.  In fiscal 1996, the Company changed the 
estimated remaining life of such costs due to the increased exposure to 
continued modifications of the software to meet changing demands of its 
customers as well as more rapid technological changes.  This change resulted 
in the remaining balance being fully amortized as of March 31, 1996 and 
additional costs of $832,000 being expensed during fiscal 1996. 

     RESEARCH, DEVELOPMENT AND ENGINEERING--Research, development and 
engineering costs are expensed as incurred.  Research, development and 
engineering includes costs for the development of new products and prototype 
units.  The Company also incurs engineering costs associated with 
modifications to its system, testing of such systems and the integration of 
equipment to comply with customer requirements.  Management believes that 
system modifications can generally be utilized by other customers and 
accordingly, has combined such costs with research, development and 
engineering.  Any customized modification for a customer contract is charged 
to cost of sales as management believes these costs are specific to a 
customer's workflow requirements.

     ACCOUNTING FOR STOCK-BASED COMPENSATION--The Company accounts for 
stock-based awards to employees using the intrinsic value method in 
accordance with Accounting Principles Board (APB) Opinion No. 25, ACCOUNTING 
FOR STOCK ISSUED TO EMPLOYEES (Note 12). 

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

     NET INCOME (LOSS) PER SHARE--In February 1997, the Financial Accounting 
Standards Board ("FASB") issued SFAS No. 128, EARNINGS PER SHARE ("SFAS No. 
128").  This statement is effective for periods ending after December 15, 
1997 and requires restatement of all prior periods.  The Statement redefines 
earnings per share ("EPS") under generally accepted accounting principles, 
making EPS comparable to international standards.  SFAS No. 128 requires dual 
presentation of "Basic" and "Diluted" EPS, by entities with complex capital 
structures, replacing "Primary" and "Fully diluted" EPS under APB Opinion
No. 15.

     Basic EPS excludes dilution from common stock equivalents and is 
computed by dividing income available to common stockholders by the weighted 
average number of common shares outstanding for the period.  Diluted EPS 
reflects the potential dilution from common stock equivalents, similar to 
fully diluted EPS, but uses only the average stock price during the period as 
part of the computation.  

     The Company has adopted the provisions of SFAS No. 128 in the 
accompanying consolidated financial statements and has restated prior periods 
to reflect the adoption of SFAS No. 128.  Common stock equivalents are 
excluded from the calculation of diluted EPS in loss years, as the impact is 
antidilutive.


                                      F-10

<PAGE>
     The number of shares used in computing EPS is as follows for the year 
ended March 31:

<TABLE>
<CAPTION>
                                                             1996         1997       1998
                                                           ---------   ---------   ----------
   <S>                                                     <C>         <C>         <C>
   Weighted average shares outstanding - basic             8,620,000   10,425,000  11,151,000
   Common stock equivalents                                  465,000      538,000      
                                                           ---------   ---------   ----------
   Weighted average shares outstanding - diluted           9,085,000   10,963,000  11,151,000
                                                           ---------   ---------   ----------
                                                           ---------   ---------   ----------
</TABLE>

     RECENT ACCOUNTING PRONOUNCEMENTS--Additionally, during 1997, the 
Financial Accounting Standards Board issued SFAS No. 130, REPORTING 
COMPREHENSIVE INCOME and SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF AN 
ENTERPRISE AND RELATED INFORMATION.  These pronouncements are effective for 
fiscal years beginning after December 15, 1997.  The Company is reviewing the 
impact of these pronouncements on its financial statements.

     RECLASSIFICATIONS--Certain amounts in the accompanying consolidated 
financial statements have been reclassified to conform with the March 31, 
1998 presentation. 

3.   ACQUISITIONS

     On May 7, 1997, the Company acquired all of the issued and outstanding 
capital stock of TFP, Inc. (TFP), a South Carolina corporation, in accordance 
with the terms and conditions of the Agreement and Plan of Reorganization and 
Merger dated as of April 7, 1997, by and among Printrak, TFP Acquisition 
Corp., a South Carolina corporation and wholly-owned subsidiary of Printrak, 
and TFP.  Pursuant to the Merger Agreement, TFP became a wholly-owned 
subsidiary of Printrak and the outstanding shares and outstanding warrants to 
purchase shares of TFP common stock and Series A preferred stock were 
converted into an aggregate of 1,399,494 shares of Printrak common stock.  
Additionally, all the outstanding options to purchase shares of TFP common 
stock were converted into options to purchase 116,496 shares of Printrak 
common stock.  The terms of the Merger Agreement were the result of arm's 
length negotiations among the parties.  The transaction was accounted for 
under the pooling of interests method of accounting.

     The following table shows the separate historical results of the Company 
and TFP for the years ended March 31, 1996 and 1997.

<TABLE>
<CAPTION>
                                                        YEAR ENDED MARCH 31,
                                                     ------------------------
                                                       1996               1997 
                                                     ----------       ----------
                                                           (in thousands)
               <S>                                    <C>               <C>
               Revenues                                       
                    Printrak . . . . . . . . . . .    $45,717           $58,865
                    TFP. . . . . . . . . . . . . .      6,350             6,718
                                                     ----------       ----------
                         Total                        $52,067           $65,583
                                                     ----------       ----------
                                                     ----------       ----------

               Net income (loss)                              
                    Printrak . . . . . . . . . . .    $ 1,836           $ 4,428
                    TFP. . . . . . . . . . . . . .       (646)              204
                                                     ----------       ----------
                         Total                        $ 1,190           $ 4,632
                                                     ----------       ----------
                                                     ----------       ----------
</TABLE>

     Merger expenses incurred to consummate the TFP transaction totaled 
$874,000, consisting of investment banking fees, accounting fees, legal fees, 
financial printing fees, stock transfer fees and certain other transaction 
costs, all of which are included in the accompanying consolidated statement 
of operations for the year ended March 31, 1998.

                                         F-11
<PAGE>

     On July 21, 1997, the Company acquired a business unit of SCC 
Communications Corp. ("SCC") located in Boulder, Colorado, in a transaction 
accounted for under the purchase method of accounting.  As a result of the 
acquisition, the business unit operates as a division of the Company (the 
Boulder Division) and its operating results have been included in the 
Company's consolidated statement of operations from the date of acquisition.  
The Boulder Division provides computer-aided dispatch systems and records 
management systems for law enforcement, fire and emergency medical services 
agencies.  The total purchase price for the transaction was $697,000, which 
was allocated to $4,253,000 of acquired identified assets, $1,966,000 of 
goodwill, and ($5,522,000) of assumed liabilities.  The pro forma impact of 
the SCC acquisition in fiscal 1997 and 1998 was not significant.

     On September 9, 1997, the Company acquired the outstanding shares of 
SunRise Imaging ("SunRise"), a California corporation, in a transaction 
accounted for under the purchase method of accounting.  As a result of the 
acquisition, SunRise became a wholly owned subsidiary of the Company and its 
operating results have been included in the Company's consolidated statement 
of operations from the date of acquisition.  SunRise develops and 
manufactures automated systems which digitize microfilm and microfiche 
records.  The total purchase price for the transaction was $10,175,000, which 
was allocated to $5,002,000 of acquired identified assets, $5,900,000 of 
acquired in-process research and development, $687,000 of goodwill, and 
($1,414,000) of assumed liabilities.  As of the acquisition date, the 
technological feasibility of the acquired in-process research and development 
had not been established and, accordingly, the allocated value was charged to 
operations during the year ended March 31, 1998.  The consolidated results of 
operations on a pro forma basis as though the SunRise acquisition had been 
consummated on April 1, 1996 and 1997 are as follows:

<TABLE>
<CAPTION>
                                                      YEAR ENDED MARCH 31,
                                              ------------------------------------
                                                    1997               1998
                                              ---------------     ----------------
                                              (IN THOUSANDS, EXCEPT PER SHARE DATA)
    <S>                                            <C>              <C>
    Total revenues ........................        $  63,123        $  77,871
    Net income (loss) .....................        $   5,530        $  (3,755)
    Net income (loss) per common share       
       Basic ..............................        $     .53        $    (.34)
       Diluted ............................        $     .50        $    (.34)
</TABLE>

     The pro forma information is not necessarily indicative of the results 
of operations that would have occurred nor of future results of the combined 
enterprise.

4.   ACCOUNTS RECEIVABLE

     Accounts receivable consist of the following at March 31:

<TABLE>
<CAPTION>
                                                  1997           1998
                                              ------------   ------------
    <S>                                       <C>            <C>
    Billed receivables .....................  $ 15,495,000   $ 18,641,000
    Unbilled receivables ...................     8,337,000     10,840,000
                                              ------------   ------------
                                                23,832,000     29,481,000
    Less allowance for doubtful accounts ...      (293,000)    (1,352,000)
                                              ------------   ------------
                                              $ 23,539,000   $ 28,129,000
                                              ------------   ------------
                                              ------------   ------------
</TABLE>

     Unbilled receivables consist of system and maintenance revenues which 
have been earned but not invoiced because of contractual terms of the 
underlying agreements. 


                                     F-12
<PAGE>
5.   CONCENTRATIONS OF REVENUE AND CREDIT RISK

     MAJOR CUSTOMERS The Company's revenues are generated from credit sales 
to customers primarily in the public safety market.  The Company performs 
ongoing credit evaluations of its customers and maintains reserves for 
potential credit losses and generally does not require collateral.  The 
Company's ten largest customers represented 32% of total revenues in fiscal 
1998.  Because of this, the Company has a large proportion of its receivables 
outstanding with these customers.  Accounts receivable from the Company's ten 
largest customers were $11,504,000 as of March 31, 1998.

     Major customers have varied from year to year but a significant portion 
of the Company's revenue has historically consisted of large orders from a 
limited number of customers.  Sales to individual customers amounting to more 
than 10% of total revenues were $8,300,000 in fiscal 1996, and $9,040,000 and 
$6,863,000 in fiscal 1997.  No customers exceeded more than 10% of total 
revenues in fiscal year 1998.  Given the significant amount of revenues 
derived from such customers in any given year, the uncollectibility of 
related receivables or a decrease in the number of large orders received 
could have a material adverse effect on the Company's financial condition and 
results of operations. 

     INTERNATIONAL SALES--A substantial portion of the Company's total 
revenues are derived from international sales.  International sales as a 
percent of the Company's total revenues are summarized as follows: 

<TABLE>
<CAPTION>
                                         YEAR ENDED MARCH 31,
                                ------------------------------------
   GEOGRAPHIC AREA               1996           1997           1998
-----------------------         ------         ------         ------
<S>                              <C>            <C>            <C>
Europe. . . . . . . . .          24.2%          10.8%          11.9%
Canada. . . . . . . . .           7.6           18.8            1.5
Latin America . . . . .                                         5.2
Other International . .           1.5            1.3            5.8
                                -------        -------        -------
                                 33.3%          30.9%          24.4%
                                -------        -------        -------
                                -------        -------        -------
</TABLE>

     International sales are subject to inherent risks, including unexpected 
changes in regulatory requirements, tariffs and other barriers, fluctuating 
exchange rates, difficulties in staffing and managing foreign sales and 
support operations, greater working capital requirements, political and 
economic instability, and potentially limited intellectual property 
protection. 

6.   INVENTORIES

     Inventories consist of the following at March 31: 

<TABLE>
<CAPTION>
                                                                      1997          1998
                                                                   ----------    -----------
     <S>                                                           <C>           <C>
     Raw materials . . . . . . . . . . . . . . . . . . . . . . .   $3,827,000    $ 4,979,000
     Work in process . . . . . . . . . . . . . . . . . . . . . .    1,758,000      4,657,000
     Finished goods. . . . . . . . . . . . . . . . . . . . . . .       36,000               
                                                                   ----------    -----------
                                                                    5,621,000      9,636,000
     Less allowance for excess and obsolete inventories  . . . .     (447,000)    (1,407,000)
                                                                   ----------    -----------
                                                                   $5,174,000    $ 8,229,000
                                                                   ----------    -----------
                                                                   ----------    -----------
</TABLE>


                                     F-13
<PAGE>

7.   PROPERTY AND EQUIPMENT

     Property and equipment consist of the following at March 31: 

<TABLE>
<CAPTION>
                                                             1997           1998
                                                         -----------    -----------
     <S>                                                 <C>            <C>
     Building and improvements . . . . . . . . . . .     $    97,000    $   365,000
     Computer equipment. . . . . . . . . . . . . . .       7,944,000      8,616,000
     Purchased software. . . . . . . . . . . . . . .         735,000        697,000
     Other equipment and furniture . . . . . . . . .         551,000      1,436,000
                                                         -----------    -----------
                                                           9,327,000     11,114,000
     Less accumulated depreciation and amortization . .   (3,757,000)    (6,028,000)
                                                         -----------    -----------
                                                         $ 5,570,000    $ 5,086,000
                                                         -----------    -----------
                                                         -----------    -----------
</TABLE>

     Assets under capital lease were $1,019,000 and $968,000 as of March 31, 
1997 and 1998, respectively.  Accumulated amortization on such leased 
equipment amounted to $497,000 and $466,000, respectively (Note 11). 

8.   OTHER ACCRUED LIABILITIES

     Other accrued liabilities consist of the following at March 31: 

<TABLE>
<CAPTION>
                                                          1997           1998
                                                       ----------     ----------
     <S>                                               <C>            <C>
     Warranty and estimated costs to complete 
       system installations. . . . . . . . . . . . .   $1,238,000     $4,776,000
     Sales and foreign taxes . . . . . . . . . . . .      532,000        804,000
     Professional fees . . . . . . . . . . . . . . .      208,000        145,000
     Insurance . . . . . . . . . . . . . . . . . . .      266,000         38,000
     Restructuring . . . . . . . . . . . . . . . . .                     618,000
     Other . . . . . . . . . . . . . . . . . . . . .      599,000        813,000
                                                       ----------     ----------
                                                       $2,843,000     $7,194,000
                                                       ----------     ----------
                                                       ----------     ----------
</TABLE>


                                       F-14
<PAGE>

9.   LONG-TERM DEBT

     Long-term debt consists of the following at March 31: 

<TABLE>
<CAPTION>
                                                            1997             1998
                                                        -------------    -------------
     <S>                                               <C>               <C>
     Revolving line of credit with bank, 
     collateralized by substantially all assets 
     of the Company, interest payable monthly 
     at the bank's reference rate or the bank's 
     LIBOR rate, plus 1.75%.  The revolving line 
     has two borrowing lines.
           $15 million Working Capital Line . . . . .   $ 1,000,000     $  7,488,000
           $5 million Acquisition Line  . . . . . . .                      4,000,000

     Obligations under capital leases (Note 11) . . .       771,000          528,000
                                                        -----------     ------------
                                                          1,771,000       12,016,000
     Less current portion of long-term debt . . . . .      (247,000)      (1,056,000)
                                                        -----------     ------------
                                                        $ 1,524,000     $ 10,960,000
                                                        -----------     ------------
                                                        -----------     ------------
</TABLE>

     The bank's reference rate and LIBOR rate at March 31, 1998 were 8.5% and
5.8%, respectively.

     Annual debt principal repayments are as follows:

<TABLE>
<CAPTION>
       Year ending March 31:
          <S>                                         <C>
          1999 . . . . . . . . . . . . . . . . . . .  $ 1,056,000
          2000 . . . . . . . . . . . . . . . . . . .   10,779,000
          2001 . . . . . . . . . . . . . . . . . . .       96,000
          2002 . . . . . . . . . . . . . . . . . . .       80,000
          2003 . . . . . . . . . . . . . . . . . . .        5,000
                                                      -----------
                                                      $12,016,000
                                                      -----------
                                                      -----------
</TABLE>

     The revolving line of credit and term loan agreements with a bank 
contain certain restrictive covenants which restrict the Company's ability to 
pay dividends and require the Company to maintain minimum tangible net worth 
and certain financial ratios such as current ratio, cash flow to debt service 
ratio and total liabilities to tangible net worth ratio.  The Company was in 
compliance with or had subsequently obtained waivers for all covenants as of 
March 31, 1998.  On July 7, 1998, the Company received a written commitment 
letter from its bank to refinance its debt into a $15.0 million revolving 
credit facility, expiring in July 1999 and a $4.0 million term loan payable in
quarterly installments beginning November 1, 1998 and maturing February 1, 
2001.  As a result, the portion of the related debt has been classified as 
long term in the accompanying consolidated balance sheet as of March 31, 
1998, reflecting the terms of commitment.


                                   F-15
<PAGE>

10.  INCOME TAXES

     The Company's provision for income taxes consists of the following for 
the year ended March 31: 

<TABLE>
<CAPTION>
                                                           1996          1997            1998
                                                         --------     ----------      ---------
     <S>                                                 <C>          <C>             <C>
     Current:
          Federal  . . . . . . . . . . . . . . . . .     $ 90,000     $  499,000      $(236,000)
          State  . . . . . . . . . . . . . . . . . .       42,000        551,000         51,000
          Foreign  . . . . . . . . . . . . . . . . .      100,000        280,000        280,000
                                                         --------      ---------       ---------
             Total current . . . . . . . . . . . . .      232,000      1,330,000         95,000
                                                         --------      ---------       ---------

     Deferred:
          Federal  . . . . . . . . . . . . . . . . .      145,000        528,000            -0-
          State  . . . . . . . . . . . . . . . . . .        9,000        283,000            -0-
                                                         --------      ---------       ---------
             Total deferred  . . . . . . . . . . . .      154,000        811,000            -0-
                                                         --------      ---------       ---------
     Total provision . . . . . . . . . . . . . . . .     $386,000     $2,141,000      $  95,000
                                                         --------      ---------       ---------
                                                         --------      ---------       ---------
</TABLE>

     The reconciliation between the Company's effective tax rate and the 
statutory federal income tax rate follows: 

<TABLE>
<CAPTION>
                                                         1996        1997         1998
                                                      ---------   ---------    ---------
     <S>                                                <C>         <C>         <C>
     Statutory federal income tax rate . . . . . . .     35.0%       35.0%      (35.0%)
     State taxes net of federal benefit. . . . . . .      1.3         8.1        (1.7)
     Amortization of deferred credit . . . . . . . .    (26.0)
     Foreign operations. . . . . . . . . . . . . . .      3.1         1.2        (0.1)
     Increase (decrease) in valuation allowance. . .     12.1       (15.8)       22.2
     In-process research and development . . . . . .                             14.3
     Goodwill and other intangibles. . . . . . . . .                              1.3
     Other . . . . . . . . . . . . . . . . . . . . .     (1.0)        3.1        (0.3)
                                                      ---------   ---------    ---------
                                                         24.5%       31.6%        0.7%
                                                      ---------   ---------    ---------
                                                      ---------   ---------    ---------
</TABLE>

     The Company has not provided for U.S. federal income and foreign 
withholding taxes on the earnings of its foreign subsidiary because it is 
currently anticipated that these earnings will be permanently reinvested.  If 
these earnings are distributed, foreign tax credits will become available 
under U.S. law to reduce the effect on the Company's overall tax liability. 

     Income (loss) before provision for income taxes was comprised of the 
following for the year ended March 31:

<TABLE>
<CAPTION>
                                                           1996          1997           1998
                                                        ----------    ----------    ------------
     <S>                                                <C>           <C>           <C>
     Income (loss) before provision for income taxes:
           Domestic . . . . . . . . . . . . . . . . .   $1,279,000    $5,968,000    $(15,041,000)
           Foreign. . . . . . . . . . . . . . . . . .      297,000       805,000         646,000
                                                        ----------    ----------    ------------
                                                        $1,576,000    $6,773,000    $(14,395,000)
                                                        ----------    ----------    ------------
                                                        ----------    ----------    ------------
</TABLE>


                                       F-16
<PAGE>

     Deferred tax assets consist primarily of the following temporary 
differences at March 31: 

<TABLE>
<CAPTION>
                                                          1997           1998
                                                      -----------    -----------
     <S>                                              <C>            <C>
     Net operating loss carryforwards. . . . . . . .  $ 3,169,000    $ 3,901,000
     Intangible asset basis. . . . . . . . . . . . .    1,854,000      1,252,000
     Deferred revenue. . . . . . . . . . . . . . . .      776,000        876,000
     Reserves. . . . . . . . . . . . . . . . . . . .      663,000      3,613,000
     Employee benefits . . . . . . . . . . . . . . .      378,000        245,000
     Depreciation. . . . . . . . . . . . . . . . . .      300,000        537,000
     Other . . . . . . . . . . . . . . . . . . . . .     (252,000)      (263,000)
                                                      -----------    -----------
     Gross deferred assets . . . . . . . . . . . . .    6,888,000     10,161,000
     Valuation allowance . . . . . . . . . . . . . .   (2,963,000)    (6,155,000)
                                                      -----------    -----------
     Net deferred tax assets . . . . . . . . . . . .  $ 3,925,000    $ 4,006,000
                                                      -----------    -----------
                                                      -----------    -----------
</TABLE>

     At March 31, 1998, the Company has net operating loss carryforwards of 
approximately $11,108,000 and $2,076,000, respectively, for federal and 
California income tax purposes, which begin to expire in 2003.  As a result 
of an equity ownership change in a prior year, the use of certain of the 
federal and California net operating loss carryforwards is subject to 
limitations.

11.  COMMITMENTS AND CONTINGENCIES

     COMMITMENTS--The Company is obligated under noncancelable capital and 
operating leases for its principal operating facility and certain furniture 
and office equipment.  The Company incurred $191,000, $849,000 and $958,000 
in rent expense during the years ended March 31, 1996, 1997 and 1998, 
respectively.  During each of the years ended March 31, 1997 and 1998, 
$773,000 of rent expense was to a related party (Note 14). 

     Future minimum lease commitments at March 31, 1998 under noncancelable 
leases that have initial or remaining terms in excess of one year are as 
follows: 

<TABLE>
<CAPTION>

                                                                  CAPITAL        OPERATING
                                                                  LEASES          LEASES
                                                                -----------     -----------
<S>                                                             <C>            <C>
     Year ending March 31:
          1999 . . . . . . . . . . . . . . . . . . . . . . .    $  270,000     $ 1,220,000
          2000 . . . . . . . . . . . . . . . . . . . . . . .       147,000       1,216,000
          2001 . . . . . . . . . . . . . . . . . . . . . . .       110,000         509,000
          2002 . . . . . . . . . . . . . . . . . . . . . . .        86,000         393,000
          2003 . . . . . . . . . . . . . . . . . . . . . . .         5,000         204,000
                                                                ----------     -----------
     Total minimum payments required . . . . . . . . . . . .       618,000     $ 3,542,000
     Less amount representing interest . . . . . . . . . . .       (90,000)    -----------
                                                                ----------     -----------
     Capital lease obligations . . . . . . . . . . . . . . .       528,000 
     Less current portion of capital lease obligations . . .      (223,000)
                                                                ----------
                                                                $  305,000
                                                                ----------
                                                                ----------
</TABLE>

     Certain of the Company's customers require the Company to be bonded to 
ensure performance under certain contracts or to guarantee outstanding bids.  
At March 31, 1998, the Company had outstanding performance bonds ensuring 
performance under various contracts which totaled $12,748,000. 


                                    F-17
<PAGE>

     LITIGATION--From time to time, the Company may be involved in litigation 
relating to claims arising out of its operations in the normal course of 
business.  As of March 31, 1998, the Company is not a party to any legal 
proceedings, the adverse outcome of which, in management's opinion, 
individually or in aggregate, would have a material adverse effect on the 
Company's results of operations or financial position. 

12.  STOCK BENEFIT PLANS

     EXECUTIVE STOCK OPTION PLAN--The Company adopted the Executive Stock 
Option Plan (the Executive Plan) in May 1992 which provides for the granting 
of incentive stock options and nonstatutory options to purchase shares of the 
Company's common stock and restricted stock grants covering an aggregate of 
800,000 shares of the Company's common stock.  As of March 31, 1998, there 
were options outstanding to purchase 648,600 shares under the Executive Plan 
at a weighted average exercise price of $6.93 per share. 

     1994 STOCK OPTION PLAN--The Company adopted the 1994 Stock Option Plan 
(the 1994 Plan) in December 1993.  The 1994 Plan provides for the granting of 
incentive stock options and nonstatutory options to purchase shares of the 
Company's common stock and restricted stock grants covering an aggregate of 
744,000 shares of the Company's common stock.  As of March 31, 1998, there 
were options outstanding to purchase 552,506 shares under the 1994 Plan at a 
weighted average exercise price of $6.27 per share. 

     1996 STOCK INCENTIVE PLAN--The Company adopted the 1996 Stock Incentive 
Plan (the 1996 Plan) in April 1996.  The 1996 Plan provides for the granting 
of incentive stock options and nonstatutory options.  The 1996 Plan provides 
for options to purchase shares of the Company's common stock and restricted 
stock grants covering an aggregate of 1,500,000 shares of the Company's common
stock. As of March 31, 1998, there were options outstanding to purchase 
589,840 shares under the 1996 Plan at a weighted average exercise price of 
$10.47 per share. 

     TFP STOCK INCENTIVE PLAN TFP--adopted a stock option plan in August 
1994. In conjunction with the acquisition of TFP, the outstanding options 
were converted into the right to acquire 116,496 shares of common stock of 
Printrak. As of March 31, 1998, there were options outstanding to purchase 
74,826 shares under the Plan at a weighted average exercise price of $2.66 
per share.

     The exercise price of incentive stock options under the above Plans must 
at least be equal to the fair market value of a share of common stock on the 
date the option is granted (110% with respect to optionees who own at least 
10% of the outstanding common stock).  Nonstatutory options shall have an 
exercise price of not less than 85% of the fair market value of a share of 
common stock on the date such option is granted (110% with respect to 
optionees who own at least 10% of the outstanding common stock).  The options 
must expire no later than ten years from the date of grant (five years with 
respect to optionees who own at least 10% of the outstanding common stock).  
Vesting is generally 20% at the end of the first year with the remaining 
vesting over four years on a pro rata basis.  As of March 31, 1998, options 
to purchase 1,011,000 shares were available for future grant under these 
Plans.


                                   F-18
<PAGE>

     The following is a summary of stock option activity:

<TABLE>
<CAPTION>
                                                                                 WEIGHTED
                                                                  NUMBER OF       AVERAGE 
                                                                   SHARES      EXERCISE PRICE
                                                                 -----------   --------------
     <S>                                                         <C>               <C>
     BALANCE, April 1, 1995. . . . . . . . . . . . .               806,200         $2.50
       Granted (weighted average fair value of $3.16) . . . .      689,500          8.94
       Exercised. . . . . . . . . . . . . . . . . . . . . . .     (123,200)         2.50
       Canceled . . . . . . . . . . . . . . . . . . . . . . .      (23,200)         5.12
                                                                ----------
     BALANCE, March 31, 1996  . . . . . . . . . . . . . . . .    1,349,300          5.74
       Granted (weighted average fair value of $5.62) . . . .      260,600          8.45
       Exercised. . . . . . . . . . . . . . . . . . . . . . .     (151,944)         2.84
       Canceled . . . . . . . . . . . . . . . . . . . . . . .     (166,456)        10.21
                                                                ----------
     BALANCE, March 31, 1997  . . . . . . . . . . . . . . . .    1,291,500          6.06
       Granted (weighted average fair value of $9.57) . . . .      874,800         10.52
       Exercised. . . . . . . . . . . . . . . . . . . . . . .     (110,704)         3.47
       Canceled . . . . . . . . . . . . . . . . . . . . . . .     (189,824)        11.35
                                                                ----------
     BALANCE, March 31, 1998  . . . . . . . . . . . . . . . .    1,865,772          7.72
                                                                ----------
                                                                ----------
</TABLE>

     Stock options outstanding at March 31, 1998 are summarized as follows: 

<TABLE>
<CAPTION>
                                     OPTIONS OUTSTANDING                     OPTIONS EXERCISABLE
                      ---------------------------------------------    ---------------------------------
                          NUMBER          WEIGHTED         WEIGHTED 
                      OUTSTANDING AT      AVERAGE          AVERAGE        NUMBER           WEIGHTED 
RANGE OF EXERCISE        MARCH 31,       REMAINING         EXERCISE    EXERCISABLE AT       AVERAGE 
     PRICES                1998       CONTRACTUAL LIFE      PRICE      MARCH 31, 1998    EXERCISE PRICE
------------------    --------------  ----------------     --------    --------------    --------------
<S>                    <C>                  <C>             <C>           <C>                <C>
 $2.46-$2.46              44,436            9.10            $ 2.46         44,436            $ 2.46
 $2.50-$2.50             467,268            5.04              2.50        423,708              2.50
 $2.96-$9.00             390,415            7.73              8.68        190,160              6.09
 $9.31-$9.88             406,540            9.39              9.85         43,450              9.85
$10.00-$18.75            557,113            8.90             11.86        126,496             12.49
                       ---------                                          -------
 $2.46-$18.75          1,865,772            7.78            $ 7.72        828,250            $ 5.23
                       ---------                                          -------
                       ---------                                          -------
</TABLE>

     EMPLOYEE STOCK PURCHASE PLAN--The Company adopted the Employee Stock 
Purchase Plan (the Purchase Plan) in April 1996, covering an aggregate of 
100,000 shares of common stock.  The number of shares available for purchase 
was increased to 350,000 during the current year.  Employees are eligible to 
participate if they are employed by the Company for at least 30 hours per 
week and if they have been employed by the Company for at least one year.  
The Purchase Plan permits eligible employees to purchase common stock through 
payroll deductions, which may not exceed 15% of an employee's compensation or 
a specified number of shares.  The price of stock purchased under the 
Purchase Plan is equal to 85% of the lower of the fair market value of the 
common stock at the beginning or end of each six month offer period.  The 
Purchase Plan will terminate on December 31, 2006. 


                                     F-19
<PAGE>

     Activity under the Purchase Plan is summarized as follows:

<TABLE>
<CAPTION>
                 FISCAL     SHARES     WEIGHTED AVERAGE     WEIGHTED AVERAGE
                  YEAR      ISSUED     PRICE PER SHARE    FAIR VALUE PER SHARE
                 ------     ------     ----------------   --------------------
                  <S>       <C>            <C>                  <C>
                  1997      79,564         $  6.80              $   8.50
                  1998      83,297         $  7.21              $  11.62
</TABLE>

     At March 31, 1998, 187,139 shares were reserved for future issuances 
under the Purchase Plan.

     ADDITIONAL STOCK PLAN INFORMATION (SFAS NO. 123)

     As discussed in Note 1, the Company continues to account for its 
stock-based awards using the intrinsic value method in accordance with APB 
Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and its related 
interpretations. No compensation expense has been recognized in the financial 
statements for employee stock arrangements, as all grants have been at 
exercise prices equal to or greater than the market value of the underlying 
shares at the date of grant. 

     SFAS No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, requires the 
disclosure of pro forma net income and earnings per share had the Company 
adopted the fair value method as of the beginning of fiscal 1996.  Under SFAS 
No. 123, the fair value of stock-based awards to employees is calculated 
through the use of option pricing models, even though such models were 
developed to estimate the fair value of freely tradable, fully transferable 
options without vesting restrictions, which significantly differ from the 
Company's stock option awards.  These models also require subjective 
assumptions, including future stock price volatility and expected time to 
exercise, which greatly affect the calculated values. 

     The Company's calculations were made using the Black-Scholes option 
pricing model with the following weighted average assumptions: expected life, 
approximately two years following vesting; stock volatility, 55% in 1996, 78% 
in 1997 and 63% in 1998; risk free interest rates, 5.80% in 1996, 6.00% in 
1997 and 6.00% in 1998 and no dividends during the expected term.  The 
Company's calculations are based on a single option approach and forfeitures 
are recognized as they occur.  

     Had compensation cost been determined under all of the Company's plans 
using the provisions of SFAS No. 123, the Company's net income (loss) and 
income (loss) per share would have been reduced to the pro forma amounts 
indicated below:

<TABLE>
<CAPTION>
                                                      1996              1997           1998
                                                  -----------       -----------    -----------
                                                     (IN THOUSANDS, EXCEPT PER SHARE DATA) 
<S>                                <C>              <C>              <C>           <C>
Net income (loss):                 As reported      $  1,190         $  4,632      $  (14,490)
                                   Pro forma        $    770         $  3,922      $  (16,541)
                                                                                      
Income (loss) per share:                                                              
     Basic:                        As reported      $   0.14         $   0.44      $    (1.30)
                                   Pro forma        $   0.09         $   0.38      $    (1.48)

     Diluted:                      As reported      $   0.13         $   0.42      $    (1.30)
                                   Pro forma        $   0.08         $   0.36      $    (1.48)
                                                                                        
</TABLE>

                                              F-20

<PAGE>


     The impact of stock options granted prior to 1996 has been excluded from 
the pro forma calculation; accordingly, the 1997 and 1998 pro forma 
adjustments are not indicative of future period pro forma adjustments, when 
the calculation may apply to all applicable stock options. 

13.  EMPLOYEE BENEFIT PLANS

     The Company's 401(k) Savings Plan (the Savings Plan) covers domestic 
full-time employees with 90 days of consecutive service.  In May 1997, the 
Board approved a resolution to match employee contributions.  Employee 
deferrals during fiscal year 1998 were eligible for a matching contribution 
equal to fifty percent (50%) of the employee's salary deferral, not to exceed 
4% of the employee's annual salary.  Matching contributions vest over a 
period of four years of service. The aggregate expense related to the 
contributions was $270,000 in 1998.  

     Effective April 1, 1993, the Company adopted a Profit Sharing Plan (the 
Plan) that covers all domestic full-time employees with 90 days of 
consecutive service.  Under the Plan, each eligible employee received a 
bonus, determined under a formula set forth in the Plan, based on the 
Company's earnings.  Bonuses incurred under the Plan totaled approximately 
$408,000 and $747,000 for the years ended March 31, 1996 and 1997, 
respectively.  The Plan was terminated as of December 31, 1996. 

14.  RELATED-PARTY TRANSACTIONS

     On May 14, 1998, RICOL, LLC, a California limited liability company 
(RICOL), which is controlled by Richard M. Giles, the Company's Chairman, 
President, Chief Executive Officer and Acting Chief Financial Officer, sold 
the principal operating facility (the Property) utilized by the Company.  
Upon the sale of the building, RICOL repaid a note of $500,000 to the Company 
associated with the original sale of the building from the Company to RICOL 
on May 13, 1995.  During fiscal year 1997, the Company received $730,000 of 
principal payments on the note receivable from RICOL.  In connection with the 
sale of the property, the Company entered into a lease for the Property with 
the unrelated third party for a term of six years, expiring April 30, 2004 
with rent of $58,087 per month, subject to increases, not to exceed six 
percent, but not less than three percent for any single year during the lease 
term.

     From time to time, the Company has made loans to Mr. Giles, which have 
been evidenced by promissory notes.  During fiscal 1997, the principal amount 
outstanding equaled $50,000.  During fiscal 1996, the principal amount 
outstanding under such loans ranged from $23,000 to $147,000, and all of such 
loans had been repaid as of March 31, 1996.  In February 1996, the Company 
loaned $150,000 to Mr. Giles.  Such loan is collateralized by a pledge of 
150,000 of the shares of the Company's common stock owned by Mr. Giles, bears 
interest at 5.5%, and principal and interest were due as of March 1, 1998.  
The principal amount along with accrued interest was repaid during fiscal 
year 1997. No loans were outstanding during fiscal year 1998.

     In February 1996, the Company loaned an executive of the Company the sum of
$300,000 to enable him to exercise 120,000 vested options to purchase shares of
the Company's common stock and $10,000 to pay certain tax obligations.  The loan
was collateralized by the related shares, bears interest at 5.5%, and principal
and interest was due as of March 1, 1998.  The loan was extended during the
current year and is now due on March 1, 2000.  Due to its nature, the loan has
been classified as a reduction of stockholders' equity in the accompanying
consolidated financial statements. 

15.  FAIR VALUE OF FINANCIAL INSTRUMENTS

     
The Company's balance sheets include the following financial instruments: 
cash and cash equivalents, trade accounts receivable, notes receivable from 
related parties, accounts payable, accrued liabilities and debt.  The Company 
considers the carrying amounts in the financial statements of all financial 
instruments to approximate their fair value 


                                    F-21
<PAGE>

because of the relatively short period of time between origination of the 
instruments and their expected realization or the fact that such instruments 
have interest rates which approximate current market rates.

16.  RESTRUCTURING CHARGES

     In fiscal 1998, the Company announced a formal plan for restructuring 
both its Sunrise and TFP subsidiaries to realize cost savings and capitalize 
on synergies by consolidating the subsidiaries into the Company's Anaheim 
operations.  The restructuring charges of $987,000 include lease termination 
and facility closure costs, losses on the disposition of fixed assets and 
severance costs for terminated employees.  As a result of the restructuring, 
the Company also incurred inventory write-offs, the value of which was 
impacted by the Company's decision to relocate and outsource manufacturing 
operations, personnel relocation costs, and other integration costs.  These 
additional costs amounted to approximately $2,191,000 and are included in 
cost of sales ($882,000), research, development and engineering ($249,000), 
and selling general and administrative expenses ($1,060,000) in the 
accompanying consolidated statements of operations.   The Company anticipates 
that the restructuring will be completed by September 30, 1998. 


                                     F-22
<PAGE>

                           PRINTRAK INTERNATIONAL INC.
                  SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                                                                  ADDITIONS
                                                                           -------------------------
                                                              BALANCE AT                                             BALANCE AT
                                                              BEGINNING    CHARGED TO       FROM                       END OF
                    DESCRIPTION                               OF PERIOD     EXPENSES    ACQUISITIONS    DEDUCTIONS     PERIOD
--------------------------------------------------------      ----------   ----------   ------------    ----------   ----------
                                                                                   (DOLLARS IN THOUSANDS)
<S>                                                             <C>          <C>          <C>            <C>           <C>
Year ended March 31, 1996:
Allowance for doubtful accounts receivable . . . . . . .        $            $   402                     $    (75)     $   327
Allowance for excess and obsolete inventories  . . . . .          392            652                         (460)         584
                                                               -------       -------     ---------       ---------    ---------
Total  . . . . . . . . . . . . . . . . . . . . . . . . .        $ 392        $ 1,054                     $   (535)     $   911
                                                               -------       -------     ---------       ---------    ---------
                                                               -------       -------     ---------       ---------    ---------
Year ended March 31, 1997:
Allowance for doubtful accounts receivable . . . . . . .        $ 327        $    47                     $    (81)     $   293
Allowance for excess and obsolete inventories  . . . . .          584            603                         (740)         447
                                                               -------       -------     ---------       ---------    ---------
Total  . . . . . . . . . . . . . . . . . . . . . . . . .        $ 911        $   650                     $   (821)     $   740
                                                               -------       -------     ---------       ---------    ---------
                                                               -------       -------     ---------       ---------    ---------
Year ended March 31, 1998:
Allowance for doubtful accounts receivable . . . . . . .        $ 293        $ 1,051      $   420        $   (412)     $ 1,352
Allowance for excess and obsolete inventories  . . . . .          447            995          743            (778)       1,407
                                                               -------       -------     ---------       ---------    ---------
Total  . . . . . . . . . . . . . . . . . . . . . . . . .        $ 740        $ 2,046      $ 1,163        $ (1,190)     $ 2,759
                                                               -------       -------     ---------       ---------    ---------
                                                               -------       -------     ---------       ---------    ---------
</TABLE>

                                    F-23