To Our Shareholders:

Fiscal Year 1997 was a year of dramatic change and mixed financial 
results, ending with a solid fourth quarter including our second 
acquisition in as many years, which bodes well for FY 1998.  Our 
continued focus on increasing the quality and quantity of our 
services paid off with growth in the strategically important 
hardware service sector of our business.  As I promised last year, 
we combined internal growth with a strategy for obtaining 
additional service revenue through acquisition.  This culminated 
in the April, 1997 acquisition of the assets of Graphic Systems 
Technology, Inc., an independent provider of services for the 
electronic pre-press industry. 

Revenue increases in third party hardware maintenance and software 
maintenance were offset by larger than expected revenue decreases 
in Access proprietary hardware maintenance and Cimage software. 
When excluding amortization for capitalized software, a non cash 
charge in fiscal 1997, the Company generated $18,000 Net Profit 
Before Income Taxes.  This was the result of careful cost control 
throughout the year.  A $1,069,000 write-off of capitalized 
software during this year caused a net loss after taxes of 
$1,051,000.  Our cash position is healthy, even after the 
acquisition late in the year.

Access' business continues to change at a dramatic pace.  Rapid 
technological change coupled with our focus on new growth oriented 
business opportunities has dramatically changed ACCESS Corporation 
s' revenue mix.   In FY 1997, 64% of our revenue came from 
products or services that were not offered as recently as FY 1994.

Financial Results:

Although portions of our company did well in FY 1997, overall, 
total company revenue for FY 1997 decreased by 20% to $6,929,000.   
This was largely due to revenue reductions in two key areas: 
Cimage EDMS software sales (down 30%) and Access System M, the 
Company's proprietary storage and retrieval equipment which is no 
longer being manufactured, hardware maintenance revenue (down 
41%).   However, after strong performances in FY 1996, 
professional services and software maintenance continued to turn 
in solid revenue results for FY 1997 with modest revenue changes 
of +1.8% and +3.9%, respectively.  Our third party hardware 
maintenance business clearly stole the show with a 98% revenue 
increase over FY 1996.

Despite the revenue decrease from FY 1996, we were able to end FY 
1997 with a very modest operating profit of $18,000 excluding the 
amortization of capitalized software.  As the year began to 
unfold, we managed our cost structure carefully, including a 13% 
decrease in operating expense for the year.   We showed a large 
net loss after taxes of $1,051,000 for the year due to the 
accelerated write-off of $1,069,000 of capitalized software 
development costs for the year.   This write-off represents the 
remaining balance of the EDICS/400 software development costs 
capitalized in FY 1993.  We are committed to continued support for 
our existing EDICS/400 customers and we are actively offering this 
product for sale to new and existing customers. However, after 
reviewing the sales prospects for this software product line, we 
concluded that continuing this capitalization was inconsistent 
with our future potential revenue. 

Access finished the year with a very strong fourth quarter.  At 
$2,377,000 in revenue, and $207,000 in net income after tax, the 
fourth quarter represented an upturn in every area of our 
business.  

Our cash position continues to remain strong.  After investing 
approximately $324,000 in net cash in the fourth quarter for the 
acquisition of the assets of Graphic Systems Technology, Inc., a 
provider of Pre-press field maintenance and related services, we 
ended the year with over $1.4 million in cash, and (still) no bank 
debt.

Hardware and Software Maintenance:

At $4,040,000, hardware and software maintenance revenue accounted 
for 58% of total company revenue in FY 1997.   

Since 1992 Access has been aggressively developing a very high 
quality, flexible, quick response third party maintenance 
operation.  Our growth strategy for Third Party Maintenance (TPM) 
has been and continues to be one of focusing on delivering 
exceptionally high levels of customer satisfaction, servicing 
mission critical hardware and software, and providing nationwide 
service coverage for our Support Partners.  This has delivered 
five straight years of high double-digit revenue growth rates, for 
an average annual growth rate for the last five years of 86% per 
year.  At $1,872,000, total hardware and software TPM revenue for 
FY 1997 increased by 63% over the previous year, comprising 27% of 
total company revenue. At $1,097,000 for FY 1997, Hardware TPM 
increased by 98% over FY 1996, while software TPM increased by 31% 
to $775,000.











Access Corporation
Third Party Maintenance Revenue
Hardware & Software

 



                                                                                
Last year I reported that we were supporting 600 customers 
worldwide.  At this time we are now providing maintenance support 
to over 4,000 customers worldwide - more than a 600% increase- and 
that number is growing daily.  Our Support Partner Program offers 
flexible, high quality maintenance services for vendors of 
technical hardware and software.  As of this writing, 14 companies 
have become Access Support Partners, choosing Access to take care 
of their customers.

Access Corporation
National Field Service Coverage





Our nationwide service coverage is delivered by over 80 well-
trained, highly qualified technicians.  We currently are 
supporting customers in 48 states, including Alaska and Hawaii, 
and we can add any city in North America to our coverage within 
five business days.  Our support repertoire includes over 50 
different software and 90 different hardware products.   
Individually tailored support programs combined with available 24 
hour, 7 day per week coverage gives our customers the flexibility 
to tailor their support to their unique business needs.

Increasing by 3.8% over last fiscal year, software maintenance 
continued its 4th year in a row of revenue growth.  Buoyed by a 
31% increase in Cimage related software maintenance, software 
maintenance was 19% of total company revenue in FY 1997.  
Consistent with our overall services strategy, we invested in 
technical cross-training of our technical services personnel to 
increase our productivity and our ability to provide customer 
satisfaction.

Pre-Press Acquisition:

As I discussed last year, we began FY 1997 with a plan to look for 
growth opportunities through acquisition.  I outlined an 
acquisition program designed to bring in additional on-going 
service revenue, additional customers, and additional products or 
services.  

As a result of that program, on Friday April 11, 1996 we purchased 
the assets of Graphic Systems Technology, Inc. (GST).   GST was a 
recognized independent service company for the electronic pre-
press industry.  By the following Monday, we were supporting GST's 
former customers.  Within days, we had hired approximately 20 of 
GST's former employees, effectively doubling the number of Access' 
field hardware maintenance employees.  GST's former Field Service 
Representatives (FSR's) have proven to be highly qualified field 
engineers with a customer-first culture similar to Access'.  This 
increased geographical coverage and growth of our field personnel 
significantly increases Access' capacity to service additional 
Service Partners.

EDMS Business Unit:

Focused EDMS marketing during FY 1997 resulted in a 112% increase 
in the number of orders received over FY 1996, evidence of the 
underlying strength of the EDMS business.  As we began the year, 
our primary objective for our EDMS Business unit was to replace in 
FY 1997 the $2,148,000 in software revenue contributed by a single 
customer in FY 1996.  Although our efforts were successful in 
producing a dramatic increase in the number of orders received, 
total EDMS software revenue decreased from $2,850,000 to 
$2,006,000.

Cimage Enterprise Systems (CES), our UK-based provider of the 
Cimage software product, continues to invest in product quality 
and is a market leader in EDMS functionality.   CES also 
demonstrated their commitment to the US market place by increasing 
their US marketing investment during the year.   Cimage related 
Professional Services revenue also produced a very strong showing, 
increasing by 100% to $574,000

Business Strategy for the Future:

FY 1998 will begin with solid increases in Third Party Maintenance 
(TPM) revenue resulting from the aggressive marketing of our 
unique capabilities this past year combined with the new Pre-Press 
business.  We will continue our strategy of delivering exceptional 
levels of customer satisfaction to attract quality oriented 
Service Partners.  Strategic investments in technology to automate 
and continuously improve our systems and processes will further 
our ability to deliver a very high quality, flexible, quick 
response third party maintenance with nationwide coverage.  We 
expect steady revenue growth from this business unit throughout 
the year.
 
Growth through acquisition has been successful in each of the past 
two years.  This strategy will continue in FY 1998.   The 
investments in this area in FY 1997 not only resulted in the April 
11 asset acquisition of GST's assets, but also identified a number 
of possible acquisition targets which we will pursue in FY 1998.

Our EDMS business unit will continue to focus on the 
manufacturing, petrochemical, and utilities market segments where 
the Cimage product has proven to meet customer requirements 
extremely well.  Cimage has scheduled new software releases in the 
coming year that promise to further enhance their leading role in 
the EDMS market place.   Our strategy for EDMS growth includes 
combined Cimage and Access marketing directed at these segments 
coupled with expanded distribution through reseller partners.

Fiscal Year 1997 saw the continued transformation of your company 
to a nationwide service provider and software reseller.   We 
expect these strategies will continue to expand our coverage and 
revenue growth in FY 1998.

Sincerely,




Scott D. Watkins
President & Chief Executive Officer



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