Contents
Letter to Shareholders 2
Selected Financial Data 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Independent Auditors' Report 10
Statements of Operations 11
Statements of Capital Stock and Other
Stockholder's Equity 12
Balance Sheets 13
Statements of Cash Flows 14
Notes to Financial Statements 15
About the Company 19
ACCESS Directors, Officers and Shareholder
Information 21
To Our Shareholders:
ACCESS' fiscal 1995 produced significant improvements
in our financial health as well as the quality of our
products and services. Net profits, operating profits,
gross margins, and cash balances all showed dramatic
increases over fiscal year 1994. At the same time, we
eliminated our bank debt entirely and continued our
commitment to raising the quality of our products and
services. This all occurred during a year of very difficult
market conditions that saw a major competitor, with revenues
three times that of ACCESS, close its doors.
Financially, your company ended the year in better
health than it has in many years. Net income after tax for
fiscal 1995 was $129,000, a significant improvement over our
net after tax loss of $615,239 for the prior year.
Similarly, fiscal 1995 produced an operating income of
$231,785 versus an operating loss in fiscal 1994, for a
$791,000 improvement in the Company's operating income
between fiscal 1994 and 1995.
The Company's gross margins, calculated before the
amortization of the IBM AS/400 software development,
continue their upward trend. Gross margins before
amortization reached 50% in fiscal 1995, versus 49% in
fiscal 1994, and 42% in fiscal 1993.
For the second year in a row ACCESS' cash position
showed dramatic improvement. I reported to you last year
that the Company had reduced its bank borrowing from
approximately $960,000 at the beginning of fiscal 1994 to
under $100,000 at the end of the year. In this past year,
the Company generated another $884,000 cash from operations,
completely repaid our bank debt in July, and ended the year
with a cash balance in excess of $880,000. That's more than
a $1.8 million improvement in the Company's cash position
within two years.
In response to an overall software market characterized
by dropping prices and increased competition, we continue to
reduce our fixed costs of operation. As a result, ACCESS'
break-even volume, the minimum amount of revenue that the
Company needs to cover its operating costs, was 45% lower in
fiscal 1995 than it was in fiscal 1994.
These reductions in operating costs also reflect a
continued improvement in the Company's productivity as
measured by revenue per employee. Productivity increased by
5% to $118,000 revenue per employee in fiscal year 1995, up
from $112,000 per employee in fiscal 1994, and $100,000 per
employee in fiscal 1993.
Not everything proceeded as planned for fiscal 1995.
Total revenue for the Company dropped by 12% versus a year
ago, which was attributable to a reduction in revenue from
our TDMS software business and our discontinued
manufacturing operation. This drop in TDMS revenue was
almost entirely due to deliveries to a large TDMS customer
in fiscal year 1994, which did not recur in fiscal year
1995. However, TDMS bookings for fiscal year 1995 increased
by 4% over fiscal year 1994. Service revenue continues to
show healthy increases in revenue (+5%) and bookings (+6%)
versus last year. Fiscal 1995 also saw the elimination of
bookings and revenue from the Company's unprofitable
contract engineering and manufacturing business that we
discontinued during fiscal 1994.
Growth in Service Business:
ACCESS' service business, exclusive of manufacturing,
continues to be a strong and consistently growing part of
our company. Revenue, bookings, gross profit and
contribution income all improved over fiscal 1994. As noted
above, total service revenue increased by 5%, bookings
increased by 6%, and service gross profit increased by 8%
versus last year. Our focus on Third Party Maintenance over
the past several years has resulted in even more dramatic
improvements for fiscal 1995, with a revenue increase of 53%
over fiscal 1994. Our customer base in Third Party
Maintenance increased by over 150%. Both software and
hardware maintenance revenue increased from fiscal 1994.
We are aggressively pursuing new Third Party
Maintenance opportunities, including potential acquisitions.
Our service offering is extremely flexible and of very high
quality, accommodating the needs of each customer according
to its unique situation. This flexibility and quality
combined with our nationwide service coverage means we can
focus on special-needs customers, and vendors of moderate
size, competing effectively with much larger Third Party
Maintenance providers.
Although we are constantly watching the bottom line, we
believe that our success in the service business has come
from our constant and relentless focus on total customer
satisfaction.
TDMS Software Business:
As I discussed in last year's report, the market for
Technical Document Management Systems continues to evolve at
a rapid pace. Competitors continue to enter the TDMS market
place with new products as well as with enhanced products
from related product categories. This constant competitive
pressure, combined with the ever improving price performance
of computer hardware, exerts a tremendous downward force on
industry pricing. This trend has been clear to us for
several years, and we have responded by focusing on reducing
the fixed costs associated with delivery of our products.
Consistent, year-to-year decreases in pricing can have
detrimental impacts on any organization. In fact, we
believe prices will continue to fall over the coming year.
However, our market research tells us that at a certain, yet
to be attained, price level the market for our TDMS products
could increase significantly.
Many companies in our target industries are starting
with simpler systems than in the past, at a substantially
lower initial investment. As these first systems prove
themselves, our customers are purchasing additional software
licenses and functionality as they expand the systems to
other parts of the company. We feel this trend bodes well
for the future. The lower cost of the initial systems will
broaden the number of companies that will find it
economically attractive to buy TDMS software. The expansion
of installed systems provides a continual source of revenue
for ACCESS. This "add-on" revenue has become such a
substantial portion of our TDMS revenue, that we recently
added sales staff dedicated to handling the needs of our
existing customers.
During fiscal 1995, ACCESS focused much of our
development investment on improving the quality, reliability
and performance of our UNIX and AS/400 products. Throughout
the year this has continuously increased customer
satisfaction with these products. Although work in this
area is never done, we believe our software products to be
of exceptionally high quality. This will provide a solid
foundation on which to build additional functionality, and
to continue to pursue that price level at which we can sell
our software in high volume, while still maintaining
profitability.
Fiscal Year 1996:
Over the last two fiscal years, the Company has
dramatically strengthened its financial position. Our
challenge for fiscal 1996 will be to increase our investment
in marketing our high quality products and services, while
at the same time maintaining our strong financial
performance. The long lead time from investment to
realization of return makes this doubly difficult. Our
strategy is to expand our sales and marketing operation as
quickly as our resources will prudently allow. We will
continue our focus on building profitable Third Party
Maintenance business through sales as well as acquisition.
The mission for our TDMS software operation is to take
advantage of the high-quality products that we have
developed and to identify specific market segments where the
Company's product functionality has the optimal fit to the
customer's needs. We expect fiscal 1996 to be a year in
which the Company establishes a strong basis for growth in
our Third Party Maintenance and TDMS software business for
the coming years.
We will continue to pursue a management philosophy that
emphasizes quality over expedience, customer service and
value over the quick fix, and profitable revenue over rapid
revenue growth. We believe that this approach will allow us
to prosper over the long run by building solid, long term,
and profitable relationships with our customers.
Sincerely,
SCOTT D. WATKINS
- ----------------
Scott D. Watkins
President and Chief Executive Officer
ACCESS CORPORATION
SELECTED FINANCIAL DATA
FOR THE YEARS ENDED April 30 April 30 April 30 April 30 April 30
1995 1994 1993 1992 1991
Summary of Earnings (Loss) from Operations
Net Sales $6,041,782 $6,896,352 $7,020,074 $8,744,752 $8,562,117
Gross Profit 2,352,750 2,573,260 2,871,200 3,836,484 3,577,312
Gross Profit as percentage
of net sales 39% 37% 41% 44% 42%
Interest Expense 31,911 26,450 53,246 7,543 83,735
Net Earnings (Loss)from
Continuing Operations 129,370 (551,376) (23,947) 889,808 156,322
Net Earnings (Loss)before
cumulative effect of
accounting change 129,370 (615,239) (182,731) 614,008 153,524
Cumulative effect of
accounting change 730,000
Net Earnings (Loss) 129,370 (615,239) 547,269 614,008 153,524
Preferred Dividend 64,685 - - - -
Income(loss)applicable to
common shares $ 64,685 $ (615,239) $ 547,269 $ 614,008 $ 153,524
---------- ----------- ---------- ---------- ----------
Average common and common
share equivalents
outstanding 4,865,559 4,865,559 4,865,559 4,865,559 4,809,236
Per Common Share Statistics
Net Earnings (Loss) from
Continuing Operations $ 0.01 $ (0.11) $ (0.00) $ 0.18 $ 0.03
Net Earnings (Loss)before
cumulative effect of
accounting change 0.01 (0.13) (0.04) 0.13 0.03
Cumulative effect of
accounting change 0.15
---------- ----------- ----------- ---------- ----------
Net Earnings (Loss) $ 0.01 $ (0.13) $ 0.11 $ 0.13 $ 0.03
---------- ----------- ----------- ---------- ----------
Balance Sheet Data
Working Capital $1,734,779 $ 695,922 $ 342,444 $1,193,459 $1,194,232
Working Capital Ratio 3.3:1 1.7:1 1.1:1 1.5:1 1.9:1
Total Assets 5,129,248 5,132,511 7,242,855 5,027,295 3,260,231
Long-term debt 250,000
Mandatorily redeemable
preferred stock 1,500,000 1,500,000 1,500,000
Capital Stock and Other
Stockholders' equity $2,483,512 $2,418,826 $3,035,419 $2,488,150 $1,780,178
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
NET REVENUES
(In thousands)
1995 Change 1994 Change 1993
Net Revenues $6,042 (12%) $6,896 (2%) $7,020
ACCESS Corporation has two primary lines of business.
Over the years the Company has built a substantial,
continuing field maintenance business. This business
services, on a nationwide basis, hardware and, on a national
and international basis, software for the Company's
installed base of customers and third parties. The Company
is also a leader in the Technical Document Management
Systems (TDMS) software business. In this line of business,
the Company develops and markets software solutions for its
customers' technical processes. TDMS has the potential for
substantial growth in revenue and profits in that it serves
a potentially large, worldwide market opportunity.
The Company continues to have a stable rate base of
revenue and profits from its service operations. Service
sales are comprised of hardware and software support to the
Company's installed base of customers and some third-party
maintenance contracts. Service sales were $4,538,900,
$4,320,300 and $4,141,200 in fiscal years 1995, 1994 and
1993, respectively. These sales made up 75%, 63% and 59% of
total revenues in these fiscal years, respectively. The
increase in the percentage of total sales reflects the
decrease in sales in the Technical Document Management
Systems (TDMS) line of business and the discontinuance of
its Hardware Engineering Servies and Contract Manufacturing
operations.
The fluctuations in the Company's revenues overall are
a result of the changes in its TDMS operations. System
sales from these operations were $1,275,000, $2,189,200, and
$2,490,700 in fiscal years 1995, 1994 and 1993,
respectively. These sales represented 21%, 32% and 35% of
total revenues, respectively. The reduction between 1994
and 1995 sales was the result of the completion of a major
order to deliver a system to eleven sites in fiscal 1994.
In fiscal 1995 there was no comparable order. In 1993
revenues included over $360,000 of revenue which represented
cost reimbursement for integration of the Company's software
with WANG's VS system. Revenues from the Company's TDMS
operations in 1994 were up slightly from the 1993 levels,
excluding the WANG system integration cost recovery revenue.
Effective at the beginning of the third quarter of
fiscal 1994, the Company discontinued its operations with
respect to its Hardware Engineering Services and Contract
Manufacturing line of business. It is limiting its
manufacturing to supplying cards for the micrographic
equipment sold in prior years and the parts required to
support existing equipment. The Company has completed or
transferred to third parties all contracts and commitments
for its Engineering and Contract Manufacturing customers.
Revenues from the continuing manufacturing operations,
a support group to the Service line of business, were
$227,800, $386,800 and $388,200 in fiscal years 1995, 1994
and 1993, respectively which were 4%, 5% and 6% of the total
revenues in these fiscal years, respectively.
In fiscal year 1995 sales to the U.S. commercial market
continued to exceed those to the federal government and
international markets. Sales to the U.S. commercial market
represented 78% of the total revenue in fiscal 1995,
compared with 73% in fiscal 1994 and 78% in fiscal 1993.
The federal government accounted for 18% of total revenue in
fiscal 1995, compared with 17% in 1994 and 15% in 1993.
This reflects the Company's emphasis on marketing to the
commercial market. Sales to international markets accounted
for 4% of fiscal 1995 revenues, compared with 10% in 1994
and 7% in 1993.
Gross Profits
(In Thousands) 1995 Change 1994 Change 1993
Gross Profits $2,352.8 (9%) $2,573.3 (10%) $2,871.2
Percentage of net revenues 39% 37% 41%
The above Gross Profits for 1995, 1994 and 1993 were
net of $673,700, $839,900 and $112,300 of amortization,
respectively. Service gross margins of 55% have been
relatively comparable with the fiscal 1994 and 1993 levels
of 53% and 52%, respectively. TDMS gross margins before
amortization in fiscal 1995 were 43%, which was a decrease
from fiscal 1994 level of 59% and an increase from the
fiscal 1993 level of 40%. TDMS gross margins after
amortization in fiscal 1995 were (10%), which was a decrease
from fiscal 1994 and 1993 levels of 20% and 35%,
respectively. Manufacturing gross margins of 1% in fiscal
year 1995 were more favorable than those reported in fiscal
years 1994 and 1993 of (45%) and (35%), respectively.
Selling, general and administrative expenses decreased
from $2,008,000 in fiscal 1994 to $1,528,000 in fiscal 1995.
The primary contributor to this decrease in expenses was the
reduction in personnel and related expenses.
Engineering, Research and Development (R&D)
expenditures were incurred for maintaining and upgrading
existing products and developing new products. Engineering
and development expenses for the current period decreased
from $1,124,800 in fiscal 1994 to $592,500 in fiscal 1995
because the Company completed the development work on the
AS/400 in fiscal 1994. Fiscal 1995 operating expenses for
R&D were 47% lower than fiscal 1994 and 12% higher than
fiscal 1993.
The Operating income of $196,400 increased $680,700 in
fiscal 1995. The Company's gross margin improved 2% in
fiscal 1995. The Company also decreased operating expenses
by $1,011,800 in fiscal 1995. Even though revenues
declined, these changes in operations and improved gross
margins resulted in the above increase in the operating
income in fiscal 1995.
The Company accrued $66,700 of income taxes in fiscal
1995. This expense resulted in a reduction in deferred
income tax benefits accrued in Fiscal 1993 when the Company
adopted Statement of Financial Accounting Standards (SFAS)
No. 109, "Accounting for Income Taxes".
LIQUIDITY AND CAPITAL RESOURCES
In fiscal 1995, the Company provided approximately
$1,047,500 of cash from operating activities. The Company
eliminated $71,800 of its bank borrowing. The net result
was a cash balance of $883,500 and zero bank borrowing at
April 30, 1995.
Accounts receivable increased approximately $124,200
during fiscal year 1995. This increase is the result of a
steady flow of sales throughout fiscal 1995.
Inventories at April 30, 1995 decreased approximately
$103,200 from the balance at April 30, 1994. This decrease
is primarily due to the delivery of finished products in the
manufacturing area and completion of projects for the TDMS
product line.
Accounts Payable at April 30, 1995 decreased
approximately $62,500 from April 30, 1994. This decrease
reflected primarily a reduction of spending throughout the
Company.
The Company requires progress payments on its large
TDMS System orders based on predetermined events. Reported
as current liabilities, these progress payments totaled
approximately $339,500 at April 30, 1995, which represents
an increase of approximately $30,200 from April 30, 1994.
Working capital on April 30, 1995 was $1,734,800,
compared with $695,900 on April 30, 1994. The Company has a
loan agreement which provides for a line of credit through
April 7, 1996 (See Note 2 of the Notes to the Financial
Statements). The bank line of credit was $400,000 at April
30, 1995, of which none was outstanding.
The Company's plans are structured so that revenues
from its AS/400 and UNIX products, in combination with those
from its recurring service business, are expected to provide
the cash flow required to operate the Company.
The Company's assets currently include $1,742,600 of
net realizable value for the computer software development
of the AS/400 product line. This software is currently
being amortized at the greater of 33% of the AS/400 software
revenue or $56,100 per month. These computer software
development costs will be fully amortized no later than
November 1997. At this point in time, there is a good
market for the Company's AS/400 software product line.
However, there is no assurance that this market will
continue through November 1997. If it becomes apparent that
net realizable value of this asset on the Company's books
will not be supported by sufficient future revenue, the
Company will write down the book value of the software and
take this write-down as an expense in the period in which it
occurs.
Independent Auditors' Report
Stockholders and Board of Directors:
We have audited the accompanying balance sheets of
ACCESS Corporation as of April 30, 1995 and 1994, and the
related statements of operations, of capital stock and
other stockholders' equity and of cash flows for each of the
three years in the period ended April 30, 1995. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on
the financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the
financial position of ACCESS Corporation as of April 30,
1995 and 1994, and the results of its operations and its
cash flows for each of the three years in the period ended
April 30, 1995, in conformity with generally accepted
accounting principles.
As discussed in Note 6 to the financial statements, in 1993
the Company changed its method of accounting for income
taxes to conform with Statement of Financial Accounting
Standards No. 109.
DELOITTE & TOUCHE LLP
- ---------------------
Deloitte & Touche LLP
Cincinnati, Ohio
May 31, 1995
ACCESS CORPORATION
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED APRIL 30, 1995, 1994 AND 1993
1995 1994 1993
REVENUE:
System Sales $1,274,996 $2,189,248 $2,490,713
Service 4,538,938 4,320,323 4,141,187
Manufacturing 227,848 386,781 388,183
---------- ---------- ----------
Total 6,041,782 6,896,352 7,020,074
----------- ---------- ----------
COST:
System sales, exclusive of amoritization shown
separately below 729,965 902,566 1,502,179
Service 2,059,347 2,020,136 2,008,586
Manufacturing 226,016 560,486 525,825
---------- ---------- ----------
Total 3,015,328 3,483,188 4,036,590
---------- ---------- ----------
GROSS PROFIT BEFORE AMORTIZATION 3,026,454 3,413,164 2,983,484
AMORTIZATION OF COMPUTER SOFTWARE COST 673,704 839,904 112,284
---------- ----------- ---------
GROSS PROFIT 2,352,750 2,573,260 2,871,200
OPERATING EXPENSES:
Selling, general and administrative 1,528,460 2,007,953 2,333,196
Engineering, research and development 592,504 1,124,789 528,268
---------- --------------------
OPERATING INCOME (LOSS) 231,786 (559,482) 9,736
OTHER INCOME(EXPENSE) (3,805) 24,047 15,363
INTEREST EXPENSE (31,911) (26,450) (53,246)
---------- ---------- ----------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 196,070 (561,885) (28,147)
INCOME TAXES (BENEFIT) (Note 6) 66,700 (10,509) (4,200)
----------- --------- ---------
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS 129,370 (551,376) (23,947)
DISCONTINUED OPERATIONS (Note 9):
Net earnings (loss) from operations discontinued E&M
Business (less applicable income tax benefit of
$81,800) (73,812) (158,784)
Income on disposal of discontinued operations 9,949
------------ --------- ---------
EARNINGS (LOSS) BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 129,370 (615,239) (182,731)
CUMULATIVE EFFECT AS OF MAY 1, 1992 OF A CHANGE IN
THE ACCOUNTING FOR INCOME TAXES, NET OF VALUATION
ALLOWANCE OF $2,220,000 (Note 6) 730,000
---------- ----------- --------
NET EARNINGS (LOSS) 129,370 (615,239) 547,269
PREFERRED DIVIDEND 64,685 - -
---------- --------------------
INCOME (LOSS) APPLICABLE TO COMMON SHARES $ 64,685 $ (615,239)$ 547,269
---------- ---------- ----------
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 4,865,559 4,865,559 4,865,559
PER COMMON SHARE AND COMMON SHARE EQUIVALENT (Note 4):
Net earnings (loss) from continuing operations $ 0.01 $ (0.11) $ (0.00)
Net earnings(loss) before cumulative effect of change in
accounting principle 0.01 (0.13) (0.04)
Cumulative effect of accounting change - - 0.15
---------- ---------- ----------
Net earnings (loss) $ 0.01 $ (0.13)$ 0.11
---------- ---------- ----------
<FN>
See notes to financial statements.
ACCESS CORPORATION
STATEMENTS OF CAPITAL STOCK AND OTHER STOCKHOLDERS' EQUITY
APRIL 30, 1995, 1994 AND 1993
Treasury Common Class A Common
--------------- ----------------- --------------
Shares Amount Shares Amount Shares Amount
BALANCE, Apr 30, 1992 16,270 $(15,383) 3,453,257 $345,325 1,428,572 $142,857
Net earnings
------ -------- --------- -------- --------- --------
BALANCE, Apr 30, 1993 16,270 (15,383) 3,453,257 345,325 1,428,572 142,857
Deferred compensation under
restricted stock plan
Net loss
------ -------- --------- -------- --------- --------
BALANCE, Apr 30, 1994 16,270 (15,383) 3,453,257 345,325 1,428,572 142,857
Class One Preferred Stock
Dividends
Net earnings
------ --------- --------- -------- --------- --------
BALANCE, Apr 30, 1995 16,270 $(15,383) 3,453,257 $345,325 1,428,572 $142,857
<FN>
See notes to financial statements.
ACCESS CORPORATION
STATEMENT OF CAPITAL STOCK AND OTHER STOCKHOLDERS'EQUITY
APRIL 30, 1995, 1994 AND 1993
Additional Paid-in Retained Earnings
Capital (Deficit)
BALANCE, APR 30, 1992 $10,826,201 $(8,810,849)
Net Earnings 547,269
----------- ------------
BALANCE, APR 30, 1993 10,826,201 (8,263,580)
Deferred compensation under
restricted stock plan ( 1,354)
Net Loss (615,239)
------------ ------------
BALANCE, APR 30, 1994 10,824,847 (8,878,819)
Class One Preferred Stock
dividends (64,685)
Net earnings 129,370
------------ ------------
BALANCE, APR 30, 1995 $10,760,162 $(8,479,449)
----------- ------------
<FN>
See notes to financial statements.
ACCESS CORPORATION
BALANCE SHEETS
APRIL 30, 1995 AND 1994
1995 1994
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 883,487 $ 3,500
Accounts receivable, less allowance
for doubtful accounts of $18,100 in 1995
and $17,480 in 1994 (Note 2): 1,015,811 891,600
Inventories (Note 2):
Raw materials and purchased parts 79,495 92,718
Work-in-process 318,598 365,470
Finished goods 14,772 57,840
---------- ----------
Total inventories 412,865 516,028
Prepaid expenses 68,990 106,662
Deferred income tax, net of valuation
allowance of $300,000 (Note 6) 112,000 112,000
---------- ----------
Total current assets 2,493,153 1,629,790
EQUIPMENT AND LEASEHOLD
IMPROVEMENTS (Note 2):
Computer hardware and software 1,952,220 2,280,658
Machinery and equipment 503,337 503,338
Office and service equipment 313,431 539,717
Leasehold improvements 5,000 5,000
Tools, dies and fixtures 115,013 115,013
---------- ----------
Total 2,889,001 3,443,726
Less accumulated depreciation 2,646,833 3,075,334
---------- ----------
Net equipment and leasehold 242,168 368,392
improvements
COMPUTER SOFTWARE COSTS, net of
accumulated amortization of $1,625,891 in
1995 and $952,188 in 1994 1,742,627 2,416,329
---------- ----------
DEFERRED INCOME TAX BENEFIT,
net of valuation allowance of $2,134,000 in
1995 and 1994 (Note 6) 651,300 718,000
---------- ----------
TOTAL $5,129,248 $5,132,511
---------- ----------
<FN>
See notes to financial statements.
LIABILITIES AND CAPITAL STOCK AND
OTHER STOCKHOLDERS' EQUITY 1995 1994
CURRENT LIABILITIES:
Note payable - bank (Note 2) $ - $ 71,807
Accounts payable 95,864 158,345
Accrued salaries, wages and commissions 120,054 56,721
Accrued taxes 24,429 74,269
Accrued warranty expense 44,275 44,783
Other accrued liabilities 77,683 144,691
Advances from customers 339,456 309,305
Capital leases 56,613 73,947
---------- ----------
Total current liabilities 758,374 933,868
PREPAID MAINTENANCE CONTRACTS 299,578 198,971
CAPITAL LEASES (Note 8) 23,099 80,845
MANDATORY REDEEMABLE
PREFERRED STOCK (Note 3) 1,500,000 1,500,000
Preferred Dividends 64,685
CAPITAL STOCK AND OTHER
STOCKHOLDERS' EQUITY (Notes 2,4):
Capital Stock:
Common Stock, no par value,authorized,
8,000,000 shares; issued and outstanding
3,453,257 shares 345,325 345,325
Class A Common Stock, no par value,
authorized 2,000,000 shares; issued and
outstanding 1,428,572 shares 142,857 142,857
Additional paid-in capital 10,760,162 10,824,847
Deficit from April 1, 1985 (8,749,449) (8,878,819)
16,270 Common Stock shares in treasury,
at cost (15,383) (15,383)
---------- ----------
Total capital stock and other
stockholders' equity 2,483,512 2,418,827
---------- ----------
TOTAL $5,129,248 $5,132,511
---------- ----------
ACCESS CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED APRIL 30, 1995, 1994 AND 1993
1995 1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ 129,370 $ (615,239) $ 547,269
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Amortization 673,704 839,904 112,284
Depreciation 139,819 254,943 137,319
Deferred income taxes 66,700 (830,000)
Deferred compensation under restricted stock plan (1,354)
Loss (gain) on disposal of fixed assets 7,028 (3,608) 3,119
Prepaid maintenance contracts 100,606 66,704 21,228
Change in assets and liabilities:
Accounts receivable (124,211) 1,106,941 (598,637)
Inventories 103,163 60,411 594,321
Prepaid expenses 37,672 70,470 (52,471)
Accounts payable (62,481) (133,824) (621,927)
Accrued liabilities (54,023) (283,155) 58,726
Advances from customers 30,151 (449,309) 39,498
---------- ---------- ----------
Net cash provided by (used in) operating activities 1,047,498 912,884 (589,271)
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Computer software costs (2,120,999)
Capital additions (22,779) (84,316) (83,335)
Proceeds from disposal of fixed assets 2,156 22,459 100
---------- ---------- ----------
Net cash (used in) investing activities (20,623) (61,857) (2,204,234)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds (repayments) on bank line of credit (71,807) (848,959) 920,766
Payments on capital leases (75,081) (52,068)
Proceeds from note payable 750,000
Proceeds from redeemable preferred stock 500,000
---------- ---------- ----------
Net cash provided by (used in) financing (146,888) (901,027) 2,170,766
activities ---------- ---------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 879,987 (50,000) (622,739)
CASH AND CASH EQUIVALENTS, Beginning of year 3,500 53,500 676,239
---------- ---------- ----------
CASH AND CASH EQUIVALENTS, End of year $ 883,487 $ 3,500 $ 53,500
---------- ---------- ----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid for interest $ 31,911 $ 26,616 $ 32,531
Cash paid for income taxes 13,500
<FN>
NON-CASH TRANSACTION - During 1993, notes payable of $1,000,000 were converted into
redeemable preferred stock (Note 3). During 1994, the Company entered into capital leases
totaling $206,860 (Note 8).
See notes to financial statements.
NOTES TO FINANCIAL STATEMENTS ACCESS Corporation
for the years ended April 30, 1995, 1994 and 1993
NOTE 1: A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The Company services hardware and software for its
installed base of customers and third parties. It also
develops and markets software for the electronic storage,
control and processing of technical documentation.
Revenue Recognition
Revenues from the sale of new systems are recognized
upon shipment. If there are services performed, revenue is
recognized at the time of customer acceptance.
Revenues resulting from research and development
arrangements (Note 5) are recognized as the related costs
are incurred.
Revenue from prepaid maintenance agreements is
recognized ratably over the life of the maintenance
contracts.
Inventories
Inventories comprised of material, labor, and related
overhead expenses are stated at the lower of cost (first-in,
first-out method) or market.
Equipment and Leasehold Improvements
Equipment and leasehold improvements are recorded at
cost and depreciated over their estimated useful lives using
the straight-line method. Computer software is depreciated
over three years or its useful life, whichever is less.
Computer Software Development Costs
Computer software development costs are recorded in
accordance with Statement of Financial Accounting Standards
No. 86, Accounting for the Costs of Computer Software to be
Sold, Leased or Otherwise Marketed. Costs incurred up to
the point of establishing technological feasibility are
expensed currently. Costs incurred after establishment of
technological feasibility were capitalized. Amortization of
these capitalized costs began in March 1993 when the
products were released to customers and are to be amortized
over a period not to exceed five years. Amortization
expense was $673,704, $839,904 and $112,284 for fiscal years
1995, 1994 and 1993, respectively.
Income Taxes
Effective May 1, 1992, the Company adopted Statement of
Financial Accounting Standards No. 109, which was issued in
February, 1992. The Company previously accounted for income
taxes in accordance with Statements of Financial Accounting
Standards No. 96.
Statement of Cash Flows
Cash and cash equivalents consist of cash on hand, cash
on deposit, and short-term investments with original
maturities less than ninety days.
Product Warranties
Under its product warranty policy, the Company has
agreed to replace certain parts or provide remedial service
during the designated warranty period. Costs associated
with these programs are determined on the basis of estimated
net future costs.
NOTE 2: BANK LINE OF CREDIT
The Company's current line of credit agreement
($400,000 as of April 8, 1994) extends through April 7,
1996. Borrowings under the agreement bear interest at one
percent over the prime rate, 9% at April 30, 1995. Borrowing
is based upon the levels (as set forth in the loan
agreement) of eligible accounts receivable. To secure any
borrowing, the Company has pledged accounts receivable,
inventories, fixed assets, and general intangibles. The
agreement contains restrictive and other covenants which
require the Company to maintain certain levels of
indebtedness to net worth, current ratio and cash flow from
operations. It also restricts new borrowings, capital
expenditures, and dividends on its capital stock.
_______________________________________________________________________
1995 1994 1993
_______________________________________________________________________
Maximum borrowings
during the year $127,354 $790,249 $1,159,319
Average outstanding balance
during the year $ 27,956 $302,652 $ 706,060
Weighted average
interest rate 9.1% 7.5% 7.5%
<FN>
(determined on a monthly basis)
NOTE 3: MANDATORILY REDEEMABLE PREFERRED STOCK AND NOTES PAYABLE
On October 28, 1991, the Company entered into a Note
Purchase Agreement with Oce-van der Grinten, N.V. ("Oce"),
which provided for borrowing by the Company of up to $1.5
million to fund a major software development project. On
August 26, 1992, $1,000,000 of then outstanding notes were
redeemed in exchange for 10,000 shares of mandatorily
redeemable preferred stock. In April 1993, the Company
issued to Oce an additional 5,000 shares of mandatorily
redeemable preferred stock for $500,000.
The preferred stock is divided into three series:
10,000 shares of 7% preferred stock ($1,000,000); 2,500
shares of 9% preferred stock ($250,000), and 2,500 shares of
variable rate preferred stock ($250,000). The variable rate
preferred stock was issued at the rate of 9%. Dividends on
the preferred stock for any fiscal year are cumulative only
to the extent of 50% of the Company's net after-tax
earnings, as defined, for such year.
Annually, beginning in 1995, the Company is required to
redeem the preferred stock at $100 per share plus
accumulated dividends in an amount equal to a specified
portion of after-tax earnings, as defined. Unless dividends
on the preferred stock are current, the Company may not
declare a dividend on its common shares or redeem or
purchase any of its common shares. Under the Note Purchase
Agreement, Oce agreed to limitations on the voting and
transfer of its stock (including the transfer of such stock
to a voting trust, the trustees of which are four of the
Company's directors) and Oce was released from its
obligation under certain circumstances to make a tender
offer for the Company's common stock. As of April 30, 1995,
the Company had authorized and issued a total of 15,000
shares of preferred stock.
NOTE 4: CAPITAL STOCK
In 1992 the Company entered into a Voting Trust
Agreement with Oce. The Voting Trust Agreement required Oce
to place the certificates for 1,904,763 of its Common Stock,
less 100 shares, into a voting trust. The trustees of the
trust are four directors of the Company. Pursuant to the
Voting Trust Agreement, the shares will be voted for matters
related to the election of directors in the discretion of
the voting trustees (except that such shares will be voted
for up to two director nominees designated by Oce) and on
all other matters by Oce pursuant to a proxy to be granted
to it by the voting trustees.
The Voting Trust Agreement is irrevocable for a period
of ten years and may be renewed, at the option of Oce, for
additional periods of not more than ten years each. The
Voting Trust Agreement will automatically terminate:
- with respect to any such shares sold to a party unrelated
to Oce
- upon the closing of any underwritten public offering of
Common Stock which results in not less than $10,000,000
in aggregate sales price of Common Stock having been
sold.
- upon the acquisition by any person of beneficial
ownership of as many or more shares of Common Stock as
are owned by Oce.
Further, the Voting Trust Agreement may be terminated
by notice by Oce to the voting trustees at anytime after
October 3, 1995.
If the Voting Trust Agreement is terminated by notice
or is not renewed on its tenth anniversary, Oce is required
to make a tender offer for any and all of the shares of
Common Stock (including any such shares issued on conversion
of Class A Common Stock) at a price per share not less than
that defined in the Note Purchase Agreement (Note 3) and
calculated using the Company's audited financial statements.
If the calculated price per share is less than zero, Oce is
not required to make a tender offer.
If the Voting Trust Agreement is terminated by notice
to the voting trustees, the tender offer is required not
later than six months after the end of the fiscal year in
which the first anniversary of the notice affected the
termination. If the agreement is not renewed, the tender
offer is required not later than six months after the end of
that fiscal year end.
Common Shares
Common Stock shareholders including the voting trustees
have equal voting rights. Actions by a majority of voting
trustees constitute the act of the voting trust. Class A
Common Stock shareholders have class voting privileges on
changes to the Articles of Incorporation and some other
specified matters but do not vote on the election of
directors. Class A Common Stock is convertible into Common
Stock, share for share, at any time.
Shares of Common Stock reserved for the conversion of
the Class A stock were 1,428,572 in 1995 and 1994.
Earnings Per Share
The earnings (loss) per share computations are based on
the weighted average number of common shares outstanding
during the year adjusted for the effect of common share
equivalents where dilutive. Fully diluted earnings (loss)
per share are not presented as the effect of the dilution is
less than 3% or is anti-dilutive for the years 1993 - 1995.
Stock Option Plans
During the year ended April 30, 1994, the Company
adopted the 1993 incentive stock option plan covering
500,000 shares of its Common Stock. The Company also
amended the 1983, 1985 and 1991 plans to add provisions
providing that all outstanding stock options will become
exercisable upon the occurrence of a change of control or
similar event.
Options may be granted under the 1991 and 1993 plans
to officers and key employees of the Company. Additionally,
directors of the Company and other persons in business
relationships with the Company, such as independent
contractors and consultants, may be granted nonqualified
options under the 1991 plan. No further options may be
granted under the 1979, 1983 and 1985 plans. Incentive
stock options may be granted only to Company employees.
The option price under the plans may not be less than
the fair market value of the Common Stock at the date of
grant, as determined by the Board of Directors, which
administers the plans. All options granted under the 1985
plan and any incentive stock options granted under the 1979,
1983, 1991 and 1993 plans may not be exercised prior to one
year from date of grant and expire ten years from the date
of grant.
Changes in stock options were as follows:
_______________________________________________________________________
Number of Shares
Reserved Granted
______________________________________________________________________
Balance, April 30, 1993 383,000 224,600
Reserved 500,000
Granted 325,000
Canceled (4,800) (113,800)
_________ ________
Balance,April 30,1994 878,200 435,800
Canceled (500) (73,400)
_________ _________
Balance, April 30, 1995 877,700 362,400
========= =========
[FN]
At April 30, 1995, options to purchase 204,900 shares of
Common Stock were exercisable at $.50 to $5.25 per share.
NOTE 5: ENGINEERING, RESEARCH AND DEVELOPMENT
Engineering, research and development costs for the
years ended April 30, 1995, 1994 and 1993 are as follows:
___________________________________________________________________________
1995 1994 1993
___________________________________________________________________________
Charged to specific
customer orders $ 495,887 $ 820,614 $1,158,387
Charged to computer
software costs 2,120,999
Charged directly to
engineering, research
and development 522,599 1,124,789 528,268
__________ __________ __________
Total cost of engineering,
research and develop-
ment efforts $1,018,486 $1,945,403 $3,807,654
========== ========== ==========
Revenue recognized under research and development
arrangements for the years ended April 30, 1995, 1994, and
1993 was $-0-, $-0- and $383,000 respectively. This revenue
was completely offset by costs incurred during the same
period.
NOTE 6: INCOME TAXES
The provision for income taxes (benefit) includes the
following:
______________________________________________________________________
1995 1994 1993
______________________________________________________________________
Federal:
Deferred $66,700 ($214,100) ($14,000)
Currently payable
(Refundable) 66,700 ( 10,509) 14,000
Tax benefit of net
operating loss
carryforward (66,700) ( 86,000)
Valuation Allowance 214,100
________ __________ _________
Total $66,700 ($ 10,509) ($86,000)
======== ========== =========
Effective May 1, 1992, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting
for Income Taxes." This statement supersedes SFAS No. 96,
"Accounting for Income Taxes." The cumulative effect of
adopting SFAS No. 109 on the Company's financial statements
was to increase net earnings by $730,000 ($.15 per share)
for the year ended April 30, 1993. The effect on earnings
was to increase 1993 net income by $100,000.
Deferred income taxes reflect the net income tax
effects of (a) temporary differences between the carrying
amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes, and
(b) net operating loss and tax credit carryforwards. The
income tax effects of significant items comprising the
Company's net deferred income tax asset as of April 30, 1995
and 1994 are as follows:
________________________________________________________________________
1995 1994
________________________________________________________________________
Net operating loss carryforwards
Federal $2,995,000 $3,025,000
State 37,000 138,000
Temporary differences:
Accrued warranty expense 25,000 21,000
Inventory capitalization 96,000 82,000
Other 44,300 ( 2,000)
__________ ___________
Total $3,197,300 $3,264,000
Less Valuation Allowance (2,434,000) (2,434,000)
__________ ___________
Net deferred income tax asset $ 763,300 $ 830,000
========== ===========
<FN>
The amounts and expiration dates for the Company's net
operating loss carryforwards for income tax return purposes
are summarized as follows:
Year Ending April 30 Federal
2002 $1,759,000
2004 2,762,000
2005 3,027,000
2008 459,000
2009 803,000
----------
Total $8,810,000
==========
NOTE 7: REVENUES TO MAJOR CUSTOMERS
On a continuing basis, no single customer accounts for
a significant percentage of the Company's net sales.
However, net revenues to customers in selected industries as
a percent of total revenues are as follows:
_____________________________________________________________________
1995 1994 1993
_____________________________________________________________________
Federal Government 18.4% 16.6% 15.0%
Aerospace 18.8% 5.4% 3.4%
Petroleum 4.9% 4.4% .5%
Computer 10.5% 2.1% 9.5%
Medical 7.2% 20.6% 13.8%
Manufacturing 12.4% 3.0%
<FN>
Accounts receivable from these customers at April 30,
1995 and April 30, 1994 were $778,100 and $657,100,
respectively.
NOTE 8: LEASE COMMITMENTS
The Company leases office and manufacturing facilities
and equipment under operating leases. Rent expense was
$223,977 (1995), $342,311 (1994), and $339,504 (1993) of
which $60,281 (1995), $131,268 (1994) and $45,426 (1993),
were under short-term cancelable leases.
As of April 30, 1995, minimum annual payments under all
noncancelable long-term operating lease agreements are:
$144,398 (1996), $186,780 (1997), $166,780 (1998), $170,950
(1999), and $170,950 (2000).
The Company leases office equipment and software
under capital leases. As of April 30, 1995, minimum annual
payments under all noncancelable capital lease agreements
are: $68,497 (1996) and $26,035 (1997) for a total of
$94,532. Maintenance on these leases total $3,283,
representing net minimum lease payments of $91,250.
Interest on these leases represented $11,538 for a present
value of net minimum lease payments of $79,712. This is
reflected in the balance sheet as current and noncurrent
obligations under capital leases of $56,613 and $23,098,
respectively. The cost, accumulated depreciation and
depreciation expense of assets under capital leases was
$206,900, $124,000 and $76,300, respectively at April 30,
1995.
NOTE 9: DISCONTINUED OPERATIONS
Effective as of the end of the second quarter of fiscal
1994, the Company discontinued its operations with respect
to its Hardware Engineering and Contract Manufacturing
product lines. It is limiting its manufacturing to the
supply of cards for the micrographic equipment sold in prior
years and the parts required to support existing equipment.
Revenues from discontinued operations were $431,000
and $866,000 for fiscal years 1994 and 1993, respectively.
Previously reported results of operations have been
reclassified to show the effects of the discontinued
operations.
ABOUT THE COMPANY
CORPORATE PROFILE
ACCESS Corporation is dedicated to enhancing the
quality of its customers' products by providing world class
software solutions for their technical processes. ACCESS'
software allows its customers to manage the process of
design changes, release of those changes, and the efficient
storage, indexing, and retrieval of both engineering
drawings and related technical documentation.
ACCESS Corporation primarily serves engineering
customers in discrete and process manufacturing. Its
applications benefit companies in the medical products,
pharmaceutical, computer and electronic, petrochemical,
defense, and automotive industries. In addition, companies
under strict government regulation have found ACCESS'
applications beneficial in organizing and controlling
compliance procedures.
The Cincinnati-based company has two business units:
Technical Document Management Systems (TDMS) and Component
and Systems Service.
ACCESS HISTORY
Founded over thirty years ago, ACCESS has designed
systems for use by organizations throughout the world. Some
have been in continuous use for as long as twenty years.
ACCESS' early success in automating the handling of
document based information positioned the Company to take a
leadership role in the evolution of computer technology in
the specialized area of imaging and technical document
management. As the industry has evolved into more
sophisticated products and processes, numerous document
management problems have emerged. ACCESS' TDMS business
unit addresses these challenges by designing innovative
software solutions.
The Service business is comprised of hardware and
software support to the Company's installed base of
customers and third-party maintenance contracts. It also
provides media and parts on a nationwide basis to the
Company's installed customer base.
ACCESS TDMS BUSINESS UNIT
ACCESS' application software features three unique
products: EDICS/RM (Engineering Document Image Control
System/Release Management), EDICS/DM (Engineering Document
Image Control System/ Document Management) and ECC
(Electronic Change Control) which may be configured to
specific organizational needs.
A powerful database application for managing documents
and engineering related information, EDICS processes both
text and A through E size drawings that may be scanned or
electronically imported from CAD (computer aided design).
These documents from multiple sources are integrated into a
single system which fully automates the revision process and
provides flexible tools for viewing, editing, and printing.
EDICS also enables a user to comply with regulatory
agencies, such as the Food and Drug Administration, by
allowing storage and immediate retrieval of product and
process information.
ECC may be added to the EDICS system to improve control
over the design and processing changes. It provides
advanced functionality to automate the entire document
change process, including multiple approval processing and
notification, rejection handling, in-process review,
approval history, and change-process performance reporting.
ECC automates a company's entire engineering change
control process consistent with its established procedures
and operational requirements. ECC correlates change
documents with markups and affected drawings for the length
of the change cycle. It can be easily configured to
facilitate concurrent reviews (now a Computer Aided
Acquisition and Logistics Support, CALS, requirement for
many Department of Defense contracts).
Both EDICS and ECC support effective concurrent
engineering environments, which involve the cooperative
interaction of design, manufacturing, support personnel,
suppliers, and customers. Concurrent engineering reduces
time-to-market and increases manufacturability,
serviceability, and reliability.
ACCESS has been approved as an Industry Application
Specialist by IBM's Industrial Sector Marketing. In this
relationship, ACCESS provides EDICS/400 and ECC/400 for use
on the IBM AS/400.
ACCESS also supplies EDICS and ECC in the Unix
environment running on IBM's RS/6000 and on both AT&T and
Hewlett Packard Unix platforms.
COMPONENT SERVICE
ACCESS also provides quality field maintenance
including hardware and software service on a nationwide
basis to the Company's installed customer base.
In addition to maintaining ACCESS-installed systems,
ACCESS' service group also maintains non-ACCESS electronic
and electromechanical equipment such as card embossers,
microfiche duplicators, microfilm scanners, large drawing
format scanners and highly sophisticated 5-1/4" and 12"
laser drives.
ACCESS continues to pursue additional third-party
service opportunities with manufacturers of electronic and
electromechanical products who require a rapid on-site
service response but whose customer base is not large enough
to support a nationwide service network.
SALES
ACCESS systems have been installed in 48 states, Japan,
Europe, Australia, Canada, Mexico, Jamaica, Puerto Rico, the
Middle East, China, and the former Soviet Union. Sales in
and outside the United States are handled predominantly on a
direct basis. There is no recurring geographic market
concentration with respect to the sales of ACCESS systems in
the United States, and in fiscal year 1995, not more than
13% of the Company's sales were derived from customers in
any single state.
ACCESS' primary marketing focus is the sale of its TDMS
products to manufacturers and other users of technical
documentation. No single customer accounts for a
significant percentage of the Company's revenues on a
continuing basis, although sales of ACCESS' systems to
various agencies of the federal government represented 18%
of 1995 revenues and 17% of 1994 revenues. These revenues
represented numerous federal contracts.
COMMON SHARES
Currently there is no established market for the
Company's Common Shares and the Company is not aware of any
reported bid quotations. The Company has not paid, and has
no plans to pay, dividends on its Common Shares. The number
of holders of record of ACCESS Corporation's Common Shares
as of April 30, 1995, was 389.
FORM 10-K AVAILABLE
An Annual Report on Form 10-K will be filed with the
Securities and Exchange Commission detailing the activities,
management, and financial results of ACCESS Corporation for
the fiscal year ending April 30, 1995. A shareholder may
obtain a copy of this report at no charge by writing to
ACCESS Corporation, 4350 Glendale-Milford Road, Suite 250,
Cincinnati, Ohio 45242, Attention: Treasurer.
Board of Directors
Kent P. Friel
Chairman of the Board
President, Schonberg
Associates, Inc.
Cincinnati, Ohio
Scott D. Watkins
President and Chief
Executive Officer
Newton D. Baker
Executive Vice President
and Treasurer
James H. Hardie
Partner in law firm
of Reed Smith Shaw
& McClay
Pittsburgh, Pennsylvania
Robert J. Kalthoff
Chairman of the Kalthoff
Group, Inc.
Cincinnati, Ohio
Dennis J. Sullivan, Jr.
Executive Counselor
Dan Pinger Relations, Inc.
Cincinnati, Ohio
John W. Weil
President
Weil Associates, Inc.
Bloomfield Hills, Michigan
Officers
Scott D. Watkins
President and Chief
Executive Officer
Newton D. Baker
Executive Vice President
and Treasurer
Kim Bollinger
Vice President,
Customer Services
James M. Anderson
Secretary, Partner in law
firm of Taft, Stettinius
& Hollister
Cincinnati, Ohio
Shareholder Information
Transfer Agent/Registrar
Fifth Third Bank
Fifth Third Center
Corporate Trust
Cincinnati, OH 45263
Independent Auditors
Deloitte & Touche LLP
250 East Fifth Street
Cincinnati, Ohio
45201-5340
General Counsel
Taft, Stettinius & Hollister
1800 Star Bank Center
Cincinnati, Ohio 45202
Patent Counsel
Wood, Herron & Evans
2700 Carew Tower
Cincinnati, Ohio 45202