Contents
Letter to Shareholders 1
Selected Financial Data 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Independent Auditors' Report 11
Statements of Operations 12
Statements of Capital Stock and Other Stockholder's Equity 13
Balance Sheets 14
Statements of Cash Flows 15
Notes to Financial Statements 16
Corporate Profile 20
ACCESS Directors, Officers and Shareholder Information 22
To Our Shareholders:
By all accounts, Fiscal Year 1996 was an extremely successful year
for your company. In large part due to a successful acquisition
in July 1995, revenue and profits improved dramatically over FY
ended April 30, 1995. We continued several very positive trends
in efficiency, profitability and cash balances. Each of our two
business units contributed to this success. Our Electronic
Document Management System (EDMS) business experienced tremendous
revenue growth facilitated by the acquisition of CimSoft Inc. The
Customer Support business once again added numerous new accounts
in both the Third Party Hardware and Software Maintenance areas.
Financial Success:
It is a pleasure to report the financial results of our business
for FY 1996. Revenue increased by 44% to $8.7 million, the
highest in 4 years. This was primarily due to a tremendous 198%
increase in EDMS business, growing from $1.3 million in FY 1995 to
$3.8 million in FY 1996. Customer Support revenue grew a modest
3% overall to $4.9 million in FY 1996, camouflaging a dynamic
shift in this business to third party maintenance from proprietary
product maintenance.
Net profit after tax improved by 58% to $205,000, owing largely to
a significant improvement in contribution profit from the EDMS
business unit. Operating efficiencies, as measured by revenue per
employee, also played an important part in our profit growth.
Continuing a 4 year trend of improvement, revenue per employee
grew an incredible 48% to $175,000 in FY 96, well above the
average for our industry.
Access' cash balance at year end increased by 134% to over $2
million, with operating activities providing $1.6 million of cash.
This is the third year in a row of significant cash balance
growth. Profitability combined with large non-cash amortization
of capitalized software and tax loss carry forward benefits
continue to produce positive cash results. As the chart below
shows, removing the effects of these non-cash items reveals the
steady growth in the bottom line performance from continuing
operations of your company over the past 4 years.
CimSoft Acquisition:
Perhaps the most dramatic change in your company this past year
occurred on July 31, 1995, when we completed the acquisition of
CimSoft Inc. Only months old at the time, CimSoft was established
by former employees of the Cimage Corporation. A competitor of
Access, Cimage had recently fallen on hard times and had been
purchased by Tarmac PLC, a $4 billion construction company
headquartered in the United Kingdom. By acquiring CimSoft, Access
became the exclusive North American distributor for the Cimage
product line, an industry leading EDMS software product offering.
Although CimSoft had no revenue, Access purchased the opportunity
to support and market to a sizable customer base in the US. We
also acquired an excellent sales organization located in an
Irvine, California office providing us an important presence on
the west coast.
Our Customer Support staff rose to the challenge, providing
support to Cimage customers within days of the acquisition.
Financially, the acquisition has been very successful. The
purchase price has been fully recovered through collection of
Cimage receivables, and the Cimage related revenue has grown
quickly and been profitable. In fact, Cimage related revenue
(software, services and hardware) accounted for 42% of Access'
revenue in Fiscal Year 1996.
Tarmac PLC established a separate business unit for the Cimage
product line, Cimage Enterprise Systems (CES), the new incarnation
of the Cimage organization, is a part of the Professional Services
Division of Tarmac PLC. CES is investing heavily in product
development and worldwide marketing. Access and CES have an
excellent working relationship.
EDMS Business Unit
Access' EDMS business unit benefited from significant investments
in Fiscal Year 1996. The acquisition of CimSoft combined with
becoming the exclusive North American distributor for the Cimage
product line provided an opportunity to rapidly grow this
business. In addition to acquisition costs, we also invested
heavily in EDMS Sales and Marketing, increasing these operating
expenses by 130% over the previous year. The investments paid off
almost immediately as EDMS revenue jumped by 198% to $3.8 million
in FY 1996. EDMS sales staff productivity also increased nearly
100%, as EDMS revenue per EDMS sales employee grew to $550,000 in
FY 1996.
Much of this growth resulted from the Cimage product line. The
large installed base of Cimage customers in North America is very
happy with the functionality and quality of the product as well as
the high level of support provided by Access' Customer Support
organization. As a result, there is a strong market for add-on
purchases of software and services. With strong, referenceable
installations in our target markets of Manufacturing,
Petrochemicals, and Utilities, we have a solid foundation for
increasing this installed base in FY 1997.
Access' own EDICS/400 EDMS product also continues to expand at
existing customer sites. The product is still the only full
function EDMS product running on IBM's AS/400 platform. Product
quality and reliability are exceptional, and functionality is
competitive, if not advanced in the areas of Engineering Change
Control and Life Cycle Management. Although the AS/400 market is
much smaller than that for UNIX based systems, it has a strong,
loyal following. We continue to look for ways of working with IBM
sales & marketing staff to market this product line. EDICS/400 is
particularly strong in providing regulatory compliance, especially
for FDA and OSHA (hazardous materials) regulated industries.
Customer Support Business Unit
A modest 3% growth in revenue masks the dramatic changes that are
taking place in our Customer Support business unit. As Access'
older proprietary hardware systems are replaced by newer
technologies, maintenance revenue from this hardware steadily
decreases. This trend is inevitable, and has been evident for
several years. In response, our Customer Support business unit
began an intense program to offer very high quality, flexible,
quick response third party maintenance services. We focused on
markets such as scanners, plotters, optical juke boxes, and
similar electromechanical products. The results have been a
continual increase in Third Party Maintenance revenue in each of
the last 4 years.
Our Customer Support organization continues to focus on providing
exceptional levels of customer satisfaction. We now support over
600 customers worldwide, covering 117 cities in the US alone. We
can add coverage to new cities within 5 days. Access provides 24
hour, 7 days per week, 365 days per year toll free dispatch for
our customers. Our Support Partner program offers immediate, high
quality customer support services for vendors who do not have this
capability. Currently we have 9 companies who have chosen Access
to take care of their customers. Perhaps the success of this
program is best expressed in a letter of recommendation from one
of our Support Partners:
"The people at Access Corporation.seem to be better equipped to
adapt to individual customer wants and needs than any other
maintenance provider I have been associated with. Their technical
support staff.know that the customer's needs come first."
Access Customer Locations
Over 600 Customers in 117 Cities
Business Strategy for the Future:
Your management's objectives have been and continue to be to
provide value and liquidity for Access' shareholders. Our
performance in Fiscal Year 1996 is another important step toward
that goal. Culpepper & Associates, a leading consulting and
research firm in the software industry, annually publishes
"Financial Operating Ratios for Software Companies". In their most
recent edition, they conclude that "as the software industry
continues to mature, companies are shifting their staffing efforts
towards customer support and professional services." Furthermore,
their analysis indicates that the most profitable firms in the
software industry are those with high sales growth rates (20% -
30% per year). The financial performance of Access in Fiscal Year
1996 reflects these conclusions. These principles also provide the
foundation for Access's business strategy for growth:
1. Provide very high quality products, support and services.
2. Very high levels of customer satisfaction.
3. Provide an ever increasing array of solutions to our existing
customers.
4. Acquire new customers and solutions.
5. Focus on our existing market space.
6. Focus on quarterly and annual increases in profitability.
We believe that our current operations offer solid revenue growth
opportunities. However, the growth potential inherent in current
operations falls short of the growth targets we believe are
necessary to achieve our shareholder goals of value and liquidity.
As a result, we have been actively seeking additional acquisitions
that can contribute to your company's growth. Our search is
focused on companies that can profitably provide:
1. Additional on-going service revenue.
2. Additional customers to which we can sell our existing products
and services.
3. Additional solutions (products and services) that we can sell
to our customers.
Fiscal Year 1996 was an extremely successful year for your
company, in large part due to the successful acquisition in July
1995 (For additional information about Fiscal Year 1996 and our
future, please see the Management Discussion and Analysis
elsewhere in this report). Healthy cash flow and cash balances
combined with zero bank borrowing give your company the ability to
aggressively pursue additional revenue and profit growth
opportunities in Fiscal year 1997.
Sincerely,
SCOTT D. WATKINS
- --------------------------------------------
Scott D. Watkins
President and Chief Executive Officer
ACCESS CORPORATION
SELECTED FINANCIAL DATA
FOR THE YEARS ENDED April 30, 1996 April 30 1995 April 30 1994 April 30 1993 April 30 1992
Summary of Earnings (Loss) from Operations
Net Sales $ 8,704,452 $ 6,041,782 $ 6,896,352 $ 7,020,074 $ 8,744,752
Gross Profit 3,310,059 2,352,750 2,573,260 2,871,200 3,836,484
Gross Profit as percentage
of net sales 38% 39% 37% 41% 44%
Interest Expense 9,378 31,911 26,450 53,246 7,543
Net Earnings (Loss) from
Continuing Operations 205,021 129,370 (551,376) (23,947) 889,808
Net Earnings (Loss) before
cumulative effect of
accounting change 205,021 129,370 (615,239) (182,731) 614,008
Cumulative effect of
accounting change 730,000
Net Earnings (Loss) 205,021 129,370 (615,239) 547,269 614,008
Preferred Dividend 102,510 64,685 - - -
Income(loss) applicable to
common shares $ 102,511 $ 64,685 $ (615,239) $ 547,269 $ 614,008
=========== =========== =========== =========== ===========
Average common and common
share equivalents
outstanding 4,865,559 4,865,559 4,865,559 4,865,559 4,865,559
Per Common Share Statistics
Net Earnings (Loss) from
Continuing Operations $ 0.02 $ 0.01 $ (0.11) $ (0.00) $ 0.18
Net Earnings (Loss) before
cumulative effect of
accounting change 0.02 0.01 (0.13) (0.04) 0.13
Cumulative effect of
accounting change 0.15
----------- ----------- ----------- ----------- -----------
Net Earnings (Loss) $ 0.02 $ 0.01 $ (0.13) $ 0.11 $ 0.13
=========== =========== =========== =========== ===========
Balance Sheet Data
Working Capital $ 2,925,217 $ 1,734,779 $ 695,922 $ 342,444 $ 1,193,459
Working Capital Ratio 3.0:1 3.3:1 1.7:1 1.1:1 1.5:1
Total Assets 6,241,633 5,129,248 5,132,511 7,242,855 5,027,295
Long-term debt 250,000
Mandatorily redeemable
preferred stock 1,500,000 1,500,000 1,500,000 1,500,000
Capital Stock and Other
Stockholders' equity $ 2,586,024 $ 2,483,512 $ 2,418,826 $ 3,035,419 $ 2,488,150
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
NET REVENUES
(In thousands)
1996 Change 1995 Change 1994
Net Revenues $8,704 44% 6,042 (12%) $6,896
ACCESS Corporation has two primary lines of business. Over the years
the Company has built a substantial customer support 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
Electronic Document Management Systems (EDMS) software business. In
this line of business, the Company develops and markets software solutions
for its customers' technical processes.
The fluctuations in the Company's revenues overall are a result of the
changes in its EDMS operations. System sales from these operations were
$3,800,800, $1,275,000, and $2,189,200 in fiscal years 1996, 1995 and 1994,
respectively. These sales represented 44%, 21% and 32% of total revenues,
respectively. The increase between 1995 and 1996 sales was the result of
the acquisition of CimSoft Incorporated, a distributor of Cimage Software
and services.
The Company continues to have a stable 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 $4,768,800, $4,538,900 and
$4,320,300 in fiscal years 1996, 1995 and 1994, respectively. These sales
made up 55%, 75% and 63% of total revenues in these fiscal years,
respectively. The decrease in the percentage of total sales in fiscal 1996
reflects the increase in sales in the EDMS line of business.
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. In 1994 the
Company completed or transferred to third parties all contracts and commit-
ments for its Engineering and Contract Manufacturing customers.
Revenues from the continuing manufacturing operations, a support group to
the Service line of business, were $134,800, $227,800 and $386,800 in fiscal
years 1996, 1995 and 1994, respectively which were 1%, 4% and 5% of the total
revenues in these fiscal years, respectively.
In fiscal year 1996 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 88% of the total revenue in fiscal
1996, compared with 78% in fiscal 1995 and 73% in fiscal 1994. The federal
government accounted for 11% of total revenue in fiscal 1996, compared with
18% in 1995 and 17% in 1994. This reflects the Company's emphasis on
marketing to the commercial market. Sales to international markets accounted
for 1% of fiscal 1996 revenues, compared with 4% in 1995 and 10% in 1994.
Gross Profits
(In Thousands) 1996 Change 1995 Change 1994
Gross Profits $3,310.1 41% $2,352.8 (8%) $2,573.3
Percentage of net revenues 38% 39% 37%
The above Gross Profits for 1996, 1995 and 1994 were net of $673,700,
$673,700 and $839,900 of amortization of computer software costs, respective-
ly. EDMS gross margins before amortization in fiscal 1996 were 46%, which was
a increase from fiscal 1995 level of 43% and an decrease from the fiscal
1994 level of 59%. EDMS gross margins after amortization in fiscal 1996
were 28%, which was an increase from fiscal 1995 and 1994 levels of (10%)
and 20%, respectively. Service gross margins of 46% decreased from fiscal
1995 and 1994 levels of 55% and 53%, respectively. This decrease in gross
margin in fiscal 1996 is the result of the CimSoft acquisition. The Cimage
software maintenance requires the Company to pay a royalty to the proprietor
of the Cimage software. Manufacturing gross margins of (75%) in fiscal
year 1996 were less favorable than those reported in fiscal years 1995 of 1%
and in fiscal 1994 of (45%).
Selling, general and administrative expenses increased from
$1,528,500 in fiscal 1995 to $2,433,400 in fiscal 1996. The primary
contributor to this increase in expenses was the increase in personnel
and related expenses. CimSoft,Incorporated had a sales office and personnel
in Irvine, California, which the Company took at the time of the acquisition.
Engineering, Research and Development (R&D) expenditures were
incurred for maintaining and upgrading existing products. Engineering and
development expenses for the current period increased from $592,500 in fiscal
1995 to $611,300. Fiscal 1996 operating expenses for R&D were 3% higher than
fiscal 1995 and 46% lower than fiscal 1994. In fiscal 1994 the Company
completed the development work on the AS/400.
The Net Income Before Income Tax in fiscal 1996 of $310,600 increased
$114,600 over that of fiscal 1995. The Company's gross margin decreased 1% in
fiscal 1996. The Company increased operating expenses by $923,700 in fiscal
1996. Revenues increased more than cost of goods sold and operating
expenses, thus yielding the above increase in the net income before income
tax in fiscal 1996.
The Company provided $105,600 of income taxes in fiscal 1996. This
expense resulted in a reduction in deferred income tax benefits.
LIQUIDITY AND CAPITAL RESOURCES
In fiscal 1996, the Company provided approximately $1,621,500 of cash
from operating activities. The Company did not utilize the bank line of
credit. The result was a cash balance of $2,071,800 and zero bank borrowing
at April 30, 1996.
Accounts receivable decreased approximately $163,000 during fiscal
1996. This decrease is the result of a steady flow of sales throughout fiscal
1996.
Inventories at April 30, 1996 decreased approximately $224,400 from
the balance at April 30, 1995. This decrease is primarily due to the
completion of projects for the EDMS product line.
Accounts Payable at April 30, 1996 increased approximately $86,200
from April 30, 1995. This increase reflected primarily the spending required
to resell the Cimage product line.
Prepaid maintenance contracts at April 30, 1996 increased approx-
imately $294,300 from April 30, 1995. This increase reflected the increase
in annual prepaid maintenances for the Cimage product line.
The Company requires progress payments on its large EDMS System
orders based on predetermined events. Reported as current liabilities,
these progress payments totaled approximately $408,500 at April 30, 1996,
which represents a decrease of approximately $449,000 from April 30, 1995.
Working capital on April 30, 1996 was $2,925,200, compared with
$1,734,800 on April 30, 1995. The Company has a loan agreement which
provides for a line of credit through April 7, 1998 (See Note 2 of the Notes
to the Financial Statements). The bank line of credit was $400,000 at
April 30, 1996, of which none was outstanding.
The Company's plans are structured so that revenues from its AS/400
and Cimage 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 $1,068,900 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 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.
While Access has just completed a very successful year and is well
positioned for the future, the Company is relatively a small player in the
technically dynamic market which is populated by large players like Microsoft
and IBM, as well as many middle and small size firms. In this fragmented
market, a great many companies are competing for each new customer order.
Access faces a future filled with opportunities but also filled with a great
many risks, many of which are beyond its control.
Independent Auditors' Report
Stockholders and Board of Directors:
We have audited the accompanying balance sheets of ACCESS Corporation as
of April 30, 1996 and 1995, 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, 1996. 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 30,1996 and 1995, and the results of its operations
and its cash flows for each of the three years in the period ended
April 30, 1996, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
- ---------------------
Deloitte & Touche LLP
Cincinnati, Ohio
May 24, 1996
ACCESS CORPORATION
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED APRIL 30, 1996, 1995 AND 1994
1996 1995 1994
REVENUE:
System Sales $3,800,795 $1,274,996 $2,189,248
Service 4,768,837 4,538,938 4,320,323
Manufacturing 134,820 227,848 386,781
--------- --------- ---------
Total 8,704,452 6,041,782 6,896,352
--------- --------- ---------
COST:
System sales, exclusive of amoritization shown separately below 2,052,266 729,965 902,566
Service 2,432,402 2,059,347 2,020,136
Manufacturing 236,022 226,016 560,486
--------- --------- ---------
Total 4,720,690 3,015,328 3,483,188
--------- --------- ---------
GROSS PROFIT BEFORE AMORTIZATION 3,983,762 3,026,454 3,413,164
AMORTIZATION OF COMPUTER SOFTWARE COST 673,704 673,704 839,904
--------- --------- ---------
GROSS PROFIT 3,310,058 2,352,750 2,573,260
OPERATING EXPENSES:
Selling, general and administrative 2,433,376 1,528,460 2,007,953
Engineering, research and development 611,295 592,504 1,124,789
--------- --------- ---------
OPERATING INCOME (LOSS) 265,387 231,786 (559,482)
OTHER INCOME(EXPENSE) 54,612 (3,805) 24,047
INTEREST EXPENSE (9,378) (31,911) (26,450)
--------- --------- ---------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 310,621 196,070 (561,885)
INCOME TAXES (BENEFIT) (Note 6) 105,600 66,700 (10,509)
--------- --------- ---------
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS 205,021 129,370 (551,376)
DISCONTINUED OPERATIONS (Note 9):
Net loss from operations of discontinued E&M business (73,812)
Income on disposal of discontinued operations 9,949
--------- --------- ---------
NET EARNINGS (LOSS) 205,021 129,370 (615,239)
PREFERRED DIVIDEND 102,510 64,685 -
--------- --------- ---------
INCOME (LOSS) APPLICABLE TO COMMON SHARES $ 102,511 $ 64,685 $ (615,239)
========= ========= =========
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 $ 0.02 $ 0.01 $ (0.11)
Net earnings (loss) $ 0.02 $ 0.01 $ (0.13)
========= ========= =========
<FN>
See notes to financial statements.
ACCESS CORPORATION
STATEMENTS OF CAPITAL STOCK AND OTHER STOCKHOLDERS' EQUITY
APRIL 30, 1996, 1995 AND 1994
Additional Retained
Treasury Common Class A Common Paid-in Earnings
Shares Amount Shares Amount Shares Amount Capital (Deficit)
--------------------------------------------------------------------------------------------
BALANCE, April 30, 1993 16,270 $(15,383) 3,453,257 $345,326 1,428,572 $142,857 $10,826,201 $(8,263,580)
Deferred compensation under
restricted stock plan (1,354)
Net loss (615,239)
------ -------- --------- -------- --------- -------- ----------- ------------
BALANCE, April 30, 1994 16,270 (15,383) 3,453,257 345,326 1,428,572 142,857 10,824,847 (8,878,819)
Class One Preferred Stock
dividends (64,685)
Net earnings 129,370
------ -------- --------- -------- --------- -------- ----------- -----------
BALANCE, April 30,1995 16,270 (15,383) 3,453,257 345,326 1,428,572 142,857 10,760,162 (8,749,449)
Class One Preferred Stock
dividends (102,510)
Conversion of Class A Common
Stock to Common Stock 1,428,572 142,857 (1,428,572) (142,857)
Net earnings 205,021
------ -------- --------- -------- --------- -------- ----------- -----------
BALANCE, April 30, 1996 16,270 $(15,383) 4,881,829 $488,183 - $ - $10,657,652 $(8,544,428)
====== ======== ========= ======== ========= ======== =========== ===========
<FN>
See notes to financial statements.
ACCESS CORPORATION
BALANCE SHEETS
APRIL 30, 1996 AND 1995
LIABILITIES AND CAPITAL STOCK AND
ASSETS 1996 1995 OTHER STOCKHOLDERS' EQUITY 1996 1995
CURRENT ASSETS: CURRENT LIABILITIES:
Cash and cash equivalents $2,071,772 $ 883,487 Accounts payable $ 285,703 $ 95,864
Accounts receivable, less allowance Accrued salaries, wages and commissions 367,282 120,054
for doubtful accounts of $189,685 in 1996 Accrued taxes 22,400 24,429
and $18,100 in 1995 (Note 2): 1,890,673 1,015,811 Accrued warranty expense - 44,275
Inventories (Note 2): Other accrued liabilities 49,385 40,256
Raw materials and purchased parts 64,553 79,495 Accrued Royalty 291,192 37,427
Work-in-process 102,900 318,598 Advances from customers 408,460 339,456
Finished goods 21,057 14,772 Capital leases 19,599 56,613
---------- --------- --------- ---------
Total inventories 188,510 412,865 Total current liabilities 1,444,021 758,374
Prepaid expenses 106,283 68,990
Deferred income tax, net of valuation PREPAID MAINTENANCE CONTRACTS 609,078 299,578
allowance of $300,000 (Note 6) 112,000 112,000
---------- ---------
Total current assets 4,369,238 2,493,153 CAPITAL LEASES - 23,099
EQUIPMENT AND LEASEHOLD MANDATORY REDEEMABLE CLASS ONE
IMPROVEMENTS (Note 2): PREFERRED STOCK (Note 3) 1,500,000 1,500,000
Computer hardware and software 1,449,310 1,952,220 Preferred Dividends - Accrued 102,510 64,685
Machinery and equipment 503,337 503,337
Office and service equipment 364,492 313,431 CAPITAL STOCK AND OTHER
Leasehold improvements 13,405 5,000 STOCKHOLDERS' EQUITY (Notes 2,4):
Tools, dies and fixtures 115,013 115,013 Capital Stock:
---------- --------- Common Stock, no par value,authorized,Ep
Total 2,445,557 2,889,001 8,000,000 shares; issued and outstanding
Less accumulated depreciation 2,187,785 2,646,833 4,881,829 in 1996 and 3,453,257 shares in 1995 488,183 345,325
---------- --------- Class A Common Stock, no par value,
Net equipment and leasehold authorized 2,000,000 shares; issued and
improvements 257,772 242,168 outstanding 1,428,572 shares in 1995 142,857
Additional paid-in capital 10,657,652 10,760,162
COMPUTER SOFTWARE COSTS, net of Deficit from April 1, 1985 (8,544,428 (8,749,449)
accumulated amortization of $2,299,595 in 16,270 Common Stock shares in treasury,
1996 and $1,625,891 in 1995 1,068,923 1,742,627 at cost (15,383) (15,383)
---------- ----------
Total capital stock and other
DEFERRED INCOME TAX BENEFIT, stockholders' equity 2,586,024 2,483,512
net of valuation allowance of $2,134,000 in ---------- ---------
1996 and 1995 (Note 6) 545,700 651,300
--------- ---------
TOTAL $6,241,633 $5,129,248 TOTAL $6,241,633 $5,129,248
========== ========= ========== ==========
<FN>
See notes to financial statements.
ACCESS CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED APRIL 30, 1996, 1995 AND 1994
1996 1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ 205,021 $ 129,370 $ (615,239)
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Amortization 673,704 673,704 839,904
Depreciation 143,027 139,819 254,943
Deferred income taxes 105,600 66,700
Deferred compensation under restricted stock plan (1,354)
Loss (gain) on disposal of fixed assets 1,111 7,028 (3,608)
Prepaid maintenance contracts 294,324 100,606 66,704
Change in assets and liabilities:
Accounts receivable 162,968 (124,211) 1,106,941
Inventories 224,355 103,163 60,411
Prepaid expenses (37,293) 37,672 70,470
Accounts payable 86,215 (62,481) (133,824)
Accrued liabilities 211,417 (54,023) (283,155)
Advances from customers (448,994) 30,151 (449,309)
---------- ---------- ----------
Net cash provided by operating activities 1,621,455 1,047,498 912,884
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of business, net of cash received (148,629)
Capital additions (166,010) (22,779) (84,316)
Proceeds from disposal of fixed assets 6,267 2,156 22,459
---------- ---------- ----------
Net cash used in investing activities (308,372) (20,623) (61,857)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on bank line of credit (71,807) (848,959)
Dividends on Class One Preferred Stock (64,685)
Payments on capital leases (60,112) (75,081) (52,068)
---------- ---------- ----------
Net cash used in financing activities (124,797) (146,888) (901,027)
---------- ---------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,188,286 879,987 (50,000)
CASH AND CASH EQUIVALENTS, Beginning of year 883,487 3,500 53,500
---------- ---------- ----------
CASH AND CASH EQUIVALENTS, End of year $2,071,773 $ 883,487 $ 3,500
========== ========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid for interest $ 31,911 $ 31,911 $ 26,616
During 1994, the Company entered into capital leases
totaling $206,860 (Note 8).
Dividends declared but unpaid on Class One Preferred Stock totaled
$102,510 (1996) and $64,685 (1995)
<FN>
See notes to financial statements.
NOTES TO FINANCIAL STATEMENTS ACCESS Corporation
for the years ended April 30, 1996, 1995 and 1994
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.
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, $673,704 and $839,904 for fiscal years 1996, 1995 and 1994,
respectively.
Use of Estimates
The preparation of the 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 amounts could differ from those estimates.
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.
Stock-Based Compensation
The FASB issued Statement of Financial Accounting Standards No.
123 - Accounting for Stock-Based Compensation in October 1995. The standard
defines a fair-value based method of accounting for stock-based compensation
but permits compensation expense to continue to be measured using the
intrinsic value-based method previously used. The Company intends to
continue measuring compensation expense using the intrinsic value-based
method and under the provisions of the standard, which must be adopted in
1997, will be required to make pro forma disclosures of net income and
earnings per share as if the fair value method had been used.
Note 2: Bank Line of Credit
The Company's current line of credit agreement ($400,000 as of April 7,
1996) extends through April 7, 1998. Borrowings under the agreement bear
interest at one percent over the prime rate, 8 1/4% at April 30, 1996.
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.
- ---------------------------------------------------------------------------------
1996 1995 1994
- ---------------------------------------------------------------------------------
Maximum borrowings
during the year $ -0- $127,354 $790,249
Average outstanding balance
during the year $ -0- $ 27,956 $302,652
Weighted average
interest rate 9.1% 7.5%
(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 Class One Preferred
Stock. In April 1993, the Company issued to Oce an additional 5,000 shares
of mandatorily redeemable Class One Preferred Stock for $500,000.
The Class One Preferred Stock is divided into three series: 10,000
shares of 7% Class One Preferred Stock ($1,000,000); 2,500 shares of 9% Class
One Preferred Stock ($250,000), and 2,500 shares of variable rate Class One
Preferred Stock ($250,000). The variable rate Class One Preferred Stock was
issued at the rate of 9%. Dividends on the Class One 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 Class
One 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 Class One 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, 1996, the
Company had authorized and issued a total of 15,000 shares of Class One
Preferred Stock. The Company was not required to and has not redeemed any
Class One Preferred Stock in Fiscal 1996.
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 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. In Fiscal 1996, the Class A Common Stock was converted
to Common Stock.
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 1994 - 1996.
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 non-qualified 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, 1994 878,200 435,800
Canceled ( 500) ( 73,400)
_______ _______
Balance, April 30, 1995 877,700 362,400
Issued 350,000
Canceled ( 2,400) ( 2,400)
_______ _______
Balance, April 30, 1996 875,300 710,000
======= =======
At April 30, 1996, options to purchase 281,250 shares of Common Stock
were exercisable at $.50 to $1.00 per share.
Note 5: Engineering, Research and Development
Engineering, research and development costs for the years ended
April 30, 1996, 1995 and 1994 are as follows:
- ----------------------------------------------------------------------------
1996 1995 1994
- ----------------------------------------------------------------------------
Charged to specific
customer orders $380,741 $ 495,887 $ 820,614
Charged directly to
engineering, research
and development 611,295 592,504 1,124,789
_________ ________ _________
Total cost of engineering,
research and develop-
ment efforts $922,036 $1,088,391 $1,945,403
======= ========= =========
Note 6: Income Taxes
The provision for income taxes (benefit) includes the following:
- ------------------------------------------------------------------------------
1996 1995 1994
- ------------------------------------------------------------------------------
Federal:
Deferred $105,600 $ 66,700 ($214,100)
Currently payable
(Refundable) 164,000 66,700 ( 10,509)
Tax benefit of net
operating loss
carryforward (164,000) (66,700)
Valuation Allowance 214,100
________ ________ ________
Total $105,600 $66,700 ($10,509)
======= ======= ========
Deferred income taxes reflect the net income tax effects of (a) temp-
orary 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 carryforwards. The income tax effects of signif-
icant items comprising the Company's net deferred income tax asset as of
April 30, 1996 and 1995 are as follows:
- -----------------------------------------------------------------------------
1996 1995
- -----------------------------------------------------------------------------
Net operating loss carryforwards
Federal $2,826,600 $3,100,700
State 75,800 37,000
Temporary differences:
Customer Deposits 67,500
Accrued warranty expense 25,000
Inventory capitalization 96,400 96,000
Other 131,100 44,300
_________ _________
Total $3,197,400 $3,303,000
Less Valuation Allowance (2,539,700) (2,539,700)
_________ _________
Net deferred income tax asset $ 657,700 $ 763,300
======== ========
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 $1,622,000
2004 2,762,000
2005 3,027,000
2008 459,000
2009 803,000
---------
Total $8,673,000
=========
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:
- -----------------------------------------------------------------------------
1996 1995 1994
- -----------------------------------------------------------------------------
Federal Government 10.9% 18.4% 16.6%
Aerospace 14.9% 18.8% 5.4%
Petroleum 4.5% 4.9% 4.4%
Computer 10.5% 10.5% 2.1%
Medical 8.6% 7.2% 20.6%
Manufacturing 1.5% 12.4% 3.0%
Utilities 33.4% 4.6% -0-
Accounts receivable from these customers at April 30, 1996 and
April 30, 1995 were $1,100,800 and $778,100, respectively.
Note 8: Lease Commitments
The Company leases office and manufacturing facilities and equipment
under operating leases. Rent expense was $244,718 (1996), $223,977 (1995),
and $342,311 (1994) of which $64,313 (1996), $60,281 (1995) and $131,268
(1994), were under short-term cancelable leases.
As of April 30, 1996, minimum annual payments under all non-cancelable
long-term operating lease agreements are: $186,780 (1997), $166,780 (1998),
$170,950 (1999), and $170,950 (2000).
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 for fiscal year
1994.
Note 10: CimSoft Acquisition
On July 31, 1995, the Company acquired CimSoft Incorpoated, which started
business in June 1995, for $257,500 in a business combinatiuon which was
accounted for using the purchase method. The results of operations of the
company include CimSoft from the date of acquisition. Proforma results of
operations of CimSoft are not material. CimSoft was a distributor of Cimage
software and a Cimage service provider in North America.
CORPORATE PROFILE
Access, a Cincinnati based company has two business units: Electronic
Document Management Systems (EDMS) and Customer Support (component and
systems maintenance).
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' EDMS business unit provides software and professional
services to assist its customers in the design, configuration, installation
and maintenance of electronic document systems. The Customer Support
business unit is comprised of hardware and software service which is
provided to the Company's installed base of customers and third-party
maintenance customers. It also provides media and parts on a worldwide basis
to the Company's installed customer base.
Access EDMS Business Unit
Access Corporation is dedicated to enhancing the quality of its
customers' products by providing world class software and professional
services for their document based processes. 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, document and workflow management. Access
provides document and workflow management in three distinct markets: Discrete
Manufacturing, Oil & Gas, and Utilities. Access provides both software and
professional services to configure, install and maintain electronic document
management solutions. Access' extensive history in sales and service of
document based retrieval technology has allowed the company to build
an expertise in applying current state of the technologies to customers'
document management products.
The EDMS Business Unit experienced significant growth in fiscal 1996, in
terms of both revenues and staffing. In the first quarter of fiscal 1996,
Access acquired CimSoft Inc., a systems integrator servicing a wide base
of EDMS customers within the United States. At the same time, Access also
formalized a partnership with Cimage Enterprise Systems Ltd., making
Access the exclusive distribution and support provider for Cimage products
within North America. These two business ventures well positioned Access
for rapid growth through three changes: an increased customer base, an
additional leading edge software offering, and additional personnel
skilled in the sale and support of EDMS applications. In addition to this
new role as a software reseller, Access continues to maintain and develop
Document Management Software and still provides the industry's only large
format EDMS available on the IBM AS/400 computer.
Throughout fiscal 1996, Access increased staff within the EDMS
Business Unit to meet the growing demand for software products and
professional support services. Through the continued recruitment
of EDMS experienced personnel, Access was able to minimize the training time
and costs associated with expanding our EDMS business. As a result
of the business ventures previously mentioned, this business unit enjoyed
a 198% growth in revenues during fiscal 1996, compared with fiscal 1995.
Equally importantly, Access was able to meet its originally stated goal
of sustaining a consistent increased profit throughout this growth period.
Access' EDMS software offerings fall into two product areas: EDICS
(Engineering Document Image Control System) and the Cimage Document Manager
System. EDICS is primarily focused at providing Document Life Cycle
Management on the IBM AS/400 platform, while the Cimage Document Management
is focused on Document Distribution applications using UNIX and Microsoft
Windows NT servers.
Both products utilize a powerful database application for managing
documents and related information, including paper based documents, A through
J size drawings, Computer Aided Design (CAD) data, company procedures and
office correspondence. These documents both come from multiple sources,
and are in multiple formats. The EDMS applications integrate all of these
into a single system which fully automates the revision process, the
distribution process, and also provides flexible tools for viewing, editing,
and printing.
Access also delivers high-quality, high-value Professional Services
to its customers. Access' industry specialization allows it to apply its
document system expertise to its customers' business problems in Document
Management Applications. While the various software modules are the same
at each customer, each implementation is unique through the "tailoring" of
the document organizational structure, document-to-document relationships,
and user interface presentation. Through Access' understanding of Document
Management requirements, customers have been able to achieve industry
compliance with regulatory agencies, become ISO 9000 certified, and
achieve system implementations in extremely short time periods. Access
increased fiscal 1996 Professional Services revenue by 6% as compared to
fiscal 1995. This increase is primarily due to the delivery of Professional
Services to our customers utilizing the Cimage product.
Customer Support
Access' Customer Support business unit provides quality hardware and
software service on a nationwide basis to both the company's installed base
of EDMS customers and third-party maintenance customers. The Software Support
revenue from our EDMS customers grew by 42% in fiscal 1996 over fiscal 1995.
This growth is attributed to the Company bringing Cimage customers under
maintenance contracts.
Third-party maintenance includes the support of non-Access
electronic and electromechanical equipment such as card embossers, microfiche
duplicators, microfilm scanners, large drawing format scanners, large format
plotters, highly sophisticated 5-1/4" and 12" laser drives, and optical
jukebox systems. Access has a number of Support Partners that recommend
Access as their nationwide service provider. The Company's third-party
maintenance revenue increased by 41% in fiscal 1996 over fiscal 1995.
Growth in third-party maintenance is an Access strategic objective.
Access continues to pursue additional third-party service opportunities
with manufacturers and distributors of electronic and electromechanical
products. Access' key to success in third-party maintenance is the ability
to provide their Support Partners with all of the benefits of having
their own national service company without having to build and support the
infrastructure of a nationwide service organization. Access offers its
business partners a 24 hour a day, toll free dispatch center; rapid
on-site service response; quality repairs and preventive maintenance for
their customers.
Sales
EDMS 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.
Access' primary marketing focus is the sale of its EDMS products to
discrete manufacturers, oil and gas, and utility providers. The market
segment which accounted for the highest percentage of the Company's revenue
was telecommunications, at 34% of total company revenues.
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, 1996, was 381.
Form 10-K Available
An Annual Report of Form 10-K will be filed with the Securities and
Exchange Commission for the fiscal year ending April 30, 1996. 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.
ACCESS Directors, Officers and Shareholder Information
Board of Directors Officers Shareholder Information
Kent P. Friel Scott D. Watkins Transfer Agent/Registrar
Chairman of the Board President and Chief Fifth Third Bank
President, Schonberg Executive Officer Fifth Third Center
Associates, Inc. Corporate Trust
Cincinnati, Ohio Cincinnati, OH 45263
Scott D. Watkins Newton D. Baker Independent Auditors
President and Chief Executive Vice President Deloitte & Touche LLP
Executive Officer and Treasurer 250 East Fifth Street
Cincinnati, OH
Newton D. Baker Kim Bollinger 45201-5340
Executive Vice President Vice President,
and Treasurer Customer Services General Counsel
Taft,Stettinius & Hollister
1800 Star Bank Center
James H. Hardie Marc Baines Cincinnati, Ohio 45202
Partner in law firm Vice President,
of Reed Smith Shaw Sales and Marketing Patent Counsel
& McClay Wood, Herron & Evans
Pittsburgh, Pennsylvania 2700 Carew Tower
Cincinnati, Ohio 45202
Robert J. Kalthoff James M. Anderson
Chairman of the Kalthoff Secretary, Partner in law
Group, Inc. firm of Taft, Stettinius
Cincinnati, Ohio & Hollister
Cincinnati, Ohio
Dennis J. Sullivan, Jr.
Executive Counselor
Dan Pinger Relations,Inc.
Cincinnati, Ohio
John W. Weil
President
Weil Associates, Inc.
Bloomfield Hills, Michigan