ANALYTICAL SURVEYS INC, 10-K, 1998-12-24

ANALYTICAL SURVEYS INC
10-K, 1998-12-24
BUSINESS SERVICES, NEC

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1998

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NUMBER 0-13111

ANALYTICAL SURVEYS, INC.
(Exact name of registrant as specified in its charter)

Colorado 84-0846389
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State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)

941 Meridian Street, Indianapolis, IN 46204
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(Address or principal executive offices) (Zip Code)

Registrant's telephone number, including area code (317) 634-1000
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered

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

Securities registered pursuant to section 12(g) of the Act:
Common Stock
------------------------------------------------------------
(Title of class)

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

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

The aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant is $139,433,000, based on the closing price
of the Common Stock on December 15, 1998.

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The number of shares outstanding of the registrant's Common Stock, as of
December 15, 1998, was 6,772,054.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated by reference into Part III of this
Report: the Registrant's definitive proxy statement for its 1999 Annual
Meeting of Shareholders.

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TABLE OF CONTENTS

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Page
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PART I.

Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . 14

Item 4 Submission of Matters to a Vote of Security Holders. . . . . . . . . 14

PART II.

Item 5. Market for Common Equity and Related Stockholder Matters . . . . . . 14

Item 6. Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . 15

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . 17

Item 7A. Quantitative and Qualitative Disclosures . . . . . . . . . . . . . . 24

Item 8. Financial Statements and Supplementary Data. . . . . . . . . . . . . 24

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure. . . . . . . . . . . . . . . . . . . . . . . . 24

PART III.

The information required by Part III (Items 10, 11, 12 and 13) is
incorporated by reference to the Company's Proxy Statement for its 1999
Annual Meeting of Shareholders in accordance with General Instruction G(3) of
Form 10-K.

PART IV.

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K . . 43

</TABLE>

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PART I.

ITEM 1. BUSINESS.

OVERVIEW

Analytical Surveys, Inc. ("ASI" or the "Company") is a leading provider
of customized data conversion and digital mapping services for the geographic
information systems market. A geographic information system ("GIS") is a
high-resolution, large-scale, richly detailed "intelligent map" that allows
users to input, update, query, analyze and display detailed information about
a geographic area. Geographic information systems are widely used by
utilities, state and local governments, federal agencies and commercial
businesses to manage massive infrastructures effectively, to improve
operating efficiencies and to analyze future demand for facilities. The
Company primarily targets utilities and state and local governments, and its
current customers include but are not limited to the New York City Department
of the Environment, Florida Power & Light, Niagra Mohawk Power Company,
Entergy, Michigan Consolidated Gas, U S WEST and FirstEnergy Corp.

The Company believes that the market for geographic information systems
is experiencing growth due to numerous factors, including: growing awareness
of the benefits of GIS technology; significant reductions in computer
hardware prices; increased capability and reliability of hardware and
software; deregulation and consolidation in the utility industry; and
increased demand for geographic information systems in growing communities.
In addition, the Company believes that GIS users are increasingly outsourcing
their data conversion and other GIS services projects to third-party
providers such as ASI. The Company provides its customers with a single
source for all data conversion services necessary in the production of a
customized GIS.

In 1995, ASI embarked on its current growth strategy, which includes
consolidation of the fragmented GIS services industry. To date, the Company
has completed four strategic acquisitions that have expanded the Company's
geographical scope, capacity, customer base, product offerings, proprietary
technology and operational expertise. The Company acquired Intelligraphics,
Inc. ("Intelligraphics") located in Wisconsin in December 1995; Westinghouse
Landmark GIS, Inc. ("ASI Landmark") located in North Carolina in July 1996,
MSE Corporation ("MSE") located in Indiana in July 1997 and Cartotech, Inc.
("Cartotech") located in Texas in June 1998.

Through internal growth and acquisitions, the Company has increased its
sales from $9.1 million for fiscal 1993 to $88.2 million for fiscal 1998, an
annual compound average growth rate of 57.5%. In addition, the Company's net
income has increased from $485,000 to $7.2 million over the same period, an
annual compound average growth rate of 71.5%. As of September 30, 1998,
ASI's backlog, which represents the amount of revenue that has not been
recognized on signed contracts, was $99.0 million, up from $9.1 million at
September 30, 1993.

INDUSTRY BACKGROUND

Large organizations, such as utility companies, local governments,
federal agencies and businesses, often need tools with which they can monitor
complex networks of assets and infrastructure, forecast trends, analyze
present and future demands on facilities and manage daily operations. Central
to many of these processes are the availability and integration of accurate
geo-referenced information.

Historically, geo-referenced information, such as the location of
utility facilities and infrastructure, tax data, property assessments and
zoning restrictions, has been available only in paper-based form, such as
maps, aerial photographs and property records, or in tabular databases.
Geo-referenced information in these forms is difficult to integrate into
useful information systems and offers few opportunities to leverage
information into additional uses in a timely and effective manner. The advent
of more powerful, reliable and less expensive computer hardware and software,
greater standardization of operating systems such as Windows NT, and more
cost-effective means of delivering a GIS, such as CD-ROM or electronic
distributions via the Internet, have made geographic information

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systems an affordable and widely utilized tool in many organizations. As a
result, more organizations are implementing geographic information systems in
order to manage previously overwhelming amounts of information and are
expanding both the access to and applications for geographic information
systems.

GEOGRAPHIC INFORMATION SYSTEMS

A geographic information system is a high-resolution, large-scale (E.G.,
one inch = 100 feet), richly detailed "intelligent map" that allows users to
input, update, query, analyze and display information about a geographic
area. A GIS integrates database operations, such as query and statistical
analyses, with the unique visualization and geographic analyses offered by
paper maps. The capabilities of a GIS make it a valuable tool for a wide
range of organizations for complex analysis and planning.

A GIS is produced by converting high-resolution aerial photography or
paper maps into a digital form to create a digital base map. Once a digital
base map has been created, additional geo-referenced data (E.G., water and
sewer lines, power lines and property boundaries) are converted into digital
form and added as additional layers of information onto the base map. The map
can then be linked to existing or newly created tabular databases, such as
property records and billing and usage history. The resulting GIS is used to
perform the specific analyses and functions required by users. New or changed
data can then be added easily, allowing users to maintain records that are
more accurate, detailed and current than paper maps, and can be accessed
simultaneously by multiple users within an organization.

USERS OF GEOGRAPHIC INFORMATION SYSTEMS

Geographic information systems are most widely used by utilities, state
and local governments, federal agencies and commercial businesses to manage
massive infrastructures more effectively, to improve operating efficiencies
and to analyze future demand for facilities. Typical customers and
applications for geographic information systems are illustrated below.

CUSTOMER TYPE SAMPLE USES

Gas and electric utilities and dispatch service crews
telephone companies monitor capital equipment replacement
and maintenance
evaluate and select rights-of-way
corridors
analyze environmental impacts

State and local governments dispatch emergency vehicles
analyze crime or traffic patterns
determine tax assessments
analyze future demand for roads or
recreational facilities

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Federal agencies manage forests
track soil and water pollution levels
create and maintain navigation systems
analyze population statistics to determine
voting districts

Commercial businesses manage natural resources
design civil engineering projects
develop aircraft terrain avoidance systems

THE GIS MARKET

Frost & Sullivan, an industry research firm, estimates that the global
GIS market will grow from $4.5 billion in 1997 to $8.1 billion by 2002. Frost &
Sullivan identifies five segments within the GIS market: software for
personal computers; software for work stations; software for mainframes;
data; and services (which includes consulting, systems integration, database
design, data collection and data conversion). The Company competes primarily
in the data conversion and collection segments of the GIS services industry.
Frost & Sullivan estimates that the GIS services market, which represents
approximately 70% of the global GIS market, will grow from $3.2 billion in
1997 to $5.5 billion in 2002.

The GIS services business is very competitive and highly fragmented.
Participants in the industry include small regional firms, large independent
firms, large companies with GIS services divisions, in-house operations and
international low-cost providers of data conversion services. The Company
believes that many of the businesses in the GIS services industry do not have
adequate access to capital for expansion, lack the capacity to complete
large, long-term projects and do not have the technical expertise or
experience that customers increasingly require of their GIS services vendors.
As a result, the Company believes that the industry is poised for
consolidation.

FACTORS DRIVING MARKET GROWTH

Several factors are driving the growth of the GIS services market:

INCREASED AWARENESS OF THE BENEFITS OF GIS. As GIS technology is
implemented and becomes an integral part of the planning and
decision-making processes throughout organizations, such as utilities
and governments, an increased awareness of the benefits of geographic
information systems is driving greater demand.

ADVANCES IN TECHNOLOGY. Significant reductions in computer hardware
and software prices, as well as increased processing power and
reliability of information systems, have made geographic information
systems more technologically feasible and economically viable for
organizations to implement and maintain. As a result, GIS technology
is available for more users within organizations, thereby increasing
access and applications for geographic information systems.

DEREGULATION AND CONSOLIDATION IN THE UTILITY INDUSTRY. Increased
competition in the utility industry, brought about by deregulation and
consolidation, has fueled demand for geographic information systems as
utilities seek the benefits of geographic information systems in order
to market more effectively, increase operating efficiencies and manage
larger infrastructures.

NEEDS OF GROWING COMMUNITIES. Rapid population growth has increased
the requirements of certain state and local governments for geographic
information systems to assist in building and managing
infrastructures, including resources such as roads, utilities and fire
departments.

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TREND TOWARDS OUTSOURCING. The Company believes that GIS users are
increasingly outsourcing their data conversion and collection
projects, recognizing the numerous benefits of leveraging the
expertise and capacity of third-party vendors. In addition,
outsourcing allows customers to continue to focus on their core
businesses and avoid the significant investments in personnel and
infrastructure required to implement and maintain a GIS.

ANALYTICAL SURVEYS, INC.

The Company serves as a single-source provider for all data conversion
and collection services necessary to create a customized GIS. Through
internal development and strategic acquisitions, the Company has developed
significant resources and capacity to perform the wide range of data
conversion and collection tasks necessary in the successful completion of
large, complex projects for a wide range of industries. The Company has also
developed and acquired industry-leading expertise and proprietary technology
essential to accurately and timely satisfy the unique requirements of each
GIS project. In addition, ASI's completion of four strategic acquisitions
since 1995 has established it as one of the industry's leading consolidators.

STRATEGY

The Company's objective is to maintain and enhance its leadership
position in the data conversion and digital mapping industry. This objective
is reflected in the Company's strategy:

EXPAND BUSINESS IN EXISTING MARKETS. The Company believes that there
is significant potential within its existing customer base for
expanded services and products and intends to add to the breadth of
services it offers to such customers. The Company also intends to
capitalize on the increasing number of GIS users in its core markets
of utilities and state and local governments by marketing to new
customers in these markets and increasing capacity in order to meet
the demands of an expanded customer base.

CONSOLIDATE INDUSTRY EXPERTISE AND "BEST PRACTICES" THROUGH STRATEGIC
ACQUISITIONS. In 1995, ASI embarked on a strategy to acquire companies
with demonstrated records of performance, proven operating methods,
solid management teams and complementary technologies and customer
bases. To date, the Company has completed four strategic acquisitions
that have expanded the Company's geographical scope, capacity,
customer base, product offerings, proprietary technology and
operational expertise. By retaining the core management teams at these
acquired companies, the Company believes that it is able to take
advantage of the "best practices" of each acquired company. The
Company intends to continue consolidating the highly fragmented GIS
services industry by targeting similar businesses for acquisition. See
" Recent Acquisitions" and "Risk Factors Risks Associated with
Acquisition Strategy."

CONTINUE TO MAINTAIN AND DEVELOP TECHNOLOGICAL AND OPERATIONAL
LEADERSHIP. The Company believes that its past success has been
largely due to its technological expertise and operating procedures.
The Company has developed and acquired proprietary software and
procedures that automate portions of otherwise labor-intensive data
conversion processes, enabling the Company to provide cost-effective
and high-quality services on a timely basis. The Company intends to
continue its efforts to develop new technology and to improve its
existing technology and procedures, thereby enhancing its ability to
expand into additional markets and further improve its production
capacity and productivity. See " Research and Development."

EXPAND INTO INTERNATIONAL MARKETS. In fiscal 1998, revenues from
international sales represented approximately 8% of the Company's
total revenues. The Company intends to increase its share of the
international GIS services market by targeting international GIS users
within its core markets. The Company believes that alliances with
local businesses or individuals may be important to successful entry
into certain international markets. The Company intends to continue to
seek out

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such relationships and to continue to market directly to international
GIS users. See " Sales and Marketing."

ASI SERVICES

DESIGN OF A GIS PROJECT

Data conversion and collection services comprise an important part of
the process of developing a geographic information system. The development of
a GIS typically involves multiple vendors, each of whom may participate in
one or more portions of the overall project. Such vendors, which include
consultants, hardware and software vendors and data conversion and collection
providers, are generally evaluated on the basis of experience, expertise,
reputation, production capacity and price. The typical phases of a GIS
project are: planning/bidding; contract award; data collection; data
conversion; and maintenance and updating.

A description of the tasks performed during each phase of a typical
project is set forth below. These tasks, from planning/bidding through data
conversion, generally take between one to four years to complete. Services
provided by the Company are highlighted in italicized boldface type.

PROJECT PHASE ACTIVITIES

Planning/Bidding Select consultant, if desired
Conduct needs assessment
Determine scope and functions of GIS
Prepare technical specifications
Design database
Distribute requests for proposal

Contract Award Select hardware and software vendors
Select data conversion vendor

Data Collection CONVERT PAPER MAPS AND EXISTING COMPUTER
BASED INFORMATION TO GIS DIGITAL FORMAT
OBTAIN AERIAL PHOTOGRAPHS
CONDUCT FIELD INVENTORY
OBTAIN OTHER DATA PAPER OR DIGITAL
VERIFY ACCURACY OF DATA

Data Conversion CREATE DIGITAL LAND-BASE MAP
-DIGITAL ORTHOPHOTOGRAPHY
-PHOTOGRAMMETRIC MAPPING
-CADASTRAL MAPPING
CONVERT OTHER GEO-REFERENCED DATA INTO DIGITAL FORM
TO CREATE INFORMATION "LAYERS"

Maintenance GATHER AND CONVERT UPDATED DATA
and Updating

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SPECIALIZED SERVICES OF ASI

The Company offers a full range of services to create the digital base
maps and databases of related geo-referenced information used in geographic
information systems.

DIGITAL LAND BASE MAPS. ASI uses specialized computers and internally
developed proprietary software to create digital land base maps from paper
maps, aerial photographs, land surveys and legal descriptions. The base maps
are created using one of three technologies, depending on the needs of the
customer: photogrammetric mapping, digital orthophotography or cadastral
mapping.

PHOTOGRAMMETRIC MAPPING. Photogrammetric mapping produces a digital land
base map using data that is extracted from aerial photographs. The process
uses an analytical stereoplotter (a three-dimensional viewing and data
recording device), specialized computer equipment and proprietary software
and operating procedures to draw, with lines, a highly precise map of
visible ground features. Photogrammetric mapping may include contour and
elevation information.

DIGITAL ORTHOPHOTOGRAPHY. Digital orthophotography is used to create richly
detailed digital maps that have the appearance of, and are based on, aerial
photographs. Aerial photographs are scanned into a computer, and the
resulting image is corrected (orthorectified) to delete distortions in
order to produce a highly precise map. Vector lines can be superimposed
onto the map to enable users to determine the precise location of any
particular feature or to measure distances from one feature to another.
Digital orthophotographs also can be used as base maps for the layering of
additional geo-referenced data.

CADASTRAL MAPPING. Cadastral maps illustrate property lines and are
prepared by digitizing existing paper maps or converting the legal property
descriptions into map coordinates.

OTHER GEO-REFERENCED INFORMATION. Once the base map is produced, links to
tabular databases are created, and other geo-referenced data, such as
buildings, telephone poles and zoning restrictions, are collected, verified,
converted into digital format and added to the base map to create a GIS. The
Company provides an experienced field inventory staff to collect and verify
information and uses computerized and manual techniques to verify and
digitize data from paper sources. Once a GIS is completed, users can view the
base map and any or all of the layers of data on a computer screen and can
retrieve selected data concerning any desired location appearing on the
screen or all data matching one or more variables.

RECENT ACQUISITIONS

In 1995, the Company embarked on its current growth strategy, including
consolidation of the fragmented GIS services industry. The Company acquired
substantially all of the assets of Intelligraphics, based in Wisconsin, in
December 1995. Intelligraphics, with over 200 employees, significantly
expanded the Company's capacity to perform large projects, added utility
industry expertise and established ASI's presence in the midwestern United
States. The acquisition contributed over 25 new customers and $12.3 million
in backlog to the Company.

In July 1996, the Company expanded its services to state and local
governments by acquiring substantially all of the assets of ASI Landmark.
Based in North Carolina, ASI Landmark's primary business is land base and
cadastral mapping. Prior to this acquisition, ASI had utilized outside
subcontractors for certain of these services. ASI Landmark also provided the
Company with additional capacity for photogrammetry and a presence in the
eastern and southeastern United States. The acquisition contributed
approximately 20 new customers, $9.1 million in backlog and 105 employees to
the Company.

The Company acquired MSE in July 1997. The acquisition of Indiana-based
MSE gave the Company greater capacity to serve the utility market and further
enhanced ASI's presence in the midwestern United States. In addition, the
acquisition of MSE contributed over 200 new customers and $43.0 million of
backlog to the Company.

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Over 325 employees joined the ASI workforce as a result of the MSE
acquisition, including the Company's current Chief Operations Officer and
Chief Administrative Officer.

The Company acquired Texas-based Cartotech in June 1998. The Cartotech
acquisition extended ASI's presence in the utility market, enhanced the
Company's field inventory operations and provided the Company with a strong
presence in the southwestern United States. The Cartotech acquisition
contributed over 50 new customers, 270 employees and backlog of $19.3 million
to the Company. One of Cartotech's customers, FirstEnergy Corp. (formerly
known as Ohio Edison), accounted for approximately 46.0% of Cartotech's
revenues in 1997.

With all of its acquisitions to date, the Company has retained the core
management teams (except for former owners) and most employees in order to
capitalize on their understanding of their respective markets and to provide
continuity with existing customer relationships. As a result, the acquired
businesses continue to operate somewhat independently while the Company has
taken steps to assimilate the businesses on a gradual basis. The Company
believes that this approach avoids disrupting existing customer
relationships, promotes initiative and responsibility by such management and
personnel and avoids the disruption that can accompany rapid assimilation.
This approach also enables the Company to promote use of the "best practices"
of the acquired businesses throughout the Company in such areas as bid
preparation, production processes and utilization of proprietary software.

CUSTOMERS

The Company derives its revenues primarily from two core markets,
utilities and state and local governments, and also serves federal agencies
and commercial businesses. From time to time, the revenues earned on a
specific contract may exceed 10% of total Company revenues earned in a fiscal
year. The only customer that accounted for more than 10% of the Company's
revenues in fiscal 1996 was Southern New England Telephone, which accounted
for approximately 10% of revenues in that year. No customer accounted for
more than 10% of the Company's revenues in fiscal 1997 or fiscal 1998. See
"Risk Factors Dependence on Certain Customer Markets."

Set forth below are certain of ASI's current and recent past customers
in these markets.

UTILITIES
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Electric Power
Boston Edison Company
Central Illinois Power
Consolidated Natural Gas
Duke Power
FirstEnergy Corp. (formerly Ohio Edison)
Florida Power & Light
Helix Water District
Illinois Power Company

Michigan Consolidated Gas
MidAmerican Energy Corporation
Mississippi Power
Niagara Mohawk
Southern California Gas
Southern New England Telephone
U S WEST
UtiliCorp United
Virginia Power

COMMERCIAL BUSINESSES
- ---------------------
Allied Signal

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Jeppesson Sanderson

STATE AND LOCAL GOVERNMENTS
- ---------------------------
Baltimore County, MD
Cambridge, MA
Capital Area Planning Council, Austin, TX
Davidson County, NC
DeKalb County, GA
Gwinnett County, GA
Greenwich, CT
Johnson County, KS
Knoxville, TN
Montgomery County, MD
New York City Department of Environment, NY
Norfolk, VA
Summit County, OH

INTERNATIONAL
- -------------
Centra Gas Company (Ontario, Canada)
China Light & Power (Hong Kong)
Mercury Energy (New Zealand)
SaskPower (Saskatchewan, Canada)
Union Gas Company (Ontario, Canada)
Yorkshire Electricity Board (United Kingdom)

Federal Agencies
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National Imagery Mapping Agency
U.S. Army Corps of Engineers
U.S. Geological Survey

Sales and Marketing

The Company markets its products and services in its domestic and
international markets primarily through an internal sales force. The Company
augments its direct sales efforts by maintaining memberships in professional
and trade associations and by actively participating in industry conferences.

The Company believes that alliances with local businesses or individuals
may be important to successful entry into certain international markets and
intends to continue to seek out such relationships and to market directly to
international customers. The Company's sales cycle is generally lengthy, as
customers normally take several months to go through the bidding/planning and
award phases of a GIS project. Once awarded, it generally takes 30 to 60 days
until the final contract is signed. Most contracts take from six to 48 months
to complete. See "Risk Factors Dependence on Business Alliances."

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SUBCONTRACTORS

ASI employs certain selected subcontractors for tasks outside its
expertise, such as aerial photography and ground survey. The Company also
uses subcontractors when necessary to expand capacity, meet deadlines, reduce
production costs, manage work load and encourage businesses owned by women
and minorities. In May 1998, the Company acquired Interra Technologies, a
280-employee India-based company, for $438,000. Interra had been a provider
of subcontractor services to the Company. See "Risk Factors Dependence on
Subcontractors," and "Risk Factors Dependence on Offshore Operations" and
"-Personnel."

RESEARCH AND DEVELOPMENT

The Company believes that its past success has been largely due to its
technological expertise and operating procedures. The Company has developed
and acquired proprietary software and procedures that automate portions of
otherwise labor-intensive data conversion processes, enabling the Company to
provide cost-effective and high-quality services on a timely basis. The
Company intends to continue its efforts to develop new technology and to
improve its existing technology and procedures, thereby enhancing its ability
to expand into additional markets and further improve its production capacity
and productivity.

The Company engages in several research and development activities. The
majority of these activities occur as the Company develops software or
designs a product for a particular contract, so that the costs of such
efforts are included as an integral part of the Company's services. Such
custom designed software can often be applied to projects for other
customers. These amounts expended by the Company are not included in research
and development expenses, although the Company retains ownership of such
proprietary software or products. Approximately 50 employees are
substantially engaged in research and development efforts including three in
its Advanced Technology Division. The Company expended $283,872, $274,905 and
$255,928 in its Advanced Technology Division for the fiscal years ended
September 30, 1996, 1997 and 1998 respectively. See "Risk Factors Reliance on
Technology; Limited Protection of Proprietary Rights."

COMPETITION

The GIS services business is competitive and highly fragmented. The
Company's competitors include small regional firms, independent firms, large
companies with GIS services divisions, customer in-house operations and
international low-cost providers of data conversion services. Additionally,
as the GIS services industry evolves, additional competitors with greater
resources than the Company may enter the industry. Several large companies
with substantial financial resources are in the process of launching
satellites with imagery technology that provides much more detailed
photographs than have been available with such technology in the past.
Although current commercially available satellite imagery does not provide
the degree of resolution required by most of the Company's customers, if such
technology becomes commercially available, satellite companies may attempt to
enter the GIS services business or could form strategic alliances with the
Company's competitors, and thereby could pose a substantial competitive
threat to the Company. In addition, other improvements in technology could
provide competitors or customers with readily available tools to perform the
services provided by the Company and lower the cost of entry into the GIS
services industry.

ASI seeks to compete on the basis of the quality of its products
and the accuracy, responsiveness and efficiency with which it can provide
services to customers. The Company uses its internally-developed proprietary
production software as well as commercially available software to automate
much of the otherwise labor-intensive GIS production process. The Company
believes that its automated approach enables it to achieve more consistent
quality and greater efficiencies than it could if it used more
manually-intensive methods. The Company also believes that the retention of
highly qualified managers and executive officers is critical to its ability
to compete in the GIS data conversion industry. See "Risk Factors
Competition" and "-Dependence on Key Personnel."

PERSONNEL

As of September 30, 1998, ASI had approximately 1,735 employees,
virtually all of whom are full-time. ASI does not have a collective
bargaining agreement with any of its employees and generally considers
relations with its employees to be good.

9
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RISK FACTORS

IN ADDITION TO THE OTHER INFORMATION SET FORTH IN THIS FORM 10-K, THE ISSUES
AND RISKS DESCRIBED BELOW SHOULD BE CONSIDERED CAREFULLY IN EVALUATING AN THE
COMPANY'S OUTLOOK AND FUTURE.

RISKS ASSOCIATED WITH ACQUISITION STRATEGY

A major component of the Company's strategy is the acquisition of
complementary GIS services businesses. The Company acquired Intelligraphics
in December 1995; ASI Landmark in July 1996; MSE in July 1997; and Cartotech
in June 1998. Acquisitions involve a number of special risks, including, but
not limited to, potential adverse short-term effects on the Company's
operating results, diversion of management's attention, the loss of key
personnel, risks associated with the assimilation of the operations and
personnel of the acquired companies, unanticipated business problems or legal
liabilities and amortization of acquired intangible assets. In addition, when
the Company acquires another business, it assumes the obligation to complete
the acquired company's contracts that are in process. The Company's results
of operations following any acquisition will depend, in part, on the ability
of the Company to profitably complete such contracts, which could be
adversely affected by the acquired company's underestimation of the cost or
amount of work required to complete the project as well as additional costs
necessary to correct problems associated with the acquired company's prior
performance. There is no assurance that the Company will be able to
integrate Cartotech or other acquired businesses into the Company without
substantial costs, delays or other operational or functional difficulties, or
to obtain the synergies expected from such acquisitions. Some or all of these
risks could have a material adverse effect on the Company. In addition, there
can be no assurance that the Company will be able to identify and acquire
additional strategic businesses, and, to the extent that consolidation
becomes more prevalent in the GIS services industry, the prices for
attractive acquisition candidates may reach unacceptably high levels. The
inability of the Company to implement and manage its acquisition strategy
successfully for the reasons set forth above or for other reasons would have
an adverse effect on the Company. See " Risks Associated with Terms of
Customer Contracts."

ABILITY TO MANAGE GROWTH

The Company has grown substantially since 1996 and, in particular, since
its acquisition of MSE in July 1997 and Cartotech in June 1998. An integral
part of the Company's strategy is to continue its growth, primarily as a
result of acquisitions and increased sales by the Company to new and existing
clients. To the extent that the Company is able to continue to grow, its
ability to manage any such growth will be critical to its success. The
Company's growth will require the establishment of financial controls and
accounting procedures at the acquired companies and the control of
acquisition-related overhead. Such growth also will require the continued
enhancement of operational, financial and information systems and the
attraction and retention of additional management and trained personnel.
There can be no assurance that the Company will be able to manage expanded
operations effectively, and its failure to do so would have a material
adverse effect on the Company. See " Risks Associated with Acquisition
Strategy."

<PAGE>

COMPETITION

The GIS services business is very competitive and highly fragmented. The
Company's competitors include small regional firms, independent firms, large
companies with GIS services divisions, customer in-house operations and
international low-cost providers of data conversion services. Additionally,
as the GIS services industry evolves, additional competitors with greater
resources than the Company may enter the industry. Several large companies
with substantial financial resources are in the process of launching
satellites with imagery technology that provides much more detailed
photographs than have been available with such technology in the past.
Although current commercially available satellite imagery does not provide
the degree of resolution required by most of the Company's customers, if such
technology becomes commercially available, satellite companies may attempt to
enter the GIS services business or could form strategic alliances with the
Company's competitors, and thereby could pose a substantial competitive
threat to the Company. In addition, other improvements in technology could
provide competitors or customers with tools to perform the services provided
by the Company and lower the cost of entry into the GIS services industry. A
number of the Company's competitors or potential competitors have
capabilities and resources greater than those of the Company. See "
Dependence on Business Alliances."

RISKS ASSOCIATED WITH TERMS OF CUSTOMER CONTRACTS

Virtually all of the Company's revenue is earned under long-term,
fixed-price contracts. The Company's contractual obligations typically
include several large projects that will extend over one to four years. The
Company's ability to estimate its costs accurately when negotiating the
overall price of a project is critical to ensuring the profitability of such
project. The Company must also control the costs of performance under such
fixed-price contracts. As the Company increases its marketing efforts to
obtain larger projects, the needs to estimate costs accurately and to control
costs of performance become more important. Schedule delays resulting from a
customer's lack of available funding or schedule compressions required by
customers may place additional strains on management to hire and train the
personnel required for project completion. The Company's contracts with its
customers are generally terminable by the customer on relatively short
notice, and customers may request that the Company slow down or scale back
the scope of a project in order to satisfy the customer's budget or cash flow
requirements. In addition, the Company could experience material contract
terminations or slowdowns. Long-term, fixed-price contracts for larger
projects generally increase the Company's risk due to inflation.

FLUCTUATIONS IN QUARTERLY OPERATING RESULTS; VOLATILITY OF STOCK PRICE

The Company has experienced and expects to continue to experience
quarterly variations in sales and operating income as a result of many
factors, including the effects of acquisitions, timing of customers' budget
processes, slowdowns or acceleration of work by customers, the number of
operating days in each quarter and the impact of weather conditions on the
ability of subcontractors to obtain satisfactory aerial photography. In
addition, the Company has in the past experienced lower sales in its first
fiscal quarter (ended December 31) due to certain customers' year-end funding
constraints, seasonal limitations on obtaining aerial photography and
seasonal slowdowns associated with the year-end holidays.

The Common Stock has experienced, and is likely to continue to
experience significant price and trading volume fluctuations. The trading
price of the Common Stock has been and may continue to be subject to
significant fluctuations in response to actual or anticipated variations in
the Company's quarterly operating results and other factors, such as: the
introduction of new services or technologies by the Company or its
competitors; changes in other conditions in the GIS industry or in the
industries of any of the Company's customers; changes in governmental
regulation, government spending levels or budgetary procedures; changes in
securities analysts' estimates of the future performance of the Company, its
competitors or the industry generally; or general market conditions. The
trading price of the Common Stock may vary without regard to the operating
performance of the Company. General market price declines or market
volatility in the future, or future declines or volatility in the prices of
stock for companies in the GIS industry, also could affect the market price
of the Common Stock.

<PAGE>

RELIANCE ON TECHNOLOGY; LIMITED PROTECTION OF PROPRIETARY RIGHTS

The Company has devoted significant resources to developing and
acquiring specialized data conversion hardware and software. In order to
remain competitive, it will be necessary for the Company to continue to
select, invest in, acquire and develop new and enhanced technology on a
timely basis. There can be no assurance that the Company will be successful
in these efforts or in anticipating developments in data conversion
technology. Although the Company believes that its operating procedures and
proprietary software have been important factors in its success, the
technology used by the Company in developing its proprietary software is
readily available to, or could legally be duplicated by, its competitors. The
Company does not have any patent protection for its products or technology.
Although the Company relies to a great extent on trade secret protection for
much of its technology and has obtained confidentiality agreements from most
of its employees, third parties could independently develop similar
technology, obtain unauthorized access to the Company's proprietary
technology or misappropriate technology to which the Company has granted
access.

DEPENDENCE ON CERTAIN CUSTOMER MARKETS

The Company derives its revenues primarily from two core markets,
utilities and state and local governments, and also serves federal agencies
and commercial businesses. The ongoing consolidation of the utility industry
could increase competition for the GIS services projects of the utilities
that remain. Also, to the extent that utilities remain regulated, legal,
financial and political considerations may constrain the ability of utilities
to fund geographic information systems. Many state and municipal entities are
subject to legal constraints on spending, and a multi-year contract with any
such entity may be subject to termination in any subsequent year if the
entity does not choose to appropriate funds for such contracts in that year.
Moreover, fundamental changes in the business practices or capital spending
policies of any of these customers, whether due to budgetary, regulatory,
technological or other developments or changes in the general economic
conditions in the industries in which they operate, could cause a material
reduction in demand by such customers for the services offered by the
Company. Any such reduction in demand could have a material adverse effect on
the Company.

DEPENDENCE ON INTERNAL LABOR FORCE

The Company's business is labor-intensive and requires trained
employees. In order to support additional growth, if any, the Company must
increase production capacity by the addition of more employees. There can be
no assurance that the Company will be able to continue to hire, train and
retain sufficient numbers of qualified employees. A significant portion of
the Company's costs consists of wages to hourly workers. An increase in
hourly wages, costs of employee benefits or employment taxes could have a
material adverse effect on the Company. Although the Company believes that
its employee turnover rate is at an acceptable level, turnover could increase
for any of several reasons, including the disruption that is sometimes
associated with the acquisition of businesses and increased competition for
labor in any geographic area where the Company operates. A higher turnover
rate among the Company's employees would increase the Company's recruiting
and training costs, could affect the Company's ability to perform services
and earn revenues on a timely basis and could decrease operating efficiencies
and productivity.

DEPENDENCE ON SUBCONTRACTORS

ASI employs certain selected subcontractors for tasks outside its
expertise, such as aerial photography and ground survey. The Company also
uses subcontractors for work similar to that performed by ASI employees in
order to expand capacity, meet deadlines, reduce production costs, manage
work load and encourage businesses owned by women and minorities. The
inability to obtain the services of such subcontractors when needed or at all
could have a material adverse effect on the Company. See "Business
Subcontractors."

<PAGE>

RISKS RELATING TO INTERNATIONAL SALES

In fiscal 1998, revenues from international sales represented
approximately 8% of the Company's total revenues. The Company intends to
continue expanding its operations outside the United States and to enter
additional international markets, which will require management attention and
financial resources. If foreign sales become a more significant component of
the Company's net sales, the Company's business will become more vulnerable
to the inherent risks of doing business internationally, including increased
difficulties in collection of accounts receivable, unexpected changes in
regulatory requirements, tariffs and other trade barriers, fluctuations in
currency exchange rates, potentially adverse tax consequences and political
instability. The existence or occurrence of any one of these factors could
have a material adverse effect on the Company.

DEPENDENCE ON BUSINESS ALLIANCES

A significant portion of the Company's sales is the result of referrals
derived, either directly or indirectly, from consultants in the GIS industry.
The Company believes that its continued success in the GIS services market is
dependent, in part, on its ability to maintain current relationships and to
cultivate additional relationships with other leading consultants. Such
consultants could acquire a GIS data collection or data conversion business
or businesses or form other relationships with the Company's competitors.
There can be no assurance that relationships with GIS consultants will
continue to be a source of business for the Company. The inability of the
Company to maintain such relationships or to form new relationships could
have a material adverse effect on the Company.

DEPENDENCE ON KEY PERSONNEL

The success of the Company depends in large part upon the continued
service of its executive officers and other key employees. While the Company
has employment agreements with certain of its key personnel, there is no
assurance that the Company will be able to retain the services of such key
personnel. The Company does not maintain any key person life insurance
policies. Moreover, in order to support additional growth, if any, the
Company will be required to recruit, develop and retain additional qualified
management personnel. The loss of key personnel or the inability to obtain
additional key personnel could have a material adverse effect on the Company.

DEPENDENCE ON OFFSHORE OPERATIONS

The Company utilizes operations in Mumbai, India to perform certain data
capture tasks at lower costs than could be achieved in the United States.
These operations were acquired in May 1998. These operations employ
approximately 325 persons. Although the Company believes that it could
replace the personnel in India, and while the amounts paid for the
performance of services overseas have not, to date, been material, the
ability of the Company to perform services under some existing contracts on a
profitable basis is dependent upon the continued availability of its overseas
operations. In the past, India has experienced significant inflation as well
as civil unrest and regional conflicts. India's recent testing of nuclear
devices has resulted in the imposition of economic sanctions by the United
States, and it is not known what effect these events might have on the
attitude of the Indian government toward U.S. businesses in India. Moreover,
the Indian government has exercised and continues to exercise significant
influence over many aspects of the Indian economy. Events or governmental
actions that would impede or prohibit the operations of the Company's Mumbai
facility could have a material adverse effect on the Company.

EFFECT OF PREFERRED STOCK PROVISIONS

The Company's Articles of Incorporation allow the Board of Directors to
issue up to 2,500,000 shares of preferred stock and to fix the rights,
privileges and preferences of those shares without any further vote or action
by the shareholders. The rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of
any preferred stock that may be issued by the Company in the future. Although
the Company has no present intention to issue any preferred stock, any such
issuance could be used to discourage an unsolicited acquisition proposal by a
third party.

<PAGE>

For risks related to the Year 2000 problem, see "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Year 2000 Issues".

ITEM 2. PROPERTIES.

The Company's office and production facilities are described in the
table below. All properties are leased.

<TABLE>
<CAPTION>
Location Square Footage Lease Termination
<S> <C> <C>
Colorado Springs, Colorado 43,100 2004
Cary, North Carolina 23,500 2000
Waukesha, Wisconsin 25,300 1999
Indianapolis, Indiana 114,300 2002*
San Antonio, Texas 23,500 2003
Mumbai, India 5,200 2001

</TABLE>

- ------------------------
* two five-year options available

The Company believes that these facilities are in generally good
condition and adequate for its current needs. ASI also operates sales
offices in Denver, Colorado; Sterling, Virginia (near Washington, D.C.); Mt.
Laurel, New Jersey (near Philadelphia, Pennsylvania); and West Palm Beach,
Florida.

ITEM 3. LEGAL PROCEEDINGS.

Neither the Company nor any of its properties is the subject of any
material pending legal proceedings.

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

There were no matters submitted to a vote of the Company's shareholders
during the fourth quarter of the year ended September 30, 1998.

PART II.

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Company's Common Stock is traded publicly under the symbol "ANLT" on
the Nasdaq National Market System. The table below sets forth the range of
the per share high and low bid prices of the Common Stock for each quarterly
period for the fiscal years ended September 30, 1997 and 1998 as reported by
Nasdaq. These prices reflect inter-dealer quotations without adjustments for
retail markup, markdown or commission, and do not necessarily represent
actual transactions.

<TABLE>
<CAPTION>
High Low
<S> <C> <C>
Fiscal Year Ended September 30, 1997
First Quarter $12.75 $8.50
Second Quarter $13.00 $9.50
Third Quarter $14.00 $10.25

</TABLE>

<PAGE>

<TABLE>
<S> <C> <C>
Fourth Quarter $24.38 $13.50

Fiscal Year Ended September 30, 1998
First Quarter $35.50 $18.75
Second Quarter $54.00 $29.75
Third Quarter $52.94 $21.88
Fourth Quarter $39.00 $15.13

</TABLE>

As of December 15, 1998 there were approximately 4,000 shareholders and
6,772,054 shares of Common Stock outstanding, which includes investors
holding stock in "street name."

Holders of the Common Stock are entitled to receive dividends as and
when they may be declared by the Company's Board of Directors. No dividends
have ever been paid with respect to the Common Stock, and the Company expects
to retain earnings to finance the expansion and development of its business
for the foreseeable future. In addition, the Company's current bank loans
prohibit the payment of any dividends without the bank's consent.

ITEM 6. SELECTED FINANCIAL DATA.

The following selected consolidated financial data as of and for the
fiscal years ended September 30, 1994, 1995, 1996, 1997 and 1998 are derived
from consolidated financial statements of the Company which have been audited
by KPMG Peat Marwick LLP, independent accountants. The Company's historical
consolidated financial statements as of September 30, 1997 and 1998 and for
the years ended September 30, 1996, 1997, and 1998 are contained elsewhere in
this Report. The following selected consolidated financial data should be
read in conjunction with the Company's consolidated financial statements and
the related notes thereto and with Item 7 - Management's Discussion and
Analysis of Financial Condition and Results of Operations included elsewhere
in this Report.

<PAGE>

1994 1995 1996(1)(2) 1997(3) 1998(4)
------- ------- ---------- ------- -------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:

Sales $11,176 $13,538 $22,669 $40,799 $88,155
Cost and expenses:

Salaries, wages and related benefits 4,475 5,247 10,501 19,792 42,953

Subcontractor costs 2,628 3,244 3,898 5,899 11,961

Other general administrative 1,834 2,244 3,681 7,115 14,964

Depreciation and amortization 759 784 1,184 1,780 3,860
------- ------- ------- ------- -------
9,696 11,519 19,264 34,586 73,738
------- ------- ------- ------- -------
Earnings from operations 1,480 2,019 3,405 6,213 14,417

Other expenses, net 184 119 339 770 2,292
------- ------- ------- ------- -------
Earnings before income taxes 1,296 1,900 3,066 5,443 12,125

Income tax expenses 492 716 1,153 2,112 4,894
------- ------- ------- ------- -------
Net earnings $804 $1,184 $1,913 $3,331 $7,231
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Diluted earnings per share $0.20 $0.27 $0.38 $0.60 $1.06
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Weighted average common shares outstanding-diluted 4,010 4,408 5,033 5,562 6,819

CONSOLIDATED BALANCE SHEET DATA:

Working capital $3,693 $5,738 $9,986 $21,085 $40,986

Total assets 8,016 10,048 21,988 50,146 94,540

Long-term debt, less current maturities 391 408 4,528 14,145 29,920

Total stockholders' equity 4,597 6,654 10,926 23,831 44,463

</TABLE>

- ------------------------
(1) In December 1995 the Company acquired Intelligraphics for $3.5 million in
cash and 345,000 shares of restricted Common Stock valued at $891,000.

(2) In July 1996 the Company acquired ASI Landmark for $2.0 million in cash.

(3) In July 1997 the Company acquired MSE for $12.5 million in cash and
925,000 shares of restricted Common Stock valued at $7.3 million.

(4) In June 1998 the Company acquired Cartotech for $8.1 million in cash and
354,167 shares of restricted common stock valued at $8.3 million.

<PAGE>

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

THE DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
THE COMPANY SET FORTH BELOW SHOULD BE READ IN CONJUNCTION WITH THE
CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES THERETO INCLUDED
ELSEWHERE IN THIS FORM 10-K. THIS FORM 10-K CONTAINS FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISK AND UNCERTAINTIES. THE STATEMENTS CONTAINED IN
THIS FORM 10-K THAT ARE NOT PURELY HISTORICAL ARE FORWARD-LOOKING STATEMENTS
WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF
THE EXCHANGE ACT. WHEN USED IN THIS FORM 10-K, OR IN THE DOCUMENTS
INCORPORATED BY REFERENCE INTO THIS FORM 10-K, THE WORDS "ANTICIPATE,"
"BELIEVE," "ESTIMATE," "INTEND" AND "EXPECT" AND SIMILAR EXPRESSIONS ARE
INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING
STATEMENTS INCLUDE, WITHOUT LIMITATION, THE STATEMENTS IN ITEM 1 BUSINESS -
RISK FACTORS AND STATEMENTS RELATING TO COMPETITION, FUTURE ACQUISITIONS,
MANAGEMENT OF GROWTH, INTERNATIONAL SALES, THE COMPANY'S STRATEGY, FUTURE
SALES, YEAR 2000 COMPLIANCE FUTURE EXPENSES AND FUTURE LIQUIDITY AND CAPITAL
RESOURCES. ALL FORWARD-LOOKING STATEMENTS IN THIS FORM 10-K ARE BASED UPON
INFORMATION AVAILABLE TO THE COMPANY ON THE DATE OF THIS FORM 10-K, AND THE
COMPANY ASSUMES NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS.
THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN
THIS FORM 10-K. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES
INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED BELOW, IN ITEM 1.
BUSINESS--"RISK FACTORS" AND ELSEWHERE IN THIS FORM 10-K.

OVERVIEW

ASI, a leading provider of data conversion and digital mapping services
to users of customized geographic information systems, was founded in 1981 by
John A. Thorpe. From 1981 to 1990, the Company experienced steady growth in
revenues with periodic fluctuations in financial results. After the hiring of
the Company's current Chief Executive Officer and Chief Financial Officer in
1990, the Company implemented a controlled growth strategy, including
improving and standardizing operating controls and procedures, investing in
infrastructure, upgrading the Company's proprietary software and establishing
capital sources.

In 1995, the Company embarked on a more aggressive growth strategy,
including consolidation of the fragmented GIS services industry. The Company
acquired substantially all of the assets of Wisconsin-based Intelligraphics,
Inc. ("Intelligraphics") in December 1995 for $3.5 million in cash and
345,000 shares of restricted Common Stock valued at $891,000.
Intelligraphics, with over 200 employees, significantly expanded the
Company's capacity to perform large projects, added utility industry
expertise, and established ASI's presence in the midwestern United States.
The acquisition contributed over 25 new customers and $12.3 million in
"backlog," which represents the amount of revenue that has not been
recognized on signed contracts.

In July 1996, the Company expanded its services to state and local
governments by acquiring substantially all of the assets of Westinghouse
Landmark GIS, Inc. ("ASI Landmark") for $2.0 million in cash. Based in North
Carolina, ASI Landmark's primary business is land base and cadastral mapping.
Prior to this acquisition, ASI had utilized subcontractors for certain of
these services. ASI Landmark also provided the Company with additional
capacity for photogrammetry, and a presence in the eastern and southeastern
United States. The acquisition contributed approximately 20 new customers,
$9.1 million in backlog and 105 employees to the Company.

The Company acquired MSE Corporation ("MSE") in July 1997 for $12.5
million in cash and 925,000 shares of restricted Common Stock valued at $7.3
million. The acquisition of Indiana-based MSE gave the Company greater
capacity to serve the utility market and further enhanced ASI's presence in
the midwestern United States. In addition, the acquisition of MSE contributed
over 200 customers and $43.0 million of backlog to the Company. Over 325
employees joined the ASI workforce as a result of the MSE acquisition,
including the Company's current Chief Operations Officer and Chief
Administrative Officer.

<PAGE>

The Company acquired Texas-based Cartotech, Inc. ("Cartotech") in June
1998 for approximately $8.1 million in cash and 354,167 shares of restricted
Common Stock valued at approximately $8.3 million. The Cartotech acquisition
extended ASI's presence in the utility market, enhanced the Company's field
inventory operations and provided the Company with a strong presence in the
southwestern United States. The Cartotech acquisition contributed over 50 new
customers, backlog of $19.3 million and 270 employees to the Company. One of
Cartotech's customers, FirstEnergy Corp. (formerly known as Ohio Edison),
accounted for approximately 46.0% of Cartotech's revenues in calendar 1997.

In conjunction with the above acquisitions, the Company has recorded
goodwill, which represents the excess of the purchase price over the fair
value of the net assets acquired in business combinations. As of September
30, 1998, goodwill, net of accumulated amortization, was $25.3 million. The
Company will amortize the value of the intangible assets acquired in its
recent business acquisitions over a period of 15 years, representing the
expected period of benefit from the acquisitions. The Company believes this
amortization period to be appropriate based on the historical and forecasted
operating results of the acquired businesses.

The Company recognizes revenue using the percentage of completion method
of accounting on a cost-to-cost basis. For each contract, an estimate of
total production costs is determined. At each accounting period and for each
of the Company's contracts, the percentage of completion is based on
production costs incurred to date as a percentage of total estimated
production costs. This percentage is then multiplied by the contract's total
value to calculate the sales revenue to be recognized.

Production costs consist of internal costs, primarily salaries and
wages, and external costs, primarily subcontractor costs. Internal and
external production costs may vary considerably among projects and during the
course of completion of each project. As a result, the Company experiences
yearly and quarterly fluctuations in production costs, in salaries, wages and
related benefits and in subcontractor costs. These costs may vary as a
percentage of sales from period to period. Since 1995 the Company has relied
less on subcontractors and more on employees. The Company anticipates that,
as a percentage of sales, salaries, wages and related benefits will continue
to increase, with a corresponding decrease in subcontractor costs, due, in
part, to the Company's May 1998 purchase of Interra Technologies, an
India-based company that had been a provider of subcontractor services to the
Company. The following table illustrates the relationship of salaries, wages
and related benefits and subcontractor costs:

YEAR ENDED SEPTEMBER 30,
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
PERCENTAGE OF SALES:
Salaries, wages and related benefits 46.3% 48.5% 48.7%
Subcontractor costs 17.2 14.5 13.6

Total production costs 63.5% 63.0% 62.3%

</TABLE>

The Company recognizes losses on contracts in the period such loss is
determined. From the beginning of fiscal 1995 through the end of fiscal 1998,
the Company has recognized aggregate losses on contracts of approximately
$910,000. Over the same period, the Company recognized sales of $165.2
million. Sales and marketing expenses associated with obtaining contracts are
expensed as incurred.

Backlog increases when new contracts are signed and decreases as revenue
is recognized. As of September 30, 1998, backlog was $99.0 million. Recently,
the number of large projects awarded to the Company has increased. Contracts
for larger projects generally increase the Company's risk due to inflation

<PAGE>

as well as changes in customer expectations and funding availability. The
Company's contracts are generally terminable on short notice, and while in
the Company's experience such termination is rare, there is no assurance that
the Company will receive all of the revenue anticipated under signed
contracts. See Item 1. Business--"Risk Factors Risks Associated with Terms of
Customer Contracts" and "Customer Contracts."

The Company engages in research and development activities. The majority
of these activities occur as the Company develops software or designs a
product for a particular contract, so that the costs of such efforts are
included as an integral part of the Company's services. Such custom-designed
software can often be applied to projects for other customers. These amounts
expended by the Company are not included in research and development
expenses, although the Company retains ownership of such proprietary software
or products. The Company, through its Advanced Technology Division, also
engages in research and development activities independently of the Company's
work on particular customer projects. For fiscal 1996, 1997 and 1998, the
Company expended $283,872, $274,905 and $255,928, respectively on such
independent research and development activities in the Advanced Technology
Division.

RESULTS OF OPERATIONS

The following table sets forth, for the fiscal years ended September 30
below, selected consolidated statement of operations data expressed as a
percentage of sales:

1996 1997 1998
------ ------ ------
<S> <C> <C> <C>
PERCENTAGE OF SALES:

Sales 100.0% 100.0% 100.0%

Costs and expenses:
Salaries, wages and related benefits 46.3 48.5 48.7
Subcontractor costs 17.2 14.5 13.6
Other general and administrative 16.3 17.4 16.9
Depreciation and amortization 5.2 4.4 4.4
----- ----- -----
Earnings from operations 15.0 15.2 16.4
Other expense, net 1.5 1.9 2.6
----- ----- -----
Earnings before income taxes 13.5 13.3 13.8
Income tax expense 5.1 5.1 5.6
----- ----- -----
Net earnings 8.4% 8.2% 8.2%
----- ----- -----
----- ----- -----

</TABLE>

FISCAL YEARS ENDED SEPTEMBER 30, 1998 AND 1997

SALES. The Company's sales consist of revenue recognized for services
performed. Sales increased $47.4 million to $88.2 million for fiscal 1998
from $40.8 million for fiscal 1997. This increase was due to an increase in
the number and size of customer contracts with the Company (including MSE and
Cartotech) as well as the impact of the acquisition of MSE in July 1997 and
Cartotech in June 1998. Prior to their acquisition by the Company, MSE's
sales for fiscal 1996 were approximately $ 22.5 million and Cartotech's sales
for fiscal 1997 were approximately $14.6 million.

SALARIES, WAGES AND RELATED BENEFITS. Salaries, wages and related benefits
includes employee compensation for production, marketing, selling,
administrative and executive employees. Salaries, wages and related

<PAGE>

benefits increased 117.0% to $43.0 million for fiscal 1998 from $19.8 million
for fiscal 1997. This increase was primarily due to the addition of over 325
employees as a result of the MSE acquisition in July 1997 and 270 employees
as a result of the Cartotech acquisition in June 1998, as well as the hiring
of additional employees to support the Company's increased business. As a
percentage of sales, salaries, wages and related benefits increased to 48.7%
for fiscal 1998 from 48.5% for fiscal 1997. This increase, and the
corresponding decrease in subcontractor costs, was primarily attributable to
the Company's increased capability to perform more tasks internally as well
as a decrease in the number of projects which required subcontractor
services. The Company anticipates that, as a percentage of sales, salaries,
wages and related benefits will continue to increase, with a corresponding
decrease in subcontractor costs, due, in part, to the Company's May 1998
purchase of Interra Technologies, an India-based company that had been a
provider of subcontractor services to the Company.

SUBCONTRACTOR COSTS. Subcontractor costs includes production costs incurred
through the use of third parties for production tasks such as data conversion
services to meet contract requirements, aerial photography and ground and
airborne survey services. Subcontractor costs increased 102.8% to $12.0
million for fiscal 1998 from $5.9 million for fiscal 1997, but decreased as a
percentage of sales to 13.6% for fiscal 1998 from 14.5% for fiscal 1997.

OTHER GENERAL AND ADMINISTRATIVE COSTS. Other general and administrative
costs includes rent, maintenance, travel, supplies, utilities, insurance and
professional services. Such costs increased 110.3% to $15.0 million for
fiscal 1998 from $7.1 million for fiscal 1997, primarily due to the
acquisition of MSE and Cartotech. As a percentage of sales, other general
and administrative costs decreased to 16.9% for fiscal 1997 from 17.4% for
fiscal 1997.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization consists
primarily of amortization of goodwill incurred in connection with the
Company's acquisitions, as well as depreciation of certain of the Company's
operating assets. For fiscal 1998, depreciation and amortization increased
116.9% to $3.9 million from $1.8 million for fiscal 1997. This increase was
primarily attributable to the increased goodwill recorded as a result of the
MSE and Cartotech acquisitions. As a percentage of sales, depreciation and
amortization was 4.4% for both fiscal 1998 and 1997.

OTHER EXPENSE, NET. Other expense, net is comprised primarily of net
interest expense. Net interest expense increased 179.3% to $2.2 million for
fiscal 1998 from $772,000 for fiscal 1997. This increase was primarily due to
increased term debt incurred in connection with the acquisition of MSE in
July 1997 and Cartotech in June 1998 and increased utilization of the
Company's lines of credit for working capital.

INCOME TAX EXPENSE. Income tax expense was $4.9 million for fiscal 1998
compared to $2.1 million for fiscal 1997. The Company's effective income tax
rate for fiscal 1998 was 40.4%, an increase from 38.8% for fiscal 1997, due
to increases in state income taxes.

NET EARNINGS. Due to the factors discussed above, net earnings increased
117.1% to $7.2 million for fiscal 1998 from $3.3 million for fiscal 1997.

FISCAL YEARS ENDED SEPTEMBER 30, 1997 AND 1996

SALES. The Company's sales increased $18.1 million or 80.0% to $40.8 million
for fiscal 1997 from $22.7 million for fiscal 1996. This increase was due to
an increase in the number and size of customer contracts with the Company as
well as the impact of the MSE acquisition in July 1997. MSE's sales from July
2, 1997 (its date of acquisition) through September 30, 1997 were $6.8
million.

SALARIES, WAGES AND RELATED BENEFITS. Salaries, wages and related benefits
increased 88.5% to $19.8 million for fiscal 1997 from $10.5 million for
fiscal 1996. As a percentage of sales, salaries, wages and related benefits
increased to 48.5% in fiscal 1997 from 46.3% in fiscal 1996, primarily due to
a greater proportion of production costs being incurred as salaries and wages
as opposed to subcontractor costs in fiscal 1997.

<PAGE>

SUBCONTRACTOR COSTS. Subcontractor costs increased 51.3% to $5.9 million for
fiscal 1997 from $3.9 million for fiscal 1996 but decreased as a percentage
of sales to 14.5% for fiscal 1997 from 17.2% for fiscal 1996. This shift in
production expenses from subcontractor costs to salaries, wages and related
benefits resulted from the normal fluctuation between internally and
externally incurred production costs and from acquisitions. These
acquisitions enabled the Company to perform more tasks internally and reduce
its use of subcontractors.

OTHER GENERAL AND ADMINISTRATIVE COSTS. Other general and administrative
costs increased 93.3% to $7.1 million for fiscal 1997 from $3.7 million for
fiscal 1996. As a percentage of sales, other general and administrative costs
increased slightly to 17.4% in fiscal 1997 from 16.3% for fiscal 1996, due
primarily to increased travel and other expenses related to the integration
of newly acquired businesses.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased 50.3%
to $1.8 million for fiscal 1997 from $1.2 million for fiscal 1996. This
increase was primarily attributable to the increased goodwill recorded as a
result of the MSE acquisition. As a percentage of sales, depreciation and
amortization decreased slightly to 4.4% in fiscal 1997 from 5.2% in fiscal
1996.

OTHER EXPENSE, NET. Net interest expense increased 120.0% to $772,000 for
fiscal 1997 from $351,000 for fiscal 1996. This increase was primarily due to
the increased term debt incurred in connection with the acquisition of MSE in
July 1997, as well as increased utilization of the Company's lines of credit
for working capital.

INCOME TAX EXPENSE. Income tax expense was $2.1 million in fiscal 1997
compared to $1.2 million in fiscal 1996. The effective income tax rate for
1997 was approximately 38.8%, an increase from 37.6% in 1996 due to the
change in the mix of state tax rates as a result of the MSE acquisition in
the fourth quarter of fiscal 1997.

NET EARNINGS. Due to the factors discussed above, net earnings increased
74.1% to $3.3 million for fiscal 1997 from $1.9 million for fiscal 1996.

LIQUIDITY AND CAPITAL RESOURCES

Historically, the Company's principal source of liquidity has consisted
of cash flow from operations supplemented by secured lines of credit. As of
September 30, 1998, the Company's outstanding balance on its lines of credit
was $5.8 million. During 1998, the Company replaced its existing lines of
credit with a three-year, $21.0 million secured working capital line of
credit and the Company refinanced $25.4 million of term debt. Borrowings
under the new credit facilities bear interest at a rate per annum equal to,
at the Company's option, (i) the agent bank's prime rate or (ii) an adjusted
London Interbank Offering Rate (LIBOR) plus a margin ranging from 1.25% to
2.25%. The effective borrowing rate was 7.14% on September 30, 1998.

The Company's cash flow is significantly affected by three
contract-related accounts: accounts receivable; revenues in excess of
billings; and billings in excess of revenues. Under the percentage of
completion method of accounting, an "account receivable" is created when an
amount becomes due from a customer, which typically occurs when an event
specified in the contract triggers a billing. "Revenues in excess of
billings" occur when the Company has performed under a contract even though a
billing event has not been triggered. "Billings in excess of revenues" occur
when the Company receives an advance or deposit against work yet to be
performed. These accounts, which represent a significant investment by ASI in
its business, affect the Company's cash flow as projects are signed,
performed, billed and collected.

Net cash provided by the Company's operating activities was $772,000,
and $2.7 million for fiscal years 1996 and 1997, respectively. Net cash used
by the Company's operating activities was $4.4 million in

<PAGE>

1998. The change in operating cash flows is primarily attributable to normal
fluctuations in the contract-related accounts described in the previous
paragraph. At September 30, 1998, the working capital in contract-related
accounts was equivalent to 182 days sales outstanding, up from 170 days at
September 30, 1997. The Company believes that this level of investment is
consistent with its normal operating range of days sales outstanding.

Cash used by investing activities for fiscal years 1996, 1997 and 1998
was $6.4 million, $12.5 million and $12.2 million, respectively. Such
investing activities principally consisted of payments for net assets
acquired in business combinations and purchases of equipment and leasehold
improvements.

Cash provided by financing activities for fiscal years 1996, 1997 and
1998 was $6.0 million, $10.3 million and $17.3 million, respectively.
Financing activities consisted primarily of net borrowings and payments under
lines of credit for working capital purposes and net borrowings and payments
of long-term debt used for business combinations and the purchase of
equipment and leasehold improvements.

The Company believes that funds available under its lending arrangements
and cash flow from operations are adequate to finance its operations for at
least the next 18 months.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income." This statement requires that changes in comprehensive income be
shown in a financial statement that is displayed with the same prominence as
other financial statements. The statement will be effective for fiscal years
beginning after December 15, 1997 (the Company's fiscal year beginning
October 1, 1998). Reclassification for earlier periods is required for
comparative purposes. The Company does not believe this statement will have a
material impact on its financial statements, financial position or results of
operations.

In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclosures About Segments of an Enterprise and Related
Information." This statement supersedes Statement of Financial Accounting
Standards No. 14, "Financial Reporting for Segments of a Business
Enterprise." This statement includes requirements to report selected segment
information quarterly and entity-wide disclosures about products and
services, major customers, and the material countries in which the entity
holds assets and reports revenues. The statement will be effective for fiscal
years beginning after December 15, 1997 (the Company's fiscal year beginning
October 1, 1998). Reclassification for earlier periods is required, unless
impracticable, for comparative purposes. The Company believes that it
operates one business segment, therefore this statement will have no effect
on its financial statements, financial position or results of operations.

In June 1998, the FASB issued Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (FAS 133), which is effective
for fiscal quarters beginning after June 15, 1999. FAS No. 133 requires
companies to record derivatives on the balance sheet as assets or liabilities
measured at fair value. Gains or losses resulting from changes in the values
of those derivatives would be accounted for depending on the use of the
derivative and whether it qualifies under the standard for hedge accounting.
The Company does not believe this statement will have a material impact on
its financial statements, financial position or results of operations.

YEAR 2000 ISSUES

The "Year 2000" issue is the result of computer programs using two
digits, rather than four, to define the applicable year. The failure of such
programs to recognize the year 2000 as such could result in systems failures
and miscalculations. The Company and the third parties with which it does
business rely on numerous computer programs in their daily operations.

<PAGE>

The Company is currently in the process of assessing the impact of the
Year 2000 issues. The Company expects that such assessment and any required
action will be carried out solely by its employees. Accordingly, the Company
has not incurred material costs to date and does not believe that the costs
associated with this process will be material.

The Company has assessed its most critical systems, its proprietary
operations software, and believes such software to be Year 2000 compliant.
The Company is in the process of assessing its other internal systems,
including financial and other operational systems for Year 2000 compliance,
including information technology ("IT") and critical non-IT areas where Year
2000 issues may exist. The majority of the personal computers used by the
Company are running Microsoft's Windows 95 or Windows 98 or Microsoft NT
operating systems, each of which the Company believes will be substantially
Year 2000 compliant before 2000. The Company expects that any personal
computers that are not Year 2000 compliant will be upgraded or replaced prior
to 2000. Although the Company has not completed its assessment of internal
systems readiness for Year 2000, the Company believes that the costs required
to remedy internal Year 2000 issues will not be material.

The Company has not formally surveyed its relationships with its vendors
or subcontractors. Based on informal inquiries, the Company does not believe
that any of its significant vendors or subcontractors is or is likely to
present any significant exposure due to the Year 2000 issues. If any such
vendors or subcontractors or their products are not Year 2000 compliant and
they suffer significant business interruptions or use of their products
interfere with the Company's operations, the Company believes that
alternative vendors and subcontractors will be available to provide the
services and products provided by the Company's current vendors and
subcontractors at comparable costs.

The Company's customer contracts specify database designs, including
date fields, and the Company's delivery of data conforms to such
specifications. Accordingly, the Company has not formally evaluated the Year
2000 issue as it relates to the computer systems used by its customers and
potential customers. The Company faces risk to the extent its major customers
do not comply with Year 2000 requirements in their own operations and suffer
business disruptions as a result. To the extent Year 2000 issues cause
significant delays or cancellation of customer's GIS projects, the Company's
financial position and results of operations could be materially adversely
affected.

Based on currently available information, the Company believes that it
does not have material exposure to significant business interruption as a
result of Year 2000 compliance issues. However, the Company is planning to
undertake a more formal review of its internal operational systems and its
significant vendors and subcontractors, which it expects to complete by March
31, 1999. However, there can be no assurances that the Company will not
experience serious unanticipated negative consequences and/or material costs
caused by undetected errors or defects in the systems used by the Company in
its internal operations.

<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company may from time to time employ risk management techniques such
as interest rate swaps and foreign currency hedging transactions. None of
these techniques are used for speculative or trading purposes and the amounts
involved are not considered material.

Short term interest rate changes can impact the Company's interest
expense on its variable interest rate debt. Variable interest rate debt of
$31 million was outstanding as of September 30, 1998. Assuming September 30,
1998 debt levels, an increase or decrease in interest rates of one percentage
point would impact the Company's interest expense by $310,000.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements of the Company are filed under this item beginning
on page 25.

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

None.

<PAGE>

INDEPENDENT AUDITORS' REPORT

THE BOARD OF DIRECTORS AND STOCKHOLDERS
ANALYTICAL SURVEYS, INC.:

We have audited the accompanying consolidated balance sheets of Analytical
Surveys, Inc. and subsidiaries as of September 30, 1997 and 1998, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the years in the three-year period ended September 30, 1998.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
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 audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Analytical Surveys,
Inc. and subsidiaries as of September 30, 1997 and 1998, and the results of
their operations and their cash flows for each of the years in the three-year
period ended September 30, 1998 in conformity with generally accepted accounting
principles.

KPMG PEAT MARWICK LLP

Denver, Colorado
October 30, 1998

25
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 1997 AND 1998

(In thousands)

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
ASSETS (NOTE 4) 1997 1998
- --------------- ---- ----
<S> <C> <C>
Current assets:

Cash $ 1,559 2,243
Accounts receivable, net of allowance for doubtful
accounts of $164 and $161 in 1997 and 1998,
respectively (notes 3 and 9) 8,991 17,501
Revenue in excess of billings (note 3) 21,613 39,316
Deferred income taxes (note 6) 136 557
Income taxes receivable - 675
Prepaid expenses and other 545 659
------ ------

Total current assets 32,844 60,951
------ ------
Equipment and leasehold improvements, at cost:
Equipment 7,983 13,015
Furniture and fixtures 1,151 1,594
Leasehold improvements 499 817
------ ------
9,633 15,426
Less accumulated depreciation and amortization (5,483) (7,470)
------ -------
4,150 7,956
------ ------

Deferred income taxes 41 134
Goodwill, net of accumulated amortization of $368 and
$1,654 in 1997 and 1998, respectively (note 2) 12,353 25,272
Other assets, net of accumulated amortization of $130 and
$549 in 1997 and 1998, respectively 758 227
------ ------
Total assets $ 50,146 94,540
====== ======
</TABLE>
(Continued)

<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS, CONTINUED

(In thousands)

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY 1997 1998
- ------------------------------------ ---- ----
<S> <C> <C>
Current liabilities:
Current portion of long-term debt (note 4) $ 4,524 4,594
Billings in excess of revenue (note 3) 789 1,232
Accounts payable and other accrued liabilities 3,693 8,229
Accrued payroll and related benefits 2,753 5,910
------ ------

Total current liabilities 11,759 19,965

Long-term debt, less current portion (note 4) 14,145 29,920

Deferred compensation payable 411 192
------ ------

Total liabilities 26,315 50,077
------ ------
Stockholders' equity (note 7):
Preferred stock, no par value. Authorized 2,500
shares; none issued or outstanding - -
Common stock, no par value. Authorized 100,000
shares; 6,114 and 6,732 shares issued and
outstanding in 1997 and 1998, respectively 15,269 28,670
Retained earnings 8,562 15,793
------ ------
Total stockholders' equity 23,831 44,463
------ ------
Commitments and contingencies (notes 5 and 7)

Total liabilities and stockholders' equity $ 50,146 94,540
====== ======
</TABLE>

See accompanying notes to consolidated financial statements.

27
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998

(In thousands, except per share amounts)

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Sales $ 22,669 40,799 88,155
------ ------ ------

Costs and expenses:
Salaries, wages and benefits 10,501 19,792 42,953
Subcontractor costs 3,898 5,899 11,961
Other general and administrative 3,681 7,115 14,964
Depreciation and amortization 1,184 1,780 3,860
------ ------ ------
19,264 34,586 73,738
------ ------ ------

Earnings from operations 3,405 6,213 14,417
------ ------ ------

Other income (expense):
Interest expense, net (351) (772) (2,156)
Costs related to terminated stock offering - - (300)
Other 12 2 164
------ ------ ------
(339) (770) (2,292)
------ ------ ------

Earnings before income taxes 3,066 5,443 12,125

Income tax expense (note 6) 1,153 2,112 4,894
------- ------ ------

Net earnings $ 1,913 3,331 7,231
====== ====== ======

Earnings per common share:
Basic $ .41 .64 1.14
Diluted $ .38 .60 1.06

Weighted average outstanding common shares:
Basic 4,691 5,244 6,349
Diluted 5,033 5,562 6,819

</TABLE>

See accompanying notes to consolidated financial statements.

28
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED SEPTEMBER 30, 1996, 1997 AND 1998

(In thousands)

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,913 3,331 7,231
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization 1,184 1,780 3,860
Gain on sale of assets (12) (2) (15)
Deferred income tax benefit (163) (55) (350)
Tax benefit relating to exercise of stock options 885 1,307 3,115
Changes in operating assets and liabilities, net of effect of
business combinations:
Accounts receivable, net (481) 951 (6,907)
Revenue in excess of billings (2,820) (4,746) (16,213)
Income taxes receivable - - (675)
Prepaid expenses and other (18) 9 15
Billings in excess of revenue 163 (302) 121
Accounts payable and other accrued liabilities (9) (111) 3,434
Accrued payroll and related benefits 130 555 1,963
----- ------ ------
Net cash provided (used) by operating activities 772 2,717 (4,421)
----- ------ ------
Cash flows from investing activities:
Purchase of equipment and leasehold improvements (919) (1,596) (3,888)
Proceeds from sale of equipment 12 159 15
Payments for net assets acquired in business combinations, net
of cash acquired (5,541) (11,092) (8,337)
----- ------ ------
Net cash used by investing activities (6,448) (12,529) (12,210)
----- ------ ------
Cash flows from financing activities:
Net borrowings (payments) under lines-of-credit with bank 500 (2,027) 4,277
Proceeds from issuance of long-term debt 5,765 12,714 29,072
Principal payments on long-term debt (815) (1,292) (18,051)
Proceeds from exercise of stock options 583 954 2,017
----- ------ ------
Net cash provided by financing activities 6,033 10,349 17,315
----- ------ ------
Net increase in cash 357 537 684

Cash at beginning of year 665 1,022 1,559
----- ------ ------
Cash at end of year $ 1,022 1,559 2,243
===== ====== ======
Supplemental disclosures of cash flow information:
Cash paid for interest $ 344 815 2,113
===== ======= ======
Cash paid for income taxes $ 376 888 2,643
===== ====== ======
Common stock issued for net assets acquired in business
combinations $ 891 7,313 8,269
===== ====== ======
</TABLE>

See accompanying notes to consolidated financial statements.

29
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 1997, 1996 AND 1995
- -------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) BUSINESS AND BASIS OF FINANCIAL STATEMENT PRESENTATION

Analytical Surveys, Inc. (ASI or the Company) is a Colorado
corporation formed in 1981. ASI's primary business is the
production of precision computerized maps and information files
used in Geographic Information Systems (GIS). Federal, state and
local government agencies and commercial companies use GIS to
manage information relating to utilities, natural resources,
streets, land use and property taxation.

The consolidated financial statements include the accounts of the
Company and its wholly and majority owned subsidiaries. All
significant intercompany balances and transactions have been
eliminated in consolidation.

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 revenue and expenses during the reporting
period. Actual results could differ from those estimates.

(b) EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Equipment and leasehold improvements are recorded at cost.
Depreciation and amortization are provided using the straight-line
method over the following estimated useful lives:

<TABLE>
<S> <C>
Equipment 3 to 10 years
Furniture and fixtures 5 to 10 years
Leasehold improvements 5 to 10 years
</TABLE>

Maintenance, repairs and renewals which do not add to the value of
an asset or extend its useful life are charged to expense as
incurred.

The Company recognizes revenue using percentage of completion
accounting based on the cost-to-cost method, whereby the
percentage complete is based on costs incurred in relation to
total estimated costs. Costs associated with obtaining contracts
are expensed as incurred. The Company does not combine contracts
for purposes of recognizing revenue and, generally, does not
segment contracts.

30
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue in excess of billings represents revenue related to
services completed but not billed. The Company bills customers
based upon the terms included in the contracts, which are
generally upon delivery of certain products or information, or
achievement of milestones defined in the contracts. When billed,
such amounts are recorded as accounts receivable. Billings in
excess of revenue represent billings in advance of services
performed.

The Company recognizes losses on contracts in the period such
losses are determined. The Company does not believe warranty
obligations on completed contracts are significant.

(d) GOODWILL

Goodwill represents the excess of the purchase price over net
assets acquired in business combinations and is being amortized
over a fifteen-year period using the straight-line method.

(e) INCOME TAXES

The Company accounts for income taxes under the provisions of
Statement of Financial Accounting Standards No. 109, ACCOUNTING
FOR INCOME TAXES (SFAS 109). SFAS 109 requires the use of the
asset and liability method of accounting for income taxes. Under
the asset and liability method of SFAS 109, deferred tax assets
and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. Under SFAS 109, the effect on
deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment
date.

(f) IMPAIRMENT OF LONG-LIVED ASSETS

The Company accounts for long-lived assets under the provisions of
Statement of Financial Accounting Standards No. 121, ACCOUNTING
FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS
TO BE DISPOSED OF (SFAS 121) which requires that long-lived assets
and certain identifiable intangibles, including goodwill, held and
used by an entity be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying value of an
asset may not be recoverable. An impairment loss is recognized
when estimated undiscounted future cash flows expected to be
generated by an asset are less than its carrying value.
Measurement of the impairment loss is based on the fair value of
the asset, which is generally determined using valuation
techniques such as the discounted present value of expected future
cash flows or independent appraisal.

31
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(g) STOCK-BASED COMPENSATION

The Company accounts for its stock-based employee compensation
plans using the intrinsic value based method prescribed by
Accounting Principles Board Opinion No. 25, ACCOUNTING FOR STOCK
ISSUED TO EMPLOYEES, and related interpretations (APB 25). The
Company has provided pro forma disclosures of net earnings and
earnings per share as if the fair value based method of accounting
for the plans, as prescribed by Statement of Financial Accounting
Standards No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION (SFAS
123), had been applied. Pro forma disclosures include the effects
of employee stock options granted during the years ended September
30, 1998, 1997 and 1996.

(h) RESEARCH AND DEVELOPMENT COSTS

The Company expenses research and development costs as they are
incurred. Research and development costs, which are included in
general and administrative expenses in the consolidated statements
of operations, totaled $283,872, $274,905 and $255,928 for the
years ended September 30, 1996, 1997 and 1998, respectively.

(i) EARNINGS PER SHARE

Effective January 1, 1998, the Company adopted Statement of
Financial Accounting Standards No. 128, EARNINGS PER SHARE (SFAS
128) which requires that basic and diluted earnings per share
(EPS) be presented in place of primary and fully diluted EPS.
Basic EPS is computed by dividing income available to common
shareholders by the weighted average number of common shares
outstanding for the period. Diluted EPS includes the effects of
the potential dilution of the Company's stock options, determined
using the treasury stock method. SFAS 128 requires additional
informational disclosures, makes certain modifications to
applicable EPS calculations, and requires restatement of EPS for
all prior periods reported. Fully diluted EPS was the same as
diluted EPS for 1996 and 1997.

(j) FINANCIAL INSTRUMENTS

The carrying amounts of the Company's financial instruments at
September 30, 1997 and 1998 approximate estimated fair values. The
fair value of a financial instrument is the amount at which the
instrument could be exchanged in a current transaction between
willing parties. The carrying amounts of cash, receivables,
accounts payable and accrued liabilities approximate fair value
due to the short maturity of these instruments. The carrying
amounts of debt approximate fair value due to the variable nature
of the interest rates of these instruments.

32
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
(k) RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to
the 1998 presentation.

(2) BUSINESS COMBINATIONS

In June 1998, the Company, through its wholly owned subsidiary, Surveys
Holdings, Inc. acquired all of the issued and outstanding common stock of
Cartotech, Inc. (Cartotech) for cash of approximately $8,092,000 and
354,167 shares of restricted common stock valued at approximately
$8,269,000 for total consideration of approximately $16,362,000.

In May 1998, the Company acquired all of the issued and outstanding
common stock of Interra Technologies (India) Private Limited (Interra)
for cash of approximately $438,000. Interra had previously been an
exclusive subcontractor to the Company.

In July 1997, the Company acquired all of the issued and outstanding
common stock of MSE Corporation for cash of approximately $12,500,000 and
925,000 shares of restricted common stock valued at approximately
$7,313,000, for total consideration of approximately $19,813,000.

In July 1996, the Company, through its wholly owned subsidiary, ASI
Landmark, Inc., acquired substantially all of the assets and assumed
certain liabilities of Westinghouse Landmark GIS, Inc. for cash of
approximately $1,993,000.

In December 1995, the Company acquired substantially all of the assets
and assumed certain liabilities of Intelligraphics, Inc. for
approximately $3,548,000 cash and 345,000 shares of restricted common
stock valued at approximately $891,000, for total consideration of
approximately $4,439,000.

All of the acquisitions were accounted for using the purchase method of
accounting and, accordingly, the accompanying consolidated financial
statements include the results of operations of the acquired businesses
since the date of acquisition. The aggregate purchase prices of the
acquisitions were allocated based on fair values as follows (amounts in
thousands):
<TABLE>
<CAPTION>
Year ended September 30,
-------------------------------
1996 1997 1998
------ ------ ------
<S> <C> <C> <C>
Current assets $ 4,286 13,463 3,732
Equipment 1,245 1,500 1,950
Other assets, including goodwill 3,022 10,996 14,048
Current liabilities (2,121) (5,526) (2,930)
Non-current liabilities - (620) -
------ ------ -----
$ 6,432 19,813 16,800
===== ====== ======
</TABLE>

33
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
The following unaudited pro forma information presents the results of
operations of the Company as if the acquisitions had occurred on October
1, 1996 (in thousands, except per share amounts):

<TABLE>
<CAPTION>
Year ended September 30,
------------------------
1997 1998
-------- --------
<S> <C> <C>
Revenue $ 73,428 $ 99,614
======= =======
Net earnings $ 4,914 $ 7,343
======= ======
Diluted earnings per share $ .74 $ 1.04
====== ======
</TABLE>

The pro forma information is based on historical results and does not
necessarily reflect the actual operating results that would have occurred
nor is it necessarily indicative of future results of operations of the
combined enterprises.

(3) ACCOUNTS RECEIVABLE, REVENUE IN EXCESS OF BILLINGS AND BILLINGS IN
EXCESS OF REVENUE

At September 30, 1998, the estimated period to complete contracts in
process ranges from one to thirty-nine months, and the Company expects to
collect substantially all related accounts receivable and revenue in
excess of billings within one year.

The following summarizes contracts in process at September 30 (in
thousands):

<TABLE>
<CAPTION>
1997 1998
---- ----
<S> <C> <C>>
Costs incurred on uncompleted contracts $ 73,344 110,185
Estimated earnings 30,911 46,779
------- -------
104,255 156,964
Less billings to date (83,431) (118,880)
------- -------

$ 20,824 38,084
======= =======
Included in the accompanying balance sheets
as follows:

Revenue in excess of billings $ 21,613 39,316
Billings in excess of revenue (789) (1,232)
------- -------
$ 20,824 38,084
======= =======
</TABLE>

34
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
(4) DEBT

Long-term debt and lines-of-credit with bank consists of the following at
September 30:
<TABLE>
<CAPTION>
1997 1998
-------- --------
(in thousands)
<S> <C> <C>
Lines-of-credit with bank providing for total borrowings of $21,000,000,
with interest at LIBOR plus applicable margins ranging from 1.25% to
1.75% (7.14% at September 30, 1998), collateralized by substantially
all of the assets of the Company. Borrowings of $5,750,000 were
outstanding under the line-of-credit as of September 30, 1998 and
are due in June 2001. (a) $ 1,473 5,750

Note payable to bank in quarterly installments with interest based
on LIBOR plus applicable margins ranging from 1.25% to 1.75% or
prime rate (7.14% at September 30, 1998), with final payment in
October 2003, secured by substantially all assets of the
Company. (a) - 25,350

Capital lease obligation under a $4,250,000 leasing facility, bearing
interest at effective rates ranging from 7.37% to 10.00%, payable in
monthly installments through November 2001. 595 2,809

Notes payable to bank in monthly installments with interest ranging from
8.09% to 9.00% at September 30, 1997, repaid in fiscal 1998. 16,226 -

Other 375 605
------ ------
18,669 34,514
(4,524) (4,594)
------ ------
$ 14,145 29,920
====== ======
</TABLE>

Maturities of long-term debt, exclusive of the lines-of-credit, as of
September 30, 1998, are as follows (in thousands):

<TABLE>
<S> <C>
Years ending September 30:
1999 $ 4,594
2000 5,986
2001 6,142
2002 5,570
2003 5,860
Thereafter 612
-----
$ 28,764
======
</TABLE>

35
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
(a) These loan agreements contain restrictive covenants which require,
among other things, the maintenance of certain financial ratios and
include certain limitations on capital expenditures and dividend
payments.

(5) LEASES

The Company leases its facilities and certain equipment under operating
leases. Amounts due under noncancelable operating leases with terms of
one year or more at September 30, 1998 are as follows (in thousands):

<TABLE>
Years ending September 30:
<S> <C>
1999 $ 3,175
2000 2,753
2001 2,039
2002 1,705
2003 723
Thereafter 376
------

Total minimum operating lease payments $ 10,771
======
</TABLE>

Rent expense totaled $535,203, $1,345,310 and $2,300,113 for the years
ended September 30, 1996, 1997 and 1998, respectively.

(6) INCOME TAXES

Income tax expense (benefit) for the years ended September 30 is as
follows (in thousands):

<TABLE>
<CAPTION>
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Current:
Federal $ 1,148 1,847 4,244
State and local 168 320 1,000
----- ----- -----
1,316 2,167 5,244
----- ----- -----
Deferred:
Federal (141) (42) (270)
State and local (22) (13) (80)
----- ----- -----
(163) (55) (350)
----- ----- -----
$ 1,153 2,112 4,894
===== ===== =====
</TABLE>

The exercise of non-qualified stock options results in state and federal
income tax deductions to the Company related to the difference between
the market price at the date of exercise and the option exercise price.
The benefit of such deductions is recorded as an increase to
stockholders' equity and totaled approximately $885,000, $1,307,000 and
$3,115,000 in 1996, 1997 and 1998, respectively.

36
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
(6) INCOME TAXES (CONTINUED)

Actual income tax expense differs from the amount computed using the
federal statutory rate of 34% for the years ended September 30 as follows
(in thousands):

<TABLE>
<CAPTION>
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Computed "expected" income tax
expense $ 1,042 1,851 4,123
State income taxes, net of federal
tax effect 96 203 607
Amortization of nondeductible
goodwill - - 84
Other 15 58 80
----- ----- -----

Actual income tax expense $ 1,153 2,112 4,894
===== ===== =====
</TABLE>

The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and liabilities at September 30, are
presented below (in thousands):

<TABLE>
<CAPTION>
1997 1998
---- ----
<S> <C> <C>
Current deferred tax assets and liabilities:
Accounts receivable, primarily due to allowance for
doubtful accounts $ 22 30
Accrued liabilities, primarily due to accrued
compensated absences for financial statement
purposes 143 543
Prepaid expenses, primarily due to marketing
commissions expensed for income tax purposes (34) (16)
Other 5 -
--- --
Total net current deferred tax asset $ 136 557
=== ===
Noncurrent deferred tax assets:
Deferred compensation accrued for financial
statement purposes only 24 16
Equipment and leasehold improvements, primarily
due to differences in depreciation 17 118
--- ---
Total noncurrent deferred tax asset $ 41 134
=== ===
</TABLE>

Management believes that it is more likely than not that future
operations will generate sufficient taxable income to realize the
deferred tax assets.

37
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
(7) STOCKHOLDERS' EQUITY AND STOCK OPTIONS

The Board of Directors may issue preferred stock with rates of
dividends, voting rights, redemption prices, liquidation prices,
liquidation premiums, conversion rights and other requirements without a
vote of the shareholders.

The Company currently has five nonqualified stock option plans. At
September 30, 1998, approximately 66,000 shares were available for grant
under the plan. The exercise price of the options is established by the
Board of Directors on the date of grant. Employees may vest in their
options either 100% on date of grant or 25% six months from date of
grant and 25% on the anniversary of date of grant thereafter, as
determined by the Board of Directors. The options are exercisable in
whole or in part for a period of up to ten years from date of grant.

As discussed in note 1, the Company applies APB Opinion 25 and related
interpretations in accounting for its stock option plans. Accordingly,
because the Company grants its options at or above market value at date
of grant, no compensation cost has been recognized under the plans. Had
compensation cost for the Company's stock-based compensation plans been
determined based upon the fair value of options on the grant dates,
consistent with the provisions of SFAS 123, the Company's pro forma net
earnings and diluted earnings per share would have been as follows:

<TABLE>
<CAPTION>
Year ended September 30,
---------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Net earnings $ 1,754 2,798 4,743
Diluted earnings per share $ .35 .50 .70
</TABLE>

The weighted average fair value of options granted during 1996, 1997 and
1998 was $4.99, $5.49 and $17.93 per share, respectively. The fair value
of each option granted was estimated at the date of grant using the
Black-Scholes option-pricing model with the following assumptions: no
expected dividends, expected life of the options of three years, 60%
volatility, and a risk-free interest rate of 6% in 1996 and 1997 and 5%
in 1998.

The above pro forma disclosures are not necessarily representative of
the effect on the historical net earnings for future periods because
options vest over several years, and additional awards are made each
year. In addition, compensation cost for options granted prior to
October 1, 1995, which vest after that date has not been considered.

38
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
(7) STOCKHOLDERS' EQUITY AND STOCK OPTIONS (CONTINUED)

Stock option activity for the plans for the years ended September 30 are
summarized as follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
Weighted average
Number of exercise price
options per share
--------- ---------
<S> <C> <C>
Balance, October 1, 1995 $ 1,067 2.73
Granted 238 11.07
Exercised (295) 1.99
Canceled (21) 3.17
-----

Balance, September 30, 1996 989 4.95
Granted 641 13.06
Exercised (302) 3.16
Canceled (40) 10.64
-----

Balance, September 30, 1997 1,288 9.23
Granted 753 38.67
Exercised (264) 7.65
Canceled (4) 23.58
----- -----

Balance, September 30, 1998 $ 1,773 21.94
===== =====
</TABLE>

A summary of the range of exercise prices and the weighted-average contractual
life of outstanding stock options at September 30, 1998 is as follows (shares in
thousands):

<TABLE>
<CAPTION>
Options outstanding Options exercisable
----------------------------------------------- ---------------------------------
Number Weighted Number
outstanding Weighted average exercisable Weighted
Range of September 30, average remaining life September 30, average
exercise prices 1998 exercise price (years) 1998 exercise price
--------------- ---- -------------- ------- ---- --------------
<S> <C> <C> <C> <C> <C>
$ .01 - $ 10.00 320 $ 3.27 6 319 $ 3.27
10.01 - 20.00 703 12.54 8 359 12.37
20.01 - 40.00 295 27.95 10 - -
40.01 - 45.88 455 45.69 9 103 45.88
----- - ----- ----- ----- -- --- -----
$ .01 - $ 45.88 1,773 $ 21.94 8 781 $ 13.12
===== ===== ===== ===== == === =====
</TABLE>

39
<PAGE>

ANALYTICAL SURVEYS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
(8) EMPLOYEE BENEFIT PLAN

The Company sponsors a qualified tax deferred savings plan in accordance
with the provisions of section 401(k) of the Internal Revenue Code.
Employees may defer up to 15% of their compensation, subject to certain
limitations. The Company matches 50% of employee contributions up to 4%
of their compensation. The Company contributed $65,756, $185,602 and
$370,814 to the plan in 1996, 1997 and 1998, respectively.

(9) CONCENTRATIONS OF CREDIT RISK

Financial instruments which potentially expose the Company to
concentrations of credit risk, as defined by Financial Accounting
Standards Board's Statement No. 105, DISCLOSURE OF INFORMATION ABOUT
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND FINANCIAL
INSTRUMENTS WITH CONCENTRATION OF CREDIT RISK, consist
primarily of accounts receivable with the Company's various customers.

Historically, the Company's customers have included cities, counties,
engineering companies, utility companies and federal government
agencies. Substantially more than 50% of revenues have historically been
derived from state and local government contracts. In addition, a
significant portion of the Company's revenues are generated from utility
clients, both commercial and municipal.

The Company's accounts receivable are due from a variety of
organizations throughout the United States. The Company provides for
uncollectible amounts upon recognition of revenue and when specific
credit and collection issues arise. Management's estimates of
uncollectible amounts have been adequate in prior years, and management
believes that all significant credit and collection risks have been
identified and adequately provided for at September 30, 1998.

40
<PAGE>

EXHIBIT INDEX

The following exhibits are filed herewith or incorporated by reference
herein (according to the number assigned to them in Item 601 of
Regulation S-K), as noted:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
<S> <C>
3.1 Articles of Incorporation, as amended (incorporated by
reference to ASI's Registration Statement on Form S-18,
(Registration No. 2-93108-D).)

3.2 By-Laws (incorporated by reference to ASI's Registration
Statement on Form S-18 (Registration No. 2-93108-D).

3.3 Amendment to By-laws.

4. Form of Stock Certificate (incorporated by reference to ASI's
Registration Statement on Form S-18 (Registration No.
2-93108-D).)

10.1 Employment Agreement dated June 27, 1994 between ASI and
Sidney V. Corder, Chief Executive Officer and President,
(incorporated by reference to ASI's Quarterly Report on Form
10-QSB for the quarter ended June 30, 1994.)

10.2 Stock Option Plan dated December 17, 1987 and amended on
August 31, 1992 (incorporated by reference to ASI's Annual
Report on Form 10-K for the fiscal year ended September 30,
1992.)

10.3 1991 Non-Qualified Stock Option Plan dated December 17, 1990,
as amended (incorporated by reference to ASI's Annual Report
on Form 10-K for fiscal year ended September 30, 1992.)

10.4 1993 Non-Qualified Stock Option Plan dated December 11, 1992
(incorporated by reference to ASI's Proxy Statement dated
January 11, 1993.)

10.5 Analytical Surveys, Inc. 401-K Plan dated October 1, 1988 and
amended and restated May 22, 1992 (incorporated by reference
to ASI's Annual Report on Form 10-K for Fiscal Year ended
September 30, 1992.)

10.6 Analytical Surveys, Inc. Incentive Bonus Plan (incorporated by
reference to ASI's Annual Report on Form 10-K for fiscal year
ended September 30, 1992.)

10.7 Employment Agreement dated September 20, 1995 between ASI and
Scott C. Benger (incorporated by reference to ASI's Annual
Report on Form 10-KSB for the fiscal year ended September 30,
1995.)

10.8 1995 Non-Qualified Stock Option Plan dated August 22, 1995
(incorporated by reference to ASI's Annual Report on Form
10-KSB for the fiscal year ended September 30, 1995.)

10.9 Real Estate Lease between MSE Realty, LLC and MSE Corporation,
dated July 2, 1997 (incorporated by reference to ASI's Annual
Report on Form 10-K for the fiscal year ended September 30,
1998.)
</TABLE>

41
<PAGE>

<TABLE>
<S> <C>
10.10 Employment Agreement dated July 2, 1997 between ASI and Randal
J. Sage (incorporated by reference to ASI's Annual Report on
Form 10-K for the fiscal year ended September 30, 1998.)

10.11 Employment Agreement dated July 2, 1997 between ASI and John
J. Dillon III (incorporated by reference to ASI's Annual
Report on Form 10-K for the fiscal year ended September 30,
1998.)

10.12 Consulting Agreement between ASI and John A. Thorpe, dated
June 27, 1997 (incorporated by reference to ASI's Annual
Report on Form 10-K for the fiscal year ended September 30,
1998.)

10.13 Analytical Surveys, Inc. 1997 Incentive Stock Option Plan, as
amended and restated (incorporated by reference to Amendment
No. 1 to ASI's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1998.)

10.14 Credit Agreement between ASI and Bank One, Colorado, N.A..
dated June 3, 1998 (including Exhibits A-1, A-2, A-3, C, D and
E thereto) (incorporated by reference to ASI's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998.)

10.15 Amendment No. 1 to Credit Agreement between ASI and BankOne,
Colorado, N.A.. dated as of July 10, 1998.

10.16 Amendment No. 2. To Credit Agreement between ASI and BankOne,
Colorado, N.A.. dated as of October 20, 1998.

10.17 Amendment No. 3 to Credit Agreement between ASI and BankOne,
Colorado, N.A. dated as of November 24, 1998.

10.18 Registration Rights Agreement dated July 2, 1997, between ASI
and Sol C. Miller (incorporated by reference to ASI's Current
Report on Form 8-K dated July 16, 1997, as amended on
September 9, 1997).

10.19 Consulting and Non-Competition Agreement dated July 2, 1997,
between ASI and Sol C. Miller (incorporated by reference to
ASI's Current Report on Form 8-K dated July 16, 1997, as
amended on September 9, 1997).

10.20 Amendment to Consulting and Non-Competition Agreement between
ASI and Sol C. Miller dated July 1, 1998.

23. Consent of KPMG Peat Marwick LLP.

27. Financial Data Schedule.
</TABLE>

42
<PAGE>

PART IV.

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

(a) (1) Financial Statements

Included in Part II of this Report:

Independent Auditors' Report

Consolidated Balance Sheets, September 30, 1998 and 1997

Consolidated Statements of Operations, Years Ended September 30,
1998, 1997 and 1996

Consolidated Statements of Stockholders' Equity, Years Ended
September 30, 1998, 1997 and 1996

Consolidated Statements of Cash Flows, Years
Ended September 30, 1998, 1997 and 1996

Notes to Consolidated Financial Statements,
September 30, 1998 and 1997

(2) Financial statement schedules

Included in Part IV of this report:

Financial statement schedules required to be filed have
been omitted because they are not applicable, or the
required information is set forth in the applicable
financial statements or notes thereto.

(3) Exhibits

The following exhibits are filed herewith or incorporated by reference
herein (according to the number assigned to them in Item 601 of Regulation
S-K), as noted:

3. Articles of Incorporation and By-Laws

<TABLE>
<S> <C>
3.1 Articles of incorporation as amended (incorporated by reference to
ASI's Registration Statement on Form S-18,
(Registration No. 2-93108-D).)

3.3 By-laws (incorporated by reference to ASI's Registration Statement on
Form S-18 (Registration No. 2-93108-D).

3.3 Amendment to By-laws.
</TABLE>

4. Instruments defining the rights of Security Holders including Indentures

<PAGE>

Form of Stock Certificate (incorporated by reference to ASI's
Registration Statement on Form S-18 (Registration No. 2-93108-D).)

10. Material Contracts

<TABLE>
<S> <C>
10.1 Employment agreement dated June 27, 1994 between ASI and Sidney V.
Corder, Chief Executive Officer and President, (incorporated by
reference to ASI's Quarterly Report on Form 10-QSB for the quarter
ended June 30, 1994.)

10.2 Stock Option Plan dated December 17, 1987 and amended on August 31,
1992 (incorporated by reference to ASI's Annual Report on Form 10-K
for the fiscal year ended September 30, 1992.)

10.3 1991 Non-Qualified Stock Option Plan dated December 17, 1990, as
amended (incorporated by reference to ASI's Annual Report on
Form 10-K for fiscal year ended September 30, 1992.)

10.4 1993 Non-Qualified Stock Option Plan dated December 11, 1992
(incorporated by reference to ASI's Proxy Statement dated
January 11, 1993.)

10.5 Analytical Surveys, Inc. 401-K Plan dated October 1, 1988 and
amended and restated May 22, 1992 (incorporated by reference to
ASI's Annual Report on Form 10-K for Fiscal Year ended
September 30, 1992.)

10.6 Analytical Surveys, Inc. Incentive Bonus Plan (incorporated by
reference to ASI's Annual Report on Form 10-K for fiscal year ended
September 30, 1992.)

10.7 Employment agreement dated September 20, 1995 between ASI and
Scott C. Benger (incorporated by reference to ASI's Annual Report
on Form 10-KSB for the fiscal year ended September 30, 1995.)

10.8 1995 Non-Qualified Stock Option Plan dated August 22, 1995
(incorporated by reference to ASI's Annual Report on Form 10-KSB
for the fiscal year ended September 30, 1995.)

10.9 Real Estate Lease between MSE Realty, LLC and MSE Corporation, dated
July 2, 1997 (incorporated by reference to ASI's Annual Report on
Form 10-K for the fiscal year ended September 30, 1998.)

10.10 Employment Agreement dated July 2, 1997 between ASI and Randal J.
Sage (incorporated by reference to ASI's Annual Report on Form 10-K
for the fiscal year ended September 30, 1998.)

10.11 Employment Agreement dated July 2, 1997 between ASI and John J.
Dillon III (incorporated by reference to ASI's Annual Report on
Form 10-K for the fiscal year ended September 30, 1998.)

10.12 Consulting Agreement between ASI and John A. Thorpe, dated June 27,
1997 (incorporated by reference to ASI's Annual Report on Form 10-K
for the fiscal year ended September 30, 1998.)

</TABLE>
44

<PAGE>

<TABLE>
<S> <C>
10.13 Analytical Surveys, Inc. 1997 Incentive Stock Option Plan, as
amended and restated (incorporated by reference to Amendment No. 1
to ASI's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1998.)

10.14 Credit Agreement between ASI and Bank One, Colorado, N.A.. dated
June 3, 1998 (including Exhibits A-1, A-2, A-3, C D and E thereto
(incorporated by reference to ASI's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998.)

10.15 Amendment No. 1 to Credit Agreement between ASI and BankOne,
Colorado, N.A.. dated as of July 10, 1998.

10.16 Amendment No. 2. To Credit Agreement between ASI and BankOne,
Colorado, N.A.. dated as of October 20, 1998.

10.17 Amendment No. 3 to Credit Agreement between ASI and BankOne,
Colorado, N.A.. dated as of November 24, 1998.

10.18 Registration Rights Agreement dated July 2, 1997, between ASI and
Sol C. Miller (incorporated by reference to ASI's Current Report
on Form 8-K dated July 16, 1997, as amended on September 9, 1997).

10.19 Consulting and Non-Competition Agreement dated July 2, 1997,
between ASI and Sol C. Miller (incorporated by reference to ASI's
Current Report on Form 8-K dated July 16, 1997, as amended on
September 9, 1997).

10.20 First Amendment to Consulting and Non-Competition Agreement
between ASI and Sol C. Miller dated July 1, 1998.

</TABLE>

23. Consent of Experts and Counsel:

Consent of KPMG Peat Marwick LLP.

27. Financial Data Schedule.

(b) Reports on Form 8-K filed during the quarter ended September 30, 1998:

Date of Report Items Reported Financial Statements Filed
-------------- -------------- --------------------------
<S> <C> <C>

June 26, 1998 Item 2 Audited financial statements
of Cartotech, Inc. for fiscal
years ended December 31, 1997
and 1996.

Unaudited financial statements
of Cartotech, Inc. for the
five month period ended May 31, 1998.

Proforma statement of operations
for the nine month period ended
June 30, 1998.

</TABLE>

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Analytical Surveys, Inc.

By: /s/ Sidney V. Corder Date: December 22, 1998
---------------------------------------------------
Sidney V. Corder, Chairman of the Board, President,
Chief Executive Officer, and Director

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

Signature Date:

By: /s/ Sidney V. Corder December 22, 1998
-----------------------------------------------
Sidney V. Corder, Director, Chairman of the Board,
President, Chief Executive Officer, and Director

By: /s/ Scott C. Benger December 22, 1998
-----------------------------------------------
Scott C. Benger, Sr. Vice President Finance and Secretary/
Treasurer (chief financial officer and principal
accounting officer)

By: /s/ Brian J. Yates December 22, 1998
-----------------------------------------------
Brian J. Yates, Controller

By: /s/ Richard P. MacLeod December 22, 1998
-----------------------------------------------
Richard P. MacLeod, Director

By: /s/ James T. Rothe December 22, 1998
-----------------------------------------------
James T. Rothe, Director

By: /s/ Robert H. Keeley December 22, 1998
-----------------------------------------------
Robert H. Keeley, Director

By: /s/ John A. Thorpe December 22, 1998
-----------------------------------------------
John A. Thorpe, Director

By: /s/ Willem H. J. Andersen December 22, 1998
-----------------------------------------------
Willem H. J. Andersen, Director

By: /s/ Sol C. Miller December 22,1998
-----------------------------------------------
Sol C. Miller, Director

<PAGE>

EXHIBIT 3.3

AMENDMENT TO BYLAWS

"RESOLVED that the Bylaws of the Corporation are hereby amended, pursuant
to Article X of those Bylaws as follows:

Article IX is deleted in its entirety."

<PAGE>

EXHIBIT 10.15

AMENDMENT NO. 1
TO
CREDIT AGREEMENT

THIS AMENDMENT (the "Amendment"), dated as of July 10, 1998 by and among
ANALYTICAL SURVEYS, INC. (the "Borrower"), the BANKS listed on the signature
page hereof (each a "Bank") and BANK ONE, COLORADO, N.A., as Agent (the
"Agent").

WITNESSETH

WHEREAS, the Borrower, the Banks and the Agent are parties to a Credit
Agreement dated as of June 3, 1998 (the "Credit Agreement") (capitalized terms
used and not otherwise defined herein shall have the meanings ascribed thereto
in the Credit Agreement);

WHEREAS, the Borrower has requested and the banks have agreed to the
amendments of certain terms and conditions of the Credit Agreement more fully
set forth herein; and

WHEREAS, the amendments contained herein shall be of benefit, either
directly or indirectly, to the Borrower.

NOW THEREFORE, in consideration of the covenants, conditions and agreements
set forth herein, the parties agree as follows:

1. AMENDMENTS. Upon and after the effectiveness of this Amendment (as
defined in Section 3 below):

(a) Subparagraph (ii) of the defined term "Applicable Margin" in
SECTION 1.1 of the Credit Agreement is restated in its entirety to read as
follows:

(ii) Notwithstanding the foregoing, the Applicable Margin will be equal
to the LIBOR Base Rate + 2.25% or the Prime Rate + 0.50%, as the case may
be, from the Effective Date to July 6, 1998, at which time the Applicable
Margin shall be the LIBOR Base Rate + 1.25% or the Prime Rate + 0.0%, as
the case may be, and thereafter shall be subject to adjustment, if
necessary, five (5) days after delivery of the Compliance Certificate
accompanying the financial statements furnished for the period ended May
31, 1998. Such financial statements for the period ended May 31, 1998
shall be delivered to the Agent on or before July 10, 1998.

(b) The defined term "Commitment Fee Rate" is amended by the
restatement in its entirety of the last sentence of the definition to read as
follows:

<PAGE>

Notwithstanding the foregoing, the Commitment Fee Rate shall be
0.250% from the Effective Date until July 6, 1998, at which time the
Commitment Fee Rate shall be 0.150%, and thereafter shall be subject
to adjustment, if necessary, five (5) days after delivery of the
Compliance Certificate accompanying the financial statements
furnished for the period ended May 31, 1998. Such financial
statements for the period ended May 31, 1998 shall be delivered to
the Agent on or before July 10, 1998.

MINIMUM FIXED CHARGE COVERAGE RATIO. Fail to maintain a ratio of
Trailing Four Quarter EBITDA to Fixed Charges of not less than 1.3
to 1.0.

2. REPRESENTATIONS AND WARRANTIES. In order to induce the Banks to
agree to amend the Credit Agreement, the Borrower makes the following
representations and warranties, which shall survive the execution and delivery
of this Amendment:

(a) Prior to and as of the date first referenced above, no Event
of Default has occurred and as of the date first referenced above no Event of
Default will exist immediately after giving effect to the amendments contained
herein; and

(b) Each of the representations and warranties set forth in
ARTICLE IV of the Credit Agreement are true and correct as though such
representations and warranties were made at and as of the date first referenced
above, except to the extent that any such representations or warranties are made
as of a specified date or with respect to a specified period of time, in which
case such representations and warranties shall be made as of such specified date
or with respect to such specified period. Each of the representations and
warranties made under the Credit Agreement shall survive to the extent provided
therein and not be waived by the execution and delivery of this Amendment.

3. EFFECTIVENESS. The amendments to the Credit Agreement contained in
Section 1 of this Amendment shall become effective as of the date first
referenced above after the Borrower shall have executed a copy of this Amendment
and shall have delivered the same to the Banks and the Agent.

4. PAYMENT OF EXPENSES. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by the Agent in connection with the
preparation, execution and delivery of this Amendment and any other documents or
instruments which may be delivered in connection herewith, including, without
limitation, the reasonable fees and expenses of Davis, Graham & Stubbs LLP,
counsel for the Agent.

5. COUNTERPARTS. This Amendment may be executed in counterparts and by
different parties hereto in separate counterparts, each of which, when so
executed and delivered, shall be deemed to be an original and all of which, when
taken together, shall constitute one and the same instrument.

6. RATIFICATION. The Credit Agreement is and shall continue to be in
full force and effect and is hereby in all respects confirmed, approved and
ratified. All terms and conditions of the Credit Agreement remain the same.

2
<PAGE>

7. GOVERNING LAW. The rights and duties of the Borrower, the Banks and
the Agent under this Amendment shall be governed by the law of the State of
Colorado.

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date first written above.

ANALYTICAL SURVEYS, INC. BANK ONE, COLORADO, N.A.,
as Agent and Bank

By /s/ Scott C. Benger By /s/ Shaun P. McCarthy
------------------------- -------------------------
Scott C. Benger Shaun P. McCarthy
Senior Vice President-Finance, Vice President
Secretary and Treasurer

<PAGE>

EXHIBIT 10.16

AMENDMENT NO. 2
TO
CREDIT AGREEMENT

THIS AMENDMENT (the "AMENDMENT"), dated as of October 20, 1998 by and among
ANALYTICAL SURVEYS, INC. (the "BORROWER"), the BANKS listed on the signature
page hereof (each a "Bank") and BANK ONE, COLORADO, N.A., as Agent (the
"AGENT").

WITNESSETH

WHEREAS, the Borrower, the Banks and the Agent are parties to a Credit
Agreement dated as of June 3, 1998, as amended (the "CREDIT AGREEMENT")
(capitalized terms used and not otherwise defined herein shall have the meanings
ascribed thereto in the Credit Agreement);

WHEREAS, the Borrower has requested and the Banks have agreed to the
amendments of certain terms and conditions of the Credit Agreement more fully
set forth herein; and

WHEREAS, the amendments contained herein shall be of benefit, either
directly or indirectly, to the Borrower.

NOW THEREFORE, in consideration of the covenants, conditions and agreements
set forth herein, the parties agree as follows:

1. AMENDMENTS. Upon and after the Amendment Effective Date (as defined in
Section 4 below):

(1) The first sentence of the Recitals is amended in its entirety to
read as follows:

Pursuant to and subject to the terms and conditions of this
Agreement, the Banks will make available to the Borrower (a)
until June 30, 2001, a Senior Secured Revolving Line of Credit
in the maximum amount up to $21,000,000, (b) until October 5,
2003, a Senior Secured Term Loan of $25,350,000, and (c) a
Senior Secured Acquisition Draw Facility in the maximum amount
of $0.

(2) The defined term "Acquisition Loans Commitment" in SECTION 1.1 of
the Credit Agreement is amended by the deletion of $10,000,000 and the insertion
in its place of $0.

(3) The defined term "Maximum Revolving Credit Amount" in SECTION 1.1 of
the Credit Agreement is restated in its entirety to read as follows:

"MAXIMUM REVOLVING CREDIT AMOUNT" means the lesser of
(i) $21,000,000 or (ii) the Borrowing Base.

(4) The defined term "Revolving Loans Scheduled Maturity Date" in
SECTION 1.1 of the Credit Agreement is restated in its entirety to read as
follows:

<PAGE>

"REVOLVING LOANS SCHEDULED MATURITY DATE" means the later of
(a) June 30, 2001 and (b) the Revolving Loans Scheduled
Maturity Date as it may be extended pursuant to SECTION 2.1(a).

(5) The defined term "Revolving Loans Commitment" in SECTION 1.1 of the
Credit Agreement is amended by deleting $11,000,000 and inserting in its place
"$21,000,000."

(6) The defined term"Revolving Note" in SECTION 1.1 of the Credit
Agreement is amended by deleting $11,000,000 and inserting in its place
$21,000,000.

(7) The defined term "Term Note" in SECTION 1.1 of the Credit Agreement
is amended by deleting "$16,000,000" and inserting in its place "$25,350,000."

(8) The defined term "Term Loan Scheduled Maturity Date" in SECTION 1.1
of the Credit Agreement is restated in its entirety to read as follows:

"TERM LOAN SCHEDULED MATURITY DATE" means October 5, 2003.

(9) Subsection (a) of SECTION 2.1 of the Credit Agreement is amended by
the insertion of the following immediately prior to the final sentence thereof:

"Subject to the written approval of the Banks, which approval
may, in the Banks sole discretion, be withheld, the Borrower
may request an extension of the Revolving Loans Scheduled
Maturity Date by providing a written request for such an
extension to the Agent. Such request for an extension of the
Revolving Loans Scheduled Maturity Date may not be made more
often than once each calender year, and must be received by the
Agent between March 31 and June 30. Such request for
extension, if approved by the Banks, shall not cause the
current term of the Revolving Loans Commitment to be more than
three (3) years. In no event shall the Revolving Loans
Scheduled Maturity Date extend beyond October 5, 2005. No fee
will be imposed by the Banks for a request for an extension of
the Revolving Loans Scheduled Maturity Date pursuant to this
SECTION 2.1(a).

(10) The defined term "Applicable Margin" in SECTION 1.1 of the Credit
Agreement is amended by deleting the table therein and inserting in its place
the following table:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------
Ratio of Total Debt to Less Than LIBOR Base Rate + Prime Rate +
Trailing Four Quarter
EBITDA
Greater Than or Equal
to
-----------------------------------------------------------------------
<S> <C> <C> <C>
2.50x 3.00x 1.75% 0.000%
-----------------------------------------------------------------------
2.00x 2.50x 1.50% 0.000%
-----------------------------------------------------------------------
- 2.00x 1.25% 0.000%
-----------------------------------------------------------------------
</TABLE>

(11) The defined term "Commitment Fee Rate" in SECTION 1.1 of the Credit
Agreement is amended by deleting the table therein and
inserting in its place the following table:

2
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
Ratio of Total Debt to Less Than Commitment Fee Rate
Trailing Four Quarter
EBITDA Greater Than
or Equal to
-------------------------------------------------------------------------
<S> <C> <C>
2.50x 3.00X 0.375%
-------------------------------------------------------------------------
2.00x 2.50x 0.250%
-------------------------------------------------------------------------
-- 2.00x 0.250%
-------------------------------------------------------------------------
</TABLE>

(12) SECTION 2.6 of the Credit Agreement is amended by restating in its entirety
subsection (b) thereof to read as follows:

(b) INSTALLMENT PAYMENTS OF TERM LOAN. The Borrower will
repay the Term Loan in quarterly installment payments of
principal, commencing on January 5, 1999 and on the last day of
each quarter thereafter, in accordance with the following:

<TABLE>
<CAPTION>
Quarterly Principal Payment
---------------------------
Repayment Date Amount
-------------- ------
<S> <C>
January 5, 1999 $1,150,000

April 5, 1999 $1,150,000

July 5, 1999 $1,150,000

October 5, 1999 $1,225,000

January 5, 2000 $1,225,000

April 5, 2000 $1,225,000

July 5, 2000 $1,225,000

October 5, 2000 $1,300,000

January 1, 2001 $1,300,000

April 5, 2001 $1,300,000

July 5, 2001 $1,300,000

October 5, 2001 $1,375,000

January 5, 2002 $1,375,000

April 5, 2002 $1,375,000

July 5, 2002 $1,375,000

October 5, 2002 $1,450,000

January 5, 2003 $1,450,000

April 5, 2003 $1,450,000

3
<PAGE>

Quarterly Principal Payment
---------------------------
Repayment Date Amount
-------------- ------
<S> <C>

July 5, 2003 $1,450,000

October 5, 2003 $ 500,000
</TABLE>

(13) SECTION 2.2 of the Credit Agreement is amended by the deletion of
$10,000 and the insertion in its place of $25,000.

(14) SECTION 5.2(a)(i) of the Credit Agreement is restated in its
entirety to read as follows:

(1) MAXIMUM TOTAL DEBT TO EBITDA RATIO. Permit, as of the end of
any Fiscal Quarter, for Borrower and all Subsidiaries on a
consolidated basis a ratio of (y) Total Debt to (z) Trailing
Four Quarter EBITDA to be greater than
<TABLE>
<CAPTION>
Time Period Maximum Ratio
----------- -------------
<S> <C>
From the Effective Date to March 31,
1999 2.75:1.00

April 1, 1999 to September 30, 1999
2.50:1.00

October 1, 1999 and thereafter 2.00:1.00
</TABLE>

(15) SECTION 5.2(a)(iv) of the Credit Agreement is restated in its
entirety to read as follows:

(iv) MAXIMUM ANNUAL CAPITAL EXPENDITURES. During the Fiscal Years
listed below, make Capital Expenditures for the Borrower and
all Subsidiaries on a consolidated basis in excess of

<TABLE>
<CAPTION>
Fiscal Year Ending
------------------
<S> <C>
September 30, 1999 $ 5,000,000
September 30, 2000 $10,000,000
September 30, 2001 $12,000,000
</TABLE>

(16) SECTION 5.2 (a) of the Credit Agreement is amended by the deletion
of subsection (v) thereto.

(17) SECTION 5.2(d)(v) of the Credit Agreement is restated in its
entirety to read as follows:

(v) other Debt in the aggregate principal amount in
excess of

4
<PAGE>

<TABLE>
<CAPTION>
Fiscal Year Ending
------------------
<S> <C>
September 30, 1999 $ 5,000,000
September 30, 2000 $10,000,000
September 30, 2001 $12,000,000
</TABLE>

(18) SECTION 1.1 of the Credit Agreement is amended by the insertion of
the following definition of "Eligible Account Receivable" in alphabetical order:

"ELIGIBLE ACCOUNT RECEIVABLE" means all Accounts
Receivable of the Borrower and its Subsidiaries which
are subject to a first and prior Lien in favor of the
Agent on behalf of the Banks pursuant to the Collateral
Documents (reduced by the amount of any refund, rebate,
allowance, discount or other concession to the account
debtor in connection therewith) except for the
following:

(a) Accounts Receivable with respect to which the account debtor
is an Affiliate of the Borrower or any Guarantor, or a director,
officer, employee or agent of the Borrower or any Guarantor;

(b) Accounts Receivable by reason of which the payment of the
account debtor may be conditional;

(d) Accounts Receivable from account debtors whose financial
condition or creditworthiness of such account debtor is unacceptable
under the credit policy of the Borrower, which credit policy shall
be consistent with prudent industry practice;

(e) Accounts Receivable which are not due and payable within 60
days after their invoice date;

(f) Accounts Receivable which are more than 90 days past their
invoice date;

(g) Accounts Receivable owing from a single account debtor if
more than twenty-five percent (25%) of its Accounts Receivable with
the Borrower and all Guarantors is more than 60 days past due;

(h) Accounts Receivable from account debtors which do not
maintain their principal place of business in the United States,
unless they are supported by an irrevocable letter of credit from a
banking institution in the United States acceptable to the Agent in
its sole discretion;

(i) Accounts Receivable from an account debtor which has filed,
or which has had filed against it, and is pending, a petition in
bankruptcy or an application for relief under any provision of any
state or federal bankruptcy, insolvency or debtor-relief statute; or
which has had appointed, and continues to be appointed, a trustee,
custodian or receiver for the assets of such account debtor; or
which has made, and is pending, an assignment for the benefit of
creditors or has become, and remains, insolvent or has failed, and
continues to fail, generally to pay its debts (including its
employee payroll) as such debts become due;

(j) Accounts Receivable with respect to which the account debtor
is the United States, or any department or agency thereof (other
than such Accounts Receivable in which the Banks have been granted
an enforceable assignment in compliance with the provisions of 41
U.S.C. Section 15); and

(k) Accounts Receivable which are not subject to a Lien in favor
of the Agent, or which are subject to a Lien in favor of a Person
other than the Agent, whether or not such Lien is junior to

5
<PAGE>

the Lien of the Agent other than Liens imposed by any Governmental
Authority for taxes, assessments or charges not yet due or which are
being contested in good faith and with due diligence and with
respect to which adequate reserves, determined in the reasonable
discretion of the Agent, have been established and Liens which do
not materially and adversely affect the Banks= rights and interests
in such Accounts Receivable, the Collateral, or the collectibility
of the Accounts Receivable.

(19) SECTION 1.1 of the Credit Agreement is amended by the insertion in
alphabetical order of the following definition of "Eligible Unbilled Accounts
Receivable":

"ELIGIBLE UNBILLED ACCOUNT RECEIVABLE" means an Account Receivable
that (i) complies with all of the requirements of an Eligible
Account Receivable, (ii) all work has been performed by the Borrower
with respect to the Account Receivable, (iii) a bill for such
Account Receivable has not been sent to the account debtor because a
contractual billing event has not occurred, and (iv) is included in
the disclosure of "Revenues in Excess of Billings" in the audited
consolidated financial statements of the Borrower or the quarterly
financial statements of the Borrower prepared in accordance with
GAAP.

(20) SECTION 1.1 of the Credit Agreement is amended by the insertion in
alphabetical order of the following definition of "Borrowing Base":

"BORROWING BASE" shall have the meaning specified in SECTION 2.15

(21) SECTION 1.1 of the Credit Agreement is amended by the insertion in
alphabetical order of the following definition of "Borrowing Base Certificate":

"BORROWING BASE CERTIFICATE" shall mean a certificate to be provided
to the Agent by the Borrower from time to time in accordance with
SECTION 2.15 substantially in the form of EXHIBIT B-4 hereto.

(22) A new SECTION 2.15 shall be added to the Credit Agreement that shall
read as follows:

SECTION 2.15. BORROWING BASE.

(a) Not later than the initial Advance, and thereafter not later
than 45 days after the conclusion of each Fiscal Quarter, the
Borrower shall deliver to the Agent a Borrowing Base Certificate, in
the form of EXHIBIT B-4, duly executed by an Authorized Signatory,
which Borrowing Base Certificate will set forth the information
contained therein as of the end of the preceding Fiscal Quarter.
The Agent will have the right to request and the Borrower will
promptly provide additional information concerning the information
set forth in the Borrowing Base Certificate. Within five (5) days
after receipt of the Borrowing Base Certificate, the amount set
forth therein as the Borrowing Base shall become the Borrowing Base
under this Agreement unless prior to the end of such period the
Agent shall have given notice to the Borrower that a different
amount is effective as the Borrowing Base. The Borrowing Base so
established shall remain effective until the Required Banks elect to
redetermine the Borrowing Base, subject to the terms of this
Agreement, whether based upon the next quarterly Borrowing Base
Certificate submitted by the Borrower to the Agent, or at any other
time, in the Required Banks sole discretion.

(b) For purposes of determining the applicable Borrowing Base,
(i) Eligible Accounts Receivable shall be valued at eighty percent
(80%) of the amount thereof and (ii) Eligible Unbilled Accounts
Receivable shall be valued at fifty percent (50%) of the amount
thereof, PROVIDED,

6
<PAGE>

HOWEVER, Eligible Unbilled Accounts Receivable shall not exceed
$7,500,000 for purposes of determining the Borrowing Base.

(23) A new EXHIBIT B-4, Form of Borrowing Base Certificate shall be added
to the Credit Agreement in the form of the attached EXHIBIT A hereto.

(24) SCHEDULE 2.1 of the Credit Agreement is replaced in its entirety
with the form of SCHEDULE 2.1 that is attached as EXHIBIT B hereto.

(25) SECTION 5.1(b) of the Credit Agreement is amended by the addition of
a new subsection (xvii) that shall read as follows:

(xvii) within 45 days after the end of each Fiscal Quarter, (A) a
Borrowing Base Certificate;

2. CONDITIONS PRECEDENT. In the judgement of the Agent, on or before the
Amendment Effective Date, each of the following shall have been satisfied:

(1) The Reaffirmation of Guaranty attached hereto as EXHIBIT C shall
have been duly executed and delivered to the Agent by all of the Guarantors.

(2) Borrower shall execute and deliver to the Agent, Promissory Notes in
principal amounts that correspond to the Commitments of the Banks reflected in
the SCHEDULE 2.1 as amended by this Amendment.

(3) Borrower shall pay the legal fees and expenses incurred by the Agent
in connection with the preparation of this Amendment and related instruments.

(4) Borrower shall pay to the Agent an Amendment Fee of 0.125% on the
existing Commitments of $36,350,000 ($45,437.50) that is due the Banks on a Pro
Rata basis.

(5) Borrower shall pay to the Agent the amounts due the Agent under the
Fee Letter dated October 8, 1998.

3. REPRESENTATIONS AND WARRANTIES. In order to induce the Banks to agree to
amend the Credit Agreement, the Borrower makes the following representations and
warranties, which shall survive the execution and delivery of this Amendment:

(1) Prior to and as of the date first referenced above, no Event of
Default has occurred and as of the date first referenced above no Event of
Default will exist immediately after giving effect to the amendments contained
herein; and

(2) Each of the representations and warranties set forth in ARTICLE IV
of the Credit Agreement are true and correct as though such representations and
warranties were made at and as of the date first referenced above, except to the
extent that any such representations or warranties are made as of a specified
date or with respect to a specified period of time, in which case such
representations and warranties shall be made as of such specified date or with
respect to such specified period. Each of the representations and warranties
made under the Credit

7
<PAGE>

Agreement shall survive to the extent provided therein and not be waived by the
execution and delivery of this Amendment.

4. EFFECTIVENESS. The amendments to the Credit Agreement contained in Section
1 of this Amendment shall become effective as of the date first referenced above
after the Agent shall have received this Amendment, executed and delivered by
the Borrower, the Agent and the Banks (the "Amendment Effective Date").

5. PAYMENT OF EXPENSES. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by the Agent in connection with the preparation,
execution and delivery of this Amendment and any other documents or instruments
which may be delivered in connection herewith, including, without limitation,
the reasonable fees and expenses of Davis, Graham & Stubbs LLP, counsel for the
Agent.

6. COUNTERPARTS. This Amendment may be executed in counterparts and by
different parties hereto in separate counterparts, each of which, when so
executed and delivered, shall be deemed to be an original and all of which, when
taken together, shall constitute one and the same instrument.

7. RATIFICATION. The Credit Agreement is and shall continue to be in full
force and effect and is hereby in all respects confirmed, approved and ratified.
All terms and conditions of the Credit Agreement remain the same.

8
<PAGE>

8. GOVERNING LAW. The rights and duties of the Borrower, the Banks and the
Agent under this Amendment shall be governed by the law of the State of
Colorado.

9. REFERENCE TO CREDIT AGREEMENT. From and after the Amendment Effective
Date, each reference in the Credit Agreement to "this Credit Agreement",
"hereof", "hereunder" or words of like import, and all references to the Credit
Agreement in any and all agreements, instruments, documents, notes, certificates
and other writings of every kind and nature, shall be deemed to mean the Credit
Agreement as modified and amended by this Amendment.

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date first written above.

ANALYTICAL SURVEYS, INC. BANK ONE, COLORADO, N.A.,
as Agent and Bank

By /s/ Scott C. Benger By /s/ Shaun P. McCarthy
--------------------------------- ------------------------------
Scott C. Benger Shaun P. McCarthy
Senior Vice President-Finance, Vice President
Secretary and Treasurer

THE FIFTH THIRD BANK OF
CENTRAL INDIANA

By /s/ Erik C. Miner
-----------------------------
Erik C. Miner
Vice President

<PAGE>

EXHIBIT 10.17

AMENDMENT NO. 3

CREDIT AGREEMENT

THIS AMENDMENT NO. 3 (the "AMENDMENT"), dated as of November 24, 1998
by and among ANALYTICAL SURVEYS, INC. (the "BORROWER"), the BANKS listed on the
signature page hereof and BANK ONE, COLORADO, N.A. as Agent (the "AGENT").

WITNESSETH:

WHEREAS, the Borrower, the Banks and the Agent are parties to the Credit
Agreement dated as of June 3, 1998, as amended (the "CREDIT AGREEMENT")
(capitalized terms used and not otherwise defined herein shall have the meaning
ascribed thereto in the Credit Agreement); and

WHEREAS, the Borrower has requested and the Banks have agreed to the
amendments to the Credit Agreement more fully set forth herein; and

WHEREAS, such amendments shall be of benefit, either directly or
indirectly, to the Borrower;

NOW THEREFORE, in consideration of the covenants, conditions and agreements
hereinafter set forth, the parties hereto agree as follows:

1. AMENDMENTS. Upon and after the Amendment Effective Date (as defined
in Section 4 below):

(a) The defined term "Obligations" in SECTION 1.1 of the Credit
Agreement is restated in its entirety to read as follows:

"OBLIGATIONS" means the obligations of the Borrower to repay the
balance of the Loans outstanding hereunder, together with accrued and
unpaid interest thereon, fees payable hereunder, and all other amounts
payable or obligations to be performed by the Borrower hereunder or
under any other Loan Instrument or amounts arising and payable under
the ISDA Master Agreement on the occurrence of an Early Termination
Date (as defined in the ISDA Master Agreement) or Event of Default (as
defined in the ISDA Master Agreement) or otherwise.

(b) SECTION 1.1 of the Credit Agreement is amended by the insertion
in alphabetical order of the defined term "ISDA Master Agreement" to read as
follows:

"ISDA MASTER AGREEMENT" means that a certain International Swap
Dealers Association, Inc. Master Agreement dated as of June 1, 1997
between the Borrower and Bank One, Colorado, N.A., as amended,
modified or renewed, with respect to any Transaction (as defined in
the ISDA Master Agreement) entered into pursuant thereto.

(c) The defined term "LOAN INSTRUMENT" in SECTION 1.1 of the Credit
Agreement is amended to include the ISDA Master Agreement.

<PAGE>

2. REPRESENTATIONS AND WARRANTIES. In order to induce the Bank to agree
to amendments to the Credit Agreement provided herein, the Borrower makes the
following representations and warranties, which shall survive the execution and
delivery of this Amendment:

(a) Prior to and as of the date first referenced above, no Event of
Default has occurred and as of the date first referenced above no Event of
Default will exist immediately after giving effect to the amendments contained
herein; and

(b) Each of the representations and warranties set forth in ARTICLE
IV of the Credit Agreement are true and correct as though such representations
and warranties were made at and as of the Amendment Effective Date, except to
the extent that any such representations or warranties are made as of a
specified date or with respect to a specified period of time, in which case such
representations and warranties shall be made as of such specified date or with
respect to such specified period. Each of the representations and warranties
made under the Credit Agreement shall survive to the extent provided therein and
not be waived by the execution and delivery of this Amendment.

3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AMENDMENT NO. 3. The
obligations of the Banks with respect to the Amendments as described in Section
1 above, are subject to the satisfaction of (or waiver by the Banks in their
sole discretion) the following conditions precedent:

(a) The International Swap and Derivatives Association Master
Agreement attached hereto as EXHIBIT A shall have been duly executed by
Authorized Signatories of the Borrower and delivered to the Agent.

(b) The Reaffirmation of Guaranty attached hereto as EXHIBIT B shall
have been duly executed by the Guarantors and delivered to the Agent.

(c) The amendments to the Security Agreement and Pledge Agreement, in
form and substance satisfactory to the Agent in its sole discretion, shall have
been duly executed and delivered to the Agent.

(d) Pay the legal fees and expenses incurred by the Bank in connection
with the preparation of this Amendment and related waivers.

4. EFFECTIVENESS. The amendments to the Credit Agreement contained in
Section 1 of this Amendment shall become effective as of the date first
referenced above after the Bank shall have received this Amendment, executed and
delivered by the Borrower (the "AMENDMENT EFFECTIVE DATE").

5. PAYMENT OF EXPENSES. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by the Bank in connection with the preparation,
execution and delivery of this Amendment and any other documents or instruments
which may be delivered in connection herewith, including, without limitation,
the reasonable fees and expenses of Davis, Graham & Stubbs LLP, counsel for the
Bank.

7. RATIFICATION. The Credit Agreement, as amended by this Amendment, is
and shall continue to be in full force and effect and is hereby in all respects
confirmed, approved and ratified. Borrower confirms and ratifies its continuing
and continuous pledge, assignment and grant of a security interest in the
Collateral in favor of the Bank. Except as amended hereby, all terms and
conditions of the Credit Agreement remain the same.

8. GOVERNING LAW. The rights and duties of the Borrower and the Bank
under this Amendment shall be governed by the law of the State of Colorado.

2
<PAGE>

9. REFERENCE TO CREDIT AGREEMENT. From and after the Amendment Effective
Date, each reference in the Credit Agreement to "this Credit Agreement",
"hereof", "hereunder" or words of like import, and all references to the Credit
Agreement in the Loan Instruments and in any and all agreements, instruments,
documents, notes, certificates and other writings of every kind and nature,
shall be deemed to mean the Credit Agreement as modified and amended by this
Amendment.

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date first written above.

ANALYTICAL SURVEYS, INC. BANK ONE, COLORADO, N.A.
AS AGENT AND A BANK

By: /s/ Scott C. Benger By: /s/ J. Wayne Hutchens
----------------------------- ---------------------------
Scott C. Benger J. Wayne Hutchens
Senior Vice President-Finance, Executive Vice President
Secretary and Treasurer

THE FIFTH THIRD BANK OF
CENTRAL INDIANA

By /s/ Erik C. Miner
----------------------------
Erik C. Miner

<PAGE>

EXHIBIT 10.20

FIRST AMENDMENT TO
CONSULTING AND NONCOMPETITION AGREEMENT

THIS FIRST AMENDMENT TO CONSULTING AND NONCOMPETITION AGREEMENT (the
"Amendment") is entered into as of July 1, 1998 between Analytical Surveys,
Inc., a Colorado corporation ("ASI"), and Sol C. Miller (the "Consultant").

RECITALS

A. ASI and the Consultant are parties to the Consulting and
Noncompetition Agreement dated as of July 2, 1997 (the "Agreement").

B. The Agreement will expire on its terms on July 2, 1998.

C. ASI and the Consultant desire to extend the terms of the Agreement
and to make certain other amendments to the Agreement, as set forth below.

AGREEMENT

The parties agree as follows:

1. Section II.2(i) of the Agreement is amended and restated, as
of July 1, 1998, as follows:

"(i) The Consultant will receive an annual consulting fee
of $100,000, payable monthly on or about the 15th day of each month, in addition
to normal Director Fees; and"

2. Section II.5(a) of the Agreement is amended and restated, as
of July 1, 1998, as follows:

"(a) The Consultant's consulting agreement under this
Agreement will begin on the date of this Agreement and continue until July 2,
1999."

3. The references to "July 2, 1998" in Section II.5(b) and (c)
are changed to "July 2, 1999."

4. The reference to "Kansas City, Missouri" in Section IV.3 is
changed to "Indianapolis, Indiana."

<PAGE>

5. The address of Buyer in Section IV.14 is changed to:

Analytical Surveys, Inc.
941 North Meridian Street
Indianapolis, IN 46204

6. In all other respects, the provisions of the Agreement remain
in full force and effect.

The parties to this Amendment have executed this Amendment as of the date
first above written.

ANALYTICAL SURVEYS, INC.

By: /s/ Sidney V. Corder
---------------------------------
Sidney V. Corder
Chief Executive Officer/President

/s/ Sol C. Miller
---------------------------------
Sol C. Miller

<PAGE>

EXHIBIT 23

CONSENT OF INDEPENDENT AUDITORS

THE BOARD OF DIRECTORS
ANALYTICAL SURVEYS, INC.:

We consent to incorporation by reference in the registration statements (No.
33-24142, No. 33-33948, No. 33-53950, No. 33-59940 and No. 333-47365) on Form
S-8 of Analytical Surveys, Inc. of our report dated October 30, 1998, relating
to the consolidated balance sheets of Analytical Surveys, Inc. and subsidiaries
as of September 30, 1998 and 1997, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the years in the
three-year period ended September 30, 1998, which report appears in the
September 30, 1998 Annual Report on Form 10-K of Analytical Surveys, Inc.

KPMG PEAT MARWICK LLP

Denver, Colorado
December 21, 1998

<PAGE>
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEC FORM
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