SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1997
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ______ to ______
Commission file number 0-20743
OPEN PLAN SYSTEMS, INC.
(Exact name of small business issuer as specified in its charter)
Virginia 54-1515256
State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
4299 Carolina Avenue, 23222
Building C, Richmond, Virginia (Zip Code)
(Address of principal executive office)
(804) 228-5600
(Issuer's telephone number)
-------------------------------------------------------------
Former name,former address and former fiscal year, if changed since last report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 __.
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Common Stock, no par value - 4,472,433 shares as of July 31, 1997.
Transitional Small Business Disclosure Format (check one): Yes No X
<PAGE>
OPEN PLAN SYSTEMS, INC.
Contents
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PART I. FINANCIAL INFORMATION PAGE
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Item 1. Financial Statements
Consolidated Balance Sheets - June 30, 1997 (unaudited) 1
and December 31, 1996
Consolidated Statements of Operations- Three months and six months 2
ended June 30, 1997 and 1996 (unaudited)
Consolidated Statements of Cash Flows - Three months and six 3 months
ended June 30, 1997 and 1996 (unaudited)
Notes to Consolidated Financial Statements - June 30, 1997 5
Item 2. Management's Discussion and Analysis of 8
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of 14
Security Holders
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
</TABLE>
SIGNATURES
<PAGE>
OPEN PLAN SYSTEMS, INC.
PART I
FINANCIAL INFORMATION
Item 1: Financial Statements
Consolidated Balance Sheets
(amounts in thousands)
<TABLE>
<CAPTION>
June 30 December 31
1997 1996
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(Unaudited)
<CAPTION>
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 301 $ 3,066
Trade accounts receivable, net 5,146 5,252
Inventories 9,201 6,807
Prepaids and other 607 431
Refundable income taxes 738 385
Deferred income taxes 120 52
-------------------------------------
Total current assets 16,113 15,993
Property and equipment, net 2,778 2,698
Goodwill, net 4,544 4,621
Other 462 398
-------------------------------------
Total assets $ 23,897 $ 23,710
=====================================
Liabilities and stockholders' equity Current liabilities:
Trade accounts payable $ 1,945 $ 1,457
Accrued compensation 189 247
Other accrued liabilities 223 150
Customer deposits 699 655
Current portion of long-term debt and capital lease
obligations 174 212
-------------------------------------
Total current liabilities 3,230 2,721
Deferred income taxes 124 106
Long-term debt and capital lease obligations, less current
Portion 42 92
-------------------------------------
Total liabilities 3,396 2,919
Stockholders' equity:
Common stock, no par value:
Authorized shares - 50,000
Issued and outstanding shares - 4,472 20,088 20,088
Additional capital 137 137
Retained earnings 276 566
-------------------------------------
Total stockholders' equity 20,501 20,791
-------------------------------------
Total liabilities and stockholders' equity $ 23,897 $ 23,710
=====================================
</TABLE>
See accompanying notes.
<PAGE>
OPEN PLAN SYSTEMS, INC.
Consolidated Statements of Operations (Unaudited)
(amounts in thousands, except per share)
<TABLE>
<CAPTION>
Three Months ended Six Months ended June 30
June 30
1997 1996 1997 1996
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<CAPTION>
<S> <C> <C> <C> <C>
Net sales $ 7,164 $ 4,965 $ 13,601 $ 10,545
Cost of sales 5,010 3,313 9,986 6,908
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Gross profit 2,154 1,652 3,615 3,637
Operating expenses:
Amortization of intangibles 69 138 -
Selling and marketing 1,504 802 2,754 1,482
General and administrative 573 273 1,301 615
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2,146 1,075 4,193 2,097
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Operating (loss) income 8 577 (578) 1,540
Other (income) expense:
Interest expense 11 60 19 123
Interest income (24) (40) (59) (47)
Other, net (4) (7) (14) (15)
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(17) 13 (54) 61
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Income (loss) before income taxes 25 564 (524) 1,479
Income tax expense (benefit) -- 22 (234) 22
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Net income (loss) $ 25 $ 542 $ (290) $ 1,457
=====================================================================
Earnings (Loss) per common share $ .01 $ (.06)
================= ==================
Weighted average common shares outstanding 4,472 4,472
================= ==================
Pro forma income data:
Pro forma income before income taxes $ 564 $ 1,479
Pro forma provision for income taxes 220 577
-----------------
=================
Pro forma net income $ 344 $ 902
================= =================
Pro forma earnings per common share $ .11 $ .31
================= =================
Weighted average common shares outstanding 3,137 2,918
================= =================
</TABLE>
See accompanying notes.
<PAGE>
OPEN PLAN SYSTEMS, INC.
Consolidated Statements of Cash Flows (Unaudited)
(amounts in thousands)
<TABLE>
<CAPTION>
Three Months ended June 30 Six Months ended June 30
1997 1996 1997 1996
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<CAPTION>
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Operating activities
Net income (loss) $ 25 $ 542 $ (290) $ 1,457
Adjustments to reconcile net income (loss) to net
cash (used) provided by operating activities:
Provision for losses on receivables 8 (10) 8 13
Depreciation and amortization 206 46 418 96
Loss on sale of property 4 3 4 3
Deferred income taxes (23) (17) (46) (17)
Changes in operating assets and liabilities:
Accounts receivable 224 526 98 (398)
Inventories (1,479) (638) (2,394) (931)
Prepaids and other (241) 18 (559) 18
Trade accounts payable 241 93 488 159
Customer deposits (64) 65 40 (25)
Accrued and other liabilities (74) (24) 23 (187)
---------------------------------------------------------------------
Net cash (used) provided by operating activities (1,173) 604 (2,210) 188
Investing activities
Purchases of property and equipment (101) (520) (474) (725)
Proceeds from the sale of property and equipment 8 64 8 64
Other -- (3) -- (9)
---------------------------------------------------------------------
Net cash used in investing activities (93) (459) (466) (670)
</TABLE>
<PAGE>
OPEN PLAN SYSTEMS, INC.
Consolidated Statements of Cash Flows (Unaudited) (continued)
(amounts in thousands)
<TABLE>
<CAPTION>
Three Months ended June 30 Six Months ended June 30
1997 1996 1997 1996
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<CAPTION>
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Financing activities
Advances to stockholders $ -- $ (186) $ -- $ (306)
Repayment of advances to stockholders -- -- -- 62
Net (repayments) borrowings on revolving line of
credit -- (4,000) -- (2,706)
Principal payments on long-term debt, and capital
lease obligations (42) (45) (89) (97)
Proceeds from sale of common stock -- 17,560 -- 17,560
Distributions to stockholders -- (3,036) -- (3,760)
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Net cash (used) provided by financing activities (42) 10,293 (89) 10,753
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Increase (Decrease) in cash and cash equivalents (1,308) 10,438 (2,765) 10,271
Cash and cash equivalents at beginning of period 1,609 75 3,066 242
---------------------------------------------------------------------
Cash and cash equivalents at end of period $ 301 $ 10,513 $ 301 $ 10,513
=====================================================================
Supplemental disclosures
Interest paid $ 11 $ 60 $ 11 $ 123
=====================================================================
Income taxes paid $ 136 $ -- $ 136 $ --
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Summary of non-cash transactions
Distributions offset against advances to stockholders
$ -- $ 183 $ -- $ 591
=====================================================================
Notes payable for equipment $ -- $ 502 $ -- $ 502
=====================================================================
</TABLE>
See accompanying notes.
<PAGE>
OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements (Unaudited)
June 30, 1997
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB of the Securities
and Exchange Commission. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, these financial statements
reflect all adjustments of a normal recurring nature which the Company considers
necessary for a fair presentation. Historically, the Company's business has been
significantly affected by seasonal factors. The Company typically has greater
sales revenue during the first and fourth quarters. The results for the three
month and six month periods ending June 30, 1997 are not necessarily indicative
of the results that may be achieved for the entire year ending December 31, 1997
or for any other interim period.
Certain reclassifications have been made to prior period amounts to conform to
the current period presentation.
2. Inventories
Inventories are in two main stages of completion and consisted of the following
(amounts in thousands):
<TABLE>
<CAPTION>
June 30 December 31
1997 1996
-------------------------------------
(Unaudited)
<CAPTION>
<S> <C> <C>
Components and fabric $4,761 $3,355
Jobs in process and finished goods 4,440 3,452
-------------------------------------
$9,201 $6,807
=====================================
</TABLE>
3. Income Taxes
Prior to the Company's initial public offering of common stock in June 1996, the
Company had elected by consent of its stockholders to be taxed under the
provisions of Subchapter S of the Internal Revenue Code. Under these provisions,
the Company did not pay federal and state income taxes on its corporate income.
Instead the Company's income was included in the income of its stockholders for
federal and state income tax purposes. The Company revoked its S-Corporation
election effective May 31, 1996.
3. Indebtedness
During June 1997, the Company renegotiated it's revolving line of credit with a
bank. The new credit facility provides for borrowings up to $10,000,000 through
May 1998. The borrowings bear interest at varying amounts depending on the
Company meeting and maintaining certain levels of income for the four most
recent quarters. There were no outstanding borrowings under the line at June 30,
1997. Advances under the line are secured by substantially all assets and are
limited to specified percentages of accounts receivables and inventories. Under
the terms of the agreement, the Company is required to maintain a defined
earnings to debt ratio and an interest coverage ratio. The Company was in
compliance with all covenants of the agreement at June 30, 1997.
4. Pro Forma Information
The accompanying pro forma income data reflects a provision for income taxes as
if the Company's earnings had been subject to federal and state income taxes as
a regular corporation for all periods presented.
Pro forma earnings per common share are based on the weighted average common
shares outstanding for 1996 increased for the average number of shares of common
stock deemed to be outstanding, which represents the approximate number of
common shares deemed sold by the Company at the initial public offering of $10
per share to fund the final S-Corporation distribution of $2,695,000 to the
Company's shareholders.
<PAGE>
OPEN PLAN SYSTEMS, INC.
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations
Overview
Since its inception in 1989, the Company has generated the majority of
revenues from the sale of remanufactured Work Stations and to a lesser extent
from the sale of "as-is" Work Stations and rentals. The Company's sales are
highly dependent upon its network of Company-owned sales offices and sales
personnel because the Company sells approximately 80% of its Work Stations
directly to end-users. Sales from these offices have increased each year as the
Company has added sales personnel, as these personnel have gained experience and
as the Company has achieved greater consumer awareness and name recognition.
Generally, branch sales offices do not generate significant sales in their first
nine months to one year of operation.
The Company sells approximately 20% of its Work Stations through its
dealer network. While the Company prefers to sell directly to the end-user
through its own sales offices, it will continue to use dealers in non-exclusive
relationships, in markets that are too small to support a sales office or in
markets where it does not expect to be able to open a sales office in the near
future. Selling through Company-owned sales offices rather than through dealers
increases the Company's selling costs due to increased overhead and salesperson
compensation expenses. However, the Company believes that these increased costs
are more than offset by the portion of the dealer gross profit margin captured
by the Company. The Company believes that the fifty largest metropolitan areas
in the United States are of sufficient size to support a Company sales office. A
core component of the Company's growth strategy is to increase sales by opening
new sales offices and adding additional sales personnel. The Company acquired
the expertise to manufacture new office furniture and Haworth office furniture
through separate acquisitions in 1996.
Historically, the Company's sales volume has been lower in the spring
and summer months and higher in the fall and winter months. The Company believes
that this seasonal increase in sales volume, which generally coincides with the
first and fourth quarters of the Company's fiscal year, is due to the tendency
of customers to expend funds budgeted for office furniture either early in the
calendar year or after the summer vacation season. Because the Company
recognizes revenues upon shipment and typically ships Work Stations within three
weeks of an order, a substantial portion of the Company's revenue in each
quarter results from orders placed by customers during that quarter. As a
result, the Company's revenues and profits are difficult to predict and may
fluctuate from quarter to quarter. The Company typically does not have any
significant backlog of customer orders because it generally ships products
within three weeks of receipt of an order. The Company uses temporary employees
and other measures to increase production capacity during periods of higher
sales while keeping its baseline operating expenses to a minimum during periods
of lower sales.
Results of Operations
The following table sets forth the relationship of costs and expenses
as a percentage of the Company's sales for the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
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Net sales .......................... 100.0% 100.0% 100.0% 100.0%
Cost of sales ...................... 69.9 66.7 73.4 65.5
----------- ---------- ---------- -----------
Gross profit ....................... 30.1 33.3 26.6 34.5
Amortization of intangibles ........ 1.0 0.0 1.0 0.0
Selling and marketing expenses ..... 21.0 16.2 20.2 14.1
General and administrative expenses. 8.0 5.5 9.6 5.8
----------- ---------- ---------- -----------
Operating (loss) income ............ 0.1 11.6 (4.2) 14.6
Other (income) expense.............. (0.2) 0.3 (0.4) 0.6
----------- ---------- ---------- -----------
Net income before income taxes...... 0.3 11.3 (3.8) 14.0
Provision for income taxes ......... 0.0 0.4 (1.7) 0.2
----------- ---------- ---------- -----------
Net income ......................... 0.3% 10.9% (2.1)% 13.8%
=========== ========== ========== ===========
</TABLE>
Comparison of Three Months and Six Months Ended June 30, 1997 and June 30, 1996
Sales. Sales in the three months ended June 30, 1997 were $7,164,000,
an increase of approximately $2,199,000 or 44.3% over the same period in 1996.
Sales for the six months ending June 30, 1997 were $13,601,000, an increase of
$3,056,000 or 28.9% over the same period in 1997. The increase in sales was
primarily due to the acquisition of TFM Remanufactured Furniture in the fourth
quarter of 1996. Sales for the Company's sales offices which were open in both
of the first two quarters of 1996 and 1997 actually decreased slightly from
prior year levels. The Company believes the decrease was primarily the result of
salespeople resolving customer service issues resulting from operational
and shipping problems experienced at the end of 1996 and beginning of 1997. The
Company's newer sales offices generally did not meet expectations in the second
quarter although their revenue and volume increased from first quarter levels.
The Company did not open any sales offices in the second quarter but opened
offices in Detroit and Philadelphia during the first quarter.
The Company believes that, based on initial customer response, its new
direct mail advertising programs put in place during the first quarter of 1997
will prove to be more effective than the telemarketing programs they have
replaced. Additionally, the Company has begun to add additional salesmen to some
branch offices to help increase the visibility and marketing efforts in certain
markets. While progress has been made during the second quarter, the Company
believes that these changes will have a positive impact on long-term sales
office performance.
Cost of Sales. The Company's cost of sales includes cost of raw
materials (new and used workstation components, new fabric, laminate, paint, and
other materials), labor, supplies, freight, utilities, and other manufacturing
related expenses. As discussed in previous quarters, the Company expanded its
strategy of manufacturing component parts that had previously been purchased
from third parties. In September 1996, the Company placed in service equipment
purchased during the second quarter of 1996 from Birum Corporation and commenced
its new part manufacturing operations. This equipment purchase allows the
Company to manufacture all the metal and wood component parts used in the
remanufacturing process and in the Company's line of new work stations.
Cost of sales increased by $1,697,000 in the second quarter of 1997
from the $3,313,000 reported in the second quarter of 1996 and increased by
$3,078,000 for the first two quarters of 1997 as compared to the $6,908,000
reported in the comparable period of 1996. The increase in cost of sales were
primarily attributable to volume increases. The gross margin decreased to 30.1%
in the second quarter of 1997 from 33.3% in the second quarter of 1996 and
decreased to 26.6% for the first half of 1997 as compared 34.5% for the
comparable period in 1996. The gross margin actually increased by 32.6% in the
second quarter from the 22.7% reported in the first quarter. Such increase in
margin is primarily attributable to the new programs initiated in the first
quarter and further enumerated below.
Upon commencement of the new part manufacturing operations, the Company
immediately began producing a wide array of component parts for use in the
remanufacturing business, and all the parts necessary to build the Company's
line of new workstations. As a result of the rapid implementation, expected
manufacturing efficiencies were not achieved and product costs increased.
Additionally, the Company experienced quality problems and training issues
related to the large product mix that was being manufactured on the plant floor.
The Company initiated several new programs during the first quarter to address
these issues. Among the actions undertaken by the Company were strategic
sourcing initiatives which determine, on a part by part basis, whether the
Company should make or buy component parts. The Company has determined that
there are certain products that it can manufacture efficiently and others that
it should purchase from part suppliers or in the used furniture market.
Accordingly, the Company has reduced unit costs by limiting manufacturing
processes and outsourcing the production of other component parts. The impact of
these strategic sourcing changes is partially reflected in the increase in gross
margin in the second quarter.
While the Company is pleased by the progress made thus far, it believes
that further benefits will be realized over the next several quarters until the
Company's gross margin returns to or exceeds historical percentages.
Operating Expenses. The Company's most significant operating expense is
selling and marketing expense. These costs are primarily related to salesperson
compensation, advertising and other marketing expenses and rents. The Company
compensates its salespeople through a combination of salaries, commissions and
bonuses. While most of these expenses are directly related to the current year's
sales, certain other marketing expenses are incurred to build brand recognition
and generate sales leads that may contribute to sales in later periods.
Selling and marketing expenses for the second quarter of 1997 increased
to $1,504,000 from $802,000 in the second quarter of 1996 and increased to
$2,754,000 for the first half of 1997 from $1,482,000 for the first half of
1996. The increases were related to the acquisition of TFM Remanufactured
Furniture as well as the opening of five new sales offices during the past year.
The Company, as a result of its new marketing initiatives, increased its
advertising expense by approximately 50% over prior year levels. An additional
contributing factor in the sales and marketing increase is that it typically
takes several years for new sales offices to generate enough sales to provide
targeted returns. This increases the percentage of selling expenses to sales
since the higher initial costs of these sales offices have not yet been offset
with the increased sales volume expected from these offices. Additionally, the
Company incurred additional expenses related to the restructuring of its sales
office management structure during the second quarter of 1997.
Additionally during the first quarter of 1997, the Company revised its
marketing strategy from its previous telemarketing efforts to direct mail
advertising targeted to prospective companies in certain of its markets. These
targeted companies are of the size that the Company has been most successful in
its marketing efforts in the past. The Company is encouraged by the early
responses in markets where the Company's previous advertising efforts have not
succeeded. Sales in those branches increased in the second quarter of 1997 over
the first quarter of this year. The telemarketing group was disbanded due to the
difficulty of reaching potential purchasers through traditional telemarketing
techniques. The Company believes that the new method will be a more effective
manner of advertising in certain markets than previous methods.
General and administrative expenses increased to $573,000 in the second
quarter of 1997 from the $273,000 reported in the second quarter of 1996 and
increased to $1,301,000 for the first half of 1997 from the $615,000 reported in
the comparable period of 1996. The increase for the second quarter and through
the first six months of 1997 was related primarily to investments made in the
Company's infrastructure to handle current and future capacity as well as
certain non-recurring costs. The non-recurring costs, totaling approximately
$40,000 in the quarter and $190,000 year to date, related to professional
expenses in connection with the evaluation of several potential acquisition
candidates. Ultimately, the Company determined that these acquisitions were not
in the best interests of the Company. General and administrative expenses also
increased during the first and second quarters due to the effort and expense
dedicated to the annual report, annual meeting and other fees required as a
public company that the Company had not experienced in prior years. As
anticipated, the second quarter administrative expenses decreased as a
percentage of sales as compared to the first quarter, and management believes
that this trend should continue for he remainder of the year, subject to costs
which may be incurred in evaluating potential acquisition candidates.
Other Non-Operating Income and Expense. Total other income and expense
changed from an expense of $13,000 and $61,000, for the second quarter and six
months ended June 30, 1996, respectively, to income of $17,000 and $54,000 for
the second quarter and six months ended June 30, 1997, respectively. The primary
reason for the increase is due to cash raised at the Company's initial public
offering. During 1996, the Company paid off its line of credit debt and invested
excess cash proceeds of the offering to maximize returns.
Income Taxes. The income tax benefit of $234,000 for the six months
ending June 30, 1997 was caused by the pre-tax losses incurred by the Company
through June 30, 1997. Prior to the initial public offering, the Company was
treated as an S-Corporation for federal and state income tax purposes. The
higher marginal tax rate between pro forma taxes and actual 1997 taxes is due to
the non-deductibility of certain intangible assets and life insurance policies
of certain executives.
Liquidity and Capital Resources
Cash Flows from Operating Activities. Net cash used in operating
activities was $1,173,000 and $2,210,000 for the three and six months ended June
30, 1997, respectively, as compared to cash provided by operating activities of
$604,000 and $188,000 for the second quarter and six months ended June 30, 1996
respectively. The decrease in cash provided by operating activities for those
periods was primarily due to lower profits, increased working capital needs in
1997 as compared to 1996 and required raw material and in-process inventories as
a result of the Company's new part and component manufacturing capabilities. In
particular, the second quarter inventory increase was primarily the result of
the Company reinstituting a product stocking program comparable to what was
maintained in prior years and building stock for the Heilig-Meyers Furniture
Company job which was formally awarded in early July 1997. The Company continued
to maintain a stock of approximately one month's volume of panels and
worksurfaces at June 30, 1997 to enable to the Company to respond quickly to
customer orders. Additionally, the Company instituted a one-week quick ship
program for certain products during the course of the second quarter of 1997.
The Company anticipates that inventories will decrease somewhat over the next
several quarters. Trade accounts receivable decreased by approximately $232,000
during the second quarter of 1997 due to increased collection efforts and the
correction of the shipping problems that occurred in early 1997, which allowed
the Company to reduce terms that were previously extended for certain customers.
The Company believes that future receivable growth from increased sales volume
will continue to be tempered with decreases in the number of days sales
outstanding.
Cash Flows from Investing Activities. Net cash used in investing
activities was $93,000 and $466,000 for the three and six months ended 1997,
respectively, as compared to $459,000 and $670,000 for the three and six months
ended June 30, 1996, respectively. The decrease in the second quarter and
through the first six months is due to the purchase of equipment from the Birum
Corporation in 1996. The 1997 capital expenditures are primarily due to the
growth of the Company over the past year and expenditures on its new information
system. The Company anticipates that capital spending for 1997 will range
between $1.5 million and $2 million during 1997. The source of funds for
anticipated capital spending will be funds from operations as well as borrowings
on the line of credit.
Cash Flows from Financing Activities. Net cash used in financing
activities was $42,000 and $89,000 during the second quarter and six months of
1997. This represented principal payments on outstanding long-term debt and
capital leases. Net cash provided by financing activities of $10,293,000 and
$10,753,000 for the second quarter and six months ended June 30, 1996,
respectively, was primarily the result of the initial public offering offset by
distributions to former stockholders and the payoff of debt balances.
During the second quarter, the Company renegotiated and expanded its
revolving line of credit with a bank. The new credit facility provides for
borrowings up to $10,000,000 through May 1998 as opposed to a $5,000,000 line of
credit under the old facility. The borrowings bear interest at varying amounts
depending on the Company meeting and maintaining certain levels of income for
the four most recent quarters. There were no outstanding borrowings under the
line at June 30, 1997. Advances under the line are secured by substantially all
assets and are limited to specified percentages of accounts receivables and
inventories. The Company believes that this expanded line of credit will provide
it with significant operating flexibility over the next year.
Expected Future Cash Flows. Cash provided by operating activities
should increase as profitability growth should exceed the growth in receivables
and inventory. The Company anticipates that current cash balances plus cash
flows from operating activities and borrowings under its credit line will be
adequate to fund its capital expenditures and business acquisition strategy.
The Company plans to continue evaluating future strategic business
combinations to complement the existing business and expand the geographic range
of the business.
Seasonality and Impact of Inflation
Historically, the Company has experienced lower net sales levels in the
second and third quarters of the year and increased levels in the first and
fourth quarters. The Company believes that this seasonal increase in sales
volume is due to the tendency of customers to expend funds budgeted for office
furniture either early in the calendar year or after the summer vacation season.
The Company believes that its new product offerings will enable it to be
somewhat more competitive on a year-round basis. Because the Company recognizes
revenues upon shipment and typically ships workstations within three weeks of an
order, a substantial portion of the Company's revenues in each quarter results
from orders placed by customers during that quarter. As a result, the Company's
results may vary from quarter to quarter.
Inflation has not had a material impact on the Company's net sales or
income to date. However, there can be no assurances that the Company's business
will not be affected in the future by inflation.
Impact of New Accounting Standards
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings Per Share, which is required to be adopted on
December 31, 1997. At that time the Company will be required to change the
method currently used to compute earnings per share and to restate all prior
periods. Under the new requirements for calculating primary earnings per share,
the dilutive effect of stock options will be excluded. Had Statement 128 been
applied to the period presented herein, there would have been no change in
earnings per share, since the Company's presently outstanding options are
anti-dilutive.
In June 1997, the Financial Accounting Standards Board issued Statement
No. 130, Reporting Comprehensive Income, which establishes standards for the
reporting and display of comprehensive income and its components in a full set
of general purpose financial statements. This statement requires that all items
that are required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. The Company is not required
to adopt the provisions of Statement No. 130 until 1998. Management does not
believe the adoption of Statement No. 130 will have a significant impact on its
financial statements.
Forward-Looking Statements
The foregoing discussion contains certain forward-looking statements,
which may be identified by phrases such as "the Company expects" or words of
similar effect. The Private Securities Litigation Reform Act of 1995 provides a
safe harbor for forward-looking statements. The Company has identified certain
important factors that in some cases have affected, and in the future could
affect, the Company's actual results and could cause the Company's actual
results for fiscal 1997 and any interim period to differ materially from those
expressed in any forward-looking statements made by, or on behalf of, the
Company. These factors are set forth under the caption "Forward-Looking
Statements" in Item 6 of the Company's Form 10-KSB for the fiscal year ended
December 31, 1996, a copy of which is on file with the Securities and Exchange
Commission. The Company assumes no duty to update any of the statements of this
report.
<PAGE>
OPEN PLAN SYSTEMS, INC.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
On May 13, 1997, the Registrant held its annual meeting of
shareholders. Seven (7) persons were elected to the Board of
Directors, divided into Classes I, II and III. Directors in Class
I shall serve for a term of one (1) year expiring on the date of
the annual meeting of shareholders in 1998, Class II directors
shall serve for terms of two (2) years expiring on the date of the
annual meeting of shareholders in 1999, and Class III directors
shall serve for terms of three (3) years expiring on the date of
the annual meeting of shareholders in 2000, with members of each
class to hold office until their respective successors are duly
elected and qualified. Set forth below are the names of the
persons elected at the May 1997 annual meeting as directors, the
class in which they serve, and the vote totals for each such
director:
<TABLE>
<CAPTION>
For Withheld
Number Number
of Votes of Votes
<CAPTION>
<S> <C> <C>
Class I - Terms Expire 1998
Gary M. Farrell 4,177,237 36,850
C.T. Hill 3,912,089 301,998
Item 4 (continued)
Class II - Terms Expire 1999
Anthony F. Markel 4,177,237 36,850
Theodore L. Chandler, Jr. 3,912,089 301,998
Class III - Terms Expire 2000
Stan A. Fischer 4,177,237 36,850
Troy A. Peery, Jr. 4,175,616 38,471
Robert F. Mizell 4,065,532 148,555
</TABLE>
The only other matter considered at the May 1997 Annual
Meeting was the ratification of the appointment of the firm of
Ernst & Young LLP as independent auditors for the Registrant for
the fiscal year ending December 31, 1997. The vote total for
approval of this matter is set forth below:
<TABLE>
<CAPTION>
Number
of votes
<CAPTION>
<S> <C>
For................................................. 3,934,661
Against ........................................... 21,150
Abstain ........................................... 144,950
</TABLE>
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
The registrant has included the following exhibits pursuant to
Item 601 of Regulation S-B.
<TABLE>
<CAPTION>
Exhibit No. Description
---------------- --------------------------------------------------------------
<CAPTION>
<S> <C>
10.1 $10,000,000 Line of Credit Agreement with Crestar Bank
11 Schedule Re: Computation of Per Share Earnings
27 Financial Data Schedule (filed electronically only)
</TABLE>
(b) Reports on Form 8-K
None
<PAGE>
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
OPEN PLAN SYSTEMS, INC.
----------------------------------
(Registrant)
Date: August 12, 1997 /s/ Stan A. Fischer
----------------------------------
Stan A. Fischer
President
Date: August 12, 1997 /s/ Gary M. Farrell
-----------------------------------
Gary M. Farrell
Chief Financial Officer
Date: August 12, 1997 /s/ Neil F. Suffa
------------------------------------
Neil F. Suffa
Corporate Controller
<PAGE>
OPEN PLAN SYSTEMS, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------------- ---------------------------------------------------------------
<CAPTION>
<S> <C>
10.1 $10,000,000 Line of Credit Agreement with Crestar Bank
11 Schedule Re: Computation of Per Share Earnings
27 Financial Data Schedule (filed electronically only)
</TABLE>
Crestar Bank
P.O. Box 26665
Richmond, VA 23261-6665
(804) 782-5000
CRESTAR
June 26, 1997
Mr. Gary M. Farrell
Chief Financial Officer
Open Plan Systems, Inc.
4299 Carolina Avenue, Bldg. C
Richmond, VA 23222
Dear Gary:
On behalf of Crestar Bank (the "Bank"), I am pleased to advise you that the
Bank has renewed and increased its line of credit (the "Line") extended to Open
Plan Systems, Inc. (the "Borrower"). The Line shall be for the purposes and
subject to the terms and conditions set forth below.
1. Amount and Purpose:
Upon acceptance of this letter agreement, the Bank will renew and increase
its revolving line of credit provided to the Borrower to $10,000,000
(subject to the advance limits described herein). The purpose of this
facility shall continue to be to finance working capital requirements and
future acquisitions of the Borrower. Advances under the Line will be
evidenced by the Borrower's master note in the amount of the Line and
delivered prior to advances.
2. Repayment:
All principal advances made under the Line shall be payable on a demand
basis.
3. Interest Rate / Fees:
Interest shall be computed on the aggregate unpaid principal balance of the
Line from time to time outstanding at a rate equal to the LIBOR Rate (as
defined below) plus credit spreads as follows:
<PAGE>
<TABLE>
<CAPTION>
Unused Credit
Fee Spread
<CAPTION>
<S> <C> <C>
If Funded Debt / EBITDA > 3.00 35bp 2.25%
If Funded Debt / EBITDA > 2.00 & < 3.00 25bp 1.75%
If Funded Debt / EBITDA < 2.00 15bp 1.25%
</TABLE>
Funded debt shall be defined as total borrowed funds measured at each
quarter-end.
EBITDA shall be defined as net earnings before subtracting for interest,
taxes, depreciation and amortization. This measure shall be calculated on a
quarterly basis and include the four most recent (rolling) quarters.
The Bank shall charge a fee for the credit facility based on the unused
amount of the facility (per annum). This fee amount shall be payable on a
quarterly basis in arrears and shall be calculated based on the ratio of
Funded Debt / EBITDA as noted above.
The term LIBOR shall mean the rate published in The Wall Street Journal for
"London InterBank Offered Rates (LIBOR)" for maturities of 30 days. If such
amounts are not published in The Wall Street Journal, the LIBOR Rate shall
mean the rate of interest at which deposits in immediately available and
freely transferable funds in U.S. dollars are offered by major banks to
major banks in the London InterBank Eurodollar Market for delivery on the
first day of the applicable interest period with the corresponding maturity
(30 days). The current LIBOR Rate is 5.6875%. For the purposes of
establishing the rate to be charged on this loan the Bank will set the LIBOR
base rate on the first day of each month and that rate will remain in effect
for all borrowings during that month.
4. Collateral:
All advances shall be secured by a blanket first security interest in all
inventory, accounts receivable, fixed assets, and general intangibles now
owned or hereafter acquired by the Borrower. The Borrower agrees to
maintain adequate hazard insurance coverage covering the above inventory and
fixed assets with the Bank named as loss payee.
Advances under the Line shall be limited to 70% of eligible accounts
receivable balances aged 90 days or less and 50% of eligible inventory on
hand. Eligibility shall be defined as calculated on a monthly basis from
aging of accounts receivable and monthly internal financial statements which
shall be provided by the Borrower to the Bank on a monthly basis no later
than 20 days after month-end.
5. Expiration of Line:
Unless extended in writing at the sole option of the Bank, the Line shall
expire on May 31, 1998.
6. General and Special Conditions:
(A) Additional Debt:
The Borrower shall incur no additional debt for borrowed funds
without the prior written consent of the Bank.
(B) Funded Debt/EBITDA:
The Borrower must maintain a ratio of Funded Debt / EBITDA (as
defined earlier) of no more than 4.0. This shall be measured at each
quarter-end as noted above in section #3. Despite this ratio, line
availability during the quarter ending 9/30/97 will be allowed to
exceed 4.0, however, will be limited to the lesser of $5,000,000 or
the collateral availability as outlined in section #4. At the
9/30/97 quarter-end and during subsequent quarters the above noted
Funded Debt / EBITDA 4.0 required ratio shall apply.
(C) Interest Coverage Ratio
The Borrower must maintain a ratio of EBIT / Interest Expense no
less than 3.00 to 1.00 as measured at each quarter-end. (EBIT shall
be defined as - Net Earnings before Interest & Taxes). This ratio
shall be measured on a quarter by quarter basis.
(D) Loan Documents:
The Line will be governed by this letter agreement and by the other
loan documents required by the Bank, including the master note,
security agreements, UCC financing statements covering corporate
locations in (Richmond, Atlanta, and Lansing) and corporate
borrowing resolution. All loan documents must be in form and
substance satisfactory to the Bank.
(F) Expenses:
The Borrower shall pay all of the Bank's out-of-pocket expenses,
including all filing fees and all fees and expenses of the Bank's
counsel, in connection with the making of loans.
(G) Financial Statements:
The Borrower must furnish to the Bank (1) within 120 days after the
end of its fiscal year, a copy of its audited financial statements
containing the unqualified report of its independent certified
public accountants; (2) within 45 days after the end of each fiscal
quarter, a copy of the quarterly 10-Q reports; (3) within 20 days
after the end of each of its fiscal months, a copy of its interim
monthly financial statements in form satisfactory to the Bank
(monthly financial statements on an unconsolidated basis shall be
acceptable to the Bank, however, if available Bank would ask that
summary level consolidated statements also be provided); (4) within
20 days after the end of each of its fiscal months, a listing of the
Borrower's accounts receivable aging report and an inventory report;
and (5) such other information as the Bank may from time to time
request.
(H) Acquisitions:
Within 45 days following the funding of any acquisition with a
purchase price in excess of $2,000,000, Borrower agrees to provide
the Bank with general financial information regarding that
acquisition.
7. Events of Default:
Events of default include late payments of principal and/or interest and
violation of any covenants in this agreement or other loan documents.
Please signify your acceptance by signing and returning the enclosed copy
of this letter and renewal note. This commitment shall be void unless accepted
by the Company prior to July 31, 1997.
Sincerely,
David S. Reynolds
Vice President
Accepted and agreed to this _____ day of __________, _____.
Open Plan Systems, Inc.
By: Title:
<PAGE>
Commercial Note
Borrower: Open Plan Systems, Inc.
Loan Amount: Ten Million Dollars and no cents ($10,000,000.00)
Borrower's Address: 4299 Carolina Avenue, Bldg. C
Richmond, VA 23222-1403
Officer: David S Reynolds __________ (initials) Date: June 26,1997
Account No: 04300011120229 Note No: 1001 Note Type: Renewal Loan
For Value Received, the undersigned (whether one or more) jointly and
severally promise to pay to the order of Crestar Bank (the "Bank") at any of its
offices, or at such place as the Bank may designate in writing, without offset
and in Immediately available funds, the Loan Amount shown above, including or
plus interest, and any other amounts due, upon the terms specified below.
Loan Type And Repayment Terms
Loan Type: Revolving Master Borrowing Line
This is an open end revolving line of credit. You may
borrow an aggregate principal amount up to the Loan Amount
shown above outstanding at any one time.
Repayment Terms: Principal on demand, plus interest, but the undersigned
shall be liable for only so much of the Loan Amount as
shall be equal to the total advanced to or for the
undersigned, or any of them, by the Bank from time to time,
less all payments made by or for the undersigned and
applied by the Bank to principal, plus interest on each
such advance, and any other amounts due all as shown on the
Bank's books and records, which shall be prima facie
evidence of the amount owed.
This Master Borrowing arrangement will terminate upon
written notice from the Bank to the undersigned, or if such
notice is not sooner given, 60 months from the date of this
Note, unless an alternate termination date is indicated in
the "Agreement", as defined below.
The Bank shall have the right to demand payment at any time
even if an event of default (as identified in this Note)
has not occurred.
Additional Terms And Conditions:
This Note is governed by additional terms and conditions contained in a
Commitment Letter between the undersigned and the Bank dated June 26, 1997, and
any modifications, renewals, extensions or replacements thereof (the
"Agreement"), which is incorporated in this Note by reference. In the event of a
conflict between any term or condition contained in this Note and in the
Agreement, such term or condition of the Agreement shall control.
Interest
Accrued interest will be payable on the last day of each month beginning on June
30, 1997.
Interest will accrue daily on an actual/360 basis (that is, on the actual number
of days elapsed over a year of 360 days).
Each scheduled payment made on this Note will be applied to accrued interest
before it is applied to principal. Interest will accrue from the date of this
Note on the unpaid balance and will continue to accrue after maturity, whether
by acceleration or otherwise, until this Note is paid in full. If this is a
variable rate transaction, the interest rate is prospectively subject to
increase or decrease without prior notice, and if this is a Term-Variable
Payment loan, adjustments in the payment schedule will be made as necessary. If
this is a variable transaction which uses a Crestar Prime Rate as the index, the
index is subject to increase or decrease at the sole option of the Bank.
- -------------------------------------------------------------------------------
IMPORTANT NOTICE
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO
OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.
- -------------------------------------------------------------------------------
Page 2
CRE 0261 VA (11/96)
Copies: 0 Distribution: Original - Collateral File
____________ (Bor's initials)
<PAGE>
- --------------------------------------------------------------------------------
Capital Adequacy
Should the Bank, after the date of this Note, determine that the adoption of any
law or regulation regarding capital adequacy, or any change in its
interpretation or administration, has or would have the effect of reducing the
Bank's rate of return under this Note to a level below that which the Bank could
have achieved but for the adoption or change, by an amount which the Bank
considers to be material, then, from time to time, 30 days after written demand
by the Bank, the undersigned shall pay to the Bank such additional amounts as
will compensate the Bank for the reduction. Each demand by the Bank will be made
in good faith and accompanied by a certificate claiming compensation under this
paragraph and stating the amounts to be paid to it and the basis for the
payment.
Late Charges And Other Authorized Charges
If any portion of a payment is at least ten (10) days past due, the undersigned
agree to pay a late charge of 5.00% of the amount which is past due. Unless
prohibited by applicable law, the undersigned agree to pay the fee established
by the Bank from time to time for returned checks if a payment is made on this
Note with a check and the check is dishonored for any reason after the second
presentment. In addition, as permitted by applicable law, the undersigned agree
to pay the following: (1) all expenses, including, without [imitation, all court
or collection costs, and attorneys' fees of 25% of the unpaid balance of this
Note, or actual attorneys' fees if in excess of such amount, whether suit be
brought or not, incurred in collecting this Note; (2) all costs incurred in
evaluating, preserving or disposing of any Collateral granted as security for
the payment of this Note, including the cost of any audits, appraisals,
appraisal updates, reappraisals or environmental inspections which the Bank from
time to time in its sole discretion may deem necessary; (3) any premiums for
property insurance purchased on behalf of the undersigned or on behalf of the
owner(s) of the Collateral pursuant to any security instrument relating to the
Collateral; (4) any expenses or costs incurred in defending any claim arising
out of the execution of this Note or the obligation which it evidences, or
otherwise involving the employment by the Bank of attorneys with respect to this
Note and the obligations it evidences; and (5) any other charges permitted by
applicable law. The undersigned agree to pay these authorized charges on demand
or, at the Bank's option, the charges may be added to the unpaid balance of the
Note and will accrue interest at the stated Rate. Upon the occurrence of an
event of default, interest will accrue at the Default Rate.
Waivers
The undersigned and each other Party waive presentment, demand, protest, notice
of protest and notice of dishonor and waive all exemptions, whether homestead or
otherwise, as to the obligations evidenced by this Note. The undersigned and
each other Party waive any rights to require the Bank to proceed against any
other Party or person or any Collateral before proceeding against the
undersigned or any of them, or any other Party, and agree that without notice to
any
Page 3
<PAGE>
Party and without affecting any Party's liability, the Bank, at any time or
times, may grant extensions of the time for payment or other indulgences to any
Party or permit the renewal or modification of this Note, or permit the
substitution, exchange or release of any Collateral for this Note and may add or
release any Party primarily or secondarily liable. The undersigned and each
other Party agree that the Bank may apply all moneys made available to it from
any part of the proceeds of the disposition of any Collateral or by exercise of
the right of setoff either to the obligations under this Note or to any other
obligations of any Party to the Bank, as the Bank may elect from time to time.
The undersigned also waive any rights afforded to them by Sections 49-25 and
49-26 of the Code of Virginia of 1950 as amended. TO THE EXTENT LEGALLY
PERMISSIBLE, THE UNDERSIGNED WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LITIGATION
RELATING TO TRANSACTIONS UNDER THIS NOTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE.
Judgment By Confession
The undersigned hereby duly constitute and appoint Joel W. Maddock or Donna R.
Norfleet as the true and lawful attorney-in-fact for them in any or all of their
names, place and stead, and upon the occurrence of an event of default, to
confess judgment against them, or any of them, in the Circuit Court for the City
of Richmond, Virginia, upon this Note and all amounts owed hereunder, including
all costs of collection, attorneys' fees equal to 25% of the unpaid principal
balance hereof and court costs, hereby ratifying and confirming the acts of said
attorney-in-fact as if done by themselves, expressly waiving benefit of any
homestead or other exemption laws.
Severability, Amendments And No Waiver By Bank
Any provision of this Note which is prohibited or unenforceable will be
ineffective to the extent of the prohibition or unenforceability without
invalidating the remaining provisions of this Note. No amendment, modification,
termination or waiver of any provision of this Note, nor consent to any
departure by the undersigned from any term of this Note, will in any event be
effective unless it is in writing and signed by an authorized employee of the
Bank, and then the waiver or consent will be effective only in the specific
instance and for the specific purpose for which given. If the interest Rate is
tied to an external index and the index becomes unavailable during the term of
this loan, the Bank may designate a substitute index with notice to the
Borrower. No failure or delay on the part of the Bank to exercise any right,
power or remedy under this Note may be construed as a waiver of the right to
exercise the same or any other right at any time.
Page 4
CRE 0261 VA (11/96)
____________ (Borrowers's initials)
<PAGE>
- --------------------------------------------------------------------------------
Corporate Borrowing Resolution
Name of Corporation Date
Taxpayer I.D. No.
I hereby certify to Crestar Bank ____________ (the "Bank") that I am the
Secretary of the above corporation (the "Corporation") which is duly organized
and existing under the laws of ____________, that the following is a true copy
of resolutions duly adopted by the Board of Directors of the Corporation at a
meeting duly held on the ____ day of ________, 199__ at which a quorum was
present and voting throughout and that such resolutions have not been rescinded
or modified:
"RESOLVED, that any ______ (number of signatures required) of the following
(insert the titles of authorized officers)
or their successors, are hereby authorized and empowered (1) to make
application, release financial information and borrow from time to time on
behalf of the Corporation from the Bank such sums of money as they or any of
them may deem requisite for the use of the Corporation and to discount, sell,
assign, or otherwise transfer to the Bank any property belonging to the
Corporation including, but not limited to, accounts receivable, promissory
notes, instruments, leases, trade paper and chattel paper, and to endorse or
guarantee the same in the name of the Corporation, all on such terms and
conditions as may be agreed upon by any of such officers and the Bank from time
to time; (2) to make, execute and deliver promissory notes or other obligations
of the Corporation, including, but not limited to, obligations under letters of
credit in form satisfactory to the Bank for any sums so obtained; and (3) to
mortgage, assign, transfer or pledge as collateral security for any sums so
obtained or otherwise any property belonging to the Corporation (whether real or
personal, tangible or intangible) including, but not limited to, accounts
receivable, promissory notes, instruments, documents of title, chattel paper,
contract rights, securities, insurance policies, inventories and equipment and
to make any endorsements or execute any instruments in the name of the
Corporation, including, but not limited to, security agreements, deeds of trust,
financing statements, assignments, transfers and guarantees which may be
necessary or proper to effect such mortgage, assignment transfer or pledge in
form satisfactory to the Bank, and
FURTHER RESOLVED that the obtaining by the Corporation of any sums of money from
the Bank heretofore, and any notes, or other instruments heretofore executed in
the name of the Corporation by any of its officers or employees and any
assignment transfer or pledge of any property belonging to the Corporation as
security for such loans, or otherwise, are hereby approved and ratified.
FURTHER RESOLVED that the foregoing resolutions shall remain in full force and
effect until written notice of their amendment or rescission shall have been
received by the Bank and receipt of such notice acknowledged by it, and that
receipt and. acknowledgment of such notice shall not affect any action taken by
the Bank prior thereto."
I further certify that there is no provision in the Charter or By-laws or any
Shareholder Agreement of the Corporation, or in any instrument to which the
Corporation is a party or by which it may be bound, limiting the power of the
Board of Directors to adopt the above resolutions and that such resolutions are
in conformity with the provisions of the Charter and By-laws and any Shareholder
Agreement and do not violate the provisions of any such instrument.
IN WITNESS WHEREOF, I have subscribed my name as Secretary of the Corporation
and affixed the Corporate Seal on the date set forth above.
(Affix Corporate Seal Here)
Secretary
(This Certificate must also be signed by an additional officer.)
I, _____________________________, the of the above named
Corporation, do hereby certify that is
the duly elected Secretary and is now acting in this capacity and is authorized
to sign this Resolution.
Signature and Title
CRE-0028 SYS (10/92)
0360199.01
OPEN PLAN SYSTEMS, INC.
EXHIBIT 11 - STATEMENT RE: COMPUTATION
OF PER SHARE EARNINGS
(amounts in thousands, except per share)
<TABLE>
<CAPTION>
Three Months Ended Six Months ended
June 30 June 30
1997 1996 1997 1996
-------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C> <C>
Weighted average shares outstanding during the
period 4,472 2,942 4,472 2,686
Average number of shares assumed outstanding
during the period approximating the number
of shares sold (at the initial offering price of
$10) to fund the final S-Corporation distribution -- 195 -- 232
-------------------------------------------------------------------------------
Total 4,472 3,137 4,472 2,918
===============================================================================
Net income (loss) used in computation $ 25 $ (290)
==================== ====================
Loss per common share $ .01 $ (.06)
==================== ====================
Pro forma net income used in computation $ 344 $ 902
==================== ====================
Pro forma earnings per common share $ .11 $ .31
=================== ====================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF OPEN PLAN SYSTEMS, INC. AS OF JUNE 30 1997 AND THE RELATED STATEMENTS
OF INCOME AND CASH FLOWS FOR THE SIX MONTHS THEN ENDED AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK>0001011738
<NAME>Open Plan Systems, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 301
<SECURITIES> 0
<RECEIVABLES> 5,274
<ALLOWANCES> (128)
<INVENTORY> 9,201
<CURRENT-ASSETS> 16,113
<PP&E> 3,764
<DEPRECIATION> (986)
<TOTAL-ASSETS> 23,897
<CURRENT-LIABILITIES> 3,230
<BONDS> 42
0
0
<COMMON> 20,088
<OTHER-SE> 413
<TOTAL-LIABILITY-AND-EQUITY> 23,897
<SALES> 13,601
<TOTAL-REVENUES> 13,601
<CGS> 9,986
<TOTAL-COSTS> 9,986
<OTHER-EXPENSES> 4,181
<LOSS-PROVISION> 12
<INTEREST-EXPENSE> 19
<INCOME-PRETAX> (524)
<INCOME-TAX> (234)
<INCOME-CONTINUING> (290)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (290)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
</TABLE>
