SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1999
[ ] 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 registrant 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
(Telephone number of registrant)
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 __.
As of the close of business on August 8, 1999, Open Plan Systems, Inc. had
4,672,433 shares of Common Stock, no par value, outstanding.
<PAGE>
OPEN PLAN SYSTEMS, INC.
Table of Contents
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
<S> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets - June 30, 1999 (unaudited) 1
and December 31, 1998
Consolidated Statements of Operations - Three and six months 2
ended June 30, 1999 and 1998 (unaudited)
Consolidated Statements of Cash Flows - Six months 3
ended June 30, 1999 and 1998 (unaudited)
Notes to Consolidated Financial Statements - June 30, 1999 4
Item 2. Management's Discussion and Analysis of 7
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of 13
Security Holders
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES
</TABLE>
<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,
1999 1998
-------------------------------------
Assets (unaudited)
<S><C> <C> <C>
Current assets:
Cash and cash equivalents $ 30 $2
Accounts receivable, net 6,275 6,289
Inventories 6,673 6,908
Prepaids and other 1,113 672
Refundable income taxes 305 305
-------------------------------------
Total current assets 14,396 14,176
Property and equipment, net 2,336 2,288
Goodwill, net 2,989 3,075
Other 447 466
-------------------------------------
Total assets $ 20,168 $ 20,005
=====================================
Liabilities and shareholders' equity
Current liabilities:
Revolving line of credit $740 $952
Trade accounts payable 2,038 1,995
Accrued compensation 249 263
Other accrued liabilities 399 429
Customer deposits 1,005 1,000
Current portion of long-term debt 56 20
-------------------------------------
Total current liabilities 4,487 4,659
Long-term debt 124 -
-------------------------------------
Total liabilities 4,611 4,659
Shareholders' equity:
Preferred stock, no par value:
Authorized shares - 5,000
Issued and outstanding shares - none - -
Common stock, no par value:
Authorized shares - 50,000
Issued and outstanding shares - 4,672 19,324 19,324
Additional capital 137 137
Accumulated deficit (3,904) (4,115)
-------------------------------------
Total shareholders' equity 15,557 15,346
-------------------------------------
Total liabilities and shareholders' equity $20,168 $20,005
=====================================
</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,
1999 1998 1999 1998
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 8,878 $ 8,332 $ 16,387 $ 16,232
Cost of sales 6,029 7,143 11,417 13,399
------------------------------------------------------------------------
Gross profit 2,849 1,189 4,970 2,833
Operating expenses:
Amortization of intangibles 54 69 107 138
Selling and marketing 1,894 2,048 3,419 4,020
General and administrative 675 939 1,155 1,683
Operational restructuring - 1,290 - 1,290
------------------------------------------------------------------------
2,623 4,346 4,681 7,131
------------------------------------------------------------------------
Operating income (loss) 226 (3,157) 289 (4,298)
Other (income) expense:
Interest expense 44 66 89 132
Interest income (4) (9) (12) (9)
Other, net 1 15 1 15
------------------------------------------------------------------------
41 72 78 138
------------------------------------------------------------------------
Income (loss) before income taxes 185 (3,229) 211 (4,436)
Income taxes - - - -
========================================================================
Net income (loss) $ 185 $ (3,229) $ 211 $ (4,436)
========================================================================
Basic and diluted income (loss) per common share $ .04 $ (.72) $ .05 $ (.99)
========================================================================
Weighted average common shares outstanding 4,675 4,506 4,674 4,489
========================================================================
See accompanying notes.
</TABLE>
<PAGE>
OPEN PLAN SYSTEMS, INC.
Consolidated Statements of Cash Flows (Unaudited)
(amounts in thousands)
<TABLE>
<CAPTION>
Six Months ended
June 30,
1999 1998
----------------------------------
<S> <C> <C>
Operating activities
Net income (loss) $ 211 $ (4,436)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Provision for losses on receivables 18 128
Depreciation and amortization 487 553
Operational restructuring - 1,290
Loss on sale of property 3 28
Deferred income taxes - 4
Changes in operating assets and liabilities:
Accounts receivable (4) (653)
Inventories 235 3,012
Prepaids and other (443) (113)
Trade accounts payable 43 (687)
Customer deposits 5 (59)
Accrued and other liabilities (44) 245
----------------------------------
Net cash provided by (used in) operating activities 511 (688)
Investing activities
Purchases of property and equipment (431) (369)
----------------------------------
Net cash used in investing activities (431) (369)
Financing activities
Net (payments) borrowings on revolving line of credit (212) 659
Notes payable issued 165 -
Issuance of common stock (net of expenses) - 413
Principal payments on long-term debt, and capital
lease obligations (5) (60)
----------------------------------
Net cash (used in) provided by financing activities (52) 1,012
----------------------------------
Increase (decrease) in cash and cash equivalents 28 (45)
Cash and cash equivalents at beginning of period 2 73
----------------------------------
Cash and cash equivalents at end of period $ 30 $ 28
==================================
Supplemental disclosures
Interest paid $ 89 $ 132
==================================
Income taxes paid $ - $ 12
==================================
</TABLE>
See accompanying notes.
<PAGE>
OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements (Unaudited)
June 30, 1999
1. Principles of Presentation
The accompanying unaudited consolidated financial statements of Open Plan
Systems, Inc. and subsidiaries (the Company) have been prepared in accordance
with generally accepted accounting principles for interim financial information.
The interim financial statements included herein are unaudited. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. All
significant intercompany balances and transactions are eliminated in
consolidation. 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. The results for the three month and six month
periods ended June 30, 1999 are not necessarily indicative of the results that
may be achieved for the entire year ending December 31, 1999 or for any other
interim period. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's Form 10-KSB for the
year ended December 31, 1998.
2. Inventories
Inventories were in two main stages of completion and consisted of the following
(amounts in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
-------------------------------------
(Unaudited)
<S> <C> <C>
Components and fabric $4,150 $4,221
Jobs in process and finished goods $2,523 2,687
-------------------------------------
$6,673 $6,908
=====================================
</TABLE>
3. Income Taxes
The Company recorded no income tax benefit for the first half of 1998 due to the
uncertainty of realization of potential tax benefits associated with recent
operating losses. Utilization of net operating loss carryforwards resulted in no
income tax expense for the first two quarters of 1999. Related deferred income
tax assets have been offset by a valuation allowance. The Company will
reevaluate the potential realizability of the deferred tax assets on a quarterly
basis.
<PAGE>
4. Indebtedness
At June 30, 1999, the Company had outstanding borrowings of $740,000 on its
$5,000,000 line of credit. Total available borrowings under the facility were
$4.1 million. The Company also entered into loan agreements to replace certain
vehicles. These loans have maturities of between three and five years and bear
annual interest at between 0.9% and 8.9%. These loans are secured by the
financed vehicles.
5. Commitments and Contingencies
A portion of the potential consideration for the 1996 acquisition of Immaculate
Eagle, Inc. (d/b/a TFM Remanufactured Office Furniture)("TFM") was 87,500 shares
of common stock of the Company, which has been held in escrow, with an agreed
upon value of $1.3 million, as security for indemnification obligations of the
former shareholders of TFM. In addition, under the terms of the TFM purchase
agreement, if the closing sales price of the Company's common stock on October
1, 1998 was less than $15 per share, the Company was to make a cash payment to
the former shareholders of TFM equal to the difference between the closing sales
price on that date and $15, multiplied by the 87,500 shares of common stock
(subject to certain adjustments, including claims by the Company for
indemnification). The Company's stock traded at $2.25 per share on October 1,
1998 and accordingly the amount potentially payable to the former TFM
shareholders would be $1,115,625.
Management of the Company has reviewed the circumstances of the TFM acquisition
and determined that the indemnification obligations of the former TFM
shareholders exceed the $1.3 million agreed value of the stock in escrow. The
Company has requested the escrow agent retain all of the stock and served notice
of the indemnification claims to the former TFM shareholders. As a result, no
cash payment is due on any of the stock in escrow. The former shareholders of
TFM have disputed the indemnification claims and pursuant to the purchase
agreement, the matter has gone to arbitration.
If the Company prevails on all of its claims in arbitration, the escrowed shares
will be returned to the Company. Should the Company not prevail on all its
claims, the Company may be required to make cash payments to the shareholders in
amounts designated by the arbitrator. The aggregate $1,115,625 difference
between the stock's market price on October 1, 1998 and the $15 value assumed in
the TFM purchase agreement has been recorded as a reduction in goodwill and
shareholders' equity.
Two former officers of the Company have filed suit against the Company
asserting, among other things, non-compliance with the contractual terms of
certain employment agreements, claiming damages of approximately $400,000. The
Company believes these claims are without merit and is contesting them. The
Company filed suit against the two former officers claiming, among other things,
improper use of Company assets. The Company has reached a settlement with the
former officers of the Corporation related to the improper use of Company
assets. One officer is to repay the Company for an immaterial amount of these
expenses.
<PAGE>
OPEN PLAN SYSTEMS, INC.
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations
THREE AND SIX MONTHS ENDED JUNE 30, 1999 COMPARED WITH 1998
Results of Operations
Sales. Sales for the three months ended June 30, 1999 were $8,878,000, an
increase of approximately $546,000 or 6.6% versus the same period in 1998. Sales
for the six months ended June 30, 1999 were $16,387,000, an increase of $155,000
or 1.0% over the first six months of 1998. The increase in second quarter 1999
sales was due to continued strength provided by the sales office network. In
total, the Company's branch office network achieved increased sales by
approximately $600,000 in the second quarter of 1999 and over $1,000,000 for the
first six months of 1999 versus the comparable 1998 periods. The sales increases
were in spite of the fact that the Company reduced its sales offices by three in
July 1998 and reflect the positive impact that the Company's new marketing and
sales initiatives are having on sales office performance.
The Company also experienced an increase in its sales order volume for the
first two quarters of 1999. The Company received orders of $17.1 million in the
first half of 1999 which compares favorably with the $16.3 million in orders
booked during the first half of 1998. Additionally, the Company's order backlog
at the end of June 1999 of $3.2 million is 33% higher than at June 30, 1998.
The Company continued to experience less discounting pressure in the second
quarter of 1999. This was the result of sales office initiatives as well as
reduced sales to dealers served by the National Accounts Group. The Company has
implemented marketing initiatives around its traditional core customer market of
small to medium-size end users where, historically, there has been less
discounting pressure. The results of this effort contributed to the continued
strong sales performance by the branch offices. The Company is also
strengthening its National Accounts Group sales force so that this group can
increase its contribution to future results.
Cost of Sales. The Company's cost of sales includes costs of materials,
labor, supplies, freight, utilities, and other manufacturing related expenses.
Cost of sales decreased by $1,114,000 in the second quarter of 1999 to
$6,029,000 from the $7,143,000 reported in the second quarter of 1998.
Additionally, the Company's cost of sales decreased by $1,982,000 for the first
half of 1999 from the $13,399,000 reported in the first half of 1998. The
decrease in cost of sales is primarily attributable to reduced manufacturing and
installation costs.
The gross margin increased to 32.1% in the second quarter of 1999 compared
to 28.2% in the first quarter of 1999 and 14.3% reported in the second quarter
of 1998. The margin for the first half of 1999 of 30.3% compares favorably to
the 17.5% reported in the first half of 1998. The Company's gross margin during
the second quarter and first half of 1999 benefited from the operational
restructuring which occurred in the second quarter of 1998 and reduced the
amount of warehouse space and eliminated certain inefficient production
capacity. During the first half of 1998, the Company began reducing inventory
levels and reduced production volumes which resulted in higher per unit
production costs due to spreading fixed costs over fewer production units and
also incurred lower margins related to certain brokered product sales. 1999
gross margin levels were also impacted by increased sales volumes which allowed
the Company's fixed production costs to decrease as a percentage of sales.
The gross margin levels for the second quarter of 1999 reached the
short-term goal of 30%+ margins, similar to those achieved before 1997. The
Company believes that it has positioned itself to gain further improvements in
these levels as its' sales volume increases and operational improvement programs
continue to produce their desired results.
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 rent. The Company
compensates its salespeople through a combination of salaries and commissions.
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 1999 decreased to
$1,894,000 from the $2,048,000 reported in the second quarter of 1998. These
expenses decreased to $3,419,000 for the first two quarters of 1999 from the
$4,020,000 reported for comparable period in 1998. The decreases were primarily
related to the reduction in sales offices and sales trainee staffing that
occurred in the second quarter of 1998 as well as increased focus on cost
controls and reductions in marketing overhead. Selling expenses were somewhat
higher in the second quarter of 1999, as compared to the first quarter, as the
result of completing a new marketing brochure, direct mail advertisements and
price lists.
The Company anticipates that it will continue to add salespeople in certain
branch offices consistent with its plan to manage sales growth and productivity.
The Company is also evaluating locations for a potential new sales office which
the Company anticipates opening within the next year.
General and administrative expenses decreased to $675,000 in the second
quarter of 1999 from the $939,000 reported in the second quarter of 1998. These
expenses also decreased to $1,155,000 for the first six months of 1999 from the
$1,683,000 reported for the first half of 1998. The primary reasons for the
decrease were reduced expenses resulting from the operational restructuring that
occurred in the second quarter of 1998. Offsetting these improvements to a
degree were legal fees in excess of $150,000 associated with the litigation with
the former officers of the Company. The Company anticipates that these expenses
may remain higher than normal during the next quarter due to this litigation.
For a discussion of such litigation, see Part II, Item 1 of this report.
Other Non-Operating Income and Expense. Total net other expense decreased
from $72,000 and $138,000 for the second quarter and first half of 1998 to
$41,000 and $78,000 for the second quarter and first half of 1999. The primary
reason for the decrease is due to the Company reducing its borrowings on the
line of credit facility.
Income Taxes. The Company recorded no income tax benefit for the second
quarter and first half of 1998 due to the uncertainty of realization of
potential tax benefits associated with recent operating losses. Utilization of
net operating loss carryforwards resulted in no income tax expense for the
second quarter and first half of 1999. Related deferred income tax assets have
been offset by a valuation allowance. The Company will reevaluate the potential
realizability of the deferred tax assets on a quarterly basis.
Liquidity and Capital Resources
Cash Flows from Operating Activities. Net cash provided by (used in)
operating activities was $511,000 for the six months ended June 30, 1999 as
compared to ($688,000) for the six months ended June 30, 1998. The increase in
cash provided by operating activities for the first half of 1999 was primarily
due to the Company's net income for the period coupled with a small decrease in
receivables. The Company's inventory decreased during the second quarter of 1999
due to the Company's sales volume increasing along with a reduction of raw
materials. In 1998, the Company decreased inventories as part of its program to
reduce its stock of raw materials and finished goods to more closely match sales
volumes. Trade accounts receivable did not increase although overall sales
increased in the second quarter of 1999 as the Company continues to make
progress in the collection of its past due accounts. The Company continues to
focus on decreasing the number of days sales outstanding and would expect that
future changes in sales volume will not have a direct correlation to changes in
accounts receivable.
Cash Flows from Investing Activities. Net cash used in investing activities
was $431,000 for the six months ended June 30, 1999 as compared to $369,000 for
the six months ended June 30, 1998. The cash used during the first half of 1999
was due to the purchase of certain capital equipment related to improving the
productivity of its remanufacturing activities and the purchase of certain
installation vehicles intended to replace leased and older vehicles. These
purchases are consistent with the Company's focus on producing high-quality,
affordable office systems and reducing overall operations costs. The Company
anticipates that capital spending for 1999 will be less than $750,000. The
source of funds for anticipated capital spending will be funds from operations
as well as borrowings on the Company's line of credit. At June 30, 1999, the
Company had borrowings of $740,000 under its line of credit.
Cash Flows from Financing Activities. Net cash (used in) provided by
financing activities was ($52,000) during the first half of 1999 as compared to
$1,012,000 in the first half of 1998. This decrease in cash flows from financing
activities for the first half of 1999 represented reduced principal payments on
outstanding long-term debt and capital leases offset by a reduced need for
short-term borrowings on the Company's line of credit due to the increased
profitability of the Company and an improved working capital position. The
Company also issued 200,000 shares of stock in the second quarter of 1998
related to an investment made by Great Lakes Capital Corporation, LLC.
Expected Future Cash Flows. The Company expects that cash flow from
operating activities will continue to increase over the next several quarters as
the Company continues to reduce its past due receivables and inventories and
improves its financial performance.
Year 2000 Issues
As disclosed in the Company's annual report, the Company has examined the
Year 2000 issue and the potential costs and consequences to the Company in
addressing this issue. The Company has determined that its existing systems are
"Year 2000" compliant and therefore the Company will not have to convert any
existing software, hardware and telephone systems or manufacturing equipment, in
order to process transactions in the Year 2000. As a result, management believes
the Year 2000 issue is not expected to have a material impact on the Company's
operations.
In assessing the material risks to the Company's business from the Year
2000 problem, the Company has considered the Year 2000 readiness of suppliers,
customers (including the federal government), financial service providers,
public utilities, telecommunication service providers and other third parties
with which it does business. Although the Company has taken, and will continue
to take, reasonable efforts to gather information to determine the Year 2000
readiness of third parties, such information may not be provided voluntarily,
may be otherwise unavailable, or may not be reliable. The Year 2000 compliance
of third parties is substantially beyond the Company's knowledge and control,
and there can be no assurances that the Company will not be adversely affected
by the failure of a third party to adequately address the Year 2000 problem.
The Company will continue to assess its exposure to the Year 2000 issue
with regards to new technology acquired or additional entities with which it
interacts and, if necessary, appropriate contingency plans will be developed.
Amounts expended to date associated with the Company's Year 2000 efforts have
not been material. There can be no assurance that the Company's systems or the
systems of other companies on which the Company relies will not be adversely
affected by the Year 2000 issue.
Seasonality and Impact of Inflation
In prior years, the Company noted a seasonal trend of lower sales volumes
in the second and third quarters, but for the past two years the Company has had
no discernable pattern of seasonality. 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 revenues in each quarter results from
orders placed by customers during that quarter. As a result, the Company's sales
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 by inflation in the future.
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 1999 and any interim period to differ materially from those
expressed or implied 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, 1998, a copy of which is on file with the Securities and Exchange
Commission. The Company assumes no duty to update any of the forward-looking
statements of this report.
Item 3: Quantitative and Qualitative Disclosures about Market Risk
The Company believes that its exposure to market risk associated with
transactions involving derivative and other financial instruments is not
material.
<PAGE>
OPEN PLAN SYSTEMS, INC.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
A portion of the potential consideration for the 1996 acquisition of
Immaculate Eagle, Inc. (d/b/a TFM Remanufactured Office
Furniture)("TFM") was 87,500 shares of common stock of the Company,
which has been held in escrow, with an agreed upon value of $1.3
million, as security for indemnification obligations of the former
shareholders of TFM. In addition, under the terms of the TFM purchase
agreement, if the closing sales price of the Company's common stock on
October 1, 1998 was less than $15 per share, the Company was to make a
cash payment to the former shareholders of TFM equal to the difference
between the closing sales price on that date and $15, multiplied by
the 87,500 shares of common stock, (subject to certain adjustments,
including claims by the Company for indemnification). The Company's
stock traded at $2.25 per share on October 1, 1998 and accordingly the
amount potentially payable to the former TFM shareholders would be
$1,115,625.
Management of the Company has reviewed the circumstances of the TFM
acquisition and determined that the indemnification obligations of the
former TFM shareholders exceed the $1.3 million agreed value of the
stock in escrow. The Company has requested the escrow agent retain all
of the stock and served notice of the indemnification claims to the
former TFM shareholders. As a result, no cash payment is due on any of
the stock in escrow. The former shareholders of TFM have disputed the
indemnification claims and pursuant to the purchase agreement, the
matter has gone to arbitration.
If the Company prevails on all of its claims in arbitration, the
escrowed shares will be returned to the Company. Should the Company
not prevail on all its claims, the Company may be required to make
cash payments to the shareholders in amounts designated by the
arbitrator. The aggregate $1,115,625 difference between the stock's
market price on October 1, 1998 and the $15 value assumed in the TFM
purchase agreement has been recorded as a reduction in goodwill and
shareholders' equity.
On November 6, 1998, two former officers of the Company filed a
lawsuit against the Company in the State of Michigan, 30th Judicial
Court, asserting among other things, non-compliance with the
contractual terms of certain employment agreements. The plaintiffs
assert damages of approximately $400,000 in the aggregate. The Company
believes that these claims are without merit. On November 9, 1998, the
Company filed suit against the two former officers in the United
States District Court for the Eastern District of Virginia, claiming
among other things, improper use of Company assets. In May 1999, the
Company settled its lawsuit with the former officers of the Company
for an immaterial monetary settlement. Payment of such settlement has
been deferred until the former officers' lawsuit for non-compliance
with the contractual terms of certain employment agreements has been
resolved.
<PAGE>
Item 2. Changes in Securities and Use of Proceeds
Not Applicable
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
On May 11, 1999, the Company held its annual meeting of
shareholders (the "Meeting"). Five persons, three designated as Class
II directors and two designated as a Class I directors, were elected
to the Board of Directors at the meeting. Set forth below are the
names of the persons elected at the Meeting as directors, the class to
which they were elected, and the vote totals for each such director:
<TABLE>
<CAPTION>
Votes For Votes Withheld
<S> <C> <C> <C> <C>
Class II - Terms Expire 2002
Anthony F. Markel 3,310,688 1,010,067
E.W. Mugford 4,316,730 4,025
Theodore L. Chandler, Jr. 3,310,688 1,010,067
Class I - Terms Expire 2001
William Sydnor Settle 4,316,730 4,025
John L. Hobey 4,316,730 4,025
</TABLE>
<PAGE>
Item 4 (continued)
The only other matter considered at the Meeting was the ratification
of the appointment of the firm of Ernst & Young LLP as independent
auditors for the Company for the fiscal year ending December 31, 1999.
The vote total for approval of this matter is set forth below:
<TABLE>
<CAPTION>
Number
of Votes
<S> <C> <C>
For 3,312,905
Against 1,007,800
Abstain 50
</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-K.
<TABLE>
<CAPTION>
Exhibit No. Description
---------------- --------------------------------------------------------------
<S> <C>
11 Statement Re: Computation of Per Share Earnings
27 Financial Data Schedule (filed electronically only)
</TABLE>
(b) Reports on Form 8-K
None
<PAGE>
Pursuant to the requirements 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.
OPEN PLAN SYSTEMS, INC.
----------------------------
(Registrant)
Date: August 12, 1999 /s/ John L. Hobey
----------------------------
John L. Hobey
Chief Executive Officer
Date: August 12, 1999 /s/ William F. Crabtree
---------------------------
William F. Crabtree
Chief Financial Officer
Date: August 12, 1999 /s/ Neil F. Suffa
---------------------------
Neil F. Suffa
Corporate Controller
<PAGE>
OPEN PLAN SYSTEMS, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------------- ------------------------------------------------------------------------
<S> <C> <C>
11 Statement Re: Computation of Per Share Earnings
27 Financial Data Schedule (filed electronically only)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Weighted average shares
outstanding during the 4,672 4,506 4,672 4,489
period
Assumed exercise of options 3 - 2 -
less assumed acquisition of
shares
===============================================================================
Total 4,675 4,506 4,674 4,489
===============================================================================
Net income (loss) used in $ 185 $ (3,229) $ 211 $ (4,436)
computation
===============================================================================
Income (loss) per common share $ .04 $ (.72) $ .05 $ (.99)
===============================================================================
</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 , 1999 AND THE RELATED STATEMENTS
OF INCOME AND CASH FLOWS FOR THE YEAR 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-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 30
<SECURITIES> 0
<RECEIVABLES> 6,506
<ALLOWANCES> (231)
<INVENTORY> 6,673
<CURRENT-ASSETS> 14,396
<PP&E> 4,416
<DEPRECIATION> (2,080)
<TOTAL-ASSETS> 20,168
<CURRENT-LIABILITIES> 4,487
<BONDS> 0
0
0
<COMMON> 19,324
<OTHER-SE> (3,767)
<TOTAL-LIABILITY-AND-EQUITY> 20,168
<SALES> 16,387
<TOTAL-REVENUES> 16,387
<CGS> 6,029
<TOTAL-COSTS> 6,029
<OTHER-EXPENSES> 4,681
<LOSS-PROVISION> 18
<INTEREST-EXPENSE> 89
<INCOME-PRETAX> 211
<INCOME-TAX> 0
<INCOME-CONTINUING> 211
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 211
<EPS-BASIC> .05
<EPS-DILUTED> .05
</TABLE>
