<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------------------------------
FORM 10-QSB
----------------------------------------------------------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998 Comm. File No. 0-8115
- ------------------------------------------------ ----------
PH GROUP, INC.
-----------------------------------------------------------------
(Exact name of Small Business Issuer as specified in its charter)
Ohio 31-0737351
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2365 Scioto Harper Drive, Columbus, Ohio 43204
- --------------------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (614) 279-8877
----------------
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act 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.
(1) YES X NO (2) YES X NO
--- --- --- ---
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the last practicable date: 1,588,731 common shares, without par
value, outstanding as of March 31, 1998.
<PAGE> 2
FINANCIAL INFORMATION
ITEM 1. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
Note 1. BASIS OF FINANCIAL PRESENTATION
- ---------------------------------------
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles (GAAP) for interim
financial information and with the instructions to FORM 10-QSB and Item 310(b)
of Regulation SB. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
The accounting policies followed by PH Group, Inc. (the Company), are set forth
in Note 2 to the financial statements in the Company's 1997 FORM 10-KSB.
In the opinion of management, the accompanying unaudited consolidated financial
statements reflect all adjustments which are necessary for a fair presentation
of the financial results. The results of the operations for the /three months
period ended March 31, 1998 are not necessarily indicative of the results to be
expected for the whole year.
Note 2. Inventories
- -------------------
Inventories are valued at the lower of cost (First in, first out basis) or
market. Composition of inventories at March 31, 1998 and December 31, 1997 were
as follows.
March 31, 1998 Dec. 31, 1997
-------------- -------------
Raw Materials $ 377,268 $ 386,377
Work In Process 2,273,417 2,403,795
Finished Goods 0 0
---------- ----------
Inventory included
in Current Assets $2,650,685 $2,790,172
---------- ----------
The Company has in stock certain items which are not expected to be utilized or
sold currently. Inventory of $39,000 shown on the balance sheet as a long-term
asset represents an estimate of this portion of total raw materials inventory.
<PAGE> 3
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
RESULTS OF OPERATIONS
The Company maintained the strong revenue flow in the first quarter of 1998 on
the heels of record performance of fiscal 1997. This is primarily the result of
entering 1998 with a backlog of $6.5 million. Orders for the first quarter
matched revenues for the same period, as ending backlog at March 31 is $6.6
million.
1998 COMPARED TO 1997
Revenues for the first quarter of 1998 totaled $4.2 million, an 83% increase
over the same period in 1997. These revenues generated operating income of $0.3
million, and income before taxes of $0.2 million. The Company uses an effective
tax rate of 35% for book recognition purposes.
During the last quarter of 1997 the Company quoted and received an order for
$1.2 million. In the quotation estimating the Company under estimated the labor
and material costs to complete the order. This order comprised 22.5 percent of
the first quarter shipments with a gross margin of less than 20 percent compared
to an expected gross profit margin of 28 percent. This order is the major reason
for the decrease in gross margin in the first quarter. The Company's second
quarter results will also be adversely affected as there is still $242,837 to be
shipped of the above order. The remainder of the first quarter orders remained
constant to its historical averages.
Labor as a percent of total revenues improved to 13.0% versus 17.2% in the first
quarter of 1997. The Company believes that it has available labor supply to meet
the years scheduled shipments.
Salary, General and Administrative costs rose considerably ($800 thousand versus
$500 thousand) compared to the previous year. Interest expense is 135% greater
in the first quarter of this year. The increase in interest expense is due to
increased line of credit borrowings to finance the 83% sales increase.
Additionally, the Company has $500 thousand in acquisition debt for the St.
Lawrence purchase. The acquisition debt was not incurred until the second
quarter 1997. The Company engaged an investment banker to raise equity through
the sale of preferred stock. If the Company is successful in raising the equity
a portion of the proceeds will be used to pay down debt, reducing interest
expense. The Company expects to receive the equity funds in the third quarter.
As a percent of revenues, SG&A represented 19.0% in the quarter, compared to
23.2% in 1997. The Company seeks to keep SG&A costs at the minimal possible
levels, and yet be able to optimize future business opportunities.
LIQUIDITY AND CAPITAL RESOURCES
The financial position of The Company continues to improve as the result of the
continued growth in revenues and profits. Net worth increased in the period by
$169,000 to $1,953,000. This is an increase of 9.5% compared to the year ending
1997. Working capital increased to $408,000, or 4.5% of total assets. For the
year ended 1997 working capital stood at $169,000, which was 2.0% of total
assets. In the first quarter inventories decreased from the fourth quarter 1997
level by $139,000. This decrease results from the shipments in the first
quarter. The Company's accounts receivable balance for the quarter increased by
$1.0 million. Accounts payable for the quarter increased by $665,000 to
$2,617,000.
Our net income of $133,000 in addition to non-cash expenses of $75,000 generated
cash flow $208,000 for the quarter. Property, plant and equipment (net of
depreciation) remained relatively unchanged in the quarter.
The Company currently has available to it $2.5 million in a bank line of credit.
The line is backed by the receivables and inventory of the company. The company
also has a term loan balance of
<PAGE> 4
$267,000 which is secured by company fixed assets. The unused and available
funds on the credit line at March 31, 1998 were in excess of $1,000,000.
The Company is reviewing its computer systems and programs to ensure that they
will function properly and be Year 2000 ready. The Company expects to upgrade or
replace the existing systems. The Company presently believes that by modifying
existing software and converting to new software, Year 2000 will not present a
significant operational problem for The Company's computer system. The Company
does not expect that the cost of the efforts will be material to the financial
position or results of operation of any subsequent year.
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On January 25, 1998, 2,500 options were exercised by an inside Director at $.80
per share. The Company relied on Section 4(2) of the Securities Act of 1933 to
issue these common shares upon exercise.
On February 23, 1998, 23,750 options were exercised by an outside Director at
$.80 per share. The Company relied on Section 4(2) of the Securities Act of 1933
to issue these common shares upon exercise.
On February 24, 1998, 18,750 options were exercised at $.80 per share. The
Company relied on Section 4(2) of the Securities Act of 1933 to issue these
common shares upon exercise.
All of the proceeds were used for working capital.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of the shareholders of the Company was held April
30, 1998.
(b) The matters voted upon at the Annual meeting and the results of the
voting are set forth below:
(i) The shareholders voted 1,109,567 shares in favor, 14,432
shares against and withheld authority on 10,385 votes with
respect to amending Article IV of the Amended Articles of
Incorporation to authorize issuance of 2,500,000 Preferred
Shares, without par value.
(ii) The shareholders voted 1,115,007 in favor, 11,462 shares
against, and withheld authority of 9,760 votes with respect to
amending Sections 2 and 5 of the Articles of the Amended Code
of Regulations, deleting references therein to "common" shares
and to substitute therefore "voting " shares.
<PAGE> 5
(iii) The shareholders voted as follows with respect to the election
of directors:
Shares in Favor Shares Withheld
Alida L. Breen 1,259,550 2,765
David H. Montgomery 1,258,300 4,015
Charles T. Sherman 1,259,050 3,265
ITEM 6. EXHIBITS AND REPORTS
(a) List of Exhibits
Amended and Restated Articles of Incorporation of the Company
as filed
(27) Financial Data Schedule (filed electronically)
SIGNATURES
IN ACCORDANCE WITH THE REQUIREMENTS OF THE EXCHANGE ACT, THE REGISTRANT HAS
CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED.
PH GROUP, INC,
AN OHIO CORPORATION
DATE: MAY 8, 1998 BY: \S\ CHARLES T. SHERMAN
---------------------- ----------------------
CHARLES T. SHERMAN
PRESIDENT
EXHIBIT INDEX
Exhibit Number Description Page #
-------------- ----------- ------
A Amended Articles of Inc.
27 Financial Data Schedule Filed electronically
<PAGE> 6
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PH GROUP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31 DEC. 31
ASSETS 1998 1997
- ------ ----------- -----------
<S> <C> <C>
Current Assets
Cash $ 5,044 $ 7,789
Accounts Receivable $ 3,821,299 $ 2,834,678
Inventories $ 2,650,685 $ 2,790,172
Deferred Income Taxes $ 150,500 $ 150,500
Other Current Assets $ 167,551 $ 193,798
----------- -----------
Total Current Assets $ 6,795,079 $ 5,976,937
----------- -----------
Property and Equipment, at cost
Office Equipment $ 634,538 $ 621,933
Manufacturing Equipment $ 1,094,344 $ 1,053,198
Leasehold Improvements $ 274,050 $ 265,564
Vehicles $ 166,180 $ 166,180
----------- -----------
$ 2,169,112 $ 2,106,875
Less: Accumulated Depreciation & Amortization $(1,187,055) $(1,112,086)
----------- -----------
Net Property and Equipment $ 982,057 $ 994,789
----------- -----------
Other Non-Current Assets
- ------------------------
Inventory, Longterm Portion $ 39,000 $ 39,000
Land Held for Investment $ 169,720 $ 169,720
Goodwill, net $ 766,346 $ 785,899
Deferred Income Taxes $ 50,100 $ 50,100
Other Noncurrent Assets $ 227,064 $ 278,132
----------- -----------
Total Other Non-Current Assets $ 1,252,230 $ 1,322,851
----------- -----------
TOTAL ASSETS $ 9,029,366 $ 8,294,577
============ =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 7
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PH GROUP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31 DEC. 31
LIABILITIES 1998 1997
- ----------- ----------- -----------
<S> <C> <C>
Accounts Payable $ 2,616,785 $1,950,925
Bank Line of Credit $ 1,406,349 $ 457,049
Current Portion of Long-Term Debt $ 649,377 $ 750,658
Current Portion of Capital Lease Oblig $ 19,804 $ 19,175
Income Taxes Payable $ 105,639 $ 422,626
Accrued Expenses and Taxes $ 229,600 $ 485,635
Advance Billings $ 1,358,752 $1,722,235
----------- ----------
Total Current Liabilities $ 6,386,306 $5,808,303
----------- ----------
Noncurrent Liabilities, all less Current Portions:
Long-Term Debt $ 343,529 $ 353,070
Capital Lease Obligations $ 18,572 $ 23,765
Deferred Compensation $ 15,417 $ 12,916
----------- ----------
Total Noncurrent Liabilities $ 377,518 $ 389,751
----------- ----------
Total Liabilities $ 6,763,824 $6,198,054
----------- ----------
Redeemable Common Stock $ 312,500 $ 312,500
----------- ----------
Shareholders' Equity
- --------------------
Common Stock, with no par value, authorized
10,000,000 shares; issued and outstanding 1,588,731
at stated value $ 11,710 $ 11,350
Additional Paid- In Capital $ 1,327,691 $1,292,051
Retained Earnings (deficit) $ 614,111 $ 480,622
Treasury Stock $ (470) $ 0
----------- ----------
Total Shareholders' Equity $ 1,953,042 $1,784,023
TOTAL LIABILITIES AND EQUITY $ 9,029,366 $8,294,577
============================ =========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 8
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PH GROUP, INC.
CONSOLIDATED INCOME STATEMENT
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31 MARCH 31
1998 1997
----------- -----------
NET SALES $ 4,200,528 $ 2,297,708
- ---------
Cost of Goods Sold $ 3,116,594 $ 1,641,496
----------- -----------
Gross Margin $ 1,083,934 $ 656,212
Selling, General and
and Administrative Expense $ 799,368 $ 532,826
----------- -----------
Operating Income $ 284,566 $ 123,386
----------- -----------
Other Income (Expense)
Interest Income $ 3,417 $ 418
Interest(Expense) ($ 78,368) ($ 33,302)
Oil & Gas Royalties, After Amort $ 687 ($ 1,521)
Other ($ 3,667) $ --
----------- -----------
Total Other Income (Expense) ($ 77,931) ($ 34,405)
----------- -----------
Income Before Income Taxes $ 206,635 $ 88,981
Provision for Taxes $ 73,000 $ 18,000
----------- -----------
NET INCOME $ 133,635 $ 70,981
- ---------- =========== ===========
PER SHARE DATA:
Basic Earnings per Share $ 0.09 $ 0.05
=========== ===========
Diluted Earnings per Share $ 0.08 $ 0.05
=========== ===========
Weighted Average Common Shares
Outstanding (1) 1,438,078 1,378,525
=========== ===========
(1) Adjusted for stock split January 2, 1998
The accompanying notes are an integral part of the financial statements.
<PAGE> 9
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PH GROUP, INC.
CONSOLIDATED CASHFLOW STATEMENT
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31
1998 1997
--------- ---------
<S> <C> <C>
Cash Flow From Operating Activities
Net Income $ 133,635 $ 70,981
Adjustments to Reconcile Net Income to Net Cash
Depreciation and Amortization $ 74,969 $ 56,386
Loss (Gain) on Sale of Property and Equipment $ 3,667 $ 0
Changes in Certain Assets and Liabilities
Decrease (Increase) in Accounts Receivable $(986,621) $ 131,716
Decrease (Increase) in Inventory $ 139,487 $(528,374)
Decrease (Increase) in Other Current Assets $ 26,247 $ (93,205)
Decrease (Increase) in Other Non Current Assets $ 51,068 $ (8,773)
Increase (Decrease) in Accounts Payable $ 665,860 $ 774,357
Increase (Decrease) in Income Taxes Payable $(316,987) $ (13,260)
Increase (Decrease) in Deferred Income Taxes $ 0 $ 0
Increase (Decrease) in Deferred Compensation $ 2,501 $ 3,819
Increase (Decrease) in Accrued Exp and Taxes $(256,035) $(114,985)
Increase (Decrease) in Advanced Billings $(363,483) $(136,877)
--------- ---------
Net Cash Provided By Operating Activities $(825,692) $ 141,785
- ----------------------------------------- --------- ---------
Cash Flows from Investing Activities
Proceeds from Sale of Equipment $ 0 $ 0
Capital Expenditures for Property and Equipment $ (66,050) $ (49,048)
(Increase) Decrease in Other Long Term Assets $ 19,553 $ 0
(Increase) Decrease in Other Investments $ 0 $ (450)
--------- ---------
Net Cash Used In Investing Activities $ (46,497) $ (49,498)
- ------------------------------------- --------- ---------
Cash Flows from Financing Activities
Principal Payments of Debt Obligations $(115,386) $ (39,236)
Change in Line of Credit, net $ 949,300 $(189,000)
Proceeds from Notes Payable $ 0 $ 0
Repayment of Advances from Directors $ 0 $ 0
Proceeds from issuance of Common Stock $ 35,530 $ 20,000
--------- ---------
Net Cash Used In Financing Activities $ 869,444 $(208,236)
- ------------------------------------- --------- ---------
Net (Decrease) in Cash $ (2,745) $(115,949)
Cash, Beginning of Period $ 7,789 $ 116,449
--------- ---------
CASH, END OF PERIOD $ 5,044 $ 500
- ------------------- ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 1
Exhibit A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
PH GROUP INC.
ARTICLE I
The name of said corporation shall be PH Group Inc.
ARTICLE II
The place in Ohio where its principal office is to be located is in
Columbus, Franklin County, Ohio.
ARTICLE III
The purposes for which it is formed are to engage in any lawful act or
activity for which corporations may be formed under Sections 1701.01 to 1701.98,
inclusive, of the Revised Code.
This corporation reserves the right at any time and from time to time
substantially to change its purpose in the manner now or hereafter permitted by
statute. Any change of the purposes of the corporation which is authorized or
approved by the holders of shares entitling them to exercise the proportion of
the voting power of the corporation now or hereafter required by statue, shall
be binding and conclusive upon every shareholder as if he had voted therefor. No
shareholder, notwithstanding that he may have voted against such change of
purposes or may have objected thereto in writing, shall be entitled to payment
of the fair cash value of his shares.
ARTICLE IV
AUTHORIZED SHARES
Section 1. Number and Class of Shares. The number of shares which the
Corporation is authorized to have issued and outstanding is 12,500,000 shares.
The classes and the aggregate number of shares of each class are as follows:
(a) 10,000,000 Common Shares, without par value; and
(b) 2,500,000 Preferred Shares, without par value.
No holder of Common Shares or Preferred Shares shall have as such, as a
matter of right, the preemptive right to subscribe for or purchase any part of
any new or additional issue of shares of any class whatsoever, or of securities
or other obligations convertible into or exchangeable for any shares of any
class whatsoever or which by warrants or others entitle the holders thereof to
subscribe for or purchase any shares of any class whatsoever, whether now or
hereafter authorized and whether issued for cash or other consideration.
Section 2. Preferred Shares.
<PAGE> 2
2.1 Issuance in Series. Any unissued or treasury Preferred Shares may
be issued from time to time in one or more series for such consideration as may
be fixed from time to time by the Board of Directors. The Board of Directors is
hereby expressly authorized to adopt amendments to the Articles of Incorporation
in respect of any unissued or treasury Preferred Shares to, among other things,
fix or change (a) the division of Preferred Shares into one or more series, (b)
the designation and authorization number of shares of each series, and (c) the
express terms of each series or Preferred Shares. The express terms of shares of
different series of Preferred Shares shall be identical except that there may be
variations in respect of:
2.1.1 the dividend or distribution rate;
2.1.2 the dates of payments of dividends or distribution and the dates
from which they are cumulative;
2.1.3 redemption rights and price;
2.1.4 liquidation price;
2.1.5 sinking fund requirements;
2.1.6 conversion rights; and
2.1.7 restrictions in the issuance of shares of the same series or of
any other class or series.
2.2 Voting Rights. As to every matter requiring the approval of the
shareholders of the Corporation, every holder of Preferred Shares shall be
entitled to one vote for each Preferred Share standing in his name on the books
of the Corporation, with the same and identical voting rights, except as
otherwise provided herein, as a holder of Common Shares. The Preferred Shares
and Common Shares shall vote together as a single class, except as otherwise
required by law or the Articles of Incorporation.
2.3 Priority of Preferred Shares in Event of Dissolution. In the event
of any dissolution, liquidation or winding up of the affairs of the Corporation,
whether voluntarily or involuntarily, the holders of each series of Preferred
Shares shall be entitled, after payment or provision for payment of the debts
and other liabilities of the Corporation, to receive, out of the net assets of
the Corporation, the amount fixed and determined by the Board of Directors in
any amendment to the Articles of Incorporation providing for the issuance of a
particular series of Preferred Shares, before any distribution shall be made to
the holders of Common Shares. Neither the merger or consolidation of the
Corporation, nor the sale, lease or conveyance of all or part of its assets,
shall be deemed to be a liquidation, dissolution or winding up of the affairs of
the Corporation within the meaning of this Section 2.3.
2.4 Priority of Preferred Shares to Dividends or Other Distributions.
As and when dividends or other distributions payable in cash, property or
capital stock of the Corporation may be declared by the Board of Directors,
holders of Preferred Shares shall be paid a dividend or distribution in an mount
to be determined by the Board of Directors in any amendment to the Articles of
Incorporation before payment of any such dividend or distribution is made to
holder of Common Shares.
ARTICLE V
A. Notwithstanding any provision of the Revised Code of Ohio, now or
hereafter in force, requiring for any purpose the vote of the holders of shares
entitling them to exercise two-thirds or any other proportion of the voting
power of the corporation or of any class or classes of shares thereof, such
action, unless otherwise expressly required by statute, may be taken by the vote
of the holders of shares entitling them to exercise a majority of the voting
power of the corporation or of such class or classes.
<PAGE> 3
B. The corporation reserves the right to amend, alter, change or repeal
any provision contained in the Articles of Incorporation, in the manner now or
hereafter prescribed or permitted by statute, and all rights conferred upon
shareholders herein are granted subject to this reservation.
C. No person shall be disqualified from being a director of the
corporation because he or she is or may be a party to, and no director of the
corporation shall be disqualified from entering into any contract or other
transaction to which the corporation is or may be party. No contract or other
transaction to which the corporation is or may be a party shall be void or
voidable for the reason that any director or officer or other agent of the
corporation is a party thereto, or otherwise has any direct or indirect interest
in such contract or transaction or in any other party thereto, for reason that
any interested director or officer or other agent of the corporation authorized
or participates in authorization of such contract or transaction, (a) if the
material facts as to such interest are disclosed or are otherwise known to the
Board of Directors at the time the contract or transaction is authorized and at
least a majority of the disinterested members vote for or otherwise take action
authorizing such contract or transaction even though such disinterested
directors as less than quorum, or (b) if the contract or transaction (i) is not
less favorable to the corporation than an arm's length contract or transaction
in which no director or officer or other agent of the corporation has any
interest or (ii) is otherwise fair to the corporation as of the time it is
authorized. Any interested director may be counted in determining the presence
of quorum at any meeting of the Board of Directors which authorized the contract
or transaction.
D. Section 1701.831 of the Ohio revised Code, as amended from time to
time, shall not apply to "control share acquisitions" of shares of stock of the
corporation, as defined in Section 1701.01(Z) of the Ohio Revised Code, as
amended from time to time.
E. No shareholder of the corporation may cumulative voting power in the
election of directors.
ARTICLE VI
The Board of Directors is hereby authorized to determine whether any,
and, if any, what part of the surplus, however created or arising, shall be used
or disposed of or declared in dividends or paid to shareholders, and, without
action of the shareholders, to use and apply such surplus, or any part thereof,
at any time or from time to time, in the purchase or acquisition of shares of
any class now or thereafter authorized, voting-trust certificates for shares,
bonds, debentures, notes, scrip, warrants obligations, evidences of indebtedness
of the corporation, and other securities of the corporation, to such extent or
amount and in such manner and upon such terms as the Board of Directors shall
deem expedient.
ARTICLE VII
The provision of so Section 1701.13(E)(5)(a) of the Ohio Revised Code
or any statue of like tenor or effect which is hereafter enacted shall not apply
to the corporation. The corporation shall, to the fullest extent not prohibited
by any provision of applicable law other than Section 1701.13(E)(5)(a) of the
Ohio Revised Code or any statue or effect which is hereafter enacted, indemnify
each director and officer against any and all costs and expenses (including
attorney fees, judgments, fines, penalties, amounts paid in settlement and other
disbursements) actually and reasonable incurred by or imposed upon such person
in connection with any action, suit, investigation or proceeding (or any claim
or other matter therein), whether civil, criminal, administrative or otherwise
becomes or is threatened to be made a party by reason of being or at anytime
having been, while such a director or officer, an employee or other agent of the
corporation or, at the direction or request of the corporation, a director,
trustee, officer, administrator, manger employee, advisor or other agent of or
fiduciary for any other corporation, partnership, trust venture or other entity
or enterprise including any employee benefit plan.
The corporation shall indemnify any other person to the extent such
person shall be entitled to indemnification under Ohio law by reason of being
successful on the merits or otherwise in defense of an
<PAGE> 4
action to which such person is named a party by reason of being an employee or
other agent of the corporation and the corporation may further indemnify any
such person if it is determined on a case by case basis by the Board of
Directors that indemnification is proper in the specific case.
Notwithstanding anything to the contrary in these Articles of
Incorporation, no person shall be indemnified to the extent, if any, it is
determined by the Board of Directors or by written opinion of legal counsel
designated by the Board of Directors for such purposes that indemnification is
contrary to applicable law.
ARTICLE VIII
These Amended and Restated Articles of Incorporation supersede and
replace the original articles of PH Group Inc. and its predecessor and all
previously adopted amendments thereto that are in force on the date hereof.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 5,044
<SECURITIES> 0
<RECEIVABLES> 3,821,299
<ALLOWANCES> 0
<INVENTORY> 2,689,685
<CURRENT-ASSETS> 6,795,079
<PP&E> 2,169,112
<DEPRECIATION> (1,187,055)
<TOTAL-ASSETS> 9,029,366
<CURRENT-LIABILITIES> 6,386,306
<BONDS> 362,101
0
0
<COMMON> 11,710
<OTHER-SE> 1,941,332
<TOTAL-LIABILITY-AND-EQUITY> 9,029,366
<SALES> 4,200,528
<TOTAL-REVENUES> 4,200,528
<CGS> 3,116,594
<TOTAL-COSTS> 3,116,594
<OTHER-EXPENSES> 2,980
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 78,368
<INCOME-PRETAX> 206,635
<INCOME-TAX> 73,000
<INCOME-CONTINUING> 133,635
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 133,635
<EPS-PRIMARY> .09
<EPS-DILUTED> .08
</TABLE>
