GREENSTONE ROBERTS ADVERTISING INC, 10-K, 1996-01-29

GREENSTONE ROBERTS ADVERTISING INC
10-K, 1996-01-29
ADVERTISING AGENCIES

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED).

For the fiscal year ended October 31, 1995

[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED).

For the transition period from to
Commission file number 000-17468

GREENSTONE ROBERTS ADVERTISING, INC.
(Exact name of registrant as specified in its charter)

NEW YORK 11-2250305
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

One Huntington Quadrangle
Suite 1C14
Melville, New York 11747
(Address of principal executive offices)(Zip Code)

(516) 249-2121
Registrant's telephone number, including area code

Securities registered pursuant to Section 12 (b) of the Act: None.
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, par value $.01 per share

(Title of Class)

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

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

State the aggregate market value of the voting stock held by non-
affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the stock was sold, or
the average bid and asked prices of such stock, as of a specified
date within 60 days prior to the date of filing.
$3,153,270 as of January 22, 1996

Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date.
Common Stock, $0.01 par value -- 7,474,418 shares
(as of January 22, 1996)

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement for the Registrant's
1996 Annual Meeting of Shareholders will be incorporated into Part III
of this Form 10-K

PART I
Item 1. Business.
General

The Registrant was incorporated under the laws of the State of New
York on February 25, 1972 under the name Greenstone Ad Agency, Inc. and
subsequently changed its name to Greenstone & Rabasca Advertising, Inc.
On December 16, 1988, the Registrant amended its Certificate of
Incorporation to increase the number of shares of Common Stock
authorized to 30,000,000, par value $.01 per share, and to change its
name to Greenstone Rabasca Roberts, Inc. Its stock was first sold to the
public on February 13, 1989. At their annual meeting on
April 5, 1991, the Registrant's shareholders approved the Registrant's
name change to Greenstone Roberts Advertising, Inc.

The Registrant is a full service advertising agency which analyzes
and provides advertising for its clients, and plans and creates
advertising for dissemination through various media such as television,
radio, newspapers, magazines and billboards. The Registrant has
developed expertise in such related areas as marketing, consultation,
direct mail advertising, market and product research, design and
production of merchandising and sales promotion programs and materials,
corporate identification, public relations, investor relations and
recruitment advertising. The Registrant creates an advertising program
within the limits imposed by the client's advertising budget or its
annual retainer. The commission for advertising services in the industry
and for the Registrant is generally 15% of the gross charge (commonly
referred to as "billings") for purchasing advertising space or time.

The Registrant operates offices in Long Island, New York and in
Coconut Creek, Miami and Orlando, Florida. The Registrant believes,
based on management's knowledge of and experience in the market, that it
is the largest advertising agency in Long Island, New York in terms of
commissions and fee revenues, and has a strong base in the Florida
market. The Registrant's success in these areas is based on its
established reputation and expertise in representing clients in
businesses such as vitamins, minerals and nutritional supplements,
personal care and food products, travel, computer hardware and software,
photographics and optics, financial services, telecommunications
equipment, cleaning and safety products, wine and spirits and real
estate. In the past fifteen years, the Registrant has received many of
the advertising industry's most recognized awards including ANDY's,
CLIO's and ONE SHOW's. In the past fifteen years, the Registrant has
received in excess of one hundred "Best on Long Island" awards for its
creativity in advertisements and collateral materials.

The strategy of the Registrant's General Advertising Division is to
concentrate on servicing medium and large-size accounts that are seeking
the personalized service, attention and continuity of relationships with
top management and creative personnel that the Registrant offers and
that larger advertising firms based in major metropolitan areas are not
always able to provide. The Registrant plans to continue to expand its
business by focusing on such accounts and through possible acquisitions
of other advertising agencies in Long Island, Florida and in other
metropolitan markets. The Registrant did not make any such acquisitions
during the fiscal year ended October 31, 1995.

The Registrant's Recruitment Advertising Division, which was formed
in 1986, develops recruitment advertising for existing advertising
clients and others in connection with personnel hiring. Programs
developed by Greenstone Roberts Recruitment Advertising, Inc. include
classified and display help-wanted advertisements which appear in
newspapers, trade publications and magazines. Recruitment Advertising
personnel solicit new clients, write and create employment
advertisements and select the appropriate media, the length of time the
advertisements should appear in such media and the size of the
advertisements. Clients of the Recruitment Advertising Division include
banks, insurance companies, manufacturers, schools, government agencies,
high technology businesses and hospitals. The Recruitment Advertising
Division is operated from the Long Island office.

The Registrant's Public Relations Division provides corporate,
product and financial public relations for a broad range of industries.
To gain exposure for a client's products and services and to increase
awareness among its prospects and investors, the Public Relations
Division prepares a plan using product and financial releases, news
stories, feature articles, media conferences, special events and trade
show publicity. The Registrant's Public Relations Division provides its
services both to the Registrant's existing advertising clients as well
as to the Division's own clients and is operated from three of its
offices.

Solicitation of New Business

The Registrant has been in business for 23 years and believes it is
well known in the Long Island marketplace, and is fairly well known in
the South Florida and Orlando marketplaces. The Registrant generally
obtains new accounts through referrals or by identifying prospects
through market research in product and service industries in which the
Registrant does not have a conflicting account. The Registrant solicits
prospective accounts through personal contacts and presentations by
agency principals, backed by a team of creative and media personnel. The
initial step in the selection process normally involves preparing a
capability study demonstrating the Registrant's ability to service the
prospective account. Following the submission of a capability study,
advertisers generally seek presentations from a limited number of
agencies. In soliciting new clients, the Registrant often incurs
expenses prior to obtaining such accounts, only a portion of which
eventually may be reimbursed by the client. The Registrant considers the
potential revenue from a new account when determining the appropriate
level of expenses for such presentations. The period of time required by
the Registrant to obtain a new account and generate revenues therefrom
may range from two weeks to several months.

Revenues

The primary sources of the Registrant's revenues are commissions
earned from advertising placed with the various media and service fees
for creative time. Clients pay the Registrant the full media charges
for these advertisements, and the Registrant, in turn, pays the media,
less an agency commission which is generally 15% of the gross media
charges. The billing and paying procedures established by the Registrant
with its clients, whether by written agreement or course of practice,
require that payment be received from the client in sufficient time for
the Registrant to make the corresponding payment to the related media.
Normally, payments are received by the Registrant within 30 to 60 days
of invoice. Service fees for inside creative and typesetting time are
established on a case-by-case basis. The Registrant also receives a
service fee on its outside purchases of production materials (such as
photography and printing) for clients, which fee is generally 20% over
the cost of such purchases. In some cases, fees are generated in lieu
of commissions on media and markup on outside purchases of production
materials.

The Public Relations Division generates substantially all of its
revenues from fixed retainer fees which range from $1,000 to $15,000 per
month per client. The Public Relations Division has had between 15 and
20 clients on retainer over the last 24 months. The Public Relations
Division also derives a small portion of its revenues from production
work done on behalf of clients, which may include production of press
kits, mailings, financial reports and other items.

The Recruitment Advertising Division derives its revenues
principally from the 15% media commission it receives from the various
newspapers, trade publications, magazines and other media in which it
places clients' advertisements. In the event the media are non-
commissionable, the Registrant marks up the net cost by 17.65%. Revenues
are also derived by the Recruitment Advertising Division from production
work performed in preparing advertisements, literature and related items
for recruitment accounts.

Clients

The Registrant and its subsidiary consider their relations with
their clients to be good. Due to the nature of the business, however,
any client could at some time in the future reduce its advertising
budget, or transfer to another agency all or part of its advertising
presently placed through the Registrant and its subsidiary.
Representation of a client does not necessarily mean that all
advertising for such client is handled by the Registrant and/or its
subsidiary exclusively. In some cases, the Registrant and its subsidiary
handle the advertising of only a portion of a client's products or
services.

Advertising industry clients can terminate their relationship with
the Registrant on relatively short notice, typically 60-90 days. While
the loss of the entire business of the largest client might have a
material effect upon the revenues of the Registrant, because the
business represents revenues from different divisions of this client,
the Registrant believes that it is unlikely that the entire business of
this client would be lost at the same time. The Registrant can terminate
at any time personnel working directly on the accounts to reduce its
overhead.

For the twelve months ended October 31, 1995, one of the
Registrant's clients (Twin Laboratories, Inc.) represented 15% of the
Registrant's consolidated revenues. In addition, the Registrants's five
largest clients represented 38% of consolidated revenues for that period
and the Registrant depends upon a core of approximately 30 clients from
which it obtains the bulk of its consolidated revenues.

Suppliers

The Registrant internally produces substantially all of the
materials required for its clients. Services and materials such as
photography, printing and film material are generally purchased from
outside vendors on behalf of clients. The Registrant does not maintain
any written contracts with its suppliers. Substantially all of such
suppliers are located in Long Island and Florida.

Seasonality

Historically, first quarter operating results have been losses
because of the timing of certain major clients' budgetary cycles.

Government Regulation

Federal, state and local governments and governmental agencies in
recent years have adopted statutes and regulations affecting the
advertising activities of advertising agencies and their clients. For
example, statutes and regulations have prohibited television advertising
for certain products and regulated the form and content of certain types
of advertising for many consumer products. The Federal Trade Commission
("FTC") has also required proof of accuracy of advertising claims with
respect to various products and, in its enforcement policies, is seeking
to establish more stringent standards with respect to advertising
practices. The FTC has the authority to investigate and to institute
proceedings against advertisers and their advertising agencies for
deceptive advertising. The effect on the advertising business of future
application of existing statutes or regulations, or the extent, nature
or effect of future legislation or regulatory activity with respect to
advertising, cannot be predicted.

While the Registrant maintains errors and omissions insurance, no
claims or enforcement actions have been instituted against it to date
and the Registrant believes that such coverage would adequately protect
it in the event claims are made by governmental agencies or others
against the Registrant and its subsidiary. In addition, the Registrant
has a hold harmless clause in most agreements with clients.

Employees

As of October 31, 1995, the Registrant employed 101 persons on a
full-time basis, including 38 in account management, 7 in media, 19 in
production, 15 in creative services and 22 in general administration and
finance.

The Registrant believes its future success will depend, in part, on
its ability to recruit and retain highly skilled management and creative
personnel upon whom it has depended in the past. Professional personnel
in the advertising industry normally do not enter into employment
contracts and are free to move from one agency to another. There is
substantial competition for qualified employees, although there is a
large pool of such persons in the New York Metropolitan Area. The
Registrant, because of the competitive nature of the advertising
business, has required most personnel to execute Employee Restrictive
Covenant Agreements, which provide generally that when such employee
leaves the employ of the Registrant voluntarily, for a period of one
year such employee is prohibited from soliciting and accepting business
from the Registrant's clients and from trying to persuade any of the
Registrant's other employees to sever their employment with the
Registrant.

None of the Registrant's employees is represented by a labor union.
The Registrant has experienced no work stoppages and believes that its
employee relations are good. In order to recruit and retain key
personnel, the Registrant has a wide range of employee benefit plans.

Competition

The advertising industry and other marketing communications
businesses are highly competitive. Agencies of all sizes strive to
attract new clients or additional assignments or accounts from existing
clients. In addition, many companies have in-house departments which
handle all or a portion of their advertising and/or public relations
requirements.

The Registrant must compete with other agencies to maintain
existing client relationships and to obtain new clients. Competition in
the advertising industry depends to a large extent on the client's
perception of the quality of an agency's "creative product". As the
Registrant has expanded its operations it has had to compete more
frequently against larger advertising agencies. These larger agencies
generally have substantially greater financial resources, personnel and
facilities than the Registrant and many of them are large conglomerates
and/or have an international clientele. The Registrant has signed
agreements with non-affiliated agencies in Europe, S.E. Asia and Latin
America in order to provide its existing and future clients with a
seamless method to communicate their advertising message worldwide.
Although the Registrant believes it is able to compete on the basis of
the quality of its product, service, personal relationships with clients
and reputation, there can be no assurance that the Registrant will be
able to maintain its current position in the industry.

Item 2. Properties.
The Registrant does not own any real property. All offices are
located in leased premises. The Registrant considers its offices ample
for its present needs. The following table provides data on the offices
of the Registrant.
<TABLE>
<CAPTION>
Annual Approximate Lease
Offices Location Base rent Sq. feet Exp.Date
<S> <C> <C> <C> <C>

New York One Huntington Quadrangle
Melville, New York $435,024 16,371 6/30/98

Florida 3730 Coconut Creek Pkwy
Coconut Creek, Florida 156,576 9,489 10/31/96

Sun Bank Center
Orlando, Florida 181,186 9,309 11/30/99

815 N.W. 57th Ave.
Miami, Florida 2,927 330 1/31/96

</TABLE>

Item 3. Legal Proceedings.

On January 10, 1995 the Registrant filed a civil action in
the
United States District Court for the Eastern District of New York
against a former client, Gold Star Cruises of Galveston, L.C.,
and various related parties "(Gold Star)". The complaint seeks
payment of
amounts for advertising fees and expenses for services provided
to Gold
Star and not paid as a result of the alleged breach by Gold Star
of its
agreement with the Registrant's subsidiary. The complaint also
seeks
relief for damages resulting from an alleged scheme to defraud
the Registrant by Gold Star. As of this date, the courts are
reviewing a
motion to dismiss brought by Goldstar's attorneys. It is the
Registrant's belief that this motion to dismiss will be denied.

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

There were no matters submitted to a vote of the
shareholders of the Registrant during the fourth quarter of the
fiscal year covered by this report.

PART II

Item 5. Market Price of and Dividends on the Registrant's Common
Equity and Related Stockholder Matters.

The Registrant's Common Stock is traded in the over-the-counter
market and is quoted on NASDAQ under the symbol GRRI.

The following table sets forth the high and low closing bid
quotations
for the Registrant's Common Stock as reported by NASDAQ for the
periods indicated. These quotations represent bid prices between
dealers, do
not include retail markups, markdowns or commissions, and do not
necessarily represent actual transactions.

Common Stock Closing Bid Prices
Fiscal year ended October 31,
1995 1994
High Low High Low

First Quarter 15/32 7/16 23/32 1/2

Second Quarter 15/32 3/8 21/32 1/2

Third Quarter 1/2 3/8 19/32 7/16

Fourth Quarter 1/2 3/8 9/16 7/16

The Registrant's Common Stock was held by approximately 326
shareholders of record as of January 22, 1996.

The Registrant has never paid a cash dividend on its Common Stock
and does not contemplate paying cash dividends on its Common
Stock in the foreseeable future.

Item 6. Selected Financial Data.

FIVE-YEAR SELECTED FINANCIAL DATA

The selected historical financial data presented below has been
derived
from consolidated financial statements audited by Arthur Andersen
LLP, independent public accountants. The selected historical
financial data
should be read in conjunction with the consolidated financial
statements, related notes and other financial information
included elsewhere in this document.

Fiscal Year Ended October 31,

<TABLE>

<CAPTION>
FISCAL YEAR ENDED OCTOBER, 31,
1995 1994 1993 1992 1991
STATEMENT OF OPERATIONS
<S> <C> <C> <C> <C> <C>
DATA: $ 9,685,169 $10,507,754 $11,191,293 $12,166,931 $ 9,044,328
Commissions and fees
$ (211,062) $ 4,122 $ (466,735) $ 663,177 $ 380,212
Net (loss)/income

Net (loss)/income per common $ (0.02) $ 0.00 $ (0.05) $ 0.07 $ 0.04
share

Average shares 9,536,318 9,536,318 9,536,318 9,985,104 10,600,000
outstanding

BALANCE SHEET DATA: $13,596,373 $13,075,318 $12,861,865 $15,904,743 $11,969,355
Total assets
$ 250,000 $ 250,000 $ 250,000 $ 250,000 $ ---
Long-term debt
</TABLE>

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

Results of operations for the fiscal year ended October 31, 1995 as compared to
the fiscal year ended October 31, 1994.

Consolidated commission and fee revenue decreased $822,585, or 8% from
$10,507,754 for the fiscal year ended October 31, 1994 to $9,685,169 for
the fiscal year ended October 31, 1995. Although increased activity with
existing clients and the addition of new clients generated a 2% and 10%
increase respectively in commission and fee revenue, this was more than
offset by lost clients which approximated 20%, particularly the residual
effect of losing Royal Caribbean Cruises Ltd.

Salaries and related costs decreased 4% from $7,197,734 for the fiscal year
ended October 31, 1994 to $6,921,093 for the fiscal year ended October 31,
1995. The decrease is the result of a reduction in staffing in response to
the decreased activity during the year with a number of the Company's
clients, partially offset by additional staff to support new accounts and
salary increases. Salary and related costs as a percent of revenue
increased to 71% for the fiscal year ended October 31, 1995, from 68% for
the fiscal year ended October 31, 1994, mainly the result of decreased revenue
for the fiscal year.

Other operating expenses decreased $222,589 or 7% mainly due to
management's efforts to control costs.

Interest income, net, increased $50,583 as a result of higher average cash
balances during the fiscal year as well as higher average yields resulting
from investments made in U.S. Treasury bills and notes.

(Loss)/income before provision/(benefit) for taxes decreased $272,772 from a
profit of $54,382 for the fiscal year ended October 31,
1994 to a loss of
$218,390 for the fiscal year ended October 31, 1995. These results are mainly
due to the reduction in revenue as discussed above.

The effective tax rate for the tax benefit of $7,328 is approximately 3%.
This is primarily the result of certain expenses that are permanently non-
deductible for income tax purposes and an IRS audit assessment for
approximately $20,000 which closes tax years 1992, 1993 and 1994.

Results of operations for the fiscal year ended October 31, 1994 as compared to
the fiscal year ended October 31, 1993.

Consolidated commission and fee revenue decreased $683,539, or 6%, from
$11,191,293 for the fiscal year ended October 31, 1993 to $10,507,754 for
the fiscal year ended October 31, 1994. The consolidated revenue decrease
is mainly due to the loss of Royal Caribbean Cruises Ltd., the Company's
largest client for the fiscal years ended October 31, 1993 and 1992,
partially offset by increased activity from new and existing clients which
approximated 7%.

Salaries and related costs decreased 9%, from $7,883,903 for the fiscal
year ended October 31, 1993 to $7,197,734 for the fiscal year ended October
31, 1994. The decrease is the result of a reduction in staffing in response to
the decreased activity during the year with the
Company's
largest client, partially offset by additional staff to support new accounts,
and normal salary increases. Salaries and related
costs as a
percent of revenues decreased slightly from 70% for the fiscal year ended
October 31, 1993 to 68% for the fiscal year ended
October 31, 1994, mainly as a result of the decreased staffing, partially
offset by decreased revenues for the fiscal year.

Other operating expenses decreased $615,510, or 15%, partly due to the result of
management efforts to control costs in various
operating areas,
but mainly due to the charges above normally recurring levels reflected in
operating costs for the fiscal year ending October 31, 1993, for bad debt
expense ($385,000),unbillable production inventory write-offs ($68,000),
higher professional fees ($147,000), and costs related to the move of the
Orlando office ($17,000). The higher charges for bad debts and inventory
write-offs related to the overall deterioration in the economy which impacted a
number of clients coupled with the loss of the
Company's largest
client. Additionally, a write-off of approximately $70,000 of accounts
receivable due to the settlement of a lawsuit (more fully disclosed in Note 3 on
F-7) contributed to this increase.

The higher level of professional fees is related to the legal expense
incurred in connection with the lawsuit referred to above, along with an
overall increase in services rendered by the Company's advisors. There
were also increased depreciation and amortization costs relating to new
fixed assets and to the acquisition by the Company of certain assets of
four advertising agencies completed during the prior fiscal year, and increased
expenditures on new business proposals.

Interest income, net, increased $63,548 as a result of higher average cash
balances during the fiscal year, as well as higher average interest yields
resulting from investments made in U.S. Treasury bills.

(Loss)/income before provision for income taxes increased $681,688 from a
loss of ($627,306) for the fiscal year ended October 31, 1993 to income of
$54,382 for the fiscal year ended October 31, 1994. The increase is the
result of management efforts to reduce and control costs as discussed
above, as well as the higher levels of certain expenses in the fiscal year
ending October 31, 1993 (as discussed above).

The effective tax rate of approximately 92% results primarily from the
Company's state tax provision. For the fiscal year ended October 31, 1994,
the Company incurred a loss at its Florida subsidiary for which a tax
benefit was recorded at 5.5% and had profitable operations in New York
which required a provision for New York State taxes at a rate of
approximately 12%. On a consolidated basis, the net income is
significantly less than New York State income, thereby resulting in an
effective tax rate significantly higher than the statutory rate.

Liquidity and Capital Resources

The Company's working capital improved by $97,289 from $3,990,725 at
October 31, 1994 to $4,088,014 at October 31, 1995. Cash and cash
equivalents increased during fiscal 1995 by $2,178,326 primarily due to the
maturity of short-term investments in U.S. Treasury bills of $1,159,032 and
the net cash provided from operating activities of $1,298,463.
Additionally, $279,169 of cash was used to acquire capital assets.

It should be noted that the Company recognizes commissions as a percentage
of expenditures incurred for clients. Therefore, the accounts receivable
balance does not relate only to the commissions and fees shown on the
income statement, but also represents receivables for the total of the
production costs and media purchased for clients. Similarly, the accounts
payable balance includes payables for production costs and media incurred on
behalf of clients.

The Company has available an unused committed line of credit from a bank of
$5,000,000 at October 31, 1995. Management believes
that its current
working capital levels and funds provided by operations will be sufficient
to meet the Company's liquidity and working capital requirements for the
foreseeable future. On January 19, 1996 the Company used approximately
$900,000 of its cash and cash equivalents to repurchase common stock from a
significant shareholder and pay certain related expenses. The shares
repurchased are being held as Treasury Stock. The Company does not
anticipate any material increases of capital expenditures or other
requirements which will adversely affect its liquidity.

Item 8. Financial Statements and Supplementary Data.

The financial statements filed as part of this Report commence following
Item 14.

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

None.

Part III

Item 10. Directors and Executive Officers of the Registrant.

Information required by this Item is omitted from this Report as the
Registrant intends to file its definitive proxy statement not later than
120 days after the end of the fiscal year covered by this Report, and the
information to be included therein is included herein by reference.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

Item 13. Certain Relationships and Related Transactions.

Not applicable.

Part IV

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

(a)(1) Financial Statements:
(i) Report of Independent Public Accountants
(ii) Consolidated Balance Sheets
(iii) Consolidated Statements of Operations
(iv) Consolidated Statements of Shareholders' Equity
(v) Consolidated Statements of Cash Flows
(vi) Notes to Consolidated Financial Statements

(2) Financial Statement Schedules:
(i) Report of Independent Public Accountants on Schedule
(ii) Schedule II - Valuation and Qualifying Accounts

(b)Exhibits:
Number Description
3.1 Certificate of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1 of the Registrant's Registration
Statement on Form S-18 (Registration No. 33-26372 NY)).

3.2 By-laws of the Registrant (incorporated by reference to Exhibit 3.2 of
the Registrant's Registration Statement on Form S-18
(Registration No. 33-26372 NY)).

10.1 1988 Stock Option Plan (incorporated by reference to Exhibit 10.6 of the
Registrant's Registration Statement on Form S-18
(Registration No. 33-26372 NY)).

10.2 Amendment No.1 to the 1988 Stock Option Plan dated February 7, 1990
(incorporated by reference to Exhibit 10.6 of the
Registrant's Form 10-K for the fiscal year ending
October 31, 1990).

10.3 Lease agreements between the Registrant and We're Associates dated
September 28, 1987 (incorporated by reference to Exhibit
10.4 and 10.5 of the Registrant's Registration Statement on Form S-18
(Registration No. 33-26372 NY)).

10.4 Second and third modifications of lease agreements between the Registrant
and We're Associates dated February 14, 1989 and
July 7, 1989, respectively (incorporated by reference to Exhibit 10.8 of the
Registrant's Form 10-K for the fiscal year ending
October 31, 1990).

10.5 Lease agreements between the Registrant and Wyncreek Partners, Ltd.
dated April 17, 1989 and the first and second amendments
dated June 29, 1989 and April 10, 1990, respectively
(incorporated by reference to Exhibit 10.10 of the Registrant's
Form 10-K for the fiscal year ending October 31, 1990).

10.6 Employment agreement between the Registrant and Ronald M.
Greenstone dated December 31, 1994. (Incorporated by reference to Exhibit
10.6 of the Registrant's Form 10-K for the fiscal year
ending October 31, 1994).

10.7 Employment agreement between the Registrant and Gary C. Roberts dated
December 31, 1995.

10.8 Fifth and sixth amendments of lease agreements between
the Registrant and We're Associates dated June 13, 1990
and June 18, 1991, respectively (incorporated by
reference to Exhibit 10.11 of the Registrant's Form 10-
K for the fiscal year ending October 31, 1991).

10.9 Third amendment of lease agreement between the Registrant and Wyncreek
Partners, Ltd. dated January 19, 1991 (incorporated
by reference to Exhibit 10.12 of the Registrant's Form 10-K for the fiscal year
ending October 31, 1991).

10.10 Fourth and fifth amendments of lease agreement between the
Registrant and Wyncreek Partners, Ltd. dated January 22, 1992 and
May 12, 1992 (incorporated by reference to Exhibit 10.10 of the
Registrant's Form 10-K for the fiscal year ending October 31,
1992).

10.11 Lease agreement between the Registrant and Lincoln-Sun Center Ltd. dated
September 4, 1992 (incorporated by reference to
Exhibit 10.11 of the Registrant's Form 10-K for the fiscal year
ending October 31, 1992).

10.12 Sixth amendment of lease agreement between the Registrant
and Wyncreek Partners, Ltd. dated August 26, 1993 (incorporated by
reference to Exhibit 10.12 of the Registrant's Form 10-K
for the fiscal year ending October 31, 1993).

SIGNATURES
Pursuant to the requirements of the Section 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized in the
City of Melville, State of New York on January 25, 1996.

Greenstone Roberts Advertising, Inc.

By:
Ronald M. Greenstone
Chairman of the Board

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

RONALD M. GREENSTONE Chairman of the Board, January 25, 1996
Chief Executive Officer,
(principal executive
officer) and Director

GARY C. ROBERTS President, Chief January 25, 1996
Operating Officer
and Director

GREGORY A. RICE Senior Vice President, January 25, 1996
Chief Financial
Officer, Treasurer

ANTHONY V. CURTO Director January 25, 1996

RICHARD PROJAIN Director January 25, 1996

LEONARD SCHRIFT Director January 25, 1996

MARTIN SUSSMAN Director January 25, 1996

GREENSTONE ROBERTS ADVERTISING, INC. AND SUBSIDIARY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Number

Report of Independent Public Accountants F-1

Consolidated Balance Sheets as of October 31, 1995 and 1994 F-2

Consolidated Statements of Operations
for the years ended October 31, 1995,1994 and 1993 F-3

Consolidated Statements of Shareholders' Equity
for the years ended October 31, 1995, 1994 and 1993 F-4

Consolidated Statements of Cash Flows for the
years ended October 31, 1995, 1994 and 1993 F-5

Notes to Consolidated Financial Statements F-6 to F-10

Index to Supplemental Schedules S-1

Report of Independent Public Accountants on Schedule S-2

Schedule II - Valuation and Qualifying Accounts S-3

Information required by other schedules called for under Regulation S-X is
either not applicable or is included in the consolidated financial
statements or notes thereto.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Greenstone Roberts Advertising, Inc.:

We have audited the accompanying consolidated balance sheets of Greenstone
Roberts Advertising, Inc. (a New York corporation) and subsidiary as of
October 31, 1995 and 1994 and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the three years
in the period ended October 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Greenstone Roberts
Advertising, Inc. and subsidiary as of October 31, 1995 and 1994, and the
results of their operations and their cash flows for each of the three
years in the period ended October 31, 1995, in conformity with generally
accepted accounting principles.

ARTHUR ANDERSEN LLP

Melville, New York
January 3, 1996
except with respect
to the matter
discussed in Note 9,
as to which the date
is January 19, 1996

GREENSTONE ROBERTS ADVERTISING, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS

<TABLE>

<CAPTION>
October 31, October 31
ASSETS 1995 1994

CURRENT ASSETS:

<S> <C> <C>
Cash and cash equivalents $ 3,184620 $ 1,006,294
Short-term investments 1,121,015 2,280,047
Accounts receivable (net of
allowance for bad debts of
$377,723 and $327,865,
respectively) 7,016,706 7,141,058
Billage production orders in
process, at cost 532,600 682,876
Deferred income tax benefit 332,328 227,653
Other current assets 111,105 112,021

Total current assets 12,298,374 11,49,949

FURNITURE, EQUIPMENT AND LEASEHOLD
IMPROVEMENTS, as cost, less accumulated
depreciation and amortization of
$1,883,435 and $1,495,518,
respectively 891,987 1,000,735

NOTE RECEIVABLE 150,000

OTHER ASSETS 406,012 474,634

TOTAL ASSETS $13,596,373 $13,075,318

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable $ 7,658,037 $ 7,179,695
Accrued liabilities 552,323 279,529
Total current liabilities 8,210,360 7,459,224

LONG-TERM DEBT 250,000 250,000

DEFERRED INCOME TAX 53,109 72,128

COMMITMENTS AND CONTINGENCIES (Note 8) - -

SHAREHOLDERS' EQUITY:
Preferred stock, $1.00 par value,
1,000,000 shares authorized, no
shares issues or outstanding - -
Common stock, $.01 par value,
authorized, 10,600,000 shares
issued 106,000 106,000
Additional paid-in capital 2,600,692 3,600,692
Retained earnings 1,822,959 2,034,021
Less: Treasury stock,
1,063,682 shares held at cost (446,747) (446,747)

Total shareholders' equity 5,082,904 5,293,966

TOTAL LIABILTIES AND SHAREHOLDERS
EQUITY $13,596,373 $13,075,318

</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.

GREENSTONE ROBERTS ADVERTISING, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>

<CAPTION>
For the years ended October 31,

1995 1994 1993

<S> <C> <C> <C>
REVENUES FROM COMMISSIONS AND
FEES $9,685,169 $10,507,754 $11,191,293

EXPENSES:
Salaries and related costs 6,921,093 7,197,734 7,883,903

Other operating expenses 3,142,500 3,365,089 3,980,599

Interest income, net (160,034) (109,451) (45,903)

9,903,559 10,453,372 11,818,599

(LOSS)/INCOME BEFORE (BENEFIT)
PROVISON FOR INCOME TAXES (218,390) 54,382 (627,306)

(BENEFIT)/PROVISION FOR INCOME
TAXES (7,328) 50,260 (160,571)

NET (LOSS)/NET INCOME $(211,062) $ 4,122 $ (466,735)

NET (LOSS)/NET INCOME PER COMMON
SHARE $ (0.02) $ 0.00 $ (0.05)

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES 9,536,318 9,536,318 9,536,318
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

<TABLE>
<CAPTION>
GREENSTONE ROBERTS ADVERTISING, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED OCTOBER 31, 1995, 1994 AND 1993

Common Stock Additional Treasury Stock
Number of Paid-in Retained Number of
Shares Amount Capital Earnings Shares Amount Total
<S> <C> <C> <C> <C> <C> <C> <C>
Balance- October 31, 1992 10,600,000 $106,000 $3,600,692 $2,496,634 1,063,682 $(446,747) $5,756,579

Net (loss) - - - (466,735) - - (466,735)

Balance- October 31, 1993 10,600,000 106,000 3,600,692 2,029,899 1,063,682 (446,747) 5,289,844

Net income - - - 4,122 - - 4,122

Balance- October 31, 1994 10,600,000 106,000 3,600,692 2,034,021 1,063,682 (446,747) 5,293,966

Net (loss) - - - (211,062) - - (211,062)

Balance - October 31, 1995 10,600,000 $106,000 $3,600,692 $1,822,959 1,063,682 $(466,747) $5,082,904
</TABLE>

The accompanying notes are an integral part of these consolidated
statements.

GREENSTONE ROBERTS ADVERTISING, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
For the years ended October 31,
1995 1994 1993

CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net (loss/income $(211,062) $ 4,122 $ (466,735)
Adjustments to reconcile net income/(loss)
to net cash
Provided by/(used in) operating activities:
Depreciation and amortization 451,723 438,737 412,427
Provision for doubtful accounts 51,907 129,057 463,682
Deferred income tax benefit (104,675) (227,653) -
Deferred income tax liability (19,019) 168,303 (161,993)
Increases/(decreases) in cash
resulting from changes in
operating assets and liabilities
Change in accounts receivable 72,445 (1,831,889) 4,169,437
Change in billable production
orders in process, at cost 150,276 186,672 (287,748)
Change in income tax receivable - 64,859 (138,471)
Change in other current assets 916 30,210 214,039
Change in note receivable 150,000 - -
Change in other assets 4,816 (753) 59,097
Change in accounts payable 478,342 279,547 (2,507,057)
Change in accrued liabilities 272,794 (142,344) 70,344

Net cash provided by/(used in)
operating activities 1,298,463 (901,132) 1,827,022

CASH FLOWS FROM INVESTING ACTIVITIES:
Maturity/(purchase) of short-term
investments 1,159,032 (2,280,047) -
Capital expenditures, net (279,169) (253,116) (398,079)

Net cash provided by/(used in)
investing activities 879,863 (2,533,163) (398,079)

NET INCREASE/(DECREASE) IN CASH AND
CASH EQUIVALENTS 2,178,326 (3,434,295) 1,428,943

CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 1,006,294 4,440,589 3,011,646

CASH AND CASH EQUIVALENTS AT END OF YEAR $3,184,620 $1,006,294 $4,440,589
</TABLE>

The accompanying notes are an integral part of these
consolidated statements.

GREENSTONE ROBERTS ADVERTISING, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation

The accompanying consolidated financial statements include
the accounts of Greenstone Roberts Advertising, Inc. and its
100% owned subsidiary, Greenstone Roberts Advertising
Florida, Inc. (together the "Company"). All intercompany
balances and transactions have been eliminated.

Recognition of Commission and Fee Revenue

Substantially all revenues are derived from commissions for
placement of advertisements in various media and for
production of advertisements and marketing materials. Such
revenues are recognized as billed. Billings are generally
rendered upon insertion date for print media, job completion
date for production costs, and month of air date for
broadcast media.

Concentration of Credit Risk

The Company provides advertising and marketing services to
a wide range of clients who operate in many industry
sectors. The Company grants credit to all qualified clients,
but does not believe it is exposed to any undue
concentration of credit risk to any significant degree.

Reclassifications

Certain prior year amounts have been reclassified to conform
with the 1995 presentation.

Cash Equivalents

For purposes of the consolidated balance sheets and
consolidated statements of cash flows, the Company
considers all highly liquid debt instruments purchased with
original maturities of three months or less to be cash
equivalents, including commercial paper, certificates of
deposit and money market mutual funds. Cash equivalents
as of October 31, 1995 and 1994 were $2,891,281 and $910,303,
respectively.

Short-Term Investments
Effective November 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115 "Accounting for Certain
Investments in Debt and Equity Securities" ("SFAS No. 115"). SFAS No. 115
establishes the accounting and reporting for investments
in equity securities that have readily determinable fair
values and for all investments in debt securities.
In connection with the adoption of this pronouncement,
the Company's debt securities have been classified as held
to maturity and are stated at amortized cost which, due to the
nature of the securities, aproximates market value.
The adoption of SFAS No. 115 had an immaterial effect on the
Company's financial statements.

Short term investments include Treasury bills and notes with maturities of four
to seven months, with yields ranging
from 5.50% to 7.54%

Furniture, Equipment and Leasehold Improvements

Furniture, equipment and leasehold improvements are
stated at cost, net of accumulated depreciation and
amortization. Depreciation and amortization are
computed using the straight-line
method over the useful lives of the assets as follows:

Furniture 5 - 7 years
Equipment 5 - 7 years

Leasehold improvements Lease term or useful life,
whichever is shorter

Other Assets

Other assets include intangible assets (primarily goodwill) which
were recorded by the Company based on the value of certain
assets obtained in the acquisition of other businesses.
These assets are being amortized on a straight-line
basis, over a ten-year period.

Income Taxes

Effective November 1, 1993, the Company
adopted Statement of Financial Accounting Standards No.
109 "Accounting for Income Taxes" ("SFAS No. 109"). SFAS
No. 109 requires the use of the asset and liability method of
accounting for income taxes and deferred income taxes are
recorded to reflect the tax consequences on future years of
differences between the tax bases of assets and liabilities and
their financial reporting amounts at each year-end. The
adoption of SFAS No. 109 had an immaterial effect on the
Company's financial statements.

Recently Issued Accounting Pronouncements

In March of 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 121
(SFAS No. 121) - "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed of".
SFAS No. 121 requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be
reviewed for impairment whenever events or changes in
circumstances indicated that the carrying amount of an asset
may not be recoverable.

In October of 1995, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards
No. 123 (SFAS No. 123) "Accounting for Stock-Based
Compensation". SFAS No. 123 established financial
accounting and reporting standards for stock-based employee
compensation plans as well as transactions in which an
entity issues equity instruments to acquire goods or services
from non-employees.

SFAS No. 121 and SFAS No. 123 are effective for fiscal years
beginning after December 15, 1995, although earlier
adoption is permitted. The Company does not believe that
the adoption of SFAS No. 121 or SFAS No. 123 will have a
material adverse effect on the Company's consolidated
financial statements.

2. LINE OF CREDIT AGREEMENTS:

The Company has an unsecured $5,000,000 line of credit
with a bank which expires April 30, 1996. Borrowings
against this line bear interest at
the rate of prime plus 1/2% per
annum. The Company did not borrow against the line during
fiscal 1995 and fiscal 1994.

3. NOTE RECEIVABLE:

On July 21, 1993, the Company entered into a
settlement agreement with the former
principals of an earlier acquisition regarding certain
accounts receivable. Under the terms of the agreement,
the principals agreed to pay the Company a total
of $160,000 in consideration of approximately
$230,000 of accounts receivable. The difference was
written-off as bad debt expense. Additionally, the
principals were required to return Company owned
assets which were in their possession, including office
furniture, equipment, files and records. The $160,000
payment consisted of an immediate payment of $10,000 and a
balloon promissory note bearing interest at 8% per annum,
in the principal amount of $150,000 which was payable on
or before January 1, 1996, or upon the sale or
conveyance of certain real property against which the note
has been secured by a second mortgage, whichever occurs
first. On August 15, 1995, the Company received full
payment of the principal of $150,000 and all accrued interest.

4. LONG-TERM DEBT:

Long-term debt consists of a note payable relating to the acquisition of
certain assets of an advertising agency in
February 1992. The note, by its terms, was payable in two
equal installments of $125,000 in February 1993 and 1994,
respectively. The Company believes that due to certain
misrepresentation s by the seller in connection with
the business of this agency, a significant adjustment in the
purchase price is required. Accordingly, the Company has
forgone any payment of the note payable until a fair settlement is agreed to.
The entire note payable balance has therefore
been included in long-term debt. Any adjustment to the purchase price would
result in a reduction to long-term debt and other
assets.

5. INCOME TAXES:

The (benefit)/provision for income taxes included in the
accompanying consolidated statements of operations consists of the following:
<TABLE>
<CAPTION>
October 31, October 31, October 31,
1995 1994 1993
CURRENT:
<S> <C> <C> <C>
Federal $50,863 $ 5,324 $(12,456)
State 65,503 71,117 3,878
116,366 76,441 (8,578)
DEFERRED:
Accelerated depreciation (10,538) 2,363 10,998
Employee bonus - (8,438) (58,934)
Allowance for bad debts (15,579) (1,270) (84,093)
Goodwill amortization (11,230) 6,450 -
Vacation accrual (34,263) (1,451) (17,196)
Various accrued
liabilities and other (20,973) 4,958 ( 2,768)
State NOL carry forward (31,111) (28,793) -
(123,694) (26,181) (151,993)
TOTAL $ (7,328) $50,260 $(160,571)
</TABLE>

The Company has a state net operating loss (NOL) carryforward in
Florida of approximately $60,000 as of October 31, 1995. The NOL
carryforward is due to losses incurred by the Company's 100%
owned subsidiary. The carryforward, which management expects
will be
fully utilized, expires as follows:

Year Amount

2009 $29,000
2010 $31,000

The deferred income tax benefit and deferred income tax liability
reflected in the accompanying consolidated balance sheet
represents
differences in the timing of the recognition of certain income
and expenses for income tax and financial reporting purposes.
The primary sources of these differences are bad debt
deductions and depreciation.

The following table reconciles the Federal Statutory rate to
the Company's effective rate:

<TABLE>
<CAPTION>
October 31, October 31, October 31,
1995 1994 1993
<S> <C> <C> <C>
Tax (benefit)/provision computed
at statutory rate (31.3%) 15.0% ( 34.0%)
State tax, net of Federal tax effect 2.3% 66.1% 0.4%
Non-deductible expenses and other 25.6% 11.3% 8.0%
(3.4%) 92.4% (25.6%)
</TABLE>

The effective tax rate in fiscal 1995 of (3.4%) is primarily the
result of certain expenses that are permanently non-
deductible for income tax purposes and an IRS audit
assessment for approximately $20,000 which closes tax
years 1992, 1993 and 1994.

In fiscal 1994, the effective tax rate of approximately 92%
results primarily from the Company's state tax provision.
During that year, the Company incurred a loss at its Florida
subsidiary for which a tax benefit was recorded at 5.5% and
had profitable operations in New York State which required
a provision for New York State taxes at a rate of
approximately 12%. On a consolidated basis, the net
income is significantly less than New York State income,
thereby resulting in an effective tax rate significantly higher
than the statutory rate.

Income taxes paid during fiscal 1995, 1994 and 1993 were
$143,228, $0, and $146,499, respectively.

6. SAVINGS PLAN:

The Company adopted a 401(k) Savings Plan ("Saving Plan") as
of August 1, 1984. The Savings Plan covers all employees with
one or more years of service. The Company matches
employee contributions utilizing a percentage determined at the
discretion of management. Such percentage was 15% of
employee contributions for both fiscal 1995 and 1994 and
had been 25% for the preceding year. The Company's fiscal
October 31, 1995, 1994, and 1993 Savings Plan contributions
were $32,496, $39,630, and $45,443, respectively.

7. SIGNIFICANT CUSTOMERS:

For the year ended October 31, 1995, business from one
customer represented 15% of the Company's
consolidated revenues. In addition, the Company's five
largest clients represented 38% of consolidated revenues for that
period and the Company depends upon a
core of approximately 30 clients from which it obtains the bulk
of its consolidated revenues. For the years ended
October 31, 1994 and 1993, business from a
company which is no longer a customer represented 11%,
and 25% of consolidated revenues, respectively.
During 1994, no other individual customer
represented more than 10% of consolidated
revenues.

8. COMMITMENTS AND CONTINGENCIES:

Leases

At October 31, 1995, the Company was committed under
operating leases, principally for office space,
through fiscal 2000.

Rent expense was $841,826, $809,499 and $796,724, for the years
ended October 31, 1995, 1994 and 1993, respectively.
Future minimum rents under terms of the existing leases are as
follows:

1996 $782,020
1997 $626,602
1998 $491,997
1999 $212,385
2000 $17,771

Stock Option Plan

In December 1988, the Board of Directors approved the
adoption of the 1988 Stock Option Plan (the "Plan"). The
Plan was amended in 1990 to increase the number of
common shares reserved for issuance to key employees,
including officers and directors who are also employees,
from 600,000 to 900,000 shares. All options are granted at
not less than 100% of the fair market value on the date of
grant.

Options granted expire six years from the date of grant, and
are exercisable in varying amounts up to three years, at
which time all options granted become exercisable. Options
that are unexercised are canceled immediately if the holder
ceases to be an employee of the Company.

The following is a summary of activity and information
relating to shares subject to option under the Plan:
<TABLE>
<CAPTION>
Number of Shares
under Option

<S> <C>
BALANCE, October 31, 1993 at exercise prices from
$0.46875 to $1.63 503,000
Options granted at exercise price of $0.50 per share 515,000
Options canceled at exercise prices from $0.78
to $1.63 per share (203,000)

BALANCE, October 31, 1994 at exercise prices from
$0.46875 to $0.50 815,000
Options granted at exercise price of $0.46875 to
$0.53 22,500
Options canceled at exercise price of $0.46875 to
$0.53 (193,500)

BALANCE, October 31, 1995 at exercise prices from
$0.46875 to $0.53 644,000
</TABLE>

As of October 31, 1995 there were 621,500 options excercisable
and 256,000 options available for grant.

Employment Agreements

As of January 1, 1996 and January 1, 1995, the Company
renewed employment agreements with its two executive
officers. The employment agreements provide for
aggregate annual compensation of $665,000, and expire December
31, 1997. The agreements also provide for incentive compensation
equivalent to an aggregate amount of 5% of income before
provision for income taxes.

Litigation

The Company is involved in legal matters arising from the
ordinary course of business. In management's opinion, any
unfavorable outcome associated with these matters
would not have a material adverse effect on the Company's
consolidated financial statements.

9. SUBSEQUENT EVENT:

On January 19, 1996 the Company repurchased 2,061,900 shares
of its common stock that were under the control
of one shareholder. The repurchase price was $.41 per
share for an aggregate purchase price of approximately
$845,000 plus certain expenses. The shares repurchased
represented approximately 22% of the outstanding common stock of
the Company and are being held in treasury. The treasury stock
repurchase was paid for from the Company's cash and cash
equivalent balance. Following the repurchase, the Company has
7,474,418 shares of common stock outstanding.

GREENSTONE ROBERTS ADVERTISING, INC. AND SUBSIDIARY
INDEX TO SUPPLEMENTAL SCHEDULES

PAGE
NUMBER
Report of Independent Public Accountants on Schedule S-2
Scheduel II - Valuation and Qualifying Accounts S-3

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE

To Greenstone Roberts Advertising, Inc.:

We have audited, in accordance with generally accepted auditing
standards, the consolidated financial statements of Greenstone
Roberts Advertising, Inc. and subsidiary included in this filing
and have issued our report thereon dated January 3, 1996 except
with respect to the matter discussed in Note 9, as to which the
date is January 19, 1996. Our audits were made for the purpose
of forming an opinion on the basic consolidated financial
statements taken as a whole. The schedule listed in the
accompanying index is presented for purposes of complying with
the Securities and Exchange Commission's rules and is not part
of the basic consolidated financial statements. This schedule
has been subjected to the auditing procedures applied in the
audits of the basic consolidated financial statements and, in
our opinion, fairly states, in all material respects, the
financial data required to be set forth therein in relation to
the basic consolidated financial statements taken as a whole.

Melville, New York
January 3, 1996

SCHEDULE II

GREENSTONE ROBERTS ADVERTISING, INC. AND SUBSIDIARY
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED OCTOBER 31, 1995, 1994 AND 1993

<TABLE>

<CAPTION>
Balance at Charged to
beginning costs and Balance at
of year expenses Deductions end of year

Description
Allowance for Bad Debts-
Fiscal year ended-
<S> <C> <C> <C> <C>
October 31, 1993 $ 89,000 $463,682 $216,350 $336,332

October 31, 1994 $336,332 $129,057 $137,524 $327,865

October 31, 1995 $327,865 $ 51,907 $ 2,049 $377,723
</TABLE>

This schedule should be read in conjunction with the accompanying
consolidated financial statements and notes thereto.
EXHIBIT INDEX

EXHIBIT 22
SUBSIDIARIES OF THE REGISTRANT
Greenstone Roberts Advertising Florida, Inc.
(A New York Corporation)

EXHIBIT 10.7
Employment agreement between the Registrant and Gary Roberts
dated January 1, 1996 (Attached)

Exhibit 10.7

AGREEMENT, made as of January 1, 1996, by and between
GREENSTONE ROBERTS ADVERTISING, INC., a New York corporation (the
"Corporation"), and GARY C. ROBERTS, an individual residing at 22
School House Lane, Roslyn, New York 11577 (the "Executive")

W I T N E S S E T H :

WHEREAS, the Corporation desires to employ the
Executive, and the Executive is agreeable to accepting such
employment, under the terms of this Agreement;

NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, the parties agree to as
follows:

1. The Corporation employs the Executive, and the
Executive agrees to serve the Corporation, for a period of two
(2) years commencing on January 1, 1996 and ending at 12:00
midnight on the second anniversary thereof (the "First
Termination Date"), and from year to year thereafter unless the
period of employment hereunder shall be terminated by either
party giving at least six (6) months' prior written notice of
termination to the other party specifying the date of
termination. Each of the initial term of this Agreement and the
renewal periods thereof is referred to herein as a "Period of
Employment." Such termination date shall be either the First
Termination Date or an anniversary date of the First Termination
Date and termination shall be effective on the date specified in
such notice.

2. During the period of employment hereunder, the
Executive shall be employed by the Corporation as the President
of the Corporation, and, except as hereinafter provided, shall
devote his full business time and efforts to the business and
affairs of the Corporation, use his best efforts to promote the
business of the Corporation, hold the offices in the Corporation
to which from time to time he may be elected or appointed, and
perform such executive duties as shall be assigned to him by the
Chairman of the Board and/or the Board of Directors of the
Corporation, provided they are at least of the same degree of
responsibility as the duties being performed by the Executive
contemporaneously with the execution of this Agreement. In
connection with the performance of his duties hereunder, the
Executive from time to time may be required to travel both within
and outside of the United States of America. The Executive shall
be reimbursed for all travel and other expenses incidental to the
performance of services hereunder in accordance with the usual
practices of the Corporation. The Executive shall be entitled to
vacations in accordance with the Corporation's existing vacation
policy and the Corporation shall provide the Executive with
reasonable perquisites suitable to the office in the Corporation
which he holds. The Corporation agrees that, consistent with the
foregoing, the Executive may devote such time and attention as is
reasonably necessary to his personal and financial affairs.

3. (a) The Corporation shall compensate the Executive
for the services to be rendered by him hereunder, including all
services to be rendered as an officer or director of the
Corporation, by paying the Executive a salary at the rate of not
less than Three Hundred Thousand ($300,000.00) Dollars. Such
salary shall be payable in accordance with the usual salary
payment practices of the Corporation or as otherwise determined
by the Board of Directors.

For each fiscal year ending October 31 in which the
Executive is employed, the Corporation shall establish a five
(5%) percent pre-tax earnings bonus pool, the dollar amount of
which shall be determined by the Corporation's auditors which
shall be binding upon the Corporation and the Executive. As
additional incentive compensation, the Executive shall be
entitled to receive forty (40%) percent of this pool. If the
Executive's employment shall terminate on a date other than
October 31, then the Executive's share of the bonus pool shall be
pro-rated for that portion of the year the Executive has rendered
service.

The Board of Directors of the Corporation annually
shall review the services rendered by the Executive and, in its
sole discretion, may award the Executive bonus compensation for
the services rendered during the year under review. The Board of
Directors of the Corporation also shall review the salary of the
Executive at least annually. Nothing herein contained shall
prevent the Board of Directors of the Corporation from
prospectively increasing the salary or other compensation of the
Executive during the period of employment hereunder.

(b) In the event that the Executive is terminated by
the Corporation (a "Cessation of Employment") otherwise than for
"cause" (as hereinafter in Paragraph 6 defined):

(i) The Corporation shall within five (5) days of
the Cessation of Employment pay to the Executive in one lump sum
as a special severance and termination payment an amount equal to
the annual salary then being paid to the Executive pursuant to
the provisions of Paragraph 3(a); and

(ii) For the entire remaining portion of the then
current Period of Employment, the Corporation shall continue to
pay to the Executive the salary then being paid by the
Corporation to the Executive pursuant to the provisions of
Paragraph 3(a) prior to the date of the Cessation of Employment;

(iii) For the entire remaining portion of the then
current Period of Employment, the Executive shall continue to be
eligible to, and shall participate in, all employee benefit
programs of the Corporation in which the Executive participated
prior to the date of the Cessation of Employment, including,
without limitation, all savings, life, accident, medical and
dental insurance plans and programs; and the Executive shall be
entitled to make whatever elections may be available to him with
respect to his interests in savings and comparable plans.

4. In the event of the Executive's death during the
term hereof, this agreement shall terminate on the date of death
of the Executive.

5. While employed hereunder, the Executive shall not
engage in or carry on, directly or indirectly, either for himself
or as a member of a partnership or as a stockholder, investor,
lender, officer or director of a corporation (other than the
Corporation), or as an employee or agent of, or consultant to,
any person, partnership or corporation (other than the
Corporation), or in any capacity on behalf of any trust or other
organization or entity, any business in competition with (as
defined in Paragraph 6) any business then carried on by the
Corporation as long as any like business is carried on by the
Corporation or by any person, corporation, partnership, trust or
other organization or entity deriving title to the good will of
such business, directly or indirectly, from the Corporation;
provided, however, that nothing herein contained shall prevent
the Executive from purchasing securities of any publicly-owned
company, the securities of which are listed on a national
securities exchange or registered pursuant to Section 12(g) of
the Securities Exchange Act of 1934, as amended, but the total
holding of any such security so listed or registered shall be
limited to one percent (1%) of the amount of any such security
outstanding. The Executive may make investments, without
restriction on amount, in non-competitive private businesses.

6. To induce the Corporation to execute and deliver
this Agreement, and to protect the trade secrets of the business
of the Corporation, the Executive hereby covenants and agrees
that if the Executive shall terminate his employment hereunder in
breach of this Agreement, or if his employment is terminated by
the Corporation for cause (as hereinafter defined), then for a
period of twelve (12) months from the effective date of
termination of the period of employment hereunder, the Executive
will not engage in or carry on, directly or indirectly, either
for himself or as a member of a partnership or as a stockholder,
investor, lender, officer or director of a corporation, or as an
employee or agent of, or consultant to, any person, partnership
or corporation, or in any capacity on behalf of any trust or
other organization or entity, any business with or for any person
or entity which at any time during the twenty-four (24) months
preceding the date of termination of this Agreement was a client
of Corporation in completion with any business then carried on by
the Corporation; provided, however, that nothing herein contained
shall prevent the Executive from purchasing securities of any
publicly-owned company, the securities of which are listed on a
national securities exchange or are registered pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended,
but the total holding of any such securities so listed or
registered shall be limited to one percent (1%) of the amount of
any such security outstanding. Nothing contained herein shall
prevent the Executive from purchasing or otherwise beneficially
owning, without restriction on amount, any securities issued by
the Corporation. The term "in competition with" as used in this
Agreement shall mean a business which is conducted anywhere
within the United States or in other areas in the world where the
Corporation then carries on business and which is substantially
similar in whole or in part to the business then conducted by the
Corporation.

For the purposes of this Paragraph 6, the term "for
cause" shall mean, and be limited exclusively to, the following
actions by the Executive: actual (as distinguished from
statutory) fraud; misappropriation of funds or property of the
Corporation for his own use; embezzlement of the Corporation's
property; or a material and intentional breach by Executive of
the provisions to be performed by him of Paragraph 2, 7 or 9 of
this Agreement. A mere allegation by the Corporation shall not
be sufficient; the burden of proving that a termination is "for
cause" shall be on the Corporation. It is specifically agreed
that "cause" shall not include any act of commission or omission
by the Executive in the exercise of Executive's business judgment
as a senior executive of the Corporation or a member of the Board
of Directors of the Corporation.

7. The Executive agrees that any and all systems,
work-in-progress, inventions, discoveries, improvements,
processes, compounds, formulae, patents, copyrights and
trademarks, made, discovered or developed by him, solely or
jointly with others, or otherwise, during the period of his
employment by the Corporation, and which may be useful in or
relate to any business of the Corporation, shall be fully
disclosed by the Executive to the Board of Directors of the
Corporation, and shall be the sole and absolute property of the
Corporation, and the Corporation will be the sole and absolute
owner thereof. The Executive agrees that at all times, both
during his employment and after the termination of his
employment, he will keep all of the same secret from everyone
except the Corporation and will disclose the same to no one
except as required for the business of the Corporation or unless
otherwise authorized in writing by the Board of Directors or the
Chairman of the Board of Directors of the Corporation, unless
such information shall have become public knowledge or shall have
become known generally to competitors through sources other than
the Executive.

8. The Executive agrees, at the request of the
Corporation, to make application in due form for United States
Letters Patent and foreign Letters Patent on any of said systems,
inventions, discoveries, improvements, processes, compounds and
formulae, and to assign to the Corporation all of his right,
title and interest in and to said systems, inventions,
discoveries, improvements, processes, compounds, formulae and
patent applications therefore or any patents thereon, and to
execute at any and all times any and all instruments, and to do
any and all acts necessary, or which the Corporation may deem
desirable, in connection with such application for Letters
Patent, to establish and perfect in the Corporation the entire
right, title and interest in and to said systems, inventions,
discoveries, improvements, processes, compounds, formulae and
patent applications therefor or patents thereon or in the conduct
of any proceedings or litigation in regard thereto. It is
understood and agreed that all costs and expenses, including, but
not limited to, reasonable attorneys' fees, incurred at the
request of the Corporation in connection with any action taken by
the Executive pursuant to this Paragraph 8, shall be borne by the
Corporation.

9. The Executive agrees that, during or after the
termination of this Agreement, he shall not divulge, furnish or
make accessible to any person, corporation, partnership, trust or
other organization or entity, any information, trade secrets,
technical data or know-how relating to the business, business
practices, methods, products, processes, equipment or any
confidential or secret aspect of the business of the Corporation
without the prior written consent of the Corporation, unless such
information shall have become public knowledge or shall have
become known generally to competitors of the Corporation through
sources other than the Executive.

10. The Executive shall be entitled to participate in
the life insurance, dental, 401(k) and major medical group plans
of the Corporation, and in each other employee benefit plan that
the Corporation has or may establish and maintain for the benefit
of the employees of the Corporation.

11. The Executive agrees that the Corporation may
procure life insurance on the life of the Executive, in such
amount as the Corporation may deem appropriate, with the
Corporation named as the sole beneficiary under such policy or
policies. The Executive agrees that upon request from the
Corporation, he will submit to a physical examination and will
execute such applications and other documents as may be required
for the procurement of such insurance.

12. The Executive acknowledges that he has been
employed for his unique talents and that his leaving the employ
of the Corporation would seriously hamper the business of the
Corporation.

13. This Agreement sets forth the entire agreement and
understanding between the parties and merges and supersedes all
prior discussions, agreements and understandings of every kind
and nature between them concerning the subject matter hereof. No
variation hereof shall be deemed valid unless in writing and
signed by the party to be bound thereby and no discharge of the
terms hereof shall be deemed valid unless by full performance by
the parties or by a writing signed by both parties. No waiver by
a party of any breach by the other party of any provision or
condition of this Agreement by him or its to be performed shall
be deemed a waiver of the breach of a similar or dissimilar
provision or condition at the same time or any prior or
subsequent time or of the provision or condition itself.

14. All notices relating to this Agreement shall be in
writing and shall be deemed to have been given at the time when
delivered personally, against appropriate receipt, or when mailed
in any general or branch office of the United States Postal
Service, by registered or certified mail, postage prepaid, return
receipt requested, addressed to the address of the other party
hereinbefore set forth, or to such changed address as the other
party may fix by notice; provided, however, that any notice of
change of address shall be effective only upon receipt.

15. This Agreement shall inure to the benefit of and
be binding upon the Corporation, it successors and assigns,
including, without limitation, any corporation which may acquire
all or substantially all of the Corporation's assets and business
or with or into which the Corporation may be consolidated or
merged, and the Executive, his heirs, executors, administrators
and legal representatives, provided that the obligations of the
Executive hereunder may not be delegated.

16. If any provision of this Agreement or the
application of any provision to this Agreement is declared to be
illegal, invalid or otherwise unenforceable by a court of
competent jurisdiction, the remainder of this Agreement shall not
be affected except to the extent necessary to delete such
illegal, invalid or unenforceable provision, unless such
declaration shall substantially impair the benefit of the
remaining portions of this Agreement.

17. This Agreement shall be governed by the laws of
the State of New York governing contracts made to be performed in
such State without giving effect to principles of conflicts of
law.

18. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and
all of which together shall be deemed to be the same Agreement.

IN WITNESS WHEREOF, each of the parties hereto has
executed this Agreement as of the date first set forth above.

GREENSTONE ROBERTS
ADVERTISING, INC.

By:
Name: RONALD GREENSTONE GARY C. ROBERTS
Title: Chairman of the Board