OAKHURST CO INC, S-1, 1996-01-12

OAKHURST CO INC
S-1, 1996-01-12
MOTOR VEHICLE SUPPLIES & NEW PARTS

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As filed with the Securities and Exchange Commission on January 12, 1996

Registration No. 33-_____
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

OAKHURST COMPANY, INC.
(formerly Oakhurst Capital, Inc.)
(Exact name of registrant as specified in its charter)

Delaware 5013 25-1655321
(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction Industrial Identification No.)
of Incorporation or Classification Code
Organization) Number)

1001 Santerre Drive, Grand Prairie, Texas (214) 660-4499
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

Mark Auerbach
Chairman of the Board of Directors and Chief Executive Officer
Oakhurst Company, Inc.
1001 Santerre Drive
Grand Prairie, Texas
(214) 660-4499
(Name, address, including zip code, and
telephone number, including area code, of agent for service)

with copies to:
Roger M. Barzun Roger D. Feldman
P.O. Box 767 Bingham, Dana & Gould
Concord, MA 01742 150 Federal Street
(508) 287-4275 Boston, MA 02110
(617) 951-8000

Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement is declared effective.
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. |X|

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Title of Amount to be Proposed Maximum Proposed Maximum Amount of
Securities to Registered Offering Price Aggregate Offering Registration Fee
be Registered Per Share* Price*

<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Common Stock, 987,451 shares $1.50 $1,481,176.50 $511.00
$.01 par value
per share
- ------------------------------------------------------------------------------------------------------
</TABLE>

* Estimated solely for the purpose of determining the registration fee.
Calculated in accordance with Rule 457(c) under the Securities Act of 1933
based on the average of the high and low sale prices reported in the
consolidated trading system of the Nasdaq Small-Cap Market on January 9,
1996.

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.

<PAGE>

Oakhurst Company, Inc.

Cross Reference Sheet between Items in Part I of Form S-1 and the Prospectus
pursuant to Item 501(b) of Regulation S-K

Form S-1
Item Number and Caption Caption in Prospectus
----------------------- ---------------------
<S> <C> <C>

1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus.................. Outside Front Cover Page of Prospectus

2. Inside Front and Outside Back Cover Pages of
Prospectus............................................. Inside Front and Outside Back Cover Pages
of Prospectus; Available Information

3. Summary Information; Risk Factors; and Ratio of
Earnings to Fixed Charges.............................. Prospectus Summary; Risk Factors; Not Applicable

4. Use of Proceeds........................................ Prospectus Summary; Use of Proceeds

5. Determination of Offering Price........................ Outside Front Cover Page of Prospectus

6. Dilution............................................... Not Applicable

7. Selling Security Holders............................... Principal Stockholders; Selling Stockholders

8. Plan of Distribution................................... Outside Front and Inside Front Cover Page of
Prospectus; Plan of Distribution

9. Description of Securities to be Registered............. Outside Front Cover Page of Prospectus; Prospectus
Summary; Dividend Policy; Description of Capital Stock;
Capitalization; Price Range of Common Stock

10. Interests of Named Experts and Counsel................. Legal Matters; Experts

11. Information with Respect to Registrant................. Outside Front and Inside Front Cover Pages of Prospectus;
Prospectus Summary; Risk Factors; The Company; Dividend
Policy; Capitalization; Selected Financial Data; Management's
Discussion and Analysis of Financial Condition and Results of
Operations; Business; Management; Certain Transactions; Principal
Stockholders; Selling Stockholders; Description of Capital Stock;
Consolidated Financial Statements

12. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities......................... Not Applicable

</TABLE>

<PAGE>

Subject to Completion, Dated January 12, 1996

Oakhurst Company, Inc.
PROSPECTUS

987,451 Shares
Common Stock, $.01 par value
--------------------------

This Prospectus ("Prospectus") of Oakhurst Company, Inc. (formerly
Oakhurst Capital, Inc.), a Delaware corporation (the "Company" or "Oakhurst"),
relates to up to 987,451 shares (the "Shares") of the Company's common stock,
$.01 par value per share (the "Common Stock"), being sold by certain
stockholders of the Company, including certain directors and executive officers
of the Company (the "Selling Stockholders"), for their respective accounts. See
"Description of Capital Stock," "Principal Stockholders" and "Selling
Stockholders." The Company will not receive any proceeds from the sale of the
Shares by the Selling Shareholders.

The Common Stock of the Company is traded on the Nasdaq Small-Cap
Market under the symbol OAKC. On January 9, 1996 the last reported sale
price of the Common Stock on the Nasdaq Small-Cap Market was $1.50 per
share. See "Price Range of Common Stock."

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Price to Public Underwriting Proceeds to Selling
Discounts and Stockholders
Commissions
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share (1) (1)(2) (1)(2)
- --------------------------------------------------------------------------------------
Total (1) (1)(2) (1)(2)
- --------------------------------------------------------------------------------------
</TABLE>

(1) The sale or distribution of the Shares may be effected directly to
purchasers by the Selling Stockholders as principals or through one or more
underwriters, brokers, dealers or agents from time to time in one or more
transactions (which may involve crosses or block transactions) or (i) on any
exchange or in the over-the-counter market, (ii) in transactions otherwise than
in the over-the-counter market or (iii) through the writing of options (whether
such options are listed on an options exchange or otherwise) on, or settlement
of short sales of, the Shares. Any of such transactions may be effected at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, at varying prices determined at the time of sale or at
negotiated or fixed prices, in each case as determined by the Selling
Stockholder or by agreement between the Selling Stockholder and underwriters,
brokers, dealers or agents, or purchasers. If the Selling Stockholders effect
such transactions by selling Shares to or through underwriters, brokers, dealers
or agents, such underwriters, brokers, dealers or agents may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholders or commissions from purchasers of Securities for whom they
may act as agent (which discounts, concessions or commissions as to particular
underwriters, brokers, dealers or agents may be in excess of those customary in
the types of transactions involved). The Selling Stockholders and any brokers,
dealers or agents that participate in the distribution of the Shares may be
deemed to be underwriters, and any profit on the sale of Shares by them and any
discounts, concessions or commissions received by any such underwriters,
brokers, dealers or agents may be deemed to be underwriting discounts and
commissions under the Securities Act.

Under the securities laws of certain states, the Shares may be sold in
such states only through registered or licensed brokers or dealers. In addition,
in certain states the Shares may not be sold unless the Shares have been
registered or qualified for sale in such state or an exemption from registration
or qualification is available and is complied with.

The Company will pay all of the expenses incident to the registration,
offering and sale of the Shares to the public hereunder other than commissions,
fees and discounts of underwriters, brokers, dealers and agents. The Company has
agreed to indemnify the Selling Stockholders and any underwriters against
certain liabilities, including liabilities under the Securities Act. The Company
will not receive any of the proceeds from the sale of any of the Shares by the
Selling Stockholders.

All of the 266,667 shares of Common Stock being sold by Anthony N. Puma
are subject to restrictions on transfer and sale for the period from October 20,
1994 to October 19, 1996 and 133,334 of such shares are subject to restrictions
on transfer and sale until October 19, 1997, all pursuant to a Stock Agreement,
dated as of October 20, 1994, between the Company and Anthony N. Puma. See
"Selling Stockholders" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources."

Certain of the underwriters, dealers, brokers or agents may have other
business relationships with the Company and its affiliates in the ordinary
course.

See "Plan of Distribution", "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources" and "Selling Stockholders."

(2) The Company has agreed to prepare and file this Prospectus and the
related Registration Statement and supplements and amendments thereto required
by the Securities Act with the Securities and Exchange Commission, to register
and qualify the Common Stock if required under applicable Blue Sky laws, and to
deliver copies of the Prospectus to the Selling Stockholders. The expenses
incurred in connection with the same, estimated at $78,511, will be borne by
the Company. The Company will not be responsible for any discounts, concessions,
commissions or other compensation due to any broker or dealer in connection with
the sale of any of the shares offered hereby, which expenses will be borne by
the Selling Stockholder.

For a Discussion of Certain Factors that should be Considered by Prospective
Investors See "Risk Factors."

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

<PAGE>

Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

<PAGE>

AVAILABLE INFORMATION

The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements, information statements and other
information with the Securities and Exchange Commission (the "Commission"), 450
Fifth Street, N.W., Washington, D.C. 20549. Such reports, proxy statements,
information statements and other information filed by the Company with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
Seven World Trade Center, 13th Floor, New York, New York 10048 and at Northwest
Atrium Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of such material can also be obtained from the Public Reference Section,
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 upon payment of prescribed rates. In addition, the Company's Common Stock
is listed on the Nasdaq Small-Cap Market, and reports, proxy statements,
information statements and other information concerning the Company can be
inspected at the offices of the National Association of Securities Dealers, Inc.
at 1735 K Street, N.W., Washington, D.C. 20006.

The Company has filed with the Commission a Registration Statement on Form
S-1 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. Statements made
in this Prospectus as to the contents of any contract, agreement or other
document referred to are not necessarily complete. With respect to each such
contract, agreement or other document filed as an exhibit to the Registration
Statement, reference is made to such exhibit for a more complete description of
the matters involved, and each such statement shall be deemed qualified in its
entirety by such reference. For further information with respect to the Company
and the Common Stock offered hereby, reference is made to the Registration
Statement, including the exhibits and schedules thereto. The Registration
Statement can be inspected without charge at the Commission's principal office
at 450 Fifth Street, N.W., Washington, D.C. 20006, and copies may be obtained
therefrom upon payment of the fees prescribed by the Commission.

Upon request, the Company will provide without charge to each person to
whom a copy of this Prospectus has been delivered a copy of any information that
was incorporated by reference in the Prospectus (other than exhibits to
documents, unless such exhibits are specifically incorporated by reference into
the information incorporated by reference in the Prospectus). The Company will
also provide upon specific request, without charge to each person to whom a copy
of this Prospectus has been delivered, a copy of any or all documents filed from
time to time by the Company with the Commission pursuant to the Exchange Act.
Requests for such copies should be directed to Karen Stempinski, Vice President
and Treasurer, Oakhurst Company, Inc., 1001 Santerre Drive, Grand Prairie, Texas
75050, (214) 660-4448.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements and with quarterly reports for the first
three fiscal quarters of each year containing certain unaudited interim
financial information.

<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and the consolidated financial statements (including notes thereto)
appearing elsewhere in this Prospectus.

The Company

Oakhurst Company, Inc., formerly known as Oakhurst Capital, Inc. and prior
to that as Hallwood Holdings Incorporated ("Oakhurst" or the "Company"), is a
holding company which was formed as a result of a merger transaction in July
1991, in which Steel City Products, Inc. ("SCPI") became a majority-owned
subsidiary of Oakhurst. In accordance with the merger, Oakhurst owns 10% of the
outstanding common stock of SCPI and all of the SCPI Series A Preferred Stock,
with the result that the aggregate fair market value of SCPI's common stock and
Series A Preferred Stock owned by Oakhurst is equal to approximately 90% of the
aggregate fair market value of all the issued and outstanding capital stock of
SCPI, and represents 90% of the voting stock of SCPI.

Under the trade name "Steel City Products," SCPI is engaged in the
distribution of automotive parts and accessories to independent retailers from a
facility in Pittsburgh, Pennsylvania. This business has been owned by the
Company or its predecessors since 1969.

In January 1994, Oakhurst acquired all the outstanding capital stock of
H&H Distributors, Inc., d/b/a Harry Survis Auto Center ("H&H"), a
Pittsburgh-based company involved in the distribution and installation of
automotive accessories, including stereos, alarms and cellular phones.

In August 1994, Oakhurst acquired all the outstanding capital stock of
Dowling's Fleet Service Co., Inc. ("Dowling's"), a distributor of automotive
radiators based in Mt. Vernon, New York that operates six facilities in New
York, Connecticut and New Jersey.

In October 1994, Oakhurst acquired all the outstanding capital stock of
Puma Products, Inc. ("Puma"), a distributor of accessories to the van and light
truck conversion industry, based in Grand Prairie, Texas.

The Company was incorporated in Delaware in 1991. Its principal executive
offices are located at 1001 Santerre Drive, Grand Prairie, Texas 75050, and its
telephone number is (214) 660-4499.

In March 1995, the Company formed a wholly-owned subsidiary, Oakhurst
Management Corporation, to coordinate the provision of corporate administrative
services to the Company and its subsidiaries. Certain existing employees and
officers of the Company are now paid and are provided benefits by Oakhurst
Management Corporation.

In August 1995, Oakhurst Holdings, Inc. was formed to hold and manage
intangible investments, including without limitation, investments in stocks,
bonds, notes and other debt obligations, patents, patent applications,
trademarks, trade names and similar intangible assets on behalf of SCPI, H&H,
Dowling's and Puma. As of the date of this Prospectus, all of the issued and
outstanding capital stock of Oakhurst Holdings, Inc. was owned of record by
SCPI, Dowling's, H&H and Puma which stock was issued to each in consideration of
the contribution of certain intangible assets and investments by each to
Oakhurst Holdings, Inc.

The Offering

<TABLE>
<S> <C>
Common Stock offered by the Selling Stockholders 987,451 shares

Common Stock outstanding at December 1, 1995...... 3,195,235 shares(1)

<PAGE>

Use of Proceeds by the Company................... The Company will not receive any proceeds
from the sale of the shares of the Common
Stock offered hereby by the Selling
Stockholders

Nasdaq Small-Cap Market Symbol.................. OAKC

</TABLE>

(1) Excludes as of December 31, 1995, (i) 561,074 shares of Common Stock
issuable upon exercise of stock options outstanding at exercise prices per share
ranging from $2.75 to $3.875, (ii) 16,348 shares of Common Stock reserved for
issuance under the 1994 Omnibus Stock Option Plan and 28,000 shares of Common
Stock reserved for issuance under the 1994 Non-Employee Director Stock Option
Plan, and (iii) 120,346 shares of Common Stock issuable upon conversion of
convertible debt issued to certain executives of Dowling's in connection with
the Company's acquisition of Dowling's. See "Management-Stock Option Plans" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources."

<PAGE>

OAKHURST COMPANY, INC.
SUMMARY CONSOLIDATED AND UNAUDITED
PRO FORMA FINANCIAL INFORMATION
(In thousands, except per share data)

Six Twenty-six Fiscal Fiscal Fiscal Fiscal
Months Weeks Year Year Year Year
Ended Ended Ended Ended Ended Ended
August August Fiscal Year Ended February February February March
31, 27, February 28, 1995 26, 27, 29, 2,
1995 1994(2) Actual Pro Forma(1) 1994 1993 1992 1991
---- ---- --------------------- ---- ---- ---- ----
(Unaudited)

Operating results:
Sales $26,542 $19,760 $43,142 $53,219 $32,386 $33,584 $29,893 $29,255
======= ======= ======= ======= ======= ======= ======= =======
Income (loss) from
continuing
operations $ (664) $ 697 $ 819 $ 1,157 $ 439 $ 742 $ 99 $ (38)

Income (loss) on
disposal of
discontinued
operations - 66 90 - - (44) 130 (3,362)
------ ------- ------ ------ ------ - ------ ------ -------

Net income (loss) $ (664) $ 763 $ 909 $1,157 $ 439 $ 698 $ 229 $(3,400)
====== ======= ====== ====== ====== ====== ====== =======

Per share amounts:
Income (loss) from
continuing
operations $(0.21) $ 0.24 $ 0.27 $ 0.36 $ 0.16 $ 0.27 $ 0.03 $(0.01)

Income (loss) from
discontinued
operations - 0.02 0.03 - - (0.02) 0.05 (1.31)
------ ------- ------ ------ ------ ------ ------ ------

Net income (loss) $(0.21) $ 0.26 $ 0.30 $ 0.36 $ 0.16 $ 0.25 $ 0.08 $(1.32)
====== ======= ====== ======== ====== ====== ====== ======

</TABLE>

August 31, February 28,
1995 1995
---------- -------------
Balance sheet data:
Total assets $31,802 $33,301
Long-term obligations 2,642 5,627
Creditor notes 986 1,323
Stockholders' equity 14,206 14,835

(1) Gives effect to (i) the acquisition of Dowling's in August 1994 and (ii)
the acquisition of Puma in October 1994. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources."

(2) The results of operations for the twenty-six weeks ended August 27, 1994 do
not include the results of Puma prior to its acquisition in October 1994 and
includes the results of operations of Dowling's from the date of acquisition in
August 1994 to August 27, 1994.

<PAGE>

RISK FACTORS

An investment in the shares of Common Stock offered hereby involves a high
degree of risk. Prospective investors should consider carefully the following
risk factors in addition to the other information set forth in this Prospectus
before purchasing the shares of Common Stock offered hereby.

Competition. The automotive parts and accessories distribution industry is
highly competitive, with many similar companies operating in the Company's
various market niches.

Steel City Products, Inc. Several distributors compete with SCPI, and many
of SCPI's suppliers also offer their products directly to SCPI's
customers. SCPI competes on the basis of breadth of merchandise offered,
price, levels of service, order fill rates and order turn-around times,
supported by the product expertise of its field and headquarters
personnel. There can be no assurance that SCPI will continue to compete
effectively or maintain its current market position.

H&H Distributors, Inc. In its automotive accessories business, H&H
competes with other distributors of such products and with manufacturers
that offer their products directly to H&H's customers. There can be no
assurance that H&H will be able to continue to compete effectively or
retain its market position. In its cellular phone business, where H&H acts
as an agent for Bell Atlantic Mobile Systems ("BAMS"), H&H competes with
other agents for BAMS, with direct sales by BAMS salespeople and BAMS
retail sales, and with sales by AT&T Wireless Communications (formerly
"Cellular One") and its agents. The significant growth in the cellular
phone industry has resulted in a proliferation of retailers attempting to
satisfy customers for these services and there can be no assurance that
H&H will be able to maintain its competitive position. In addition,
although H&H has entered into a five year agency agreement with BAMS,
there can be no assurance that such agency agreement will not be
terminated. The loss of the BAMS agency agreement would have a material
adverse effect on H&H.

Dowling's Fleet Service Co., Inc. Many distributors compete with Dowling's
in its business of supplying automotive radiators to radiator repair
shops, although most competitors are smaller than Dowling's, and many
operate as "multi-tier" resources (supplying dealers, jobbers and retail
customers, as well as radiator repair shops), a practice which Dowling's
avoids so as not to compete with its own customers. Dowling's competes on
the basis of wide product selection, quality radiator products (featuring
"Modine," a high quality after-market radiator), price and service
(including twice-daily deliveries to customers, using Dowling's own
vehicle fleet) and the economies of scale it is able to achieve in buying
and in operations. There can be no assurance that Dowling's will continue
to compete effectively or that competitors will not attract Dowling's
customers or open facilities within Dowling's current market area. In
fact, several competitors have opened new facilities in recent years, and
in the first quarter of fiscal 1996, Dowling's encountered several new
competitors in one of its markets. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Significant
Trends".

Puma Products, Inc. In its business supplying vehicle converters and other
customers with accessories for the van and light truck markets, Puma
competes with a large number of manufacturers and distributors. Puma
generally competes on the basis of innovative, high-quality products, many
of which are manufactured to its own specifications, thus providing Puma
with the ability to supply a range of products to converters seeking a
single resource. There can be no assurance that Puma will continue to
compete effectively or maintain its current market position.

Dependence on Key Personnel. The Company is dependent upon a number of key
management personnel, at both the Company and subsidiary levels. The loss of the
services of one or more of these key individuals may have a material adverse
effect upon the Company or its subsidiaries. The Company's success will also
depend on its ability to attract and retain other highly qualified management
personnel. The Company faces strong competition for such personnel and there can
be no assurance that the Company will be able to attract or retain such
personnel. See "Management."

In addition, the Company and its subsidiaries are dependent on a large
number of employees. All warehouse and certain office employees of SCPI are
represented by Local 636 of the International Brotherhood of Teamsters.
Employees of the Company and its other subsidiaries are not represented by any
unions. In the past, neither the Company nor its subsidiaries has encountered
significant labor relations difficulties, but there can be no assurance that
this will continue to be the case. See "Business - Dowling's Fleet Service
Company, Inc. - Employees."

Product Liability. The marketing and sale of automobile products entails
an inherent risk of allegations of product defects or other product liability
claims and there can be no assurance that such allegations will not be asserted
against the Company and/or its subsidiaries. The Company and each of its
subsidiaries is covered by a limited amount of product liability insurance, and
although neither the Company nor, to the best of its knowledge, any of its
subsidiaries, has encountered significant product liabilities in the past, there
can be no assurance that the Company or its subsidiaries has, or will be able to
maintain, sufficient insurance or will have sufficient resources to satisfy any
liability resulting from any potential claims. Any successful products liability
claim made against the Company and/or its subsidiaries in excess of insurance
coverage could substantially reduce any stockholders' equity in the Company and
could have a material adverse effect on the Company and/or its subsidiaries.

Net Operating Tax Loss Carryforwards. The Company currently enjoys the
benefit of substantial Net Operating Tax Loss Carryforwards (the "Tax
Benefits"), which shelter most of the Company's income from federal income
taxes, and are expected by the Company to continue to do so for several years. A
change of control (as defined in the applicable Internal Revenue Service
regulations) in the ownership of Oakhurst or SCPI could result in the loss of
most of the Tax Benefits. While there can be no assurance that such a change of
control will not occur with regard to either Oakhurst or SCPI, management has
taken steps to help preclude such an event through limitations on the transfer
of shares (see "Description of Capital Stock - Delaware Law and Certain Charter
and By-Law Provisions"). Loss of the Tax Benefits could have a material adverse
effect on the Company's net income. The Company believes that the registration
of the shares offered by the Selling Stockholders pursuant to this registration
will not result in a change of control.

Effect of Certain Charter and By-Law Provisions. The Company's Certificate
of Incorporation contains provisions designed to limit the transferability of
shares of the Company's capital stock in order to preserve the Tax Benefits.
Such provisions may, in certain cases, have the effect of decreasing the
liquidity of shares of the Company's Common Stock and could limit the price that
certain investors might be willing to pay in the future for shares of the
Company's Common Stock and may also discourage acquisition bids for the Company
by limiting the number of shares that potential acquirors would be able to
purchase. Shares of Preferred Stock may be issued by the Company in the future
without stockholder approval and upon such terms as the Board of Directors may
determine. The rights of the holders of Common Stock will be subject to, and may
be adversely affected by, the rights of the holders of any Preferred Stock that
may be issued in the future. The issuance of Preferred Stock, while providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire, or of discouraging a third party from acquiring, a
majority of the outstanding stock of the Company. See "Description of Capital
Stock - Delaware Law and Certain Charter and By-Law Provisions."

Recent Acquisition of H&H Distributors, Inc., Dowling's Fleet Service Co.,
Inc. and Puma Products, Inc. The Company acquired H&H in January 1994; Dowling's
in August 1994; and Puma in October 1994. There can be no assurance that any or
all of these companies will be successfully integrated into the Company's
operation or that past financial results of any or all of these companies will
continue under Oakhurst's ownership. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations Liquidity and Capital
Resources," "Business - Acquisition of Operating Subsidiaries" and "Business
Legal Proceedings."

Sources of Supply. SCPI and H&H acquire merchandise from a number of
different suppliers, none of which accounts for more than 15% of their
respective revenues.

H&H's cellular phone business is dependent on the continuation of its
relationship with BAMS or the development of an alternative relationship with
AT&T Wireless Communications. The current five-year BAMS agency agreement was
entered into in 1993.

Approximately 60% of the radiators sold by Dowling's are acquired from a
single supplier, Modine Manufacturing Company ("Modine"), and while Dowling's
has had a business relationship with Modine for many years and believes that it
is one of Modine's largest customers, there can be no assurance that this
relationship will continue. However, the Company believes that other sources are
available should Modine for any reason be unable to satisfy Dowling's needs.

Approximately 68% of the products sold by Puma have in the past been
obtained from a single foreign source and there can be no assurance that such
products will remain available to Puma at favorable prices or that Puma will not
be adversely affected in the event that these products cease to be available. In
addition, changes in the currency exchange rate with regard to the foreign
source's country could result in changes in the prices Puma pays for such
products.

In addition, from time to time, market or seasonal conditions may affect
the availability of certain merchandise, which changes in availability may
individually or in the aggregate have a material adverse effect on the Company
or any one or more of its subsidiaries.

Customer Base. SCPI's customers are continually affected by changes in the
retail environment, including the recent competitive pressures facing regional
mass merchandisers and the growing influence of automotive specialty chains.
These changes have led to fluctuations in the level of business that SCPI enjoys
with individual customers. For example, in recent years, SCPI has lost some
significant customers principally due to the financial difficulties of those
customers, and has suffered reductions in business as certain customers have
closed stores in the face of competition or have reduced their automotive
merchandise selection. Furthermore, some customers have changed their buying
practices to acquire certain merchandise direct from manufacturers rather than
through distributors such as SCPI. In fiscal 1994, SCPI's three largest
customers (those individually representing more than 10% of SCPI's sales)
accounted for 49% of Oakhurst's sales; in fiscal 1995, such customers, numbering
two, accounted for 24% of Oakhurst's sales. In October, 1995 one of these large
customers, Jamesway, filed for bankruptcy protection and immediately ceased
buying from SCPI, and the other, Forest City, advised SCPI that it would change
its source of supply over the succeeding months. See "Management's Discussion &
Analysis of Financial Condition and Results of Operations - Significant Trends"
and "Business - Steel City Products, Inc. - Customer Base."

Continuing efforts to develop new revenue sources have enabled SCPI to
replace some of the lost business, but its profitability has been adversely
affected. There can be no assurance that SCPI will be able to continue to
replace the lost business or that it will not again be faced with customer
losses.

There can be no assurance that the Company's other operating subsidiaries
will not face customer losses.

Certain customers ("converters") of Puma Products are dependent on
supplies of new vehicles from the major automobile manufacturers. Such supplies
can be affected by industry demand for new vehicles. Since March 1995, many of
Puma Products' converter customers have received many fewer vehicles than in the
past, with the result that such customers have since March 1995 severely
curtailed their purchases of accessories from Puma, and Puma has encountered
increased competition and price pressure for such accessories.

Working capital. The Company and its subsidiaries require adequate levels
of inventory to support their various businesses. In the past, Oakhurst has
maintained adequate levels of working capital from operating cash flow and bank
lines of credit. While the Company believes that its current banking agreements
provide adequate working capital, there can be no assurance that this will
continue to be the case if operating cash flow is insufficient to meet seasonal
needs, to support sales growth or to finance capital expenditure requirements
and debt repayments. Much of the projected operating cash flow for the next few
years from the businesses acquired in 1994 will be required to repay bank debt,
seller loans and earn-outs. Furthermore, the limitations on a change of control
of the Company may inhibit the raising of capital through the sale of stock by
Oakhurst. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Financial Resources."

<PAGE>

The Company

Oakhurst Company, Inc., formerly known as Oakhurst Capital, Inc. and prior
to that as Hallwood Holdings Incorporated, ("Oakhurst" or "the Company") is a
holding company which was formed as a result of a merger transaction in July
1991, in which Steel City Products, Inc. ("SCPI") became a majority-owned
subsidiary of Oakhurst. In accordance with the merger, Oakhurst owns 10% of the
outstanding common stock of SCPI and all of the SCPI Series A Preferred Stock,
with the result that the aggregate fair market value of SCPI's common stock and
Series A Preferred Stock owned by Oakhurst is equal to approximately 90% of the
aggregate fair market value of all the issued and outstanding capital stock of
SCPI, and represents 90% of the voting stock of SCPI.

In October 1994, Oakhurst acquired all the outstanding capital stock of
Puma Products, Inc., a distributor of accessories to the van and light truck
conversation industry, based in Grand Prairie, Texas.

The Company conducts all of its operations through its subsidiaries and
has no significant assets other than the shares of, or inter-company advances
to, such subsidiaries.

The Company was incorporated in Delaware in 1991. Its principal executive
offices are located at 1001 Santerre Drive, Grand Prairie, Texas, and its
telephone number is (214) 660-4499.

In August 1995, Oakhurst Holdings, Inc. was formed to hold and manage
intangible investments, including without limitation investments in stocks,
bonds, notes and other debt obligations, patents, patent applications,
trademarks, trade names and similar intangible assets on behalf of SCPI, H&H,
Dowling's and Puma. As of the date of this Prospectus, all of the issued and
outstanding capital stock of Oakhurst Holdings, Inc. was owned of record by
SCPI, Dowling's, H&H and Puma which stock was issued to each in consideration of
the contribution of certain intangible assets and investments by each to
Oakhurst Holdings, Inc.

USE OF PROCEEDS

The Company will not receive any proceeds from the sale of shares of
Common Stock offered hereby by the Selling Stockholders.

DIVIDEND POLICY

The Company has not paid cash dividends since its inception. The Company
currently intends to retain all of its earnings, if any, for use in its business
and does not anticipate paying any cash dividends in the foreseeable future.

<PAGE>

PRICE RANGE OF COMMON STOCK

The Company's Common Stock is listed and traded on the Nasdaq Small-Cap
Market under the symbol OAKC.

The following table sets forth, for the period indicated, the range of the
high and low bid prices for the Company's Common Stock as reported by Nasdaq:

Fiscal Year Ended February 28, 1995 Fiscal Year Ended February 29, 1996
----------------------------------- -----------------------------------
Quarter High Low High Low
- ------- ---- --- ---- ---
<S> <C> <C> <C> <C>
First $3.75 $2.50 $3.75 $2.50

Second $4.75 $3.13 $2.625 $1.875

Third $4.94 $3.50 $2.25 $1.375

Fourth $3.88 $3.13
</TABLE>

The stock price ranges represent the high and low bid quotations on the
Nasdaq Small-Cap Market and reflect inter-dealer prices without retail mark-up,
mark-down, or commission and may not necessarily represent actual transactions.

At the close of business on February 28, 1995, there were 3,300 holders of
record of the Common Stock. On December 11, 1995, the closing sale price of the
Common Stock, as reported by the Nasdaq Small-Cap Market, was $1.375 per share.

<PAGE>

CAPITALIZATION

(Dollar amounts in thousands
except per share data)

The following table sets forth the capitalization of the Company at August
31, 1995. This information should be read in conjunction with the Company's
consolidated financial statements and notes thereto and with "Management's
Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources."

Long-term debt and creditor notes, excluding
current portion.................................... $ 3,323
---------
Stockholders' equity:
Preferred stock, par value $0.01 per share;
authorized 1,000,000 shares; none issued........ -
Common stock, par value $0.01 per share;
authorized 14,000,000 shares; issued
3,195,235(A) shares. ........................... 32
Additional paid-in capital........................ 46,515
Deficit (reorganized on August 26, 1989).......... (32,340)
Treasury stock, at cost, 207 common shares........ (1)
--------
Total stockholders' equity.......................... 14,206
---------
Total capitalization................................ $ 17,529
=========

(A) As of August 31, 1995, excludes (i) 561,074 shares of Common Stock issuable
upon exercise of stock options outstanding at exercise prices per share ranging
from $2.75 to $3.875, (ii) 16,348 shares of Common Stock reserved for issuance
under the 1994 Omnibus Stock Option Plan and 28,000 shares of Common Stock
reserved for issuance under the 1994 Non-Employee Director Stock Option Plan,
and (iii) 120,346 shares of Common Stock issuable upon conversion of convertible
debt issued to certain executives of Dowling's in connection with the Company's
acquisition of Dowling's. See "Management - Stock Option Plans" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources."

<PAGE>

SELECTED HISTORICAL CONSOLIDATED AND UNAUDITED PRO FORMA FINANCIAL DATA

The selected historical consolidated financial data set forth below as of
February 28, 1995 (actual), February 26, 1994 and for each of the three years in
the period ended February 28, 1995 (actual), are derived from the Company's
consolidated financial historical statements included elsewhere in this
Prospectus, which have been audited by Deloitte & Touche LLP, the Company's
independent auditors. The selected historical consolidated financial data set
forth below as of February 27, 1993, February 29, 1992 and March 2, 1991 and for
the years ended February 29, 1992 and March 2, 1991 have been derived from the
Company's audited consolidated financial statements which are not included
herein. The selected consolidated financial data set forth below as of and for
the six months ended August 31, 1995 and as of and for the twenty-six weeks
ended August 27, 1994 are derived from the Company's unaudited consolidated
financial statements which have been prepared on the same basis as the audited
consolidated financial statements and, in the opinion of management, contain all
adjustments, consisting of only normal recurring adjustments necessary for a
fair presentation of the results of operations for such periods. Operating
results for the six months ended August 31, 1995 are not necessarily indicative
of the results that may be expected for the year ending February 28, 1996. The
selected pro forma consolidated financial data set forth below are derived from
the Company's unaudited consolidated financial statements included elsewhere in
this Prospectus. The following table sets forth selected financial and other
data of the Company and its subsidiaries and should be read in conjunction with
the Company's consolidated financial statements and notes thereto and with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained elsewhere in this Prospectus.

OAKHURST COMPANY, INC. AND SUBSIDIARIES
(Dollar amounts in thousands except per share data)

Six Twenty-six Fiscal Fiscal Fiscal Fiscal
Months Weeks Year Year Year Year
Ended Ended Fiscal Year Ended Ended Ended Ended Ended
August August February 28, February February February March
31, 27, 1995 26, 27, 29, 2,
1995 1994(5) Pro Forma(1) Actual 1994 1993 1992(2) 1991
---- ---- --------------------- ---- ---- ------- ----
(Unaudited)

Operating
results:
Sales $26,542 $19,760 $53,219 $43,142 $32,386 $33,584 $29,893 $29,255
======= ======= ======= ======= ======= ======= ======= =======
Income (loss)
from continuing
operations $ (664) $ 697 $1,157 $ 819 $ 439 $ 742 $ 99 $ (38)

Income (loss)
from discontinued
operations(3) - 66 - 90 - (44) 130 (3,362)
------ ------ ------ ------ ------ ------ ------ ------

Net income (loss) $ (664) $ 763 $1,157 $ 909 $ 439 $ 698 $ 229 $(3,400)
====== ====== ====== ====== ======= ======= ======= =======

Per share amounts:

Income (loss) from
continuing
operations $(0.21) $ 0.24 $ 0.36 $ 0.27 $ 0.16 $ 0.27 $ 0.03 $ (0.01)

Income (loss) from
discontinued
operations - 0.02 - 0.03 - (0.02) 0.05 (1.31)
------ -------- ------ -------- ----- -------- ------- --------

Net income (loss) $(0.21) $ 0.26 $ 0.36 $ 0.30 $ 0.16 $ 0.25 $ 0.08 $ (1.32)
====== ======== ======== ======== ======== ======== ======== ========

Balance sheet
data:

Total assets $31,802 $28,045 $33,301 $18,767 $14,632 $14,508 $15,494
Long-term
obligations 2,642 2,889 5,627 85 143 305 266
Creditor notes
(3)(4) 986 1,323 1,323 1,653 1,883 1,904 -

Stockholders'
equity 14,206 14,571 14,835 11,344 5,670 4,862 5,035
Book value per
share of
Common Stock 4.45 5.49 4.65 4.39 2.20 1.88 1.95

</TABLE>

(1) Gives effect to (i) the acquisition of Dowling's in August 1994 and (ii)
the acquisition of Puma in October 1994. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources."

(2) Oakhurst was formed as a result of a merger transaction on July 5, 1991.
The merger resulted in a restructuring of SCPI such that it became a
majority-owned subsidiary of Oakhurst. This has been accounted for as a
corporate reorganization of entities under common control. See Note 1 to
the Consolidated Financial Statements.

(3) In September 1990, SCPI completed the sale of its Retail Division to RAC as
discussed in Note 8 to the Consolidated Financial Statements. The loss on
the sale was recorded in the fiscal year ended March 3, 1990. SCPI remained
contingently liable for most mortgage debt, and for many lease obligations
of the Retail Division following the sale. RAC went into bankruptcy in
March 1991. RAC's Reorganization Plan (the "RAC Plan") contained provision
for releases in favor of SCPI together with an injunction against further
actions by contingent creditors against SCPI. Accordingly, SCPI was
released from further liability except for payment of the Creditor Notes as
further described in Notes 6 and 8 of the Consolidated Financial
Statements.

(4) These amounts represent the discounted value of the Creditor Notes, which
were issued by SCPI pursuant to the RAC Plan. See Notes 6 and 8 to the
Consolidated Financial Statements.

(5) The results of operations for the twenty-six weeks ended August 27, 1994 do
not include the results of Puma prior to its acquisition in October 1994
and includes the results of operations of Dowling's from the date of
acquisition in August 1994 to August 27, 1994.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following is management's analysis of the significant factors that
have influenced the Company's financial position and results of operations
during the periods included in the accompanying consolidated financial
statements.

Liquidity and Capital Resources

Management believes that the corporate structure resulting from the merger
transaction, whereby SCPI became a special, limited purpose, majority-owned
subsidiary of Oakhurst, will facilitate capital formation by Oakhurst while
permitting Oakhurst and SCPI to file consolidated tax returns so that both may
utilize the Tax Benefits (including approximately $146 million of net operating
loss carryforwards) attributable to SCPI. SCPI is expected to concentrate on its
historical line of business, the distribution of automotive parts and
accessories to independent retailers while future growth and expansion
opportunities are expected to be pursued by Oakhurst or its other subsidiaries.
Through Oakhurst's ownership of SCPI, primarily in the form of preferred stock,
Oakhurst retains the value of SCPI, and receives substantially all of the
benefit of SCPI's operations through dividends on such preferred stock.
Oakhurst's ownership of SCPI facilitates the preservation and utilization of
SCPI's Tax Benefits.

Until 1994, Oakhurst's principal business, which is conducted by SCPI
under the trade name "Steel City Products," was the distribution of automotive
parts and accessories to independent retailers from a facility in Pittsburgh,
Pennsylvania.

In January 1994, Oakhurst acquired all the outstanding capital stock of
H&H, a Pittsburgh-based company that distributes and installs automotive
accessories, including car stereos, car alarms and cellular phones. The purchase
price of approximately $1.4 million consisted of approximately $1.2 million in
cash (funded by a loan from SCPI) and a note payable to the seller for the
balance, which was paid in July 1994. In addition, Oakhurst incurred acquisition
costs of approximately $50,000.

In August 1994, Oakhurst acquired all the outstanding capital stock of
Dowling's, a New York-headquartered distributor of automotive radiators and
related products. The purchase price of approximately $5.5 million consisted of
$4 million in cash, a note payable to the seller of $700,000 which bears
interest at prime and is due in two annual installments commencing with the
first anniversary of the closing date, earn-out payments which were estimated at
$300,000, convertible debt of $500,000 that was issued to certain executives of
Dowling's, which accrues interest at 6% and is convertible at the executives'
option to 120,346 shares of Oakhurst common stock on August 1, 1997, and
acquisition costs of approximately $260,000. See "Business - Legal Proceedings."

The cash portion of the purchase price of Dowling's was funded by Series A
Preferred stock dividends of $4.8 million from SCPI (funded by the Term Loan,
see below), by advances from SCPI and by advances under the Credit Agreement
(see below).

In October 1994, Oakhurst acquired all the outstanding capital stock of
Puma, a Texas-based distributor of after-market products to the light truck and
van conversion industry. The purchase price of approximately $4.5 million
consisted of $1.2 million in cash, a note payable to the seller of $600,000
which bears interest at prime plus 1%, and was originally due in two annual
installments commencing with the first anniversary of the closing date, a
120-day note payable to the seller of approximately $737,000 which bears
interest at prime plus 1%, earn-out payments currently estimated at $1,100,000
and the issuance of 266,667 shares of Oakhurst's common stock and acquisition
costs of approximately $170,000. The purchase agreement provides for bonus
earn-out payments to be made to the former shareholder over five years in the
event that earnings exceed historical levels, to a maximum payout of $500,000.
If such payment is ultimately made, the purchase price will be adjusted
accordingly.

During fiscal 1996 the payment date relating to the first $200,000
installment of the $600,000 note payment was deferred to fiscal 1997, and the
120-day note was amended to be paid in installments through February 1996.

The cash portion of the acquisition price of Puma was funded by available
cash and by borrowings under the Credit Agreement.

The capital stock of the various subsidiaries acquired in these
transactions is pledged as additional collateral under Oakhurst's Credit
Agreement.

The notes payable outstanding relating to the above acquisitions include a
two-year Dowling note payable of $700,000 that bears interest at prime and is
due in two annual installments beginning in August 1995, a two-year Puma note
payable of $600,000 that bears interest at prime plus 1% and, following
amendment, is due in installments between March 1996 and October 1996 and a
short-term Puma note payable with a balance at August 31, 1995 of approximately
$490,000 that bears interest at prime plus 1% and is due in installments through
February 1996.

The earn-out payments for the acquisitions of Dowling's and Puma are due
beginning in fiscal 1996, over two to three years for Dowling's and over three
to five years for Puma, and at August 31, 1995 were estimated at approximately
$1.4 million, the current portion of which was estimated at $270,000.

These acquisitions resulted from Oakhurst's program of diversification and
expansion, which was adopted in early 1994, with the intention of improving
Oakhurst's profit potential. H&H, Dowling's and Puma have been historically
profitable and, despite a loss by Dowling's and H&H and lower profits than in
the past at Puma in the first half of fiscal 1996 (see "Significant Trends"
below), are expected to be profitable in the future. Although the acquisitions
resulted in a significant use of available cash and in the issuance of long-term
and short-term debt, the earnings potential of these new subsidiaries is
expected to enhance Oakhurst's liquidity and financial position in the future,
and to be sufficient to satisfy the acquisition obligations, and the Company
believes such earnings will be sheltered from federal income taxes by the Tax
Benefits.

Further acquisitions may be limited by the Company's available cash, by
its borrowing ability and by limitations on the amount of stock which the
Company may issue without jeopardizing the Tax Benefits.

Term Loan and Line of Credit

In August 1994, SCPI obtained a four year term loan that was issued in
connection with Oakhurst's acquisition of Dowling's, in the amount of $2,560,000
(the "Term Loan"), that is secured by a mortgage on SCPI's real estate,
guaranteed by Oakhurst and its subsidiaries, and supported by a pledge of the
capital stock of Oakhurst's subsidiaries. The Term Loan provides for monthly
repayments beginning in September 1994 and bears interest at a fixed rate of
9.25%.

In August 1994, Oakhurst entered into a two year revolving credit
agreement (the "Credit Agreement") that, until its amendment, provided for
maximum borrowings of $3 million and carried an interest rate of prime plus 1%.
Borrowings may be limited by the borrowing base, as defined in the Credit
Agreement, which is calculated according to the level of Oakhurst's
subsidiaries' accounts receivable. At current and expected levels of accounts
receivable, any such limitation is not expected to reduce the borrowing base
below the maximum. The Credit Agreement permits Oakhurst to make advances from
time to time to each of its subsidiaries. At August 31, 1995, the amount
outstanding under the Credit Agreement was $2,800,000.

The Term Loan and the Credit Agreement are cross-collateralized, and
contain various financial covenants. At the end of the second quarter, August
31, 1995, SCPI and Oakhurst were in the process of finalizing replacement
covenants with the bank, to reflect the Puma acquisition that was completed in
the latter part of fiscal 1995, and received waivers in respect of those
covenants as to which the companies were not in compliance at the end of the
second quarter.

The Credit Agreement was amended during the third quarter of the current
fiscal year to provide for maximum borrowings of $4 million, subject to the
borrowing base, and to eliminate all of the financial covenants except for
certain amended subsidiary and consolidated net worth requirements. The Term
Loan was also amended to reflect such revised covenants. Borrowings under the
amended Credit Agreement bear interest at prime plus 1.5%, and are secured by
the accounts receivable, inventory and capital stock of Oakhurst's subsidiaries.

At the end of the third quarter of the current fiscal year, November 30,
1995, Oakhurst did not meet the consolidated net worth covenant, as amended,
and requested a modification of such covenant. The modification was granted by
the bank on January 3, 1996 in exchange for Oakhurst's and SCPI's agreement to
accelerate the maturity date of the Term Loan to July 31, 1996, and to increase
the interest rates on borrowings under the Credit Agreement and on the Term
Loan by 1% and 1.25%, respectively, effective February 28, 1996. Accordingly,
the Term Loan has been presented as a current liability until replacement
financing is finalized.

In December 1995, Oakhurst initiated negotiations with several lenders to
obtain replacement financing and on January 8, 1996 accepted a letter of intent
from an institutional lender which is expected to provide a significant increase
in the level of financing available to Oakhurst and its subsidiaries based upon
essentially similar collateral as provided under the existing bank financing.

Each of Oakhurst's subsidiaries encounters periodic fluctuations in its
working capital requirements, resulting principally from the need to increase
inventory to anticipate seasonal changes in demand, and also from changes in the
levels of accounts receivable and accounts payable. Management believes that the
Credit Agreement is currently adequate for the seasonal needs of its businesses
and that Oakhurst and SCPI will secure a commitment on and close a refinancing
before February 29, 1996 to replace the existing bank financing.

The Creditor Notes

The creditor notes that were issued in connection with the Retail
Acquisition Corp. bankruptcy (the "Creditor Notes") (see Note 8 to the
Consolidated Financial Statements) are payable in six equal annual installments
through July 1998, subject to a prepayment provision whereby if defined cash
flow exceeds $900,000, $1,000,000 and $1,100,000 in each of fiscal 1995, 1996
and 1997, respectively, holders of the Creditor Notes may tender for prepayment
a portion thereof in the amount of the excess defined cash flow, but not to
exceed approximately $400,000 per year. SCPI did not meet the prepayment
threshold in fiscal 1995. The Creditor Notes have been discounted using an
imputed interest rate of 7.5% and are included in the net obligation of the
discontinued business segment.

Significant Trends

SCPI's customers are continually affected by changes in the retail
environment, including the recent competitive pressures facing regional mass
merchandisers and the growing influence of automotive specialty chains. These
have led to fluctuations in the level of business that SCPI enjoys with
individual customers. In recent years, SCPI has lost some significant customers
and has suffered reductions in business as certain customers have closed stores
in the face of competition, have been forced into bankruptcy, or have reduced
their automotive merchandise selection. Furthermore, some customers have changed
their buying practices to acquire certain merchandise direct from manufacturers
rather than through distributors such as SCPI. In its efforts to offset these
trends, SCPI has strengthened its sales team to help identify new customers and
better serve existing customers, expanded its product offerings to certain
customers and enlarged the territory that it serves. SCPI has recently begun
offering "hard parts" such as brake rotors.

SCPI's management became aware in June 1993 that two of its largest
customers were experiencing serious liquidity problems. These customers became
past due in their payments to SCPI and in July 1993 both customers filed for
protection under Chapter 11 of the United States Bankruptcy Code. At that time,
receivables from these customers totaled approximately $1.2 million. As a
result, SCPI ultimately wrote off approximately $879,000 of these customers'
uncollectible accounts receivable. To ease the negative impact on working
capital arising from the non-collection of these accounts receivable, management
negotiated extended payment terms in 1993 with a number of vendors, more closely
controlled inventory levels and instituted several expense reduction measures.

One of these customers, Fisher Big Wheel, was unable to formulate a viable
reorganization plan and it closed its stores in December 1993. Although sales to
this customer declined in each of fiscal 1993 and 1994, this customer
represented an important proportion of SCPI's revenues (10% and 17% in fiscal
1994 and 1993, respectively).

The other large customer, Jamesway, emerged from bankruptcy in January
1995. However, sales to this customer decreased by 29% in fiscal 1995 compared
with fiscal 1994, as this customer closed certain locations and began buying
certain products on a factory direct basis as a part of its restructuring
strategy. In October 1995 Jamesway once again filed for Chapter 11 bankruptcy
protection and announced that all its stores would be closed. SCPI immediately
terminated shipments and provided $150,000 for the doubtful debt relating to
this customer. Also in October 1995 another large customer, Forest City Auto
Products Inc., advised the Company of its intention to change its source of
supply during the succeeding months. In the first half of fiscal 1996 sales by
SCPI to these two customers amounted to $6.3 million, approximately 24% of the
Company's consolidated sales.

During fiscal 1995, two new customers were added by SCPI which management
believes will partially offset the negative impact of these sales reductions.
However, while management continually attempts to identify new customers, there
can be no assurance that further customers will be secured to replace all of
this lost business. Based on present information, management estimates that
SCPI's revenues in fiscal 1996 will be less than $25 million, compared with
$27.3 million in the prior years and that sales in fiscal 1997 will be lower
than in fiscal 1996. In reaction to the declining sales trend, SCPI's management
has reduced operating, selling and administrative costs and has intensified its
efforts to add new customers or expand business with existing customers. These
efforts include the addition of new product categories.

During fiscal 1996 H&H has encountered increased competition in its
cellular phone business, due to the proliferation of retailer's offering
cellular phones for sale, and the opening of several new facilities by cellular
phone specialists. This situation was ameliorated by the opening of a second H&H
facility in September 1994, but management expects that results of H&H in fiscal
1996 will not achieve the fiscal 1995 profit level of $500,000.

During the first quarter of fiscal 1996, Dowling's was faced with intense
competitive pressures in one of its markets. Management's efforts to overcome
this competition succeeded, by the end of June 1995, in returning sales levels
in that market close to historical levels. However, Dowling's gross margin in
the first half of fiscal 1996 were adversely affected, and management expects
that Dowling's will earn only a small profit in fiscal 1996 as a result of this
first quarter competitive pressure.

The strong retail demand for light trucks and sport utility vehicles had
an adverse impact on sales by Puma beginning in the first quarter of fiscal
1996, because automobile manufacturers sought to satisfy dealer demand at the
expense of converters, which represent an important segment of Puma's customers.
Increased competition and price pressure has affected Puma throughout fiscal
1996 as a result of these market conditions. Puma has taken steps to mitigate
the impact of this situation, including enlarging its product selection, seeking
new suppliers, opening a satellite facility in Elkhart, Indiana to service the
customers concentrated in that market, introducing an extensive catalog to
enlarge its customer base and strengthening its sales force. However, management
expects that Puma's profits for fiscal 1996 will be much lower than in the prior
year.

Tax Loss Carryforwards

At December 31, 1994, SCPI had net operating loss carryforwards (the "Tax
Benefits") of approximately $146 million, which expire in the years 2001 through
2005. A change in control of SCPI or Oakhurst in any three-year period exceeding
50% may lead to the loss of the majority of the Tax Benefits. In order to reduce
the likelihood of such a change of control occurring, SCPI's and Oakhurst's
Certificates of Incorporation include restrictions on the registration on either
company's books of transfers of stock resulting in, or increasing, individual
holdings exceeding 4.5% of each corporation's common stock.

Since the regulations governing the Tax Benefits are highly complex and
may be changed from time to time, and since SCPI's and Oakhurst's attempts to
reduce the likelihood of a change of control occurring may not be successful,
management is unable to determine the likelihood of the continued availability
of the Tax Benefits. However, management believes that the Tax Benefits are
currently available in full and intends to take all appropriate steps to help
ensure that they remain fully available. Should the Tax Benefits become
unavailable to SCPI or Oakhurst, most future income of SCPI and any consolidated
affiliate would not be shielded from federal taxation, thus reducing funds
otherwise available for corporate purposes.

Under Statement of Financial Accounting Standards No. 109 ("SFAS 109"),
Oakhurst is required to recognize currently the estimated realizable value of
the future benefit of the Tax Benefits along with other tax benefits. The
initial adoption of SFAS 109 resulted in the recognition of a deferred tax asset
of $51 million less a valuation allowance of $49.5 million, and a corresponding
increase of $1.5 million in additional paid-in capital as of the beginning of
fiscal 1994. The accounting treatment to increase additional paid-in capital
results from SCPI's quasi-reorganization accounting in fiscal 1990. The amount
of the valuation allowance was determined by, among other things, management's
estimate of Oakhurst's ability to utilize the net operating tax loss
carryforwards prior to their expiration based on business conditions at that
time. Management re-evaluated the allowance as of February 26, 1994 in light of
SCPI's earnings trends and the then current business conditions and because the
Company was able to utilize a significant portion of the recorded deferred tax
asset during fiscal 1994, and also to reflect Oakhurst's acquisition of H&H. As
a result, management determined that a reduction in the valuation allowance and
a corresponding increase in additional paid-in capital as of February 26, 1994
of approximately $3.7 million was appropriate. Management re-evaluated the
allowance as of February 28, 1995 because of Oakhurst's acquisitions of
Dowling's and Puma and in light of the performance of SCPI and H&H and
determined that a further reduction in the valuation allowance and a
corresponding increase in additional paid-in capital of $1.6 million was
appropriate.

At August 31, 1995, Oakhurst would need to earn approximately $18 million
of consolidated pre-tax income through fiscal 2006 to realize the net recorded
tax benefit.

Capital Expenditures

The Company has no outstanding commitments for significant capital
expenditures.

Results of Operations

Operations in fiscal 1994 include the results of SCPI's operating
division, Steel City Products, and the administrative costs of SCPI and Oakhurst
and also include one month of operations for H&H. In fiscal 1995 and the six
months ended August 31, 1995 operations include Steel City Products and H&H,
together with Dowling's and Puma for the respective periods of ownership, and
the administrative costs of SCPI and Oakhurst.

Fiscal Year Ended February 28, 1995 Compared with Fiscal Year Ended
February 26, 1994

Compared with fiscal 1994, sales increased by 33%, or $10.8 million in
fiscal 1995. Increased sales of $15.5 million resulted from the acquisitions;
$5.1 million, $7.1 million and $3.3 million for H&H, Dowling's and Puma,
respectively, for the periods of ownership. These increases were offset by a
decrease of $4.7 million in sales by SCPI.

SCPI faced a difficult year in fiscal 1995, as it was unable to fully
replace the sales to a large customer that was liquidated in fiscal 1994 and as
another of its large customers closed stores and bought more products on a
factory-direct basis. Sales decreases attributable to these two customers were
approximately $5.1 million. There was a net increase of approximately $400,000
in sales by SCPI to all other customers following intensive efforts to replace
the lost business.

Other income increased by $287,000. Of the increase, $175,000 is
attributable to the recovery by SCPI of amounts placed in escrow in prior years
as part of SCPI's predecessor's bankruptcy.

Gross profits increased by $4.2 million, or by 65%, and as a percentage of
sales, increased from 20.2% to 24.9% during fiscal 1995. The increase is
entirely due to the acquisitions, with increased gross profits of approximately
$2.7 million earned by H&H (twelve months in fiscal 1995 compared with one month
in fiscal 1994) and gross profits of approximately $1.5 million and $740,000
earned by Dowling's and Puma, respectively. Gross margin earned by H&H, at
approximately 55%, is at a much higher rate than traditionally earned by the
Company; however, this is offset by higher operating, selling and administrative
expenses which approximate 45% of H&H's sales.

These increases in gross profits were partially offset by a decrease in
gross profits attributable to SCPI of approximately $750,000 compared with
fiscal 1994. The decrease resulted from the reduction in SCPI's sales, combined
with an addition to the LIFO reserve of $25,000 compared with a reduction in the
reserve in fiscal 1994 of $70,000.

Operating, selling and administrative expenses reflected an increase of
82%, or $4.2 million in fiscal 1995, primarily as a result of the acquisitions,
with $2.2 million, $940,000 and $510,000 attributable to H&H, Dowling's and
Puma, respectively. SCPI's fiscal 1995 results also included an increase of
$210,000, primarily due to increased sales expenses that were necessary to
maintain the changing customer base and identify new customers. Oakhurst's
overhead expenses increased as a result of the business growth. These factors,
together with the higher percentage of H&H's operating, selling and
administrative expenses to H&H's sales, explain the increase in overhead
expenses from 15.6% of sales in fiscal 1994 to 21.4% in fiscal 1995.

Amortization of the excess of costs over net assets acquired ("goodwill")
was $290,000 in fiscal 1995, compared with $11,000 in fiscal 1994, as a result
of the acquisitions.

The provision for doubtful accounts decreased by $852,000 in fiscal 1995
compared with fiscal 1994, when SCPI required a significant provision for
doubtful accounts related to two of its largest customers that filed for Chapter
11 bankruptcy protection.

Interest expense increased by $255,000 in fiscal 1995 compared with fiscal
1994, reflecting interest on the new debt that was issued in connection with the
acquisitions, and on higher average working capital borrowings to support the
newly acquired businesses.

In fiscal 1995, pre-tax operating profits of approximately $1.3 million
were contributed by the newly acquired businesses ($525,000 by H&H, $570,000 by
Dowling's and $250,000 by Puma).

Income from discontinued operations for fiscal 1995 of $90,000 reflected
decreases in SCPI's reserve for contingent liabilities relating to its former
retail division, net of an income tax provision of $46,000.

The Company incurred a loss during the fourth quarter of fiscal 1995 as a
result of decreased sales levels and higher expense due to increased sales
efforts. Also, corporate expenses increased during the quarter as a result of
the acquisitions of Dowling's and Puma.

Fiscal Year Ended February 26, 1994 Compared with Fiscal Year Ended February 27,
1993

Sales by H&H were approximately $382,000 from the date of the acquisition
through the end of fiscal 1994. After excluding these sales, compared with
fiscal 1993, SCPI's sales decreased by 4.7%, or by $1.6 million. A decrease of
approximately $2.5 million was attributable to reduced shipments to one of
SCPI's largest customers as a result of its bankruptcy; sales to this customer
were suspended in the third quarter of fiscal 1994. Other decreases totaling
$2.2 million resulted from reduced sales to several independent distributors as
a consequence of increased competition, and from the downsizing of its
automotive departments by one customer. These decreases were offset by sales
increases of approximately $2.1 million to one large customer obtained in May
1992, and by increased sales to another large customer resulting from its store
openings and its expanded product mix. Geographic expansion produced further
sales gains.

Other income increased by approximately $98,000 due to higher revenues
associated with the SCPI auto show, together with higher interest income
resulting from higher average invested cash levels.

Although SCPI's sales decreased in fiscal 1994 compared with fiscal 1993,
gross profit dollars attributable to SCPI increased 3.3% as a result of
improvements in the gross margin percentage combined with reduced buying and
occupancy expenses. The higher gross margin was in part attributable to a
reduction in the LIFO reserve of $70,000 in fiscal 1994; there was no LIFO
effect in fiscal 1993. Other increases in the gross margin percentage were
achieved as a result of certain customers' temporary needs for rapidly shipped
goods, a trend that did not continue into fiscal 1995. Gross profits
attributable to H&H in fiscal 1994 from the date of acquisition totaled
approximately $220,000.

Operating, selling and administrative expenses decreased by $115,000
compared with fiscal 1993, despite the inclusion of administrative costs of
$192,000 related to H&H. Excluding such costs, the decrease in expenses in
fiscal 1994 was $307,000. These decreases were primarily achieved through
management's efforts to control costs and partially offset the negative impact
of the bankruptcy filings of two customers. Cost reductions of approximately
$90,000 were achieved at the operating level, and significant additional savings
resulted from the implementation of a corporate overhead reduction program,
which included the termination of a financial advisory agreement. As a result,
despite the decline in sales and after excluding costs related to H&H, the
percentage of operating, selling and administrative expenses decreased from
14.8% of SCPI's sales to 14.5%.

The provision for doubtful accounts increased by $828,000 in fiscal 1994.
As previously discussed, two of SCPI's largest customers filed for Chapter 11
bankruptcy protection in July 1993. At that time, approximately $1.2 million was
outstanding from the two customers. As a result, SCPI ultimately wrote off
$879,000 of these uncollectible accounts receivable.

Interest expense increased by $28,000 in fiscal 1994 compared with fiscal
1993, primarily as a result of imputed interest on the Creditor Notes, which
were issued during fiscal 1993 to satisfy liabilities related to SCPI's former
Retail Division.

The effective tax rate decreased in fiscal 1994 from 55.7% to 44.1% due to
a lower effective state income tax rate as a consequence of the merger of a
subsidiary with SCPI in December 1992. Because of the adoption of SFAS 109, the
34% federal income tax expense is accounted for as a reduction of the deferred
tax benefit.

Six Months Ended August 31, 1995 Compared With Twenty-Six Weeks Ended August 22,
1994

Compared with the prior year, sales increased by $6.8 million, or 34.3%
for the six months ended August 31, 1995. Increased sales of approximately $8
million resulted from the acquisitions by Oakhurst during fiscal 1995 of
Dowling's ($4.4 million) and Puma ($3.6 million); sales by existing businesses
decreased by $1.2 million.

Sales attributable to SCPI decreased by approximately $900,000. Sales
increases aggregating $2.1 million resulted primarily from the addition of
several new customers, together with higher sales to several customers
(including Jamesway but sales to this customer, which represented 12.6% of
consolidated sales in the first half of the current year, were suspended in
October 1995 as a result of an anticipated bankruptcy filing). These sales
increases were offset by decreases of $3 million, with over half of the
reduction attributed to SCPI's small customer base and to reduced sales in the
Northeast market, resulting from intense competitive pressures being faced by
those customers, along with reduced sales of spring product lines due to a rainy
spring season in the Northeast. The remainder of the decrease resulted from
lower sales to customers that have downsized or eliminated their automotive
departments, have filed bankruptcy, or that have changed their source of supply.

Sales attributable to H&H decreased by approximately $380,000, despite the
opening of a second location in September 1994. Approximately $215,000 of the
decrease is attributed to reduced equipment sales and commission revenues
associated with H&H's cellular phone business as a result of aggressive
competition in the current year, combined with a slightly reduced commission
structure related to cellular activations. The balance of the reduction is
largely due to lower sales of car accessories.

Consolidated gross profits were $5.7 million (21.5% of sales) for the six
months ended August 31, 1995, compared with $4.9 million (24.7% of sales) last
year. The increase in gross profits resulted from the acquisitions. The
reduction in gross margin percentage is principally attributable to Dowling's,
which was affected by increased competition this year, so that its gross margins
were lower than those earned by the Company in the prior year. Excluding the two
acquisitions, gross profits on existing businesses decreased by about $472,000,
due to lower sales combined with a slight decrease in gross margins.

Operating, selling and administrative expenses increased by $1.8 million.
Approximately $1.5 million is attributable to the two businesses acquired in the
prior year; the balance of the increase primarily reflects corporate overheads
necessitated by the larger company.

There was an increase in the provision for doubtful accounts of $267,000
when compared with the prior year six month period, primarily attributable to
SCPI; the provision was increased by $150,000 in connection with the balances
due from Jamesway (one of SCPI's largest customers) at the end of the second
quarter, and by $107,000 for the bankruptcies of three of SCPI's smaller
customers that occurred during the current year six month period.

Amortization of the excess of costs over net assets acquired ("goodwill")
increased by $212,000 compared with the prior year, as a result of the
acquisitions of Dowling's and Puma.

Interest expense increased by $292,000 principally as a result of the debt
incurred in connection with the acquisitions and higher levels of working
capital borrowings.

Income tax expense decreased by $388,000 in the six months ended August
31, 1995 compared with the same period of the prior year as a result of the
$655,000 loss incurred in the current period.

In summary, there was a loss before taxes of $655,000 in the six months
ended August 31, 1995 this year compared with income before taxes of $1.1
million in the prior year six month period. Operating profits contributed by
SCPI and H&H were about $975,000 lower than last year, due primarily to the
effect of reduced sales together with the large addition by SCPI to its
provision for doubtful accounts. Dowling's incurred a loss in the current year
period, due to increased competition, accounted for approximately $255,000 of
the profit variance. Accordingly, despite a profit contribution by Puma, the
results of the newly-acquired companies were not sufficient to offset the
increases in goodwill amortization, interest and in overhead expense which
resulted from the acquisitions, combined with the significant reduction in
profit contribution by existing businesses.

<PAGE>

BUSINESS

Oakhurst is a holding company which was formed as a result of a merger
transaction in July 1991, in which SCPI became a majority-owned subsidiary of
Oakhurst. In accordance with the merger agreement, Oakhurst owns 10% of the
outstanding common stock of SCPI and all of the SCPI Series A Preferred Stock,
with the result that the aggregate fair market value of SCPI's common stock and
Series A Preferred Stock owned by Oakhurst is equal to approximately 90% of the
aggregate fair market value of all the issued and outstanding capital stock of
SCPI, and represents approximately 90% of the voting stock of SCPI.

Pursuant to the merger, SCPI became a special, limited purpose subsidiary
of Oakhurst that concentrates on its historical line of business, while any
future growth and expansion opportunities will be pursued by Oakhurst or by one
or more of its subsidiaries. Because Oakhurst's ownership of SCPI is primarily
in the form of preferred stock, Oakhurst believes it will retain the value of
SCPI, and Oakhurst's income from SCPI will be determined by the Series A
Preferred Stock dividend. This form of ownership is designed to facilitate the
preservation and utilization of SCPI's net operating loss carryforwards, which
amounted to approximately $146 million at December 31, 1994.

Oakhurst, through SCPI and three other subsidiaries is primarily a
distributor of products to the automotive after-market. Its largest business is
conducted by SCPI under the trade name "Steel City Products." SCPI is engaged in
the distribution of automotive parts and accessories to independent retailers
from a facility in Pittsburgh, Pennsylvania.

In early 1994, Oakhurst adopted a program of diversification and
expansion, primarily through acquisitions, intended to improve its profit
potential.

In January 1994, Oakhurst acquired all the outstanding capital stock of
H&H, d/b/a Harry Survis Auto Center, a Pittsburgh-based company involved in the
distribution and installation of automotive accessories, including car stereos,
car alarms and cellular phones.

In August 1994, Oakhurst acquired all the outstanding capital stock of
Dowling's, a distributor of automotive radiators based in Mt. Vernon, New York
that operates six facilities in New York, Connecticut and New Jersey.

In October 1994, Oakhurst acquired all the outstanding capital stock of
Puma, a distributor of accessories to the van and light truck conversion
industry, based in Grand Prairie, Texas.

Steel City Products, Inc.

Background

SCPI was incorporated in West Virginia in 1959, and in 1963 became known
as Heck's, Inc. In 1969, the "Steel City Products" automotive distribution
business was acquired. SCPI was reincorporated in Delaware under the name
Hallwood Industries Incorporated in fiscal 1991. The name was changed to Steel
City Products, Inc. in January 1993.

For many years prior to 1990, Heck's, Inc. operated a Retail Division
consisting of a chain of discount department stores. In September 1990, all of
the assets of the Retail Division were sold to Retail Acquisition Corp. ("RAC"),
an unrelated company.

<PAGE>

Operations

SCPI distributes functional and decorative car and truck accessories (such
as floor mats, seat covers, mirrors, running boards and lights), car care
products (including waxes and paints), chemicals (such as antifreeze, windshield
washer fluid and motor oil) and car repair and maintenance items (including
spark plugs, windshield wipers, brake pads and air and oil filters). Many of the
products sold by SCPI are nationally-advertised brand names. For twenty-five
years, SCPI's operations have been conducted from the same facility in
Pittsburgh.

Certain of SCPI's business is performed on a service basis, which involves
visits by its sales personnel to customers' stores to count and re-order
merchandise. Generally, these re-orders are transmitted electronically to SCPI's
offices in Pittsburgh, and shipments are usually made directly to each of the
customers' stores. Certain customers electronically transmit their own orders to
SCPI's offices. Because many orders are generated electronically and are shipped
within a few days of receipt, the size of SCPI's order backlog is not relevant
to an understanding of the business. SCPI also provides price ticketing and
associated services to those of its customers that request such services.

Sources of Supply

SCPI acquires its merchandise from a large number of suppliers, none of
which has accounted for more than 15% of its revenues. Because of the diversity
and number of suppliers and products carried, the business is not generally
dependent on the continued availability of individual products or continued
dealings with existing supply sources. However, from time to time, market or
seasonal conditions may affect the availability of certain merchandise, but not
to the extent that SCPI believes would materially impact its business.

SCPI generally carries in inventory only those products that its customers
have identified as necessary for their own merchandising needs. SCPI does not
acquire significant quantities of other merchandise.

Seasonality

SCPI's business is seasonal, being slower in the early winter months than
at other times of the year. In anticipation of higher sales volume in the spring
and summer, SCPI generally carries higher inventories beginning in February. As
is customary in the industry, many suppliers allow extended payment terms for
such inventory build-ups and, in turn, SCPI grants extended payment terms to
many of its customers to facilitate their inventory buildup in the spring.

SCPI's needs for working capital are affected by these seasonal
fluctuations (see "Management's Discussion and Analysis of Financial Condition
and Results of Operations Liquidity and Capital Resources - Line of Credit").

Customer Base

SCPI's customers include general merchandise retail chains, automotive
specialty stores, grocery chains, drug stores, hardware stores and other
automotive accessory retailers. Most customers are based in the northeastern
United States, although stores operated by some customers are located as far
west as Michigan, and as far south as Florida. There are no foreign sales.

SCPI's customers are continually affected by changes in the retail
environment, including the recent competitive pressures facing regional mass
merchandisers and the growing influence of automotive specialty chains. These
changes have led to fluctuations in the level of business that SCPI enjoys with
individual customers. In recent years, SCPI has lost some significant customers
and has suffered reductions in business as certain customers have closed stores
in the face of competition, have been forced into bankruptcy, or have reduced
their automotive merchandise selection. Furthermore, some customers have changed
their buying practices to acquire certain merchandise direct from manufacturers
rather than through distributors such as SCPI. In its effort to offset these
trends, SCPI has added new customers, expanded its product offerings to certain
customers and enlarged the territory that it serves. In addition, SCPI has
recently begun offering some "hard parts," such as brake rotors.

Examples of the changes discussed above include the fact that SCPI's
largest customer in fiscal 1992, Fisher Big Wheel, represented a diminishing
percentage of its total revenues in each subsequent fiscal year and then closed
all of its stores in 1993 following a bankruptcy filing, and that one of SCPI's
largest customers in fiscal 1996, Jamesway, filed for bankruptcy in October 1995
and is expected to close all its stores (see table below).

Because SCPI provides services as well as goods to most of its larger
customers, any such customer would need to replace those services if it decided
to terminate business with SCPI. Historically, SCPI has not lost customers to
competitive distributors, however in October 1995 a large customer advised SCPI
that it intends, over a period of several months, to change to another
distributor, so that sales to this customer will be eliminated.

During fiscal 1995, a significant new customer was identified, and in the
second quarter of fiscal 1996, two significant new customers were added. The
Company believes these customers will partially offset the negative impact of
recent sales reductions. However, while management of SCPI continually attempts
to identify new customers, there can be no assurance that further customers will
be secured to replace lost business.

SCPI is currently investigating an opportunity to manage and supply an
automotive accessory department for a national retail chain which is not
currently a customer. Testing of this new concept began in September 1995, and
if the concept proves successful, SCPI anticipates that it could service and
supply a substantial number of this retailer's outlets. However, there can be no
assurance that this future business opportunity will prove successful.

SCPI is also exploring the addition of new product categories so as to
help enlarge sales with existing customers and help attract new customers, but
there can be no assurance that these efforts will be successful.

Sales attributable to SCPI in fiscal 1995 were approximately $27.3
million, or 63% of Oakhurst's consolidated sales in fiscal 1995. Based on
present information, management estimates that SCPI's revenues in fiscal 1996
will be $125 million less than in fiscal 1995, and that sales in fiscal 1997
will be lower than in fiscal 1996.

The following table shows sales to each of SCPI's customers that
individually accounted for more than 10% of SCPI's sales for the fiscal years
shown below (in thousands):

Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
February 28, 1995 February 26, 1994 February 27, 1993
----------------- ----------------- -----------------

% of % of % of
Consolidated Consolidated Consolidated
Sales Sales Sales Sales Sales Sales
------ ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Fisher Big Wheel - - $3,198 10% $5,738 17%
Forest City $6,046 14% $6,250 19% $5,461 16%
Jamesway $4,465 10% $6,332 20% $4,159 12%

</TABLE>

Fisher Big Wheel and Jamesway both filed for Chapter 11 bankruptcy
protection in July 1993, and Fisher Big Wheel closed all of its stores in
December 1993. Jamesway emerged from bankruptcy in January 1995; however, sales
to this customer diminished in fiscal 1995 compared with fiscal 1994 since this
customer closed certain locations as part of its restructuring strategy and
began to buy certain products on a factory-direct basis. In October 1995
Jamesway again filed for bankruptcy protection and announced that it will close
all of its stores. In October 1995 Forest City advised SCPI that it intends,
over a period of several months, to change to another distributor so that SCPI's
sales to this customer will be eliminated.

None of SCPI's business is based on government contracts, and there are no
long-term sales contracts with any customers.

Competition

The automotive parts and accessories distribution industry is highly
competitive, with several similar companies operating in SCPI's marketplace. In
addition, many of SCPI's suppliers also offer their products directly to
retailers and therefore compete directly with SCPI. Management is unable to
quantify SCPI's relative size in its industry or in relation to its competitors.
SCPI competes on the basis of the breadth of merchandise offered, price, level
of service, order fill rates and order turn-around times. Management believes
that SCPI's long history, good reputation, experienced management, product
variety and high order fill rates enable it to compete favorably with other
distributors.

Regulation

SCPI's management does not anticipate existing or known pending
environmental legislation or other regulations will require major capital
expenditures or will affect its operations.

Employees

SCPI employs approximately ninety persons, of whom about seventy are
employed in the headquarters office and distribution facility in Pittsburgh.
Most of the others are sales people. The October 1995 loss of two large
customers is expected to result in a reduction in the number of SCPI employees.
Senior executives, including Bernard Frank (a founder of SCPI in 1947), have
many years of service with SCPI and each is employed under a long-term contract.

All warehouse and certain office employees are represented by Local 636 of
the International Brotherhood of Teamsters. SCPI believes that it has
experienced generally good labor relations, and no significant labor disputes
have affected its business in recent years.

H&H Distributors, Inc.

Background and Customer Base

The business operated by H&H was founded about sixty years ago and
operates under the name "Harry Survis Auto Center." Oakhurst acquired all the
capital stock of H&H in January 1994 from Harold Garfinkel, who owned and has
managed the business for many years. Mr. Garfinkel continues as President of H&H
under a long-term employment agreement.

The Company believes that the "Harry Survis" name is well known in the
Pittsburgh market due to its long history of use and H&H's extensive ongoing
advertising campaign. H&H sells and installs products for the automotive
aftermarket, including automobile sound and alarm systems, sun roofs and other
accessories. In September 1994, H&H opened a second location in the
greater-Pittsburgh area.

In recent years H&H has expanded its involvement in the cellular phone
business, and is currently one of the largest agents for Bell Atlantic Mobile
Systems ("BAMS") in the Pittsburgh market, selling portable cellular phones as
well as installing phones in cars, and earning commissions on the introduction
of new cellular subscribers to BAMS.

In addition to selling direct to the general public and to businesses, H&H
supplies accessories to many automotive dealers and provides installation
services for such products. H&H also uses a number of sub-agents in its cellular
phone business. There are no foreign sales.

The cellular phone industry has recorded significant growth over the past
decade, with large numbers of new subscribers being added each year. The Company
believes that this growth environment and continued pattern of change within the
industry present opportunities for H&H, but in fiscal 1996 H&H experienced
increased competition as the number of retailers selling cellular phones
increased significantly. Sales attributable to H&H were approximately $5.4
million in fiscal 1995 and accounted for approximately 13% of Oakhurst's
consolidated sales in fiscal 1995. H&H has a broad customer base, with no one
customer representing a material proportion of consolidated sales.

Sources of Supply

H&H acquires its accessory products from many well known manufacturers,
and acquires its cellular phones from BAMS and direct from manufacturers and
other suppliers. In some cases, inventory is held on consignment and not paid
for until sold.

H&H has been an agent for BAMS since the Pittsburgh area cellular system
was established in 1984. Prior to its acquisition by Oakhurst, H&H entered into
a new five year agency agreement with BAMS.

Seasonality

The business conducted by H&H is seasonal, with higher revenues in the
summer months than at other times of the year. The cellular phone business also
experiences strong sales during the Christmas period.

Competition

In its automotive accessories business, H&H competes with other
distributors of such products and with manufacturers that offer their products
directly to H&H's customer base. The Company believes that H&H differentiates
itself from such competition by its strong name recognition ("Harry Survis")
which the Company believes has been synonymous with quality automotive products
and installation for over sixty years, supported by a wide selection of premium
brand accessories, and by experienced sales staff and installation technicians.
However, there can be no assurance that H&H will be able to continue to retain
its market position. In its cellular phone business, in which H&H acts as an
agent for BAMS, H&H competes with other agents for BAMS, with direct sales by
BAMS salespeople and retail outlets operated by BAMS, and with sales by AT&T
Wireless Communications (formerly "Cellular One") and its agents. As a BAMS
agent since the inception of cellular phone service in the Pittsburgh market in
1984, the Company believes that H&H's experience and competitive position is
enhanced by the recognition of the "Harry Survis" name supported by a
professional sales and installation staff. However, the significant growth in
the cellular phone industry has resulted in a proliferation of retailers
attempting to satisfy customers for these services, and although the Company
believes that such outlets generally fail to provide services comparable to
those which H&H delivers, there can be no assurance that H&H will be able to
maintain its competitive position.

Regulation

While the cellular phone industry is regulated by the federal government,
such regulation has to date had no material adverse effect on the business of
H&H. It is anticipated that wireless communications activities will be subject
to some deregulation in the future, the effect of which on H&H's cellular phone
business cannot be predicted.

Employees

H&H employs an aggregate of approximately forty-five persons at its two
facilities in Pittsburgh, none of whom are represented by a labor union. H&H
believes that its relationship with its employees is generally good and that H&H
enjoys a high average length of service among its employees.
<PAGE>

Dowling's Fleet Service Co., Inc.

Background

Dowling's was established in 1933. It operates six facilities which are
located in New York, Connecticut and New Jersey and is one of the largest
distributors of automotive radiators and related products in the northeastern
United States. Oakhurst acquired the company in August 1994 from James Dowling,
who owned and managed the business for many years and who is the son of the
founder.

Two other long-service employees of Dowling's now manage the business as
President and Vice President under long-term employment agreements.

Most of Dowling's customers are radiator repair shops, which perform
repairs for car dealers, service stations and retail customers. Dowling's has
avoided a multi-level sales approach, so as to build strong allegiance from its
radiator repair shop customers, and has achieved a high market share in its
markets. Dowling's has a broad customer base, with no one customer representing
a material percentage of consolidated sales. There are no foreign sales.

The radiator replacement market has undergone important changes in recent
years. As manufacturers sought to reduce automobile weight, aluminum/plastic
radiators tended to replace the traditional copper/brass models as original
equipment. Initially, this product changeover extended radiator lives, so that
the replacement market experienced a decrease in replacement demand. This trend
is now reversing, as the aluminum/plastic products are beginning to reach
replacement age. Furthermore, these new radiators are more difficult to repair
than copper/brass, so that the proportion of replacement to repair has
increased. In addition, the range of replacement radiator models has increased
in recent years. For these reasons, the Company believes that repair shops have
become more dependent on distributors for both selection and service.

Dowling's is exploring expansion opportunities in markets contiguous with
the area currently served, and in connection therewith entered into a
non-binding Letter of Intent in October 1995 to acquire a radiator distribution
business in Philadelphia, Pennsylvania.

Fiscal 1995 sales attributable to Dowling's for the period following
acquisition were approximately $7.1 million, or 16% of Oakhurst's consolidated
sales.

Sources of Supply

Dowling's acquires its products from several well known manufacturers and
carries both name-brand and generic products. Dowling's concentrates on offering
high quality products and it purchases over sixty percent of the products it
sells from a major United States radiator manufacturer, Modine Manufacturing
Company ("Modine"). Dowling's is one of Modine's largest United States
after-market customers. Because of its buying position and storage facilities,
Dowling's is able to obtain competitive pricing from its suppliers.

Seasonality

Dowling's business is seasonal, with higher revenues in hot summer months
and very cold winter months when automobile radiators are most affected by the
extreme temperatures. Changes in weather patterns in Dowling's market area may
therefore affect its sales levels.

Competition

Dowling's competes with many other radiator distributors. Demand in the
radiator market was very strong in 1993 and 1994, which led to an increase in
the number of radiator distributors in Dowling's markets. Dowling's reputation
is based on its competitive pricing, quality products, and service consisting of
twice daily delivery to all customers. Because of this, Oakhurst believes that
Dowling's is positioned to withstand such competition and to build upon its
historic sales and profits. However, there can be no assurance that past levels
of sales and profitability can be maintained. In fact, in the first quarter of
fiscal 1996 one of Dowling's locations suffered a significant decline in sales
due to the nearby opening of a competitor. See "Employees" below.

Regulation

Dowling's management does not anticipate that any major capital
expenditures will be required by existing or known pending environmental
legislation or other regulations.

Employees

Dowling's employs approximately 40 persons. No employees are represented
by a labor union.

In March 1995 Dowling's suffered the loss of all five of its employees at
one major location to a new competitor with a resulting significant loss of
business. Most of these employees were re-hired in July 1995, and sales from
this location subsequently returned close to previous levels. To the Company's
knowledge, none of the other Dowling's locations has encountered significant
difficulties in its employee relations.

Puma Products, Inc.

Background and Customer Base

Puma was founded in 1988 by Anthony N. Puma, from whom Oakhurst acquired
the business in October 1994. Mr. Puma continues as President of Puma under a
long-term employment agreement. Puma distributes accessories to automotive and
truck converters and restylers and to retail automotive accessory stores
throughout the United States, with a market concentration in the five states
around its base in Grand Prairie, Texas and in Elkhart, Indiana, where a new
facility was opened in September 1995. Puma's products include high quality wood
interior finishes for light trucks and sport utility vehicles and other auto
accessories including spoilers, running boards, and exterior trim.

Puma grew very rapidly since its founding, by adding customers, enlarging
its market territory, and expanding its range of products. While the Company
believes that opportunities for expansion for Puma still exist, there can be no
assurance that Puma's past growth and profitability levels can be maintained or
increased. Geographic expansion opportunities and new product lines are
currently under consideration. In November 1995 Puma developed a catalog to
support its efforts to enlarge its customer base. There are no foreign sales.

A large proportion of Puma's business is with vehicle converters who, in
turn, are dependent upon the availability of new vehicles from the "Big Three"
United States automobile manufacturers. In fiscal 1996, shortages of such
vehicles have lead to limits on the number of vehicles available to converters
and to a consequent reduction in Puma's sales to these customers.

Fiscal 1995 sales attributable to Puma for the period following the
acquisition in October 1994 were approximately $3.3 million, or about eight
percent of Oakhurst's consolidated sales.

Sources of Supply

Puma's wood products are developed to its own specifications for sale to
converters of most domestic pickup trucks and sport-utility vehicles. Wood
products, which account for more than half of Puma's sales, are mostly
manufactured in Mexico. Puma's non-wood products are acquired from established
United States suppliers and from importers and many carry brand names recognized
in the industry.

Although from time to time Puma has experienced rapid growth in demand for
its wood products, the Company believes that Puma's supply sources are adequate
for its needs.

Seasonality

Puma's sales generally encounter seasonal fluctuations related to the
introduction of each new vehicle model, with the summer and early fall months
being slower than at other times of the year.

Competition

Puma competes with many distributors and with manufacturers of automotive
interior wood products. Puma competes by offering high quality products at
competitive prices, enhanced by its volume purchasing ability and ample storage
facilities. Puma competes on a combination of price, quality and its rapid order
turnaround time. The shortage of vehicles attributable to Puma's converter
customers in fiscal 1996 has led to increased competition and price pressures in
this segment of its business.

Regulation

Puma's management does not anticipate that any major capital expenditures
will be required by existing or known pending environmental legislation or other
regulation.

Employees

Puma Products employs approximately thirty persons, none of whom is
represented by a union. Many of its key employees have been with Puma since its
inception, and Puma believes that its relationship with its employees is
generally good.

Properties

SCPI operates its business from an approximately 100,000 square-foot
building which it owns in an industrial park in Pittsburgh, Pennsylvania. The
original building was constructed in 1970 and it has been expanded several
times.

H&H is headquartered and operates from an approximately 25,000 square foot
building near the downtown area of Pittsburgh, Pennsylvania, which is leased
from Harold Garfinkel, President and former owner of the business. (See "Certain
Transactions.") In 1994, H&H opened a second facility comprised of approximately
1,100 square feet, which is located in a shopping center in McMurray,
Pennsylvania, and is leased from an independent landlord.

Dowling's conducts its business from six leased facilities aggregating
approximately 72,000 square feet, which are located in Mt. Vernon and Hempstead,
New York, in Bridgeport and Hartford, Connecticut and in Hillside and Lodi, New
Jersey. Two of the facilities are leased from James Dowling, the former owner of
Dowling's. (See "Certain Transactions") Dowling's main offices are located at
the Mt. Vernon location.

Following Oakhurst's acquisition of Puma, its operations were moved to a
substantially larger facility of approximately 27,000 square feet located in
Grand Prairie, Texas which is leased from Anthony N. Puma, President and former
owner of Puma. (See "Certain Transactions.")

In February 1995, Oakhurst also moved certain of its corporate personnel
to the Grand Prairie facility.

Legal Proceedings

On July 26, 1995 the Company initiated an arbitration proceeding with the
American Arbitration Association in connection with the Company's August 1994
acquisition of Dowling's. The Company is seeking rescission of the acquisition,
or in the alternative, damages and indemnification in excess of $1.6 million.
The proceeding is based, among other things, on the Company's belief that the
seller breached certain provisions of the purchase and sale agreement covering
the acquisition by furnishing to the Company financial information that was
materially inaccurate. The Company has exercised its right of set-off pending
resolution of this matter, against approximately $1,000,000 of the purchase
price which remains unpaid. The seller has denied the Company's allegations and
is seeking payment of amounts due under the purchase and sale agreement. If the
Company is successful in obtaining a rescission of the purchase, the Company
would receive back the portion of the purchase price paid and other
consideration given at the closing, and would be relieved of the obligation to
pay the balance of the purchase price (approximately $1 million). In the event
of a rescission of the acquisition, the Company believes that in the near term
it might earn less as a result of the repayment of the debt that was incurred to
make the acquisition and the investment of any cash repaid that is in excess of
that debt than it might otherwise have earned from the continued ownership of
the Dowling's business.

There are otherwise no material legal proceedings known by the Company to
be pending against the Company or any of its subsidiaries.

<PAGE>

MANAGEMENT

The names of the directors and executive officers of the Company and their
respective ages and positions with the Company are as follows:

Executive Director or
Name Age Position(s) with the Company Officer Since
- ---- --- ---------------------------- -------------
<S> <C> <C> <C>
Mark Auerbach 57 Chairman of the Board of 1991
Directors, President, Chief
Executive Officer,
Chief Financial Officer, Director

Bernard H. Frank 74 Executive Vice President 1994*
and Chief Operating Officer,
Director

Roger M. Barzun 53 Senior Vice President, 1991
Secretary and General
Counsel

Richard Randolph 70 Senior Vice President, Director 1991*

John R. Ruda 54 Senior Vice President-Marketing 1995*

Laurence D. Finman 34 Vice President 1995*

John D. Abernathy 58 Director 1994

Robert M. Davies 45 Director 1991*

Joel S. Lever 42 Director 1994

Anthony N. Puma 31 Director 1995*

</TABLE>

* These persons have been associated with the Company's subsidiaries since
earlier dates, as described below.

Mark Auerbach. Chairman of the Board of Directors, President, Chief Executive
Officer and Chief Financial Officer, Director. Mr. Auerbach has been Chairman of
the Board, Chief Executive Officer and Chief Financial Officer since December
18, 1995 succeeding Mr. Maarten Hemsley who resigned from these positions
effective as of such date. Mr. Auerbach has been Senior Vice President and Chief
Financial Officer since April 1993 of Central Lewmar, L.P., a fine paper
merchant. From September 1992 until April 1993, he was a partner of Marron
Capital, L.P., an investment banking company. From 1990 to 1992, he was
President, Chief Executive Officer and Chairman of the Board of Implant
Technology, Inc., a manufacturer of artificial hip systems. He is a director of
Pharmaceutical Resources, Inc., a generic drug manufacturer, and Acorn Venture
Capital Corporation. Mr. Auerbach is a certified public accountant, and has been
a director of the Company since 1991. He was previously a director of SCPI from
September 1993 until March 1994.

Bernard H. Frank. Executive Vice President and Chief Operating Officer. Mr.
Frank was appointed to these positions in May 1994. Mr. Frank was a founder of
the Steel City Products business which the Company's predecessor acquired in
1969; he has been associated with its business for approximately forty-eight
years. He is a director of SCPI and assumed the title of Chief Executive Officer
of SCPI in January 1993 and was appointed Chairman of SCPI in March 1994.
Oakhurst's Nominating Committee selected Mr. Frank to serve as a director
following the resignation of Joseph Jacobs in May 1995.

Roger M. Barzun. Senior Vice President, Secretary and General Counsel. Mr.
Barzun has been Secretary and General Counsel of Oakhurst since August 1991 and
a Senior Vice President since May 1994. He is also Secretary and General Counsel
of SCPI. Mr. Barzun has been a lawyer since 1968 and is a member of the New York
and Massachusetts bars.

Richard Randolph. Senior Vice President, Director. Mr. Randolph was a Vice
President of the Company from 1991 to May 1994, when he became a Senior Vice
President. Mr. Randolph has been President of Dick Randolph Associates, a
consulting firm, since 1988. Before that, he was credit manager of Mattel Toys,
Inc. for many years. Mr. Randolph has also been a director of SCPI since 1989.

John R. Ruda. Senior Vice President-Marketing. Mr. Ruda was a director and an
executive officer (most recently as President) of SCPI for more than five years
until his resignation in December 1995, when he was elected to his current
position with the Company.

Laurence D. Finman. Vice President. Mr. Finman has been Vice President and Chief
Operating Officer of the Company's Puma Products subsidiary since its
acquisition in October 1994 and was elected a Vice President of the Company in
December 1995. Prior to that Mr. Finman held senior management positions in a
family-owned automobile tire distribution business.

John D. Abernathy. Director. Mr. Abernathy has been Executive Director of Patton
& Boggs, L.L.P., a Washington, D.C. law firm, since January 1995 and is a
certified public accountant. From February 1994 to January 1995 he was a
financial and management consultant and from March 1991 to February 1994, Mr.
Abernathy was the Managing Director of Summit, Solomon & Feldesman, a law firm
in dissolution since March 1993. From July 1983 until June 1990 he was Chairman
and Chief Executive Partner of BDO Seidman, a public accounting firm. Mr.
Abernathy is a director of Barringer Technologies, Inc., a manufacturer of high
sensitivity analytical instruments for chemical sensing and of Wahlco
Environmental Systems, Inc., an environmental equipment and services company.
Mr. Abernathy has been a Director of the Company since 1994.

Robert M. Davies. Director. Since 1994 Mr. Davies has been a Vice President of
Wexford Capital Corporation, which acts as the investment manager to several
private investment funds. Since November 1, 1995, Mr. Davies has served as
Executive Vice President of Wexford Management Corporation, a private investment
company. From September 1993 to May 1994 he was a Managing Partner of Steinhardt
Enterprises, Inc., an investment banking company, and from 1987 to August 1993,
Mr. Davies was Executive Vice President of The Hallwood Group Incorporated, a
merchant banking firm. Mr. Davies has been a director of the Company since 1991
and a director of SCPI since 1989 and is a director of Wahlco Environmental
Systems, Inc., a publicly-traded environmental equipment and services company.

Joel S. Lever. Director. Mr. Lever has been associated with the law firm of
Kurzman & Eisenberg or its predecessor since 1980, and became a member of that
firm in 1984. Mr. Lever specializes in transactional business matters with
particular emphasis on fine arts publishing, distribution and investment, and
the sale and acquisition of commercial real estate entities. Prior to 1980, Mr.
Lever was an Assistant District Attorney for Kings County, New York. Mr. Lever
has been a director of the Company since 1994.

Anthony N. Puma. Director. Mr. Puma was the founder (in 1988) of Puma, which was
acquired by the Company in October 1994 and has been President of Puma from 1988
to the present. Before 1988, Mr. Puma held various positions with SDI
Corporation, a distributor of accessories to the small truck and van conversion
markets. Mr. Puma was elected as a director of the Company in August 1995.

<PAGE>

EXECUTIVE COMPENSATION

The Summary Compensation Table below sets forth all compensation paid to
the Chief Executive Officer and the other most highly paid executive officers of
the Company who earned in excess of $100,000 for services rendered to the
Company during the fiscal years ended February 28, 1995, February 26, 1994 and
February 27, 1993. Also included is compensation paid to the two executive
officers of SCPI who are not also executive officers of the Company.

Summary Compensation Table

Annual Compensation Long-Term
------------------- Compensation
Awards
------------
Other
Annual Securities
Name and Compen- Underlying All Other
Principal Position Year Salary($) Bonus($) sation($) Options (#) Compensation($)
------------------ ---- --------- -------- --------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Maarten D. Hemsley (1) 1995 135,105 97,366 27,466(3) 100,000 6,021 (4)
Chairman, President, 1994 174,980 3,993
Chief Executive 1993 159,796
Officer and Chief
Financial Officer

Bernard H. Frank (2) 1995 100,100 55,779 27,500 21,029 (5)
Executive Vice 1994 80,340 51,000 23,212
President and 1993 80,774 86,175 29,157
Chief Operating Officer

John R. Ruda (2) 1995 151,525 73,632 15,000 9,103 (6)
President and Chief 1994 141,340 69,727 12,723
Executive Officer - 1993 133,760 102,703 9,714
SCPI

Terrance W. Allan (2) 1995 110,855 21,746 6,498 (6)
Executive Vice 1994 109,913 19,600 7,067
President-SCPI 1993 90,964 52,000 5,980

</TABLE>

(1) In fiscal 1995, of Mr. Hemsley's total salary, $25,000 was paid by the
Company and $110,105 was paid by SCPI (of which he is Chief Financial
Officer). Of his total bonus, $45,366 was paid by the Company and $52,000
was paid by SCPI. In December 1995, Mr. Hemsley resigned from all his
positions with the Company and as a director. He will remain, however, as a
consultant to the Company.

(2) Mr. Frank, who is also Chairman and Chief Executive Officer of SCPI, and
Messrs. Ruda and Allan were compensated only by SCPI, except with respect
to stock options and stock awards. In December 1995, Mr. Ruda resigned as
President of SCPI and as a director, and was elected Senior Vice President
- Marketing of the Company.

(3) This amount consists of a stock award of 5,909 shares of Common Stock
valued at $3.125 per share, the closing price of the Common Stock on the
date of award, and $9,000 representing a car allowance made available to
him under his employment agreement with SCPI (see "Employment Agreements,"
below.)

(4) This amount consists of (i) $1,810 paid by SCPI into its 401(k) plan for
the account of Mr. Hemsley, an amount equal to 25% of his contributions,
and (ii) $4,211 representing long term disability insurance premiums paid
by the Company.

(5) This amount consists of (i) $9,304 paid by SCPI into its 401(k) plan for
the account of Mr. Frank, an amount equal to 25% of his contributions,
together with a discretionary year-end contribution that is allocated to
employees according to a point system based on years of service, salary,
bonus and commissions earned; and (ii) $6,504, $5,508 and $1,896 that Mr.
Frank received under three substantially identical agreements amended in
1987 in consideration of the waiver by Mr. Frank of his bankruptcy claims
for annuity rights in SCPI's predecessor's bankruptcy.

(6) This amount represents a contribution by SCPI to its 401(k) plan for the
account of this executive, an amount equal to 25% of his contributions, and
a discretionary year-end contribution that is allocated as described in
footnote (5), above.

Executive Employment and Other Related Agreements.

Maarten D. Hemsley. Under an employment agreement with the Company
effective March 1, 1994 and which terminated on August 31, 1995, Mr. Hemsley was
paid a salary at the annual rate of $58,333 through August 1994 and thereafter
at the annual rate of $30,000. The agreement required Mr. Hemsley to devote, on
average, fifty percent of his working time to the affairs of the Company and
SCPI and entitled him to an annual bonus equal to 10% of the defined profits of
the Company on a consolidated basis exceeding $1,250,000; to a stock option,
that vests over a four-year period, to purchase 100,000 shares of the Company's
Common Stock; and five annual awards of stock consisting of 5,909 shares each,
commencing in April 1994.

Mr. Hemsley had a similar agreement with SCPI that provided for an
annual salary of $116,667 through August 1994 and thereafter at $60,000 per
year.

From August 31, 1995 until December 31, 1995 Mr. Hemsley continued to be
employed by the Company and SCPI on similar terms to the expired employment
agreements. Effective January 1, 1996, when Mr. Hemsley ceased to be employed by
either company, Oakhurst entered into a consulting agreement with Bryanston
Management, Ltd., of which Mr. Hemsley is owner and president, pursuant to which
Mr. Hemsley will provide consulting services to Oakhurst and its subsidiaries.
The agreement provides for monthly fees of $7,083 and is terminable by either
party on six months notice. During the term of the consulting agreement,
Oakhurst will also provide Mr. Hemsley with similar benefits as provided to him
during his prior employment by the companies. See "Certain Transactions."

Mr. Frank and SCPI Executives. SCPI has three-year employment agreements
with each of Messrs. Frank, Ruda and Allan (each sometimes hereinafter referred
to as the "executive") commencing September 1, 1993 that provide for base
salaries of $100,000 (Mr. Frank); $140,060 increasing over the term of the
agreement to $163,020 (Mr. Ruda); and $96,200 increasing to $115,050 (Mr.
Allan). The agreements provide for the payment of annual management bonuses
based upon the defined profits of SCPI's operating division, with Messrs. Frank
and Ruda entitled to a minimum bonus of fifteen percent and ten percent,
respectively, of base salary. The aggregate amount of such management bonuses
payable each year to these executives and to all other SCPI executives is not to
exceed 8% of such defined profits and the allocation thereof is made by the
Compensation Committee of SCPI based on recommendations of Mr. Frank as Chief
Executive Officer of SCPI. Messrs. Ruda and Allan are also each entitled to an
executive bonus calculated as a percentage of defined annual profits of SCPI
that exceed $2,000,000.

Following the loss in October of two of SCPI's largest customers, each
of Messrs. Frank, Ruda and Allan has agreed to salary reductions and/or deferral
of contractual increases.

In the event of non-renewal of the agreements, the executive is entitled
to an aliquot portion of the bonuses he would have earned during the year of
non-renewal, since the contract year does not coincide with the fiscal year of
SCPI. The agreements also provide that if the executive's employment terminates
by reason of his death or disability, he is entitled to the greater of two
years' salary (one year for Mr. Allan) or the salary for the balance of the term
of the agreements and the minimum bonus for such period in the case of Messrs.
Frank and Ruda and the management bonus that would otherwise have been paid in
the case of Mr. Allan. If the executive's employment is otherwise terminated
without cause, he is entitled to his salary and bonuses for the greater of one
year or the balance of the term of the agreement.

The agreements with Messrs. Frank, Ruda and Allan provide for car
allowances, and the executives are eligible to participate in all defined
contribution plans, survivor and supplemental benefits, short and long-term
disability benefits, and all other benefit plants and perquisites available now
or in the future to the senior executives of SCPI.

The agreements also provide for certain termination rights in the event
of a change in control of SCPI. Change in control is defined to include certain
changes in the make-up of the SCPI board of directors or a sale of SCPI's assets
or business. Each executive has the right to terminate his employment within a
defined period (ranging up to one year) following a change in control and to (i)
be paid his base salary for a period of up to twenty-four months following such
termination; (ii) continue to receive for a like period the benefits that he is
entitled to receive under his agreement; and (iii) be paid twenty-five percent
of his base salary in lieu of all bonus entitlement. The agreements also provide
for substantially the same payments and benefits in the event the executive's
employment is terminated by SCPI without cause as a result of a change in
control. In the event of any termination other than for cause, or voluntary
resignation in the absence of a change in control, the executive's options
become fully exercisable for a period of seven months following termination. If
a change in control had occurred on June 1, 1995, and if each of Messrs. Frank,
Ruda and Allan had exercised his rights of termination, payments by SCPI would
have been approximately $910,000 in the aggregate.

In December 1995, Mr. Ruda resigned as President of SCPI and as a
director, and was elected Senior Vice President - Marketing of the Company. The
Company anticipates entering into a new agreement with Mr. Ruda in his new
position.

Other Compensation Agreement

Mr. Frank also receives compensation of $13,908 per year, in the
aggregate, under three substantially identical agreements amended in 1987 in
consideration of the waiver by Mr. Frank of his bankruptcy claims for annuity
rights in SCPI's predecessor's bankruptcy. The amended agreements provide for
payments to be made for a period of fifteen years subsequent to January 1988 of
$6,504, $5,508 and $1,896 per year for the three agreements, respectively.
Payments commenced in January 1987 and will continue until January 2003.

Retirement Plans

SCPI maintains a defined contribution profit-sharing plan qualified
under Section 401(k) of the Internal Revenue Code of 1986 (the "Code") covering
substantially all of its employees including the executives, whereby employees
with six months of service may contribute a percentage of compensation, limited
to maximum allowed amounts under the Code. The plan provides for a 25% matching
employer contribution (which was suspended following the loss by SCPI of two
major customers in October 1995) and an annual discretionary contribution
determined by SCPI's Board of Directors. Retirement plan costs are funded on a
current basis and the plan has no independent trustees.

Dowling's has a profit-sharing plan for all employees, including
executives, over the age of twenty-one with 1,000 hours of defined service.
Employer contributions to the plan are made on an annual basis at the discretion
of management.

H&H maintains a defined contribution profit-sharing plan for all
employees, including executives, over the age of twenty-one who have met the
requirement of one year of defined eligibility service. Employer contributions
to the plan are made on an annual basis at the discretion of management.

Stock Option Plans

The 1994 Omnibus Stock Option Plan. On July 19, 1994, the Company's
stockholders approved the adoption of the 1994 Omnibus Stock Option Plan (the
"Plan"). The Plan provides for the issuance of a maximum of 350,000 shares of
Common Stock pursuant to the grant of incentive stock options to employees and
the grant of non-qualified stock options, stock or restricted stock to
employees, consultants, directors and officers of the Company and its
subsidiaries. Any employee of the Company or its subsidiaries who is considered
a key contributor to the overall success of the consolidated enterprise is an
eligible participant in the Plan. Grants and awards are made based on the
recommendation of senior management and in the case of executive officers, based
on the evaluation of the Stock Plans Committee (the "Committee") of the Board of
Directors of the Company.

Under the Plan, the exercise price of incentive options must be not less
than 100% (or 110% with respect to any optionee owning more than 10% of the
total combined voting power of all classes of stock of the Company) of the fair
market value of the Common Stock at the date of grant, and the aggregate fair
market value (determined at the time of grant) of shares issuable pursuant to
such options which first became exercisable in any calendar year by an employee
or officer, may not exceed $100,000. The term of such options may not exceed ten
years (except that with respect to any optionee who owns more than 10% of the
total combined voting power of all classes of stock of the Company, the term may
not exceed five years). The corresponding provisions of any non-qualified stock
options granted under the Plan are not similarly limited by the Plan terms.

The Plan is administered by the Stock Plans Committee, none of whose
members is eligible to receive options or awards under the Plan. Subject to the
provisions of the Plan itself, the Committee has the authority to select the
optionees or Stock award recipients and determine the terms of the options or
stock granted, including: (i) the number of Shares; (ii) the term of the option
(which may not exceed ten years); (iii) the exercise or purchase price (which in
the case of an incentive stock option cannot be less than the market price of
the Common Stock as of the date of the grant); (iv) the type an duration of any
transfer or other restrictions; and (v) the time and form of payment for stock
and upon exercise of options. Options granted are not transferable by the option
holder except by will or by the laws of descent and distribution. Also,
generally, no incentive stock option may be exercised more than 60 days
following termination of employment. However, in the event that termination is
due to death or disability, an incentive stock option is exercisable for a
maximum of 180 days after such termination.

As of August 31, 1995, options for the purchase of 333,652 shares of
Common Stock were outstanding under the Plan (of which options covering 192,834
shares were exercisable); 14,318 shares of Common Stock have been awarded under
the Plan; and an additional 16,348 shares remained available for grants or
awards under the Plan.

The 1994 Non-Employee Director Stock Option Plan. The stockholders of
the Company on July 19, 1994 approved the adoption of the 1994 Non-Employee
Director Stock Option Plan (the "Director Plan"). Up to 100,000 shares of Common
Stock are authorized for issuance under the Director Plan to directors who are
not employees of the Company (currently five persons). The Director Plan is
administered by the Committee. Pursuant to the provisions of the Director Plan,
in April 1994 non-employee directors were each granted a fully-vested option to
purchase 3,000 shares of Common Stock at the market value of a share on that
date ($2.75). On May 1 of each subsequent year, each non-employee director
holding office on such date will receive a fully-exercisable option to purchase
3,000 shares of Common Stock at the market value of a share of Common Stock on
that date. Pursuant to such provision, on May 1, 1995, the non-employee
directors were each granted a fully exercisable option to purchase 3,000 shares
of Common Stock (aggregating 24,000 shares) at the market value of a share on
that date ($3.375). No consideration is payable by recipients with respect to
the option grants. The options expire ten years from the date of grant. Options
under the Director Plan may not be assigned or transferred except by will or by
the laws of descent and distribution and are exercisable only while the optionee
is serving as a director of the Company or within 180 days after the optionee
ceases to serve as a director of the Company, except that if a director dies or
becomes disabled while he or she is serving as a director of the Company, the
option is exercisable until the scheduled expiration date of the option.

As of August 31, 1995, options for the purchase of 48,000 shares of
Common Stock were outstanding and exercisable under the Director Plan, and an
additional 52,000 shares remained available for grants or awards under the Plan.

Option Grants and Exercises in the Last Fiscal Year. Options covering
24,000 shares were granted to non-employee directors during fiscal 1995, none of
which were exercised during such year.

<PAGE>

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth certain information with respect to stock
options granted to the executive officers of the Company named in the Summary
Compensation Table during the fiscal year ended February 28, 1995.

<TABLE>
<CAPTION>
Potential
Realizable
Value at Assumed
Annual Rates of
Percent of Stock Price
Total Per Appreciation for
Grants Share Option Term (5)
Options To All Exercise Expiration ----------------
Name Granted Employees Price(4) Date 5% 10%
- ---- ------- --------- -------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Maarten D. Hemsley 100,000(1) 39.0% $2.750 2004 $172,946 $438,279
Bernard H. Frank 27,500(2) 11.0% 2.750 2004 47,560 120,527
John R. Ruda 15,000(3) 5.8% 2.750 2004 25,942 65,742
Terrance W. Allan 5,000(3) 1.9% 2.750 2004 8,647 21,914
" " 1,000(3) 0.4% 3.375 2004 2,123 5,379
</TABLE>

(1)This option becomes exercisable at the rate of one-fifth of the shares
subject to the option on the grant date and an additional one-fifth on each
of the next four anniversaries of the date of grant.

(2)This option became exercisable in full on the grant date.

(3)These options become exercisable as to one-third of the shares on the grant
date and an additional one-third on each of the next two anniversaries of the
date of grant.

(4)This exercise price is the fair market value of the Common Stock on the date
of grant.

(5)The "potential realizable value" is calculated based on the term of the
option (ten years) at its date of grant. It is calculated by assuming that
the stock price on the date of grant appreciates at the indicated annual rate
compounded annually for the entire term of the option. However, the optionee
will not actually be able to realize any benefit from the option unless the
market value of the Common Stock in fact increases over the option price.

<PAGE>

FISCAL YEAR END OPTION VALUES

During fiscal 1995, there were no options exercised by any of the
executive officers of the Company named in the Summary Compensation Table.
However, Maarten Hemsley exercised warrants issued in 1989 for 62,500 shares at
$1.00 per share. The following table sets forth certain information based upon
the fair market value per share of the Common Stock as of February 28, 1995
($3.375), with respect to stock options held by each of the Company's named
executive officers as of that date. The "value" of unexercised in-the-money
options is the difference between the market value of the Common Stock subject
to the options at February 28, 1995 and the exercise (purchase) price of the
option shares, assuming the option were exercised and the shares sold on that
date for such market value.

Number of Shares
of Common Stock
Underlying Unexercised Value of Unexercised
Options at Fiscal Year End Options at Fiscal Year End
--------------------------- --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Maarten D. Hemsley 89,424 80,000 $43,390 $50,000
Bernard H. Frank 48,327 - 30,204 -
John R. Ruda 25,827 10,000 16,141 6,250
Terrance W. Allan 10,248 4,083 6,249 2,083
</TABLE>

<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information known to the Company
regarding beneficial ownership of the Company's Common Stock at December 1, 1995
and the offering hereby by (i) each person who is known by the Company to own
beneficially more than 5% of the Company's Common Stock; (ii) each director of
the Company; (iii) each executive officer of the Company; and (iv) all directors
and executive officers as a group. Except as otherwise indicated in the
footnotes, the Company believes, based on information furnished by such owners,
that the beneficial owners of the Common Stock listed below have sole investment
and voting power with respect to the shares of Common Stock shown as
beneficially owned by them, subject to community property laws where applicable.
Unless otherwise indicated, the address of each of the 5% stockholders named
below is the Company's principal executive office.

Shares Beneficially Owned
Prior to Offering(1)
--------------------------
Name and Address of
Beneficial Owner Number Percentage
------------------- ------ ----------
<S> <C> <C>
Fidelity Capital Trust:
Fidelity Capital Appreciation
Fund(2) 289,000 9%

Special Situations Fund III,
L.P.(3)(4) 289,000 9%

Maarten D. Hemsley 189,903(5) 6%
John D. Abernathy 20,996(6) *
Mark Auerbach 20,996(6) *
Robert M. Davies 103,992(7) 4%
Bernard H. Frank 80,334(8) 3%
Joel S. Lever 61,815(9) 2%
Richard Randolph 20,996(6) *
Anthony N. Puma 266,667(10) 8%
Terrance W. Allan 12,665(11) *
John R. Ruda 39,327(12) 1%

All directors and executive
officers as a group, 10
persons 817,691(13) 26%

</TABLE>

* Less than 1%.

(1) Shares of Common Stock subject to options exercisable as of December 1,
1995 (or exercisable within 60 days after such date), are deemed
outstanding for purposes of computing the percentage ownership of the
person holding such option but are not outstanding for purposes of
computing the percentage of any other person. Unless otherwise indicated in
these footnotes, each stockholder listed above has sole voting and
investment power with respect to the shares beneficially owned.

(2) The business address of the Fidelity Capital Appreciation Fund (the "Fund")
is 82 Devonshire Street, Boston, Massachusetts 02109. The Fund is a
portfolio of the Fidelity Capital Trust, an investment company registered
under the Investment Company Act of 1940, as amended. Fidelity Management
and Research Company, a management corporation and an investment advisor
registered under Section 201 of the Investment Advisors Act of 1940, as
amended ("FMRC"), provides investment advisory services to the Fund and to
certain other registered investment companies. FMRC is a wholly-owned
subsidiary of FMR Corp., a Massachusetts corporation.

(3) The address of Special Situations Fund III, L.P. is 153 E. 53rd Street,
New York, New York.

(4) Pursuant to an agreement dated as of June 11, 1991 among The Hallwood Group
Incorporated ("HGI") Special Situations Funds, L.P. (formerly
Prudential-Bache Special Situations Fund, L.P. ("SSF")), SCPI and the
Company, SSF agreed to vote its shares in favor of a proposed merger in
which SCPI became a subsidiary of the Company. In exchange, SCPI, HGI and
the Company agreed to cause Mark Auerbach, a nominee of SSF, to be
appointed to the Board of Directors of the Company. During the term of the
agreement, SSF has the right to nominate Mr. Auerbach or another designee
as a nominee for election as a Director of the Company and HGI is required
to vote its shares in favor of such nominee. The obligations of HGI are
binding on the transferees of the shares formerly owned by HGI including
certain of the directors and officers of the Company (see "Security
Ownership of Management" below). By agreement with the Company dated June
25, 1990, as amended, SSF agreed not to increase its beneficial ownership
of the Common Stock of the Company or SCPI above 8.2% of the then
outstanding shares except in transactions to which the Company or SCPI, as
the case may be, is a party or under certain other circumstances.

(5) Includes 109,424 shares issuable upon the exercise of options that are
presently exercisable at $2.75 per share.

(6) Includes 20,996 shares issuable upon the exercise of vested options,
17,996 at $2.75 per share, and the balance at $3.375 per share.

(7) Includes 38,992 shares issuable under outstanding stock options that are
presently exercisable; 35,992 at $2.75 per share and the balance at $3.375
per share.

(8) Includes 48,327 shares issuable upon the exercise of vested options
at $2.75 per share.

(9) Includes 20,996 shares issuable under outstanding stock options that are
presently exercisable; 17,996 at $2.75 per share and the balance at $3.375
per share.

(10) One-half of these shares may not be sold by Mr. Puma prior to October
1996 and the other one-half may not be sold prior to October 1997.

(11) Includes 12,165 shares issuable under outstanding options that
are presently exercisable; 11,665 at $2.75 per share and the balance
at $3.375 per share. Mr. Allan is an executive officer of the
Company's subsidiary, SCPI.

(12) Includes 30,827 shares issuable upon the exercise of stock options that are
presently exercisable at $2.75 per share.

(13) Includes 280,727 shares issuable under vested options at prices ranging
from $2.75 to $3.375 per share, and 12,665 shares held or presently
purchasable under outstanding stock options by Mr. Allan, who is not an
executive officer or director of the Company.

<PAGE>

SELLING STOCKHOLDERS

The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of December 1, 1995 and as
adjusted to reflect the sale of the Common Stock offered hereby, by each of the
Selling Stockholders.

Except as indicated below, none of the Selling Stockholders has had any
position, office or other material relationship within the past three years with
the Company or its affiliates.

<TABLE>
<CAPTION>
Shares To Be
Shares Beneficially Owned
Beneficially After Offering
Name of Selling Owned Prior Shares ------------------------
Stockholder to Offering (1) Offered(2) Number Percentage
--------------- ---------------- ---------- ------- ----------
<S> <C> <C> <C> <C>
Roger M. Barzun (3) 12,160 6,160 6,000 *
Norman Berke 10,000 10,000 0 -
Chelverton Fund 40,000 20,000 20,000 *
Ruth S. Cohen 10,000 10,000 0 -
Robert M. Davies(4) 103,992 75,000 28,992 1%
Fidelity Capital Trust:
Fidelity Capital
Appreciation Fund 289,000 174,000 115,000 4%
Bernard H. Frank (5) 80,334 32,007 48,327 2%
Harold Garfinkel (6) 22,000 12,000 10,000 *
Maarten D. Hemsley (7) 189,903 80,479 109,424 3%
Robert Holtz 5,000 5,000 0 -
Joseph M. Jacobs (8) 25,819 25,819 0 -
Michelle Jacobs 20,000 20,000 0 -
Joel S. Lever (9) 61,815 40,819 20,996 *
Anthony N. Puma(10)(11) 266,667 266,667 0 -
John R. Ruda (12) 39,327 7,500 31,827 1%
Special Situations Fund
III, L.P. 289,000 89,000 200,000 6%
David R.A. Steadman 15,000 10,000 5,000 *
James B. Stein(6) 5,500 3,000 2,500 *
William Witter, Inc. 126,729 100,000 26,729 *
----------- --------- ---------- --------
Totals 1,612,246 987,451 624,795 16%
=========== ========= ========== ========
</TABLE>

* Less than 1%.

(1) Except as provided herein, the Company believes, based on information
provided by the Selling Shareholders, that each Selling Stockholder has
sole voting and investment power with respect to the shares beneficially
owned.

(2) The sale or distribution of the Shares may be effected directly to
purchasers by the Selling Stockholders as principals or through one or more
underwriters, brokers, dealers or agents from time to time in one or more
transactions (which may involve crosses or block transactions) or (i) on any
exchange or in the over-the-counter market, (ii) in transactions otherwise
than in the over-the-counter market or (iii) through the writing of options
(whether such options are listed on an options exchange or otherwise) on, or
settlement of short sales of, the Shares. Any of such transactions may be
effected at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, at varying prices determined at the time
of sale or at negotiated or fixed prices, in each case as determined by the
Selling Stockholder or by agreement between the Selling Stockholder and
underwriters, brokers, dealers or agents, or purchasers. If the Selling
Stockholders effect such transactions by selling Shares to or through
underwriters, brokers, dealers or agents, such underwriters, brokers,
dealers or agents may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders or commissions from
purchasers of Shares for whom they may act as agent (which discounts,
concessions or commissions as to particular underwriters, brokers, dealers
or agents may be in excess of those customary in the types of transactions
involved). The Selling Stockholders and any brokers, dealers or agents that
participate in the distribution of the Shares may be deemed to be
underwriters, and any profit on the sale of Shares by them and any
discounts, concessions or commissions received by any such underwriters,
brokers, dealers or agents may be deemed to be underwriting discounts and
commissions under the Securities Act.

Under the securities laws of certain states, the Shares may be sold in such
states only through registered or licensed brokers or dealers. In addition,
in certain states the Shares may not be sold unless the Shares have been
registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.

The Company will pay all of the expenses incident to the registration,
offering and sale of the Shares to the public hereunder other than
commissions, fees and discounts of underwriters, brokers, dealers and
agents. The Company has agreed to indemnify the Selling Stockholders and any
underwriters against certain liabilities, including liabilities under the
Securities Act. The Company will not receive any of the proceeds from the
sale of any of the Shares by the Selling Shareholders.

(3) Roger M. Barzun is Senior Vice President, Secretary and General
Counsel of the Company.

(4) Robert M. Davies has been a director of the Company since 1991.

(5) Bernard H. Frank is Executive Vice President, Chief Operating Officer
and a Director of the Company.

(6) Harold Garfinkel is President and Chief Executive Officer of H&H and James
B. Stein is General Manager of H&H.

(7) Maarten D. Hemsley, until his resignation on December 18, 1995,
was a Director, Chairman of the Board of Directors, President, Chief
Executive Officer and Chief Financial Officer of the Company. Mr.
Hemsley will remain a consultant to the Company, however.

(8) Joseph M. Jacobs is a former Director of the Company, who resigned from
the Board in May 1995.

(9) Joel S. Lever is a Director of the Company.

(10) Anthony N. Puma is President of Puma and was elected as a Director of the
Company at the August 10, 1995 Annual Meeting of Stockholders.

(11) All of the 266,667 shares of Common Stock being sold by Anthony N. Puma are
subject to restrictions on transfer and sale for the period from October
20, 1994 to October 19, 1996 and 133,334 of such shares are subject to
restrictions on transfer and sale until October 19, 1997, all pursuant to a
Stock Agreement, dated as of October 20, 1994, between the Company and
Anthony N. Puma. See "Plan of Distribution" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Liquidity
and Capital Resources."

(12) John R. Ruda was the President of SCPI until December 1995 when he
was elected Senior Vice President - Marketing of the Company.

<PAGE>

DESCRIPTION OF CAPITAL STOCK

Description of Oakhurst Common Stock

At August 31, 1995 Oakhurst's authorized capital stock consisted of
14,000,000 shares of Common Stock with a par value of $0.01 per share and
1,000,000 shares of Preferred Stock with a par value of $0.01 per share, in one
or more series, and with such designations, powers, preferences, rights,
qualifications, limitations and restrictions as the Board of Directors of
Oakhurst shall by resolution establish. At August 31, 1995 there were 3,195,235
shares of Common Stock issued and outstanding and options to purchase 383,402
shares of Common Stock and Convertible Debt convertible into 120,346 shares of
Common Stock.

The following statements relating to Oakhurst Common Stock constitute a
brief description of its material attributes but do not purport to be complete.
They are qualified in their entirety by reference to Oakhurst's Certificate of
Incorporation and the laws of the State of Delaware. Oakhurst's Common Stock is
listed on the Nasdaq Small-Cap Market under the trading symbol OAKC.

Common Stock.

Dividend Rights. Oakhurst's Common Stock is entitled to all dividends
if, when and as declared from funds legally available therefor by resolution of
the Board of Directors of Oakhurst, after full provision for Preferred Stock of
Oakhurst, if and when any Preferred Stock is issued by Oakhurst.

Voting Rights. Owners of record of Oakhurst Common Stock are
entitled to notice of and to vote at any meeting of stockholders of Oakhurst.
Each share of Oakhurst Common Stock is entitled to one vote.

Liquidation Rights. After satisfaction of creditors and of preferential
liquidation rights of Preferred Stock of Oakhurst, if and when any shall be
issued and outstanding, holders of Oakhurst Common Stock are entitled to share
ratably in the distribution of the remaining assets of Oakhurst.

Preferred Stock.

The Board of Directors of Oakhurst is authorized, subject to any
limitations prescribed by law, without further stockholder approval, to issue
from time to time up to an aggregate of 1,000,000 shares of Preferred Stock in
one or more series. Each such series of Preferred Stock shall have such number
of shares, designations, preferences, voting powers, qualifications and special
or relative rights or privileges, which may include, among others, dividend
rights, voting rights, redemption and sinking fund provisions, liquidation
preferences and conversion rights, as shall be determined by the Board of
Directors in a resolution or resolutions providing for the issuance of such
series. Any such series of Preferred Stock, if so determined by the Board of
Directors, may have full voting rights with the Common Stock or superior or
limited voting rights, and may be convertible into Common Stock or another
security of the Company.

The Company has granted to the Board of Directors the authority to issue
Preferred Stock and to determine its rights and preferences in order to
eliminate delays associated with a stockholder vote on specific issuances. The
issuance of Preferred Stock, while providing desirable flexibility in connection
with possible acquisitions and other corporate purposes, could have the effect
of making it more difficult for a third party to acquire, or of discouraging a
third party from acquiring, a majority of the outstanding voting stock of the
Company. The Company has no present plans to issue any shares of Preferred
Stock. See "Risk Factors - Effect of Certain Charter and By-law Provisions."

Delaware Law and Certain Charter and By-Law Provisions

Certain anti-takeover provisions. The Company is subject to the
provisions of Section 203 of the General Corporation Law of Delaware. Section
203 prohibits certain publicly held Delaware corporations from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an
"interested stockholder," unless the business combination is approved in a
prescribed manner. A "business combination" includes mergers, asset sales and
other transactions resulting in a financial benefit to the interested
stockholder. Subject to certain exceptions, an "interested stockholder" is a
person or entity who, together with affiliates and associates, owns (or within
the preceding three years, did own) 15% or more of the corporation's voting
stock. The statute contains provisions enabling a corporation to avoid the
statute's restrictions if the stockholders holding a majority of the
corporation's voting stock approve an amendment to the corporation's Certificate
of Incorporation or By-Laws.

The Certificate of Incorporation of the Company provides that the
directors of the corporation shall be divided into three classes, with the terms
of each class to expire on different years.

Certain Restrictions on Transfer. The Certificate of Incorporation of
the Company provides for certain restrictions on the transfer of shares of the
capital stock of the Company. The restrictions are designed to preserve the Tax
Benefits. The provisions provide that no person other than the Company may
transfer, without the advance approval of the Board of Directors, any shares of
the capital stock of the Company to any person to the extent that such transfer
would cause the percentage ownership interest in the Company of the transferee
to exceed 4.5% or would cause any increase in the percentage ownership interest
in a transferee whose percentage ownership interest in the Company already
exceeded 4.5% prior to the transfer.

The Certificate of Incorporation of the Company contains a provision
authorizing a class of Preferred Stock, the terms of which may be fixed
from time to time by the Board of Directors without further stockholder
approval. See "Preferred Stock."

Reference is made to the full text of the foregoing statutes, the
Company's Certificate of Incorporation, as amended, and By-Laws for their entire
terms. The partial summary contained in this Prospectus is not intended to be
complete.

See "Risk Factors - Effect of Certain Charter and By-Law Provisions."

Elimination of Monetary Liability for Officers and Directors. The
Company's Certificate of Incorporation incorporates certain provisions permitted
under the General Corporation Law of Delaware relating to the liability of
Directors. The provisions eliminate a Director's liability for monetary damages
for a breach of fiduciary duty, including gross negligence, except in
circumstances involving certain wrongful acts, such as the breach of a
Director's duty of loyalty or acts or omissions which involve intentional
misconduct or a knowing violation of law. These provisions do not eliminate a
Directors' duty of care. Moreover, the provisions do not apply to claims against
a Director for violations of certain laws, including federal securities laws.
The Company's Certificate of Incorporation also contains provisions to indemnify
the Directors, officers, employees or other agents to the fullest extent
permitted by the General Corporation Law of Delaware. The Company believes that
these provisions will assist the Company in attracting and retaining qualified
individuals to serve as Directors.

Indemnification of Officers and Directors. The Company's Certificate of
Incorporation also contains provisions to indemnify the Directors, officers,
employees or other agents to the fullest extent permitted by the General
Corporation Law of Delaware. These provisions may have the practical effect in
certain cases of eliminating the ability of shareholders to collect monetary
damages from directors. The Company believes that these provisions will assist
the Company in attracting or retaining qualified individuals to serve as
Directors.

Transfer Agent and Registrar

The Transfer Agent and Registrar for the Common Stock of the Company is
American Stock Transfer & Trust Company.

<PAGE>

CERTAIN TRANSACTIONS

In fiscal 1994, H&H entered into a seven year lease with Harold
Garfinkel, the President and former owner of H&H, for the principal property
from which it conducts its business. The lease has an option to renew for an
additional five years, and requires annual lease payments of $144,000. H&H paid
Mr. Garfinkel $144,000 in fiscal 1995 and $12,000 in fiscal 1994 under this
lease.

In fiscal 1995, Dowling's entered into two five-year leases with James
Dowling, the Vice Chairman of the Board of Directors of Dowling's and former
owner of Dowling's for a facility in New York in which Dowling's is
headquartered and operates a warehouse, and for a facility in Connecticut where
Dowling's operates a warehouse. Both leases have an option to renew for an
additional five years and require aggregate annual rent payments of $211,000.
Dowling's paid Mr. Dowling approximately $122,000 in fiscal 1995 under these
leases.

In fiscal 1995, Puma entered into a six year lease with Anthony Puma for
the facility in which Puma conducts its business. The lease has an option to
renew for an additional four years, contains an option to rent additional space
that is exercisable every two years, and requires annual lease payments of
$133,000. Puma paid Mr. Puma approximately $20,000 in fiscal 1995 under this
lease.

The Company has recently negotiated the terms of a consulting agreement
with Mark Auerbach, a director of the Company and, as of December 18, 1995, the
Chairman of the Board of Directors, Chief Executive Officer and President of the
Company (See "Management"). The currently negotiated terms of the consulting
agreement provide that Mr. Auerbach will receive $10,000 per month as a
consulting fee for a term of one year and will also receive options to purchase
up to 100,000 shares of the Company's Common Stock, with options to purchase up
to 50,000 of such shares exercisable upon the effective date of the agreement at
an exercise price of $1.25 per share, with the remaining options exercisable one
year from the effective date of the agreement at an exercise price of $2.00 per
share. It is currently contemplated that the Company will have the right to
renew the agreement at its expiration for an additional one year term.

Effective January 1, 1996, when Mr. Hemsley ceased to be employed by Oakhurst,
Oakhurst entered into a consulting agreement with Bryanston Management, Ltd., of
which Mr. Hemsley is owner and president, pursuant to which Mr. Hemsley will
provide consulting services to Oakhurst and its subsidiaries. The agreement
provides for monthly fees of $7,083 and is terminable by either party on six
months notice. During the term of the consulting agreement, Oakhurst will also
provide Mr. Hemsley with similar benefits as provided to him during his prior
employment by the companies.

PLAN OF DISTRIBUTION

The sale or distribution of the Shares may be effected directly to
purchasers by the Selling Stockholders as principals or through one or more
underwriters, brokers, dealers or agents from time to time in one or more
transactions (which may involve crosses or block transactions) or (i) on any
exchange or in the over-the-counter market, (ii) in transactions otherwise than
in the over-the-counter market or (iii) through the writing of options (whether
such options are listed on an options exchange or otherwise) on, or settlement
of short sales of, the Shares. Any of such transactions may be effected at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, at varying prices determined at the time of sale or at
negotiated or fixed prices, in each case as determined by the Selling
Stockholder or by agreement between the Selling Stockholder and underwriters,
brokers, dealers or agents, or purchasers. If the Selling Stockholders effect
such transactions by selling Shares to or through underwriters, brokers, dealers
or agents, such underwriters, brokers, dealers or agents may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholders or commissions from purchasers of Securities for whom they
may act as agent (which discounts, concessions or commissions as to particular
underwriters, brokers, dealers or agents may be in excess of those customary in
the types of transactions involved). The Selling Stockholders and any brokers,
dealers or agents that participate in the distribution of the Shares may be
deemed to be underwriters, and any profit on the sale of Shares by them and any
discounts, concessions or commissions received by any such underwriters,
brokers, dealers or agents may be deemed to be underwriting discounts and
commissions under the Securities Act.

Certain of the underwriters, dealers, brokers or agents may have other
business relationships with the Company and its affiliates in the ordinary
course.

LEGAL MATTERS

The validity of the Common Stock to be sold in this offering is being passed
upon for the Company by Roger M. Barzun, Esq., General Counsel to the Company.
Mr. Barzun is also Senior Vice President and Secretary of the Company and owns
a total of 6,160 shares of the Common Stock and has options covering 16,000
shares of Common Stock of which 8,000 shares are exercisable within sixty days
of the date hereof. See "Management" and "Selling Stockholders."

EXPERTS

The financial statements of Oakhurst as of February 28, 1995 and
February 26, 1994 and for each of the three fiscal years in the period ended
February 28, 1995, of Dowling's as of July 31, 1994 and September 30, 1993 and
for the ten months ended July 31, 1994 and the year ended September 30, 1993,
and of Puma as of September 30, 1994 and for the nine months then ended
and the related financial statement schedule of Oakhurst, included in this
Prospectus have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports dated April 28, 1995, December 20, 1994 and February 10,
1995, respectively, appearing herein. Their report on Oakhurst expressed an
unqualified opinion and included an explanatory paragraph referring to the
Company's change in its method of accounting for income taxes to conform with
Statement of Financial Accounting Standards No. 109. Because they were unable to
satisfy themselves concerning the inventory quantities as of September 30, 1991,
Deloitte & Touche LLP has disclaimed an opinion on the statements of income,
stockholders' equity and cash flows of Dowling's for the year ended September
30, 1992. Such financial statements of Oakhurst, Dowling's and Puma are included
herein in reliance upon the respective reports of such firm given upon their
authority as experts in accounting and auditing.

The financial statements of Puma as of December 31, 1993 and for the
year then ended have been audited by Podsednik & Company, independent auditors,
as stated in their report dated February 10, 1995 appearing herein. Such
financial statements of Puma are included herein in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), a Registration Statement on Form S-1 under the Securities Act
with respect to the Common Stock being offered hereby. For further information
about the Company and the securities offered hereby, reference is made to the
Registration Statement and to the financial statements, schedules and exhibits
filed as a part thereof. Statements contained in this Prospectus as to the
contents of any contract or any other document are not necessarily complete, and
in each instance, reference is made to the copy of such contract or document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference. The Registration Statement,
including exhibits thereto, may be inspected without charge at the Commission's
principal office at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and copies of all or any part thereof may be obtained from such office
after payment of the fees prescribed by the Commission.

<PAGE>

INDEX TO FINANCIAL STATEMENTS

Page

OAKHURST COMPANY, INC. & SUBSIDIARIES

Independent Auditors' Report ....................... F-3

Consolidated Balance Sheets as of August 31, 1995*,
February 28, 1995 and February 26, 1994 .......... F-4

Consolidated Statements of Operations for the six
months ended August 31, 1995*, the twenty-six
weeks ended August 27, 1994* and each of the three
fiscal years in the period ended February 28, 1995 F-5

Consolidated Statements of Stockholders' Equity
for each of the three fiscal years in the period
ended February 28, 1995 and the six months ended
August 31, 1995* ................................. F-6

Consolidated Statements of Cash Flows for the six
months ended August 31, 1995*, the twenty-six
weeks ended August 27, 1994* and each of the
three years in the period ended February 28, 1995 F-7

Notes to Consolidated Financial Statements ......... F-8

Schedule II - Valuation and Qualifying Accounts
for each of the three fiscal years in the period
ended February 28, 1995 .......................... F-21

- -------------
* The financial statements as of and for the
six months ended August 31, 1995
and the twenty-six weeks ended August 27, 1994
are unaudited.

DOWLING'S FLEET SERVICE CO., INC.

Independent Auditors' Report ....................... F-22

Balance Sheets as of July 31, 1994 and
September 30, 1993 ............................... F-23

Statements of Income for the ten months ended
July 31, 1994 and the years ended
September 30, 1993 (as restated)
and 1992 (unaudited) ............................. F-24

Statements of Stockholder's Equity for the
ten months ended July 31, 1994 and the
years ended September 30, 1993 (as restated)
and 1992 (as restated) (unaudited) ............... F-25

Statements of Cash Flows for the ten months
ended July 31, 1994 and the years
ended September 30, 1993 (as restated)
and 1992 (as restated) (unaudited) ............... F-26

Notes to Financial Statements ...................... F-27

LBI CORP. d/b/a PUMA PRODUCTS

Independent Auditors' Reports ...................... F-31

Balance Sheets as of September 30, 1994 and
December 31, 1993 ................................ F-33

F-1
<PAGE>

Statements of Income for the nine months ended
September 30, 1994 and the year ended
December 31, 1993 ................................ F-34

Statements of Stockholder's Equity for the
nine months ended September 30, 1994 and
the year ended December 31, 1993 ................. F-35

Statements of Cash Flows for the nine months
ended September 30, 1994 and the
year ended December 31, 1993 ..................... F-36

Notes to Financial Statements ...................... F-37

PRO FORMA CONDENSED CONSOLIDATED (UNAUDITED)
FINANCIAL STATEMENTS

Pro Forma Condensed Consolidated Statement
of Income (unaudited) ............................ F-40

Notes to Pro Forma Condensed Consolidated
Statement of Income .............................. F-41

F-2
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Oakhurst Capital, Inc.:

We have audited the accompanying consolidated balance sheets of Oakhurst
Company, Inc. and subsidiaries as of February 28, 1995 and February 26, 1994,
and the related consolidated statements of operations, stockholders' equity, and
cash flows for the years ended February 28, 1995, February 26, 1994 and February
27, 1993. Our audits also included the financial statement schedule listed in
the Index to Financial Statements. These financial statements and financial
statement schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial statements and
financial statement schedule 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, such consolidated financial statements present fairly, in all
material respects, the financial position of Oakhurst Company, Inc. and
subsidiaries as of February 28, 1995 and February 26, 1994, and the results of
their operations and their cash flows for the years ended February 28, 1995,
February 26, 1994 and February 27, 1993 in conformity with generally accepted
accounting principles. Also, in our opinion, the financial statement schedule,
when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly in all material respects the information set forth
therein.

As discussed in Note 1 to the financial statements, the Company changed its
method of accounting for income taxes effective February 28, 1993 to conform
with Statement of Financial Accounting Standards No. 109.

/s/ Deloitte & Touche LLP
Deloitte & Touche LLP

Pittsburgh, Pennsylvania
April 28, 1995

F-3
<PAGE>

OAKHURST COMPANY, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands except per share data)

August 31, February 28, February 26,
1995 1995 1994
---------- ------------ ------------
(Unaudited)

<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ............................ $ 302 $ 314 $ 1,071
Trade accounts receivable, less allowance
of $487, $282 and $320, respectively 5,231 5,760 3,728
Commissions receivable ............................... 224 226 228
Inventories .......................................... 9,423 10,400 6,295
Deferred tax asset ................................... -- 620 237
Other ................................................ 500 280 202
------- ------- -------
Total current assets ........ 15,889 18,098 11,761
------- ------- -------
Property and equipment, at cost............................ 3,034 2,993 1,825
Less accumulated depreciation......................... (876) (921) (623)
------- ------ ------
2,158 2,072 1,202
------- ------ ------
Deferred tax asset......................................... 6,086 5,466 4,763
Excess of cost over net assets acquired, net............... 7,401 7,399 965
Other assets............................................... 268 266 76
------- ------ ------
13,755 13,131 5,804
------- ------ ------
$31,802 $33,301 $18,767
======= ====== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of revolving
credit agreement ....................................$ 2,800 $ -- $ --
Note payable, related party .......................... 287 532 165
Term loan, current ................................... 1,962 585 --
Accounts payable ..................................... 6,843 8,066 4,880
Accrued compensation ................................. 475 757 264
Income taxes payable ................................. -- 109 116
Current maturities of long-term
obligations ........................................ 46 32 57
Current maturities of long-term obligations,
related parties .................................... 740 800 --
Net obligation of discontinued business
segment-current portion ............................ 536 505 397
Other ................................................ 584 468 115
------- ------- -------
Total current liabilities 14,273 11,854 5,994
------- ------- -------
Long-term obligations:
Net obligation of discontinued business segment ...... 681 985 1,344
Long-term debt ....................................... 1,391 3,237 --
Long-term debt, related parties ...................... 1,960 1,800 --
Convertible debt, related parties .................... 532 517 --
Other long-term obligations .......................... 111 73 85
----- ----- -----
3,323 6,612 1,429
----- ----- -----

Commitments and contingencies ............................. -- -- --
Stockholders' equity:
Preferred stock, par value $0.01 per share;
authorized 1,000,000 shares, none issued ........... -- -- --
Common stock, par value $0.01 per share;
authorized 14,000,000 shares; issued
3,195,235, 3,189,326 and 2,582,689 shares,
respectively ....................................... 32 32 26
Additional paid-in capital ........................... 46,515 46,480 43,904
Deficit (Reorganized on August 26, 1989) ............. (32,340) (31,676) (32,585)
Treasury stock, at cost, 207 common shares ........... (1) (1) (1)
-------- -------- --------
Total stockholders' equity 14,206 14,835 11,344
-------- -------- --------
$ 31,802 $ 33,301 $ 18,767
======== ======== ========
</TABLE>

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

F-4
<PAGE>

OAKHURST COMPANY, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars amounts in thousands, except per share data)

<TABLE>
<CAPTION>
Twenty-Six
Six Months Weeks Fiscal Fiscal Fiscal
Ended Ended Year Ended Year Ended Year Ended
August 31, August 27, February 28, February 26, February 27,
1995 1994 1995 1994 1993
---------- ---------- -------- ----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>

Sales ......................................... $ 26,542 $ 19,760 $ 43,142 $ 32,386 $ 33,584
Other income .................................. 197 228 655 368 270
-------- ---------- --------- -------- --------
26,739 19,988 43,797 32,754 33,854
-------- ---------- --------- -------- --------

Cost of goods sold, including occupancy and
buying expenses ............................ 20,828 14,876 32,384 25,849 27,472
Operating, selling and administrative expenses 5,660 3,883 9,243 5,073 5,193
Provision for doubtful accounts ............... 267 -- 27 879 51
Amortization of excess of cost over net assets
acquired .................................... 262 50 290 11 6
Interest expense .............................. 377 85 411 156 128
Write-off of deferred financing costs (Note 15) -- -- -- -- 532
-------- ---------- --------- -------- --------
27,394 18,894 42,355 31,968 33,382
-------- ---------- --------- -------- --------

Income (loss) before income taxes and minority
interest .................................... (655) 1,094 1,442 786 472

Income tax expense ............................ 9 397 (623) (347) (263)

Income from minority interest in Steel City
Products, Inc.'s loss attributable
to common stockholders
(Notes 1 and 2) ............................. -- -- -- -- 533
-------- -------- --------- -------- --------

Income (loss) from continuing operations .... (664) 697 819 439 742

Discontinued operations:
Income (loss) on disposal, less applicable
income tax expense (benefit) of $46 and
($23) in 1995 and 1993, respectively ... -- 66 90 -- (44)
---------- ---------- ---------- ----------- -----------
Net income (loss) ........................... $ (664) $ 763 $ 909 $ 439 $ 698
========== ========== ========== =========== ===========

Per share amounts:
Income from continuing operations ......... $ (0.21) $ 0.24 $ 0.27 $ 0.16 $ 0.27
Income (loss) from discontinued operations -- 0.02 0.03 -- (0.02)
---------- ---------- ---------- ----------- -----------
Net income ................................ $ (0.21) $ 0.26 $ 0.30 $ 0.16 $ 0.25
========== ========== ========== =========== ===========

Weighted average number of shares outstanding
used in computing per share amounts ....... 3,192,832 2,949,777 3,076,801 2,788,812 2,768,667
========== ========== ========== =========== ===========

</TABLE>

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

F-5
<PAGE>

OAKHURST COMPANY, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Dollar amounts in thousands)
<TABLE>
<CAPTION>

Additional Retained
Common Paid-in Earnings Treasury
Stock Capital (Deficit) Stock Total
------ ---------- --------- -------- ------
<S> <C> <C> <C> <C> <C>
Balance at February 29, 1992 ............ $ 26 $ 38,559 $(33,722) $ (1) $ 4,862
Net income .............................. 698 698
Addition to paid-in capital resulting
from utilization of tax loss
carryforwards ...................... 87 87
Exercise of warrants .................... * *
Other ................................... 23 23
-------- -------- -------- -------- --------

Balance at February 27, 1993 ............ 26 38,669 (33,024) (1) 5,670
Net income .............................. 439 439
Cumulative effect of the adoption
of SFAS 109 resulting in a
net deferred tax asset ............. 1,500 1,500
Deferred tax benefit resulting from a
reduction in the valuation allowance
of the deferred tax asset .......... 3,735 3,735
-------- -------- -------- -------- --------

Balance at February 26, 1994 ............ 26 43,904 (32,585) (1) 11,344
Net income .............................. 909 909
Deferred tax benefit resulting
from a reduction in the
valuation allowance of the
deferred tax asset ................. 1,600 1,600
Exercise of warrants .................... 3 329 332
Issuance of Common Stock in
connection with the
acquisition of Puma
Products, Inc. .................... 3 647 650
-------- -------- -------- -------- --------

Balance at February 28, 1995 ........... 32 46,480 (31,676) (1) 14,835
Net loss (unaudited) ................... (664) (664)
Employee stock award (unaudited) ....... * 19 19
Other (unaudited) ...................... 16 16
-------- -------- -------- -------- --------

Balance at August 31, 1995 ............. $ 32 $ 46,515 $(32,340) $ (1) $ 14,206
======== ======== ======== ======== ========
</TABLE>

*Rounds to less than $1.000

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

F-6
<PAGE>

OAKHURST COMPANY, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
Twenty-Six
Six Months Weeks Fiscal Fiscal Fiscal
Ended Ended Year Ended Year Ended Year Ended
August 31, August 27, February 28, February 26, February 27,
1995 1994 1995 1994 1993
------------ ----------- ------------ ----------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Income (loss) from continuing operations .................... $ (664) $ 697 $ 819 $ 439 $ 742
Adjustments to reconcile income (loss) from
continuing operations to net cash provided by (used in)
operating activities:
Depreciation and amortization .......................... 444 138 596 153 151
Addition to paid-in capital resulting from utilization
of tax loss carryforwards ............................ -- -- -- -- 110
Deferred tax expense ................................... -- 362 514 235 --
Minority interest in Steel City Products, Inc. ......... -- -- -- -- (533)
Loss on retirement of asset ............................ 10 -- -- -- --
Employee stock award ................................... 19 -- -- -- --
Write-off of deferred financing costs .................. -- -- -- -- 532
Other changes in operating assets and liabilities:
Accounts receivable .................................... 529 (144) (213) 1,112 (243)
Inventories ............................................ 977 160 (1,051) 851 (1,205)
Accounts payable ....................................... (1,223) 188 1,759 (1,754) 440
Other .................................................. (175) 277 68 (75) (273)
------- ------- ------- ------- -------
Net cash provided by (used in) operating activities of:
Continuing operations ....................................... (83) 1,678 2,492 961 (279)
Discontinued operations ..................................... (273) (285) (161) (296) (99)
------ ------ ------ ------ ------
Net cash provided by (used in) operating activities .............. (356) 1,393 2,331 665 (378)
------ ------ ------ ------ ------

Cash flows from investing activities:
Additions to property and equipment ......................... (216) (294) (633) (36) (81)
Acquisition of subsidiaries, net of cash acquired ........... -- (3,990) (5,208) (873) --
Net change in the excess of cost over net assets acquired.... (151) -- -- -- --
Other ....................................................... -- -- (35) (28) (61)
------ ------ ------ ------ ------
Net cash used in investing activities ............................ (367) (4,284) (5,876) (937) (142)
------ ------ ------ ------ ------

Cash flows from financing activities:
Exercise of warrants ........................................ -- 64 332 -- --
Net borrowings under revolving credit agreement ............. 1,275 350 1,360 -- --
Proceeds from issuance of long-term debt .................... -- 2,560 2,560 -- --
Repayment of note payable ................................... (258) (165) (406) -- --
Principal payments on long-term obligations ................. (306) (75) (1,058) (176) (169)
Repayment of distribution payable ........................... -- (500) -- -- --
Deferred financing costs .................................... -- (58) -- -- --
------- ------- ------- ------- -------
Net cash provided by (used in) financing activities .............. 711 2,176 2,788 (176) (169)
------- ------- ------- ------- -------
Net decrease (increase) in cash and cash equivalents ............. (12) (715) (757) (448) (689)
Cash and cash equivalents at beginning of period ................. 314 1,071 1,071 1,519 2,208
------- ------- ------- ------- -------
Cash and cash equivalents at end of period ....................... $ 302 $ 356 $ 314 $ 1,071 $ 1,519
======= ======= ======= ======= =======

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest ............................................... $ 298 $ 135 $ 334 $ 154 $ 34
======= ======= ======= ======= =======
Income taxes ........................................... $ 106 $ 80 $ 20 $ 227 $ 152
======= ======= ======= ======= =======

</TABLE>

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

F-7
<PAGE>

OAKHURST COMPANY, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information as of and for the Six Months Ended August 31, 1995
and Twenty-Six Weeks Ended August 27, 1994 is Unaudited)

1. Summary of Significant Accounting Policies

Basis of Presentation

Oakhurst Company, Inc., formerly Oakhurst Capital, Inc. ("Oakhurst" or the
"Company"), was formed as a result of a merger transaction (the "merger") in
fiscal 1992 between Steel City Products, Inc. ("SCPI") and an Oakhurst
subsidiary. The merger resulted in a restructuring of SCPI such that it became a
majority-owned subsidiary of Oakhurst. In accordance with the merger, Oakhurst
owns 10% of the outstanding common stock of SCPI and all of SCPI's Series A
Preferred Stock. The merger was structured such that the aggregate fair market
value of SCPI's common stock and Series A Preferred Stock owned by Oakhurst
would be approximately 90% of the aggregate fair market value of the issued and
outstanding common and voting preferred stock of SCPI. Accordingly, Oakhurst
controls approximately 90% of the voting power of SCPI. The accompanying
consolidated financial statements reflect this control and include the accounts
of SCPI.

The merger transaction was accounted for as a corporate reorganization of
entities under common control. This method of accounting is similar to a pooling
of interests in which the assets, liabilities and stockholders' equity of both
companies are combined and are reflected in the consolidated financial
statements based upon their historical cost.

Oakhurst acquired all of the outstanding capital stock of H&H Distributors,
Inc. d/b/a Harry Survis Auto Center ("H&H"), of Dowling's Fleet Service Co.,
Inc. ("Dowling's") and of Puma Products, Inc. (formerly LBI Corp.) ("Puma") in
January 1994, August 1994 and October 1994, respectively; accordingly, the
accompanying consolidated financial statements include the accounts of these
subsidiaries for the respective periods of ownership.

All significant intercompany accounts and transactions have been eliminated
in consolidation.

The accompanying unaudited consolidated financial statements of Oakhurst
have been prepared in accordance with generally accepted accounting principles
for interim financial information. They do not include all footnotes which would
be required by generally accepted accounting principles. In the opinion of
management of Oakhurst, these financial statements contain all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of financial position, results of operations and cash flows for the
periods presented. Operating results for the six months ended August 31, 1995
are not necessarily indicative of the results that may be expected for the year
ending February 28, 1996.

Business Activities

The Company's operations at this time consist of four subsidiaries
primarily engaged in the wholesale distribution trade to the automotive
aftermarket. SCPI is a wholesale distributor operating under the trade name
Steel City Products selling primarily to discount retail chains and other
segments of the mass market, hardware, drug and grocery retail industries and to
automotive specialty stores, based primarily in the Northeastern United States.
H&H is involved in the retail and wholesale distribution and installation of
automotive accessories, including stereos, alarms and cellular phones, primarily
in Pennsylvania. Dowling's is a wholesale distributor of automotive radiators
and related parts serving primarily radiator repair shops in New York,
Connecticut and New Jersey. Puma is a wholesale distributor of high quality
truck and van conversion products that are sold to automotive and truck
converters and restylers throughout the United States, with a market
concentration around its base in Grand Prairie, Texas (see Note 3).

F-8
<PAGE>

Fiscal Year

In fiscal 1995, the Company has changed its fiscal year end to the last day
of February. Previously, the Company's fiscal year end was the Saturday closest
to the end of February. The effect of the change on the consolidated financial
statements was not material.

Cash and Cash Equivalents

For the purpose of the statements of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.

Inventories

The Company's inventories are stated at the lower of cost or market. Cost
is determined by the last-in, first-out method ("LIFO") for 61% and 95% of the
Company's inventories at February 28, 1995 and February 26, 1994, respectively,
and by the first-in, first-out ("FIFO") method for the remaining inventories.

Property and Equipment

Depreciation and amortization are computed using the straight-line method.
Estimated useful lives used for computing depreciation and amortization are:
buildings, 15-40 years; leasehold improvements, 3-25 years; and office
furniture, equipment and vehicles, 3-10 years.

Excess of Costs Over Net Assets Acquired

The excess of cost over net assets acquired of $7.4 million as of February
28, 1995 is associated with the acquisition of Oakhurst's subsidiaries and is
amortized over periods ranging from 15 to 40 years, net of accumulated
amortization of $377,000. As of February 26, 1994, the balance of $965,000
related to the acquisitions of SCPI and H&H, net of accumulated amortization of
$81,000.

Oakhurst assesses whether its excess of costs over net assets acquired is
impaired at each balance sheet date based upon an evaluation of undiscounted
projected cash flows through the remaining amortization period. If an impairment
is determined, the amount of such impairment is calculated based upon the
estimated fair value of the asset.

Revenue Recognition

Revenues are recognized at the time products are shipped or installation
occurs.

Federal Income Taxes

Oakhurst adopted Financial Accounting Standards No. 109 ("SFAS 109"),
"Accounting for Income Taxes", effective at the beginning of fiscal 1994. Prior
period financial statements were not restated. The effect of the accounting
change on the results of operations for fiscal 1994 was not material. Oakhurst
previously accounted for income taxes in accordance with Accounting Principles
Board Opinion No. 11. The new standard requires an asset and liability approach
to accounting for income taxes. Deferred tax liabilities and assets are
recognized for the future tax consequences of events that have already been
recognized in the financial statements or tax returns. Net deferred tax assets
are recognized to the extent that realization of such benefits is considered
more likely than not. Changes in enacted tax rates or laws will result in
adjustments to the recorded deferred tax assets or liabilities in the period
that the tax law is enacted (see Note 7).

F-9
<PAGE>

Computation of Per Share Amounts

Income and loss per share amounts attributable to common stockholders are
computed on the basis of the weighted average number of outstanding common
shares and common stock equivalents determined by applying the treasury stock
method to stock options and warrants outstanding.

2. Corporate Reorganization

Under the merger (see Note 1), SCPI is required for a period of five years
following the merger to issue to Oakhurst (or cancel) such number of shares of
Series A Preferred Stock and/or common stock as shall be necessary, in
accordance with periodic determinations, to maintain Oakhurst's aggregate stock
ownership of SCPI at 90%. Accordingly, a revaluation of the Company as of
February 27, 1993 was completed in May 1994 resulting in an adjustment of the
Series A Preferred Stock face value to $11.4 million, requiring the cancellation
of 119,176 shares that had previously been issued to Oakhurst. The cumulative
effect of the cancellation of shares on net income attributable to common
stockholders was reflected in the fourth quarter of fiscal 1994. A valuation of
the Company as of February 26, 1994 was also completed in May 1994, reflecting a
decrease in the valuation to $10.1 million that resulted in the cancellation of
a further 237,940 shares. The decrease in the valuation as of February 26, 1994
was primarily attributable to the abandonment of a proposed Oakhurst financing
transaction that would have resulted in significant future tax sharing payments
by Oakhurst to SCPI.

The Series A Preferred Stock carries a dividend rate of $0.5228 per share
and has a redemption price and liquidation preference of $5.2282 per share plus
any accumulated dividends in arrears. Approximately $586,000 of undeclared
dividends in arrears were outstanding as of February 28, 1995. In fiscal 1993,
the cumulative dividends on SCPI's Series A Preferred Stock exceeded SCPI's net
income for that year, thus creating a loss attributable to SCPI's common
stockholders in excess of Oakhurst's minority interest and, accordingly,
Oakhurst reduced to zero the minority interest liability related to SCPI. At
such time as SCPI's cumulative net income attributable to common stockholders
from the effective date of the merger exceeds the cumulative Series A Preferred
Stock dividends in arrears, Oakhurst will again reflect the appropriate minority
interest in liability.

3. Acquisitions

In January 1994, Oakhurst acquired all of the outstanding capital stock of
H&H. The purchase price of approximately $1.4 million consisted of approximately
$1.2 million in cash (funded by a loan from SCPI) and a note payable to the
seller for the balance, which was paid in July 1994. In addition, Oakhurst
incurred acquisition costs of approximately $50,000.

In August 1994, Oakhurst acquired all of the outstanding capital stock of
Dowling's. The purchase price of approximately $5.5 million consisted of $4
million in cash, a note payable to the seller of $700,000 which bears interest
at prime and is due in two annual installments commencing with the first
anniversary of the closing date, earn-out payments estimated at $300,000,
convertible debt of $500,000 that was issued to certain executives of Dowling's,
which accrues interest at 6% and is convertible at the executives' option to
120,346 shares of Oakhurst common stock on August 1, 1997, and acquisition costs
of approximately $260,000.

The cash portion of the purchase price of Dowling's was funded by Series A
Preferred stock dividends of $4.8 million from SCPI (funded by the Term Loan),
by advances from SCPI and by advances under the Credit Agreement (see Note 6).

In October 1994, Oakhurst acquired all of the outstanding capital stock of
Puma. The purchase price of approximately $4.2 million consisted of $1.2 million
in cash, a note payable to the seller of $600,000 which bears interest at prime
plus 1%, and is due in two annual installments commencing with the first
anniversary of the closing date, a 120-day note payable to the seller of
approximately $737,000 which bears interest at prime plus 1% and which was
subsequently amended to be payable in fiscal 1996, earn-out payments currently
estimated at $1,000,000 and the issuance of 266,667 shares of Oakhurst's common
stock valued at $650,000 which is restricted for up to a three year period and
acquisition costs of approximately $175,000. The purchase agreement provides for

F-10
<PAGE>

bonus earn-out payments to be made to the former shareholder over five years in
the event that earnings exceed historical levels, to a maximum additional
payment of $500,000. If such payment is ultimately made, the purchase price will
be adjusted accordingly.

The cash portion of the acquisition price of Puma was funded by available
cash and by borrowings under the Credit Agreement.

The former owners and certain senior executives of these acquisitions
continue with Oakhurst under long-term employment contracts. Accordingly,
amounts payable to them with respect to the acquisitions have been classified as
related party obligations.

The acquisitions were accounted for using the purchase method of
accounting. The excess of approximately $839,000, $3.4 million and $3.4 million,
respectively, of the purchase prices over the fair values allocated to H&H's,
Dowling's and Puma's net assets, respectively, is being amortized over 15 years.

In connection with the acquisitions, assets were acquired and liabilities
were assumed as follows (in thousands):

H&H Dowling's Puma
------ --------- ------
Fair value of assets acquired ... $2,075 $7,689 $5,035
Liabilities assumed ............. 640 1,927 675
------ ------ ------
Net assets acquired ........... $1,435 $5,762 $4,360
====== ====== ======

The following unaudited pro forma summary presents the consolidated results
of operations of the Company as if the above acquisitions had occurred at the
beginning of the fiscal years ending February 28, 1995 and February 26, 1994 (in
thousands, except per share date):

Fiscal Year Fiscal Year
Ended Ended
February 28, 1995 February 26, 1994
----------------- -----------------
Net sales .................. $53,219 $54,719
Net income ................. 1,157 1,028
Earnings per share ......... 0.36 0.32

The above pro forma results have been prepared for comparative purposes
only and do not purport to be indicative of the results of operations that would
actually have resulted had the acquisitions been in effect on the dates
indicated or that may result in the future. Specifically, these amounts do not
reflect the benefit of reductions in executive compensation and certain other
administrative expenses which may be realized in subsequent years following the
acquisitions.

4. Inventories

The Company's inventories are stated at the lower of cost or market. Cost
is determined by the LIFO method for 61% and 95% of the Company's inventories at
February 28, 1995 and February 26, 1994, respectively, and by the FIFO method
for the remaining inventories. Had all the Company's inventories been valued
using the FIFO method, they would have been approximately $437,000 and $413,000
higher than reported at February 28, 1995 and February 26, 1994, respectively.

F-11
<PAGE>

5. Property and Equipment

Property and equipment are summarized as follows (in thousands):

February 28, February 26,
1995 1994
----------- -----------
Land............................................... $ 170 $ 170
Buildings ......................................... 830 830
Leasehold improvements ............................ 452 134
Office furniture, equipment and vehicles .......... 1,541 691
------ ------
2,993 1,825
Less accumulated depreciation ..................... 921 623
------ ------
$2,072 $1,202
====== ======

6. Line of Credit and Long-Term Obligations

Long-term obligations consist of the
following (in thousands):

February 28, February 26,
1995 1994
----------- -----------
Term Loan, due monthly through
July 1998 at an interest rate of 9.25% ...... $2,245 $ --
Revolving Credit Agreement through August 1996
bearing interest at prime plus 1% ........... 1,525 --
Dowling's acquisition note due in two annual
installments through August 1996 bearing
interest at prime ........................... 700 --
Puma acquisition note due in two annual
installments through October 1996 bearing
interest at prime plus 1% ................... 600 --
Dowling's estimated earn-out, payable in two
annual installments beginning in
November 1995 ............................... 300 --
Puma estimated earn-out, payable in five annual
installments beginning in May 1996 .......... 1,000 --
Convertible debt payable in August 1997
bearing interest at 6% ...................... 517 --
Capital lease obligation for computer equipment,
paid in full in January 1995 ................ -- 57
Other ............................................. 157 85
------ ------
7,044 142
Less current portion .............................. 1,417 57
------ ------
$5,627 $ 85
====== ======

F-12
<PAGE>

In August 1994, SCPI obtained a four year term loan in the amount of
$2,560,000 (the "Term Loan"), in connection with Oakhurst's acquisition of
Dowling's. The Term Loan is secured by a mortgage on SCPI's real estate, is
guaranteed by Oakhurst and its subsidiaries, supported by a pledge of the
capital stock of Oakhurst's subsidiaries. The Term Loan provides for monthly
repayments beginning in September 1994 and bears interest at a fixed rate of
9.25% and includes certain prepayment penalties.

The Term Loan and the Credit Agreement are cross-collateralized, and
contain various financial covenants. At the end of the current year second
quarter, August 31, 1995, SCPI and Oakhurst were in the process of finalizing
replacement covenants with the bank to reflect an acquisition by Oakhurst that
was completed in the latter part of fiscal 1995, and received waivers in respect
of those covenants as to which the companies were not in compliance at the end
of the second quarter.

The Credit Agreement was amended during the third quarter of the current
fiscal year to provide for maximum borrowings of $4 million, subject to the
borrowing base that is calculated according to the level of the subsidiaries'
accounts receivable, and to eliminate all of the financial covenants, except for
certain amended subsidiary and consolidated net worth covenants. The Term Loan
was also amended to reflect such revised covenants. Borrowings under the amended
Credit Agreement bear interest at prime plus 1.5%, and are secured by the
accounts receivable, inventory and capital stock of Oakhurst's subsidiaries.

At the end of the current year third quarter, November 30, 1995, Oakhurst
did not meet the consolidated net worth covenant, as amended, and requested a
modification of such covenant. The modification was granted by the bank on
January 3, 1996, in exchange for Oakhurst's and SCPI's agreement to accelerate
the maturity date of the Term Loan to July 31, 1996, and to increase the
interest rates on borrowings under the Credit Agreement and the Term Loan by 1%
and 1.25%, respectively, effective February 28, 1996. Accordingly, the long-term
portion of the Term Loan has been presented as a current liability until
replacement financing is finalized.

In December 1995, Oakhurst initiated negotiations with several lenders to
obtain replacement financing and on January 8, 1996 accepted a letter of intent
for new financing from an institutional lender which is expected to provide a
significant increase in the level of financing available to Oakhurst and its
subsidiaries based upon essentially similar collateral as provided under the
existing bank financing. Management expects that Oakhurst and SCPI will secure
a commitment on and close such refinancing before February 29, 1996.

Long-term obligations, including the present value of the Creditor Notes
(see Note 8), mature during each fiscal year as follows (in thousands):

Long-Term Creditor
Fiscal Obligations Notes Total
------ ----------- -------- ------
1996......... $1,417 $ 337 $1,754
1997......... 3,197 305 3,502
1998......... 1,445 328 1,773
1999......... 535 353 888
2000......... 209 - 209
Thereafter... 241 - 241
------ ------ ------
$7,044 $1,323 $8,367
====== ====== ======

7. Income Taxes and Deferred Tax Asset

As of December 31, 1994, Oakhurst had, for tax reporting purposes, net
operating tax loss carryforwards of approximately $146 million which expire in
the years 2001 through 2005. Under SFAS 109, Oakhurst is required to recognize
currently the estimated realizable value of the future benefit of its net
operating tax loss carryforwards along with other tax benefits. The initial
adoption of SFAS 109 resulted in the recognition of a deferred tax asset of $51
million less a valuation allowance of $49.5 million, and a corresponding
increase of $1.5 million in additional paid-in-capital as of the beginning of
fiscal 1994. The accounting treatment to increase additional paid-in-capital
results from SCPI's quasi-reorganization accounting in fiscal 1990. The amount
of the valuation allowance was determined by, among other things, management's
estimate of Oakhurst's ability to utilize the net operating tax loss
carryforwards prior to their expiration based on business conditions at that
time. Management re-evaluated the allowance as of February 26, 1994 in light of
SCPI's earnings trends and the then current business conditions and because the
Company was able to utilize a significant portion of the recorded deferred tax
asset during fiscal 1994, and also to reflect Oakhurst's acquisition of H&H (see
Note 3). As a result, management determined that a reduction in the valuation
allowance and a corresponding increase in additional paid-in capital as of
February 26, 1994 of approximately $3.7 million was appropriate. Management
re-evaluated the allowance as of February 28, 1995 because of Oakhurst's
acquisitions of Dowling's and of Puma and in light of the performance of SCPI
and H&H, and determined that a further reduction in the valuation allowance and
a corresponding increase in additional paid-in capital of $1.6 million was
appropriate.

As of February 28, 1995, Oakhurst was required to earn $17.9 million of
consolidated pre-tax income through fiscal 2006 to realize the net recorded tax
benefit.

The deferred tax effects of temporary differences are not significant.

F-13
<PAGE>

Current income taxes payable represent state income taxes.

Income taxes consist of the following (in thousands):

Fiscal Fiscal Fiscal
Year Ended Year Ended Year Ended
February 28, February 26, February 27,
1995 1994 1993
-------------- ------------ ----------

Current tax expense....... $ 623 $ 347 $ 263
Current tax benefit from
utilization of net
operating loss
carryforward............ (468) (235) (115)
----- ----- -----
155 112 148
Deferred tax expense...... 468 235 115
----- ----- -----
Income tax expense........ $ 623 $ 347 $ 263
===== ===== =====

The federal income tax benefit resulting from Oakhurst's utilization of tax
loss carryforwards through fiscal 1993 was accounted for as an addition to
paid-in capital. In accordance with SFAS 109, Oakhurst recognized a deferred tax
benefit as of the beginning of fiscal 1994 and accordingly, any subsequent
utilization will be accounted for as a reduction in the deferred tax asset.
Increases in the deferred tax asset due to upward revisions in the estimate of
the realizable value of net operating loss carryforwards resulting from economic
or business changes will be reflected as further additions to paid-in-capital.

A reconciliation of the income tax provision and the amount computed by
applying the statutory rate to income before income taxes is as follows:

Fiscal Fiscal Fiscal
Year Ended Year Ended Year Ended
February 28, February 26, February 27,
1995 1994 1993
------------ ------------ -----------

Federal statutory rate.......... 34.0% 34.0% 34.0%
State income taxes, net
of federal benefit............ 6.6 7.4 21.8
Amortization of the excess
of costs over net assets
acquired...................... 6.8 -- --
Non-taxable escrow refund....... (4.2) -- --
Other........................... -- 2.7 --
---- --- -----
Effective tax rate......... 43.2% 44.1% 55.8%
==== ==== ====

In March 1991, the net assets of the Company's Steel City Products'
operating division were sold to a wholly owned subsidiary. The consolidated tax
provision for the year ended February 27, 1993 included approximately $148,000
in state income taxes relating to the taxable income of this subsidiary which
for tax purposes could not be reduced by SCPI's overhead expenses. As a result,
Oakhurst's consolidated operating results reflect a disproportionately high tax
provision in fiscal 1993. However, on December 31, 1992, the subsidiary merged
into SCPI such that separate tax treatment of the subsidiary is no longer
required.

F-14
<PAGE>

The availability of the operating tax loss carryforwards may be adversely
affected by future ownership changes of SCPI or Oakhurst; at this time, such
changes cannot be predicted. The operating tax loss carryforwards expire as
follows (in thousands):

2001..... $ 10,000
2002..... 52,000
2003..... 22,000
2004..... 49,000
2005..... 13,000
--------
$146,000
========

8. Discontinued Operations

SCPI disposed of its former retail division to an unrelated company, Retail
Acquisition Corp. ("RAC") in September 1990, when RAC acquired substantially all
the assets of the former division and assumed substantially all its liabilities.
SCPI remained contingently liable for certain of these liabilities. In early
1991, SCPI received notices of default in respect of the leased properties that
SCPI had transferred to RAC. In March 1991, RAC was forced into bankruptcy by a
group of creditors which included SCPI. Pursuant to RAC's bankruptcy
reorganization plan (the "RAC Plan"), which became effective in September 1992,
SCPI participated in a global settlement pursuant to which SCPI issued $2.5
million of non-interest bearing notes (the "Creditor Notes") solely for the
benefit of contingent creditors. In return, SCPI and Oakhurst were relieved of
any further obligations to contingent creditors, except for payment on the
Creditor Notes.

The Creditor Notes, which are non-interest bearing, are payable in equal
annual installments through July 1998, subject to a prepayment provision whereby
if defined cash flow exceeds $900,000, $1,000,000 and $1,100,000 in fiscal 1995,
1996 and 1997, respectively, holders of Creditor Notes may tender for prepayment
a portion thereof in the amount of the defined excess cash flow, but not to
exceed approximately $400,000 per annum. In fiscal 1995, SCPI did not meet the
defined criteria for such prepayment. The Creditor Notes have been discounted
using an imputed interest rate of 7.5% and, together with accrued interest
thereon, principally comprise the net obligation of the discontinued business
segment. Imputed interest expense of approximately $96,000, $128,000 and $95,000
is included in results of continuing operations for fiscal 1995, 1994 and 1993,
respectively.

The accompanying consolidated statements of operations and cash flows
reflect any income or loss associated with the disposal of the former retail
division as discontinued operations. Income from discontinued operations for
fiscal 1995 of $90,000 reflected decreases in SCPI's reserve for contingent
liabilities relating to the former retail division, net of an income tax
provision of $46,000. The loss from discontinued operations for fiscal 1993 of
$44,000 represented an increase in the contingent reserve, net of income tax
benefit of $23,000.

9. Stock Options

In fiscal 1995, the Board of Directors and shareholders approved two stock
option plans, the 1994 Omnibus Stock Option Plan (the "Omnibus Plan") and the
1994 Non-Employee Director Stock Option Plan (the "Director Plan"). Under both
plans, the exercise price of the option granted may not be less than the fair
market value of the common stock on the date of the grant, and the term of the
grant may not exceed ten years.

The Omnibus Plan provides for the issuance of a maximum of 350,000 shares
of Oakhurst's common stock pursuant to the grant of incentive stock options to
employees of Oakhurst and its subsidiaries, and the grant of non-qualified stock
options, stock or restricted stock to employees, consultants, directors and
officers of Oakhurst and its subsidiaries. In fiscal 1995, options covering
313,084 shares were granted at prices ranging from $2.75 to $3.875 and there was
one stock award of 5,909 shares of Oakhurst common stock. The options vest over
a four year period and expire ten years from the date of the grant. At February
28, 1995, no options had been exercised and options covering 134,034 shares were
exercisable.

F-15
<PAGE>

The Director Plan (a "formula plan" under rule 16.3-3 of the Securities
Exchange Act of 1934) provides for the issuance of up to 100,000 shares of
common stock pursuant to options granted to directors who are not employees of
the Company. In April 1994, pursuant to the terms of the plan, eight
non-employee directors were each granted a fully-vested option to purchase 3,000
shares (24,000 shares in the aggregate) of common stock at $2.75 per share, the
market value on the date of the grant. These options remain exercisable for ten
years. On May 1 of each subsequent year, each non-employee director holding
office on such date will receive a fully-exercisable option to purchase an
additional 3,000 shares. At February 28, 1995, none of these options had been
exercised.

In fiscal 1992, the Board of Directors granted options to purchase 194,388
shares of Oakhurst's common stock to key employees and to certain members of the
Board of Directors. The exercise price of the options, which was equal to the
market value of the stock at the date of the grant, is $2.75. At February 28,
1995, no options had been exercised and options for 14,996 shares had been
forfeited. At February 26, 1994 and February 27, 1993, no options had been
exercised. All 179,392 options outstanding are fully vested and will remain
exercisable through 2001.

In connection with SCPI's predecessor's emergence in fiscal 1990 from
Chapter 11 bankruptcy proceedings, warrants to purchase 366,837 shares of stock
were issued and were exercisable at a price of $1.00 per share through September
28, 1994. As a result of the merger (see Note 1), the warrant holders, upon
exercise, were entitled to one share each of SCPI's and Oakhurst's common stock
for the aggregate purchase price of $1.00. During fiscal 1995, 331,622 shares
were purchased pursuant to these warrants and 35,215 warrants expired. During
fiscal 1994, no shares were purchased pursuant to these warrants. During fiscal
1993, 92 shares were purchased pursuant to these warrants.

10. Employee Pension Plan

Steel City Products maintains a defined contribution profit-sharing
retirement plan covering substantially all its employees, whereby employees may
contribute a percentage of compensation, limited to maximum allowed amounts
under the Internal Revenue Code. The plan provides for a 25% matching employer
contribution and an annual discretionary contribution determined by SCPI's Board
of Directors. Total annual expense was $150,000 for each of fiscal 1995, 1994
and 1993. Retirement plan costs are funded on a current basis and the plan has
independent trustees.

Dowling's has a profit-sharing plan for all employees over the age of
twenty-one with 1,000 hours of defined service. Employer contributions to the
plan are made on an annual basis at the discretion of management. Total expense
was $8,000 in fiscal 1995.

H&H maintains a defined contribution profit-sharing retirement plan for all
employees over the age of twenty-one who have met one year of defined
eligibility service. Employer contributions to the plan are made on an annual
basis at the discretion of management. Total expense was approximately $12,000
in fiscal 1995.

11. Leases

The Company leases its corporate office and certain of its subsidiaries'
offices and warehouses under operating leases which expire over the next six
years. Generally, leases are net leases that require the payment of executory
expenses such as real estate taxes, insurance, maintenance and other operating
costs. The leases generally provide for renewal options. Certain of these leases
are with related parties (see Note 14).

F-16
<PAGE>

Minimum annual rentals for all operating leases having initial
noncancelable lease terms in excess of one year are as follows (in thousands):

Fiscal
------
1996.................................. $ 863
1997.................................. 853
1998.................................. 804
1999.................................. 762
2000.................................. 394
Thereafter ........................... 111
------

Total future minimum rental payments $3,787
======

Total rent expense for all operating leases amounted to approximately
$420,000 for fiscal 1995. There were no material operating leases prior to
fiscal 1995.

12. Commitments and Contingencies

SCPI has employment agreements with certain senior executives that provide
termination rights in the event of a change in control of SCPI, as defined. The
rights include payments ranging from six to twenty-four months of the
executives' base salaries, along with continuation of benefits and certain other
payments to each executive. Each agreement also provides for substantially the
same provisions in the event that the executive's employment were to be
terminated by SCPI without cause.

In fiscal 1994 and 1995, Oakhurst entered into employment agreements with
certain senior executives of Oakhurst, H&H, Dowling's and Puma that provide for
certain termination rights in the event that the executive's employment were to
be terminated by Oakhurst without cause. The employment agreements expire
between August 1995 and October 1999.

Management is unaware of any other significant contingencies.

13. Major Customers

Sales to each of those major customers representing individually more than
10% of the Oakhurst's consolidated sales were as follows (in thousands):

Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
February 28, 1995 February 26, 1994 February 27, 1993
----------------- ----------------- -----------------
% of % of % of
Total Total Total
Sales Sales Sales Sales Sales Sales
----- ----- ----- ----- ----- -----
Customer "A" $ -- -- $3,198 10% $5,738 17%
Customer "B" $6,046 14% $6,250 19% $5,461 16%
Customer "C" $4,465 10% $6,332 20% $4,159 12%

All of the above customers were attributable to SCPI. SCPI's management
became aware in June 1993 that two of its largest customers were experiencing
serious liquidity problems. These customers became past due in their payments to
SCPI and in July 1993 both customers filed for protection under Chapter 11 of
the United States Bankruptcy Code, at which time approximately $1.2 million was
outstanding from them to SCPI. As a result, SCPI ultimately wrote off
approximately $879,000 of these customer's receivables.

One of these customers was unable to formulate a viable reorganization plan
and closed all its stores in December 1993. Although sales to this customer
declined in each of the last two fiscal years, this customer

F-17
<PAGE>

represented an important proportion of consolidated revenues (10% and 17% in
fiscal 1994 and in fiscal 1993, respectively).

The other large customer emerged from bankruptcy in January 1995. However,
sales to this customer decreased by 29% in fiscal 1995 compared with fiscal
1994, as this customer closed certain locations as a part of its restructuring
strategy.

14. Related Party Transactions

From November 1989 until June 1993, SCPI engaged The Hallwood Group
Incorporated ("Hallwood"), a principal stockholder of Oakhurst until February
1994, under a financial advisory agreement. SCPI paid Hallwood approximately
$83,000 in fiscal 1994 and $250,000 in fiscal 1993 in connection with this
agreement.

SCPI and Oakhurst entered into agreements, effective August 1, 1991, with
Integra Management Company ("IMC") to provide corporate office administrative
functions. SCPI and Oakhurst entered into similar agreements with IMC, effective
March 1, 1992, to provide certain tax services. IMC was a wholly owned
subsidiary of Hallwood until October 1992, when it became a wholly owned
subsidiary of Integra Hotels, Inc., formerly Integra - A Hotel and Restaurant
Company. Mr. Hemsley, then Oakhurst's Chairman, was President of both IMC and
Integra until March 1994. The agreements were approved by the Company's Board of
Directors, and were terminated in May 1994. SCPI paid IMC $11,000 in fiscal 1995
and $60,000 in each of fiscal 1994 and 1993 pursuant to these agreements.
Oakhurst paid IMC $6,750 in fiscal 1995 and $36,000 in each of fiscal 1994 and
1993 pursuant to these agreements.

In fiscal 1994, H&H entered into a seven-year lease with Harold Garfinkel,
the President and former owner of H&H, for the principal property from which it
conducts its business. The lease has one option to renew for an additional five
years, and requires annual lease payments of $144,000. H&H paid Mr. Garfinkel
$144,000 in fiscal 1995 and $12,000 in fiscal 1994 under this lease.

In fiscal 1995, Dowling's entered into two five-year leases with James
Dowling, the Vice Chairman and former owner of Dowling's for a facility in New
York in which Dowling's is headquartered and operates a warehouse, and for a
facility in Connecticut where Dowling's operates a warehouse. Both leases have
one option to renew for an additional five years and require aggregate annual
rent payments of $211,000. Dowling's paid Mr. Dowling approximately $122,000 in
fiscal 1995 under these leases.

In fiscal 1995, Puma entered into a six year lease with Anthony Puma for
the facility in which it conducts its business. The lease has one option to
renew for an additional four years, contains an option to rent additional space
that is exercisable every two years, and requires annual lease payments of
$133,000. Puma paid Mr. Puma approximately $20,000 in fiscal 1995 under these
leases.

15. Deferred Financing Costs

During the fourth quarter of fiscal 1993, deferred costs of approximately
$532,000 relating to a proposed financing transaction were written off. Efforts
by Oakhurst's management to complete the proposed financing transaction were
delayed by the uncertainties created by the RAC bankruptcy, as described in Note
8. Following settlement of the RAC matter, Oakhurst's management resumed its
efforts in respect of the proposed financing transaction. However, management
determined that the delays encountered in completing such transaction did not
enable a conclusion to be reached, with significant certainty, that the
transaction would ultimately be consummated.

16. Predecessor Bankruptcy

During fiscal 1995, SCPI recovered funds placed into escrow in prior
years as a part of SCPI's predecessor's bankruptcy in the amount of
approximately $175,000, that is included in other income. SCPI's predecessor
emerged from bankruptcy in 1990.

F-18
<PAGE>

17. Selected Quarterly Financial Data (Unaudited)
(Dollar amounts in thousands, except per share data)

Fiscal 1995 First Second Third Fourth
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Sales ......................... $ 9,869 $ 9,891 $ 11,329 $ 12,053
Gross profit .................. 2,418 2,467 2,946 21.9
Income (loss) from
continuing operations ....... 294 403 379 (257)
Income from discontinued
operations .................. -- 66 6 18
Net income (loss) ............. 294 469 385 (239)

Per Share:
Income (loss) from continuing
operations ................ .10 $ .13 $ .11 $ (.08)
Net income (loss) ........... .10 .15 .12 (.08)
Average number of shares
outstanding ................. 2,866,277 3,034,650 3,318,073 3,182,734

Fiscal 1994 First Second Third Fourth
- ----------- ----------- ----------- ----------- -----------

Sales ......................... $ 9,620 $ 7,434 $ 8,881 $ 6,451
Gross profit .................. 1,602 1,611 1,838 1,486
Net income (loss) ............. (602) 316 371 354

Per Share:
Net income (loss) ........... $ (.23) $ .11 $ .13 $ .13
Average number of shares
outstanding ............... 2,582,689 2,794,196 2,792,621 2,788,476
</TABLE>

During fiscal 1995, the previous estimate to provide for the disposal of
the discontinued Retail Division was reduced.

The Company incurred a loss during the fourth quarter of fiscal 1995 as a
result of decreased sales levels and higher expenses due to increased sales
efforts. Also, corporate expenses increased during the quarter as a result of
the acquisition of Puma near the end of the third quarter.

A reclassification of approximately $115,000 was made from discontinued
operations to continuing operations in the third quarter of fiscal 1995 results
of operations, which related to the recovery of escrowed funds associated with
SCPI's predecessor's bankruptcy.

18. Subsequent Events (Unaudited)

On July 26, 1995 the Company initiated an arbitration proceeding with the
American Arbitration Association in connection with the August 1994 acquisition
by the Company of Dowling's. The Company is seeking rescission of the
acquisition, or in the alternative, damages and indemnification in excess of
$1.6 million. The proceeding is based, among other things, on the Company's
belief that the seller breached certain provisions of the purchase and sale
agreement covering the acquisition by furnishing to the Company financial
information that was materially inaccurate. The seller has denied the Company's
allegations and is seeking payment of amounts due under the purchase and sale
agreement. If the Company is successful in obtaining a rescission of the
purchase, the Company would receive back the portion of the purchase price paid
and other consideration given at the closing, and would be relieved of the
obligation to pay the balance of the purchase price (approximately $1,000,000)
over the three year period following the closing. In the event of a rescission
of the acquisition, the Company believes that in the near term it might earn
less as a result of the repayment of the debt that was incurred to make the
acquisition and the investment of any cash repaid that is in excess of that
debt, than it might otherwise have earned from the continued ownership of the
Dowling's business.

F-19
<PAGE>

Pending resolution of the arbitration, Oakhurst has exercised its right of
set-off, as defined in the Dowling's purchase agreement, against a principal
payment due of $350,000 on a related-party note payable issued in connection
with the Dowling's acquisition.

During the second quarter of the 1996 fiscal year, management curtailed the
level of credit allowed to Jamesway Corporation ("Jamesway"), one of SCPI's
largest customers, after becoming aware that Jamesway was experiencing financial
difficulties. Although Jamesway had emerged from bankruptcy in January 1995, on
October 6, 1995 Jamesway announced that it is again considering filing for
bankruptcy's protection. Pending a further announcement by Jamesway, SCPI
suspended shipments to this customer in October 1995, and Oakhurst's
consolidated second quarter results included a provision of $150,000 in relation
to the balances due from Jamesway. Subsequently, Jamesway announced that it
would close all its stores.

F-20
<PAGE>

SCHEDULE II

OAKHURST COMPANY, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
(Dollars in thousands)
<TABLE>
<CAPTION>

- -------------------- ---------------- ----------------------- ----------- -----------
Column A Column B Column C Column D Column E
- -------------------- ---------------- ----------------------- ----------- -----------
Charges
Balance at Charged to other Balance
beginning to costs accounts Deductions at end
Description of Period and expenses - describe - describe of Period
=========================================================================================
<S> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts deducted from
trade accounts
receivable for the
fiscal year ended:

February 28, 1995... $320 $ 27 $ -- $ 65(A) $ 282
=== ==== === ======= ===
February 26, 1994... $304 $ 879 $ -- $ 863(A) $ 320
=== === === ======= ===
February 27, 1993... $309 $ 51 $ -- $ 56(A) $ 304
=== ==== === ======= ===
</TABLE>

(A) Amounts were deemed uncollectible and written off.

F-21
<PAGE>

[Deloitte & Touche LLP logo]

2500 One PPG Place Telephone: (412) 338-7200
Pittsburgh, Pennsylvania 15222-5401 Facsimile: (412) 338-7380

INDEPENDENT AUDITORS' REPORT

To the Stockholder of
Dowling's Fleet Service Co., Inc.:

We have audited the accompanying balance sheets of Dowling's Fleet Service
Co., Inc. as of July 31, 1994 and September 30, 1993, and the related
statements of income, stockholder's equity, and cash flows for the ten months
ended July 31, 1994 and the year ended September 30, 1993. We were also engaged
to audit the statements of income, stockholder's equity and cash flows for the
year ended September 30, 1992. These financial statements are the responsibility
of the Company's management. Our responsibility is to express (or disclaim) an
opinion on these financial statements based on our audits.

Except as discussed in the following paragraph, 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 report dated September 16, 1994, we disclaimed an opinion on the
balance sheet as of September 30, 1993, and the statements of income,
stockholder's equity and cash flows for the ten months ended July 31,
1994 and the years ended September 30, 1993 and 1992 because we were engaged
as auditors after September 30, 1993, and we were not present to observe the
taking of the physical inventories as of September 30, 1993, 1992 or 1991;
nor had we been able to satisfy ourselves concerning the inventory
quantities at those dates by means of other auditing procedures.
Subsequently, we have been able to satisfy ourselves as to the inventory
quantities as of September 30, 1993 and 1992 by means of other auditing
procedures. Accordingly, our present opinion on the balance sheet as of
September 30, 1993, and the statements of income, stockholder's equity and
cash flows for the ten months ended July 31, 1994 and the year ended
September 30, 1993, as expressed herein, is different from our prior report.

Because we have been unable to satisfy ourselves concerning the inventory
quantities as of September 30, 1991 by means of other auditing procedures,
the scope of our work was not sufficient to enable us to express, and we do
not express, an opinion on the results of operations and cash flows for the
year ended September 30, 1992.

As described in Note 2 to the accompanying financial statements, the Company
has restated its financial statements for the years ended September 30, 1993
and 1992 to reflect adjustments made for cut-off and other errors related to
inventory purchases and related account balances as of the beginning of such
fiscal years.

[Deloitte Touche LLP logo]

<PAGE>

In our opinion, the accompanying 1994 and 1993 financial statements present
fairly, in all material respects, the financial position of the Company at July
31, 1994 and September 30, 1993, and the results of its operations and its cash
flows for the ten months ended July 31, 1994 and the year ended September 30,
1993 in conformity with generally accepted accounting principles.

As discussed in Note 7 to the accompanying financial statements, the amount
recorded as stockholder distribution payable at July 31, 1994, which was
being disputed, was resolved during December 1994.

/s/ Deloitte & Touche LLP

Deloitte & Touche LLP

Pittsburgh, Pennsylvania

December 20, 1994

F-22
<PAGE>

DOWLING'S FLEET SERVICE CO., INC.

BALANCE SHEETS
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
July 31 September 30
ASSETS 1994 1993
<S> <C> <C>
CURRENT ASSETS:
Cash $ 108,456 $ 302,538
Trade accounts receivable 1,366,318 1,227,921
Inventory 2,193,281 1,910,762
Other -- 21,521
---------- -----------
Total current assets 3,668,055 3,462,742
---------- -----------
PROPERTY AND EQUIPMENT 1,022,863 1,008,896
Less accumulated depreciation (684,159) (613,882)
---------- -----------
Property and equipment -- net 338,704 395,014
---------- -----------
OTHER ASSETS 148,865 186,681
---------- -----------
$4,155,624 $4,044,437
========== ===========

LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES:
Accounts payable $1,095,096 $ 739,843
Stockholder distribution payable 943,481 --
Accrued compensation 75,251 86,042
Accrued expenses 120,776 175,117
--------- ------------
Total current liabilities 2,234,604 1,001,002
--------- ------------

COMMITMENTS AND CONTINGENCIES (Notes 4, 7 and 8)

STOCKHOLDER'S EQUITY:
Common stock, $10 par value,
authorized
2,000 shares; issued 100 shares 1,000 1,000
Retained earnings 1,920,020 3,042,435
--------- ------------
Total stockholder's equity 1,921,020 3,043,435
--------- ------------
$4,155,624 $4,044,437
========== ============
</TABLE>

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

F-23
<PAGE>

DOWLING'S FLEET SERVICE CO., INC.

STATEMENTS OF INCOME
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year
Year Ended
Ten Ended September 30
Months September 30 1992
Ended 1993 (Unaudited)
July 31 (As Restated, (As Restated,
1994 See Note 2) See Note 2)
<S> <C> <C> <C>
SALES $10,047,371 $11,458,193 $9,517,817
OTHER INCOME 22,483 16,964 18,431
----------- ----------- ----------
10,069,854 11,475,157 9,536,248
----------- ----------- ----------
COST OF SALES, INCLUDING
OCCUPANCY AND BUYING
EXPENSES 7,882,642 8,959,476 7,332,544

OPERATING, SELLING AND
ADMINISTRATIVE EXPENSES 1,797,147 1,946,734 1,785,438
----------- ----------- ----------
9,679,789 10,906,210 9,117,982
----------- ----------- ----------
NET INCOME $ 390,065 $ 568,947 $ 418,266
=========== =========== ==========
EARNINGS PER SHARE $ 3,901 $ 5,689 $ 4,183
=========== =========== ==========
</TABLE>

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

F-24
<PAGE>

DOWLING'S FLEET SERVICE CO., INC.

STATEMENTS OF STOCKHOLDER'S EQUITY
-----------------------------------------------------------------------------

<TABLE>
<CAPTION>
Common Retained
Stock Earnings Total
<S> <C> <C> <C>
BALANCE, OCTOBER 1, 1991 (unaudited),
as previously reported $1,000 $ 2,372,471 $ 2,373,471

Adjustment for errors (see Note 2) -- 451,253 451,253
------ ---------- -----------

BALANCE, OCTOBER 1, 1991 (unaudited),
as restated 1,000 2,824,724 2,824,724

Net income (unaudited) -- 418,266 418,266

Distribution to stockholder (unaudited) -- (27,800) (27,800)
------ ---------- -----------

BALANCE, SEPTEMBER 30, 1992 (unaudited) 1,000 3,214,190 3,215,190

Net income -- 568,947 568,947

Distribution to stockholder -- (740,702) (740,702)
------ ---------- -----------

BALANCE, SEPTEMBER 30, 1993 1,000 3,042,435 3,043,435

Net income -- 390,065 390,065

Distribution to stockholder -- (1,512,480) (1,512,480)
------ ---------- -----------
BALANCE, JULY 31, 1994 $1,000 $ 1,920,020 $ 1,921,020
====== ========== ===========
</TABLE>

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

F-25
<PAGE>

DOWLING'S FLEET SERVICE CO., INC.

STATEMENTS OF CASH FLOWS
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year
Ended Year
September Ended
30 September 30
Ten 1993 1992
Months (As (Unaudited)
Ended Restated, (As
July 31 See Note Restated,
1994 2) See Note 2)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 390,065 $ 568,947 $ 418,266
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 129,990 152,967 148,724
Loss on sale of property and equipment 17,292 7,733 4,809
Other changes in operating assets and liabilities:
Trade accounts receivable (138,397) (167,881) (29,468)
Inventory (282,519) (286,561) (101,803)
Accounts payable 355,253 506,416 (323,115)
Other (43,611) 56,077 290,524
--------- --------- ----------
Net cash provided by operating activities 428,073 837,698 407,937
--------- --------- ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (106,407) (192,531) (72,788)
Proceeds from sale of property and equipment 1,552 13,080 --
Other (9,617) (8,011) (1,675)
--------- --------- ----------
Net cash used in investing activities (114,472) (187,462) (74,463)
--------- --------- ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to stockholder (507,683) (740,702) (27,800)
--------- --------- ----------
Cash used in financing activities (507,683) (740,702) (27,800)
--------- --------- ----------
NET (DECREASE) INCREASE IN CASH (194,082) (90,466) 305,674

CASH, BEGINNING OF PERIOD 302,538 393,004 87,330
--------- --------- ----------

CASH, END OF PERIOD $ 108,456 $ 302,538 $ 393,004
========= ========= ==========
</TABLE>

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

F-26
<PAGE>

DOWLING'S FLEET SERVICE CO., INC.

NOTES TO FINANCIAL STATEMENTS
-----------------------------------------------------------------------------

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Business Activities -- Dowling's Fleet Service Co., Inc. (the Company) is a
wholesale distributor of car and truck radiators, air conditioning units
and related parts, primarily in the Northeastern United States.

b. Fiscal Year -- The Company's fiscal year end is September 30. The
accompanying financial statements as of July 31, 1994 and the ten month
period then ended are presented as a result of the sale of all of the
Company's common stock on August 1, 1994 to an unrelated party (see Note
7).

c. Inventory -- The Company's inventory is stated at the lower of cost or
market. Cost is determined by use of the average cost method.

d. Property and Equipment -- Property and equipment are stated at cost.
Depreciation and amortization are computed generally by the
declining-balance method and the straight-line method, over the estimated
useful lives of such assets, as follows: leasehold improvements, 5-35
years; vehicles, 3-5 years; and computer, furniture and equipment, 5-10
years.

e. Covenants not to Compete -- Covenants not to compete are amortized on the
straight-line method over the term of the related agreements and are
included in other assets.

f. Revenue Recognition -- Revenues are recognized at the time products are
shipped.

g. Tax Status -- The Company has elected to be taxed under the provisions of
Subchapter S of the Internal Revenue Code for federal income tax purposes.
The Company has also elected to be taxed under similar provisions for state
income tax purposes. Under the provisions of Subchapter S, the stockholder,
rather than the Company, has the responsibility for the payment of federal
and state income taxes. Accordingly, no provision for federal and state
income taxes has been recorded in these financial statements. However,
payments of stockholder income taxes, recorded as distributions, have been
reflected through charges to stockholder's equity.

F-27
<PAGE>

2. RESTATEMENT

Subsequent to the original issuance of the September 30, 1993 and 1992
financial statements, management of the Company determined that such
previously issued financial statements did not include the effects of cut-off
and other errors related to inventory purchases and related account balances
as of September 30, 1992 and 1991. Accordingly, beginning retained earnings
as of October 1, 1991 have been increased by $451,253 and such financial
statements have been restated as follows:

<TABLE>
<CAPTION>
Statements of Income: Year Ended Year Ended
September 30, 1993 September 30, 1992
----------------------------------------------------
As As
As Previously As Previously
Restated Reported Restated Reported
<S> <C> <C> <C> <C>
Sales $11,458,193 $11,523,050 $9,517,817 $9,452,960
Cost of sales, including
occupancy and buying
expenses 8,959,476 8,778,960 7,332,544 7,061,807
Net income 568,947 814,320 418,266 624,146
</TABLE>

3. PROPERTY AND EQUIPMENT

Property and equipment are summarized as follows:

<TABLE>
<CAPTION>
July 31 September 30
1994 1993
<S> <C> <C>
Leasehold improvements $ 215,623 $ 215,624
Vehicles 412,720 433,068
Computer 188,960 177,753
Furniture and equipment 205,560 182,451
---------- ----------

1,022,863 1,008,896
Less accumulated
depreciation (684,159) (613,882)
---------- ----------

$ 338,704 $ 395,014
========== ==========
</TABLE>

4. LEASES

The Company leases its corporate office and certain warehouses under
operating leases which expire over the next five years. Generally, leases are
net leases which require the payment of executory expenses such as real
estate taxes, insurance, maintenance and other operating costs. The leases
generally provide for renewal options.

F-28
<PAGE>

Minimum rentals for all operating leases having initial noncancelable lease
terms in excess of one year are as follows:

<TABLE>
<S> <C>
Year ending September 30

1994 (two months ending September 30) $ 58,400
1995 350,500
1996 347,100
1997 328,800
1998 301,300
1999 257,300
----------

Total future minimum rental payment $1,643,400
==========
</TABLE>

Total rent expense for all operating leases amounted to approximately
$382,900 for the ten month period ended July 31, 1994, and $432,400 and
$427,800 for the years ended September 30, 1993 and 1992, respectively.

5. TRANSACTIONS WITH RELATED PARTIES

The Company leases two warehouses from its stockholder. Rental payments
amounted to approximately $275,500 for the ten month period ended July 31,
1994, and $318,000 for each of the years ended September 30, 1993 and 1992,
respectively. On August 1, 1994, in connection with the sale of the common
stock of the Company (see Note 7), new five year lease agreements for the two
warehouses were entered into between the Company and the former stockholder.
The minimum rentals for the new leases with the former stockholder are as
follows:

<TABLE>
<S> <C>
Year ending September 30

1994 (two months ending September 30) $ 35,800
1995 214,700
1996 214,700
1997 214,700
1998 214,700
1999 178,900
</TABLE>

These amounts are included in the lease disclosure set forth in Note 4.

The Company sold two vehicles to the stockholder during the ten month period
ended July 31, 1994. The vehicles were sold at their estimated market value
of $43,000 and the Company incurred a loss on disposition of the assets in
the amount of $17,200. The sales of the vehicles were noncash transactions
with the sales price being recorded as a distribution to stockholder in the
statement of stockholder's equity.

F-29
<PAGE>

6. PROFIT-SHARING PLAN

The Company has a profit-sharing plan for all employees with 1,000 hours or
more of annual service. Contributions to the plan are made on an annual basis
at the discretion of management. The Company expensed approximately $41,700
for the ten month period ended July 31, 1994, and $50,000 and $52,000 for the
years ended September 30, 1993 and 1992, respectively.

7. SUBSEQUENT EVENT

On August 1, 1994, the stockholder entered into a Purchase and Sale Agreement
under which all of the outstanding common stock of the Company was sold to an
unrelated third party. The acquiror purchased the common stock in exchange
for $4,000,000 of cash, a $700,000 two-year promissory note, a two-year earn
out not to exceed $400,000 and the issuance of notes aggregating $500,000 to
certain executives which accrue interest at 6% and are convertible at the
executives' option to 120,346 shares of the acquiror's common stock on August
1, 1997.

The stockholder distribution payable of $943,481 recorded in the accompanying
balance sheet at July 31, 1994 represented management's estimate of the
amount payable to the stockholder as defined by the Purchase and Sale
Agreement. This amount, which was recorded in the financial statements for
the ten month period ended July 31, 1994, was being disputed by the acquiror.
During December 1994, an agreement was reached between the stockholder and
the acquiror whereby the acquiror will pay the stockholder $659,566 in
satisfaction of the obligation under the Purchase and Sale Agreement.

8. COMMITMENTS AND CONTINGENCIES

On August 1, 1994, the Company entered into employment agreements with
certain senior executives that provide for termination rights in the event
that the executives' employment were to be terminated by the Company without
cause. The employment agreements expire between July 31, 1997 and December
31, 1997. The rights include lump-sum payments of salary for the remainder of
the term of the employment agreement. The executives' salaries under the
employment agreements do not exceed $254,000 in the aggregate annually.

* * * * * *

F-30
<PAGE>

[Deloitte & Touche LLP logo]

2500 One PPG Place Telephone: (412) 338-7200
Pittsburgh, Pennsylvania 15222-5401 Facsimile: (412) 338-7380

INDEPENDENT AUDITORS' REPORT

To the Stockholder of
LBI Corp. d/b/a/ Puma Products:

We have audited the accompanying balance sheet of LBI Corp. d/b/a Puma
Products as of September 30, 1994, and the related statements of income,
stockholder's equity and cash flows for the nine months then ended.
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 audit. The financial statements of the Company for
the year ended December 31, 1993 were audited by other auditors whose report,
dated February 10, 1995, expressed an unqualified opinion on those
statements.

We conducted our audit 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 audit provides a
reasonable basis for our opinion.

In our opinion, such 1994 financial statements present fairly, in all
material respects, the financial position of the Company at September 30,
1994, and the results of its operations and its cash flows for the nine months
then ended in conformity with generally accepted accounting principles.

/s/ Deloitte & Touche LLP

Pittsburgh, Pennsylvania

February 10, 1995

[Deloitte Touche LLP logo]

F-31
<PAGE>

PODSEDNIK & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
350 WESTPARK WAY, SUITE 221
EULESS, TEXAS 76040
-----
(817) 545-1847
METRO 267-7388
FAX (817) 545-9912

Independent Auditor's Report

The Stockholders
LBI Corp. d/b/a Puma Products

We have audited the accompanying balance sheet of LBI Corp. d/b/a Puma
Products as of December 31, 1993, and the related statements of income,
retained earnings, and cash flows for the year then ended. 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 audit.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of LBI Corp. d/b/a Puma
Products as of December 31, 1993, and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.

/s/ Podsednik & Company

February 10, 1995

F-32
<PAGE>

LBI CORP. d/b/a PUMA PRODUCTS

BALANCE SHEETS
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>

September 30, December 31,
ASSETS 1994 1993
<S> <C> <C>
CURRENT ASSETS:
Cash $ 367,495 $264,583
Trade accounts receivable, less allowance of
$44,000 and $36,000, respectively 463,204 180,086
Inventory 904,472 526,419
Other 1,562 2,931
----------- -----------
Total current assets 1,736,733 974,019
----------- -----------
EQUIPMENT 90,626 47,491
Less accumulated depreciation 36,557 24,731
----------- -----------
Equipment -- net 54,069 22,760
----------- -----------
OTHER ASSETS 5,860 523
----------- -----------
$1,796,662 $997,302
=========== ===========

LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES:
Accounts payable $ 332,390 $101,299
Stockholder distribution payable 232,000 --
Accrued expenses 36,592 138,229
Current portion of long-term debt 12,110 7,503
----------- ------------
Total current liabilities 613,092 247,031
----------- ------------
LONG-TERM DEBT 9,288 7,018
----------- ------------

COMMITMENTS AND CONTINGENCIES (Notes 5 and 7)

STOCKHOLDER'S EQUITY:
Common stock, no par value; authorized 10,000
shares; issued 1,000 shares 1,000 1,000
Retained earnings 1,173,282 742,253
---------- ----------
Total stockholder's equity 1,174,282 743,253
---------- ----------
$1,796,662 $997,302
========== ==========
</TABLE>

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

F-33
<PAGE>

LBI CORP. d/b/a PUMA PRODUCTS

STATEMENTS OF INCOME
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine-
Month
Period Year
Ended Ended
September 30, December 31,
1994 1993
<S> <C> <C>
SALES $5,667,725 $5,505,739
OTHER INCOME 83,015 70,437
---------- ----------
5,750,740 5,576,176
---------- ----------
COST OF SALES, INCLUDING
OCCUPANCY AND BUYING EXPENSES 4,457,863 4,126,931

OPERATING, SELLING AND
ADMINISTRATIVE EXPENSES 629,848 795,279
---------- ----------
5,087,711 4,922,210
---------- ----------
NET INCOME $ 663,029 $ 653,966
========== ==========
EARNINGS PER SHARE $ 663 $ 654
========== ==========
</TABLE>

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

F-34
<PAGE>

LBI CORP. d/b/a PUMA PRODUCTS

STATEMENTS OF STOCKHOLDER'S EQUITY
-----------------------------------------------------------------------------

<TABLE>
<CAPTION>
Common Retained
Stock Earnings Total
<S> <C> <C> <C>
BALANCE, JANUARY 1, 1993 $1,000 $ 333,327 $ 334,327
Net income -- 653,966 653,966
Distribution to stockholder -- (245,040) (245,040)
------ --------- -----------
BALANCE, DECEMBER 31, 1993 1,000 742,253 743,253
Net income -- 663,029 663,029
Distribution to stockholder -- (232,000) (232,000)
------ --------- -----------
BALANCE, SEPTEMBER 30, 1994 $1,000 $1,173,282 $1,174,282
====== ========== ==========
</TABLE>

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

F-35
<PAGE>

LBI CORP. d/b/a PUMA PRODUCTS

STATEMENTS OF CASH FLOWS
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine-
Month
Period
Ended Year
September Ended
30, December 31,
1994 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 663,029 $ 653,966
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 11,826 7,745
Other changes in operating assets and liabilities:
Trade accounts receivable (283,118) (30,004)
Inventory (378,053) (276,284)
Accounts payable 231,091 41,020
Other (105,605) 7,574
--------- ---------
Net cash provided by operating activities 139,170 404,017
--------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (43,135) (9,250)
--------- ---------
Cash used in investing activities (43,135) (9,250)
--------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution to stockholder -- (245,040)
Proceeds from issuance of long-term debt 14,879 --
Principal payments of long-term debt (8,002) (7,503)
--------- ---------
Net cash used in financing activities (6,877) (252,543)
--------- ---------
NET INCREASE IN CASH 102,912 142,224
CASH, BEGINNING OF PERIOD 264,583 122,359
--------- ---------
CASH, END OF PERIOD $ 367,495 $ 264,583
========= =========
</TABLE>

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

F-36
<PAGE>

LBI CORP. d/b/a PUMA PRODUCTS

NOTES TO FINANCIAL STATEMENTS
-----------------------------------------------------------------------------

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Business Activities -- LBI Corp. d/b/a Puma Products (the Company) is a
wholesale distributor of accessories for trucks, vans and cars throughout the
United States.

b. Fiscal Year -- The Company's fiscal year end is December 31. The
accompanying financial statements as of September 30, 1994 and the nine-month
period then ended are presented as a result of the sale of all of the
Company's common stock on October 26, 1994 to an unrelated party (see Note
6).

c. Inventory -- The Company's inventory is stated at the lower of first-in,
first-out (FIFO) cost or market.

d. Equipment -- Equipment is stated at cost. Depreciation is computed by the
modified accelerated cost recovery method over the estimated useful lives of
such assets (five to seven years).

e. Revenue Recognition -- Revenues are recognized at the time products are
shipped.

f. Tax Status -- The Company has elected to be taxed under the provisions of
Subchapter S of the Internal Revenue Code for federal income tax purposes.
Under the provisions of Subchapter S, the stockholder, rather than the
Company, has the responsibility for the payment of federal income
taxes. Accordingly, no provision for federal income taxes has been
recorded in these financial statements. However, payments of stockholder
income taxes, recorded as distributions, have been reflected through charges
to stockholder's equity.

2. EQUIPMENT

Equipment is summarized as follows:

September December 31,
30, 1994 1993
<S> <C> <C>
Computer $ 18,260 $ 6,601
Vehicles 42,604 27,725
Furniture and equipment 29,762 13,165
--------- ---------

90,626 47,491
Less accumulated
depreciation (36,557) (24,731)
--------- ---------

$ 54,069 $ 22,760
========= =========
</TABLE>

F-37
<PAGE>

3. LONG-TERM DEBT

Long-term debt consists of various notes, payable in monthly installments
through January 1997, with interest ranging from 5.75% to 6.91%.

Interest expensed and paid was $1,262 and $1,633 during the nine-month period
ended September 30, 1994 and the year ended December 31, 1993, respectively.

Maturities of long-term debt are as follows:

Year Ending September 30

1995 $12,110
1996 6,935
1997 2,353
-------
$21,398
=======

4. LINE OF CREDIT

The Company has a bank line of credit with a maximum borrowing limit of
$100,000, at an interest rate of 1.5% above the bank's prime rate. The
Company had no borrowings under lines of credit at September 30, 1994 and
December 31, 1993. Upon the sale of the Company's common stock (see Note 6),
the line of credit was terminated.

5. LEASES

The Company leased its corporate office and warehouse under an operating
lease which expired during December 1994. Rent expense amounted to
approximately $16,875 for the nine-months ended September 30, 1994, and
$22,500 for the year ended December 31, 1993.

On December 15, 1994, the Company relocated its warehouse and offices to a
facility leased from the former stockholder. The new lease expires on
December 31, 2000 and provides for a four year renewal option.

Minimum rentals under these leases having initial noncancelable lease terms
in excess of one year are as follows:

Year ending September 30

1995 $ 69,200
1996 78,500
1997 78,500
1998 78,500
1999 78,500
Thereafter 98,125
---------

Total future minimum rental payments $481,325
========

F-38
<PAGE>

6. SUBSEQUENT EVENT

On October 26, 1994, the stockholder entered into a Purchase and Sale
Agreement under which all of the outstanding common stock of the Company was
sold to an unrelated third-party. The acquiror purchased the common stock in
exchange for $1,200,000 of cash, a 120-day promissory note for $950,000, a
$600,000 two-year promissory note, 266,667 shares of the acquiror's common
stock and a five-year earn-out of up to $1,000,000. The amount of the 120-day
promissory note will be increased or decreased based on the final
determination of the purchase price, pursuant to the terms of the Purchase
and Sale Agreement. The Purchase and Sale Agreement also provides for bonus
earn-out payments to be made to the stockholder in the event that earnings
exceed historical levels over the five-year earn-out period, with a maximum
additional payment of $500,000.

7. COMMITMENTS AND CONTINGENCIES

On October 26, 1994, the Company entered into employment agreements with two
executives that provide for termination rights in the event that the
executives' employment were to be terminated by the Company without cause.
The employment agreements expire on October 26, 1997 and October 26, 1999,
respectively. The rights include lump-sum payments of salary for the
remainder of the term of the employment agreement. The executives' annual
salaries under the employment agreements do not exceed $165,000 in the
aggregate.

* * * * * *

F-39

(footnote continued from previous page)

(footnote continued to next page)

<PAGE>

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated statement of
income is presented to reflect the acquisition of all of the outstanding common
stock of Dowling's Fleet Service Co., Inc. ("Dowling's") which occurred in
August 1994 and LBI Corp. d/b/a Puma Products ("Puma") which occurred in October
1994 by Oakhurst Company, Inc. ("Oakhurst"). The unaudited pro forma condensed
consolidated statement of income reflects the estimated effects of the Dowling's
and Puma acquisitions, assuming the acquisitions were consummated as of the
beginning of the fiscal year ended February 28, 1995.

The unaudited pro forma condensed consolidated statement of income does not
purport to represent what the consolidated results of operations would actually
have been if the Dowling's and Puma acquisitions in fact had occurred on
February 27, 1994 or to project the results of operations of Oakhurst for any
future date or period.

The pro forma adjustments are based upon currently available
information and upon certain assumptions that management believes are reasonable
in the circumstances. The pro forma financial information presented and
accompanying notes should be read in conjunction with the historical
consolidated financial statements of Oakhurst.

F-40
<PAGE>

OAKHURST COMPANY, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Year Ended February 28, 1995
(Dollars in thousands except per share data)
(Unaudited)

<TABLE>
<CAPTION>
Puma
Dowling's Products
(Period (Period
2/27/94- Pro 2/27/94- Pro
Historical 7/31/94) Adjustments Forma 10/26/94) Adjustments Forma
---------- -------- ----------- ----- --------- ----------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Sales ...................... $ 43,142 $ 5,355 $ -- $48,497 $4,772 $ -- $ 53,219
Other Income ............... 655 11 -- 666 82 -- 748
----------- ----------- ------ ------- ------ ------- ----------
43,797 5,366 -- 49,163 4,804 -- 53,967
----------- ----------- ------ ------- ------ ------- ----------

Costs of goods sold,
including occupancy
and buying expenses ..... 32,384 4,201 (25)(a) 36,560 3,732 40,292
Operating, selling and
administrative expenses . 9,560 958 (193)(b) 10,410 525 (58)(f) 11,023
85 (c) 146 (c)
Interest expense ........... 411 -- 100 (d) 511 -- 81 (d) 592
----------- ----------- ------ ------- ------ ------- ----------
42,355 5,159 (33) 47,481 4,257 169 51,907
----------- ----------- ------ ------- ------ ------- ----------

Income before income
taxes ................... 1,442 207 33 1,682 547 (169) 2,060

Income tax expense ......... (623) -- (103)(e) (726) -- (177)(e) (903)
----------- ----------- ------ ------- ------ ------- ----------

Net income ................. $ 819 $ 207 $ (70) $ 956 $ 547 $ (346) $ 1,157
=========== =========== ====== ======= ====== ======= ==========

Net income per share ....... $ 0.27 $ 0.36
=========== ==========

Weighted average number
of shares outstanding
used in computing per
share amounts ........... 3,076,801 3,259,154
=========== =========
</TABLE>

(See notes to pro forma condensed consolidated statements of income.)

F-41
<PAGE>

NOTES TO PRO FORMA CONDENSED
CONSOLIDATED STATEMENTS OF INCOME

(a) Represents the reduction of rent expense associated with warehouse
facilities leased from the former shareholder of Dowling's resulting from
new lease agreements being entered into at the time of the acquisition.

(b) Represents historical administrative expenses which will be nonrecurring.
These nonrecurring expenses consist primarily of the reduction of an
officer's salary.

(c) Represents the amortization of excess of cost over net assets acquired
which will be amortized on the straight-line basis over 15 years.

(d) Represents interest expense in connection with additional long-term
obligations.

(e) Represents adjustment to reflect consolidated tax expense at Oakhurst's
statutory tax rate.

(f) Represents historical administrative expenses which will be nonrecurring.
These nonrecurring expenses consists primarily of administrative wages and
benefits for terminated personnel and other expenses incurred by the former
stockholder.

F-42
<PAGE>

No person has been authorized to give any information or to
make any representations in connection with this offering
other than those contained in this Prospectus and, if given
or made, such other information and representations must not
be relied upon as having been authorized by the Company.
Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of
the Company since the date hereof or that the information
contained herein is correct as of any time subsequent to its
date. This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any securities other
than the registered securities to which it relates. This
Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy such securities in any
circumstances in which such offer or solicitation is
unlawful.

TABLE OF CONTENTS

Page

Additional Information.................... 5
Prospectus Summary........................ 6
Risk Factors.............................. 9
The Company............................... 12
Use of Proceeds........................... 12
Dividend Policy........................... 12
Price Range of Common Stock............... 13
Capitalization............................ 14
Selected Consolidated Financial Data...... 15
Management's Discussion and Analysis
of Financial Condition and Results
of Operations........................... 17
Business.................................. 24
Management................................ 33
Principal Stockholders.................... 43
Selling Stockholders...................... 45
Description of Capital Stock.............. 46
Certain Transactions...................... 49
Plan of Distribution...................... 49
Legal Matters............................. 50
Experts................................... 50
Additional Information.................... 50
Index to Financial Statements............. F-1

987,451 Shares

Oakhurst Company, Inc.

Common Stock

==========
PROSPECTUS
==========
January 12, 1996

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS
January 12, 1996
Item 13. Other Expenses of Issuance and Distribution

Expenses of the Registrant in connection with the issuance and distribution
of the securities being registered, other than underwriting discounts and
commissions, are estimated as follows:

SEC Registration Fee....................... $ 511
Legal Fees and Expenses.................... 40,000
Accountants' Fees and Expenses............. 25,000
Expenses of Qualification Under
State Securities Laws, Including
Attorneys' Fees.......................... 10,000
Printing and Engraving Expenses............ 3,000
-------
Total...................................... $78,511
=======

Item 14. Indemnification of Directors, Officers and Employees

Section 145 ("Section 145") of the Delaware General Corporation Law
provides a detailed statutory framework covering indemnification of directors
and officers against liabilities and expenses arising out of legal proceedings
brought against them by reason of their status or service as Directors or
officers. The Registrant's By-Laws provides for indemnification of Directors and
officers to the full extent permitted by Section 145. Section 145 generally
provides that a director or officer of a corporation (i) shall be indemnified by
the corporation for all expenses of such legal proceedings when he/she is
successful on the merits; (ii) may be indemnified by the corporation for the
expenses, judgments, fines and amounts paid in settlement of such proceedings
(other than a derivative suit), even if he/she is not successful on the merits,
if he/she acted in good faith and in a manner he/she reasonably believed to be
in or not opposed to the best interests of the corporation (and, in the case of
a criminal proceeding, had no reasonable cause to believe his/her conduct was
unlawful), and (iii) may be indemnified by the corporation for expenses of a
derivative suit (a suit by a stockholder alleging a breach by a director or
officer of a duty owed to the corporation), even if he/she is not successful on
the merits, if he/she acted in good faith and in a manner he/she reasonably
believed to be in or not opposed to the best interests of the corporation. No
indemnification may be made under clause (iii) above, however, if the Director
or officer is adjudged liable for negligence or misconduct in the performance of
his/her duties to the corporation, unless a court determines that, despite such
adjudication, but in view of all of the circumstances, he/she is entitled to
indemnification. The indemnification described in clauses (ii) and (iii) above
may be made only upon a determination that indemnification is proper because the
applicable standard has been met. Such a determination may be made by a majority
of a quorum of disinterested Directors, independent legal counsel, the
stockholders or a court of competent jurisdiction. The Board of Directors may
authorize advancing litigation expenses to a Director or officer upon receipt of
an undertaking by such Director or officer to repay such expenses if it is
ultimately determined that he/she is not entitled to be indemnified for them.

<PAGE>

Item 15. Recent Sales of Unregistered Securities

Described below is information regarding all unregistered securities of the
Company sold by the Company within the last three years.

The following securities were sold and issued in reliance upon the
exemption provided by Section 4(2) under the Securities Act and Regulation D
promulgated thereunder:

(1) In August 1994, Oakhurst issued, in connection with the acquisition by
the Company of all of the issued and outstanding capital stock of Dowling's,
convertible debt of $500,000 to certain executives of Dowling's, which is
convertible at the executives' option into 120,346 shares of Oakhurst common
stock on August 1, 1997.

(2) In October 1994, Oakhurst issued 266,667 shares of the Company's common
stock to the shareholders of LBI Corp., d/b/a Puma Products, as part of the
consideration paid by the Company in connection with the acquisition of all of
the issued and outstanding capital stock of Puma.

Item 16. Exhibits and Financial Statement Schedules

The following is a list of exhibits filed as a part of this
registration statement:

Exhibit
No. Description

2.1 Agreement and Plan of Merger dated as of May 20, 1991 (filed as
Appendix A to the Proxy Statement/Prospectus dated April 16, 1991 of
the Company and Steel City Products, Inc. ("SCPI")).

3.1 Restated Certificate of Incorporation dated August 5, 1993 (filed as
Exhibit 3.1 to the Company's Annual Report on Form 10-K for the fiscal
year ended February 26, 1994).

3.2 By-laws (filed as Appendix C to the Proxy Statement/Prospectus of the
Company and SCPI dated April 16, 1991).

4.1 Agreement and Plan of Merger dated as of May 20, 1991 (see Exhibit 2.1
above).

5 Opinion of Roger M. Barzun, Esq. with respect to the legality of the
shares being registered.

10.1 Form of Option Agreement dated August 29, 1991 with directors and
executive officers (filed as Exhibit 10(b) to the Company's Annual
Report on Form 10-K for the fiscal year ended February 26, 1994).

10.2 Agreement dated June 11, 1991 with Prudential-Bache Special Situations
Fund (filed as Exhibit 10(q) to the Annual Report on Form 10-K of SCPI
for the fiscal year ended March 3, 1990).

10.3 Stock Purchase Agreement with Harold Garfinkel and H&H Distributors,
Inc. dated as of January 25, 1994 (filed as Exhibit 10.4 to the
Company's Annual Report on Form 10-K for the fiscal year ended February
26, 1994).

10.4 Employment Agreement with Harold Garfinkel dated as of November 1, 1993
(filed as Exhibit 10.5 to the Company's Annual Report on Form 10-K for
the fiscal year ended February 26, 1994).
<PAGE>

10.5 Agreement between Harold Garfinkel and H&H Distributors, Inc. dated as
of November 1, 1993 (filed as Exhibit 10.6 to the Company's Annual
Report on Form 10-K for the fiscal year ended February 26, 1994).

10.6 Credit Agreement by and between SCPI and Integra Bank Pittsburgh (filed
as Exhibit 10.1 to SCPI's Quarterly Report on Form 10-Q for the period
ended August 27, 1994).

10.7 Mortgage and Security Agreement by and between SCPI and Integra Bank
Pittsburgh (filed as Exhibit 10.2 to SCPI's Quarterly Report on Form
10-Q for the period ended August 27, 1994).

10.8 Credit Agreement by and between the Company and Integra Bank Pittsburgh
(filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
for the period ended August 27, 1994).

10.9 Pledge and Security Agreement by and between the Company and Integra
Bank Pittsburgh (filed as Exhibit 10.2 to the Company's Quarterly
Report on Form 10-Q for the period ended August 27, 1994).

10.10 Purchase and Sale Agreement relating to the acquisition of Dowling's
Fleet Service Co., Inc. by the Company, also containing employment
agreements with James Dowling, Robert Keane and Joseph Quattrochi
(filed as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q
for the period ended August 27, 1994).

10.11 Stock Purchase Agreement dated as of October 20, 1994 among the
Company, LBI Corp. d/b/a Puma Products, Inc. and Anthony Puma also
containing employment agreements with Anthony Puma and Laurence Finman
(filed as an exhibit to the Company's Current Report on Form 8-K dated
October 26, 1994).

10.12 Lease Agreements by and between James Dowling and Dowling's Fleet
Service Co., Inc. (filed as Exhibit 10.13 to the Company's Annual
Report on Form 10-K for the year ended February 28, 1995).

10.13 Lease Agreement by and between Anthony Puma and Puma Products, Inc.
(filed as Exhibit 10.14 to the Company's Annual Report on Form 10-K for
the year ended February 28, 1995).

10.14 The 1994 Omnibus Stock Plan with form of option agreement (filed as
Exhibit 10.15 to the Company's Annual Report on Form 10-K for the year
ended February 28, 1995).

10.15 The 1994 Non-Employee Director Stock Option Plan with form of stock
option agreement (filed as Exhibit 10.16 to the Company's Annual Report
on Form 10-K for the year ended February 28, 1995).

10.16 Letter Agreement dated January 3, 1996 between the Company and Integra
amending the Credit Agreement dated August 1, 1994 between the Company
and Integra.

10.17 Letter Agreement dated January 3, 1996 between SCPI and Integra
amending the Credit Agreement dated August 1, 1994 between SCPI and
Integra.

21 Subsidiaries of Registrant.

23.1 Consent of Deloitte & Touche LLP.

23.2 Consent of Podsednik & Company.

23.3 Consent of Roger M. Barzun, Esq., general counsel to Registrant
(included in Exhibit 5).

24 Power of Attorney (included in signature page to Registration
Statement).

27 Financial Data Schedule

<PAGE>

Item 17. Undertakings

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.

(4) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.

(5) That prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is a part of
this registration statement, by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c), the issuer undertakes
that such reoffering prospectus will contain the information called for
by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information
called for by the other items of the applicable form.

(6) That every prospectus (i) that is filed pursuant to paragraph
(5) immediately preceding, or (ii) that purports to meet the
requirements of section 10(a)(3) of the Securities Act and is used in
connection with an offering of securities subject to Rule 415, will be
filed as a part of an amendment to the registration statement and will
not be used until such amendment is effective, and that, for purposes
of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(7) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with

<PAGE>

the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.

(8) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of
this Form, within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other equally
prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through
the date of responding to the request.

(9) To supply by means of a post-effective amendment all
information concerning a transaction, and the company being acquired
involved therein, that was not the subject of and included in the
registration statement when it became effective.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant,
Oakhurst Company, Inc., certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-1 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of Duxbury, The Commonwealth of Massachusetts, on
this 31st day of December, 1995.

Oakhurst Company, Inc.

By: /s/ Mark Auerbach
Mark Auerbach
Chairman of the Board,
and Chief Executive Officer

<PAGE>

POWER OF ATTORNEY

Each person whose signature appears below hereby appoints Roger D. Feldman
and Roger M. Barzun and each of them severally, acting alone and without the
other, his/her true and lawful attorney-in-fact with the authority to execute in
the name of each such person, and to file with the Securities and Exchange
Commission, together with any exhibits thereto and other documents therewith,
any and all amendments (including without limitation post-effective amendments)
to this registration statement necessary or advisable to enable the registrant
to comply with the Securities Act of 1933, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, which amendments may make such other changes in the
registration statement as the aforesaid attorney-in-fact executing the same
deems appropriate.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:

Signature Title Date

/s/ Mark Auerbach Chairman of the December 31, 1995
- ---------------- Board of Directors,
Mark Auerbach President, Chief Executive
Officer, Chief
Financial Officer
(principal executive,
financial and
accounting officer),
Director

/s/ John D. Abernathy Director December 31, 1995
- ---------------------
John D. Abernathy

/s/ Robert M. Davies Director December 31, 1995
- --------------------
Robert M. Davies

/s/ Joel S. Lever Director December 31, 1995
- --------------------
Joel S. Lever

/s/ Richard Randolph Director December 31, 1995
- -------------------
Richard Randolph

/s/ Bernard H. Frank Director December 31, 1995
- --------------------
Bernard H. Frank

/s/ Anthony N. Puma Director December 31, 1995
- -------------------
Anthony N. Puma

<PAGE>
Index to Exhibits

Exhibit No. Description Page No.
- ----------- ------------ --------

5.0 Opinion of Roger M. Barzun, Esq.
with respect to the legality of the
shares being registered 104

10.16 Letter Agreement dated January 3, 1996
between the Company and Integra amending
the Credit Agreement dated August 1, 1994
by and between the Company and Integra
Bank Pittsburgh] 105

10.17 Letter Agreement dated January 3, 1996
between SCPI and Integra amending the
Credit Agreement, dated August 1, 1994,
between SCPI and Integra 107

21 Subsidiaries of the Registrant 109

23.1 Consent of Deloitte & Touche LLP 110

23.2 Consent of Podsednik & Company 111

27 Financial Data Schedule 113

EXHIBIT 5

Roger M. Barzun
Attorney at Law
60 Hubbard Street
Concord, Massachusetts 01742

Telephone: (508) 287-4275
Facsimile: (508) 287-4276

January 11, 1996

Oakhurst Company, Inc.
1001 Santerre Drive
Grand Prairie, Texas 75050

Gentlemen:

I am General Counsel of Oakhurst Company, Inc., a Delaware corporation, (the
"Company"), and in that capacity this opinion is delivered to you in connection
with the registration statement on Form S-1 (as amended from time to time, the
"Registration Statement") to be filed with the Securities and Exchange
Commission on or about January 11, 1996 under the Securities Act of 1933
relating to 987,451 shares (the "Shares") of the common stock, $0.01 par value
per share (the "Common Stock") of the Company offered by certain stockholders
of the Company listed in the Registration Statement.

I am familiar with the Company's Restated Certificate of Incorporation, its
By-Laws and its corporate minute book as well as the Registration Statement. I
have also examined such other documents, records and certificates and made such
further investigation as I have deemed necessary for the purposes of this
opinion.

Based upon the foregoing, I am of the opinion that the Shares have been validly
issued and are fully paid and non-assessable.

I understand that this opinion is to be used in connection with the Registration
Statement and accordingly I consent to the filing of this opinion as an exhibit
to the Registration Statement. I further consent to the reference to me under
the heading "Legal Matters" in the prospectus included in the Registration
Statement.

Very truly yours,

/s/ Roger M. Barzun

Exhibit 10.16

[Integra Bank Logo]

Integra Bank
300 Fourth Avenue
Pittsburgh, PA 15278

January 3, 1996

VIA CERTIFIED MAIL

Maarten D. Hemsley, Chairman
OAKHURST COMPANY, INC.
1001 Santerre Drive
Grand Prairie, TX 75050

RE: Credit Agreement dated August 1, 1994, as amended (the "Credit Agreement")
by and between Oakhurst Company, Inc. (the "Borrower") and Integra Bank
(the "Bank")

Dear Maarten:

This letter shall constitute notice that the borrower is in violation of
Section 6.14(a)(ii) of the Credit Agreement which reqires the borrower to
maintain "Consolidated Tangible Net Worth not less than $1,000,000 at the end of
each of its fiscal quarters." The Borrower's failure to cure the foregoing
violation to the Bank's reasonable satisfaction within fifteen (15) days after
the date of this letter will constitute an Event of Default under Section 8.03
of the Credit Agreement. The Borrower has advised the Bank that it will not be
able to cure the aforesaid covenant violation and has therefore requested the
Bank to modify the covenant requirements. Capitalized terms used in this letter
and not otherwise defined shall have the meanings ascribed thereto in the Credit
Agreement.

The Bank has considered the borrower's request and, subject to the further
provisions of this letter, the Bank has agreed to modify Section 6.14(a)(ii) of
the Credit Agreement so that the Borrower will now be required to maintain a
consolidated net worth not less than $6,500,000; for purposes of the foregoing,
"consolidated net worth" shall mean (i) the total shareholder's equity
(including capital stock, additional paid-in capital and retained earnings after
deducting treasury stock) which would appear on a consolidated balance sheet of
the Borrower prepared in accordance with GAAP, minus (ii) any tax deferrals.

The foregoing modification is being granted by the Bank with the express
understanding and agreement of the Borrower that:

(i) the Bank does not intend to extend the Revolving Credit Expiration Date
beyond July 31, 1996,

(ii) the Revolving Credit Loans and all indebtedness and obligations of Steel
City to the Bank will be immediately due and payable in full on the
Revolving Credit Expiration Date,

<PAGE>

Maarten D. Hemsley, Chairman
January 3, 1996
Page 2

(iii) the Borrower will immediately begin to solicit loan commitments from
alternate financing sources for the Borrower and Steel City, so that
all indebtedness and obligations of the Borrower and Steel City to the
Bank will be refinanced as soon as possible, but in any event no later
than July 31, 1996, and

(iv) if the Borrower has not refinanced the outstanding principal balance of
the Revolving Credit Loans by February 28, 1996, then commencing on
March 1, 1996, the outstanding principal balance of the Revolving Credit
Loans will bear interest at a rate per annum equal to the Prime Rate
plus two and one-half percent (2.5%).

Except to the extent specifically provided for above, this letter does not
constitute a modification, alteration, release,limitation or waiver of any
default, breach, right, power, remedy or privilege under the Loan Documents. The
Bank expressly reserves all rights and remedies previously available to it under
the Loan Documents against the Borrower and the Subsidiaries and, except to the
extent provided for herein, the Bank may at any time exercise its rights and
remedies.

Please signify your consent to the foregoing by signing below where indicated
and returning a signed copy to me.

Sincerely,

/s/ David G. Hammer
David G. Hammer
Vice President - Corporate Banking

cc: Charles F. O'Hanlon, III
Robert M. Moorehead
William S. Harris
D. Tiemann
Roger Barzun, Esquire
David S. Horvitz, Esquire

The foregoing is agreed to this 9th day of January, 1996.

OAKHURST COMPANY, INC.

/s/ Mark Auerbach
By: Mark Auerbach
Title: President

[Integra Bank Letterhead]

Integra Bank
300 Fourth Avenue
Pittsburgh, PA 15278

January 3, 1996

VIA CERTIFIED MAIL

Steel City Products, Inc.
630 Alpha Drive
Pittsburgh, PA 15238
Attention: Chief Executive Officer

RE: Credit Agreement dated August 1, 1994, as amended (the "Credit Agreement")
by and between Steel City Products, Inc. (the "Borrower") and Integra
Bank (the "Bank")

Gentlemen:

This letter shall constitute notice that the Borrower is in violation of
Section 7.18(a)(ii) of the Credit Agreement which requires the Borrower to cause
Oakhurst to maintain "Consolidated Tangible Net Worth of Oakhurst not less than
$1,000,000 at the end of each of its fiscal quarters." The Borrower's failure to
cure the foregoing violation to the Bank's reasonable satisfaction within
fifteen (15) days after the date of this letter will constitute an Event of
Default under section 9.03 of the Credit Agreement. The Borrower has advised the
Bank that it will not be able to cure the aforesaid covenant violation and the
Borrower has therefore requested the Bank to modify the covenant requirements.
Capitalized terms used in this letter and not otherwise defined shall have the
meanings ascribed thereto in the Credit Agreement.

The Bank has considered the Borrower's request and, subject to the further
provisions of this letter, the Bank has agreed to modify Section 7.18(a)(ii) of
the Credit Agreement so that Oakhurst will now be required to maintain a
consolidated net worth not less than $6,500,000; for purposes of the foregoing,
"consolidated net worth" shall mean (i) the total shareholder's equity
(including capital stock, additional paid-in capital and retained earnings after
deducting treasury stock) which would appear on a consolidated balance sheet of
Oakhurst prepared in accordance with GAAP, minus (ii) any tax deferrals.

The foregoing modification is being granted by the Bank with the express
understanding and agreement of the Borrower that;

(i) the Bank does not intend to extend the Revolving Credit Expiration Date
(as defined in the Oakhurst Credit Agreement) beyond July 31, 1996,

(ii) the Term Loan will be immediately due and payable in full on the
Revolving Credit Expiration Date (as defined in the Oakhurst Credit
Agreement),

<PAGE>

Maarten D. Hemsley, Chairman
January 3, 1996
Page 2

(iii) the Borrower will immediately begin to solicit loan commitments from
alternate financing sources to refinance the outstanding principal
balance of the Term Loan as soon as possible, but in any event no later
than July 31, 1996, and

(iv) if the Borrower has not refinanced the outstanding principal balance of
the Term Loan by February 28, 1996, then commencing on March 1, 1996,
the outstanding principal balance of the Term Loan will bear interest at
a rate per annum equal to ten and one-half percent (10.5%).

Except to the extent specifically provided for above, this letter does not
constitute a modification, alteration, release, limitation or waiver of any
default, breach, right, power, remedy or privilege under the Loan
Documents. The Bank expressly reserves all rights and remedies previously
availabe to it under the Loan Documents against the Borrower and the
Sureties and, except to the extent provided for herein, the Bank may at any
time exercise its rights and remedies.

Please signify your consent to the foregoing by signing below where indicated
and returning a signed copy to me.

Sincerely,

/s/ David G. Hammer
David G. Hammer
Vice President - Corporate Banking

cc: Charles F. O'Hanlon, III
Robert M. Moorehead
William S. Harris
D. Tiemann
Maarten Hemsley
Roger Barzun, Esquire
David S. Horvitz, Esquire

The foregoing is agreed to this 9th day of January, 1996.

STEEL CITY PRODUCTS, INC.

By: /s/ Bernard Frank
Title: Chief Executive Officer

Exhibit 21

Subsidiaries of the Registrant

Steel City Products, Inc.
H&H Distributors, Inc.
Dowling's Fleet Service, Inc.
Puma Products, Inc.
Oakhurst Management Corporation
Oakhurst Holdings, Inc.

We consent to the use in this Registration Statement of Oakhurst Company,
Inc. (formerly Oakhurst Capital, Inc.) on Form S-1 of our report on Oakhurst
Company, Inc. dated April 28, 1995 (which expresses an unqualified opinion and
includes an explanatory paragraph relating to the Company's change in its method
of accounting for income taxes), our report on Dowling's Fleet Service, Inc.
dated December 20, 1994 (which expresses an unqualified opinion on the financial
statements for the ten months ended July 31, 1994 and the year ended September
30, 1993 and disclaims an opinion on the financial statements for the year ended
September 30, 1992 as a result of our being unable to satisfy ourselves
concerning inventory quantities as of September 30, 1991) and our report on LBI
Corp. d/b/a Puma Products dated February 10, 1995, all appearing in the
Prospectus, which is part of this Registratin Statement. We also consent to the
reference to us under the headings "Experts" and "Selected Consolidated and
Unaudited Pro Forma Financial Data" in such Prospectus.

Pittsburgh, Pennsylvania

January 10, 1996

Exhibit 23.2

Podsednik & Company
Certified Public Accountants
350 Westpark Way, Suite 221
Euless, Texas 76040-3740
----
(817) 545-1847
METRO 267-7388
FAX (817) 545-9912

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Oakhurst Company, Inc.
on Form S-1 of our report on LBI Corp d/b/a Puma Products dated February 10,
1995, appearing in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.

/s/ Podsednik & Company
Euless, Texas
January 10, 1996

<ARTICLE> 5
<CIK> 0000874238
<NAME> OAKHURST COMPANY, INC.
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1996
<PERIOD-START> MAR-01-1995
<PERIOD-END> AUG-31-1995
<CASH> 302
<SECURITIES> 0
<RECEIVABLES> 5,718
<ALLOWANCES> 487
<INVENTORY> 9,423
<CURRENT-ASSETS> 15,889
<PP&E> 3,034
<DEPRECIATION> 876
<TOTAL-ASSETS> 31,802
<CURRENT-LIABILITIES> 14,273
<BONDS> 3,323
<COMMON> 32
0
0
<OTHER-SE> 14,174
<TOTAL-LIABILITY-AND-EQUITY> 31,802
<SALES> 26,542
<TOTAL-REVENUES> 26,739
<CGS> 20,828
<TOTAL-COSTS> 20,828
<OTHER-EXPENSES> 5,660
<LOSS-PROVISION> 267
<INTEREST-EXPENSE> 377
<INCOME-PRETAX> (655)
<INCOME-TAX> 9
<INCOME-CONTINUING> (664)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (664)
<EPS-PRIMARY> (0.21)
<EPS-DILUTED> (0.21)

</TABLE>