SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

                 [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934]
                   For the Fiscal Year Ended December 31, 1997

                 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                         Commission file number 0-20743

                             OPEN PLAN SYSTEMS, INC.
                 (Name of Small Business Issuer in Its Charter)

         Virginia                                              54-1515256
State or Other Jurisdiction                                 (I.R.S. Employer
of Incorporation or Organization)                            Identification No.)

 4299 Carolina Avenue, Building C                                        23222
        Richmond, Virginia                                            (Zip Code)
(Address of Principal Executive Offices)

                                 (804) 228-5600
                (Issuer's Telephone Number, Including Area Code)

           Securities registered under Section 12(b) of the Act: None.

              Securities registered under Section 12(g) of the Act:

                           Common Stock, no par value

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

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.  The issuer's revenues for the fiscal year
ended December 31, 1997 were $31,968,000.

     The aggregate  market value of the Common Stock held by  non-affiliates  of
the Company as of March 16, 1998 was $11,986,120.

     The number of shares of Common Stock outstanding as of March 16, 1998, was
4,472,433.

Transitional Small Business Disclosure Format (check one):  Yes _____   No  X

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Company's  definitive  Proxy  Statement for its 1998 Annual
Meeting of Shareholders (to be filed) is incorporated by reference into Part III
of this Form 10-KSB.
<PAGE>
                                TABLE OF CONTENTS


                                     PART I
<TABLE>
<CAPTION>

                                                                                                          Page
<S>               <C>                                                                                     <C>

Item 1            Description of Business.................................................................  1

Item 2            Description of Property.................................................................  7

Item 3.           Legal Proceedings.......................................................................  7

Item 4.           Submission of Matters to a Vote of Security Holders.....................................  7


                                                      PART II

Item 5.           Market for Common Equity and Related Stockholder Matters................................  8

Item 6.           Management's Discussion and Analysis or Plan of Operation...............................  9

Item 7.           Financial Statements.................................................................... 15

Item 8.           Changes in and Disagreements with Accountants
                  on Accounting and Financial Disclosure.................................................. 31


                                                     PART III

Item 9.           Directors, Executive Officers, Promoters and Control Persons;
                  Compliance with Section 16(a) of the Exchange Act....................................... 31

Item 10.          Executive Compensation.................................................................. 31

Item 11.          Security Ownership of Certain Beneficial Owners and Management.......................... 31

Item 12.          Certain Relationships and Related Transactions.......................................... 31

Item 13.          Exhibits, List and Reports on Form 8-K.................................................. 32

</TABLE>
<PAGE>

                                     PART I

Item 1.  .........Description of Business

     Open Plan Systems,  Inc. (the "Company") was incorporated under the laws of
the  Commonwealth  of Virginia on  September  11,  1989.  The Company  restores,
remanufactures,  manufactures  and markets  modular  office Work  Stations.  The
Company operates remanufacturing  facilities in Richmond,  Virginia and Lansing,
Michigan,  light  remanufacturing in Dallas, Texas and manufactures its own line
of Work Stations at its Richmond, Virginia facility.

The Office Furniture Industry

     The trend in the office  furniture  industry  for the past twenty years has
been away from a simple desk and file  design to a  sophisticated  Work  Station
design because of the  flexibility  and  productivity  advantages that such Work
Stations provide.  Work Stations have become more  sophisticated as the usage of
computers and telecommunications equipment has increased in modern offices.

     The Company  competes in the office  furniture  industry  with national and
regional  manufacturers  of new office  furniture  and with  local and  regional
remanufacturers of used office furniture. Steelcase, Inc. ("Steelcase"),  Herman
Miller,  Inc. ("Herman  Miller") and Haworth,  Inc.  ("Haworth")  constitute the
dominant manufacturers,  collectively  representing  approximately two-thirds of
the installed base of Work Stations.  Each of these  manufacturers has created a
unique system for  connecting  panels,  power and  telecommunications  raceways,
resulting  in  virtually  no  interchangeability  between  products of different
manufacturers.  Each  manufacturer's  Work Stations  provide for several hundred
variations.  In  recent  years,  more  sophisticated  telecommunications,  power
distribution  and wire  management  elements have been added to Work Stations as
computer   usage  has  increased  in  offices.   With  respect  to   independent
remanufacturers  of used  Work  Stations,  the  Company  believes  that the vast
majority of such  remanufacturers  are local operations serving a single city or
metropolitan area from a single sales office.

     Since the  mid-1980s,  end-users  with existing Work Stations have had four
primary options when  considering  changes in their existing Work Stations:  (i)
acquire  upgraded  power  components,  new  fabric  and panel trim from the Work
Station  manufacturer  to be retrofitted  on existing Work Stations,  frequently
during  installation  in a new  facility;  (ii) acquire new Work Stations from a
manufacturer or dealer while  disposing of existing  furniture and Work Stations
to a broker  or  remanufacturing  company;  (iii)  acquire  remanufactured  Work
Stations  while  disposing of the old  furniture and Work Stations to brokers or
the remanufacturer; and (iv) acquire "as is" Work Stations.

     The business of  remanufacturing  Work Stations has grown steadily over the
past several years.  The Company  believes this growth is principally due to the
greater  availability  of high quality  remanufactured  Work  Stations at prices
substantially  below  manufacturers'  retail list prices for new Work  Stations,
thereby providing  end-users with substantial value. In addition,  the growth of
the remanufacturing  business has been assisted by the increased availability of
used Work  Stations for  remanufacturing.  Used Work  Stations  have become more
readily  available in recent years due to an  increased  base of installed  Work
Stations  and  corporate  events  such as mergers,  acquisitions,  divestitures,
downsizings and relocations.  The adoption of recycling  programs or policies by
businesses  has  also  been a major  factor  leading  to  increased  demand  for
remanufactured Work Stations.

Overview of the Company's Operations

     The  Company's  primary  business  to date has been  the  remanufacture  of
modular  office Work  Stations.  The Company  purchases  used Work Stations from
end-users,  brokers  and  dealers  and  transports  the  Work  Stations  to  its
facilities in Richmond,  Virginia and Lansing,  Michigan.  The Work Stations are
disassembled,  inventoried  by  component  parts and stored.  The  Company  then
restores  the used Work  Stations  through the  remanufacturing  process to meet
customers'   needs.   Remanufacturing   usually  includes   sanding,   painting,
laminating,  reupholstering and updating electrical  components.  In addition to
the  remanufacture  of  used  Work  Stations,  the  Company  in  1996  began  to
manufacture  its own line of new Work  Stations as part of its growth  strategy.
See "- Products" below. As a result of its increased manufacturing capacity, the
Company also has increased its ability to  manufacture  new component  parts for
installation in its remanufactured Work Stations.

     The  Company's  design  staff works with  customers  to maximize  available
office space through  customized space plans.  Customers are able to choose from
among  several  colors of laminate and paint and over 1,000  different  fabrics.
After the initial sales call, the Company  responds to the customer's needs with
a proposal which  includes a computer  aided design of the space,  the number of
Work Stations and the cost,  typically within 72 hours. Once a purchase order is
received,  the fabric selected by the customer is applied to the panels, and the
various  components of the Work  Stations are  assembled for shipping.  The Work
Stations  sold  by  the  Company's  direct  sales  force  are  installed  at the
customer's offices by the Company's  employees or by approved outside installers
giving  the  Company  control  over the  entire  process.  The  Company's  large
inventory of disassembled  component parts permits shipping generally within one
to four weeks,  depending  on the product and fabrics  required,  of receiving a
purchase  order.  The Company  believes that its ability to provide high quality
Work  Stations  at  discounted  prices,  coupled  with its  emphasis on superior
customer  service  through  its design  staff and  Company  trained or  approved
installers,  gives it a  competitive  advantage  over  manufacturers  and  other
remanufacturers of Work Stations.

     The Company's Richmond,  Virginia and Lansing,  Michigan facilities include
all of the equipment  required to remanufacture  Work Stations  including closed
and  open  painting  and  drying  booths  as well as  sanding,  woodworking  and
reupholstering equipment.  Plant layout has been designed to facilitate the most
efficient flow of materials and streamline the  remanufacturing  process through
disassembly,  storage,  remanufacturing  and shipping.  Quality  control for the
remanufactured  products  occurs at various  stages  during the  remanufacturing
process  including the final quality control  verifications at shipment and upon
installation.  The  Company's  own  line  of  private  label  Work  Stations  is
manufactured  in its  Richmond,  Virginia,  facility.  The Company  also has the
capability of doing light remanufacturing at its Dallas, Texas facility.

The  Company  sells  Work  Stations  primarily  through  a  network  of  fifteen
Company-owned  direct sales offices. The Company believes that each of the fifty
largest  metropolitan areas of the United States will support a sales office. In
marketing  its  products,  the Company  utilizes  several  innovative  programs,
including its asset  banking  program,  which allows  customers to trade-in used
Work Stations in exchange for a credit towards future purchases.

Products

     The  Company's  principal  product to date has been  remanufactured  Herman
Miller Work Stations.  However,  with the October 1996 acquisition of Immaculate
Eagle, Inc., d/b/a TFM Remanufactured Office Furniture ("TFM"), a privately-held
regional manufacturer of Work Stations based in Lansing,  Michigan,  the Company
is now able to  remanufacture  panel systems  produced by Haworth,  the nation's
third largest manufacturer of new office Work Stations.

     The Company believes that Work Stations offer  significant  advantages over
the traditional desk,  free-standing  file and permanent drywall dividers common
to historical  office  layouts.  Work Stations  enable  businesses to house more
people in a given space than  previously  was  possible  because  Work  Stations
combine moveable panels, work surfaces,  storage units,  lighting and electrical
distribution  combined  into a single  integrated  unit.  The end result is less
square feet of office space per worker and, therefore,  lower facility costs per
employee.

     Work  Stations  often are  acoustically  treated to provide  conversational
privacy  required by closer  quarters.  Because Work Stations  usually are lower
than ceiling height, lighting, heating, ventilation and air conditioning are not
confined to individual  spaces,  allowing  distribution among more workers which
reduces  building and operating  costs per employee.  Work Stations  incorporate
electrical  circuitry  necessary  to operate  computers  and  telecommunications
equipment.  The Company's Work Stations meet the safety standards established by
Underwriters  Laboratories.  The  Company  believes  it is  one  of  only  a few
remanufacturers  whose Work  Station  components  are listed  with  Underwriters
Laboratories.

     Manufacturers  and  remanufacturers  customize Work Stations to accommodate
specific job  functions.  Each  manufacturer  offers its Work  Stations  with or
without  power access in a variety of panel  heights,  widths,  paint colors and
fabrics.  Work  surfaces,  drawer and file  pedestals,  storage  components  and
accessories are offered with various size and finish options.

     The core of the Work  Station  is a panel  two  inches  thick  with  widths
varying  from 12 inches to 60 inches.  Heights vary from 34 inches to 96 inches.
The panel  frame may be covered  with a laminated  surface or, most  frequently,
fabric over an acoustical  batting to which removable,  slotted steel side rails
and top caps are  attached to  accommodate  the  customized  interconnection  of
panels and the hanging of work surfaces or other components.  Electrical outlets
and space for telephone and computer  cables are provided by removable  raceways
of metal and plastic attached at the base of the panel.

     The Company currently offers office chairs, desks and other case goods from
various  manufacturers.  In  addition,  with the June 1996  purchase  of certain
assets from Birum Corporation,  a Michigan City, Indiana manufacturer of modular
office products, the Company has introduced its own  newly-manufactured  private
label Work Stations which it intends to market and sell through  selected office
products  dealers.  The Company intends to continue  marketing these products to
customers; however, this will not be the primary product line of the Company.

Inventory

     The number of installed Work Stations has increased  steadily over the past
twenty years and is now believed to exceed 19 million. The gradual aging of this
installed  base of Work Stations has resulted in the increased  availability  of
used  Work  Stations  for   remanufacturing.   The  Company  continuously  seeks
opportunities  to  purchase  used Work  Stations  throughout  the United  States
through  competitive bids or private  negotiations  with end-users,  brokers and
dealers.

     Manufacturers  of new Work Stations  have  developed  trade-in  programs to
assist their dealers in encouraging their customers to purchase the most current
products.  Trade-ins  also have been used to entice  customers  of  dealers  and
manufacturers to trade-in a competitor's  Work Stations for new Work Stations of
the manufacturer.  While each manufacturer has a slightly  different approach to
the trade-in market, each manufacturer  frequently contacts a list of brokers or
remanufacturers,  such as the Company, to solicit the highest bid for the entire
inventory.

     At the time the  Company  purchases  inventory,  it  disassembles  the Work
Stations and ships the  disassembled  Work Stations to its facilities  where the
Company  determines  whether the parts should be cleaned and sold as part of its
"as is"  sales  program  or  remanufactured  and  stored as  inventory  and sold
thereafter.  The Company  strives to ship all of its  customers'  orders in four
weeks or less.  The Company  initiated one, two and four week lead time programs
to accommodate shorter lead times from customers given that these customers must
use a limited  selection  of fabrics and  laminates.  The  Company  also has the
ability to  purchase  or produce  new parts and  accessories  which are in short
supply in the used furniture  market,  thereby  eliminating the need to purchase
additional  Work Stations for these  specific  parts.  The Company  believes its
ability to opportunistically acquire used Work Stations at attractive prices and
hold  them  for  future  sale  gives  it  a  competitive  advantage  over  other
remanufacturers with less capital to do the same.

     The Company utilizes a computerized  inventory  control system which serves
its sales, production, shipping and accounting functions. The system enables the
Company to continually  monitor its inventory of component  parts,  to determine
its needs for additional  purchases of used Work Stations,  to track its work in
process and to facilitate the prompt delivery of remanufactured Work Stations to
its customers.

Distribution

     Sales Offices.  The Company currently operates fifteen sales offices in the
metropolitan areas of Richmond,  Washington D.C., Baltimore, Atlanta, Charlotte,
Nashville,   Chicago,  New  York,   Philadelphia,   Raleigh,   Norfolk,  Dallas,
Cincinnati,  Lansing  and  Detroit.  The Company  believes  that  marketing  and
distributing  its  Work  Stations  through  a  direct  sales  force  located  in
geographically  dispersed  sales offices gives it a competitive  advantage  over
independent  remanufacturing  competitors who are typically local companies with
limited sales and distribution  capacity outside of their immediate market area.
Approximately  80% of  the  Company's  sales  historically  have  been  made  to
end-users  by the  Company's  own sales  representatives.  In 1998,  the Company
intends to focus on improving the  performance of its existing sales offices and
based on the  progress  made in  improving  that  performance  may elect to open
additional sales offices as conditions permit. It will also continue to evaluate
the on-going  viability of its existing  sales offices and may reduce the number
of sales offices should they not be profitable.

     Marketing and  distributing  its Work Stations  through its own sales staff
allows  the  Company  to  eliminate  the  costs  and  additional  price  mark-up
associated  with  wholesale  distribution,  as well as  enabling  the Company to
retain direct control and oversight of its products and the selling  process.  A
direct sales force also permits the Company to deliver  quality  service to each
customer through its design and installation programs.

     Dealer Network. In addition to its own sales staff, the Company maintains a
dealer network in those markets that are not sufficiently developed to support a
sales  office or in larger  markets  where the Company does not yet have a sales
office.  The dealer  network  allows the  Company to market  Work  Stations on a
cost-effective basis to a large number of businesses which may not be reached by
the Company's sales  representatives.  Approximately  20% of the Company's sales
historically  have been made  through  dealers.  The Company  believes  that its
limited dealer network  complements its strategy of expanding  revenues  through
its own sales  offices.  All  dealer  agreements  are  non-exclusive  and may be
terminated at any time, which gives the Company the ability to establish a sales
office as soon as a market becomes capable of supporting an office.

     "As Is" Sales.  A small but  profitable  portion of the Company's  sales is
made to  brokers,  end-users  and  others  who buy used Work  Stations  from the
Company  on an "as is"  basis.  The  Company's  "as  is"  program  involves  the
selective  purchase of used Work Stations in good  condition that do not require
substantial repair or other alteration.  The Company sells "as is" Work Stations
at prices that are typically 17% of the retail list price for new Work Stations.
The "as is" program appeals to customers  seeking sizable  quantities of quality
Work Stations at "budget" prices.

Sales and Marketing

     General.  The Company's sales and marketing  strategy relies primarily upon
producing quality products at competitive prices and providing superior customer
service.   Each  sales  office  advertises  through  direct  mail,   billboards,
newspapers,   business  magazines  and  journals.  Direct  mailing  to  targeted
professional  groups as well as mailings prior to and following trade shows have
resulted in large sales to several new  customers.  The Company often uses booth
displays at trade  shows for  national  organizations  of  purchasing  managers,
facility managers, interior designers, architects and local business groups. The
Company is firmly committed to advertising and constantly  re-evaluates the most
efficient means of reaching prospective customers.

     The  Company's  marketing  also  emphasizes  its  commitment  to recycling.
Through its remanufacturing process, the Company recycles several million pounds
of office  systems  furniture  each year that might  otherwise  be  deposited in
landfills.  Some  companies  have adopted  recycling  policies or programs  that
require those businesses to purchase  recycled  products in varying  quantities.
Because the Company's  remanufactured Work Stations are a recycled product,  the
Company may have a marketing advantage over manufacturers of new Work Stations.

     Asset Banking. The Company developed its asset banking program in 1994 as a
means to offer  additional  services  to larger  middle  market and  Fortune 500
businesses who  reconfigure,  dismantle and warehouse  large  quantities of Work
Stations  as an ongoing  part of their  operations.  The asset  banking  program
allows  businesses to trade-in used Work Stations by "depositing"  them with the
Company in  exchange  for a "credit"  based on current  list  prices of new Work
Stations toward future purchases of the Company's  remanufactured Work Stations.
Work Stations "deposited" by customers become part of the Company's inventory of
used  Work  Stations  that  can be  remanufactured  and are not  expected  to be
returned to the customer.  When a business  with a "credit"  chooses to purchase
Work  Stations at  then-prevailing  prices,  the customer can make a complete or
partial "withdrawal" from its account to pay for the Work Stations. The customer
has the option to receive  cash  rather  than a "credit"  toward a Work  Station
purchase. The effect of the program is to make a customer's used Work Stations a
renewable asset. The program  eliminates the customer's  inventory,  storage and
maintenance  costs  for  Work  Stations  not in  use,  while  at the  same  time
positioning the Company for a future sale and increasing the Company's inventory
which can be  immediately  remanufactured  and sold.  The Company also  provides
value-added services,  such as design and project management,  without charge to
the  customer  to enhance  the  attractiveness  of the  program.  The Company is
currently able to offer both Herman Miller and Haworth Work Stations as a result
of the  Company's  recent  expansion  into the  Haworth  product  line,  thereby
expanding the availability and attractiveness of the program to more prospective
purchasers of Work Stations.

     Rental  Program.  The  Company's  rental  program  offers a  cost-effective
alternative to ownership of Work Stations. Under the rental program, the Company
rents Work  Stations  for a minimum  term of six  months.  Rates  charged by the
Company vary with the term of the rental,  with higher  rates being  charged for
terms of less  than one year.  Rent  payments  typically  are due  monthly  from
customers  during the term of the  rental.  Upon  expiration  of the term of the
rental, the Work Stations are returned to the Company and can be rented again or
remanufactured  and sold for an  additional  profit.  The  rental  program is an
attractive alternative for those customers with capital spending constraints. In
addition,  customers who wish to evaluate long-term  furniture  requirements are
able to defer a  commitment  to  purchase  Work  Stations  while  meeting  their
short-term requirements for office furniture. To date,  substantially all of the
Company's  rentals have been of "as is" Work  Stations,  although the Company is
planning  to expand its  rentals of  remanufactured  Work  Stations.  The rental
program has not contributed  significantly to the Company's past revenues due to
the limited number of rentals which have occurred to date under the program.

     Government Services  Administration.  The United States Government Services
Administration  ("GSA") in 1996  approved  the  Company's  inclusion  on the New
Introductory  Schedule  as a  distributor  of Work  Stations  and other  related
products and services to the federal government. This has enabled the Company to
sell its  remanufactured  Work  Stations  to the federal  government  as well as
develop a previously  untapped  source of supply  through  trade-ins  and "asset
banking." The Company  believes that its asset  banking  program  should be very
attractive to the  government  due to the large  inventories of excess and aging
Work  Stations held by the  government.  The Company made its first sales to GSA
customers  during 1997 and believes  that this business will continue to grow in
1998.

Customers

     The  Company's  customers  range  from  small  businesses  to  Fortune  500
companies.  The  typical  size of a  customer  order  is ten  Work  Stations  or
approximately  $25,000.  Profit  margins on smaller orders by small to mid-sized
customers  are greater  than on larger  orders by Fortune 500  companies  due to
volume discounts provided by manufacturers of new Work Stations on large orders,
which the Company is required to meet to compete for such orders. The Company is
not  dependent  upon any single  customer or any single group of customers for a
significant  portion of its sales. In 1997, the largest  customer  accounted for
less than 5% of sales.  The loss of any one  customer  would not have a material
adverse effect on the Company.

Competition

     The Company  experiences  intense  competition in both the purchase of used
Work  Stations  and the sale of  remanufactured  and "as is" Work  Stations.  In
purchasing used Work Stations, the Company competes with manufacturers, dealers,
brokers and other remanufacturers.  The competition between  remanufacturers and
either  manufacturers  or  dealers  generally  takes  place in  connection  with
trade-ins  by end-users of used Work  Stations  for new Work  Stations.  Brokers
typically  purchase  used Work  Stations for resale to end-users  and  customers
which may include the Company,  while other  remanufacturers  generally purchase
Work Stations for their own remanufacturing activities.

     The  Company  competes  with  manufacturers,  dealers,  brokers  and  other
remanufacturers  in the sale of its newly  manufactured,  remanufactured and "as
is" Work Stations.  Competition is primarily based upon price,  design,  quality
and  customer  service.  Certain  manufacturers,   such  as  Herman  Miller  and
Steelcase,  remanufacture  their own brand of used Work  Stations  for resale to
customers.  These manufacturers and their dealers are able to offer both new and
remanufactured  Work  Stations  to  customers.  The  Company  believes  it has a
competitive  advantage over such manufacturers and other  remanufacturers due to
its innovative  marketing  programs,  direct sales force,  discount  pricing and
customer service.  However,  manufacturers and dealers of new and remanufactured
Work  Stations  have  certain  competitive   advantages  including   established
distribution  channels and marketing programs,  substantial  financial strength,
long-term  customers,  ready access to component parts, and availability of used
Work Stations through  trade-ins.  Manufacturers also can sell new Work Stations
at very  substantial  discounts which reduces the Company's  pricing  advantage.
Such  deeply  discounted  sales,  however,  generally  occur only for very large
orders which often provide  remanufacturers  such as the Company the opportunity
to acquire used Work Stations of such purchasers at very attractive prices.

     The Company believes it is the largest  independent  remanufacturer of Work
Stations in the United States based on gross revenues.  Unlike most  independent
remanufacturers,  which are typically local operations  serving a single city or
metropolitan  area from a single  sales  office,  the Company is able to compete
effectively in many markets through its distribution  channels. The Company also
believes  that its  remanufacturing  services  are more  comprehensive  than the
services provided by most other  remanufacturers.  Many remanufacturers  provide
minor  repair  services,  but  lack  the  personnel,  equipment  and  facilities
necessary to completely remanufacture Work Stations. The Company's manufacturing
facilities  include  all of the  equipment  required  to produce  new as well as
remanufactured Work Stations including sanding,  painting,  drying,  woodworking
and reupholstering equipment, and parts manufacturing equipment.

Intellectual Property

     The  Company  is the  owner of a  service  mark  for  "Open  Plan  Systems"
registered with the United States Patent and Trademark  Office.  The Company has
no trademarks or patents.

     Original  equipment  manufacturers  have obtained United States' patents on
certain component parts and design and manufacturing  processes  associated with
their  own  Work  Stations.   Management  of  the  Company   believes  that  the
remanufacturing of such Work Stations does not constitute an infringement of any
patents held by these  manufacturers.  However,  there can be no assurance  that
infringement  claims will not be asserted  against the  Company.  If such claims
were  asserted,  the Company  could incur  significant  costs and  diversion  of
resources defending such claims and, in the event the Company did not prevail in
its  defense,  the Company  could incur  substantial  damages  that could have a
material  adverse  effect on the  Company's  financial  condition and results of
operations.

     The  Company  manufactures  new  component  parts  that it cannot  purchase
through the used Work Station market. In addition, the Company inaugurated a new
product  line  in  1997  with  some  limited   success,   including   one  major
installation.  The  Company  intends  to  continue  to review  existing  patents
applicable  to  Work  Stations  in the  ordinary  course  of  manufacturing  new
component parts and developing its own product line.

Seasonality and Backlog

     Historically,  the Company's  sales volume has been lower in the spring and
summer  months and higher in the fall and winter  months.  The Company  believes
that this seasonal increase in sales volume,  which generally coincides with the
first and fourth  quarters of the Company's  fiscal year, is due to the tendency
of customers to expend funds budgeted for office  furniture  either early in the
calendar  year  or  after  the  summer  vacation  season.  Because  the  Company
recognizes revenues upon shipment and typically ships Work Stations within three
weeks of an order,  a  substantial  portion  of the  Company's  revenue  in each
quarter  results  from orders  placed by  customers  during that  quarter.  As a
result,  the  Company's  revenues  and profits are  difficult to predict and may
fluctuate  from  quarter to  quarter.  The Company  typically  does not have any
significant  backlog of customer  orders  because it  generally  ships  products
within three weeks of receipt of an order.

Employees

     As of  December  31,  1997,  the  Company  had  268  full  time  employees,
consisting  of  103  manufacturing  and  remanufacturing   personnel,  13  sales
managers, 56 salespersons, 34 installers, 52 office administrators and designers
and 7  management  employees.  The Company also had 3 part time  employees.  The
Company  believes that its continued  success  depends on its ability to attract
and retain  highly  qualified  personnel.  None of the  Company's  employees are
covered by a collective  bargaining  agreement  with the Company.  The executive
officers and  substantially  all of the  salespersons of the Company have agreed
that they will not disclose certain proprietary  information of the Company, and
upon termination, will not solicit any customer of the Company for two years and
will not compete with the Company for one year. The Company has never suffered a
work stoppage and considers its relations with employees to be good.

Government Regulation

     The  Company's  operations  are subject to a variety of federal,  state and
local  environmental  laws and  regulations  including  those  which  limit  the
discharge,  storage, handling and disposal of hazardous materials. The Company's
principal  environmental  concerns relate to the handling and disposal of paints
and solvents.  Management  believes  that the Company is in material  compliance
with applicable federal, state and local environmental  regulations.  Compliance
with  these  regulations  has not in the past  had any  material  effect  on the
Company's earnings,  capital expenditures or competitive position;  however, the
effect  of such  compliance  in the  future  cannot be  determined.  Regulations
currently  proposed  under  the  Clean Air Act  Amendments  of 1990 may  require
reduced emissions of volatile organic compounds  including emissions from paints
and solvents used by the Company in the  remanufacturing  process.  As a result,
the  Company  may be  required  to  institute  changes  in  its  remanufacturing
processes  in order  to  comply  with  these  reduced  emission  standards.  The
furniture industry and its suppliers are attempting to develop water-based paint
and  finishing  materials  to  replace  commonly-used  organic-based  paints and
finishes which are a major source of regulated emissions.  The Company cannot at
this time estimate the impact of these new standards on the Company's operations
and future capital expenditure requirements, or the cost of compliance.

     The Company's operations are also governed by laws and regulations relating
to work-place safety and worker health,  principally the Occupational Safety and
Health Act and accompanying  regulations and various state laws and regulations.
The  Company  does not believe  that future  compliance  with  current  laws and
regulations  will have a material  adverse effect on its financial  condition or
results of operations.

Insurance

     The Company  maintains  liability  insurance  policies covering a number of
risks,   including   business   interruption,    property,   commercial   crime,
comprehensive   general  liability  and  workers   compensation  and  employer's
liability  insurance.  The  Company  believes  that its  insurance  coverage  is
adequate.  In  addition,  the Company has  obtained  "key-man"  insurance in the
amount of  $3,000,000  on the life of Mr.  Fischer  naming  the  Company as sole
beneficiary.

Item 2.  .........Description of Property

     The  Company  leases  180,000  square  feet of  space  at its  facility  in
Richmond,  Virginia and 107,000 square feet of space at its facility in Lansing,
Michigan. The Richmond lease expires in July 1999, subject to an option to renew
for an additional  three-year  term. The Lansing lease expires in December 1998.
The Company also has numerous other leases for its sales offices  throughout the
states  in  which  it  operates.  The  Company  owns  substantially  all  of its
equipment,  including office and manufacturing  equipment.  The Company believes
that its properties are maintained in good operating  condition and are suitable
for its purposes.

Item 3.  .........Legal Proceedings

     There are no  material  pending  legal  proceedings,  other  than  ordinary
routine  litigation  incidental to the business,  or any proceedings known to be
contemplated by governmental authorities,  to which the Company is a party or of
which any of its property is the subject.

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

     No matters were  submitted to a vote of security  holders during the fourth
quarter of the fiscal year covered by this report.


<PAGE>

                                                      PART II


Item 5.  .........Market for Common Equity and Related Stockholder Matters

     Market for Common Stock. The Company's Common Stock is listed on the Nasdaq
National  Market under the symbol  "PLAN." The  following  table shows,  for the
periods indicated,  the high and low sales prices per share for the Common Stock
as reported by the Nasdaq National Market.
<TABLE>
<CAPTION>

Calendar Year                                                                                High        Low
<S>  <C> <C>                                                                                <C>        <C>
     1996
         Second Quarter (from May 31, 1996) (1).............................................$13.00     $11.13
         Third Quarter......................................................................$12.00     $ 8.75
         Fourth Quarter.....................................................................$10.25     $ 8.25
     1997
         First Quarter .....................................................................$ 9.25     $ 5.00
         Second Quarter.....................................................................$ 5.00     $ 3.50
         Third Quarter......................................................................$ 6.75     $ 3.50
         Fourth Quarter.....................................................................$ 6.25     $ 2.63
     1998
         First Quarter (through March 16, 1998).............................................$ 3.50     $ 2.63
</TABLE>

1) The Company's Common Stock began trading on the Nasdaq National Market on May
31, 1996, at an initial public offering price of $10.00 per share. Prior to that
date, there was no established trading market for the Common Stock.

As of March 16, 1998,  there were  approximately  1,204 holders of record of the
Company's Common Stock.

     Dividend  Policy.  Prior to the Company's  initial  public  offering in May
1996,  the  Company  elected to be treated as an S  Corporation  for federal and
state income tax purposes.  As a result, the Company's taxable net earnings were
taxed as income to the Company's  shareholders in proportion to their individual
stockholdings.   Commencing  in  1992,   the  Company  made   distributions   to
shareholders  to enable them to pay the federal and state  income taxes on their
pro rata share of the Company's S  Corporation  earnings and to provide a return
on their investment.  In 1996, the Company made distributions to shareholders in
the amount of approximately $4,350,000.  The amount distributed in 1996 included
$1,131,000 in March 1996 and $3,219,000 as a final S Corporation distribution in
June 1996, payable out of the net proceeds of the offering.

     Since the Company's  initial public offering,  the Company has not declared
or paid any cash dividends or distributions on its capital stock (other than the
final S Corporation distribution described above). The Company currently intends
to retain earnings of the Company to support operations and to finance expansion
and therefore does not  anticipate  paying cash dividends on the Common Stock in
the foreseeable  future. The payment of cash dividends in the future will depend
upon such  factors as  earnings  levels,  capital  requirements,  the  Company's
financial condition and other factors deemed relevant by the Board of Directors.


<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation

1997 Compared to 1996

     Net Sales.  Net sales for the year ended  December  31, 1997  increased  to
$32.0  million  from $22.4  million for the year ended  December  31,  1996,  an
increase of 42.9%.  The increase was primarily due to the  acquisition of TFM in
the fall of 1996 and continued growth of existing sales offices. For those sales
offices  which  were open in excess  of one year,  five of the 10 sales  offices
showed  increased sales revenues in 1997 while the others  remained  constant or
decreased  from 1996  levels.  The Company  also  opened five new sales  offices
during the year giving the Company a total of fifteen sales offices.

     The Company's  product sales mix for 1997 was split between  remanufactured
Herman Miller (44%), new products including case goods and manufactured  product
(41%) and remanufactured  Haworth (15%). In 1996, the Company's sales volume was
more heavily weighted toward  remanufactured  Herman Miller product with smaller
concentrations  of both Haworth and new product.  During 1997,  the Company also
resold more new furniture that it purchased from new furniture manufacturers and
new furniture the Company made. The Company  believes that its reemphasis on the
remanufactured  furniture  markets will reduce its dependence on these alternate
revenue  sources  in  future  periods.  The  Company  also  anticipates  further
integration of product lines across all branch offices during the next year.

     During 1997, the Company opened five new sales offices versus the three new
offices it opened in 1996.  Management believes that its strategy of controlling
distribution  through its own sales  offices  provides an important  competitive
advantage  over  manufacturers  of new Work  Stations who  distribute  through a
dealer network and over independent remanufacturers. Independent remanufacturers
are primarily  local  operations  without a significant  number of trained sales
employees.  A direct  sales  force not only gives the Company  control  over the
selling  process,  but also  allows  the  Company  to  capture a portion  of the
dealer's "mark-up" in addition to manufacturing profit.

     At the end of 1997,  the  Company  reorganized  its sales  force  into four
regions or groups.  Three of the regions  relate to the  Company's  direct sales
offices.  The fourth  group,  National  Sales,  deals  exclusively  with  larger
accounts,  brokers,  dealers and other buyers of the Company's products that are
best  served by the  corporate  office.  Each of these  groups is  managed by an
experienced  manager with extensive furniture  experience.  The Company believes
that the  addition of these  managers  will  provide  additional  oversight  and
training to the new sales offices and  salespeople  in order to increase  market
share.  The Company is also in the  process of hiring  additional  managers  and
salespeople  in branches  where the market  demand  dictates  and the  Company's
investment in those markets can be better leveraged.

     Gross Margin.  The Company's  gross margin  increased from $7.2 million for
the year ended December 31, 1996 to $8.4 million for the year ended December 31,
1997,  an increase of 16.7% from prior year levels.  This increase was caused by
the Company's  increased  sales  volume.  However,  the  Company's  gross margin
percentage  decreased from 32.3% in 1996 to 26.2% in 1997. This was attributable
to two primary  causes.  The first was the  increased  cost of making  items new
rather than remanufacturing used product as the Company had done in prior years.
This manifested  itself in higher overhead costs as the result of the additional
equipment and management  required to produce the new product lines.  The second
factor was the Company's overall  discounting  levels which were higher due to a
shift in the Company's  revenue  stream  during the year.  The Company sold more
product to National  Account  customers as opposed to its  historical  small and
middle market  customers.  National Account  customers  typically require higher
discounting  levels due to increased  levels of  competition  for these accounts
from the large  manufacturers.  The combination of these factors  contributed to
the decrease in gross margin for the year.

     During  1997,  the Company  analyzed its  procurement  options with a major
emphasis on determining the best,  most cost effective  manner of procuring each
item used in the  manufacture  and  production  of its  product  offerings.  The
Company has  implemented  a  three-prong  approach to product  acquisition.  The
Company will continue to purchase  product on the used furniture market when the
cost of such  product  does  not  exceed  certain  pricing  thresholds,  it will
purchase new product to meet demand when the purchase price is less than that of
remanufacturing or manufacturing the part, and it will make products where it is
cost  advantageous  to do so.  The  Company  is  also  refocusing  on  producing
remanufactured  product  cost  effectively.  The  Company  is in the  process of
reconfiguring  the Richmond  manufacturing  plant to accomplish a better product
flow for its remanufacturing processes to reduce cost. Additionally, the Company
is focused on reducing  inventory  levels.  While it is anticipated  that all of
these  programs will generate  long-term  benefits for the Company,  the Company
will produce less product in the short-term  meaning higher unit costs for those
products produced as inventory is drawn down.

     Operating Expenses. Selling expenses increased by 91.2% to $6.5 million for
the year ended  December 31, 1997 from $3.4 million for the year ended  December
31,  1996.  Selling  expenses  increased  in terms of absolute  dollars and as a
percentage  of sales.  The  increase in the amount of spending was caused by the
Company's increased sales volume,  extensive experimental advertising in certain
new markets and the Company's  efforts to integrate TFM,  including  expenses to
announce  the  name  change  of TFM to  Open  Plan  Systems.  Additionally,  the
Company's expenses increased as a percentage of sales due to the large number of
sales offices opened during the year.  When the Company opens new sales offices,
it typically  takes several years to generate  enough sales to provide  targeted
returns.  With the large increase in sales offices,  the higher initial costs of
these sales  offices  have not yet been offset with the  increased  sales volume
expected from these offices.

     General and administrative  expenses increased by 62.5% to $2.6 million for
the year ended  December 31, 1997 from $1.6 million for the year ended  December
31, 1996. The increase in 1997 was related to several items. First and foremost,
the  Company  incurred  additional  compensation  expenses  as the result of the
growth of the Company and the addition of several new management level resources
to handle the Company's increased size and complexity. The Company also recorded
a severance  charge of $123,000 related to the termination of three employees of
the Company in the fourth quarter of the year. Additionally,  the Company became
publicly traded in 1996 and incurred  significant costs related to the increased
costs  of SEC and  shareholder  reporting  requirements.  Finally,  the  Company
dedicated   significant  resources  in  the  evaluation  of  potential  business
combination  relationships  that  determined  not to be  strategic  fits for the
Company  over  the  long-term.  The  Company  believes  that  it has  added  the
appropriate resources to manage the Company's current operations and foreseeable
future growth. The primary initiatives in 1998 relate to the further integration
of TFM into the operations of the Company. This will be accomplished through the
completion  of a project  to  modernize  and  integrate  management  information
systems on a common  platform which should be accomplished in the second quarter
of this year. The Company believes that these expenses will continue to decrease
as a percentage of sales as revenue growth continues.

     Other  Non-Operating  Income and  Expenses.  Total other income and expense
decreased from income of $143,000 for the year ended December 31, 1996 to income
of $14,000 for the year ended  December 31, 1997.  The primary  reasons are that
the Company  drew down its entire cash  balance  during the year and borrowed on
its line of credit during the year.

     Income  Taxes.  The Company  recorded an income tax benefit for the year of
$269,000  as opposed to expense of $376,000  in the prior  year.  The  Company's
effective  tax rate was 26.5% for 1997 as  opposed  to a  pro-forma  tax rate of
40.1%.  The reason for the decrease in effective  tax rates is due  primarily to
the effect of  permanent  differences,  such as  goodwill  and  premiums on life
insurance policies  increasing taxable income. The Company anticipates that this
will normalize somewhat over the next year.

     Net (Loss) Income.  The net loss for the year ended December 31, 1997 was $
748,000  versus a profit of $1.9  million for the year ended  December 31, 1996.
The net loss was caused by higher  production  costs  relative to sales revenue,
dramatically  higher  selling  expenses  and higher  general and  administrative
costs.

Liquidity and Capital Resources

     Cash Flows from Operating Activities.  Net cash used by operations was $3.5
million for the year ended  December  31, 1997 versus $1.5  million for the year
ended  December 31, 1996.  The  decrease in cash from  operations  is due to the
Company's net loss for the year combined with higher  inventory levels without a
corresponding  increase  in  accounts  payable.   Accounts  receivable  grew  in
correlation  to sales volume but decreased and should  continue to decrease with
relation to the number of days sales outstanding. The increase in inventories is
due to the new product lines manufactured, as well as the raw materials required
to manufacture, or remanufacture, such items. The Company has begun a program to
reduce these inventory levels and levels should decrease as the year progresses.

     Cash Flows from Investing Activities. Net cash used in investing activities
was $1.4 million in 1997 versus $5.9 million in 1996.  The decrease in investing
activities was the result of the TFM  acquisition  which totaled $4.0 million in
1996. The remaining decrease is due to the asset purchase from Birum Corporation
in 1996  offset  by some  additional  spending  on the new  information  systems
network.

     Cash  Flows from  Financing  Activities.  Net cash  provided  by  financing
activities  was $1.9 million in 1997 versus $10.2 million in 1996. Net cash from
financing  activities  in 1996 was  primarily  related to the issuance of Common
Stock of $17.6 million. Of these proceeds, $3.8 million was distributed to prior
S Corporation shareholders to fund their tax liabilities and provide them with a
return on their  investment  in the Company until the initial  public  offering.
Additionally,  the Company repaid $3.0 million of borrowings on revolving  lines
of credits,  including  amounts acquired in the acquisition of TFM. In 1997, the
Company  had to  borrow  from  its  line of  credit  to fund  the  additions  to
inventory.

     Expected Future Cash Flows.  Cash provided by operating  activities  should
increase  in 1998  as a  return  to  profitability  coupled  with  decreases  in
inventory  should  offset any purchases of capital  assets in 1998.  The Company
anticipates that current cash balances plus cash flows from operating activities
and  borrowings  under its  credit  line will be  adequate  to fund its  capital
expenditures.

     Capital expenditures are anticipated to range between $1 to $2 million this
year as the Company  continues  to grow its  manufacturing  and  remanufacturing
capabilities and improves the efficiency of its remanufacturing operations.

     The Company does not currently  anticipate making future strategic business
acquisitions  but  may  elect  to  acquire  such  a  company  should  the  right
opportunity exist.

Year 2000 Issues

     Many existing  computer  programs use only two digits to identify a year in
the date field.  These programs were designed and developed without  considering
the  impact  of the  upcoming  change in the  century.  If not  corrected,  many
computer  applications  could fail or create erroneous results by or in the year
2000.  The potential  costs and  uncertainties  to companies in addressing  this
issue (the "Year 2000  issue")  will  depend on a number of  factors,  including
their software and hardware and the nature of their  industries.  Companies must
also  coordinate  with other entities with which they  electronically  interact,
including  suppliers,  customers,  creditors,  borrowers and  financial  service
organizations.

     The Company has  examined the Year 2000 issue and the  potential  costs and
consequences to the Company in addressing this issue.  Although,  as part of its
business  and growth  strategy,  the  Company  is  investing  in new  management
information  systems,  the Company has determined that its existing  systems are
"Year 2000"  compliant  and  therefore  the Company will not have to convert any
existing  software or hardware  systems in order to process  transactions in the
Year 2000. The Company also has considered the potential impact of the Year 2000
issue on third  parties  with which it does  business  and does not believe that
further  action is necessary  with respect to the Year 2000 issue.  As a result,
management  believes that the Year 2000 issue is not expected to have a material
impact on the Company's  operations and that the cost of the Company  addressing
the Year 2000 issue is not a material event or uncertainty  that would cause its
reported  financial  information  not to be  necessarily  indicative  of  future
operating results or financial condition.



Seasonality and Impact of Inflation

     Historically,  the Company has  experienced  lower net sales  levels in the
second  and third  quarters  of the year and  increased  levels in the first and
fourth  quarters.  The Company  believes  that this  seasonal  increase in sales
volume is due to the tendency of  customers to expend funds  budgeted for office
furniture either early in the calendar year or after the summer vacation season.
The  Company  believes  that its new  product  offerings  will  enable  it to be
somewhat more competitive on a year-round basis.  Because the Company recognizes
revenues upon shipment and typically  ships Work Stations  within three weeks of
an order,  a  substantial  portion of the  Company's  revenues  in each  quarter
results from orders placed by customers  during that quarter.  As a result,  the
Company's results may vary from quarter to quarter.

     Inflation  has not had a  material  impact  on the  Company's  net sales or
income to date. However,  there can be no assurances that the Company's business
will not be affected in the future by inflation.

Forward-Looking Statements

     The foregoing discussion contains certain forward-looking statements, which
may be identified  by phrases such as "the Company  expects" or words of similar
effect. In addition,  from time to time, the Company may publish forward-looking
statements  relating  to such  matters  as  anticipated  financial  performance,
business prospects and similar matters. The Private Securities Litigation Reform
Act of 1995 provides a safe harbor for forward-looking statements. The following
important factors,  among other things, in some cases have affected,  and in the
future could affect,  the Company's actual results and could cause the Company's
actual results for fiscal year 1998 and any interim period to differ  materially
from those expressed in any forward-looking statements made by, or on behalf of,
the Company. The Company assumes no duty to update any of the statements in this
report.

     Potential  Limitations on Future Growth.  The Company has experienced rapid
growth since it commenced  operations in 1989.  The Company's  continued  growth
will be dependent in part on the Company's ability to manage growth effectively,
including the improvement of the Company's financial and management  information
systems,  the  expansion  of the  Company's  manufacturing  and  remanufacturing
operations  and  the  recruitment  and  retention  of  executive  staff  and key
employees.  The  Company  also will be required  to manage  working  capital and
generate cash flow from  operations to meet the needs of an expanding  business.
There can be no assurances that the Company's  future growth will not be limited
by  insufficient  cash flow or the lack of adequate  financing  required to fund
such growth.

     Impact of Customer Preferences and Technological Advances on Sales. Certain
potential customers may prefer new Work Stations to the Company's remanufactured
Work Stations due to various  factors,  including the more  developed and better
financed marketing efforts of new Work Station  manufacturers and such potential
customers'  reluctance  to purchase  remanufactured  products  because of image,
perceived  questions of quality or other  factors.  In  addition,  technological
advances  are  frequently  incorporated  in new  Work  Stations  by the  leading
manufacturers,  particularly with respect to electrical  circuits  necessary for
more advanced computer and telecommunications features. Although the Company has
the ability to incorporate these  technological  advances in its  remanufactured
Work Stations, any such incorporation may increase remanufacturing costs and may
reduce  the  price  advantage  of   remanufactured   Work  Stations  over  newly
manufactured Work Stations.

     Dependence  Upon Supply of Work Stations and Component  Parts.  The Company
presently  purchases  only used Herman  Miller and Haworth Work  Stations in its
remanufacturing  operations.  The Company  does not have any binding  agreements
relating to the  purchase of used Herman  Miller or Haworth  Work  Stations  for
remanufacturing  and generally purchases such used Work Stations from end-users,
brokers   and  dealers   through   competitive   bids  or  directly   negotiated
transactions. Although the Company in the past has not experienced a shortage of
used Work  Stations  at  competitive  prices,  the success of the Company in the
future will depend in part upon its continued  ability to obtain Herman  Miller,
Haworth and other  manufacturers'  used Work  Stations  for  remanufacturing  in
sufficient quantities and at competitive prices. While the Company believes that
the availability of used Work Stations for remanufacturing  will increase as the
installed  base of Work  Stations  increases  and ages,  there may be periods of
tight supply as the demand for used Work Stations  increases  which could have a
material adverse effect on the Company's business and profitability.

     The Company  also  purchases  new and used  component  parts for use in the
remanufacture of Work Stations. Although the Company can manufacture many of its
component parts,  there can be no assurances that shortages of certain component
parts or higher prices for such parts will not occur in the future. An inability
to produce or purchase necessary  component parts in adequate  quantities and at
competitive prices could have a material adverse effect on the Company's results
of operations and financial condition.

     Dependence on Sales Office  Profitability.  The Company  depends heavily on
its sales offices to provide revenue growth.  The Company has opened several new
offices in the past two years. The Company's  experience indicates that it takes
several years for a sales office to develop  adequate  sales volumes to generate
expected  returns.  Until that time,  the Company's  selling  expenses  increase
faster  than the gross  profit  generated  from those  sales.  An  inability  to
increase  revenues  of new  sales  offices  to  levels  that  would  offset  the
continuing expenses of such sales offices may adversely affect the profitability
of the Company's business.

     No  Assurance  of  Expansion  of Product  Lines and  Business.  The Company
historically  has  concentrated  its business on  remanufacturing  Work Stations
manufactured by Herman Miller.  However, in October 1996, the Company acquired a
privately-held  remanufacturer of Haworth Work Stations.  The Company intends to
continue  to  expand  its  product  line  to  include  Work  Stations  of  other
manufacturers  (particularly  Steelcase)  through the  acquisition  of companies
specializing  in  remanufacturing   products  of  those   manufacturers  or  the
establishment of additional remanufacturing  facilities. The Company has limited
experience in remanufacturing  Work Stations of manufacturers  other than Herman
Miller and Haworth. Due to the differences in and lack of  interchangeability of
the various Work  Stations  and certain  component  parts  produced by the major
manufacturers,  the  Company's  expansion  of  its  product  line  will  require
additional  training of production  personnel,  the  establishment of additional
sources of supply of used Work Stations and component  parts and, in some cases,
the establishment of different  remanufacturing  processes. As a result of these
factors,  there  can be no  assurance  that the  Company  will be able to expand
successfully  its product line or maintain its  historical  gross  margins.  The
failure of the  Company to expand  successfully  its  product  line could have a
material  adverse  effect  on the  growth  and  profitability  of the  Company's
business.

     Dependence Upon Primary Remanufacturing  Facilities.  The Company primarily
remanufactures  Herman  Miller  Work  Stations  at  one  facility  in  Richmond,
Virginia,  and  Haworth  Work  Stations at one  facility  in Lansing,  Michigan.
Although the Company  presently  maintains  $3,000,000 of business  interruption
insurance on the Richmond facility and $250,000 of such insurance on the Lansing
facility,  a  lengthy  interruption  of its  remanufacturing  operations  at the
Richmond  or Lansing  facilities  would have a  material  adverse  effect on the
Company's results of operations and financial condition.

     Tax Matters Associated with Prior S Corporation Status. Until May 31, 1996,
the Company had elected to be taxed under  Subchapter S of the Internal  Revenue
Code of 1986, as amended,  as an S Corporation  for federal and state income tax
purposes since its  incorporation in 1989.  Unlike a regular or "C Corporation,"
an S Corporation is generally not subject to income tax at the corporate  level;
instead,  the S Corporation's income is taxed on the personal income tax returns
of its  shareholders.  The Company's  status as an S Corporation  was terminated
upon commencement of its initial public offering. If the Company's S Corporation
status  were  denied for any periods  prior to this  termination  by reason of a
failure to satisfy the S Corporation election or eligibility requirements of the
Code,  the  Company  would be  subject  to tax on its  income  as if it were a C
Corporation for these periods. The payment of any such tax could have a material
adverse effect on the Company's financial condition and results of operations if
the  full  amount  thereof  is not  reimbursed  by  those  individuals  who were
shareholders  of  the  Company  prior  to  the  initial  public  offering.  Such
shareholders  have  agreed to pay  their pro rata  share of any such tax and any
applicable  interest,  penalties  and expenses in the event that the Company's S
Corporation  status  is denied  for any  taxable  periods  up to the date of the
termination of the Company's S Corporation status on May 31, 1996.

     Potential Fluctuations in Quarterly Results; Seasonality. Historically, the
Company's  business has been  significantly  affected by seasonal  factors.  The
Company  typically has higher sales during the first and fourth  quarters of its
fiscal year due primarily to the tendency of customers to expend funds  budgeted
for  office  furniture  either  early in the  calendar  year or after the summer
vacation  season.  Because the Company  recognizes  revenues  upon  shipment and
typically  ships Work  Stations  within three weeks of an order,  a  substantial
portion of the Company's  revenue in each quarter  results from orders placed by
customers in that quarter. Accordingly,  quarterly revenue levels are subject to
substantial  fluctuations  and are often  difficult to predict.  Fluctuations in
operating  results  could  result in  volatility  in the price of the  Company's
Common Stock. If revenue levels are below  expectations,  operating results will
be adversely affected.

     Competition.  Competition  in  the  Work  Station  segment  of  the  office
furniture industry is intense. The Company competes with many other companies in
the sale of its new and  remanufactured  products as well as in the  purchase of
"as  is"  Work   Stations  and   component   parts  for  use  in  the  Company's
remanufactured  Work  Stations.  In the  sale  of new  and  remanufactured  Work
Stations, the Company competes with manufacturers of new Work Stations and their
remanufacturing  subsidiaries,  other independent remanufacturers and dealers of
"as is" Work  Stations.  In the  purchase  of used  Work  Stations  that are the
primary source of the Company's supply for its remanufacturing  operations,  the
Company  competes  with  the  manufacturers  of  new  Work  Stations  and  their
remanufacturing  subsidiaries,  both  of  which  sometimes  provide  a  trade-in
allowance to purchasers of their products, other independent remanufacturers and
Work Station brokers and dealers.

     Sales of the Company's remanufactured Work Stations depend on maintaining a
successful  balance  between  price and  quality so that its Work  Stations  are
positioned  in the  marketplace  to provide a product that is (i)  comparable or
superior in quality,  design and appearance to higher cost new Work Stations and
(ii)  superior in quality,  features and  appearance  to lower cost "as is" Work
Stations.  Failure by the Company to  maintain  this  balance  due to  increased
competition  in either the  purchase or sale of Work  Stations  could  adversely
affect  the  Company's   business.   Additionally,   certain  of  the  Company's
competitors have greater financial, technical,  manufacturing,  marketing, sales
and other resources than the Company.

     Environmental Regulations.  The Company is subject to a variety of federal,
state and local governmental  regulations related to the storage, use, discharge
and disposal of toxic,  volatile or otherwise  hazardous  chemicals  used in its
manufacturing  processes. In addition,  regulations currently proposed under the
Clean Air Act  Amendments  of 1990 may  require  reduced  emissions  of volatile
organic  compounds  including  emissions  from paints and  solvents  used by the
Company in the remanufacturing process. As a result, the Company may be required
to institute  changes in its  remanufacturing  processes in order to comply with
these reduced emission standards. There can be no assurance that these and other
changes in  environmental  regulations in the future will not result in the need
for capital  expenditures or otherwise impose financial  burdens on the Company.
Further,  such  regulations  could restrict the Company's  ability to expand its
operations.  Any failure by the Company to obtain required  permits for, control
the use of, or adequately restrict the discharge of, hazardous  substances under
present or future regulations could subject the Company to substantial liability
or could cause its manufacturing  operations to be suspended.  Such liability or
suspension of  manufacturing  operations could have a material adverse effect on
the Company's results of operations and financial condition.

     Risk of  Patent  Infringement  Claims.  Newly  manufactured  Work  Stations
contain numerous patented component parts.  Although the Company is not aware of
any existing or threatened  patent  infringement  claims asserted against it and
does not  believe  that  the  remanufacturing  of Work  Stations  infringes  the
proprietary  rights  of  any  third  parties,  there  can be no  assurance  that
infringement claims will not be asserted against the Company.  In addition,  the
Company  manufactures or purchases certain new and used component parts included
in its  remanufactured  Work  Stations and has begun to sell newly  manufactured
private  label  Work  Stations.  To the  extent  that  such  activities  involve
purchasing or manufacturing component parts similar to patented component parts,
the  Company  could  become  subject  to claims of  patent  infringement  if the
manufacture or use of such component parts  infringed the proprietary  rights of
third  parties.  In addition,  the existence of third party  proprietary  rights
could limit the  Company's  ability to produce or use certain  component  parts.
Damages for violation of third party proprietary rights could be substantial and
could have a material  adverse effect on the Company's  financial  condition and
results of operation.  Regardless of the validity or the successful assertion of
such  claims,  the  Company  would  incur  significant  costs and  diversion  of
resources with respect to the defense thereof.


<PAGE>


Item 7.  .........Financial Statements

          The following audited consolidated financial statements of the Company
          are included in this report:

         Report of Independent Auditors

         Consolidated Balance Sheets at December 31, 1997 and 1996

         Consolidated Statements of Income for the Years Ended
          December 31, 1997 and 1996

         Consolidated Statement of Shareholders' Equity for the Years Ended
          December 31, 1997 and 1996

         Consolidated Statements of Cash Flows for the Years Ended
          December 31, 1997 and 1996

         Notes to Consolidated Financial Statements

<PAGE>

Report of Independent Auditors


Board of Directors and Shareholders
Open Plan Systems, Inc.

We have  audited  the  accompanying  consolidated  balance  sheets  of Open Plan
Systems,  Inc.  as of December  31,  1997 and 1996 and the related  consolidated
statements of income,  shareholders'  equity,  and cash flows for the years 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 audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the consolidated financial position of Open Plan Systems,
Inc.  at  December  31,  1997 and  1996,  and the  consolidated  results  of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

Richmond, Virginia
March 17, 1998
<PAGE>
OPEN PLAN SYSTEMS, INC.
Consolidated Balance Sheets
(amounts in thousands, except per share amounts)

<TABLE>
<CAPTION>

                                                                              December 31
                                                                       1997              1996
                                                                ------------------------------------
<S><C>                                                                <C>                 <C>
Assets
Current assets:
   Cash and cash equivalents                                            $    73           $ 3,066
   Accounts receivable, net                                               5,486             5,252
   Inventories (Note 3)                                                  10,780             6,807
   Prepaids and other                                                       686               431
   Refundable income taxes                                                  795               385
   Deferred income taxes (Note 7)                                           106                52
                                                                ------------------------------------
Total current assets                                                     17,926            15,993

Property and equipment, net (Note 4)                                      3,493             2,698
Goodwill, net (Note 2)                                                    4,427             4,621
Other                                                                       468               398
                                                                ------------------------------------
Total assets                                                            $26,314           $23,710
                                                                ====================================

Liabilities and shareholders' equity
Current liabilities:
   Revolving line of credit (Note 5)                                    $ 2,110           $     -
   Trade accounts payable                                                 2,411             1,457
   Accrued compensation                                                     393               247
   Other accrued liabilities                                                280               150
   Customer deposits                                                        841               655
   Current portion of long-term debt (Note 5)                               126               212
                                                                ------------------------------------
Total current liabilities                                                 6,161             2,721

Deferred income taxes (Note 7)                                              110               106
Long-term debt, less current portion (Note 5)                                 -                92
                                                                ------------------------------------
Total liabilities                                                         6,271             2,919

Shareholders' equity (Note 6):
    Preferred stock, no par value:
     Authorized shares - 5,000
     Issued and outstanding shares - none                                     -                 -
    Common stock, no par value:
     Authorized shares - 50,000
     Issued and outstanding shares - 4,472                               20,088            20,088
   Additional capital (Note 7)                                              137               137
   Retained earnings (deficit)                                             (182)              566
                                                                ------------------------------------
Total shareholders' equity                                               20,043            20,791
                                                                ------------------------------------
Total liabilities and shareholders' equity                              $26,314           $23,710
                                                                ====================================
</TABLE>

See accompanying notes to consolidated financial statements
<PAGE>

OPEN PLAN SYSTEMS, INC.
Consolidated Statements of Income
(amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>

                                                                           Year ended
                                                                          December 31
                                                                     1997            1996
                                                                --------------------------------
<S><C>                                                          <C>             <C>
Net sales                                                              $31,968         $22,398

Cost of sales                                                           23,593          15,160
                                                                --------------------------------
Gross profit                                                             8,375           7,238

Operating expenses:
   Amortization of intangibles                                             275              70
   Selling and marketing                                                 6,524           3,410
   General and administrative                                            2,607           1,584
                                                                --------------------------------
                                                                         9,406           5,064
                                                                --------------------------------
Operating (loss) income                                                 (1,031)          2,174

Other (income) expense:
   Interest expense                                                         70             141
   Interest income                                                         (68)           (266)
   Other, net                                                              (16)            (18)
                                                                --------------------------------
                                                                           (14)           (143)
                                                                --------------------------------
Income (loss) before income taxes                                       (1,017)          2,317

Provision (benefit) for income taxes (Note 7)                             (269)            376
                                                                --------------------------------
Net (loss) income                                                      $  (748)        $ 1,941
                                                                ================================

Basic and diluted loss per share                                       $  (.17)
                                                                ================
Weighted average common shares outstanding                               4,472
                                                                ================


Pro forma income data (Unaudited) (Note 12):
   Pro forma income before income taxes                                                 $2,317
   Pro forma provision for income taxes                                                    930
                                                                                ----------------
   Pro forma net income                                                                 $1,387
                                                                                ================

   Pro forma earnings per common share                                                    $.38
                                                                                ================

   Weighted average common shares outstanding                                            3,676
                                                                                ================
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>
OPEN PLAN SYSTEMS, INC.
Consolidated Statements of Shareholders' Equity
Years ended December 31, 1997 and 1996
(amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>


                                                                 Common           Additional         Retained
                                                                  Stock            Capital           Earnings            Total
                                                                                                    (Deficit)
                                                           -------------------------------------------------------------------------
<S>     <C>                                                 <C>                     <C>              <C>                <C>

           Balance at December 31, 1995                       $ 1,215               $  -             $3,112             $ 4,327

           Distributions to shareholders:
              Cash                                                  -                  -             (3,760)             (3,760)
              Offset against advances to shareholders               -                  -               (590)               (590)
           Reclassification of undistributed
              S Corporation retained earnings (Note 7)              -                137               (137)                  -
           Initial Public Offering (Note 6)                    17,560                  -                  -              17,560
           Issuance of common stock in connection
              with acquisition (Note 2)                         1,313                  -                  -               1,313
           Net income for 1996                                      -                  -              1,941               1,941
                                                           -------------------------------------------------------------------------
           Balance at December 31, 1996                       $20,088               $137             $  566             $20,791

           Net loss for 1997                                        -                  -               (748)               (748)
                                                           -------------------------------------------------------------------------
           Balance at December 31, 1997                       $20,088               $137             $ (182)            $20,043
                                                           =========================================================================


</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>
OPEN PLAN SYSTEMS, INC.
Consolidated Statements of Cash Flows
(amounts in thousands, except per share amounts)
<TABLE>

<CAPTION>

                                                                                       Year ended
                                                                                       December 31
                                                                                  1997             1996
                                                                            ----------------------------------
<S>  <C>                                                                      <C>                <C>
Operating activities
Net (loss) income                                                             $        (748)    $       1,941
Adjustments to reconcile net (loss) income to net cash
    used by operating activities:
     Provision for losses on receivables                                                 59                29
     Depreciation expense                                                               631               299
      Amortization expense                                                              275                70
     (Gain) loss on disposal of property and equipment                                   23                (3)
     Deferred income taxes                                                              (50)               46
     Changes in operating assets and liabilities:
       Accounts receivable                                                             (293)           (1,290)
       Inventories                                                                   (3,973)           (2,136)
       Prepaids and other current assets                                               (255)              (30)
         Refundable income taxes                                                       (410)             (261)
         Other non-current assets                                                      (151)              (45)
       Trade accounts payable                                                           954               126
       Customer deposits                                                                186               (23)
       Accrued and other liabilities                                                    276              (186)
                                                                            ----------------------------------
Net cash used by operating activities                                                (3,476)           (1,463)

Investing activities
Proceeds from sale of property and equipment                                             12                80
Purchases of property and equipment                                                  (1,461)           (1,940)
Acquisition (net of cash acquired)                                                        -            (4,033)
Other                                                                                     -               (15)
                                                                            ----------------------------------
Net cash used in investing activities                                                (1,449)           (5,908)

</TABLE>

<PAGE>

OPEN PLAN SYSTEMS, INC.
Consolidated Statements of Cash Flows (continued)
(amounts in thousands, except per share amounts)

<TABLE>
<CAPTION>


                                                                                        Year ended
                                                                                        December 31
                                                                                  1997             1996
                                                                            -----------------------------------
<S>                                                                         <C>               <C>
Financing activities
Advances to shareholders                                                    $             -   $         (306)
Repayment of advances to shareholders                                                     -               84
Net borrowings (repayments) on revolving lines of credit                              2,110           (3,036)
Principal payments on notes payable, long-term debt,
   and capital lease obligations                                                       (178)            (347)
Proceeds from sale of common stock                                                        -           17,560
Distributions to shareholders                                                             -           (3,760)
                                                                            -----------------------------------
Net cash provided by financing activities                                             1,932           10,195
                                                                            -----------------------------------

(Decrease) increase in cash and cash equivalents                                     (2,993)           2,824

Cash and cash equivalents at beginning of year                                        3,066              242
                                                                            ===================================
Cash and cash equivalents at end of year                                    $            73   $        3,066
                                                                            ===================================

Supplemental disclosures
Interest paid                                                               $            70   $          144
                                                                            ===================================
Income taxes paid                                                           $           191   $          585
                                                                            ===================================

Summary of noncash transactions
Amounts offset against advances to shareholders:
   Distributions to shareholders                                            $             -   $          590
                                                                            ===================================

Issuance of common stock in connection with acquisition                     $             -   $         1,313
                                                                            ===================================

</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>

OPEN PLAN SYSTEMS, INC.
Notes to Consolidated Financial Statements
December 31, 1997 and 1996


Note 1. Summary of Significant Accounting Policies

Open Plan  Systems,  Inc.  (the  "Company")  was  incorporated  in  Virginia  in
September  1989 and is a  remanufacturer  and  marketer  of modular  office Work
Stations.  The Company  principally  manufactures new product and remanufactures
Herman Miller and Haworth  product lines and markets them through  Company sales
offices located in the East Coast and Mid-West regions of the United States.  In
addition,  the Company also sells new product office workstation components from
other  manufacturers.  The  following is a  description  of the  Company's  more
significant accounting policies.

Principles of Consolidation

The accompanying  consolidated  financial statements include the accounts of the
Company and its wholly-owned  subsidiary.  All significant intercompany balances
and transactions have been eliminated in consolidation.

Inventories

Inventories  are stated at the lower of average cost or market.  Work-in-process
inventories  include both the direct and indirect  costs of  manufacturing  such
products.

Property and Equipment

Property and equipment is stated on the basis of cost. Depreciation of equipment
and  vehicles is provided  by  straight-line  or  accelerated  methods  over the
estimated  useful lives of the related  assets,  generally three to seven years.
Improvements to leased  properties are amortized on a  straight-line  basis over
the shorter of the term of the respective lease or the estimated useful lives of
the related assets.

Goodwill

Goodwill represents the excess of the purchase price of acquired businesses over
the fair value of net assets acquired (see Note 2) and is being amortized on the
straight-line  method  over a period  of twenty  years.  The  carrying  value of
goodwill is  periodically  evaluated by management  based on  undiscounted  cash
flows of the related business units to determine if there has been an impairment
in value. Accumulated amortization was $295,000 at December 31, 1997.

Revenue Recognition

Revenues  from product  sales are  recognized  when the products are shipped and
title and risk of loss pass to the customer.

Advertising

Production   costs   associated  with  advertising  are  expensed  as  incurred.
Communication  costs  associated  with  advertising  are reported as advertising
expense as the related space is used.  Prepaid  advertising  costs were $326,000
and  $157,000 at December  31, 1997 and 1996,  respectively.  Advertising  costs
charged to expense totaled $653,000 in 1997 and $414,000 in 1996.

Income Taxes

Deferred  income  taxes are  determined  based on the  differences  between  the
financial  statement and tax bases of assets and  liabilities  using enacted tax
rates in effect in the years the  differences  are expected to reverse.

Cash Equivalents

The Company considers all highly liquid investments with original  maturities of
three months or less when purchased to be cash equivalents.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  requires  management make estimates and assumptions that
affect the amounts reported in the financial  statements and accompanying notes.
Actual results could differ from those estimates.

Long-Lived Assets

In March 1995, the Financial  Accounting  Standards  Board issued  Statement No.
121,  Accounting  for the  Impairment  of Long-Lived  Assets and for  Long-Lived
Assets to Be  Disposed  Of,  which  requires  impairment  losses be  recorded on
long-lived  assets used in operations  when indicators of impairment are present
and the  undiscounted  cash flows  estimated to be generated by those assets are
less  than  the  assets'  carrying  amount.  Statement  121 also  addresses  the
accounting  for  long-lived  assets that are  expected  to be  disposed  of. The
Company  adopted  Statement  121 in the first quarter of 1996 and, such adoption
had no effect on the consolidated financial statements. Prior to the adoption of
Statement 121, the Company  periodically  reviewed the remaining  utility of its
property and equipment,  which constituted its only material  long-lived assets,
and considered the ultimate net realizable  value. Any situation  involving what
was  considered  permanent  impairment  would have  resulted  in  adjustment  to
carrying value.

Earnings Per Share

In 1997,  the Financial  Accounting  Standards  Board issued  Statement No. 128,
Earnings Per Share.  Statement 128 replaced the calculation of primary and fully
diluted  earnings per share with basic and diluted  earnings  per share.  Unlike
primary  earnings  per share,  basic  earnings  per share  excludes any dilutive
effects of options,  warrants and convertible  securities.  Diluted earnings per
share is very similar to the  previously  reported  fully  diluted  earnings per
share.  For 1997 and 1996,  there was no  difference  between  basic and diluted
earnings per share.

Note 2. Acquisition

On October 1, 1996, the Company acquired all of the outstanding  common stock of
Immaculate Eagle, Inc. (d/b/a TFM  Remanufactured  Office Furniture) ("TFM") for
an aggregate purchase price of $5,346,000,  including  transaction costs. TFM is
located  in  Lansing,  Michigan  and is a  specialized  remanufacturer  of panel
systems produced by Haworth, Inc. Consideration for the acquisition consisted of
cash of  $4,033,000  and 87,500  shares of common stock valued at a price of $15
per share.  The 87,500  shares will be held in escrow  until  October 1, 1998 as
security for  indemnification  obligations  of the former  Shareholders  of TFM.
Under the terms of the  purchase  agreement,  if the closing  sales price of the
Company's common stock on October 1, 1998 is less than $15 per share (subject to
certain  adjustments),  the  Company  will  make a cash  payment  to the  former
Shareholders  equal to the  difference  between the closing  sales price on that
date and $15, multiplied times the 87,500 shares of common stock.

The  acquisition of TFM was recorded using the purchase method of accounting and
the excess of the purchase price over the estimated fair value of the net assets
acquired was recorded as goodwill.  The results of operations have been included
in the  accompanying  consolidated  results  of  operations  since  the  date of
acquisition.

The following unaudited  summarized,  pro forma data for the year ended December
31, 1996 presents the combined  results of the Company as if the TFM acquisition
had  occurred  at the  beginning  of 1996 (in  thousands  $,  except  per  share
amounts):
<TABLE>
<S>                                                                   <C>

Net sales                                                             $27,093
Income before income taxes                                             $1,798
Pro forma net income                                                   $1,079
Pro forma earnings per share                                             $.29
</TABLE>


Note 3. Inventories

Inventories  are in two main stages of completion and consisted of the following
(in thousands $):
<TABLE>
<CAPTION>
                                                                        December 31
                                                                   1997             1996
                                                              ---------------- ----------------
<S>                                                           <C>              <C>
Components and fabric                                            $     7,650       $    3,355
Jobs in process and finished goods                                     3,130            3,452
                                                              ---------------- ----------------
                                                                  $   10,780       $    6,807
                                                              ================ ================
</TABLE>

Note 4. Property and Equipment

Property and equipment by major classification was as follows (in thousands $):
<TABLE>
<CAPTION>
                                                                        December 31
                                                                   1997             1996
                                                              ---------------- ----------------
<S>                                                           <C>              <C>
Production and warehouse equipment                            $        2,725   $        2,240
Office equipment                                                       1,008              758
Vehicles                                                                 258              204
Leasehold improvements                                                   415              201
Construction-in-process                                                  397                -
                                                              ---------------- ----------------
                                                                       4,803            3,403
Accumulated depreciation and amortization                             (1,310)            (705)
                                                              ---------------- ----------------
                                                              $        3,493   $        2,698
                                                              ================ ================
</TABLE>

Note 5. Indebtedness

During June 1997, the Company  renegotiated  its revolving line of credit with a
bank. The new credit facility provides for borrowings up to $10,000,000  through
May 1998. The borrowings bear interest at variable rates,  the  determination of
which varies based on operating results.  Outstanding  borrowings under the line
of credit totaled $2,110,000 at December 31, 1997 at a rate of 7.219%.  Advances
under the line are  secured  by  substantially  all  assets  and are  limited to
specified  percentages of accounts receivables and inventories.  Under the terms
of the agreement, the Company is required to maintain a defined earnings to debt
ratio and an interest  coverage  ratio.  The Company was not in compliance  with
these  covenants at December 31,  1997.  On March 17, 1998,  the Company and the
lender agreed that the noncompliance  with the covenants would be waived and the
amount of the line would be reduced to $6,000,000.

Long-term debt consisted of the following (in thousands $):
<TABLE>
<CAPTION>

                                                                       December 31
                                                                  1997              1996
                                                            ------------------ ----------------
<S>                                                         <C>                <C>
Note payable to bank,  due $8 per month,  plus interest at
   7.75% per annum, through November 1998                   $           92     $          191

Note payable to bank,  due $5 per month,  plus interest at
   8.25% per annum                                                       -                 57

Capital lease obligations (see Note 8)                                  34                 56
                                                            ------------------ ----------------
                                                                       126                304
Less current portion                                                   126                212
                                                            ------------------ ----------------
                                                            $            -     $           92
                                                            ================== ================
</TABLE>

Substantially all assets are pledged as collateral for the above indebtedness.


Note 6. Shareholders' Equity

In June 1996,  the Company  completed an initial  public  offering of its common
stock, pursuant to which the Company sold 1,955,000 shares of common stock at an
initial offering price of $10 per share.

The Company has agreements  with two officers to purchase upon the death of each
all of the shares of common  stock  owned at the time of his death.  In order to
fund its potential purchase obligations under these agreements, the Company owns
and is the  beneficiary of certain life insurance  policies.  The purchase price
for the shares will be the fair market value of the shares on the date of death,
except that the Company's purchase  obligations under the agreements are limited
to the face amounts of the policies which total $4,000,000.

In March 1996, the Company's  shareholders adopted the 1996 Stock Incentive Plan
(the "Incentive Plan") and the 1996 Stock Option Plan for Non-Employee Directors
(the "Outside Directors' Plan").

The  maximum  aggregate  number of shares  of  common  stock  that may be issued
pursuant to the Outside  Directors' Plan is 25,000.  The Outside Directors' Plan
will terminate  following the annual meeting of shareholders in 2000.  Under the
Outside  Directors' Plan, each  non-employee  director of the Company serving on
the Board of Directors  on July 1, 1996 was granted an option to purchase  1,000
shares of common stock of the Company.  Thereafter,  each non-employee  director
serving on the Board of  Directors  shall  receive an option to  purchase  1,000
shares of common stock on the first  business day following  each annual meeting
of  shareholders.  The exercise price of stock options granted under the Outside
Directors'  Plan must be equal to the fair market  value of the common  stock on
the date of grant.  Each  option is first  exercisable  on the date which is six
months from the date of grant of the option and shall continue to be exercisable
for a term of ten years, subject to certain exceptions. At December 31, 1997 and
December  31,  1996,  respectively,  the  Company  had 10,000 and 5,000  options
outstanding with weighted average exercise prices of $8.86 and $11.75 per share,
respectively. In both 1997 and 1996, the Company granted 5,000 options under the
Plan,  and the weighted  average  fair value of these  options at grant date was
$4.03 and $4.00 per share, respectively.  The options outstanding had a weighted
average remaining contractual life of nine years, having exercise prices between
$5.97 and  $11.75  per share at  December  31,  1997,  and  $11.75  per share at
December 31, 1996. 10,000 and 5,000 shares were exercisable at December 31, 1997
and 1996, respectively.

The  maximum  aggregate  number of shares  of  common  stock  that may be issued
pursuant to the  Incentive  Plan is 400,000.  The  Incentive  Plan  provides for
grants  of  incentive  stock  options,   non-qualified   stock  options,   stock
appreciation  rights,  restricted  stock,  and/or  phantom stock to any officer,
director,  or key employee of the Company.  The Incentive Plan will terminate in
March 2006.

The exercise price of incentive  stock options  granted under the Incentive Plan
must be equal to at least the fair market  value of the common stock on the date
of grant. The exercise price for non-statutory stock options will be established
by the Compensation Committee.  The terms of all other options granted under the
Incentive Plan will be determined by the Compensation  Committee.  The aggregate
fair  market  value of common  stock  (determined  as of the date of the  option
grant) for which an incentive stock option, or related stock appreciation rights
may for the first time become  exercisable  in any calendar  year may not exceed
$100,000.  These options have a term of seven years.  Transactions involving the
Incentive Plan are as follows:

<TABLE>
<CAPTION>
                                                                                Average
                                                                                Exercise
                                                                   Shares          Price
                                                                 -------------- -----------
<S>    <C>                                                       <C>              <C>
       Issued in 1996                                            109,375          $9.88
                                                                 --------------
Outstanding at December 31, 1996                                 109,375          $9.88
       Issued                                                    109,375          $5.98
       Cancelled                                                 (56,250)         $8.36
                                                                 --------------
Outstanding at December 31, 1997                                 162,500          $7.79
                                                                 ==============
</TABLE>



The options  outstanding have a weighted average  remaining  contractual life of
six years and exercise  prices  between  $3.875 and $9.875 per share at December
31,1997,  and  $9.875  per  share at  December  31,  1996.  18,750  shares  were
exercisable  at December 31,  1997,  and none were  exercisable  at December 31,
1996. The options granted in 1997 and 1996 had a weighted  average fair value at
grant date of $4.05 and $3.36 per share, respectively.

     In October 1995, the Financial  Accounting Standards Board issued Statement
No. 123, Accounting for Stock-Based Compensation.  This statement defines a fair
value based method of accounting for employee stock options whereby compensation
cost is  measured  at the  grant  date  based on the  value of the  award and is
recognized  over the  service  period,  which is  usually  the  vesting  period.
However, companies may elect to continue to use the intrinsic value based method
as prescribed  by Accounting  Principles  Board Opinion No. 25,  Accounting  for
Stock Issued to Employees (APB 25), and provide pro forma  disclosures as if the
Company had accounted for its employee  stock options under the fair value based
method. Under the intrinsic value based method, compensation cost is the excess,
if any,  of the market  price of the stock at the grant  date over the  exercise
price.

     The Company has  elected to follow APB 25 and  related  interpretations  in
accounting for its employee stock options.  If the Company had accounted for its
employee stock options under the fair value based method the net loss would have
increased  by $147,040,  or $.03 per share for the year ended  December 31, 1997
and the net income would have  decreased  by $29,000,  or $.01 per share for the
year ended December 31, 1996. These amounts are not indicative of future effects
of applying  the fair value based  method  since the vesting  period was used to
measure compensation  expense. The fair value for these options was estimated at
the  date of  grant  using a  Black-Scholes  option  pricing  model  assuming  a
risk-free interest rate of 5.6%,  dividend yield of 0.0%, and a weighted average
expected  life of the  option of 6 years  for 1997 and  1996.  In 1997 and 1996,
respectively,  the volatility factors utilized were .706 and .20. Note 7. Income
Taxes

Prior to the Company's initial public offering of common stock in June 1996, the
Company  had  elected  by  consent  of its  shareholders  to be taxed  under the
provisions of Subchapter S of the Internal Revenue Code. Under these provisions,
the Company did not pay federal and state income taxes on its corporate  income.
Instead the Company's  income was included in the income of its shareholders for
federal and state income tax  purposes.  The Company  revoked its S  Corporation
election  effective May 31, 1996 and a deferred tax asset of $21,000 and related
benefit was recognized  representing  cumulative  temporary  differences at that
date. The  undistributed  balance of retained earnings of $137,000 as of May 31,
1996 was reclassified to additional capital.

The  provision  (benefit)  for income taxes is comprised  of the  following  (in
thousands $):
<TABLE>
<CAPTION>

                                                                               1997              1996
                                                                     ----------------- ----------------
<S>                                                                  <C>               <C>
Current:
   Federal                                                           $         (198)   $          282
   State                                                                        (21)               48
                                                                     ----------------- ----------------
                                                                               (219)              330
Deferred:
   Federal                                                                      (49)               62
   State                                                                         (1)                5
                                                                     ----------------- ----------------
                                                                                (50)               67

Deferred tax asset recognized at
   S Corporation termination                                                      -               (21)
                                                                     ----------------- ----------------
                                                                     $         (269)   $          376
                                                                     ================= ================
</TABLE>

A  reconciliation  of the provision for income taxes for the year ended December
31,  1997 and  December  31, 1996 and the amount  computed by applying  the U.S.
statutory  federal  income tax rate of 34% to income  before  income taxes is as
follows (in thousands $):
<TABLE>
<CAPTION>

                                                                                      1997              1996
                                                                           ------------------ -----------------
<S>                                                                        <C>                 <C>
Income tax at U.S. statutory rates                                         $         (347)    $          788
State taxes, net of federal benefit                                                   (21)                37
Tax effect on earnings during S Corporation period                                      -               (468)
Deferred tax asset recognized at S Corporation termination                              -                (21)
Amortization of goodwill                                                               86                 20
Other, net                                                                             13                 20
                                                                           ------------------ -----------------
Total provision for income taxes                                           $         (269)    $          376
                                                                           ================== =================
</TABLE>

The net  deferred  tax  liability  at December  31, 1997 and  December  31, 1996
consisted of the following (in thousands $):
<TABLE>
<CAPTION>

                                                                                      1997              1996
                                                                           ------------------ -----------------
<S>                                                                        <C>                <C>
Deferred tax assets
   Accounts receivable allowances                                          $           57     $           44
   Accrued Liabilities                                                                 22                  -
   Net operating losses                                                                38                  -
   Other                                                                               35                  8
Deferred tax liabilities:
   Tax over book depreciation                                                        (156)              (106)
                                                                           ------------------ -----------------
                                                                           $           (4)    $          (54)
                                                                           ================== =================
</TABLE>
The net deferred tax liability is classified  in the  accompanying  consolidated
balance  sheets as a current  asset of $106,000  and a  noncurrent  liability of
$110,000. Net operating loss carryforwards of $100,000 expire in 2012.

Note 8. Commitments and Contingencies

During 1995, the Company  entered into capital lease  agreements to purchase two
trucks with an aggregate cost of $81,000. The net book value of these trucks was
$34,000 and $59,000 at December 31, 1997 and 1996, respectively. Amortization of
these trucks is included in depreciation expense.

The Company  leases  office  space and  production  facilities  in Richmond  and
Lansing.  The Richmond  lease expires in July 1999 and provides for an option to
renew for an additional three years. The Lansing lease expires in December 1998.
In  addition,  the  Company  leases  its sales  offices  under  operating  lease
agreements  expiring in various periods through  December 2001.  Automobiles are
also leased under terms not  exceeding  three years.  All of the  aforementioned
leases are accounted for as operating leases.

Future minimum lease payments under the above leases were as follows at December
31, 1997 (in thousands $):
<TABLE>
<CAPTION>

         Year                                                          Capital       Operating
                                                                    ------------------------------
<S>      <C>                                                        <C>            <C>
         1998                                                         $       19   $       1,111
         1999                                                                 13             586
         2000                                                                 10             220
         2001                                                                  -              51
         2002                                                                  -               -
                                                                    ------------------------------
Total minimum lease payments                                                  42   $       1,968
                                                                                   ===============
Amounts representing interest                                                  8
                                                                    ---------------
Present value of total minimum lease payments                         $       34
                                                                    ===============
</TABLE>

The above amounts have been reduced by expected  sublease  rentals of $78,000 in
1998 and $26,000 in 1999.

Rent expense amounted to $977,000 in 1997 and $747,000 in 1996.


Note 9. Employee Benefit Plan

In January  1995,  the  Company  adopted a defined  contribution  plan  covering
substantially all employees meeting  eligibility  requirements.  Under the plan,
participants may elect to contribute a specified  portion of their  compensation
to the plan on a tax  deferred  basis.  The Company  will match  one-half of the
participant's  contributions up to six percent of compensation.  The Company may
make additional contributions at its discretion.

Additionally, the Company's wholly-owned subsidiary maintains a similar plan for
its employees. The plan allows participants to contribute a specified portion of
their  compensation to the plan on a tax deferred  basis.  The Company matches a
pre-determined  amount.  According  to  the  terms  of the  purchase  agreement,
participants  of the  subsidiary's  plan would be eligible to participate in the
Company's  plan at the first plan entry date after the first annual  anniversary
date of the  complete  distribution  of assets from the  subsidiary's  plan.  At
January 1, 1998, the Company merged the subsidiary  plan into the parent company
plan.

The Company recorded total expense related to these plans of $86,000 in 1997 and
$75,000 in 1996.

Note 10. Related Party Transactions

Prior to the  consummation of its initial public  offering the Company  advanced
funds to certain  shareholders  from time to time.  At December 31, 1995,  these
advances  bore  interest  at rates  ranging  from 6.58% to 8.19% per annum.  All
outstanding  advances  were repaid in May 1996.  Interest  income  recognized on
these advances amounted to $10,000 in 1996.

The Company  incurred  legal fees of $150,000 in 1997 and  $306,000 in 1996 to a
law firm in which one of the Company's directors is a principal.

A customer whose President is a director of the Company purchased  $1,500,000 of
product in 1997.

In  connection  with the Company's  initial  public  offering,  the Company paid
underwriting fees of $606,000 to an investment  banking firm in which one of the
Company's  directors is an officer.  The Company's revolving line of credit, its
notes  payable and certain of the  operating  bank  accounts  are with a bank in
which one of the Company's directors is an officer (see Note 5).

Note 11. Concentrations of Credit Risk and Financial Instruments

Financial instruments which potentially subject the Company to concentrations of
credit risk consist primarily of cash equivalents and accounts  receivable.  The
Company's temporary cash is invested in short-term money market accounts.

The Company markets its products and services to customers  located primarily in
the Eastern and Mid-West  regions of the United States.  Production is primarily
in  response  to  customer  orders and larger  jobs  typically  require  advance
deposits.  The Company  performs  credit  evaluations of its customers  prior to
delivery or commencement  of services and normally does not require  collateral.
Payments are typically due within thirty days of billing.  The Company maintains
an allowance  for  potential  credit  losses and losses have  historically  been
within management's expectations.

The  carrying  values  of  amounts  classified  as  current  assets  or  current
liabilities  approximate  fair value due to the  short-term  maturities of these
instruments. The carrying value of long-term debt approximates fair value as the
current rates approximate market rates.


Note 12. Pro Forma Information (Unaudited)

The  accompanying pro forma income data reflects a provision for income taxes as
if the Company's  earnings had been subject to federal and state income taxes as
a regular corporation for all years presented.

Pro forma  earnings per common share are based on the  weighted  average  common
shares  outstanding  increased  by 270,000  shares of common  stock deemed to be
outstanding,  which  represents the  approximate  number of common shares deemed
sold by the Company at the initial public  offering of $10 per share to fund the
final S Corporation distribution of $2,695,000 to the Company's shareholders.
<PAGE>
Note 13.  Selected Quarterly Financial Data (Unaudited)

Results of operations  for each of the quarters  during the years ended December
31, 1997 and 1996 are as follows (in thousands, except per share data):
<TABLE>
<CAPTION>

                                                                     Quarter Ended
                                              ------------------------------------------------------------
                                                 March          June         September        December
                                                 31st           30th            30th            31st
                                              ------------ -------------- --------------- ----------------
<S>                                             <C>          <C>            <C>             <C>
Year ended December 31, 1997

Net sales                                       $  6,437     $  7,164       $  9,408        $ 8,959
Operating income (loss)                         $   (586)    $      8       $    179        $  (509)
Income (loss) before income taxes               $   (549)    $     25       $    180        $  (673)
Net income (loss)                               $   (315)    $     25       $    147        $  (605)
Earnings (loss) per common share                $   (.07)    $    .01       $    .03        $  (.14)

Year ended December 31, 1996

Net sales                                       $  5,580     $  4,965       $  4,402        $ 7,451
Operating income                                $    963     $    577       $    227        $   407
Income before income taxes                      $    914     $    564       $    363        $   476
Pro forma net income                            $    558     $    344       $    216        $   269
Pro forma earnings per common share             $    .21     $    .11       $    .05        $   .06
</TABLE>
<PAGE>


Item 8. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure

         None.


                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act

     The information  required by this item is incorporated  herein by reference
to the  Company's  definitive  Proxy  Statement  for its 1998 Annual  Meeting of
Shareholders to be filed within 120 days of the end of the 1997 fiscal year.

Item 10. Executive Compensation

     The information  required by this item is incorporated  herein by reference
to the  Company's  definitive  Proxy  Statement  for its 1998 Annual  Meeting of
Shareholders to be filed within 120 days of the end of the 1997 fiscal year.

Item 11. Security Ownership of Certain Beneficial Owners and Management

     The information  required by this item is incorporated  herein by reference
to the  Company's  definitive  Proxy  Statement  for its 1998 Annual  Meeting of
Shareholders to be filed within 120 days of the end of the 1997 fiscal year.

Item 12. Certain Relationships and Related Transactions

     The information  required by this item is incorporated  herein by reference
to the  Company's  definitive  Proxy  Statement  for its 1998 Annual  Meeting of
Shareholders to be filed within 120 days of the end of the 1997 fiscal year.
<PAGE>

                                     PART IV

Item 13. Exhibits, List and Reports on Form 8-K
<TABLE>
<S>      <C>      <C>      <C>

         (a)      Exhibits

                  The following exhibits are filed on behalf of the Company as part of this report:

                  3(i)     Amended and Restated  Articles of  Incorporation,  incorporated by reference to
                           Exhibit 3(i) of the Registrant's Form SB-2 Registration  Statement, as amended,
                           File No. 333-3188.
                  3(ii)    Amended and Restated Bylaws,  incorporated by reference to Exhibit 3(ii) of the
                           Registrant's Form SB-2 Registration Statement, as amended, File No. 333-3188.
                  4        Form of Stock  Certificate,  incorporated  by  reference  to  Exhibit  4 of the
                           Registrant's Form SB-2 Registration Statement, as amended, File No. 333-3188.
                  10.1     Deed of  Lease,  as  amended,  dated  April 6,  1992,  between  Lingerfelt  and
                           Carpenter and Open Plan  Systems,  Inc.,  incorporated  by reference to Exhibit
                           10.1 of the Registrant's Form SB-2  Registration  Statement,  as amended,  File
                           No. 333-3188.
                  10.2     Commercial Lease Contract,  dated May 4, 1993, between M.D. Hodges Enterprises,
                           Inc. and Open Plan Systems, Inc.,  incorporated by reference to Exhibit 10.2 of
                           the  Registrant's  Form  SB-2  Registration  Statement,  as  amended,  File No.
                           333-3188.
                  10.3     Commercial Note made by Open Plan Systems,  Inc. in favor of Crestar Bank as of
                           May 9, 1996,  incorporated  by reference  to Exhibit  10.3 of the  Registrant's
                           Form SB-2 Registration Statement, as amended, File No. 333-3188.
                  10.4     Security  Agreement,  dated May 7,  1996,  between  Crestar  Bank and Open Plan
                           Systems,  Inc.,  incorporated by reference to Exhibit 10.4 of the  Registrant's
                           Form SB-2 Registration Statement, as amended, File No. 333-3188.
                  10.5     Open Plan Systems, Inc. 1996 Stock Incentive Plan, as amended,  incorporated by
                           reference to Exhibit 4.4 of the Registrant's  Form S-8 Registration  Statement,
                           File No. 333-15217.
                  10.6     Open Plan Systems, Inc. 1996 Stock Option Plan For Non-Employee  Directors,  as
                           amended,  incorporated by reference to Exhibit 4.4 of the Registrant's Form S-8
                           Registration Statement, File No. 333-15219.
                  10.7     Buy-Sell  Agreement,  dated  May 24,  1996,  between  the  Company  and Stan A.
                           Fischer,  incorporated  by reference to Exhibit 10.7 of the  Registrant's  Form
                           SB-2 Registration Statement, as amended, File No. 333-3188.
                  10.8     Buy-Sell  Agreement,  dated May 15,  1996,  between  the Company and Gregory P.
                           Campbell,  incorporated by reference to Exhibit 10.8 of the  Registrant's  Form
                           SB-2 Registration Statement, as amended, File No. 333-3188.
                  10.9     Tax Sharing  Agreement,  dated May 1, 1996, between the Company and each of the
                           shareholders  named therein,  incorporated  by reference to Exhibit 10.9 of the
                           Registrant's Form SB-2 Registration Statement, as amended, File No. 333-3188.
                  10.10    Form of Employee Non-Qualified Stock Option Agreement*
                  10.11    Form of Non-Employee Director Non-Qualified Stock Option Agreement*
                  10.12    Stock Purchase Agreement,  dated September 24, 1996, between Open Plan Systems,
                           Inc.,  Immaculate  Eagle,  Inc.,  Paul A.  Covert,  Todd A. Thomann and Siimon,
                           Inc.,  incorporated  by reference to Exhibit 2.1 of the  Registrant's  Form 8-K
                           filed October 16, 1996, File No. 0-20743.
                 10.13     Lease,  dated August 8, 1993,  between  Quality  Dairy  Company and  Immaculate
                           Eagle, Inc.
                 10.14     Open Plan Systems, Inc. Bonus Program for Officers
                 10.15     $10,000,000 Line of Credit Agreement with Crestar Bank
                  11       Statement re: Computation of Earnings Per Share
                  16       Letter from  Martin,  Dolan & Holton,  Ltd.  regarding  change in  accountants,
                           incorporated  by  reference  to  Exhibit  16  of  the  Registrant's  Form  SB-2
                           Registration Statement, as amended, File No. 333-3188.
                  21       Subsidiaries of the Registrant
                  23.1     Consent of Ernst & Young LLP*
                  23.2     Consent of Ernst & Young LLP*
                  27       Financial Data Schedule   * (filed electronically only)
</TABLE>
        ________
         *  Filed herewith

         (b)      Reports on Form 8-K.

                    The Company  filed a Current  Report on Form 8-K on November
               13, 1997 to report the election of Paul Covert as  President  and
               Chief Operating Officer.


<PAGE>

                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                                         OPEN PLAN SYSTEMS, INC.


                                     By:     /s/ Paul A. Covert
                                                 Paul A. Covert
March 17, 1998                                   President


     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  registrant and in the capacities and on
the dates indicated:
<TABLE>
<S>                                        <C>                                          <C>

          Signature                                  Title                                  Date

     /s/ Paul A. Covert                    President and Director (principal            March 17, 1998
         Paul A. Covert                    executive officer)

    /s/ Gary M. Farrell                    Chief Financial Officer, Secretary and       March 17, 1998
        Gary M. Farrell                     Director (principal financial officer)

    /s/ Neil F. Suffa                      Corporate Controller                         March 17, 1998
        Neil F. Suffa                      (principal accounting officer)

   /s/ Stan A. Fischer                     Director                                     March 17, 1998
       Stan A. Fischer

   /s/ Troy A. Peery, Jr.                  Director                                     March 17, 1998
       Troy A. Peery, Jr.

  /s/ Anthony F. Markel                    Director                                     March 17, 1998
      Anthony F. Markel

/s/ Theodore L. Chandler, Jr               Director                                     March 17, 1998
    Theodore L. Chandler, Jr.

 /s/ Robert F. Mizell                      Director                                     March 17, 1998
     Robert F. Mizell

/s/ C. T. Hill                             Director                                     March 17, 1998
    C. T. Hill

</TABLE>
                                                   EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No.                                                  Document
<S>     <C>
3(i)     Amended and  Restated  Articles of  Incorporation,  incorporated  by reference to Exhibit 3(i) of
         the Registrant's Form SB-2 Registration Statement, as amended, File No. 333-3188.
3(ii)    Amended and Restated  Bylaws,  incorporated  by reference  to Exhibit  3(ii) of the  Registrant's
         Form SB-2 Registration Statement, as amended, File No. 333-3188.
4        Form of Stock  Certificate,  incorporated by reference to Exhibit 4 of the Registrant's Form SB-2
         Registration Statement, as amended, File No. 333-3188.
10.1     Deed of Lease, as amended,  dated April 6, 1992,  between  Lingerfelt and Carpenter and Open Plan
         Systems,  Inc.,  incorporated  by  reference  to  Exhibit  10.1  of the  Registrant's  Form  SB-2
         Registration Statement, as amended, File No. 333-3188.
10.2     Commercial  Lease Contract,  dated May 4, 1993,  between M.D. Hodges  Enterprises,  Inc. and Open
         Plan  Systems,  Inc.,  incorporated  by reference to Exhibit 10.2 of the  Registrant's  Form SB-2
         Registration Statement, as amended, File No. 333-3188.
10.3     Commercial  Note made by Open Plan  Systems,  Inc.  in favor of  Crestar  Bank as of May 9, 1996,
         incorporated by reference to Exhibit 10.3 of the Registrant's Form SB-2  Registration  Statement,
         as amended, File No. 333-3188.
10.4     Security  Agreement,  dated  May 7,  1996,  between  Crestar  Bank and Open Plan  Systems,  Inc.,
         incorporated by reference to Exhibit 10.4 of the Registrant's Form SB-2  Registration  Statement,
         as amended, File No. 333-3188.
10.5     Open Plan Systems,  Inc. 1996 Stock  Incentive  Plan,  as amended,  incorporated  by reference to
         Exhibit 4.4 of the Registrant's Form S-8 Registration Statement, File No. 333-15217.
10.6     Open  Plan  Systems,  Inc.  1996  Stock  Option  Plan For  Non-Employee  Directors,  as  amended,
         incorporated by reference to Exhibit 4.4 of the  Registrant's  Form S-8  Registration  Statement,
         File No. 333-15219.
10.7     Buy-Sell  Agreement,  dated May 24, 1996,  between the Company and Stan A. Fischer,  incorporated
         by reference to Exhibit 10.7 of the Registrant's  Form SB-2 Registration  Statement,  as amended,
         File No. 333-3188.
10.8     Buy-Sell  Agreement,   dated  May  15,  1996,  between  the  Company  and  Gregory  P.  Campbell,
         incorporated by reference to Exhibit 10.8 of the Registrant's Form SB-2  Registration  Statement,
         as amended, File No. 333-3188.
10.9     Tax Sharing  Agreement,  dated May 1, 1996,  between  the  Company  and each of the  shareholders
         named  therein,  incorporated  by  reference  to  Exhibit  10.9  of the  Registrant's  Form  SB-2
         Registration Statement, as amended, File No. 333-3188.
10.10    Form of Employee Non-Qualified Stock Option Agreement
10.11             Form of Non-Employee Director Non-Qualified Stock Option Agreement
10.12    Stock Purchase Agreement,  dated September 24, 1996, between Open Plan Systems,  Inc., Immaculate
         Eagle,  Inc.,  Paul A. Covert,  Todd A. Thomann and Siimon,  Inc.,  incorporated  by reference to
         Exhibit 2.1 of the Registrant's Form 8-K filed October 16, 1996, File No. 0-20743.
10.13    Lease, dated August 8, 1993, between Quality Dairy Company and Immaculate Eagle, Inc.
10.14    Open Plan Systems, Inc. Bonus Program for Officers
10.15    $10,000,000 Line of Credit Agreement with Crestar Bank dated June 26, 1997
11       Statement re: Computation of Earnings Per Share
16       Letter from  Martin,  Dolan & Holton,  Ltd.  regarding  change in  accountants,  incorporated  by
         reference to Exhibit 16 of the Registrant's Form SB-2 Registration  Statement,  as amended,  File
         No. 333-3188.
21       Subsidiaries of the Registrant
23.1     Consent of Ernst & Young LLP*
23.2     Consent of Ernst & Young LLP*
27       Financial Data Schedule    * (filed electronically only)
</TABLE>
*  Filed herewith