--------------------------------------------------------------------------------



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


           [X] Quarterly Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                  For the quarterly period ended June 30, 2001

          [ ] Transition Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                 For the transition period from ______ to ______

                         Commission file number: 0-20743


                             OPEN PLAN SYSTEMS, INC.
             (Exact name of registrant as specified in its charter)


               Virginia                                   54-1515256
    (State or other jurisdiction of            (IRS Employer Identification No.)
    incorporation or organization)

         4299 Carolina Avenue,                               23222
    Building C, Richmond, Virginia                        (Zip Code)
(Address of principal executive office)

                                 (804) 228-5600
                        (Telephone number of registrant)


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

     As of the close of business on August 9, 2001, Open Plan Systems,  Inc. had
4,337,391 shares of Common Stock, no par value, outstanding.

--------------------------------------------------------------------------------


<PAGE>

                             OPEN PLAN SYSTEMS, INC.

                                Table of Contents
<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION                                                       Page
------------------------------                                                       ----
<S>                                                                                   <C>
Item 1.    Financial Statements

           Consolidated Balance Sheets - June 30, 2001 (unaudited)                     1
              and December 31, 2000

           Consolidated Statements of Operations - Three and six months                2
              ended June 30, 2001  and 2000 (unaudited)

           Consolidated Statements of Cash Flows - Six months                          3
              ended June 30, 2001 and 2000 (unaudited)

           Notes to Consolidated Financial Statements - June 30, 2001                  4
           (unaudited)

Item 2.    Management's Discussion and Analysis of                                    10
           Financial Condition and Results of Operations

Item 3.    Quantitative and Qualitative Disclosures about Market Risk                 17


PART II. OTHER INFORMATION
--------------------------

Item 1.    Legal Proceedings                                                          18

Item 2.    Changes in Securities and Use of Proceeds                                  18

Item 3.    Defaults Upon Senior Securities                                            18

Item 4.    Submission of Matters to a Vote of                                         18
              Security Holders

Item 5.    Other Information                                                          18

Item 6.    Exhibits and Reports on Form 8-K                                           19


SIGNATURES
----------

</TABLE>


<PAGE>


                             OPEN PLAN SYSTEMS, INC.
                                     PART I
                              FINANCIAL INFORMATION
                          Item 1: Financial Statements
                           Consolidated Balance Sheets
                             (amounts in thousands)
<TABLE>
<CAPTION>
                                                                       June 30,       December 31,
                                                                         2001             2000
                                                                  -----------------------------------
                                                                     (unaudited)
<S>                                                                  <C>              <C>
ASSETS
Current assets:
   Cash and cash equivalents                                         $        280     $        244
   Cash and cash equivalents externally restricted under
      bond indenture agreement                                              2,098            2,190
   Accounts receivable, net                                                 5,626            7,834
   Inventories                                                              3,609            6,278
   Assets held for sale                                                       571                -
   Prepaids and other                                                         484              458
   Refundable income taxes                                                     57                -
                                                                  -----------------------------------
TOTAL CURRENT ASSETS                                                       12,725           17,004

Property and equipment, net                                                 1,431            2,393
Goodwill, net                                                                   -            3,664
Other                                                                         101              271
                                                                  -----------------------------------
TOTAL ASSETS                                                         $     14,257     $     23,332
                                                                  ===================================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt                                 $      2,495     $      2,595
   Revolving line of credit                                                 4,007            3,366
   Trade accounts payable                                                   3,343            3,709
   Restructuring liabilities                                                  420                -
   Accrued compensation and related costs                                     467            1,121
   Other liabilities                                                          858              631
   Customer deposits                                                          964              860
                                                                  -----------------------------------
TOTAL CURRENT LIABILITIES                                                  12,554           12,282

Long-term debt                                                                181              227
Other long-term liabilities                                                    20               20
                                                                  -----------------------------------
TOTAL LIABILITIES                                                          12,755           12,529

Shareholders' equity:
   Common stock, no par value:
     Authorized shares - 50,000
     Issued and outstanding shares - 4,337 at 6/30/01                      18,537           18,561
                                   - 4,352 at 12/31/00
   Additional capital                                                         137              137
   Accumulated deficit                                                    (17,154)          (7,840)
   Accumulated other comprehensive income                                      22                4
   Notes receivable from employees for sale of stock                          (40)             (59)
                                                                  -----------------------------------
TOTAL SHAREHOLDERS' EQUITY                                                  1,502           10,803
                                                                  -----------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                           $     14,257     $     23,332
                                                                  ===================================
</TABLE>

See accompanying notes.


                                       1
<PAGE>

                             OPEN PLAN SYSTEMS, INC.

                Consolidated Statements of Operations (Unaudited)
                  (amounts in thousands, except per share data)
<TABLE>
<CAPTION>
                                                   Three months ended                         Six months ended
                                                        June 30,                                  June 30,
                                                 2001             2000                     2001              2000
<S>                                          <C>              <C>                      <C>              <C>
Net sales                                    $      8,040     $     10,459             $     18,002     $     19,792
Cost of sales                                       8,114            7,688                   15,563           14,108
Gross profit                                          (74)           2,771                    2,439            5,684
                                          -----------------------------------       -----------------------------------
Operating expenses:
   Amortization of intangibles                         46               69                      114              137
   Selling and marketing                            2,237            2,015                    4,639            3,942
   General and administrative                       1,376              887                    2,286            1,481
   Operational restructuring                        4,725                -                    4,725                -
   Arbitration cost                                     -              142                        -              142
                                          -----------------------------------       -----------------------------------
                                                    8,384            3,113                   11,764            5,702

                                          -----------------------------------       -----------------------------------
Operating loss                                     (8,458)            (342)                  (9,325)             (18)

Other (income) expense:
   Interest expense                                   177              140                      256              238
   Gain on disposal of fixed assets                  (260)               -                     (260)               -
   Other, net                                         (42)             (16)                      (7)             (18)
                                                     (125)             124                      (11)             220

                                          -----------------------------------       -----------------------------------
Loss before income taxes                           (8,333)            (466)                  (9,314)            (238)

Income taxes                                            -             (199)                       -              (95)
                                          -----------------------------------       -----------------------------------
Net loss                                     $     (8,333)    $       (267)            $     (9,314)    $       (143)
                                          ===================================       ===================================

Basic and diluted loss per common share      $      (1.92)    $       (.06)            $      (2.15)    $       (.03)
Diluted weighted average common shares
outstanding                                         4,337            4,403                    4,338            4,403
                                          ===================================       ===================================
</TABLE>

See accompanying notes.




                                       2
<PAGE>

                             OPEN PLAN SYSTEMS, INC.

                Consolidated Statements of Cash Flows (Unaudited)
                             (amounts in thousands)
<TABLE>
<CAPTION>
                                                                           Six Months ended
                                                                               June 30,
                                                                         2001             2000
                                                                  ---------------------------------
<S>                                                                  <C>              <C>
Operating activities
Net loss                                                             $   (9,314)      $     (143)
Adjustments to reconcile net loss to net cash used in
   operating activities:
   Provision for losses on receivables                                       49              159
   Depreciation and amortization                                            548              604
   Operational restructuring                                              4,725                -
   Write-down of inventory                                                1,722                -
   Gain on sale of property and equipment                                  (260)               -
   Deferred income taxes                                                      -              (76)
   Changes in operating assets and liabilities:
     Accounts receivable                                                  2,029             (137)
     Inventories                                                            947             (321)
     Prepaids and other                                                     (45)             (89)
     Trade accounts payable                                                (366)            (828)
     Customer deposits                                                      104              (62)
     Accrued and other liabilities                                         (409)             192
                                                                  ---------------------------------
Net cash used in operating activities                                      (270)            (701)

Investing activities
Decrease (increase)  in cash and cash equivalents externally
   restricted under bond indenture agreement                                 92           (2,450)
Proceeds from sale of property and equipment                                300                -
Purchases of property and equipment, including construction
   in progress                                                             (557)            (620)
                                                                  ----------------------------------
Net cash used in investing activities                                      (165)          (3,070)

Financing activities
Net borrowings on revolving line of credit                                  641            1,395
Proceeds from borrowing on long-term debt                                     -            2,500
Purchase of common stock                                                    (24)               -
Principal payments on long-term debt and capital lease
   obligations                                                             (146)             (35)
                                                                  ----------------------------------
Net cash provided by financing activities                                   471            3,860
                                                                  ----------------------------------

Change in cash and cash equivalents                                          36               89

Cash and cash equivalents at beginning of period                            244               13
                                                                  ----------------------------------
Cash and cash equivalents at end of period                           $      280       $      102
                                                                  ==================================

Supplemental disclosures
Interest paid                                                        $      281       $      238
                                                                  ==================================
Income taxes paid                                                    $       79       $       42
                                                                  ==================================
</TABLE>

See accompanying notes


                                       3
<PAGE>

                             OPEN PLAN SYSTEMS, INC.

             Notes to Consolidated Financial Statements (Unaudited)
                                  June 30, 2001


1. Principles of Presentation

         The accompanying  unaudited  consolidated  financial statements of Open
Plan  Systems,  Inc.  (the  Company)  have  been  prepared  in  accordance  with
accounting  principles  generally  accepted  in the United  States  for  interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by accounting  principles  generally  accepted in the United
States for complete financial statements.  All significant intercompany balances
and transactions are eliminated in consolidation.  In the opinion of management,
the June 30,  2001  financial  statements  reflect all  adjustments  of a normal
recurring  nature and  restructuring  adjustments  which the  Company  considers
necessary  for a fair  presentation.  The  results for the quarter and six month
period ended June 30, 2001 are not  necessarily  indicative  of the results that
may be achieved  for the entire year ending  December  31, 2001 or for any other
interim period.  For further  information,  refer to the consolidated  financial
statements  and footnotes  thereto  included in the Company's  Form 10-K for the
year ended December 31, 2000.

         During the fourth  quarter of the year ended  December  31,  2000,  the
Company  recorded  significant  fourth quarter  adjustments  (see Note 13 to the
Company's  Form  10-K for the year  ended  December  31,  2000).  As more  fully
described in that note, these adjustments were recorded in the fourth quarter of
2000, as the Company  could not  determine  the amount of charges  applicable to
proceeding interim periods. Therefore, information presented for the quarter and
six months  ended June 30, 2000  reflects  amounts  previously  reported and may
contain balances that were not adjusted until the fourth quarter of 2000.

2. Operational Restructuring

         On June 20, 2001, the Company approved and began the  implementation of
a  restructuring  plan that  closed its  remanufacturing  facility  in  Lansing,
Michigan and  consolidated  remanufacturing  operations  in Richmond,  Virginia;
closed five under performing sales offices located in Cincinnati,  Indianapolis,
Nashville,   Lansing  and  Boston;   reduced  the  size  of  sales   offices  in
Philadelphia,  Atlanta  and  Washington,  D.C.;  and  restructured  back  office
operations  at the  Company's  headquarters  in  Richmond,  Virginia.  This plan
returns the Company's focus to the remanufacturing of Herman Miller products and
discontinues the Haworth and Steelcase product lines. In the second quarter, the
Company  recorded a  restructuring  charge of  approximately  $4.7 million which
includes  an estimate  for the  disposal of the  existing  leased  manufacturing
facility in Michigan and related  assets,  as well as the new  facility  that is
under  construction.  The largest component of the charge was $3,580,000 related
to the  write-off  of  remaining  goodwill  associated  with the purchase of the
Michigan  operations in 1996.  Other  significant  components of the operational
restructuring  were  estimated  losses of  $404,000  related to the  disposal of
property  and  equipment,  $105,000 for  severance  costs,  $125,000  related to
expected   costs  under  lease   arrangements,   $119,000  for   shortening  the
amortization period of debt



                                       4
<PAGE>

                             OPEN PLAN SYSTEMS, INC.

             Notes to Consolidated Financial Statements (Unaudited)
                                  June 30, 2001


issuance costs related to Industrial  Revenue Bond proceeds  associated with the
new  facility  under  construction  to be  repaid  as  part  of the  operational
restructuring,   and  $156,000  for   professional   fees  associated  with  the
restructuring  plan.  In  connection  with this  plan,  the  Company  terminated
approximately 65 personnel, primarily sales personnel in offices being closed or
personnel associated with the manufacturing facility in Michigan.

         Prior to the end of the  quarter,  most of the affected  employees  had
been  terminated,   and  in  July  2001  the  Company  disposed  of  the  leased
manufacturing   facility  in  Michigan  and  the  related  assets.  The  Company
anticipates  completing  the asset  sales prior to the end of 2001 and the lease
termination  costs are anticipated to extend into the year 2002. Under this plan
the Company intends to dispose of the new facility  currently under construction
in Michigan,  and repay  bondholders for Industrial  Revenue Bond debt issued to
build the new  facility.  In addition to asset  balances  that have been written
down or reserved as part of this plan, approximately $420,000 remains accrued in
other liabilities relating to the operational  restructuring and is estimated to
approximate  the remaining  costs to be incurred,  which are  principally  lease
termination costs, severance, and professional fees.

         Along  with  the  operational   restructuring   the  Company   recorded
approximately $1.7 million for losses on inventory  write-downs,  which has been
classified  as a  component  of cost of  goods  sold.  These  losses  relate  to
inventory sold in July 2001 associated  with the existing  leased  manufacturing
facility in Michigan, and showroom inventory located at closed sales offices.

         During  the third  quarter  of 2001,  the  Company  intends  to sell or
dissolve the joint venture in Mexico. As a result, the Company anticipates a yet
to be  determined  charge in the third  quarter of 2001  related to closing  the
Mexico City, Mexico sales office.  The Company's interest in the carrying amount
of the net assets of the Mexican operation approximates $470,000.

3. Mexican Subsidiaries

         In January 2000, the Company entered into a Joint Venture  Agreement to
open a new  sales  office  in  Mexico  City,  Mexico.  The  Company  contributed
approximately  $50,000,  for an 80% interest in the venture.  The Joint  Venture
Agreement created two new companies,  Open Plan Systems,  S. de R.L. de C.V. and
Open  Plan  Servicios,  S. de R.L.  de C.V.,  each of which is 80%  owned by the
Company.  The Company has reported minority interest related to the earnings and
the equity of the minority  partner in the accompanying  consolidated  financial
statements.

4. Inventories

         Inventories  were in two main stages of completion and consisted of the
following (amounts in thousands):



                                       5
<PAGE>

                             OPEN PLAN SYSTEMS, INC.

             Notes to Consolidated Financial Statements (Unaudited)
                                  June 30, 2001


                                                      June 30,      December 31,
                                                        2001           2000
                                                  ------------------------------
                                                           (Unaudited)

Components and fabric                                 $  2,296       $  4,494
Jobs in process and finished goods                       1,313          1,784
                                                  ------------------------------
                                                      $  3,609       $  6,278
                                                  ==============================


5. Income Taxes

         The Company did not record any tax benefit associated with the net loss
for the quarter and six months ended June 30, 2001 due to the uncertainty of the
realization  of  potential  benefits  of future  deductions.  The  Company  will
re-evaluate  the  realizability  of potential  net deferred tax assets in future
periods.

6. Indebtedness

         In June 2000,  the Company  borrowed  $2.5  million  from the  Michigan
Strategic Fund following the issuance and sale by the Fund of certain Industrial
Revenue Bonds ("Industrial  Revenue Bonds") for construction of a new production
facility in Lansing,  Michigan.  The proceeds were placed into an escrow account
with the trustee for use in connection with the building of the facility. At the
same time, the Company  entered into a letter of credit  facility with a bank to
support  the  financing  on the  facility.  At June 30,  2001,  the  Company had
approximately  $2.1 million of cash and cash equivalents  externally  restricted
under the bond indenture, which is reflected in the consolidated balance sheets.
Borrowings  associated with the Industrial Revenue Bonds totaled $2.4 million at
June 30, 2001 and bore interest at a weekly variable tax exempt rate of interest
based upon the credit  worthiness of the  underlying  letter of credit (2.85% at
June 30, 2001). The obligations are secured by  substantially  all of the assets
of the Company. The bond indenture and related agreements require the Company to
meet certain  restrictive  covenants,  including  defined tangible net worth, an
interest  coverage  ratio and certain  other  covenants.  The Company was not in
compliance at December 31, 2000 and  thereafter  with certain of the  covenants,
and therefore this debt is included in the current  portion of long-term debt in
the accompanying balance sheets.

         The Company maintains two bank credit facilities consisting of a letter
of credit  facility  associated  with the issuance of $2.5 million of Industrial
Revenue  Bonds to finance  the  construction  of a new  production  facility  in
Lansing,  Michigan and a revolving  line of credit.  At December  31, 2000,  the
revolving line of credit provided for a maximum  borrowing  amount of $5,250,000
at variable  interest rates. The letter of credit facility and



                                       6
<PAGE>

                             OPEN PLAN SYSTEMS, INC.

             Notes to Consolidated Financial Statements (Unaudited)
                                  June 30, 2001


revolving  line of  credit  agreements  require  the  Company  to  meet  various
restrictive  covenants,  including  a defined  tangible  net worth,  an interest
coverage ratio and certain other covenants. At December 31, 2000 and thereafter,
the Company was not in compliance with certain of the covenants contained in the
letter of credit  facility and the  revolving  line of credit  agreements.  As a
result of the covenant  violations as well as the significant net loss in fiscal
year 2000, the Company's auditors, in its report filed as part of the Form 10-K,
have expressed  substantial  doubt as to the Company's  ability to continue as a
going concern. See "Forward Looking Statements" below and Note 1 to the December
31, 2000 consolidated financial statements contained in the Form 10-K.

         In May 2001, the Company entered into a temporary forbearance agreement
with the bank in which the bank  agreed to waive its  existing  right to declare
defaults relating to the Company's failure to comply with certain loan covenants
through June 30, 2001. Thereafter,  on August 10, 2001, the Company and the bank
entered into a new short term forbearance  agreement that expires on October 30,
2001.  The new  forbearance  agreement  provides that the bank will refrain from
exercising  any rights or remedies  based on existing  or  continuing  defaults,
including   accelerating  the  maturity  of  the  loans  under  the  two  credit
facilities,  until after the October 30,  2001  expiration  date.  Under the new
forbearance  agreement,  the line of credit was reduced from $4.65 million under
the May  forbearance  agreement to $4.55 million and will be further  reduced to
$4.4 million beginning August 15, 2001 and to $4.25 million beginning August 31,
2001. As of August 13, 2001,  approximately  $4.1 million was outstanding  under
the line of credit.  In addition,  the  interest  rate on the line of credit was
increased to LIBOR plus 6.0%. Finally, the Company is required to pay the bank a
forbearance  fee of $50,000 upon the earlier of a  refinancing  of the Company's
credit obligations to the bank or October 30, 2001.  Pursuant to the forbearance
agreement,  the bank reserves the right to declare a default and  accelerate the
loans under the two  facilities  after  October 30, 2001 if the parties have not
entered  into  amendments  to the  existing  loan  arrangements  or a subsequent
forbearance agreement.

         The cost of completing the new Lansing, Michigan production facility is
approximately $1.7 million. However, the new forbearance agreement prohibits the
Company from utilizing the approximately $2.1 million of remaining cash proceeds
from the Company's Industrial Revenue Bonds to complete the new Lansing facility
without  the prior  approval  of the bank.  The  Company  was unable to make two
progress  payments  totaling  approximately  $940,000 due on the project in June
2001 under the May 2001  forbearance  agreement.  Subsequently,  the  contractor
ceased  construction  on the project and filed a construction  lien suit against
the  Company  alleging,  among  other  things,  a  breach  of  the  construction
agreement. The Company is unable to determine at this time whether the bank will
permit such payments in the future.  Under the new  forbearance  agreement,  the
Company intends to sell the new Lansing  facility  subject to the consent of the
bank and use a portion of the proceeds from the sale to satisfy amounts that may
be owed to the contractor.  However, there can be no assurances that the Company
will be able to consummate a sale of the new Lansing facility. In addition,  the
Company has agreed in the new  forbearance



                                       7
<PAGE>

                             OPEN PLAN SYSTEMS, INC.

             Notes to Consolidated Financial Statements (Unaudited)
                                  June 30, 2001


agreement to redeem the Industrial  Revenue Bonds in connection with any sale of
the new Lansing  facility unless the Bonds are assumed by a third party with the
consent  of the  bank.  The bank has  agreed  upon any such  redemption  to seek
reimbursement  for draws on the letter of credit relating to the redemption from
the $2.1 million of escrowed proceeds  remaining from the sale of the Bonds plus
the sum of $328,000 being held in a separate account at the bank.

         As of August 14,  2001,  the  Company  has been  unable to  negotiate a
permanent waiver of the Company's loan covenant  violations,  as well as revised
loan  covenants.  Any agreement  reached with the bank could result in new terms
which are less favorable than current terms under existing  agreements and could
involve a reduction in  availability of funds, an increase in interest rates and
shorter  maturities,  among other  things.  If the Company is not  successful in
securing an extension of the forbearance agreement or permanent waivers and loan
covenant amendments,  it will need to seek new financing arrangements from other
lenders.  Such  alternative  financing  arrangements  may be  unavailable to the
Company or available on terms  substantially  less favorable to the Company than
its existing  credit  facilities.  If the Company is unable to either procure an
extension of the forbearance agreement, permanent covenant violation waivers and
covenant   amendments   with  respect  to  existing   facilities  or  acceptable
alternative financing, such failures could have a material adverse effect on the
Company's  financial  condition and results of  operations.  No assurance can be
given that the Company will be able to obtain an  extension  of the  forbearance
agreement,  permanent  covenant  violation waivers and revised loan covenants or
refinance its existing obligations.

7. Comprehensive Income (Loss)

         Comprehensive  loss for the  six-month  period  ended June 30, 2001 was
$9,296,000 as compared to a net loss of $9,314,000.  Comprehensive  loss for the
quarter  ended  June  30,  2001  was  $8,313,000  as  compared  to a net loss of
$8,333,000.  The difference  between net loss and  comprehensive  loss is due to
foreign currency translation gains and losses.

8. Repurchases of Common Stock

         In 2000, the Company's Board of Directors approved the repurchase of up
to 100,000 shares of the Company's Common Stock.  During the quarter ended March
31,  2001,  the  Company  repurchased  15,000  shares of its Common  Stock at an
aggregate cost of approximately $24,000.

9. Impact of Recently Issued Standards

         The Company  adopted the  provisions of Statement No. 133,  "Accounting
for  Derivative  Instruments  and Hedging  Activities,"  as  amended,  effective
January 1, 2001. The



                                       8
<PAGE>

                             OPEN PLAN SYSTEMS, INC.

             Notes to Consolidated Financial Statements (Unaudited)
                                  June 30, 2001


implementation  of this new  standard  did not  have a  material  effect  on the
Company's consolidated results of operations or financial position.

10. Contingencies

         On July 13, 2001, the Company was served with a complaint  filed in the
Circuit Court for the County of Eaton,  Michigan,  entitled L.D.  Clark Building
Co. v. Open Plan Systems, Inc. and Wachovia Bank, N.A. (File No. 01-913-CZ). The
complaint   alleges  that  the  plaintiff   provided  labor  and  materials  for
improvement  to real  property  located in Eaton  County,  Michigan and that the
Company  failed  to pay for such  labor  and  materials  in  breach of a certain
construction  contract  between the plaintiff and the Company dated August 2000.
The  construction  contract was for the  construction  of a new  remanufacturing
facility in Lansing, Michigan. The plaintiff also alleges that it is entitled to
a  construction  lien on the property  under  Michigan law. The plaintiff  seeks
approximately $1.5 million in labor and materials plus costs,  judgment interest
and  attorneys'  fees.  On August 2, 2001,  the Company filed a Motion to Compel
Arbitration  and to Stay  Proceedings  in the case.  The Company has also made a
related filing with the American Arbitration Association to initiate arbitration
proceedings.  The  hearing  date on the  Company's  motion is set for August 30,
2001. The Company expects to vigorously defend the suit.















                                       9
<PAGE>

                             OPEN PLAN SYSTEMS, INC.



            Item 2: Management's Discussion and Analysis of Financial
                       Condition and Results of Operations

           THREE AND SIX MONTHS ENDED JUNE 30, 2001 COMPARED WITH 2000


Management Reorganization

         The Company's  Board of Directors  accepted the resignation of Mr. John
L. Hobey as Chief Executive  Officer and a director of the Company effective May
25, 2001.  Following Mr.  Hobey's  resignation,  the Board  appointed an interim
Operating  Committee to manage the day-to-day  operations of the Company until a
replacement  can be found.  The Operating  Committee  included Dave Green,  Vice
President,  Stephen P. Hindle,  Vice  President-Sales  and Marketing,  Robert E.
O'Neil Jr., Vice  President - National  Accounts and Thomas M. Mishoe,  Jr., the
former Chief  Financial  Officer of Eskimo Pie  Corporation,  who is currently a
consultant  to the  Company.  Mr.  O'Neil  left the  Company in July  2001.  The
Operating  Committee also has been tasked with the responsibility of formulating
plans to address current issues facing the Company, including the exploration of
all  available  strategic  alternatives  to enhance  financial  performance  and
shareholder value.

Restructuring

         As a result of analysis performed by the Operating  Committee,  on June
20, 2001, the Company approved and began the  implementation  of a restructuring
plan  that  closed  its  remanufacturing  facility  in  Lansing,   Michigan  and
consolidated remanufacturing operations in Richmond, Virginia; closed five under
performing sales offices located in Cincinnati, Indianapolis, Nashville, Lansing
and  Boston;  reduced  the size of sales  offices in  Philadelphia,  Atlanta and
Washington,  D.C.;  and  restructured  back office  operations  at the Company's
headquarters in Richmond, Virginia. This plan returns the Company's focus to the
remanufacturing  of Herman Miller  products,  and  discontinues  the Haworth and
Steelcase  product  lines.  In  the  second  quarter,  the  Company  recorded  a
restructuring  charge of  approximately  $4.7 million which includes an estimate
for the disposal of the existing leased  manufacturing  facility in Michigan and
related  assets,  as well as the new facility  that is under  construction.  The
largest  component  of the charge was  $3,580,000  related to the  write-off  of
remaining  goodwill  associated with the purchase of the Michigan  operations in
1996.  Other  significant  components  of  the  operational  restructuring  were
estimated  losses of $404,000 related to the disposal of property and equipment,
$105,000 for severance  costs,  $125,000  related to expected  costs under lease
arrangements,  $119,000 for shortening the amortization  period of debt issuance
costs  related to  Industrial  Revenue  Bond  proceeds  associated  with the new
facility  under   construction   to  be  repaid  as  part  of  the   operational
restructuring,   and  $156,000  for   professional   fees  associated  with  the
restructuring  plan.  In  connection  with this  plan,  the  Company  terminated
approximately 65 personnel, primarily sales personnel in offices being closed or
personnel associated with the manufacturing facility in Michigan.



                                       10
<PAGE>

                            OPEN PLAN SYSTEMS, INC.


         Prior to the end of the  quarter,  most of the affected  employees  had
been  terminated,   and  in  July  2001  the  Company  disposed  of  the  leased
manufacturing   facility  in  Michigan  and  the  related  assets.  The  Company
anticipates  completing  the asset  sales prior to the end of 2001 and the lease
termination  costs are anticipated to extend into the year 2002. Under this plan
the Company intends to dispose of the new facility  currently under construction
in Michigan,  and repay  bondholders for Industrial  Revenue Bond debt issued to
build the new  facility.  In addition to asset  balances  that have been written
down or reserved as part of this plan, approximately $420,000 remains accrued in
other liabilities relating to the operational  restructuring and is estimated to
approximate  the remaining  costs to be incurred,  which are  principally  lease
termination costs, severance, and professional fees.

         Along  with  the  operational   restructuring   the  Company   recorded
approximately $1.7 million for losses on inventory  write-downs,  which has been
classified  as a  component  of cost of  goods  sold.  These  losses  relate  to
inventory sold in July 2001 associated  with the existing  leased  manufacturing
facility in Michigan, and showroom inventory located at closed sales offices.

         Assuming the Company  obtains  ongoing  financing on viable terms,  the
Company  hopes to achieve  annual  decreases in expenses of  approximately  $3.5
million as a result of the restructuring.  The improvements are expected to come
in the way of  decreased  plant  manufacturing  expenses of  approximately  $1.8
million,   and  decreased   selling,   general  and   administrative   costs  of
approximately  $1.7 million.  The Company does expect to see a decrease in sales
due to the closing of under performing sales offices,  but expects this decrease
to be  offset  by an  increase  in  gross  margin  as a  result  of the  reduced
manufacturing expenses. It is the Company's belief that the manufacturing volume
of Herman Miller products  previously handled by the Michigan  operations can be
absorbed in Richmond.

         During  the third  quarter  of 2001,  the  Company  intends  to sell or
dissolve the joint venture in Mexico. As a result, the Company anticipates a yet
to be  determined  charge in the third  quarter of 2001  related to closing  the
Mexico City, Mexico sales office.  The Company's interest in the carrying amount
of the net assets of the Mexican operation approximates $470,000.

Results of Operations

         During the fourth  quarter of the year ended  December  31,  2000,  the
Company  recorded  significant  fourth quarter  adjustments  (see Note 13 to the
Company's  Form  10-K for the year  ended  December  31,  2000).  As more  fully
described in that note, these adjustments were recorded in the fourth quarter of
2000, as the Company  could not  determine  the amount of charges  applicable to
proceeding interim periods. Therefore, information presented for the quarter and
six months  ended June 30, 2000  reflects  amounts  previously  reported and may
contain balances that were not adjusted until the fourth quarter of 2000.

         Net  Sales.  Sales for the six months  ended  June 30,  2001 were $18.0
million,  a decrease of approximately  $1.8 million or 9% versus the same period
in 2000.  Sales for the three  months ended June 30, 2001 were $8.0  million,  a
decrease of approximately  $2.5 million or 23.8% versus the same period in 2000.
This  decrease can be  attributed  to a decline



                                       11
<PAGE>

                            OPEN PLAN SYSTEMS, INC.


in sales generated by the under performing sales offices that were  subsequently
closed as part of the  restructuring  discussed  above;  a decrease  in National
Accounts sales over last year;  and a general  softening of the economy which is
impacting sales across the industry.

         Gross  Margin.  Gross margin for the quarter and six month period ended
June 30, 2001 was ($74,000) and $2,439,000  respectively.  Exclusive of the $1.7
million  write-down  of  inventory  in the second  quarter of 2001 as  discussed
above,  gross margin was $1.6 million or 20.6% and $4.2 million or 23.1% for the
quarter and six months ended June 30,  2001,  respectively.  This  compares to a
margin for the  quarter  and six month  period  ended June 30, 2000 of 26.5% and
28.7%  respectively.  The  decrease in margin in 2001 as compared to  comparable
periods in 2000 was in part due to running two  production  facilities at levels
well below capacity in 2001. The Company believes that gross margin will improve
as a percent  of sales in the  future,  as a result of  closing  the  production
operations in Lansing, Michigan and consolidating all production in the plant in
Richmond, Virginia.

         Operating  Expenses.  The selling and  marketing  expenses  for the six
months ended June 30, 2001  increased  $697,000 or 17.7% to $4,639,000  over the
same  period in 2000.  For the  quarter  ended  June 30,  2001,  these  expenses
increased 11% over the same period in 2000, from $2,015,000 to $2,237,000.  This
increase was due to  additional  expenses  associated  with two  domestic  sales
offices and the sales  office in Mexico  City,  Mexico,  which were opened after
January 1, 2000. In the second  quarter of 2001,  these  expenses were partially
offset by a reduction  in  marketing  and  advertising  and a reduction in under
performing sales personnel, prior to the restructuring.

         General and  administrative  expenses  increased to  $1,376,000  in the
second quarter of 2001 from $887,000 reported in the second quarter of 2000. For
the six month period ended June 30, 2001, these expenses increased $805,000 over
the comparable period in 2000 to $2,286,000.  This increase was primarily due to
increased  accounting,  legal and computer consulting fees incurred during 2001.
These fees were associated with the delay in filing the Company's 2000 Form 10-K
and  first  quarter  2001  Form  10-Q as  discussed  in Part I,  Item 2 of those
documents.  In  addition,  professional  fees were  incurred  in  resolving  the
Company's  delisting  from  NASDAQ  and  subsequent  acceptance  on the NASD OTC
Bulletin  Board.  Legal,  accounting and computer  consulting  fees increased by
approximately  $760,000 for the six months  ended June 30, 2001,  as compared to
the same period in 2000.

         During  the  second   quarter  of  2001  the  Company   implemented   a
restructuring  plan and  recorded  a  restructuring  charge of $4.7  million  as
discussed above.

         Other Non-Operating Income and Expense.  Other non-operating income was
$125,000 and $11,000 for the quarter and six month  period  ending June 30, 2001
respectively.  This  compares  to an expense of  $124,000  and  $220,000  in the
comparable  periods of 2000.  Second quarter 2001 includes a gain on disposal of
fixed  assets  of  $260,000.  This  gain was a result  of the sale of  leasehold
improvements  by the Mexico City,



                                       12
<PAGE>

                            OPEN PLAN SYSTEMS, INC.


Mexico sales office,  upon relocating  their facility.  Interest expense for the
second quarter of 2001 includes the payment of approximately  $90,000 related to
the  forbearance  agreement  between the Company and its  financial  institution
entered into in May of 2001.  A similar fee was also paid in the second  quarter
of 2000 to terminate a banking  agreement with a different  institution in order
to  switch to a  commercial  banking  relationship  with the  Company's  current
financial institution.

         Income Taxes.  In the quarter and six month period ended June 30, 2001,
the Company did not record any tax benefit  associated  with the net loss due to
the  uncertainty  of  the  realization  of  potential  tax  benefits  of  future
deductions.  The Company will  re-evaluate  the  realizability  of potential net
deferred tax assets in future periods.

         Net  Loss.  The net  loss  for the  quarter  ended  June  30,  2001 was
$8,333,000  versus a net loss of $267,000  for the same period in 2000.  For the
six months ended June 30, 2001, the net loss was $9,314,000 versus a net loss of
$143,000 in 2000.  The net loss for both the  quarter and six months  ended June
30, 2001 was due to several factors including the  restructuring  charge of $4.7
million,  an inventory  valuation charge of $1.7 million,  an increase in legal,
accounting  and other  professional  fees,  and  decreased  sales and  decreased
margins due to under performing  sales offices and under utilized  manufacturing
facilities.

Liquidity and Capital Resources

         Violations  of Loan  Covenants.  The Company  maintains two bank credit
facilities  consisting  of a  letter  of  credit  facility  associated  with the
issuance of $2.5 million of Industrial Revenue Bonds to finance the construction
of a new  production  facility in  Lansing,  Michigan  and a  revolving  line of
credit.  At December  31,  2000,  the  revolving  line of credit  provided for a
maximum borrowing amount of $5,250,000 at variable interest rates. The letter of
credit facility and revolving line of credit  agreements  require the Company to
meet various restrictive  covenants,  including a defined tangible net worth, an
interest  coverage ratio and certain other  covenants.  At December 31, 2000 and
thereafter,  the Company was not in  compliance  with  certain of the  covenants
contained  in the letter of credit  facility  and the  revolving  line of credit
agreements.  As a result of the covenant  violations as well as the  significant
net loss in fiscal year 2000,  the  Company's  auditors,  in its report filed as
part of the Form 10-K,  have  expressed  substantial  doubt as to the  Company's
ability to continue as a going concern.  See "Forward Looking  Statements" below
and Note 1 to the December 31, 2000 consolidated  financial statements contained
in the Form 10-K.

         In May 2001, the Company entered into a temporary forbearance agreement
with the bank in which the bank  agreed to waive its  existing  right to declare
defaults relating to the Company's failure to comply with certain loan covenants
through June 30, 2001. Thereafter,  on August 10, 2001, the Company and the bank
entered into a new short term forbearance  agreement that expires on October 30,
2001.  The new  forbearance  agreement  provides that the bank will refrain from
exercising  any rights or remedies  based on existing  or  continuing



                                       13
<PAGE>

                            OPEN PLAN SYSTEMS, INC.


defaults,  including accelerating the maturity of the loans under the two credit
facilities,  until after the October 30,  2001  expiration  date.  Under the new
forbearance  agreement,  the line of credit was reduced from $4.65 million under
the May  forbearance  agreement to $4.55 million and will be further  reduced to
$4.4 million beginning August 15, 2001 and to $4.25 million beginning August 31,
2001. As of August 13, 2001,  approximately  $4.1 million was outstanding  under
the line of credit.  In addition,  the  interest  rate on the line of credit was
increased to LIBOR plus 6.0%. Finally, the Company is required to pay the bank a
forbearance  fee of $50,000 upon the earlier of a  refinancing  of the Company's
credit obligations to the bank or October 30, 2001.  Pursuant to the forbearance
agreement,  the bank reserves the right to declare a default and  accelerate the
loans under the two  facilities  after  October 30, 2001 if the parties have not
entered  into  amendments  to the  existing  loan  arrangements  or a subsequent
forbearance agreement.

         The cost of completing the new Lansing, Michigan production facility is
approximately $1.7 million. However, the new forbearance agreement prohibits the
Company from utilizing the approximately $2.1 million of remaining cash proceeds
from the Company's Industrial Revenue Bonds to complete the new Lansing facility
without  the prior  approval  of the bank.  The  Company  was unable to make two
progress  payments  totaling  approximately  $940,000 due on the project in June
2001 under the May 2001  forbearance  agreement.  Subsequently,  the  contractor
ceased  construction  on the project and filed a construction  lien suit against
the  Company  alleging,  among  other  things,  a  breach  of  the  construction
agreement.  See Part II,  Item 1 - Legal  Proceedings.  The Company is unable to
determine at this time whether the bank will permit such payments in the future.
Under the new forbearance agreement, the Company intends to sell the new Lansing
facility  subject to the  consent of the bank and use a portion of the  proceeds
from the sale to satisfy  amounts that may be owed to the  contractor.  However,
there can be no assurances that the Company will be able to consummate a sale of
the new  Lansing  facility.  In  addition,  the  Company  has  agreed in the new
forbearance  agreement to redeem the Industrial Revenue Bonds in connection with
any sale of the new  Lansing  facility  unless the Bonds are  assumed by a third
party with the consent of the bank. The bank has agreed upon any such redemption
to seek  reimbursement  for  draws  on the  letter  of  credit  relating  to the
redemption from the $2.1 million of escrowed proceeds remaining from the sale of
the Bonds plus the sum of $328,000 being held in a separate account at the bank.

         As of August 14,  2001,  the  Company  has been  unable to  negotiate a
permanent waiver of the Company's loan covenant  violations,  as well as revised
loan  covenants.  Any agreement  reached with the bank could result in new terms
which are less favorable than current terms under existing  agreements and could
involve a reduction in  availability of funds, an increase in interest rates and
shorter  maturities,  among other  things.  If the Company is not  successful in
securing an extension of the forbearance agreement or permanent waivers and loan
covenant amendments,  it will need to seek new financing arrangements from other
lenders.  Such  alternative  financing  arrangements  may be  unavailable to the
Company or available on terms  substantially  less favorable to the Company than
its existing  credit  facilities.  If the Company is unable to either procure an
extension of the forbearance agreement, permanent covenant violation waivers and
covenant



                                       14
<PAGE>

                            OPEN PLAN SYSTEMS, INC.


amendments  with  respect  to  existing  facilities  or  acceptable  alternative
financing,  such failures could have a material  adverse effect on the Company's
financial  condition and results of  operations.  No assurance can be given that
the Company will be able to obtain an extension  of the  forbearance  agreement,
permanent covenant violation waivers and revised loan covenants or refinance its
existing obligations.

         Expected Future Cash Flows.  The Company can give no assurance that its
current cash balances plus cash flows from  operations,  if any, and  borrowings
available  under  its line of  credit  will be  adequate  to fund  its  expected
operating  and capital  needs for the next twelve  months.  The  adequacy of the
Company's cash  resources over the next twelve months is primarily  dependent on
the  Company's  operating  results  and its  ability to  renegotiate  its credit
arrangements with its existing bank or procure alternate financing, all of which
are subject to substantial uncertainties.

         Cash flow from  operations  for the 2001 year will be dependent,  among
other things,  upon the effect of the current economic slowdown on the Company's
sales,  the impact of the  restructuring  plan and new  management's  ability to
reduce  expenses and improve the Company's  operating  performance and financial
position.

         The failure to return to profitability and optimize operating cash flow
in the  short  term,  consummate  the sale of the  partially  completed  Lansing
facility  or obtain  the  bank's  permission  to utilize  the bond  proceeds  to
complete  the  Lansing  facility,   and  successfully   renegotiate  its  credit
agreements with the bank or procure alternate  financing,  could have a material
adverse effect on the Company's liquidity position and capital resources.

Seasonality and Impact of Inflation

         The  Company has no  discernable  pattern of  seasonality.  Because the
Company  typically  ships  Work  Stations  within  four  weeks  of an  order,  a
substantial  portion of the  Company's  revenues in each  quarter  results  from
orders placed by customers during that quarter. As a result, the Company's sales
may vary from quarter to quarter.

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

Forward-Looking Statements

         The foregoing discussion contains certain  forward-looking  statements,
which may be  identified  by phrases such as "the  Company  expects" or words of
similar effect. The Private Securities  Litigation Reform Act of 1995 provides a
safe harbor for forward-looking  statements.  The Company has identified certain
important  factors  that in some cases have  affected,  and in the future  could
affect,  the  Company's  actual  results  and could cause the  Company's  actual
results for fiscal 2001 and any interim period to differ  materially  from those
expressed or implied in any forward-looking statements made by, or on behalf of,
the



                                       15
<PAGE>

                            OPEN PLAN SYSTEMS, INC.


Company.  These  factors  are  set  forth  under  the  caption  "Forward-Looking
Statements"  in Item 7 of the  Company's  Form 10-K for the  fiscal  year  ended
December 31, 2000, a copy of which is on file with the  Securities  and Exchange
Commission.  The  Company  assumes no duty to update any of the  forward-looking
statements of this report.
















                                       16
<PAGE>

                            OPEN PLAN SYSTEMS, INC.


Item 3. Quantitative and Qualitative Disclosures about Market Risk

         The Company is exposed to changes in interest rates  primarily from its
revolving  line of credit  arrangement  and from the  letter of credit  facility
related to the Industrial  Revenue Bonds issued to fund the  construction of the
new production facility in Lansing,  Michigan. The Company's interest expense is
affected by changes in  short-term  interest on the debt  outstanding  under the
revolving line of credit and Industrial  Revenue Bonds.  These  borrowings  bear
interest at variable rates (the "Borrowing Rates").  Assuming: (i) the Borrowing
Rates vary by 100 basis points from their current  levels in any given month and
(ii) the Company  maintains an  aggregate  outstanding  debt balance  subject to
these  Borrowing  Rates of $6.5 million  during the month of variance,  interest
expense would vary by approximately  $7,000 for that month. The Company does not
use derivative instruments.


















                                       17
<PAGE>

                             OPEN PLAN SYSTEMS, INC.

                                     PART II
                                OTHER INFORMATION


Item 1.   Legal Proceedings
          -----------------

          On July 13, 2001, the Company was served with a complaint filed in the
          Circuit Court for the County of Eaton,  Michigan,  entitled L.D. Clark
          Building Co. v. Open Plan Systems,  Inc. and Wachovia Bank, N.A. (File
          No.  01-913-CZ).  The complaint  alleges that the  plaintiff  provided
          labor and materials for improvement to real property  located in Eaton
          County, Michigan and that the Company failed to pay for such labor and
          materials  in breach of a certain  construction  contract  between the
          plaintiff and the Company dated August 2000. The construction contract
          was for the construction of a new remanufacturing facility in Lansing,
          Michigan.  The  plaintiff  also  alleges  that  it  is  entitled  to a
          construction  lien on the property  under  Michigan law. The plaintiff
          seeks  approximately  $1.5 million in labor and materials  plus costs,
          judgment  interest and attorneys' fees. On August 2, 2001, the Company
          filed a Motion to Compel  Arbitration  and to Stay  Proceedings in the
          case.  The  Company has also made a related  filing with the  American
          Arbitration  Association  to  initiate  arbitration  proceedings.  The
          hearing date on the Company's  motion is set for August 30, 2001.  The
          Company expects to vigorously defend the suit.


Item 2.   Changes in Securities and Use of Proceeds
          -----------------------------------------

          Not applicable.

Item 3.   Defaults upon Senior Securities
          -------------------------------

          The Company is not in compliance with certain loan covenants under its
          bank  credit  facilities.  See  Part  I,  Item  2 and  Note  6 to  the
          Consolidated Financial Statements for additional information.

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

          Not applicable.

Item 5.   Other Information
          -----------------

          Not applicable.




                                       18
<PAGE>

                            OPEN PLAN SYSTEMS, INC.


Item 6.   Exhibits and Reports on Form 8-K

          (a)   Exhibits:

          The  registrant has included the following  exhibits  pursuant to Item
          601 of Regulation S-K.

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

                 10.1         Forbearance  Agreement  dated   August  10,  2001,
                              between the Company and Wachovia Bank, N.A.

                  11          Statement Re: Computation of Per Share Earnings



          (b)   Reports on Form 8-K

          The  Company  filed  a  Current  Report  on Form  8-K on May 25,  2001
          reporting  under  Items 5 and 7 that  the  Company  had  issued  press
          releases  dated  April  30,  2001,  April 30,  2001 and May 24,  2001,
          respectively,  that announced the Company's  receipt of a Nasdaq Staff
          Determination,  the hiring of an executive  search firm and the filing
          of the  Company's  Form 10-K for the fiscal  year ended  December  31,
          2000.

















                                       19
<PAGE>

                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended,  the  registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.



                                           OPEN PLAN SYSTEMS, INC.
                                           (Registrant)


Date: August 14, 2001                      By: /s/ Anthony F. Markel
                                               ---------------------------------
                                               Anthony F. Markel
                                               Chairman of the Board


Date: August 14, 2001                      By: /s/ Anthony F. Markel
                                               ---------------------------------
                                               Anthony F. Markel
                                               (Principal Financial Officer)



<PAGE>

                             OPEN PLAN SYSTEMS, INC.

                                  EXHIBIT INDEX



No.           Description
---           -----------

10.1          Forbearance  Agreement  dated August 10, 2001, between the Company
              and Wachovia Bank, N.A.

11            Statement Re: Computation of Per Share Earning