UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549

                                   FORM 10-K


              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                    For the fiscal year ended June 30, 1998
                         Commission file number 1-14510

                           PRECISION AUTO CARE, INC.
             (Exact name of registrant as specified in its charter)

              Virginia                                            54-1847851
---------------------------------                          ---------------------
(State or other jurisdiction                               (IRS Employer ID No.)
of incorporation or organization)

748 Miller Drive, S.E.
Leesburg, Virginia                                                   20175
----------------------------------------                          ----------
(Address of principal executive offices)                          (Zip Code)

Registrant's telephone number, including area code:  (703) 777-9095
                                                     --------------

Securities registered pursuant to Section 12(b) of the Act:  None
                                                             ----

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.01 per share
                     --------------------------------------
                                (Title of class)

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

<PAGE>


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

The aggregate market value of the voting stock held by non-affiliates of the
Corporation at September 18, 1998 was $16,726,031 based on the closing price of
$7.00 per share. As of that date, 6,120,543 shares of Common Stock were issued
and outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE
                      -----------------------------------

The information required by Part III is incorporated by reference from the
registrant's definitive proxy statement to be filed pursuant to Regulation 14A.


<PAGE>


                                                 TABLE OF CONTENTS

        Explanatory Note: Certain information called for by items 6, 7, 7A, 8
and 14 to this Annual Report on Form 10-K cannot be obtained on a timely basis
by the Registrant without unreasonable effort or expense and is the subject of a
Form 12b-25 filing made by the Registrant.

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<S><C>
PART I            Item 1.           Business                                                                    1
                  Item 2.           Properties                                                                 15
                  Item 3.           Legal Proceedings                                                          16
                  Item 4.           Submission of Matters to a Vote of Security Holders                        16

PART II           Item 5.           Market for Registrant's Common Equity and Related
                                    Stockholder Matters                                                        17
                  Item 6.           Selected Financial Data                                                    18
                  Item 7.           Management's Discussion and Analysis of Financial
                                    Condition and Results of Operations                                        18
                  Item 7A.          Quantitative and Qualitative Disclosure about Market Risk                  19
                  Item 8.           Financial Statements and Supplementary Data                                19
                  Item 9.           Changes in and Disagreements With Accountants on
                                    Accounting and Financial Disclosure                                        20

PART III          Item 10.          Directors and Executive Officers of the Registrant                         21
                  Item 11.          Executive Compensation                                                     21
                  Item 12.          Security Ownership of Certain Beneficial Owners
                                    and Management                                                             21
                  Item 13.          Certain Relationships and Related Transactions                             21

PART IV           Item 14.          Exhibits, Financial Statement Schedules and Reports
                                    on Form 8-K                                                                22
</TABLE>


                                     - i -

<PAGE>


                           Forward-Looking Statements


         This report includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 (the "Securities Act") and Section 21E
of the Securities Exchange Act of 1934. When used in this report, the words
"anticipate," "believe," "estimate," "expect," "intend" and "plan" as they
relate to Precision Auto Care, Inc. or its management are intended to identify
such forward-looking statements. All statements regarding Precision Auto Care,
Inc. or Precision Auto Care, Inc.'s expected future financial position, business
strategy, cost savings and operating synergies, projected costs and plans, and
objectives of management for future operations are forward-looking statements.
Although Precision Auto Care, Inc. believes the expectations reflected in such
forward-looking statements are based on reasonable assumptions, no assurance can
be given that such expectations will prove to have been correct. Important
factors that could cause actual results to differ materially from the
expectations reflected in the forward-looking statements herein include, among
others, the factors set forth under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Risk Factors,"
general economic and business and market conditions, changes in federal and
state laws, increased competitive pressure in the automotive aftermarket
services business, and costs or difficulties relating to the integration of
acquired businesses (including the businesses the Company acquired in connection
with its November, 1997 initial public offering), including difficulties in
achieving expected cost savings and operating synergies.


                                     - ii -


<PAGE>



PART I

Item 1.           Business
                  --------

Overview
--------

Precision Auto Care, Inc. ("Precision Auto Care" or the "Company") is a provider
of automotive maintenance services with franchised and Company-operated centers
located in the United States and in certain international locations. The
Company's services are provided to automobile owners and focus on those high
frequency items required to properly maintain the vehicle on a periodic basis.
The Company offers these services through three "Precision" brands that are
intended to be complementary:

       *   Precision Tune Auto Care provides automotive maintenance services
           which require relatively short service times including engine
           performance, oil change and lubrication and brake services. At June
           30, 1998, these services were provided at 556 Precision Tune Auto
           Care centers owned and operated by franchisees and 8 owned and
           operated by the Company.

       *   Precision Auto Wash provides self-service and touchless automatic car
           wash services. The advanced operating systems used at prototype
           Precision Auto Wash centers permit remote monitoring and
           administration of operations. The no-touch car wash technology
           employed in Precision Auto Wash centers also provides a high-quality
           wash with less risk of vehicle damage than traditional car wash
           systems. At June 30, 1998, there were 36 Company-owned car wash
           centers and 9 franchised car wash centers.

       *   Precision Lube Express  provides  convenient fast oil change and lube
           services.  Because Precision Lube Express centers consist of "above
           ground"  configured  modular  buildings manufactured  and sold by the
           Company,  operations  can commence  more quickly and with less
           capital  investment than is the  case  for many  competitors.  At
           June 30,  1998, there were 7 Precision  Lube Express  centers  owned
           and operated by franchisees  and 7 owned and  operated  by the
           Company.  As of that  date  there  were also 19 Lube  Depot centers
           operated by  franchisees,  some of which are expected to become
           Precision Lube Express centers.

The Company supports its franchisees and Company-owned centers by distributing
certain automotive and car washing parts and supplies, and manufacturing and
distributing pre-fabricated modular buildings and car wash equipment and
chemicals.

                                      -1-

<PAGE>


The Company, a Virginia corporation, was incorporated in April 1997, but through
predecessors has been in the automotive maintenance services business for over
twenty years. The first Precision Tune was established in 1976 to provide quick,
convenient and inexpensive engine tune-ups. Franchising of Precision Tune
centers began the next year. As changes in automotive technology reduced the
need for traditional tune-ups, Precision Tune expanded its menu of offered
automotive maintenance services to include oil changes, fuel injection service,
air conditioning service, cooling system service, brake service and more
diagnostic services. In September 1996, Precision Tune's name was changed to
Precision Tune Auto Care to reflect the shift in emphasis.

The Company is the result of the November 1997 combination of WE JAC Corporation
(the owner of Precision Tune Auto Care) and nine other automotive maintenance
services companies in connection with the Company's initial public offering (the
"IPO Combination"). The nine companies joined with WE JAC Corporation in the IPO
Combination were: Miracle Industries, Inc.; Lube Ventures, Inc.; Rocky Mountain
Ventures, Inc.; Rocky Mountain Ventures II, Inc.; Prema Properties, Ltd.;
Miracle Partners, Inc.; Ralston Car Wash Ltd.; KBG, LLC and Worldwide Drying
Systems, Inc. (referred to individually as a "Predecessor Company" or
collectively, the "Predecessor Companies"). With the IPO Combination, the
"Precision" family of brands was expanded to include car wash and quick oil
change and lube services. In March 1998, the Company acquired Promotora de
Francquicias Praxis S.A. de C.V., previously a holder of a master franchise
agreement for Precision Tune Auto Care in Mexico and Puerto Rico.

Operations
----------

Precision Tune Auto Care

Precision Tune Auto Care is an automotive maintenance service provider
specializing in quality maintenance services that require relatively short
service times. At June 30, 1998, these services were provided at 556 Precision
Tune Auto Care centers owned and operated by franchisees and 8 owned and
operated by the Company. The automotive care services provided by Precision Tune
Auto Care centers include the diagnosis, maintenance and repair of ignition
systems, fuel systems, computerized engine control systems, cooling systems,
starting/charging systems, emissions control systems, engine drive train
systems, electrical systems, air conditioning systems, oil and other fluid
systems, and brake systems.

Prototype Center. The current prototype Precision Tune Auto Care center is a
free-standing building with six to eight service bays, two to four of which are
drive-through and include pits to facilitate fast oil change and lubrication
services. Approximately 42% of the Company's existing domestic Precision Tune
Auto Care centers have at

                                      -2-

<PAGE>

least six service bays. The center is designed to be located on a half-acre lot,
in a high-traffic commercial area. Each center has Precision Tune Auto Care
signage to create a consistent image and heightened customer recognition.
Precision Tune Auto Care centers are generally open six days a week. Each center
maintains a broad inventory of parts and accessories, including oil and other
automotive fluids, having an aggregate average value of approximately $15,000.
The design and operation of each center is intended to provide the customer with
a superior experience by offering the customer high quality services quickly in
clean, well-run facilities. Exclusive of real estate, the estimated initial
capital required to open a prototype Precision Tune Auto Care center ranges from
$126,000 to $200,000.

Franchisees typically develop Precision Tune Auto Care centers either by
entering into a build-to-suit lease, under which the landlord constructs the
center and leases it to the franchisee, or by purchasing land and building the
facility. The Company typically seeks sites in commercial areas with a minimum
population of 50,000 people within a five mile radius and 24-hour drive-by
traffic of at least 20,000 cars. The Company aims to saturate existing markets
before opening centers in markets where Precision Tune Auto Care has no presence
in order to create and take advantage of advertising, managerial and operating
support efficiencies. The Company actively assists franchisees with site
selection and evaluation of proposed sites, and the Company has the right to
reject sites selected by franchisees.

Retail Marketing. Precision Tune Auto Care's marketing objectives at the retail
level are to increase sales, enhance first-time customers' experiences, and
bolster customer retention efforts. To further these objectives, Precision Tune
Auto Care has developed and implemented a marketing plan containing programs and
materials for use by Precision Tune Auto Care centers. The plan includes
targeted marketing programs designed to reach key market segments, in-store
merchandising materials designed to enhance retail sales and first time customer
trials, and other local marketing materials (e.g., second car discounts, service
reminder cards, and ATM receipt coupons) designed to generate customers and
improve customer retention. The Company's current data base includes
approximately three million names. The Company uses this data to analyze
services provided by Precision Tune Auto Care centers. Moreover, franchisees can
access the data for the purpose of issuing service reminder notices and other
promotional purposes. Precision Auto Care, in conjunction with an advertising
cooperative funded by franchisees, provides a variety of marketing materials to
franchisees, including television and radio commercials, newspaper, direct mail
material, and in store promotional material. In addition, a number of sales
promotion program packages, including grand opening, anniversary and peak season
promotional packages, have been developed.

Training and Operational Support. A significant element of Precision Tune Auto
Care's commitment to service is its training program for franchisees. New
franchisees are required to successfully complete 80 hours of initial training
at the Company's

                                      -3-

<PAGE>


national training center in Leesburg, Virginia. The Company also offers a full
line of technical training, including courses on engine performance, fuel
systems and emissions, automotive electronics, fuel injection, and brake
certification. These courses, which include both classroom and hands-on
training, are designed to allow franchisees and service center technicians to
maintain and update their technical capability to service today's more
technically complex vehicles. Additionally, the Company offers a program through
which trainers are available to franchisees onsite. Generally, area developers
also are required to maintain a training facility and have one certified trainer
on staff to provide local technical training and certification. Upon opening a
new center, training crews are onsite for at least the first two business days
to assist in the startup process.

The Company has designed a policies and procedures manual to simplify the
management and operational challenges faced by a franchisee, maximize the
franchisee's revenue and earnings, and provide a consistent customer experience
throughout the Precision Tune Auto Care system. At a minimum, each center in the
system receives an evaluation utilizing a standard evaluation report on a
quarterly basis. In addition, an independent service is retained to "mystery
shop" approximately one-third of Precision Tune Auto Care centers each year and
supply independent feedback on the quality of service provided.

Management also has developed the Precision Information Network ("PIN"), a
proprietary point of sale computer system, and has made this system available to
franchisees. The latest version of PIN is a Windows-based system which employs
touch-screen technology and is designed to be user friendly. The PIN system
provides reports on productivity, cost of goods, labor, inventory and line of
service information, and includes a marketing database module that facilitates
the tracking of customer information for the development of direct mail
marketing campaigns and other marketing strategies. Remote-location polling of
information and electronic ordering from the Company's parts and equipment
division are features currently under development. Approximately 38% of the
Company's domestic franchised centers have installed a version of the PIN
system.

Franchise Marketing. The Company (through a Predecessor Company) has marketed
franchises for Precision Tune Auto Care centers since 1977. The Company's
franchise sales process includes advertising in appropriate franchise and
business publications, conducting franchise sales seminars, and maintaining a
home page on the Internet through which interested parties may submit a
franchise inquiry. Prospective franchisees are asked to complete a Confidential
Qualifications Report, which serves as the initial screen to determine whether a
prospect is qualified. The Company seeks individuals with management experience
who will commit full time to the operation of their franchise and who have a
minimum of $50,000 and $150,000 in liquid assets and net worth, respectively.

                                      -4-

<PAGE>


Precision Tune Auto Care's area development system has played a significant role
in the Company's franchise development efforts. Under this system, Precision
Tune Auto Care has entered into area development agreements that grant area
developers the right and obligation to develop franchises on Precision Tune Auto
Care's behalf within specific geographic regions for stated periods of time.
Franchise agreements within the area are between the Company and the franchisee.
The area developer typically receives up to one-half of the initial franchise
fee, one-half of the subsequent royalty revenues and one-half of franchise
renewal and transfer fees. After the creation of a franchise, the area developer
performs most of Precision Tune Auto Care's franchisor obligations. Generally,
the Company is free to establish and operate Company-owned centers in areas in
which it has granted development rights to area developers. In that event the
Company is required to pay the area developer amounts equal to the royalty
payments that the area developer would otherwise receive if the center was being
operated by a franchisee. As of June 30, 1998, 25 area developers had an
ownership interest in a total of 131 Precision Tune Auto Care centers
(representing 29% of the total number of centers) and provided support to
another 228 centers.

Open Area Development. Precision Tune Auto Care's current strategy is also to
pursue the direct development of open areas in which area developers have not
been granted rights. To facilitate this strategy, the Company has formed a
franchise development team to pursue Precision Tune Auto Care's open area
development plan. This plan, which includes direct franchising and the
development of Company-owned stores for ultimate sale under the Turnkey Program
discussed below, addresses such factors as market demographics, development
resources (e.g., advertising and public relations vehicles, developers of
commercial real estate), criteria for initial center development, and criteria
for additional center development. Based on these factors, a specific expansion
strategy for each target area is developed. The Company believes that
significant expansion potential exists in areas not controlled currently by area
developers.

Precision Auto Wash

The Company is the owner, operator and franchisor of technologically-advanced
self-service and touchless automatic car wash centers. At June 30, 1998, there
were 36 Precision Auto Wash centers owned and operated by the Company. As of
that date, there were 9 franchised car wash centers.

The Company believes that the Precision Auto Wash system represents the
state-of-the-art in modern touchless automatic and self-service car washing
capabilities.

The computer-based operating system the Company developed for use in its car
wash centers includes the following features:

                                      -5-

<PAGE>


       *   Computerized control of the wash system which allows the operator to
           change time cycles, and equipment functions, and to monitor the
           status of operations, quickly, easily and cost-effectively, from a
           remote location on a laptop personal computer.

       *   The ability for customers to quickly and easily contact a central
           national customer help center on a dedicated toll-free number in the
           event of an equipment malfunction.

       *   A frequent wash card system, utilizing bar-code technology, rewards
           customers with free washes based upon wash frequency, while
           collecting valuable marketing data.

       *   Through its exclusive integrated voice, LED display and video
           instruction features, the system provides the customer with
           step-by-step instructions of how to operate the system.

       *   A grace period feature permits the customer to continue the wash
           cycle by inserting additional quarters after his or her initial time
           has expired.

       *   A bonus time feature allows customers more time per coin during
           off-peak hours.

The system also includes several important mechanical features which provide the
motorist with a superior car wash. In the automatic bay, the HydroSpray unit
travels around the vehicle in a heated, galvanized track enabling the car wash
to be open 24 hours a day, 365 days a year. Motorized wash wands and high
pressure nozzles continuously sweep dirt and grime from the vehicle. Each wash
is finished with a spot-free rinse and dried using proprietary dryers. In the
self-service bay, the customer controls the entire wash process by means of a
wash wand and foaming brush system. Many motorists prefer self-service car
washing because they maintain total control over the entire wash process and the
amount of money they spend. Used properly, the self-serve wash produces results
similar to those of the automatic wash. Because the system is operated by an
integrated computer control system, the foregoing features may be modified and
tailored to each specific location, depending on customer needs and market
conditions.

Centers generally include powerful vacuums that deliver maximum cleaning power
and feature clear, graphic instructions. A timer offers a "Last Coin Alert,"
"Extra-Time" service, and a "Count-Down" display of time remaining. All
Precision Auto Wash centers also offer a complete line of auxiliary vending
items such as towels, wet towels and protective sealants. Depending on market
conditions and requirements, other services may be offered as well such as
fragrance-dispensing machines and carpet shampooers.

                                      -6-

<PAGE>


The Company is continuing the process begun upon the completion of its initial
public offering of outfitting acquired car wash centers with its proprietary
operating system and marketing features of the Precision Auto Wash system, and
the Precision brand signage. This conversion will also generally be necessary in
connection with any auto wash companies or centers the Company may acquire in
the future. Nine of the Company-owned centers have the complete proprietary
operating system.

Prototype Center. There are two types of prototype Precision Auto Wash centers:
(i) the "Classic," a stand-alone facility consisting of one automatic and four
self-service car wash bays; and (ii) the "Junior," a one-bay automatic car wash
facility to be located on the same site as a Precision Tune Auto Care center or
a Precision Lube Express center. The "Classic" Precision Auto Wash Center is
designed to be placed on a half-acre lot. Exclusive of real estate, the
estimated initial investment to open a "Classic" Precision Auto Wash center
ranges from $360,000 to $462,000. The initial investment required for a "Junior"
Precision Auto Wash, exclusive of real estate, ranges from $128,000 to $177,000.

Retail Marketing. The Company believes that Precision Auto Wash will enjoy
significant benefits from consumer recognition of the "Precision" brand name. At
present, marketing initiatives at the retail level include (i) a grand opening
ceremony to publicize the opening of each new center, (ii) frequent usage/swipe
card system to encourage repeat business, (iii) direct mail marketing, (iv)
quarterly newsletter publication and distribution to customers, (v) advertising
on the back of grocery store receipts, (vi) customer appreciation days, and
(vii) fleet account solicitation.

Training and Operational Support. A three-day formal pre-opening training
program is required for all Precision Auto Wash franchisees prior to the opening
of a center. Precision Auto Wash provides its franchisees with an operations
policy and procedures manual, and performs a thorough center evaluation on a
quarterly basis. Precision Auto Wash centers participate in "mystery shopper"
and customer service programs. Field operations, marketing and training support
are provided by Company personnel.

Franchise Marketing. Prospective Precision Auto Wash franchisees are recruited
and granted franchises in accordance with the same processes and techniques that
are used to recruit and license prospective Precision Tune Auto Care
franchisees. Area developers who agree to become a Precision Auto Wash area
developer in their territory are paid a portion of the initial franchisee fee
and continuing royalty in consideration for assisting in the development and
ongoing support of a Precision Auto Wash center. It is anticipated that
Precision Auto Wash franchisees generally will purchase equipment manufactured
by the HydroSpray Car Wash Equipment Co., Ltd. ("HydroSpray") and Worldwide
Drying Systems, Inc. ("Worldwide"), subsidiaries of the Company, and the
operational system package from the Company.


                                      -7-

<PAGE>


Precision Lube Express

Precision Lube Express is the owner, operator and franchisor of centers which
provide fast automobile oil change, lubrication, filter replacement and related
basic services. Precision Lube Express centers also check and fill vital fluids,
and conduct vehicle safety inspections, including inspection of exhaust systems.
Precision Lube Express offers its customers air filters, PCV valves, breather
filters, wiper blades and assorted engine additives. Precision Lube Express
centers top off vital fluids between customer's oil changes at no charge. At
June 30, 1998, there were 7 Precision Lube Express centers owned and operated by
franchisees and 7 owned and operated by the Company. As of that date there were
also 19 Lube Depot centers operated by franchisees, some of which are expected
to become Precision Lube Express centers.

The Company believes that the "above-ground" configuration of the modular
Precision Lube Express building manufactured and sold by the Company enables
Precision Lube Express operators to commence operations more quickly and with
lower levels of initial investment than many of its competitors. Unlike
traditionally constructed fast oil change and lube centers which include an
in-ground service pit, the Company's modular centers can be relocated or
expanded quickly. In addition, the modular Lube Express building can be located
on a relatively small piece of property. Unlike certain of its competitors,
Precision Lube Express centers generally do not perform differential fluid
changes, radiator flushes or other automotive maintenance or repair work.
Accordingly, the Company believes that this enables Precision Lube Express
operators to provide services more inexpensively than their competitors because
Precision Lube Express operations require less skilled labor. Because the
Precision Lube Express building is modular and relatively small, it can
sometimes be located on the same site as a Precision Auto Wash center, as well
as other retail locations.

Precision Lube Express marketing emphasizes the basic "hassle-free" fast oil
change and lube services provided by Precision Lube Express.

Prototype Center. The prototype Precision Lube Express Center consists of a one
or two bay unit. The size of the site will depend on the size of the center,
with 50 feet by 100 feet the minimum required for a one-bay unit. Exclusive of
real estate, the estimated initial investment to open a Precision Lube Express
prototype Center ranges from $132,000 to $253,000.

Retail Marketing. The Company believes that Precision Lube Express will enjoy
significant benefits from consumer recognition of the "Precision" brand name.
The Company believes retail sales should be further stimulated by cross
marketing opportunities generated through Precision Lube Express's association
with Precision Tune Auto Care and Precision Auto Wash.

                                      -8-

<PAGE>


Specific marketing initiatives at the retail level include (i) VIP cards,
granting customers special rates and other benefits, (ii) point-of-sale
marketing materials, including frequent usage cards that provide customers with
free oil changes to encourage repeat business, (iii) radio and print media
advertising, and (iv) direct mail marketing.

Training and Operational Support. Precision Lube Express provides a one-week
training program that franchisees are required to complete successfully before
opening a Precision Lube Express center. The program addresses the following
areas: computer system operations, lubrication equipment training, center
operations, customer service, and advertising.

The Company actively supports its Precision Lube Express franchisees. Each
center receives operational visits similar to Precision Tune Auto Care centers
and are included in mystery shopper and customer service programs. Field
operations, marketing and training support are provided using the existing
Precision Tune Auto Care structure, with area developer personnel or corporate
personnel, as applicable.

Franchise Marketing. Prospective Precision Lube Express franchisees are
recruited and granted franchises in accordance with the same processes and
techniques that are used to recruit and license prospective Precision Tune Auto
Care franchisees.

Manufacturing and Distribution
------------------------------

The Company's manufacturing and distribution operations account for a
significant portion of the Company's revenues. As more fully described below,
these operations allow the Company to promote uniform quality of supplies and
equipment used in each "Precision" center. The Company does not rely heavily on
any single supplier for the supply of any materials, such as oil, equipment or
raw materials or components the Company utilizes in its manufacturing
operations.

Precision Tune Auto Care. Precision Automotive Components ("PAC"), a distributor
of automotive parts and equipment located in Winchester, Virginia, has been an
integral part of the Precision Tune Auto Care system since its inception. PAC
sells a complete line of quality ignition parts, oil and air filters, brake
parts, diagnostic equipment, signage, and other items necessary and incidental
to the outfitting and operation of Precision Tune Auto Care centers. PAC carries
an inventory of approximately 5,500 stock keeping units ("SKUs"), many of which
are private labeled for the Precision brand and provides two-day delivery to
centers anywhere in North America. PAC supplies oil and air filters, spare parts
and other supplies to Precision Lube Express centers and Precision Auto Wash
centers.

Precision Auto Wash. HydroSpray, a Company subsidiary, manufactures, distributes
and sells the car wash equipment used in the Precision Auto Wash system. The

                                      -9-

<PAGE>


Company believes that the HydroSpray equipment package is a leading car wash
equipment package on the market because it includes such unique features as an
integrated computer system that controls the auto wash system and allows remote
dial-in access for system status reports and the diagnosis of maintenance
problems along with its recently redesigned automatic tower and track which
adjusts to the size of each vehicle. HydroSpray will sell equipment to Precision
Auto Wash franchisees and to other third parties for installation in car wash
centers that are not franchised or otherwise affiliated with Precision Auto
Wash. HydroSpray's operations principally include the assembly of parts that
have been manufactured by suppliers to HydroSpray specifications. This assembly
process is conducted at HydroSpray's 40,000 square foot manufacturing facility
located in Cedar Falls, Iowa.

National Auto Chemicals blends and distributes the chemical solutions used in
Precision Auto Wash centers including the "Mean Green" presoak and other
solutions of the type which are required in the Precision Auto Wash system.
National Auto Chemicals makes its chemicals and supplies available to Precision
Auto Wash franchisees and other third parties who are not franchisees or
otherwise affiliated with Precision Auto Wash.

Worldwide manufactures and distributes drying systems for installation in
automatic car washes. Worldwide's dryers are available to Precision Auto Wash
franchisees and other third parties who are not franchisees or otherwise
affiliated with Precision Auto Wash. Worldwide's operations are conducted out of
a 9600 square foot leased plant outside Denver, Colorado.

Precision Lube Express. Precision Building Solutions Incorporated ("PBSI")
manufactures and installs the modular building and equipment system used by
Precision Lube Express centers. PBSI conducts these manufacturing operations at
a 27,000 square foot facility located in Mansfield, Ohio. PBSI also sells its
modular buildings to third parties for various commercial applications. The
buildings are delivered, installed, field-tested, and outfitted with all of the
supplies and tools necessary to commence operations immediately. Most
installations are complete within three to five business days from the date of
receipt, thus providing competitive time and cost advantages over traditional
construction. PBSI purchases parts from third-party suppliers which are
manufactured to the PBSI's specifications.

The Company is not dependent upon any single supplier and the parts and
materials the Company uses in connection with its manufacturing process can be
obtained from a variety of suppliers.

Franchising Activities
----------------------

Precision Tune Auto Care. As of June 30, 1998, substantially all of the
Company's Precision Tune Auto Care centers were owned and managed by
franchisees. Precision

                                      -10-

<PAGE>

Tune Auto Care's franchises have been sold during the preceding years under
franchise agreements that vary in detail as the Precision Tune Auto Care's
franchise program has evolved. Royalty rates in existing franchise arrangements
range from 6% to 7.5%. Currently, the Precision Tune Auto Care's standard
franchise agreement requires payment to the Company of an initial franchise fee
of $25,000 and a continuing royalty of 7.5% of weekly gross receipts. In
addition, the franchisee is required to contribute to or expend 9% of weekly
gross receipts on advertising, 1.5% of which is currently paid into the national
advertising fund and 7.5% of which is spent locally. The current standard form
franchise agreement has an initial term of ten years and provides for five year
renewal options.

The Company has implemented a program under which qualified franchisees are
eligible to have their royalty rate reduced to 6% if they satisfy certain
criteria. Under the program, franchisees are also provided with an incentive to
purchase additional Precision Tune Auto Care franchises. Any franchisee who has
owned and operated a center for at least one year in accordance with this
program will be charged an initial franchise fee of $15,000 for a second
franchise and $10,000 for each additional franchise purchased, provided certain
conditions are met.

Under its current form of franchise agreement, the Company has a continuing
obligation to provide technical and administrative support, supervisory
services, centralized advertising, and training and related support to its
franchisees. In certain regions, the Company has delegated these duties to area
developers under its area developer system.

Upon non-renewal and transfer, the Company has the first right to purchase the
operating assets and obtain an assignment of leased facilities in certain cases.
In certain situations, the Company will repurchase franchise rights. The
decision to repurchase is made solely at the Company's discretion and is not a
contractual obligation. The Company also periodically obtains possession of some
franchisees' franchise rights by exchanging for such rights notes payable or
other consideration, or by exercising rights outlined in the Franchise
Agreements.

The Company also enters into master franchise agreements to develop
international markets. At the present time, the Company has master franchise
agreements in Taiwan, Singapore, Indonesia, Oman, the Bahamas, Curacao/Aruba,
Jamaica, the Dominican Republic, St. Croix, Peru, and Brazil. Generally, the
master franchisee pays a license fee and is required to develop Precision Tune
Auto Care centers in accordance with an agreed upon schedule within the defined
area. Franchise agreements within the area are between the master franchisee and
the unit franchisee. The master franchisee is required to perform all of the
obligations of the franchisor including training, administrative and operational
support, and the Company generally receives 20% of the initial franchise fee and
up to one-third of ongoing royalty fees.


                                      -11-

<PAGE>


Precision Auto Wash. The Company sold six car wash centers to franchisees under
its Turnkey Program in the year ended June 30, 1998. The Company is also
aggressively marketing Precision Auto Wash franchises. The standard franchise
agreement for Precision Auto Wash franchisees will require the payment of an
initial franchise fee of $20,000. The initial franchise fee includes a $5,000
credit that may be applied towards parts and supplies purchased from the
Company. Franchisees will be required to pay continuing royalties of 5% of
weekly gross receipts.

Franchisees will also be required to contribute an amount equal to 2% of their
monthly gross receipts to a national advertising fund and an additional amount
of their gross receipts royalties to a local advertising cooperative. In
addition, a franchisee will receive franchise protection within a specified
area. Precision Auto Wash franchise agreements have an initial term of ten years
and provide for five-year renewal options.

Precision Lube Express. The standard franchise agreement for Precision Lube
Express franchisees requires the payment of an initial franchise fee of $12,500.
Franchisees are required to pay continuing royalties of 5% of weekly gross
receipts. Precision Lube Express franchisees also are required to contribute an
amount equal to 2% of their monthly gross receipts to a national advertising
fund and an additional amount of their gross receipts royalties to a local
advertising cooperative. The franchise agreements have an initial term of ten
years and provide for five-year renewal options. Certain Precision Lube Express
franchise agreements (namely those inherited in connection with the IPO
Combination) have terms that vary with the standard agreement now in use.

Precision Turnkey Program. In addition to the direct franchising activities
discussed above, pursuant to which franchisees select a site and subsequently
develop a Precision Auto Care center on the site, the Company operates a
Precision Turnkey Program. Under this program, franchisees purchase either
existing Company-owned centers or recently-developed centers from the Company.
At the time the franchisee purchases the center, the franchisee also purchases a
franchise license (pursuant to which the franchisee agrees to pay royalties to
the Company on the same basis as franchisees who execute the Company's current
standard form of franchising agreement) as well as the center's assets and
goodwill. The program is designed to enhance franchising sales by providing
readily available and immediately operational sites of Company-selected
locations.

Competition
-----------

The Company encounters competition in all aspects of its business, including the
sale by Precision Tune Auto Care, Precision Auto Wash and Precision Lube Express
centers of automotive maintenance and repair services, self-service and
automatic car wash services and fast oil and lubrication services, respectively.
The Company believes that automobile dealerships, including recently emerging
national and regional new and used

                                      -12-

<PAGE>

auto dealerships, represent Precision Tune Auto Care's principal competitors.
Other Precision Tune Auto Care competitors include tire companies and regional
under-the-hood service specialists. National competitors within Precision Tune
Auto Care's market include Sears Auto Center and the automotive maintenance
centers operated by Goodyear, Firestone and Penske, among others. Its regional
competitors include All Tune and Lube (East Coast), EconoLube and Tune (West
Coast), Tunex International, Inc. (Rocky Mountain region), Tune-Up Masters and
Speedee Oil Change and Tune-Up (Southern region), among others. The Company
believes that the greater technical complexity of today's vehicles provides a
substantial barrier to entry for competitors in the "under-the-hood" segment of
the automotive care services industry.

Precision Auto Wash competes not only with other self-service automobile car
washes but with car wash services provided by full-service tunnels, exterior
only tunnels, hand washes, oil company washes, and do-it-yourself car washing.

Precision Lube Express also competes in the service segment of the automotive
aftermarket industry. According to the American Oil Change Association, an
estimated 650 million oil changes are performed annually in cars and light
trucks. These oil changes are performed by individuals or are performed
professionally. Professional oil changes are performed in all types of
automotive aftermarket outlets including fast oil change and lubrication
facilities such as those operated by the Company, car dealerships, and gasoline
stations. On a national level, Precision Lube Express competes with a number of
major oil manufacturers dominating the fast lube market. These include Pennzoil
Company (Jiffy Lube International, Inc.), Quaker State Corp. (Q-Lube Inc.),
Valvoline Company/Ashland Oil Inc. (Instant Oil Change) and Texaco Inc. (Express
Lube), among others. In addition, Precision Lube Express competes with regional
fast oil and lubrication operations including All Tune and Lube, EconoLube and
Tune, Tunex International Inc. and Speedee Oil Change and Tune-Up, among others.

The Company believes that the Precision Tune Auto Care, Precision Auto Wash and
Precision Lube Express centers all compete on the basis of customer awareness
through advertising, service, convenience and location and, to a lesser extent,
on price. The Company believes that the potential ability to offer all of the
services provided by each of the operations at one center or in centers in close
proximity to one another will be a significant competitive advantage.

The Company's HydroSpray subsidiary competes with many other manufacturers of
self-service and touchless automatic car wash equipment manufacturers. Many of
these competitors are larger and well-established. The Company's competitors
include, but are not limited to, Mark VII Industries, Inc., Ryko, PDQ and many
smaller businesses. Some of these companies are well capitalized and have long
standing relationships with large oil companies who frequently purchase their
equipment for installation at car washes located on or adjacent to gasoline
stations.

                                      -13-

<PAGE>


Governmental Regulation
-----------------------

Franchising Regulation. The Company is subject to federal, international and
state laws and regulations, including the regulations of the Federal Trade
Commission as well as similar authorities in individual states, in connection
with the offer, sale and termination of franchises and the regulation of the
franchisor/franchisee relationship. The failure by the Company to comply with
these laws could subject the Company to liability to franchisees and to fines or
other penalties imposed by governmental authorities. From time to time, the
Company experiences periods during which sales are restricted while it registers
updates of its disclosure material with various states. Such delays may have an
adverse effect on the Company's ability to offer and sell franchises. In
addition, the Company may become subject to litigation with, or other claims
filed with state, federal or international authorities by, franchisees or area
developers based on alleged unfair trade practices, implied covenants of good
faith and fair dealing or express violations of agreements. Accordingly, the
failure of the Company to comply with applicable franchise laws and regulations
could have a material adverse effect on the Company's financial condition and
results of operations.

Environmental Regulation. Precision Tune Auto Care and Precision Lube Express
centers store new oil and handle large quantities of used automotive oils and
fluids. Precision Auto Wash centers use chemicals in the washing process. These
chemicals, along with oils, fluids and other chemicals washed off of the vehicle
are collected with the waste water from the car wash process. As a result of
these activities, the Company, its franchisees and area developers are subject
to various federal, state and local environmental laws and regulations dealing
with the transportation, storage, presence, use, disposal and handling of
hazardous materials and hazardous wastes, discharge of stormwater, and
underground fuel storage tanks. If any such substances were improperly released
or improperly stored on the Company's property or the property of any
franchisee, including leased properties, or if the Company were found to be in
violation of applicable environmental laws and regulations, the Company could be
responsible for clean-up costs, property damage and fines or other penalties,
any one of which could have a material adverse effect on the Company's financial
condition and results of operations.

Trademarks
----------

The Company has registered (subject to certain limited exceptions) a number of
trademarks and service marks with the United States Patent and Trademark Office,
including "Precision Tune Auto Care," and has filed trademark and service mark
applications with respect to the names "Precision Auto Wash" and "Precision Lube
Express." The Company's failure to obtain trademark and service mark
registration could have a material adverse effect on the Company's operations.
The Company has also registered and made application to register trademarks in
foreign countries where master franchise licenses have been granted.

                                      -14-

<PAGE>


Seasonality
-----------

Seasonal changes may impact various sectors of the Company's businesses and,
accordingly, the Company's operations may be adversely affected by seasonal
trends in certain periods. In particular, severe weather in winter months may
make it difficult for consumers in affected parts of the country to travel to
Precision Tune Auto Care, Precision Lube Express and Precision Auto Wash centers
and obtain services. Severe winter weather and rainy conditions also can
adversely impact the Company's sale, installation and use of car wash equipment.
Conversely, the Precision Auto Wash business is favorably impacted by less
severe winter weather conditions as demand for the Company's car wash service
increases substantially in winter months.

Item 2.  Properties
         ----------

The Company's corporate headquarters are located in approximately 24,000 square
feet of leased office space in Leesburg, Virginia pursuant to a lease that
expires in 2002. The Company also leases 32,000 square feet in Winchester,
Virginia pursuant to a lease that expires in 2002. The Winchester facility
houses PAC, which warehouses the parts that are distributed to the Company's
Precision Tune Auto Care operation.

The Company conducts its HydroSpray car wash equipment manufacturing operations
from a 40,000 square foot Company-owned facility located in Cedar Falls, Iowa.

The Company conducts its Worldwide Drying Systems car wash drying equipment
manufacturing operations from a 9,600 square foot leased facility outside of
Denver, Colorado.

The Company conducts its car wash chemical blending and distribution operations
from an 8,000 square foot Company-owned facility located in Columbus, Ohio and
operates its modular building manufacturing facility from a 27,000 square foot
Company-owned building located in Mansfield, Ohio.

The Company believes that the manufacturing facilities described above will
provide the Company with sufficient manufacturing capacity for the foreseeable
future.

The Company's rental obligations on its headquarters and leased warehouse and
manufacturing facilities was approximately $412,000 for the year ended June 30,
1998. The Company owns the underlying real estate for 33 Company-owned centers
and 2 franchised centers. The remaining 6 Company-owned centers are leased. The
Company-owned real estate for franchised centers is subleased to franchisees.
The rent expense associated with Company-owned centers for the year ended June
30, 1998 of $209,000 is the net amount after allowing for $790,000 of sublease
income.

                                      -15-

<PAGE>


In the opinion of management, the Company's current space is adequate for its
operating needs.

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

                  The Company and its subsidiaries are subject to routine
litigation in the ordinary course of business, including contract, franchisee
and employment-related litigation. In the course of enforcing its rights under
existing and former franchisee agreements, the Company is subject to complaints
and letters threatening litigation concerning the interpretation and applicable
of these agreements, particularly in case of defaults and terminations. None of
these routine matters, individually or in the aggregate, are believed by the
Company to be material to its business or financial condition or results of
operations.

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

                  None.

                                      -16-

<PAGE>


                                    PART II


Item 5.           Market for the Registrant's Common Equity and Related
                  Stockholder Matters
                  -----------------------------------------------------

The Company's common stock, par value $.01 per share ("Common Stock") is
publicly traded on the Nasdaq Stock Market ("Nasdaq") and is quoted under the
symbol "PACI."

As of September 18, 1998, there were 223 record holders of Common Stock. The
number of record holders was determined from the records of the Company's
transfer agent and does not include beneficial owners of Common Stock whose
shares are held in the names of various securities brokers, dealers and
registered clearing agencies. The Company estimates that there are approximately
1,050 shareholders.

The following table sets forth the high and low sales prices on the Nasdaq for
the Common Stock during the fiscal year ended June 30, 1998 following the
completion of its initial public offering in November, 1997. To date, the
Company has not paid any dividends and does not anticipate paying any dividends
in the foreseeable future. The terms of the Company's credit agreement also
restrict the Company from paying any dividends.

Fiscal Year Ended June 30, 1998

<TABLE>
<CAPTION>
Quarter                    High                               Low
-------                    ----                               ---
<S>                        <C>                                <C>
First*                     n/a                                n/a
Second*                    $ 9 1/16                           $ 7
Third                       11                                  8 5/8
Fourth                      11                                  9 3/4
</TABLE>

----------
* The Company's Common Stock began trading on the Nasdaq on November 6, 1997.

                                      -17-

<PAGE>


Item 6.  Selected Financial Data
         -----------------------

         Information responsive to this Item cannot be obtained on a timely
basis by the Registrant without unreasonable effort or expense and is the
subject of a Form 12b-25 filing made by the Registrant. The Registrant intends
to supply this information under cover of a Form 10-KA amendment to this Form
10-K shortly.

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

         Information responsive to this Item cannot be obtained on a timely
basis by the Registrant without unreasonable effort or expense and is the
subject of a Form 12b-25 filing made by the Registrant. The Registrant intends
to supply this information under cover of a Form 10-KA amendment to this Form
10-K shortly.


                                      -18-

<PAGE>


Item 7A.          Quantitative and Qualitative Disclosure about Market Risks
                  ----------------------------------------------------------

         Information responsive to this Item cannot be obtained on a timely
basis by the Registrant without unreasonable effort or expense and is the
subject of a Form 12b-25 filing made by the Registrant. The Registrant intends
to supply this information under cover of a Form 10-KA amendment to this Form
10-K shortly.

Item 8.           Financial Statements and Supplementary Data
                  -------------------------------------------

         Information responsive to this Item cannot be obtained on a timely
basis by the Registrant without unreasonable effort or expense and is the
subject of a Form 12b-25 filing made by the Registrant. The Registrant intends
to supply this information under cover of a Form 10-KA amendment to this Form
10-K shortly.

                                      -19-
<PAGE>


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

                  Not applicable.


                                      -20-

<PAGE>


                                    PART III


Item 10.          Directors and Executive Officers of the Registrant

                  Information responsive to this Item is incorporated herein by
reference to the Company's definitive Proxy Statement for the 1998 Annual
Meeting of Shareholders to be filed with the Securities and Exchange Commission
on or before October 25, 1998.

Item 11.          Executive Compensation

                  Information responsive to this Item is incorporated herein by
reference to the Company's definitive Proxy Statement for the 1998 Annual
Meeting of Shareholders to be filed with the Securities and Exchange Commission
on or before October 25, 1998.

Item 12.          Security Ownership of Certain Beneficial owners and Management

                  Information responsive to this Item is incorporated herein by
reference to the Company's definitive Proxy Statement for the 1998 Annual
Meeting of Shareholders to be filed with the Securities and Exchange Commission
on or before October 25, 1998.

Item 13.          Certain Relationships and Related Transactions

                  Information responsive to this Item is incorporated herein by
reference to the Company's definitive Proxy Statement for the 1998 Annual
Meeting of Shareholders to be filed with the Securities and Exchange Commission
on or before October 25, 1998.


                                      -21-

<PAGE>


                                    PART IV


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

(a)      The following documents are filed as part of this report:

         1.       Financial Statements

                  Information responsive to this Item cannot be obtained on a
timely basis by the Registrant without unreasonable effort or expense and is the
subject of a Form 12b-25 filing made by the Registrant. The Registrant intends
to supply this information under cover of a Form 10-KA amendment to this Form
10-K shortly.

         2.       Financial Statement Schedules

                  Information responsive to this Item cannot be obtained on a
timely basis by the Registrant without unreasonable effort or expense and is the
subject of a Form 12b-25 filing made by the Registrant. The Registrant intends
to supply this information under cover of a Form 10-KA amendment to this Form
10-K shortly.

         All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and therefore have
been omitted.

(b)      Reports on Form 8-K.

         On April 15, 1998, the Company filed a current Report on Form 8-K
pursuant to Item 2 thereof, reporting the closing of the Company's acquisition
of Promotora de Franquicias Praxis, S.A. de C.V. An amendment to this Form 8-K
was filed on June 12, 1998.

(c)      Exhibits

         3.1      Articles of Incorporation of the Company included as an
                  exhibit to the Company's Registration Statement on Form S-1
                  (No. 333-34439) filed August 27, 1997 are incorporated herein
                  by reference.

                                      -22-

<PAGE>


         3.2      By-laws of the Company included as an exhibit to the Company's
                  Registration Statement on Form S-1 (No. 333-34439) filed
                  August 27, 1997 are incorporated herein by reference.

         10.1     Plan of Reorganization and Agreement for Combination of
                  Businesses dated as of August 27, 1997 by and among the
                  Company, WE JAC Corporation, Miracle Industries, Inc., Lube
                  Ventures, Inc., Rocky Mountain Ventures, Inc., Rocky Mountain
                  Ventures II, Inc., Miracle Partners, Inc., Prema Properties,
                  LLC, Ralston Car Wash, LLC and KBG LLC, included as an exhibit
                  to the Company's Registration Statement on Form S-1 (No.
                  333-34439) filed August 27, 1997 are incorporated herein by
                  reference.

         *10.2    Loan and Security Agreement between the Company and its
                  designated subsidiaries and Signet Bank, now known as First
                  Union National Bank, dated as of November 12, 1997, but
                  incorporating on a composite basis the terms of Amendment No.
                  2 dated as of May 12, 1998.

         10.5     Employee Stock Purchase Plan, included as an exhibit to the
                  Company's Registration Statement on Form S-8 (No. 333-49097),
                  filed April 1, 1998, is incorporated herein by reference.

         10.6     Employee Stock Option Plan, included as an exhibit to the
                  Company's Registration Statement on Form S-8 (No. 333-47169),
                  filed March 2, 1998, is incorporated herein by reference.

         *10.7    Employment Agreement between the Company and John F. Ripley,
                  dated June 17, 1998.

         10.8     Employment Agreement between the Company and James A. Hay,
                  dated August 27, 1997, included as an exhibit to the Company's
                  Registration Statement on Form S-1 (No. 333-34439) filed
                  August 27, 1997 is incorporated herein by reference.

         10.9     Employment Agreement between the Company and Arnold Janofsky,
                  dated August 27, 1997, included as an exhibit to the Company's
                  Registration

                                      -23-

<PAGE>


                  Statement on Form S-1 (No. 333-34439) filed
                  August 27, 1997 is incorporated herein by reference.

         10.10    Employment Agreement between the Company and Grant G. Nicolai,
                  dated August 27, 1997, included as an exhibit to the Company's
                  Registration Statement on Form S-1 (No. 333-34439) filed
                  August 27, 1997 is incorporated herein by reference.

         *10.11   Employment Agreement between the Company and John F. Moynahan,
                  dated June 8, 1998.

         10.12    Employment Agreement between the Company and Peter Kendrick,
                  dated August 27, 1997, included as an exhibit to the Company's
                  Registration Statement on Form S-1 (No. 333-34439) filed
                  August 27, 1997 is incorporated herein by reference.

         *10.13.  Employment Agreement between the Company and Jaime J. Valdes
                  dated March 31, 1998.

         *10.14   Independent Contractor Agreement between the Company and Ernie
                  S. Malas dated November 12, 1997.

         10.15    Subscription and Stock Purchase Agreement dated as of March
                  31, 1998 by and among Precision Auto Care, Inc., Precision
                  Auto Care Mexico I, S. de R.L. de C.V., and Promotora de
                  Franquicias Praxis, S.A. de C.V., included as an exhibit to
                  the Company's Current Report on Form 8-K, filed April 15,
                  1998, is incorporated herein by reference.

         *21      Significant Subsidiaries of the Company.

         *24      Powers of Attorney

-------------------
         *  Filed herewith.

                                      -24-

<PAGE>


                                   SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on September 28, 1998.

                                      PRECISION AUTO CARE, INC.

                                      By: /s/ John F. Ripley
                                          ----------------------------------
                                           John F. Ripley
                                           President and Chief Executive Officer
                                               (Duly Authorized Officer)

         Pursuant to the requirements of the Securities Exchange Act of 1934,
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>
<CAPTION>
Signature                                  Title                                          Date
---------                                  -----                                          ----
<S>                                        <C>                                            <C>
              *                            Chairperson of the Board                       September 28, 1998
-----------------------------
Lynn E. Caruthers


/s/ John F. Ripley                         President, Chief Executive Officer and         September 28, 1998
-----------------------------              Director (Principal Executive Officer)
    John F. Ripley

/s/ John F. Moynahan                       Senior Vice President and Chief Financial      September 28, 1998
-----------------------------              Officer (Principal Financial Accounting
    John F. Moynahan                       Officer)


              *                            Director                                       September 28, 1998
-----------------------------
Woodley A. Allen


              *                            Director                                       September 28, 1998
-----------------------------
George A. Bavelis
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
<S>                                        <C>                                            <C>
              *                            Director                                       September 28, 1998
-----------------------------
Bernard H. Clineburg


              *                            Director                                       September 28, 1998
-----------------------------
Clarence E. Deal


              *                            Director                                       September 28, 1998
-----------------------------
Effie L. Eliopulos


              *                            Director                                       September 28, 1998
-----------------------------
Bassam N. Ibrahim


              *                            Director                                       September 28, 1998
-----------------------------
Richard O. Johnson


              *                            Director                                       September 28, 1998
-----------------------------
Arthur Kellar


              *                            Director                                       September 28, 1998
-----------------------------
Harry G. Pappas, Jr.

              *
-----------------------------
William R. Klumb                           Director                                       September 28, 1998


              *                            Director                                       September 28, 1998
-----------------------------
Gerald A. Zamensky
</TABLE>

*By: /s/ Arnold Janofsky
     ------------------------
           Arnold Janofsky
           Attorney-in-Fact
         (Upon the Authority of Powers-of-Attorney
         filed in Exhibit 24 to this Annual Report.)


<PAGE>


                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
                                                                              Page Number
                                                                              -----------
<S>                                                                               <C>
    10.2     Loan and Security Agreement with Signet Bank, now known
             as First Union National Bank                                          __

    10.7     Employment Agreement with John F. Ripley                              __

    10.11    Employment Agreement with John F. Moynahan                            __

    10.13    Employment Agreement with Jaime J. Valdes                             __

    10.14    Employment Agreement with Ernie S. Malas                              __

    21       Significant Subsidiaries of the Company.                              __

    24       Powers of Attorney                                                    __
</TABLE>