FORM 10-Q. - QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                            OF THE SECURITIES EXCHANGE ACT OF 1934


[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934
    For the quarterly period ended    June 30, 1999
                                     ----------------

                               or

[ ] 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 :  1-11586


                                  PTI HOLDING INC.
                       ------------------------------------------
                (Exact name of registrant as specified in its charter)


              Delaware                                   13-3590980
       ---------------------                           -------------
(State or jurisdiction                              (I.R.S. Employer
of incorporation or organization)                   Identification No.)

c/o 15 East North Street, Dover, DE                        19901
---------------------------------------                -------------
(Address of principal executive offices)                (Zip Code)


                               (302) 678-0855
                    --------------------------------------
                (Issuer's Telephone Number, Including Area Code)


     Indicate by check marker  whether the  registrant (1) has filed all reports
required to be filed by Sections 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.
                                              X  Yes      No


                 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDING DURING THE PRECEDING FIVE YEARS :

     Indicate by check mark whether the  registrant  has filed all documents and
reports  required  to be filed by  Sections  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.                            Yes      No


                       APPLICABLE ONLY TO CORPORATE ISSUERS :

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common  stock,  as of the latest  practicable  date.  As of August 16,  1999,
4,956,352 shares of the issuer's common equity were outstanding.









                       PART I FINANCIAL INFORMATION



ITEM 1.  Financial Statements
                                                                     Page

Consolidated Balance Sheets as of June 30, 1999
and December 31, 1998                                                 12

Consolidated Statements of Operations for the quarters
ended June 30, 1999 and 1998                                          13

Consolidated Statements of Cash Flows for the quarters
ended June 30, 1999 and 1998                                          14

Notes to Consolidated Financial Statements                            15 - 19



ITEM 2.  Management's Discussion and Analysis


         Statements  in this  Quarterly  Report  on  Form  10-Q  concerning  the
Company's  business outlook or future economic  performance,  or other financial
items,  and plans and objectives  related  thereto,  and  statements  concerning
assumptions   made  or  expectations  as  to  any  future  events,   conditions,
performance or other matters, are  "forward-looking  statements" as that term is
defined  under the  Federal  Securities  Laws.  Forward-looking  statements  are
subject  to risks,  uncertainties  and other  factors  that could  cause  actual
results to differ materially from those stated in such statements.

         PTI Holding Inc.  (the  "Company"),  formerly  known as Aerial  Assault
Inc., was incorporated  under the laws of Delaware in March 1990. Until February
28, 1994,  the Company was engaged in the business of designing,  developing and
marketing distinctive,  high-performance men's athletic footwear for basketball,
and related apparel  bearing the Company's name and logo. The Company  commenced
sales in February 1992.

         On March 1, 1994, the Company acquired  Foam-O-Rama,  Inc. ("Foam"),  a
New York  corporation  which was  principally  engaged  in the  business  of the
design,  marketing and sale of bicycle helmets,  by merging it with and into the
company's   wholly-owned   operating   subsidiary,    Protective    Technologies
International  Inc.,  a New  York  corporation  ("PTI"),  pursuant  to a  Merger
Agreement and Plan of Reorganization dated February 14, 1994 among PTI, Foam and
Foam's  shareholders.  From and after  March 2, 1994,  Foam had no  separate  or
independent existence, having been merged into PTI. For purposes of the transfer
of the economic  benefits and risks of such transaction and the ongoing business
of Foam,  the  acquisition  was  deemed to have  occurred  as of the  opening of
business on January 1, 1994.

         On August 5, 1997, the Company consummated the merger (the "Merger") of
Flents  Products  Co.,  Inc., a New York  corporation  ("Flents-NY"),  which was
principally  engaged in the business of the  manufacture of wax earplugs and the
marketing and sale of earplugs and other safety and medical supplies, such as an
eye drop delivery system,  styptic devices,  and air-filter masks, with and into
the Company's  wholly owned  subsidiary,  Flents  Products Co., Inc., a Delaware
corporation  ("Flents"),  pursuant to an Agreement  and Plan of Merger among the
Company,  Flents and Flents-NY.  For purpose of accounting,  the acquisition was
effective as of the opening of business on June 1, 1997,  and has been accounted
for as a purchase. Flents delivered at closing an aggregate merger consideration
of  approximately  $4.8 million.  On October 5, 1998, in accordance with certain
provisions  of the  Flents  transaction,  an  additional  54,846  shares  of the
Company's common stock were issued to the original shareholders of Flents.



         On May 12, 1998, Flents acquired certain assets of the Comfees division
of Magnivision,  a subsidiary of American Greetings Corporation,  for a purchase
price  of  approximately  $1,700,000.  The  Comfees  division  manufactures  and
distributes  contact lens cases,  liquid dispensers,  medicine droppers,  finger
splints and ear  protectors,  among other health and beauty care items.  Comfees
products  are sold  through  several mass  merchandisers,  including  K-Mart and
Target.

         On April 14, 1999, Flents  consummated an Asset Purchase Agreement with
Karlen Manufacturing, Inc. ("Karlen") and certain shareholders providing for the
acquisition of  substantially  all of the operating net assets (other than cash)
of Karlen for approximately  $17,750,000,  excluding the acquisition  costs. The
Karlen  operation,   which  is  based  in  Michigan,   is  in  the  business  of
manufacturing,  marketing  and  selling  personal  health and beauty care items,
including  some  products  similar to those sold by Flents.  It operates  from a
rented  facility in  Michigan.  In 1998,  Karlen had  revenues of  approximately
$12,000,000.

         Flents has financed the  acquisition of Karlen and its working  capital
needs through a variety of sources.

         Flents has to entered into a Revolving  Credit,  Term Loan and Security
Agreement with PNC Bank providing for a three-year  term loan of $4,000,000 with
interest  at the bank's  base rate plus .75% and a line of credit of  $6,000,000
with  interest  at the bank's  base rate plus .25%.  Flents  pledged  all of its
assets as security for this financing.

         Flents has also borrowed  $8,000,000  from The 1818 Mezzanine Fund (the
"Fund"),  an affiliate of Brown Brothers Harriman and Co. The loan is due in its
entirety in six years and provides for interest at 12% per year.  Such loan from
the Fund entitles the Fund, through a warrant, to acquire shares of common stock
(for  a  nominal  amount)  that  will  constitute  after  exercise  22%  of  the
outstanding shares of common stock of Flents.

         Flents has also issued, for $1,800,000, shares of its common stock that
constitutes 18% of Flents' common stock The purchasers are two individuals. Both
are directors and officers of the Company.  A fairness opinion has been obtained
to support the purchase price paid by these two directors.

         In addition,  the Company has contributed $1,000,000 in cash to Flents'
capital,  lent an  additional  $1,000,000  to Flents  and  assumed a  three-year
promissory note  representing part of the purchase price to Karlen in the amount
of  $1,000,000  with interest at 12% per year.  The Company has also  guaranteed
repayment of Flents' loans from PNC Bank.

         After the sale of  shares  to the two  directors  and  exercise  of the
Fund's warrant,  the Company will hold 60% of the  outstanding  shares of common
stock of Flents.

         In order to finance the Company's  contributions to Flents' acquisition
of Karlen and PTI's  working  capital  needs,  PTI has entered  into a Revolving
Credit,  Term  Loan  and  Security  Agreement  with  PNC  Bank  providing  for a
three-year  term loan of  $3,000,000  with interest at the bank's base rate plus
 .75% and a line of credit of  $22,000,000  with interest at the bank's base rate
plus .25% interest.  Upon the closing of such financing,  the Company has repaid
its previous  outstanding  bank financing in full. PTI pledged all of its assets
as security for this  financing.  The company has also  guaranteed  repayment of
PTI's loans from PNC Bank.


Three Months ended June 30,1999 compared to the Three Months ended June 30,1998
--------------------------------------------------------------------------------

         The Company's net sales were $21,769,208  during the three months ended
June 30,  1999,  an increase of 12% from net sales of  $19,397,234  for the same
period in 1998. The 12% sales increase from 1998 to 1999 resulted  predominantly
from an increase in sales of the Flents subsidiary. Sales for the second quarter
ended June 30, 1999 from Flents were $4,854,349  compared to sales of $2,187,791
for the same period in 1998. The increase  primarily results from sales from the
acquisition of Comfees in May 1998 and Karlen in April 1999.


         The cost of sales for the quarter  ended June 30, 1999 was  $16,195,452
(resulting in a gross profit margin of 26%),  compared to the Company's  cost of
sales for the quarter ended June 30, 1998 of  $13,310,903  (resulting in a gross
profit  margin  of 31%).  Although  Flents'  gross  profit  margin  contribution
approximated  49% in 1999 and 46% in 1998,  the 5% decrease in the  consolidated
gross profit margin is primarily related to the following:

o An increase in bicycle sales in 1999, a lower margin product line.
o An increase in the reserves for  discounts,  allowances,  and bad debts for
  customers  who have  recently  filed for bankruptcy
o The closing out of competitors'  inventory  bought back to secure future sales
  and relationships with future customers
o Higher  manufacturing costs associated with new safety standards implemented
  by the company in 1999

         Selling, general and administrative expenses for the quarter ended June
30,  1999 were  $4,226,801  compared  to  selling,  general  and  administrative
expenses of $3,235,987 for the quarter ended June 30, 1998. SG&A expenses,  as a
percentage  of sales were 19% and 17% for the  quarters  ended June 30, 1999 and
1998,  respectively.  The increased selling, general and administrative spending
in the first quarter of 1999 was  primarily  due to the higher costs  associated
with the  expansion  of the  helmet,  bicycle and  bicycle  accessory  business,
coupled  with an  increased  percentage  of  sales  of  licensed  products,  the
acquisitions  of Comfees and Karlens  installation of new systems and the higher
costs for human resources.

         The Company had a net income after the minority interest  deduction for
the 40% outside  ownership in Flents of $249,562 for the quarter  ended June 30,
1999 compared to the Company's net income for the quarter ended June 30, 1998 of
$1,516,244.

 Six Months ended June 30,1999 as compared to the Six Months ended June 30,1998
-------------------------------------------------------------------------------

         The  Company's net sales were  $37,890,057  during the six months ended
June 30,  1999,  an increase of 22% from net sales of  $31,143,211  for the same
period in 1998. The 22% sales increase from 1998 to 1999 resulted  predominantly
from an  increase  in sales of the Flents  subsidiary.  Sales for the six months
ended June 30, 1999 from Flents were $7,128,966  compared to sales of $4,043,904
for the same period in 1998. The increase  primarily results from sales from the
acquisition of Comfees in May 1998 and Karlen in April 1999.


         The  cost  of  sales  for  the six  months  ended  June  30,  1999  was
$27,707,044  (resulting  in a gross  profit  margin  of  27%),  compared  to the
Company's  cost of sales for the six months  ended June 30, 1998 of  $21,365,412
(resulting  in a gross  profit  margin of 31%).  Although  Flents'  gross profit
margin contribution approximated 48% in 1999 and 47% in 1998, the 4% decrease in
the consolidated gross profit margin is primarily related to the following:

o An increase in bicycle sales in 1999, a lower margin product line.
o An increase in the reserves for  discounts,  allowances,  and bad debts for
  customers  who have  recently  filed for bankruptcy
o The closing out of competitors'  inventory  bought back to secure future sales
  and relationships with future customers
o Higher  manufacturing costs associated with new safety standards implemente
  by the company in 1999


         Selling,  general and administrative  expenses for the six months ended
June 30, 1999 were $7,735,170  compared to selling,  general and  administrative
expenses of $5,617,603 for the six months ended June 30, 1998. SG&A expenses, as
a  percentage  of sales were 20% and 18% for the six months  ended June 30, 1999
and 1998,  respectively.  The  increased  selling,  general  and  administrative
spending in the first six months of 1999 was  primarily  due to the higher costs
associated  with the  expansion  of the helmet,  bicycle  and bicycle  accessory
business,  coupled with an increased  percentage of sales of licensed  products,
the  acquisition  of  Comfees,  and Karlen  installation  of new systems and the
higher costs for human resources.

         The Company had a net income after the minority interest  deduction for
the 40% outside  ownership  in Flents  Products  of $734,624  for the six months
ended June 30, 1999  compared to the  Company's net income for the quarter ended
June 30, 1998 of $2,248,509

Liquidity and Capital Resources
-------------------------------

         The Company has satisfied its capital requirements through the proceeds
of its initial public offering of securities,  which resulted in net proceeds of
approximately  $3,800,000,  through  the  proceeds of a  Regulation  'S' private
placement in November 1994,  which  resulted in gross proceeds of  approximately
$751,875,  through the exercise of certain outstanding options held by employees
and consultants of the Company,  which resulted in net proceeds of approximately
$530,000,  through  internal  cash flow,  through the issuance of common  shares
representing  18% of  Flents  for  $1,800,000  in  April  1999 and  through  the
Company's credit facilities described elsewhere in "Management's  Discussion and
Analysis" and through the exercise of public warrants in 1997, which resulted in
gross proceeds of approximately $3,002,000.

         The  Company's  working  capital at June 30,  1999 was  $12,595,225  as
compared to $10,320,370 at December 31, 1998.

         The cash flows of the Company have  fluctuated due to the impact of net
income and losses, capital spending, working capital requirements,  the issuance
of common stock and other  financing  activities.  The Company expects that cash
flows in the near  future  will be  primarily  determined  by the  levels of net
income, working capital requirements,  and financings, if any, undertaken by the
Company.  Net cash  decreased  by $412,638  and $395,987 in the six months ended
June 30, 1999 and 1998, respectively.

         Net cash provided (used in) by operating  activities was $4,022,268 and
$(9,764,361) in the six months ended June 30, 1999 and 1998,  respectively.  Net
income was $734,624 and $2,248,509 for the same periods, respectively.

         Net cash used in investing activities was $17,513,678 and $4,393,351 in
the six months  ended  June 30,  1999 and 1998,  respectively.  Net cash used in
investing  activities  included  intangible  assets  acquired  pertaining to the
Karlen and Comfees acquisitions of $14,330,589 and $1,703,809 respectfully, plus
capital expenditures of $323,004 and $1,916,173 in these periods,  respectively,
primarily for computer and manufacturing equipment.

         Net  cash  provided  by  financing   activities   was $13,078,772  and
$13,761,721 in the six months ended June 30, 1999 and 1998, respectively. During
the six months  ended June 30,  1999 and 1998  proceeds  from the bank and other
loans were $11,075,272 and $13,761,725, respectively.

         The Company  pays its  employees  and  vendors on a weekly,  monthly or
bimonthly  basis,  while its customers pay for products on an average of 75 days
after  shipment,  and  therefore the Company has  substantial  needs for working
capital. As of June 30, 1999, the Company had $424,980 of cash available for its
cash needs, compared to cash of $837,618 as of June 30, 1998.

         On May 6, 1996,  PTI opened a  revolving  line of credit at Key Bank of
New  York.  The  line of  credit  which  was  repaid  on  April  14,  1999,  was
collateralized  by the Company's  inventory,  receivables and other assets,  and
guaranteed by the Company.

         On April 14, 1999, the Company negotiated new financing agreements with
PNC  Business  Credit.  Under  the  terms of the new  financing  agreement,  PNC
Business  Credit has issued  separate  financing  agreements for PTI and Flents.
Each  company  now  has a  line  of  credit  collateralized  by  such  company's
inventory,  receivables and other assets,  and guaranteed by the Company as well
as a separate term loan.  PTI has the  availability  on its line of credit up to
$22,000,000,  and has a term loan of $3,000,000;  Flents has the availability on
its line of credit up to  $6,000,000  and a term loan of  $4,000,000.  Each term
loan  carries  terms of three  years and bears  interest of the bank's base rate
plus .75%.  The lines of credit for each bear  interest  at the bank's base rate
plus .25%. At the closing of these financing agreements, the balance owed to Key
Bank,  pursuant  to the line of credit with Key Bank,  was fully  repaid and the
Karlen asset acquisition was completed.

       Flents also  entered  into,  with a  subordinated  lender,  a  Securities
Purchase  Agreement  by which the  lender  advanced  $8,000,000  to  Flents  and
acquired (1) detachable warrants (the "Flents warrants") exercisable to purchase
22 shares of common  stock of  Flents,  par value $.01 per  share,  which  would
constitute  upon  exercise  22% of the issued and  outstanding  common  stock of
Flents on a fully diluted basis,  and (2) an $8,000,000  promissory note with an
interest rate of 12%. The Flents warrants are exercisable for a nominal purchase
price until April 14, 2009. The promissory note is payable interest only for six
years and is due in full at maturity in six years.

         Pursuant to an  Investment  Agreement by and among two of the Company's
officers/directors,  Flents  issued an  aggregate  of 18% of its common stock of
Flents, for consideration of $1,800,000.

         Based on the Company's  business,  management  anticipates that current
cash  balances,  together  with the  Company's  line of  credit  and  cash  flow
generated  from  operations,  would be  sufficient  to continue to fund existing
production,  equipment  requirements,  marketing  activities  and  research  and
development,  as well as the remainder of the Company's cash  requirements,  for
approximately the next 18 months.

         The  Company's  research and  development  efforts are directed  toward
developing  new  products,   improving   existing   products  and  refining  its
manufacturing  processes.  Such  research  and  development  costs  amounted  to
approximately  $70,000 for the six months ended June 30, 1999 and  approximately
$65,000 for the six months ended June 30, 1998.  It is expected that the Company
will spend  approximately  $200,000 on research and development  during the 1999
year.

Introduction of the Euro
-------------------------

         On January 1,  1999,  eleven of the  fifteen  member  countries  of the
European  Union  established  fixed  conversion  rates  between  their  existing
sovereign  currencies  and a new  currency  called the "Euro".  These  countries
agreed to adopt the Euro as their common legal  currency on that date.  The Euro
trades on currency exchanges and is available for non-cash  transactions.  Until
January 2, 2002, the existing  sovereign  currencies will remain legal tender in
these  countries.  On January  1, 2002,  the Euro is  scheduled  to replace  the
sovereign  legal  currencies of these  countries.  The Company will evaluate the
impact the  implementation  that the Euro will have on its business  operations,
and no assurance can be given that the  implementation of the Euro will not have
a material affect on the Company's  business,  financial position and results of
operational,  and cash flows. In addition, the Company cannot accurately predict
the  impact  the Euro  will have on  currency  exchange  rates or the  Company's
currency exchange risk.


Year 2000 Compliance
--------------------

         During 1998,  the Company  finalized  its  installation  of the SAP R/3
accounting system, which is year 2000 compliant. The company does not anticipate
any material additional costs with regard to its year 2000 compliance.

         The year 2000  issue is  expected  to affect  the  systems  of  various
entities  with which the Company  interacts,  including  suppliers  and vendors.
There can be no  assurance  that the  systems  of other  companies  on which the
Company's  systems rely will be timely  converted,  or that a failure by another
company's  systems to be year 2000 compliant  would not have a material  adverse
effect on the Company.


Recently Issued Accounting Standards
------------------------------------

         In June 1998, the FASB issued SFAS No. 133  "Accounting  for Derivative
Instruments and Hedging  Activities," which is effective for all fiscal quarters
of fiscal years  beginning  after June 15, 1999. The statement  requires that an
entity  recognize  all  derivatives  as  either  assets  or  liabilities  on the
statement of financial position and measure those instruments at fair value.


ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk.

Market Risks and Sensitivity Analysis
-------------------------------------

The Company is exposed to various  market risks,  including  changes in interest
rates. This analysis presents the hypothetical loss in earnings,  cash flows and
fair values of the financial  instruments  which are held by the Company at June
30, 1999, and are sensitive to the above market risks.  As of June 30, 1999, the
financial  instruments  subject  to  this  risk  were  the  bank  loans  payable
outstanding  at June 30, 1999 with  interest at market rate.  See  discussion of
refinancing in the notes to the consolidated financial statements.



                           PART II OTHER INFORMATION


ITEM 1.  Legal Proceedings.

         In the first quarter of 1999,  certain  product  liability  claims were
asserted  against  the  Company.  While the  outcome  of such  claims can not be
determined,  it appears the Company's product liability insurance is adequate to
cover any losses that may arise from such claims.


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

         No matter was  submitted  during the first six months of the  Company's
1999 fiscal year to a vote of security-holders.


ITEM 6.  Exhibits and Reports on Form 8-K.

         (a)      Exhibits

3.1  Registrant's  Articles  of  Incorporation,   as  amended,  incorporated  by
     reference to the like  numbered  exhibit in the  Registrant's  Registration
     Statement on Form SB-2 under the Securities  Act of 1933, as amended,  File
     No. 33-53466

3.2  Registrant's  by-laws,  incorporated  by  reference  to the  like  numbered
     exhibit in the Registrant's  Registration  Statement on Form SB-2 under the
     Securities Act of 1933, as amended, File No. 33-53466

10.2 Form of Stock Option  granted to  employees,  independent  contractors  and
     consultants,  incorporated  by  reference  to exhibit  number  10.14 in the
     Registrant's  Registration  Statement on Form SB-2 under the Securities Act
     of 1933, as amended, File No. 33-53466

10.3 Agreement  and Plan of Merger  dated  February  14,  1994 among  Protective
     Technologies  International  Inc.,  Foam-O-Rama,  Inc., Ellen Schaeffer and
     Lori Hillsberg,  as amended,  incorporated by reference to exhibit number 2
     in the  Registrant's  Current Report on Form 8-K dated March 16, 1994 under
     the Securities Exchange Act of 1934, as amended

10.4 Non-competition   Agreement   dated  March  1,  1994   between   Protective
     Technologies  International  Inc. and Ellen  Schaeffer and Lori  Hillsberg,
     incorporated  by  reference  to  exhibit  number  99.1 in the  Registrant's
     Current  Report  on Form 8-K  dated  March 16,  1994  under the  Securities
     Exchange Act of 1934, as amended

10.5 Non-competition   Agreement   dated  March  1,  1994   between   Protective
     Technologies  International  Inc. and Warren  Schaeffer and Alan Hillsberg,
     incorporated  by  reference  to  exhibit  number  99.2 in the  Registrant's
     Current  Report  on Form 8-K  dated  March 16,  1994  under the  Securities
     Exchange Act of 1934, as amended

10.6 Form of Promissory Note memorializing  loans from directors and officers as
     authorized  by the Board of Directors on March 13,  1996,  incorporated  by
     reference to exhibit number 10.21 in the Registrant's Annual Report on Form
     10-KSB  for the  period  ended  December  31,  1995,  under the  Securities
     Exchange Act of 1934, as amended

10.7 Guarantee   from  Warren   Schaeffer  and  Alan   Hillsberg  to  Protective
     Technologies  International  Inc.,  incorporated  by  reference  to exhibit
     number 10.21 in the  Registrant's  Quarterly  Report on Form 10-QSB for the
     period ended September 30, 1995, under the Securities Exchange Act of 1934,
     as amended

10.10Line of Credit  Agreement  (Asset  Based),  dated May 6, 1996,  between Key
     Bank of New York, Protective  Technologies  International Inc., PTI Holding
     Inc. and  Protective  Technologies  of America Inc.,  and  collateral  loan
     documents thereto, incorporated by reference to exhibit number 10.25 in the
     Registrant's  Quarterly  Report on Form 10-QSB dated March 31, 1996,  under
     the Securities Exchange Act of 1934, as amended

10.13Merger Agreement and plan of  Reorganization  dated July 25, 1997 among PTI
     Holding Inc. and Flents  Products Co.,  Inc., as amended,  incorporated  by
     reference to exhibit numbers 1 and 2 in the Registrant's  Current Report on
     Form 8-K date August 20, 1997 under the Securities Exchange Act of 1934, as
     amended.
`
10.14Asset  Purchase  Agreement  dated  January  8,  1999,  by and among  Flents
     Products Co., Inc.,  Karlen  Manufacturing,  Inc., and the  shareholders of
     Karlen Manufacturing,  Inc.,  incorporated by reference to exhibit number 1
     in the  Registrant's  Current Report in Form 8-K dated April 14, 1999 under
     the Securities Exchange Act of 1934, as amended.

10.15Purchase Money Promissory Note made payable to Karlen  Manufacturing,  Inc.
     dated April 14, 1999,  incorporated by reference to exhibit number 2 in the
     Registrant's  Current  Report in Form 8-K dated  April 14,  1999  under the
     Securities Exchange Act of 1934, as amended.

10.16Revolving  Credit,  Term Loan and Security  Agreement  dated April 14, 1999
     between  Flents  Products Co., Inc.,  and PNC Bank,  National  Association,
     incorporated by reference to exhibit number 3 in the  Registrant's  Current
     Report in Form 8-K dated April 14, 1999 under the  Securities  Exchange Act
     of 1934, as amended.

10.17revolving Credit,  Term Loan and Security Agreement dated April 14, 1999 by
     and among Protective Technologies International Inc., Zacko Sports Inc. and
     PNC Bank, National Association, incorporated by reference to exhibit number
     4 in the Registrant's Current Report in Form 8-K dated April 14, 1999 under
     the Securities Exchange Act of 1934, as amended.

10.18Securities  Purchase Agreement dated April 14, 1999 between Flents Products
     Co., Inc. and The 1818  Mezzanine  Fund, LP,  incorporated  by reference to
     exhibit number 5 in the Registrant's Current Report in Form 8-K dated April
     14, 1999 under the Securities Exchange Act of 1934, as amended.

10.19Investment   Agreement   dated  April  14,  1999  by  and  among   Meredith
     Birrittella,  Warren Schaeffer,  and Flents Products Co., Inc, incorporated
     by reference to exhibit number 6 in the Registrant's Current Report in Form
     8-K dated  April 14, 1999 under the  Securities  Exchange  Act of 1934,  as
     amended.

10.20Management  Agreement  dated April 14, 1999 between  Flents  Products  Co.,
     Inc.  and  Protective  Technologies  International  Inc.,  incorporated  by
     reference to exhibit  number 7 in the  Registrant's  Current Report in Form
     8-K dated  April 14, 1999 under the  Securities  Exchange  Act of 1934,  as
     amended.

10.21Shareholder's  Agreement  dated April 14, 1999 by and among Flents Products
     Co.,  Inc.,  PTI Holding Inc.,  The 1818  Mezzanine  Fund,  L.P.,  Meredith
     Birrittella,  and Warren  Scheaffer,  incorporated  by reference to exhibit
     number 8 in the  Registrant's  Current  Report in Form 8-K dated  April 14,
     1999 under the Securities Exchange Act of 1934, as amended.

10.22Fairness  Opinion  rendered by Management  Planning,  Inc.  dated April 13,
     1999,  incorporated  by reference to exhibit  number 9 in the  Registrant's
     Current  Report  in Form 8-K  dated  April 14,  1999  under the  Securities
     Exchange Act of 1934, as amended.

10.23Consent of Management Planning,  Inc., incorporated by reference to exhibit
     number 10 in the  Registrant's  Current  Report in Form 8-K dated April 14,
     1999 under the Securities Exchange Act of 1934, as amended


(b)  Reports on Form 8-K


On April 29, 1999, the Company filed Form 8-K,  reporting the asset  acquisition
of Karlen  Manufacturing  Inc.,  and other matters  related to this  acquisition
including new  financing  arrangements  and minority  interests in the Company's
Flents Products Co., Inc. subsidiary.










                                   SIGNATURES

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


PTI HOLDING INC.



By
    Meredith W. Birrittella,
    Chairman of the Board
    Chief Executive Officer (authorized signatory)



         In accordance with the requirements of the Securities Act of 1933, this
report has been signed by the  following  persons in the  capacities  and on the
dates stated.



                             Chief Executive Officer,      August 16, 1999
Meredith W. Birrittella      Chairman and Director

                             Chief Financial Officer       August 16, 1999
Anthony Costanzo             Chief Accounting Officer






<PAGE>




                                   SIGNATURES

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


PTI HOLDING INC.



By/s/ Meredith W. Birrittella
      Meredith W. Birrittella,
      Chairman of the Board
      Chief Executive Officer (authorized signatory)




         In accordance with the requirements of the Securities Act of 1933, this
report has been signed by the  following  persons in the  capacities  and on the
dates stated.


/s/ Meredith W. Birrittella     Chief Executive Officer,      August 16, 1999
----------------------------
Meredith W. Birrittella         Chairman and Director

/s/ Anthony Costanzo            Chief Financial Officer       August 16, 1999
----------------------------
Anthony Costanzo                Chief Accounting Officer


<PAGE>


                         PTI HOLDING INC. AND SUBSIDIARIES


                             CONSOLIDATED BALANCE SHEET
<TABLE>

   <S>                                                                                         <C>                      <C>
                                                                                            June 30, 1999          December 31, 1998
                                                                                          ----------------         -----------------
     ASSETS                                                                                  (unaudited)               (audited)


    Cash and cash equivalents                                                                   $ 424,980                 $ 837,618
     Accounts receivable, net of allowance for returns and doubtful collections                15,184,202                11,169,056
     Inventories                                                                               12,597,397                15,811,781
     Deferred tax asset                                                                           466,000                   266,000
     Prepaid expenses and other current assets                                                  3,355,522                 1,670,826
                                                                                     ---------------------      --------------------
    Total current assets                                                                       32,028,101                29,755,281

 Deferred tax asset                                                                               201,600                   218,400
 Equipment and improvements, net                                                                3,139,199                 3,066,426
 Intangible assets, net                                                                        19,460,668                 5,346,858
                                                                                      --------------------     ---------------------
                                                                                             $ 54,829,568              $ 38,386,965
                                                                                      ====================     =====================

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:
     Loan payable, bank                                                                      $ 11,893,734              $ 15,217,550
     Current portion of long term debt                                                          1,800,000                         -
     Accounts payable and accrued expenses                                                      5,373,743                 4,217,361
     Income tax liability                                                                         348,599                         -
                                                                                      ---------------------            -------------


    Total current liabilities                                                                  19,416,076                19,434,911
                                                                                      ---------------------            -------------

    Long term debt, net of current portion                                                     5,749,997                         -
                                                                                      ---------------------            -------------

    Subordinated debt payable, net                                                             5,849,091                         -
                                                                                      ---------------------            -------------

Commitments and contingencies

    Minority interests in subsidiary                                                            4,124,224                         -

Stockholders' equity:
    Common stock, $.01 par value; authorized 10,000,000 shares, issued
         and outstanding 4,956,352 shares                                                          49,564                    49,564
    Note receivable                                                                               (54,822)                  (58,322)
    Capital in excess of par                                                                   16,283,217                16,283,217
    Retained earnings                                                                           3,412,221                 2,677,595
                                                                                      -------------------             --------------

    Total stockholders' equity                                                                 19,690,180                18,952,054
                                                                                      --------------------            --------------


                                                                                             $ 54,829,568              $ 38,386,965
                                                                                      ====================     =====================
</TABLE>
<PAGE>




                        PTI HOLDING INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                 THREE & SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                                   (Unaudited)

<TABLE>

<S>                                                         <C>                   <C>                    <C>                 <C>

                                                       For the Three Months ended June 30,         For the Six Months ended June 30,
                                                      -------------------------------------      -----------------------------------
                                                              1999                1998                1999                  1998
                                                           ----------           -----------         ----------          -----------
Net sales                                                 $ 21,769,208         $ 19,397,234       $ 37,890,057         $ 31,143,211

Cost of sales                                               16,195,452           13,310,903         27,707,044           21,365,412
                                                           -----------          -----------         ----------          -----------
Gross profit                                                 5,573,756            6,086,331         10,183,013            9,777,799
                                                           -----------          -----------         ----------          -----------
Operating expenses :
     Licensing fees                                            645,678              333,637          1,124,379              425,543
     Depreciation and amortization                             601,238              438,733          1,032,263              727,222
     Other selling, general and administrative expenses      2,979,885            2,463,617          5,578,528            4,464,838
                                                           -----------          -----------         ----------          -----------

Total operating expenses                                     4,226,801            3,235,987          7,735,170            5,617,603
                                                           -----------          -----------         ----------          -----------
Income from operations                                       1,346,955            2,850,344          2,447,843            4,160,196

Interest expense, net                                          702,497              227,714            967,070              275,040
                                                           -----------          -----------         ----------          -----------
Income before income taxes and minority interests              644,458            2,622,630          1,480,773            3,885,156

Income taxes                                                   270,672            1,106,386            621,925            1,636,647
                                                           -----------          -----------         ----------          -----------
Income before minority interests                               373,786            1,516,244            858,848            2,248,509

Minority interests in subsidiary                              (124,224)                   -           (124,224)                   -
                                                           -----------          -----------         ----------          -----------


Net income                                                   $ 249,562          $ 1,516,244          $ 734,624          $ 2,248,509
                                                         ==============       ==============      =============        =============




Net income per share of common stock :
   Basic                                                     $ 0.05               $ 0.32               $ 0.15               $ 0.47
   Diluted                                                     0.05                 0.30                 0.15                 0.44

Weighted  average shares outstanding :
   Basic                                                    4,956,352           4,796,506            4,956,352            4,796,506
   Diluted                                                  5,008,291           5,106,439            5,011,760            5,140,654



</TABLE>
<PAGE>



                     PTI HOLDING INC. AND SUBSIDIARIES

                   CONSOLIDATED STATEMENTS OF CASH FLOWS

                  SIX MONTHS ENDED JUNE 30, 1999 AND 1998

<TABLE>
<S>                                                                                       <C>                        <C>
                                                                                          1999                     1998
                                                                                     ------------               -----------
Cash flows from operating activities:
      Net income                                                                        $ 734,624              $ 2,248,509
      Adjustments to reconcile net income to net cash used in operating
        activities:
      Minority interests in income of subsidiary                                          124,224                        -
      Provision for returns and doubtful accounts                                         525,000                  217,000
      Depreciation                                                                        823,518                  611,240
      Amortization of intangible assets                                                   216,779                  115,982
      Deferred income (benefit) tax                                                      (183,200)                 (46,877)
      (Increase) decrease in operating assets exclusive of the effects of the
         business combination:
          Accounts receivable                                                          (3,153,000)             (10,550,856)
          Inventories                                                                   5,123,914               (6,222,978)
          Prepaid expenses and other current assets                                    (1,454,343)                 339,133
      Increase in operating liabilities exclusive of the effects of the
         business combination:
         Accounts payable and accrued expenses                                            916,153                2,991,140
         Other current liabilities                                                        348,599                  533,346
                                                                                     -------------             ------------
      Net cash provided by (used in) operating activities                               4,022,268               (9,764,361)
                                                                                     -------------             ------------
Cash flows from investing activities:
      Cash payment as partial consideration for purchase of acquired assets
         and acqusition costs                                                         (16,750,000)              (1,703,809)
      Loans to stockholders, net of repayments                                           (190,391)                (773,369)
      Purchase of equipment and improvements                                             (573,287)              (1,916,173)
                                                                                     -------------            -------------
      Net cash (used in) investing activities                                         (17,513,678)              (4,393,351)
                                                                                     -------------            -------------
Cash flows from financing activities:
      Repayment of common stock receivable                                                  3,500                        -
      Minority investment in subsidiary                                                 1,800,000                        -
      Borrowings, net                                                                  11,275,272               13,761,725
                                                                                     -------------            -------------
      Net cash provided by  financing activities                                       13,078,772               13,761,725
                                                                                     -------------            -------------
Net (decrease) in cash and cash equivalents                                              (412,638)                (395,987)

Cash and cash equivalents, beginning of period                                            837,618                  682,160
                                                                                     -------------            -------------

Cash and cash equivalents, end of period                                                $ 424,980                $ 286,173
                                                                                   ===============           ==============


Supplemental disclosure:
      Interest paid                                                                   $ 1,024,191                $ 331,412
      Income taxes paid                                                                   417,325                  441,000
      Noncash investing and financing activities (see note 4.):
         Fair value of net assets acquired                                              3,419,411                        -
         Promissory note used as partial consideration in the business combination      1,000,000                        -
         Excess of purchase price over net assets acquired                             14,330,589
         Accrued Liabilities                                                              240,231                        -


</TABLE>

<PAGE>









                        PTI HOLDING INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




1.      Basis of presentation:

        The consolidated financial statements included herein have been prepared
        by the Company,  without an audit, pursuant to the rules and regulations
        of the  Securities  and Exchange  Commission.  Certain  information  and
        disclosures  normally  included  in  financial  statements  prepared  in
        accordance  with  generally  accepted  accounting  principles  have been
        condensed  or  omitted  pursuant  to such rules and  regulations.  These
        unaudited   consolidated   financial   statements   should  be  read  in
        conjunction with the consolidated financial statements and notes thereto
        included  in the  Company's  Annual  Report on Form  10-KSB for the year
        ended  December  31,  1998 and filed with the  Securities  and  Exchange
        Commission.

        In the opinion of the Company's management, these unaudited consolidated
        financial  statements  include  all  adjustments,  consisting  solely of
        normal recurring  adjustments,  necessary in order to present fairly the
        Company's  consolidated  financial  position as of June 30, 1999 and the
        results of its  operations  for the three and six months  ended June 30,
        1999 and its cash flows for the six  months  ended  June 30,  1999.  The
        results  of  operations  for  an  interim  period  are  not  necessarily
        indicative of the results to be attained in any other fiscal period.

      Reclassification:

      For  comparability,  certain  1998 amounts  have been  reclassified  where
      appropriate  to conform to the financial  statement  presentation  used in
      1999.

2.      Contingent liabilities:

        Certain claims,  suits and complaints  arising in the ordinary course of
        business  have been filed or are  pending  against the  Company.  In the
        opinion of  management,  all such  matters are without  merit or of such
        kind,  or involve such amounts,  as would not have a material  effect on
        the  financial  position  and  results of  operations  of the Company if
        concluded unfavorably.

        In 1998,  certain  product  liability  claims were asserted  against the
        Company.  While the  outcome of such  claims  cannot be  determined,  it
        appears the Company's product  liability  insurance is adequate to cover
        any losses that may arise from such claims.


3.      Segment Information:

        In June 1997, the FASB issued SFAS No. 131,  "Disclosures about segments
        of an Enterprise and Related  Information",  which establishes standards
        for  the  way  public  business  enterprises  report  information  about
        operating segments in interim and annual financial  statements.  It also
        establishes   standards  for  related  disclosures  about  products  and
        services, geographic areas and major customers. The Company adopted SFAS
        No. 131 for the year ended December 31, 1998.

        The  information  for 1998 has been  restated  from the prior  year's
        presentation  in order to  conform  to the 1999 presentation.

        The  Company has two  reportable  segments:  PTI Sports and Flents.  PTI
        Sports and Flents have  separate  management  teams and  infrastructures
        that offer different products.

        The PTI Sports segment  designs,  manufactures  and distributes  bicycle
        helmets, bicycles and bicycle accessories for sale, principally to major
        retailers in the United States and Canada.

        The Flents segment designs,  manufactures and markets earplugs and other
        safety and medical supplies such as an eye drop delivery system, styptic
        devices,  and air  filter  masks.  Customers  include  major  department
        stores, drug chains and supermarket retailers in the United States.

        The accounting  policies of the segments are the same as those described
        in the  summary of the  significant  accounting  policies.  The  Company
        evaluates  performance  based on  operating  earnings of the  respective
        segments. Inter-segment sales are not significant. Inter-segment charges
        for  production,  SG&A,  and interest costs are determined on a pro rata
        basis.

        Two major retail chains accounted for  approximately  47% and 23% of net
        sales in 1999 and 43% and 27% of net sales in 1998. As of June 30, 1999,
        accounts  receivable  included  approximately  $5,525,000 and $4,891,000
        respectively,  due from  these two  customers.  The PTI  Sports  segment
        reports  the sales of the  larger of the two major  customers,  and both
        segments report the sales of the second major  customer.  Although other
        major  retailers  are  customers,  a loss of one or both  of  these  two
        established  major customers would cause a significant loss of sales and
        affect operating results adversely.


        The following  table  presents  segment  information  for the six months
        ended June 30, 1999 and 1998.

<TABLE>

                    <S>                                     <C>                  <C>                <C>                 <C>
                   1999                                 PTI Sports              Flents             Other                Total
              ---------------                        ------------------    -----------------   ---------------    ------------------

              Net sales                                     30,761,000            7,129,000          -                   37,890,000
              Gross profit                                   6,785,000            3,398,000          -                   10,183,000
              Operating earnings                             1,351,000            1,141,000          (44,000)             2,448,000
              Depreciation and amortization                    682,000              350,000          -                    1,032,000
              Interest revenue                                  50,000                6,000             1,000                57,000
              Interest expense                                 499,000              525,000          -                    1,024,000
              Income tax expense (benefit)                     379,000              261,000          (18,000)               622,000
              Total assets                                  26,734,000           27,006,000           906,000            54,646,000
              Capital expenditures                             473,000              100,000          -                      573,000

                   1998                                 PTI Sports              Flents             Other                Total
              ---------------                        ------------------    -----------------   ---------------    ------------------

              Net sales                                     27,099,000            4,044,000          -                   31,143,000
              Gross profit                                   7,882,000            1,896,000          -                    9,778,000
              Operating earnings                             3,509,000              698,000          (47,000)             4,160,000
              Depreciation and amortization                    618,000              109,000          -                      727,000
              Interest revenue                                 38, 000                3,000             2,000                43,000
              Interest expense                                 318,000            -                  -                      318,000
              Income tax expense (benefit)                   1,360,000              295,000          (18,000)             1,637,000
              Total assets                                  32,631,000            7,690,000           341,000            40,662,000
              Capital expenditures                           1,243,000               15,000          -                    1,258,000






               Financial  information  relating to the  Company's  operations by
               geographic area is presented below.

              Net sales                                                           1999                             1998
                                                                           -------------------             ---------------------

              United States                                                        36,344,000                        29,041,000
              Canada                                                                1,496,000                         2,062,000
              Other                                                                    50,000                            40,000
                                                                           -------------------             ---------------------

                                                                         $         37,890,000            $           31,143,000
                                                                           ===================             =====================
</TABLE>


        Significantly all of the Company's  long-lived assets are located in the
        United States.


4.     Business Combination:

       On April 14, 1999, Flents Products Co., Inc.,  ("Flents"),  prior to that
       date a wholly  owned  subsidiary  of the  Company,  consummated  an asset
       acquisition   (the   "Acquisition")   of  Karlen   Manufacturing,   Inc.,
       ("Karlen").  The  Company  acquired  substantially  all of the  operating
       assets of Karlen,  other than one  product  line and cash.  The  purchase
       price was  $17,750,000  subject to  adjustment.  The assets were acquired
       subject to substantially  all existing  operating  liabilities of Karlen,
       other  than  liabilities  related  to  the  excluded  product  line.  The
       Acquisition was consummated pursuant to an Asset Purchase Agreement dated
       January 8, 1999,  as amended by  amendment  dated April 14,  1999,  among
       Flents, Karlen and the shareholders of Karlen.

       The  purchase  price  consisted  of a  $16,750,000  cash  payment  and  a
       $1,000,000  promissory  note  bearing  interest  at 12%  per  annum.  The
       operating  assets  which were not  acquired  in the  Acquisition  include
       Karlen's Blue Devil product line, which constituted approximately 1% - 2%
       of Karlen's net sales in 1998.

       Karlen had revenues in the amount of  approximately  $12,345,000 in 1998.
       The  assets  acquired  include   approximately   $1,585,000  in  accounts
       receivables,  $1,800,000  in  inventory  and  $372,000  in  property  and
       equipment. Flents assumed current liabilities of approximately $373,000.

       All agreements  entered into and described  below are dated April 14,1999
       unless noted otherwise

       In connection  with the  Acquisition,  Flents  entered into an Employment
       Agreement  with the chief  operating  officer of Karlen,  to serve as the
       President of Flents. The Employment Agreement has a term of five years.

       Flents also  entered into a Lease  Agreement.  The lease is for a term of
       three years and is at specified  rental  payments,  which Flents believes
       are fair market rates. The lessor is a shareholder of Karlen.

       In addition,  Flents has entered into a  Requirements  Agreement by which
       Flents  has  agreed  to  buy  all  of  its   requirements   of  non-latex
       polyurethane  cosmetic grade foam, subject to the terms of the Agreement,
       from an entity related to a Karlen shareholder. This raw material is used
       in the  manufacture  of foam  wedges  which are used in various  cosmetic
       products.  The term of this  agreement  is for three years with  purchase
       prices  under  the  Requirements  Agreement  approximately  equal  to the
       historic  purchase  prices  charged  to  Karlen  for  this  critical  raw
       material.

       To  finance  the  Acquisition,  at the  Closing,  Flents  entered  into a
       $10,000,000  financing facility pursuant to a Revolving Credit, Term Loan
       and Security  Agreement with a bank. The facility includes a Term loan of
       $4,000,000,  fully funded at closing,  and a line of credit of $6,000,000
       of which at closing approximately  $2,900,000 was drawn and approximately
       $1,000,000 was available under the facility's  various  borrowing limits.
       Flents pledged all of its assets as security for this financing. The term
       loan carries a term of three years and bears  interest of the bank's base
       rate plus .75%.  The line of credit for bears interest at the bank's base
       rate plus .25%.

       Flents also  entered  into,  with a  subordinated  lender,  a  Securities
       Purchase Agreement by which the lender advanced  $8,000,000 to Flents and
       acquired (1) detachable  warrants (the "Flents warrants")  exercisable to
       purchase 22 shares of common  stock of Flents,  par value $.01 per share,
       which would  constitute  upon exercise 22% of the issued and  outstanding
       common  stock  of  Flents  on a  diluted  basis,  and  (2) an  $8,000,000
       promissory  note  with an  interest  rate of 12%.  At June  30,  1999 the
       $8,000,000  promissory note had a stated value of $5,749,997 after giving
       consideration that the note has an effective interest rate of 19.88%. The
       Flents warrants are exercisable for a nominal  purchase price until April
       14, 2009. The promissory note is payable  interest only for six years and
       is due in full at maturity in six years.

       Pursuant to an  Investment  Agreement  by and among two of the  Company's
       officers/directors, Flents issued an aggregate of 18% of its common stock
       of Flents, for consideration of $1,800,000.

       Upon the  exercise of the  warrants,  the Company will own 60% of Flents.
       Because  Flents is no longer a wholly  owned  subsidiary  of the Company,
       Flents  also  entered  into  a  Management   Agreement  with   Protective
       Technologies   International   Inc.,  ("PTI  Sports"),   a  wholly  owned
       subsidiary of the Company.  Under the  Management  Agreement,  PTI Sports
       will  provide  various  services to Flents,  including  senior  executive
       services of the Chief Executive Officer and the Chief Financial  Officer,
       information  and  data  processing  functions  and  services,  management
       systems and services,  and senior human resource management functions and
       services, such as payroll, benefits, pension and related functions.

       Flents also entered into a  Shareholders'  Agreement by and among Flents,
       the  Company,  the  Subordinated  lender  and the two  officers/directors
       owning  18%  of  Flents.  The  Shareholders'   Agreement  places  various
       restrictions on the shateholders,  including restrictions on the transfer
       of shares of Flents common stock.

       Also at Closing,  PTI Sports and Zacko  Sports Inc.,  ("Zacko"),  both of
       which are  wholly  owned  subsidiaries  of the  Company,  entered  into a
       $25,000,000  financing facility pursuant to a Revolving Credit, Term Loan
       and Security  Agreement by and among PTI Sports,  Zacko and the Bank. The
       facility includes a term loan of $3,000,000, fully funded at closing, and
       a line of  credit  of  $22,000,000  of  which  at  closing  approximately
       $11,100,000  was drawn and  approximately  $4,400,000 was available under
       the facility's various borrowing limits. PTI Sports and Zacko pledged all
       of their assets as security for this financing.

       The  proceeds  of the  loans  from the Bank  were  also used to repay all
       existing bank financing of Flents, PTI Sports and Zacko, outstanding.

       The aggregate maturities of long-term debt is as follows:

       [OBJECT OMITTED]



The  following  represents  a pro-forma  statement  of income for the six months
ended June 30, 1999 assuming  Karlen had not been  acquired.  Expenses have been
adjusted  to remove all  acquisition  related  financing  charges  and  Goodwill
amortization.

<TABLE>
                                                            <S>                   <C>                    <C>
                                                         As Reported             Karlen            Net of Karlen
                                                       -----------------    -----------------    -------------------

Net sales                                                    37,890,057            2,579,701             35,310,356

Cost of sales                                                27,707,044            1,306,337             26,400,707
                                                       -----------------    -----------------    -------------------

Gross profit                                                 10,183,013            1,273,364              8,909,649

Operating Expenses                                            7,735,170              648,980              7,086,190
                                                       -----------------    -----------------    -------------------

Income from operations                                        2,447,843              624,384              1,823,459

Interest expense, net of interest (income)                      967,070              279,758                687,312
                                                       -----------------    -----------------    -------------------

Income from continuing operations                             1,480,773              344,626              1,136,147

Income tax expense                                              621,925              144,743                477,182
                                                       -----------------    -----------------    -------------------

Net Income                                                      858,848              199,883                658,965
                                                       =================    =================    ===================

</TABLE>



<PAGE>