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

                                    FORM 10-K

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
                    For the Fiscal Year Ended March 31, 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 No. 0-18984

                         REYNOLDS, SMITH AND HILLS, INC.
             (Exact name of registrant as specified in its charter)

                   Florida                         59-2986466
       (State or other jurisdiction of           (I.R.S. Employer
        incorporation or organization)          Identification No.)

            4651 Salisbury Road                              32256
           Jacksonville, Florida                          (Zip Code)
   (Address of principal executive offices)

       Registrant's telephone number, including area code: (904) 296-2000

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

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

                                             Name of each exchange on
            Title of each class                   which registered
            -------------------                   ----------------

      Common Stock, $.01 par value                      None

         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[  ]

         The  estimated   aggregate   market  value  of  Common  Stock  held  by
non-affiliates  as of June 21, 1999  computed  with  reference to the last sales
price, was $4,312,000.

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of  Regulation  S-K (ss.  229.405  of this  chapter)  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. [X]

         The number of shares of Common  Stock  outstanding  as of June 21, 1999
was 448,353 shares.

                      Documents incorporated by reference:

           DOCUMENT                                   WHERE INCORPORATED
           --------                                   ------------------

   Proxy Statement Dated June 21, 1999                     Part III


<PAGE>
<TABLE>
<CAPTION>



                                TABLE OF CONTENTS

FORM 10-K
 Item
 Number           CAPTION                                                              PAGE

                  PART I

<S>   <C>                                                                              <C>
Item  1. BUSINESS                                                                        3

Item  2. PROPERTIES                                                                      5

Item  3. LEGAL PROCEEDINGS                                                               5

Item  4. SUBMISSION OF MATTERS TO A VOTE OF
                  SECURITY  HOLDERS                                                      5

EXECUTIVE OFFICERS OF THE REGISTRANT                                                     5

                  PART II

Item  5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
                  RELATED  STOCKHOLDER MATTERS                                           6

Item  6. SELECTED FINANCIAL DATA                                                         7

Item  7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS                                    8

Item  7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES
                  ABOUT MARKET RISK                                                     13

Item  8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                    13

Item  9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE                                   13

                  PART III

Item 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE
                  REGISTRANT                                                            13

Item 11.          EXECUTIVE COMPENSATION                                                13

Item 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                  AND MANAGEMENT                                                        13

Item 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        13

                  PART IV

Item 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
                  REPORTS ON FORM 8-K                                                   14


                                        2
</TABLE>

<PAGE>



                                                      PART I

Item 1.  BUSINESS

         Reynolds, Smith and Hills, Inc. (the Company) is a professional service
firm  operating  in the  engineering,  architectural  design  and  environmental
services industry. The Company was incorporated in the state of Florida in 1989.
As used herein,  the Company refers to Reynolds,  Smith and Hills,  Inc. and its
subsidiaries.

         The  Company  provides  a full  range  of  architectural,  engineering,
planning  and  environmental  services  to public  and  private  sector  clients
primarily in the Southeastern United States.  Specific industry markets are also
served  nationally  and  internationally.  Services  are  provided  through  the
following market-focused programs of the Company:

         *        Transportation   -  Services  are  provided  to   governmental
                  agencies and private  entities and include  planning,  design,
                  environmental,  and  construction  engineering  and inspection
                  services  for  various  modes  of  transportation   (including
                  highways and bridges, mass transit, rail and port).

         *        Aviation - Services are provided to governmental  agencies and
                  private  entities  (including air carriers and  manufacturers)
                  and include planning,  design, and environmental  services for
                  airfields, terminals, and support buildings.

         *        Aerospace  and  Defense  -  Services  are  provided  to  NASA,
                  Department of Defense,  Spaceport  Florida Authority and major
                  aerospace   contractors.   The  Company  develops  launch  and
                  processing  facilities for the Shuttle and expendable vehicles
                  including the latest multi-use launch pads.

         *        Public   Infrastructure  -  Services  are  provided  to  local
                  government and quasi-governmental  agencies.  Services include
                  planning,  evaluation,  architectural and engineering  design,
                  permitting,  and construction  administration for road, water,
                  wastewater,   storm  water  and  solid  waste  systems.  These
                  services are also provided for public facilities such as parks
                  and public buildings.

         *        Commercial  -  Services  are   provided  to   commercial   and
                  industrial   entities  engaged  in  planning,   designing  and
                  construction   of  a  wide  variety  of  structures  and  land
                  development  (including  office  buildings  and office  parks,
                  warehouses,   distribution   and   manufacturing   facilities,
                  financial facilities, and data centers).

         *        Institutional  -  Services  are  provided  to public  agencies
                  engaged in governmental,  educational,  recreational,  medical
                  and  scientific  facilities,  and land  development.  Services
                  include planning and designing of a wide variety of structures
                  (including schools and campus master planning, courthouses and
                  other governmental buildings,

                                        3

<PAGE>



                  research  and  technical   facilities,   community  parks  and
                  recreational facilities, and media centers).

         Competition.  The engineering and  architectural  services  industry is
highly  competitive.  The Company's  competitors include large national firms as
well as many small local  firms.  The Company  competes  with these firms on the
basis  of  technical  capabilities,  qualifications  of  personnel,  reputation,
quality and price. Additionally, a local presence is important in certain areas.
No one firm currently dominates a significant portion of the industry.

         Major  Customers.  For each of the years ended March 31, 1999, 1998 and
1997,  approximately  80% of the  Company's  business  was with  departments  or
agencies of federal,  state and local  governments.  Contracts  with the Florida
Department of  Transportation  provided  approximately 35% of total revenues for
each of the fiscal years 1999,  1998 and 1997. The loss of a significant  client
such as the Florida  Department of Transportation  would have a material adverse
effect on the  Company.  No other  customer  accounted  for 10% or more of total
revenues.

         Backlog.  Gross revenue backlog is the estimated revenue from contracts
entered  into with  clients,  less that  portion  which has been  recognized  as
revenue.  Backlog is subject to revision due to cancellations,  modifications or
changes  in the  scope  of  projects.  There  can be no  assurance  that  signed
contracts  will  ultimately  be authorized or will not be canceled by clients in
accordance with their terms. Net revenue backlog is estimated  revenue excluding
subconsultant and other direct costs and more accurately reflects the amounts to
be earned for activities performed by the Company.

         The  Company's  gross  backlog  at March  31,  1999 was  $34.3  million
compared to $29.5  million at March 31, 1998.  Net backlog was $25.7  million at
March 31, 1999 as compared to $21.8 million at March 31, 1998. Approximately $27
million of services included in the Company's gross backlog as of March 31, 1999
will be performed in fiscal year 2000. The Company expects additional revenue in
fiscal year 2000 from sales generated  during the year which are not included in
the March 31, 1999 backlog.

         Governmental  Contracts.  Some service  contracts  with  departments or
agencies of federal,  state, and local  governments are subject to renegotiation
of profits or termination at the election of the government.  The Company is not
aware of any adjustments which would have a material impact on the Company.

         Compliance with Environmental Laws. Compliance with federal,  state and
local  regulations which have been enacted or adopted relating to the protection
of the  environment is not expected to have any material effect upon the capital
expenditures,  earnings and competitive position of the Company.  However,  such
compliance   by  the   Company's   clients   may   require   the  need  for  the
environmental-related services which the Company provides.

         Employees.  At March 31, 1999 the Company  employed  approximately  419
persons.


                                        4

<PAGE>



Item 2.   PROPERTIES

         The Company leases its principal office space in Jacksonville,  Florida
and  seven  branches  occupy  leased  office  space  in  the  following  Florida
locations: Ft. Myers, Merritt Island, Miami, Orlando,  Plantation,  Tallahassee,
and Tampa.  The  Company  also  maintains  leased  offices  in Flint,  Michigan,
Houston, Texas, and Naperville,  Illinois. In addition, the Company leases space
for construction  sites at approximately six locations in Florida.  These leases
expire at various dates through 2005. The current  facilities are sufficient for
the operation of the business.

Item 3.   LEGAL PROCEEDINGS

         The Company is subject to lawsuits  that arise in the normal  course of
business  involving  claims  typical  of those  filed  against  engineering  and
architectural   professions,   alleging  primarily  professional  errors  and/or
omissions.  The Company maintains professional liability insurance which insures
against  risk  within the policy  limits.  There can be no  assurances  that the
policy limits are sufficient to cover all claims. There are no legal proceedings
pending or, to the  knowledge  of the  Company,  threatened  against the Company
which in  management's  opinion  would  have a  material  adverse  effect on the
Company's financial condition.

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the quarter ended
March 31, 1999.

<TABLE>
<CAPTION>

                      EXECUTIVE OFFICERS OF THE REGISTRANT

      The following persons serve as the executive officers of the Company:

         Name                                        Age               Position Held
         ----                                        ---               -------------

<S>                                                   <C>              <S>
         Leerie T. Jenkins, Jr.                       50               Chairman of the Board
                                                                       and Chief Executive Officer

         David K. Robertson                           47               Executive Vice President, Secretary,
                                                                       Treasurer, Chief Financial Officer,
                                                                       Chief Operating Officer, and Director

         Darold F. Cole                               57               Senior Vice President and Director

         J. Ronald Ratliff                            50               Senior Vice President and Director
</TABLE>

         Mr.  Jenkins'  principal  positions are Chairman of the Board and Chief
Executive Officer of the Company, which he has held since June 1990. Mr. Jenkins
has been employed with the

                                        5

<PAGE>



Company or other architectural, engineering, planning and environmental services
companies  for over 27  years.  He  holds a  Masters  and  Bachelors  degree  in
landscape  architecture  from the  University  of  Michigan  and  University  of
Georgia, respectively.

         Mr. Robertson's principal positions are Executive Vice President, which
he has  held  since  January  1995,  Chief  Operating  Officer,  to which he was
appointed  in June 1999,  Secretary,  Treasurer,  Chief  Financial  Officer  and
Director  of the  Company,  which he has held since June 1990.  Prior to January
1995 Mr.  Robertson was Senior Vice President of the Company.  Mr. Robertson has
been employed with the Company or other architectural, engineering, planning and
environmental  services  companies for over 17 years.  He graduated from Florida
State University with a degree in Business.

         Mr. Cole's  principal  positions are Senior Vice President and Director
of the Company,  which he has held since June 1990.  Mr. Cole has been  employed
with the Company or other architectural, engineering, planning and environmental
services  companies  for  over  30  years.  He  holds  a  degree  in  electrical
engineering from Kansas State University.

         Mr.  Ratliff's  principal  positions  are  Senior  Vice  President  and
Director of the Company, which he has held since June 1990. Mr. Ratliff has been
employed  with the Company or other  architectural,  engineering,  planning  and
environmental  services  companies  for over 21 years.  He holds a  Masters  and
Bachelors degree from the University of South Florida.


                                     PART II

Item 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company's  securities are not presently  traded on any public stock
exchange or other public market.  The Company had approximately 205 shareholders
of record  at March  31,  1999,  including  persons  owning  stock  through  the
Company's  401(k)  plan.  The Company  pays no dividends on its common stock but
instead reinvests earnings into the Company to fund growth.


                                        6

<PAGE>




Item 6.  SELECTED FINANCIAL DATA

         The following  selected  financial  data should be read in  conjunction
with the financial  statements of the Company,  including the notes thereto, and
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations.

<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA
(in thousands, except per share data)

                                                         YEAR ENDED MARCH 31

                                          1999       1998       1997       1996      1995

STATEMENT OF OPERATIONS DATA:

<S>                                    <C>        <C>        <C>        <C>        <C>
Gross revenue                          $ 42,919   $ 37,122   $ 39,065   $ 34,070   $ 30,524

Net service revenue                      31,583     26,734     27,397     25,595     23,620

Net income                                  581        567        593         92        350

Common stock per share data:

Basic earnings per share                   1.29       1.25       1.30        .20        .78

Weighted average shares of
    common stock outstanding            452,000    455,000    455,000    451,000    446,000


BALANCE SHEET DATA:

Working capital                           3,508      3,926      2,781      1,935      2,314

Total assets                             13,926     13,310     12,680     12,521     11,858

Long-term debt (less current portion)       200          0          7         76        524

Common stockholders' equity               6,460      5,908      5,337      4,741      4,576

</TABLE>



                                        7

<PAGE>



Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

         The following  table sets forth the  percentage of net service  revenue
represented by the items in the Company's consolidated statements of income:

                              Year Ended March 31,

                                  1999      1998      1997
                                ------    ------    ------

Gross revenue                      135.9%    138.9%    142.6%

Subcontract and other
 direct costs                       35.9      38.9      42.6
                                  ------    ------    ------

   Net service revenue             100.0     100.0     100.0

Cost of services                    37.8      39.2      39.5
                                  ------    ------    ------

   Gross profit                     62.2      60.8      60.5

Selling, general, and
 administrative expenses            59.3      57.4      56.9
                                  ------    ------    ------

   Operating income                  2.9       3.4       3.6

Other income (expense)                .2        .4        .2
                                  ------    ------    ------

   Income before income taxes        3.1       3.8       3.8

Income tax expense                   1.3       1.7       1.6
                                  ------    ------    ------

   Net income                        1.8%      2.1%      2.2%
                                  ======    ======    ======


Gross Revenue:

         Revenue for fiscal 1999 was $42.9  million as compared to $37.1 million
for fiscal 1998.  This 16% increase was due  primarily to increased  revenues in
the transportation and institutional programs. Revenue for fiscal 1998 was $37.1
million as compared to $39.1 million for fiscal 1997.

                                        8

<PAGE>



This 5% decrease was due primarily to decreased sales in the  institutional  and
aviation  programs.  In addition,  the design phases for a few large projects in
the  institutional  and aviation  programs  were  completed  and had entered the
construction  administration  phase in fiscal  1998.  This  phase is less  labor
intensive resulting in comparatively lower revenues. Gross backlog decreased 10%
in fiscal 1998 from fiscal 1997 and net backlog decreased 6% in fiscal 1998 from
fiscal 1997.

         For each of the  fiscal  years  ended  March 31,  1999,  1998 and 1997,
approximately  80% of the Company's  revenues were  generated from public sector
clients.  For  each of the  same  periods,  approximately  35% of the  Company's
revenues  resulted  from  services   provided  to  the  Florida   Department  of
Transportation.

Subcontract and Other Direct Costs:

         Subcontract and other direct costs (ODC's)  increased 9% in fiscal 1999
from fiscal 1998.  This is a direct  result of  increases  in the  institutional
program's  revenue.  ODC's for fiscal 1998 decreased 11% from fiscal 1997.  This
decrease  occurred  primarily in the  institutional  and aviation  programs as a
result of the change in  projects  from  design to  construction  administration
stage as discussed above.

Net Service Revenue:

         Net service  revenue  was $31.6  million for fiscal 1999 as compared to
$26.7 million for fiscal 1998.  This 18% increase was the result of increases in
gross  revenues as discussed  above.  Net service  revenue was $26.7 million for
fiscal 1998 as compared to $27.4 million for fiscal 1997. This 2% decrease was a
result of decreases in gross revenues as discussed above.

Cost of Services:

         Cost of services  represents  direct  labor costs  associated  with the
generation  of net service  revenues.  Cost of services,  as a percentage of net
service revenue,  continued to improve to 37.8%, 39.2%, and 39.5%,  respectively
for fiscal years ended March 31, 1999, 1998, and 1997. This percentage  reflects
improving project  efficiency.  Gross profit, as a result,  has also improved at
62.2%, 60.8% and 60.5% for fiscal years 1999, 1998 and 1997, respectively.

Selling, General and Administrative Expenses:

         Selling,  general and  administrative  (SG&A) expenses consist of labor
costs of operational  personnel not utilized on projects (i.e.  indirect labor),
labor costs of administrative and support personnel,  office rent, depreciation,
insurance, and other operating expenses.

         SG&A expenses  increased 22% to $18.7 million in fiscal 1999 from $15.3
million in fiscal 1998. This increase was due primarily to a net 20% increase in
personnel,  resulting in increases in indirect labor and related  benefits.  The


                                        9

<PAGE>



Orlando and Ft. Myers,  Florida offices moved into larger office space,  and new
offices were  established in Flint,  Michigan,  Houston,  Texas, and Naperville,
Illinois. As a result, there were increases in rent, telephone, leased computer,
software license,  consultant and travel expenses.  The Company also acquired an
eleven  person  architectural  firm in Miami,  Florida  which also  resulted  in
increases in payroll and related benefits, travel, and amortization of goodwill.
There were also increases in  professional  fees related to project  litigation.
SG&A  expenses  decreased to $15.3  million in fiscal 1998 from $15.6 million in
fiscal 1997.  This 2% decrease was due primarily to a decrease in indirect labor
and related benefits, and a decrease in temporary staffing.

Net Income:

         Net income was  $581,000  in 1999,  $567,000 in 1998,  and  $593,000 in
1997.  The  increase in fiscal  1999 was a result of  increased  gross  revenues
offset  by  increases  in costs  of  services  and  general  and  administrative
expenses.  The  decrease in 1998 from 1997 was due  primarily to the decrease in
net service revenue (gross revenue less subcontract costs) as discussed above.


LIQUIDITY AND CAPITAL RESOURCES

         The Company's liquidity and capital measurements are set forth below:

                                          March 31
                                      ---------------
                                   1999     1998     1997
                                 ------   ------   ------

Working capital (in thousands)   $3,508   $3,926   $2,781

Current ratio                    1.53:1   1.59:1   1.42:1

Ratio of liabilities to equity   1.16:1   1.25:1   1.38:1

         Cash flows from  operations  were  negative  for the fiscal  year ended
March 31, 1999 due primarily to an increase in accounts  receivable and unbilled
service revenue balances. These increases were in conjunction with the growth in
revenue.  For  fiscal  years  ended  March  31,  1998 and 1997 cash  flows  from
operations  were  positive.  The Company has made a  significant  investment  of
working capital in information  technology over the last several years. Payments
on notes payable and long-term debt totaled $55,000 in fiscal 1999.

         The Company  has in place a line of credit  with a bank which  provides
for  additional  borrowing up to $2,000,000 at March 31, 1999,  with interest at
the lower of the bank's  prime  rate plus .1% or LIBOR plus 2.8%.  There were no
borrowings  outstanding under the line of credit at March 31, 1999. In addition,
the Company has also secured a committed credit facility of $2,000,000 which may
be  used  for the  acquisition  or  merger  of  other  architectural/engineering
companies.  The interest  rate on this facility is the lower of the bank's prime

                                       10

<PAGE>



rate or LIBOR plus 2.55%. These borrowing agreements, which expire September 30,
1999,  contain  covenants  related to working capital and debt to net worth. The
Company is in compliance with all provisions of these lines of credit.

         The Company believes that its existing  financial  resources,  together
with its cash flow from  operations  and its unused  bank line of  credit,  will
provide  sufficient  capital  to fund  its  operations  for  fiscal  2000.  This
statement is based on information that is currently available.

BUSINESS ACQUIRED
-----------------

         On May 7, 1998, the Company  acquired all of the outstanding  shares of
Lemuel Ramos and Associates,  Inc., an eleven person  architectural firm located
in Miami,  Florida. The Company paid cash of $387,000 and signed a $300,000 note
payable to obtain the company.  The acquisition has been accounted for using the
purchase  method of accounting,  and,  accordingly,  the purchase price has been
allocated to the assets  purchased  and the  liabilities  assumed based upon the
fair market values at the date of acquisition.  The excess of the purchase price
over the fair  values of the net assets was  $708,000  and has been  recorded as
goodwill,  which is being amortized on a straight-line  basis over 15 years. The
fair value of assets acquired and liabilities assumed are as follows:

         Fair value of assets acquired      $  71,000
         Goodwill                             708,000
                                              -------
           Total purchase price               779,000
         Less:
           Cash paid                          387,000
           Note payable to seller             300,000
                                              -------
         Liabilities assumed                $  92,000
                                            =========


Pro forma income  statements are not included due to the  insignificance  of the
acquisition.

YEAR 2000
---------

State of Readiness:
         The  Company  is in process  of  preparing  its  computer  systems  and
applications for the Year 2000. This process involves developing and acting on a
plan for the Year 2000 issue.  It includes  identifying and  communicating  with
external  service  providers to  ascertain  what steps they are taking to remedy
their Year 2000 issues,  as well as modifying or replacing  certain hardware and
software maintained by the Company. Most of the Company's information technology
systems were purchased from vendors who have represented that these systems will
not be affected by the change of century  beginning January 1, 2000. The Company
maintains  contact with third party vendors to monitor their  progress with Year
2000  issues.  Management  expects to have  substantially  all of its  currently
identified  system and  application  changes  completed in the second quarter of
fiscal 2000 (September 30, 1999).

                                       11

<PAGE>



         The Company has been informed by its third party vendors,  and has also
internally   ascertained,   that  its  computer   applications  related  to  the
development and processing of  architectural  and engineering  documents are not
date-driven and will not be affected by Year 2000 issues. In addition,  hardware
supporting these  applications has already been upgraded to respond correctly to
the Year 2000 issue. These upgrades have been in process over the last few years
as part of the Company's ongoing technological advancements.

         The Company has identified three material operating systems that may be
affected by the Year 2000 issue.  They are the general ledger  accounting system
(including  billings),  the third party payroll service, and  telecommunications
systems. Upgrades related to the general ledger accounting software and hardware
have been  completed.  The Company is  currently in its fiscal year 2000 and the
general ledger system,  including billings, is functioning  properly.  The third
party  payroll  service  states that its systems are not expected to  experience
Year  2000  related  problems  and  has  disclosed  this in its  recent  10K and
subsequent  10Q filings.  Upgrades  for  hardware  and  software  related to the
payroll service have been made and are currently being tested. Actual use of the
upgraded  payroll  system is  expected  by the second  quarter  of fiscal  2000.
Upgrades to the Company's main and branch offices telecommunications systems are
in process and are also expected to be completed by the second quarter of fiscal
2000.  Finally,  the  Company  has been  given  assurances  by its  third  party
telecommunication   hardware  and  service  providers  that  there  will  be  no
interruption in telecommunications resulting from the Year 2000 issue.

         The  Company's  primary  non-information  technology  systems are those
related to the buildings in which the Company leases space.  These include,  but
are not  limited  to,  heating  and air  conditioning  systems,  elevators,  and
security  access systems.  The owners of the properties have  represented to the
Company  that the systems  should be able to respond  correctly to the Year 2000
issue in the second quarter of fiscal 2000. Any risk associated with the failure
of these systems, is not expected to be material to the Company's business.

Associated Costs:
         The Company expects that the principal  costs will be those  associated
with  testing of its  computer  applications.  The total cost to the  Company of
these Year 2000  activities has not been, and is not anticipated to be, material
to its  financial  position or results of  operations  in any given year.  These
costs and completion dates are based on management's best estimates,  which were
derived  utilizing  numerous  assumptions of future events including third party
modification  plans.  There can be no assurances  that these  estimates  will be
achieved.

Risks:
         The risks associated with a failure of systems to respond  correctly to
the Year 2000 are delays in  production of  architectural/engineering  documents
due to hardware,  software,  telecommunication or other problems between offices
and clients (wide area network file sharing and transmission).  In addition,  to
the extent that the Company's material vendors,  subconsultants,  customers, and
financial  institutions,  experience  material  adverse  effects  from Year 2000
issues, the Company's own operations may be affected.  Various factors,  many of


                                       12

<PAGE>



which are beyond the Company's control,  could cause actual plans and results to
differ materially from those  contemplated by management.  Based on management's
current  assessment  and  estimates,  the Company does not believe that the Year
2000 issue will have a material impact on its business,  financial  condition or
operating  results.  However,  there can be no assurance that the failure of any
such  system  will not have a material  adverse  effect on or result in material
litigation brought against the Company.

Contingency Plans:
         In the event that the material  core systems fail to function  properly
given the Year 2000 problems,  the Company has established  various  contingency
plans to maintain  operations.  Payroll services could be processed  through the
general ledger or processed  manually.  Architectural  and engineering  document
production  could be  developed  independently  in each office and  delivered to
respective parties by mail.


Item 7a.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company  believes that its exposure to market risks is  immaterial.
The Company holds no market-risk  sensitive instruments for trading purposes. At
present, the Company does not employ any derivative financial instruments, other
financial  instruments or derivative  commodity  instruments to hedge any market
risk, and the Company does not currently plan to employ them in the near future.
To the extent that the Company has  borrowings  outstanding  under either of the
credit  facilities,  there  may  be  market  risk  relating  to the  amounts  of
borrowings due to the fact that interest  rates under the credit  facilities are
variable.  The Company's  exposure is immaterial due to the short-term nature of
these borrowings.


Item 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The consolidated  Financial  Statements of the registrant are set forth
beginning on page 17 of this report.

Item 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE

         None.

                                    PART III

Item 10 through 13.

         The  information  required  by Items 10 through 13 is  included  in the
Company's  definitive  proxy  statement  dated June 21, 1999 and is incorporated
herein by reference.

                                       13

<PAGE>




                                     PART IV
<TABLE>
<CAPTION>

Item 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                  FORM 8-K
                                                                                                 PAGE
                                                                                                 ----

<S>                                                                                              <C>
(a)(1)   Financial Statements

         Independent Auditors' Report                                                            17

         Consolidated Statements of Income, years ended
                  March 31, 1999, 1998 and 1997                                                  18

         Consolidated Balance Sheets as of March 31,
                  1999 and 1998                                                                  19

         Consolidated Statements of Shareholders'
                  Equity, years ended March 31, 1999, 1998
                  and 1997                                                                       20

         Consolidated Statements of Cash Flows, years
                  ended March 31, 1999, 1998 and 1997                                            21

         Notes to Consolidated Financial Statements                                              22


(a)(2)   Financial Statement Schedule

         Independent Auditors' Report                                                            31

         Schedule II - Valuation and Qualifying Accounts                                         32

(a)(3)   Exhibits

3.1*     Articles of Incorporation of the Company, as amended

3.2*     By-Laws of the Company

10.1**  Reynolds, Smith and Hills, Inc. Amended and Restated 1991 Employee Stock Bonus
        Plan

10.2**  Reynolds, Smith and Hills, Inc. Amended and Restated 1991 Nonqualified Stock Option
        Plan

                                       14

<PAGE>



10.3**  Reynolds, Smith and Hills, Inc. Amended and Restated 1991 Incentive Stock Option
        Plan

21      List of Subsidiaries                                                                     33

23      Consent of Deloitte & Touche LLP                                                         34

27      Financial  Data  Schedule  -  This  schedule  reports  certain
        financial  data  in  electronic  format  for  Electronic  Data
        Gathering and Retrieval (EDGAR) purposes only. This exhibit is
        not  included  in  copies  of  this  report   distributed   to
        shareholders and others.

*       Filed in connection with and incorporated by reference to Registration
        Statement on Form 10 (filed January 15, 1991).
**      Filed  in  connection  with  and  incorporated  by  reference  to  the
        Company's  September  30,  1997  Quarterly  Report on Form 10-Q (filed
        November 12, 1997).

(b)     Reports on Form 8-K

        No report on Form 8-K was filed during the quarter ended March 31, 1999.
</TABLE>

                                       15

<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.

                                            Reynolds, Smith and Hills, Inc.

Dated:  June 21, 1999                       By /s/David K. Robertson
        -------------                       ------------------------
                                            David K. Robertson
                                            Executive Vice President, Secretary,
                                            Treasurer, Chief Financial Officer,
                                            Chief Operating Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the  following on behalf of the  Registrant  and in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>

          Signature                            Capacity                                 Date
          ---------                            --------                                 ----

<S>                                 <C>                                              <C>
/s/Leerie T. Jenkins, Jr.           Chairman of the Board                            June 21, 1999
-------------------------           and Chief Executive Officer
Leerie T. Jenkins, Jr.              (Principal Executive Officer)

/s/David K. Robertson               Executive Vice President,                        June 21, 1999
---------------------               Secretary, Treasurer, Chief Financial
David K. Robertson                  Officer, Chief Operating Officer, and
                                    Director (Principal Financial
                                    and Accounting Officer)

/s/Darold F. Cole                   Director                                         June 21, 1999
-----------------
Darold F. Cole

/s/J. Ronald Ratliff                Director                                         June 21, 1999
-------------------
J. Ronald Ratliff

____________________                Director
David E. Thomas, Jr.

/s/Alexander P. Zechella            Director                                         June 21, 1999
------------------------
Alexander P. Zechella

_____________________               Director
R. Ray Goode

_____________________               Director
James W. Apthorp

</TABLE>

                                       16

<PAGE>



INDEPENDENT AUDITORS' REPORT


The Board of Directors and Shareholders
Reynolds, Smith and Hills, Inc.
Jacksonville, Florida


We have audited the accompanying  consolidated balance sheets of Reynolds, Smith
and  Hills,  Inc.  and its  subsidiaries  as of March 31,  1999 and 1998 and the
related consolidated  statements of income,  shareholders' equity and cash flows
for  each  of the  three  years  in the  period  ended  March  31,  1999.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

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

In our opinion,  such consolidated  financial  statements present fairly, in all
material respects, the financial position of Reynolds, Smith and Hills, Inc. and
its  subsidiaries  as of  March  31,  1999 and  1998  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
March 31, 1999 in conformity with generally accepted accounting principals.

/s/ Deloitte and Touche LLP

Jacksonville, Florida
May 21, 1999

                                       17

<PAGE>

REYNOLDS, SMITH AND HILLS, INC.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED MARCH 31
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                             1999           1998            1997
                                             ----           ----            ----
<S>                                        <C>            <C>            <C>
GROSS REVENUE                             $42,919,000    $37,122,000    $39,065,000

SUBCONTRACT AND OTHER DIRECT COSTS         11,336,000     10,388,000     11,668,000
                                           ----------     ----------     ----------
   Net service revenue                     31,583,000     26,734,000     27,397,000

COST OF SERVICES                           11,930,000     10,482,000     10,817,000
                                           ----------     ----------     ----------
Gross profit                               19,653,000     16,252,000     16,580,000

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES                  18,716,000     15,337,000     15,581,000
                                           ----------     ----------     ----------

Operating income                              937,000        915,000        999,000

OTHER INCOME (EXPENSE):
  Interest and other income                    81,000        109,000         90,000
  Interest expense                            (22,000)        (4,000)       (31,000)
                                           ----------     ----------     ----------
     Income before income taxes               996,000      1,020,000      1,058,000

INCOME TAX EXPENSE                            415,000        453,000        465,000
                                           ----------     ----------     ----------

NET INCOME                                $   581,000    $   567,000    $   593,000
                                           ==========     ==========     ==========

BASIC EARNINGS PER SHARE                  $      1.29    $      1.25    $      1.30
                                           ==========     ==========     ==========

WEIGHTED AVERAGE COMMON
  SHARES OUTSTANDING                          452,000        455,000        455,000
                                           ==========     ==========     ==========

</TABLE>

See accompnaying notes to consolidated financial statements.


                                       18
<PAGE>

REYNOLDS, SMITH AND HILLS, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

ASSETS                                                           1999           1998
------                                                           ----           ----
<S>                                                           <C>         <C>
CURRENT ASSETS:
Cash                                                          $    68,000 $  2,364,000
Accounts receivable, net of allowance for
   doubtful accounts of $181,000 and $162,000                   5,392,000    4,113,000
Unbilled service revenue                                        4,281,000    3,680,000
Prepaid expenses and other current assets                         195,000      225,000
Deferred income taxes                                             206,000      219,000
                                                               ----------   ----------

   Total current assets                                        10,142,000   10,601,000

PROPERTY AND EQUIPMENT, net                                     2,294,000    1,798,000

OTHER ASSETS                                                       41,000       47,000

IDENTIFIABLE INTANGIBLE ASSETS, net of accumulated
amortization of $966,000 and $909,000                              71,000      128,000

COST IN EXCESS OF NET ASSETS OF ACQUIRED BUSINESSES,
net of accumulated amortization of $243,000 and $177,000        1,378,000      736,000
                                                               ----------   ----------

                                                              $13,926,000  $13,310,000
                                                               ==========   ==========


LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

CURRENT LIABILITIES:
Notes payable and current portion of
     long-term debt                                           $   100,000  $     7,000
Accounts payable                                                2,393,000    1,933,000
Accrued expenses                                                2,503,000    2,681,000
Unearned service revenue                                        1,639,000    2,054,000
                                                               ----------   ----------

     Total current liabilities                                  6,635,000    6,675,000

LONG-TERM DEBT                                                    200,000            0

DEFERRED INCOME TAXES                                             170,000      206,000

OTHER LIABILITIES                                                 461,000      521,000
                                                               ----------   ----------

     Total liabilities                                          7,466,000    7,402,000
                                                               ----------   ----------

COMMITMENTS AND CONTINGENCIES (Notes 7 and 8)

SHAREHOLDERS' EQUITY:
Common stock, $.01 par value, 4,000,000 shares
  authorized, 444,000 and 455,000 issued and outstanding            4,000        5,000
Paid-in capital                                                 3,520,000    3,541,000
Retained earnings                                               2,936,000    2,362,000
                                                               ----------   ----------

Total shareholder's equity                                      6,460,000    5,908,000
                                                               ----------   ----------

                                                              $13,926,000 $ 13,310,000
                                                               ==========   ==========
</TABLE>


                                       19
<PAGE>

REYNOLDS, SMITH AND HILLS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                      Common Stock
                                      ------------
                                                         Paid-in     Retained
                                  Shares       Amount    Capital     Earnings    Total
                                  ------       ------    -------     --------    -----

<S>                               <C>          <C>      <C>         <C>        <C>
BALANCE, MARCH 31, 1996           455,000      $5,000   $3,534,000  $1,202,000 $4,741,000

Issuance of common stock,
   net of issuance costs             --            --        3,000       --        3,000

Net income                                                            593,000    593,000
                                   -------       -----    --------- ---------  ---------

BALANCE, MARCH 31, 1997           455,000       5,000    3,537,000  1,795,000  5,337,000

Issuance of common stock,
   net of issuance costs             --          --          4,000      --         4,000

Net income                                                            567,000    567,000
                                  -------       -----    ---------  ---------  ---------

BALANCE, MARCH 31, 1998           455,000       5,000    3,541,000  2,362,000  5,908,000

Issuance of common stock,
   net of issuance costs            5,000        --         63,000      --        63,000

Repurchase of common stock        (16,000)     (1,000)     (84,000)    (7,000)   (92,000)

Net income                                                            581,000    581,000
                                  -------       -----    ---------  ---------  ---------

BALANCE, MARCH 31, 1999           444,000      $4,000   $3,520,000 $2,936,000 $6,460,000
                                  =======       =====    =========  =========  =========

</TABLE>




                                       20
<PAGE>

REYNOLDS, SMITH AND HILLS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                        1999          1998           1997
                                                        ----          ----           ----
<S>                                                 <C>           <C>           <C>
OPERATING ACTIVITIES:

Net income                                          $  581,000    $  567,000    $  593,000
Adjustments to reconcile net income to net
cash (used) provided by operating activities:
  Depreciation and amortization                        817,000       760,000       747,000
  Deferred income taxes                                (23,000)     (128,000)     (131,000)
  (Gain) loss on disposal of fixed assets               11,000        (2,000)       11,000
  Deferred rent charges                                (63,000)      155,000       (97,000)
Change  in operating assets and liabilities:
  Accounts receivable and unbilled service revenue  (1,832,000)     (156,000)      853,000
  Other assets and prepaid expenses                     37,000        (9,000)        6,000
  Accounts payable and accrued expenses                303,000       (67,000)      605,000
  Unearned service revenue                            (415,000)      116,000      (115,000)
                                                    ----------      --------      --------
Net cash (used) provided by operating activities      (584,000)    1,236,000     2,472,000
                                                    ----------      --------      --------

INVESTING ACTIVITIES:
  Capital expenditures                              (1,185,000)     (269,000)     (422,000)
  Purchase of subsidiary                              (387,000)            0             0
  Proceeds from sale of fixed assets                     6,000         4,000         8,000
                                                    ----------      --------      --------
     Net cash used by investing activities          (1,566,000)     (265,000)     (414,000)
                                                    ----------      --------      --------

FINANCING ACTIVITIES:
  Repayments of long-term debt                         (55,000)      (69,000)     (448,000)
  Net decrease in credit line payable to bank                0             0      (415,000)
  Repurchase of common stock                           (92,000)            0             0
  Net proceeds from issuance of common stock             1,000         3,000         1,000
                                                    ----------    ----------    ----------
     net cas used by financing activities             (146,000)      (66,000)     (862,000)
                                                    ----------    ----------    ----------
NET (DECREASE) INCREASE IN CASH                     (2,296,000)      905,000     1,196,000
CASH AT BEGINNING OF PERIOD                          2,364,000     1,459,000       263,000
                                                    ----------    ----------    ----------
CASH AT END OF PERIOD                               $   68,000    $2,364,000    $1,459,000
                                                    ==========    ==========    ==========
SUPPLEMENTAL CASH FLOW DISCLOSURES:

CASH PAID:
  Interest paid                                     $   20,000    $    4,000    $   36,000
  Income taxes paid                                 $  383,000    $  471,000    $  444,000
NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Note payable - owner financing                    $  300,000          --            --
  Stock bonuses issued                              $   62,000          --            --
</TABLE>

See accompanying notes to consolidated financial statements.


                                       21
<PAGE>

REYNOLDS, SMITH AND HILLS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Basis of Presentation - Reynolds,  Smith and Hills,  Inc. (the Company)
         is a  professional  service  firm  operating  in  the  engineering  and
         architectural  design services  industry.  The Company  provides a full
         range  of  architectural,   engineering,   planning  and  environmental
         services.

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

         Use  of  Estimates  -  The  preparation  of  financial   statements  in
         conformity  with  generally  accepted  accounting  principles  requires
         management to make estimates and  assumptions  that affect the reported
         amounts of assets and liabilities  and disclosure of contingent  assets
         and  liabilities  at the  date  of the  financial  statements  and  the
         reported  amounts of revenues and expenses during the reported  period.
         Actual results could differ from those estimates.

         Revenue  Recognition - Revenue from contract  services is recognized on
         the percentage-of-  completion method. Revenue is recorded as costs are
         incurred,  and  profit  is  recognized  on each  contract  based on the
         percentage  that incurred costs bear to estimated  total costs.  In the
         event of an anticipated  loss, the entire amount of the loss is charged
         to current operations.

         The Company incurs  subcontract  and other direct costs  (out-of-pocket
         expenses) some of which are passed through directly to its clients. The
         Company  believes that revenue  excluding  subcontract and other direct
         costs,  more  accurately  reflects  the amounts  earned for  activities
         performed by the Company.  Accordingly,  the Company reports such costs
         as a reduction of gross revenue to arrive at net service revenue.

         Unbilled service revenue  represents  revenues  recognized in excess of
         amounts billed.  Unearned service revenue represents billings in excess
         of revenues  recognized.  Unbilled  service  revenues which will not be
         collected during the next year are not significant.

         Property  and  Equipment - Property  and  equipment  is stated at cost.
         Depreciation is computed  principally on the straight-line  method over
         the  estimated  useful  lives of the  assets.  Depreciation  of  assets
         recorded  under  capitalized  leases is computed  on the  straight-line
         method over the lesser of the estimated useful life of the asset or the
         term of the lease.  Property and equipment is periodically  reviewed by
         management for impairment  whenever changes in  circumstances  indicate
         that the carrying value may not be recoverable.



                                       22

<PAGE>


REYNOLDS, SMITH AND HILLS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         Identifiable Intangible Assets - Identifiable intangible assets consist
         of values allocated to key employees,  contract backlog, proposals, and
         a covenant not to compete and are being  amortized  on a  straight-line
         basis over periods of 2 to 10 years.

         Cost in Excess of Net Assets of Acquired  Businesses-Cost  in excess of
         net  assets  of  acquired   businesses   is  being   amortized  on  the
         straight-line  method over periods varying from fifteen to forty years.
         The carrying value of cost in excess of net assets of acquired business
         is  periodically  reviewed by  management  and  impairment,  if any, is
         recognized when the projected undiscounted cash flows are less than the
         carrying value.

         Income  Taxes - The  Company  and its  subsidiaries  file  consolidated
         Federal income tax returns. Deferred income taxes result from temporary
         differences  which arise from certain  transactions  being  reported in
         different  periods  for  financial  statement  purposes  than  for  tax
         purposes.  Deferred tax assets and liabilities are recognized  using an
         asset and liability  approach and are based on differences  between the
         financial  statement  and tax basis of  assets  and  liabilities  using
         presently enacted tax rates.

         Basic  Earnings  Per Share - Basic  earnings  per share is  computed by
         dividing net income by the  weighted  average  number of common  shares
         outstanding.  Options  outstanding  to  purchase  common  stock  had no
         significant dilutive effect.

         Cash Equivalents - The Company  considers cash on hand and cash held in
         banks subject to immediate withdrawal to represent cash.

         New Accounting Standards - For the fiscal year ended March 31, 1999 the
         Company adopted SFAS No. 130 "Reporting Comprehensive Income", SFAS No.
         131   "Disclosure   About   Segments  of  an  Enterprise   and  Related
         Information",  and SFAS No. 132 "Employer's  Disclosures about Pensions
         and Other Post-Retirement  Benefits". The impact of these statements is
         not material on the financial statements.


2.       ACQUIRED BUSINESS

         On May 7, 1998, the Company  acquired all of the outstanding  shares of
         Lemuel Ramos and Associates,  Inc., an eleven person architectural firm
         located in Miami, Florida. The Company paid cash of $387,000 and signed
         a $300,000 note payable to obtain the company. The acquisition has been
         accounted   for  using  the  purchase   method  of   accounting,   and,
         accordingly,  the  purchase  price  has been  allocated  to the  assets
         purchased and the liabilities assumed based upon the fair market values
         at the date of  acquisition.  The excess of the purchase price over the
         fair values of the net assets was $708,000 and has been recorded as

                                       23

<PAGE>


REYNOLDS, SMITH AND HILLS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         goodwill,  which is being  amortized on a  straight-line  basis over 15
         years. The fair value of assets acquired and liabilities assumed are as
         follows:

         Fair value of assets acquired      $  71,000
         Goodwill                             708,000
                                              -------
           Total purchase price               779,000
         Less:
           Cash paid                          387,000
           Note payable to seller             300,000
                                              -------

         Liabilities assumed                 $ 92,000
                                             ========


Pro forma income  statements are not included due to the  insignificance  of the
acquisition.


3.       PROPERTY AND EQUIPMENT

         Property and equipment consist of the following at March 31:
<TABLE>
<CAPTION>

                                                                          1999             1998
                                                                          ----             ----

<S>                                                                <C>                 <C>
         Leasehold improvements                                    $   245,000         $    168,000
         Equipment                                                   6,194,000            5,519,000
                                                                   ------------        ------------
                                                                     6,439,000            5,687,000
         Accumulated depreciation                                   (4,145,000)          (3,889,000)
                                                                   ------------         -----------
                                                                   $ 2,294,000         $  1,798,000
                                                                   ===========          ===========
</TABLE>




                                       24

<PAGE>


REYNOLDS, SMITH AND HILLS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

4.       ACCRUED EXPENSES

         Accrued expenses consist of the following at March 31:

                                                                      1999               1998
                                                                      ----               ----

<S>                                                           <C>                <C>
         Accrued payroll                                      $    792,000       $    646,000
         Accrued vacation pay                                      360,000            265,000
         Accrued incentive compensation                            398,000            548,000
         Other                                                     953,000          1,222,000
                                                              ------------        -----------
                                                              $  2,503,000       $  2,681,000
                                                              ============       ============

5.       DEBT

         Long-term debt consists of the following at March 31:

                                                                      1999           1998
                                                                      ----           ----
<S>                                                              <C>              <C>
         Note payable; interest at 8%,
          maturing May 7, 2001,                                  $300,000         $ -----
          $100,000 due annually
         Capital lease obligations                                  -----           7,000
                                                                 --------         ---------
                                                                  300,000           7,000
         Less current portion                                    (100,000)         (7,000)
                                                                 ----------     -----------
         Total long-term debt                                    $200,000         $  ----
                                                                  =========      =========

</TABLE>

         At March 31, 1999, the Company had  $2,000,000 of additional  borrowing
         available under a credit line, with interest at the lower of the bank's
         prime rate plus .1% or LIBOR plus 2.8%.  In  addition,  the Company has
         secured a committed credit facility of $2,000,000 which is reserved for
         the potential acquisition or merger of other  architectural/engineering
         firms.  The interest  rate on this  facility is the lower of the bank's
         prime rate or LIBOR  plus  2.55%.  These  borrowing  agreements,  which
         expire September 30, 1999, require the Company to be in compliance with
         financial  covenants relating to working capital and debt to net worth.
         Substantially  all of the  Company's  tangible  assets  are  pledged as
         security.





                                       25

<PAGE>


REYNOLDS, SMITH AND HILLS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

6.       INCOME TAXES

         The  provision for income taxes for the years ended March 31 consist of
the following:

               1999         1998         1997
            ---------    ---------    ---------
Current:
 Federal    $ 354,000    $ 454,000    $ 495,000
 State         84,000       93,000      101,000
Deferred:
 Federal      (19,000)     (78,000)    (109,000)
 State         (4,000)     (16,000)     (22,000)
            ---------    ---------    ---------
            $ 415,000    $ 453,000    $ 465,000
            =========    =========    =========


         The differences between the provision for income taxes and income taxes
         computed using the U.S. Federal statutory rate are as follows:

                                       1999         1998        1997
                                    ---------    ---------   ---------
Amount computed using
  the statutory rate                $ 339,000    $ 347,000   $ 360,000
Increase in taxes resulting from:
State income taxes                     53,000       44,000      51,000
Goodwill amortization                   9,000        9,000       9,000
Meals and entertainment                53,000       40,000      37,000
Other                                 (39,000)      13,000       8,000
                                    ---------    ---------   ---------
                                    $ 415,000    $ 453,000   $ 465,000
                                    =========    =========   =========


         The following  table  identifies net deferred  taxes  recognized in the
         Company's balance sheet at March 31:
                            1999         1998
                         ---------    ---------

Deferred tax asset       $ 545,000    $ 633,000
Deferred tax liability    (509,000)    (620,000)
                         ---------    ---------
Total deferred taxes     $  36,000    $  13,000
                         =========    =========



                                       26

<PAGE>


REYNOLDS, SMITH AND HILLS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         The types of temporary  differences and their related tax effects which
         create deferred taxes at March 31 are summarized as follows:

                                            1999         1998
                                          ---------    ---------
Assets:
  Allowance for doubtful accounts        $  69,000    $  62,000
  Allowance for warranty claims             92,000      131,000
  Excess rental expense over payments       95,000      119,000
  Accruals not currently deductible        289,000      321,000
                                          ---------    ---------
                                         $ 545,000    $ 633,000
                                          =========    =========
Liability:
  Excess of tax over book depreciation   $(288,000)   $(324,000)
  Accrued Liabilities                     ( 71,000)    ( 85,000)
  Capitalized expenses                    (150,000)    (211,000)
                                          ---------    ---------
                                         $(509,000)   $(620,000)
                                          =========    =========


7.       LEASES

         The   Company   leases   certain   facilities   and   equipment   under
         noncancellable  leases  expiring in various years through 2005. Some of
         the operating  leases provide that the Company pay taxes,  maintenance,
         insurance and other occupancy costs applicable to these premises.  Rent
         expense for the years ended March 31, 1999,  1998 and 1997  amounted to
         $2,402,000, $2,157,000 and $2,109,000, respectively.

         Future minimum  payments under  noncancellable  operating leases are as
follows:

                                              Operating
                                               Leases
                                               ------

                           2000              $ 2,039,000
                           2001                1,813,000
                           2002                1,448,000
                           2003                1,114,000
                           2004                   78,000
                           Thereafter              3,000
                                             -----------
         Total minimum payments             $  6,495,000
                                             -----------


                                       27

<PAGE>


REYNOLDS, SMITH AND HILLS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

8.       CONTINGENCIES

         The Company is subject to lawsuits  involving  claims  typical of those
         filed   against   engineering   and   architectural   professions.   In
         management's  opinion the  potential  losses not  covered by  insurance
         would not be material to the Company's financial position.

         For  each  of  the  years  ended  March  31,   1999,   1998  and  1997,
         approximately  80% of the  Company's  business is with  departments  or
         agencies of Federal, state and local governments.  For the same periods
         approximately  35%  of  the  Company's  gross  revenues  resulted  from
         services provided to the Florida  Department of  Transportation.  These
         contracts  may  be  subject  to  renegotiation  or  termination  at the
         election of the  government.  The Company is subject to examinations by
         representatives of certain governmental  agencies for which it provides
         services.  In management's opinion the results of any examination would
         not have a significant effect on the Company's financial position.


9.       EMPLOYEE BENEFIT PLAN

         The  Company  sponsors  a Profit  Sharing  Plan which  qualifies  under
         Section   401(k)  of  the  Internal   Revenue  Code.  The  Plan  allows
         participating  employees to  contribute  from 2% to 15% of their earned
         compensation  to the plan.  The Company  contributes to the plan 25% of
         each   participant's   contribution,   up  to  the  6%   level  of  the
         participant's  contribution.  For the years ended March 31, 1999,  1998
         and 1997 the  Company  contributed  $161,000,  $163,000  and  $167,000,
         respectively.  Participants  in the plan have the  option  to  purchase
         shares of the Company's common stock. At March 31, 1999,  96,000 shares
         of Company  stock have been issued and 294,000  shares are reserved for
         future issuance under the plan.


10.      STOCK BONUS AND OPTION PLAN

         The Company has a stock bonus plan that  provides  for the  awarding of
         the Company's  common stock to selected  employees.  At March 31, 1999,
         34,000 shares are reserved for future issuance under the plan.

         The Company has  considered  SFAS No. 123 and has  determined  that its
         application is not material to the financial statements.


                                       28

<PAGE>


REYNOLDS, SMITH AND HILLS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         The Company has stock option  plans that provide to selected  employees
         the granting of  incentive  and  non-qualified  options to purchase the
         Company's  common  stock.  A summary  of option  transactions  is shown
         below.

                               1999                 1998
                       --------------------   -----------------
                                   Weighted              Weighted
                                    Average              Average
                                   Exercise              Exercise
                         Options     Price    Options     Price
                         -------     -----    -------     -----
Outstanding at
  beginning of year       36,400    $    12    28,300    $    11
Options granted            3,000         14    22,400         13
Options exercised           (100)        10      (200)        11
Options forfeited        (10,300)        11   (14,100)        12
                         -------              -------
Outstanding at
  end of year             29,000    $    12    36,400    $    12
                         =======              =======
Options exercisable at
  year end                11,200               11,600

The following table summarizes  information  about stock options  outstanding at
March 31, 1999:
<TABLE>
<CAPTION>

                                            Options Outstanding                     Options Exercisable
                                            -------------------                     -------------------

                                             Weighted
                                              Average         Weighted                           Weighted
   Range of                   Number         Remaining        Average             Number         Average
   Exercise                Outstanding      Contractual       Exercise          Exercisable      Exercise
      Prices                at 3/31/99       Life (years)        Price           at 3/31/99         Price
      ------                ----------       ------------        -----           ----------         -----

<S>                           <C>                 <C>          <C>                <C>             <C>
$10.25-$10.99                  2,500               .5           $10.55             2,500           $10.55
$11.00-$11.99                 11,400              5.9            11.39             4,900            11.25
$12.00-$12.99                  5,100              7.3            12.59             1,500            12.44
$14.00-$14.99                 10,000              3.7            14.00             2,300            14.00
                              ------                                             -------
                              29,000              4.9            12.43            11,200            11.82
                              ======                                              ======

</TABLE>


                                       29

<PAGE>


REYNOLDS, SMITH AND HILLS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         Remaining  non-exercisable  stock  options as of March 31,  1999 become
available as follows:

                                    2000               6,000
                                    2001               5,900
                                    2002               3,400
                                    2003               2,500
                                                     -------
                                                      17,800
                                                      ======

         At March 31,  1999,  121,000  stock  options  are  reserved  for future
issuance under the plans.


11.      FINANCIAL INSTRUMENTS

         The Company used the following  methods and assumptions to estimate the
         fair value of the following financial instrument:

                  Debt.  Interest  rates  that are  currently  available  to the
         Company  for  issuance  of  debt  with  similar   terms  and  remaining
         maturities  are used to estimate fair value for debt  instruments.  The
         Company  believes the carrying amount is a reasonable  estimate of such
         fair value.

                                       30

<PAGE>


REYNOLDS, SMITH AND HILLS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

INDEPENDENT AUDITORS' REPORT


The Board of Directors and Shareholders
Reynolds, Smith and Hills, Inc.
Jacksonville, FL

We have audited the accompanying  consolidated financial statements of Reynolds,
Smith and Hills, Inc. and its subsidiaries as of March 31, 1999 and 1998 and for
each of the three years in the period ended March 31, 1999,  and have issued our
report  thereon  dated May 21, 1999;  such report is included  elsewhere in this
Form  10-K.  Our audits  also  included  the  consolidated  financial  statement
schedule  of  Reynolds,   Smith  and  Hills,  Inc.,  listed  in  Item  14.  This
consolidated financial statement schedule is the responsibility of the Company's
management.  Our responsibility is to express an opinion based on our audits. In
our opinion such consolidated  financial statement schedule,  when considered in
relation  to the  basic  consolidated  financial  statements  taken  as a whole,
presents fairly in all material respects the information set forth therein.


/s/ Deloitte and Touche LLP

Jacksonville, FL
May 21, 1999

                                       31
<PAGE>

                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                        REYNOLDS, SMITH AND HILLS, INC.

      --------                 --------      --------  --------       --------
      COLUMN A                 COLUMN B      COLUMN C  COLUMN D       COLUMN E
      --------                 --------      --------  --------       --------

                                             ADDITIONS: DEDUCTIONS:

                              BALANCE AT     CHARGED TO              BALANCE AT
                              BEGINNING      COSTS AND                   END
     DESCRIPTION              OF PERIOD      EXPENSES  WRITE-OFFS     OF PERIOD
     -----------              ---------      --------  ----------     ---------

Year ended march 31, 1999:
  Allowance for
    doubtful accounts         $162,000       $29,000   ($10,000)      $181,000

Year ended march 31, 1998:
  Allowance for
    doubtful accounts         $127,000       $70,000   ($35,000)      $162,000

Year ended March 31, 1997:
  Allowance for
    doubtful accounts         $148,000       $68,000   ($89,000)      $127,000


                                       32