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, 1998

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


       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 20,  1998  computed  with  reference  to the last  sales  price,  was
$4,331,000.

     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 20, 1998 was
459,998 shares.

                      Documents incorporated by reference:

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

  Proxy Statement Dated June 20, 1998                   Part III


<PAGE>

                                TABLE OF CONTENTS

FORM 10-K
 Item
 Number           CAPTION                                                PAGE
 ------           -------                                                ----

                  PART I

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                                          6

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

Item  8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                     11

Item  9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE                    11

                  PART III

Item 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE
                  REGISTRANT                                             12

Item 11.          EXECUTIVE COMPENSATION                                 12

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

Item 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS         12

                  PART IV

Item 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
                  REPORTS ON FORM 8-K                                    12


                                        2

<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 is incorporated in the state of Florida. 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.   These  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 included 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,  hotels  and  resorts,   research/development  and
                  manufacturing facilities,  sports and recreational facilities,
                  and computer 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

                                        3

<PAGE>



                  schools  and campus  master  planning,  courthouses  and other
                  governmental  buildings,  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 the  years  ended  March  31,  1998,  1997 and 1996,
approximately 80%, 80% and 75%, respectively, of the Company's business was with
departments or agencies of federal, state and local governments.  Contracts with
the Florida  Department  of  Transportation  provided  35%, 35% and 40% of total
revenues  for fiscal  years  1998,  1997 and 1996,  respectively.  The loss of a
significant  client such as 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 cancelled 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, 1998 was $29.5 million compared to
$32.6 million at March 31, 1997. Net backlog was $21.8 million at March 31, 1998
as compared to $23.1  million at March 31,  1997.  Approximately  $22 million of
services  included in the  Company's  gross backlog as of March 31, 1998 will be
performed in fiscal year 1999. The Company  expects  additional  revenue in 1999
from  sales  generated  in 1999  which are not  included  in the March 31,  1998
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,  1998 the  Company  employed  approximately  349
persons.

                                        4

<PAGE>



Item 2.   PROPERTIES

     The Company's leases its principal  office space in  Jacksonville,  Florida
and  seven  branches  occupy  leased  office  space  in  the  following  Florida
locations: Fort Myers, Merritt Island, Miami, Orlando, Plantation,  Tallahassee,
and Tampa.  The Company also  maintains a leased office in Flint,  Michigan.  In
addition, the Company leases space for construction sites at approximately seven
locations in Florida.  These leases expire at various  dates  through 2004.  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, 1998.


                      EXECUTIVE OFFICERS OF THE REGISTRANT

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

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

         Leerie T. Jenkins, Jr.     49    Chairman of the Board
                                          and Chief Executive Officer

         David K. Robertson         46    Executive Vice President, Secretary,
                                          Treasurer, Chief Financial Officer, 
                                          and Director

         Charles W. Gregg           48    Executive Vice President, Chief
                                          Operating Officer, and Director

         Darold F. Cole             56    Senior Vice President and Director

         J. Ronald Ratliff          49    Senior Vice President and Director

                                        5

<PAGE>



     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 Company and predecessor  companies for over 26 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, 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 and  predecessor  companies for over 16 years. He
graduated from Florida State University with a degree in Business.

     Mr.  Gregg's  principal  positions are Executive  Vice  President and Chief
Operating Officer of the Company, which he has held since September 1995. He was
appointed  Director of the Company in February 1998. Prior to September 1995 and
since 1992 Mr. Gregg was Senior Vice President of the Company. He graduated from
the University of Florida with a degree in civil engineering and holds a Masters
degree from Rollins College, Crummer School of 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 and  predecessor  companies for over 29 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 and predecessor companies for over 20 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 199 shareholders
of record  at March  31,  1998,  including  persons  owning  stock  through  the
Company's 401(k) plan. The Company pays no dividends on its common stock.

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.


                                        6

<PAGE>


<TABLE>
<CAPTION>

                             SELECTED FINANCIAL DATA
                      (in thousands, except per share data)
                                        ----------------------------------------------------
                                                      YEAR ENDED MARCH 31

                                          1998       1997      1996        1995       1994
                                          ----       ----      ----        ----       ----

STATEMENT OF OPERATIONS DATA:

<S>                                    <C>        <C>        <C>        <C>        <C>     
Gross Revenue                          $ 37,122   $ 39,065   $ 34,070   $ 30,524   $ 27,974

Net service revenue                      26,734     27,397     25,595     23,620     22,005

Net income                                  567        593         92        350        271

Common stock per share data:

Basic earnings per share                   1.25       1.30        .20        .78        .61

Weighted average shares of
    common stock outstanding            455,000    455,000    451,000    446,000    442,000


BALANCE SHEET DATA:

Working capital                           3,926      2,781      1,935      2,314      2,536

Total assets                             13,310     12,680     12,521     11,858     11,203

Long-term debt (less current portion)         0          7         76        524      1,035

Common stockholders' equity               5,908      5,337      4,741      4,576      4,193
</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,
                              --------------------

                                  1998      1997      1996
                                ------    ------    ------

Gross revenue                      138.9%    142.6%    133.1%

Subcontract and other
 direct costs                       38.9      42.6      33.1
                                  ------    ------    ------

   Net service revenue             100.0     100.0     100.0

Cost of services                    39.2      39.5      40.4
                                  ------    ------    ------

   Gross profit                     60.8      60.5      59.6

Selling, general, and
 administrative expenses            57.4      56.9      58.0
                                  ------    ------    ------

   Operating income                  3.4       3.6       1.6

Other income (expense)                .4        .2       (.6)
                                  ------    ------    ------

   Income before income taxes        3.8       3.8       1.0

Income tax expense                   1.7       1.6        .6
                                  ------    ------    ------

   Net income                        2.1%      2.2%       .4%
                                  ======    ======    ======


Gross Revenue:

     Revenue for fiscal 1998 was $37.1  million as compared to $39.1 million for
fiscal  1997.  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

                                        8

<PAGE>



completed and have entered the construction  administration phase. 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.

     Revenues for fiscal 1997  increased  15% from $34.1 million in fiscal 1996.
This  increase  was due to  transportation,  aviation,  aerospace  and  defense,
commercial and institutional projects. Revenues in these program areas increased
as a result of sales efforts throughout the current and prior years.

     For the fiscal years ended March 31, 1998, 1997 and 1996 approximately 80%,
80% and 75%, respectively,  of the Company's revenues were generated from public
sector clients.  For the same periods 35%, 35% and 40% 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 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. In fiscal 1997 there was a 38% increase
from fiscal 1996 in the use of subconsultants;  primarily in the transportation,
aviation, commercial and institutional programs.

Net Service Revenue:

     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.  Net service  revenue for fiscal 1997 increased 7%
from $25.6  million in fiscal 1996.  This  increase was due to the  increases 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,  has experienced  slight improvement at 39.2%, 39.5% and 40.4%,
respectively  for  fiscal  years  ended  March 31,  1998,  1997 and  1996.  This
percentage reflects improving project efficiency. Gross profit, as a result, has
also  improved at 60.8%,  60.5% and 59.6% for fiscal years 1998,  1997 and 1996,
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.


                                        9

<PAGE>



     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 (labor not charged to projects)  and related  benefits,  and a decrease in
temporary staffing. Selling, general and administrative expenses increased 5% in
fiscal 1997 from $14.8  million in 1996.  This  increase  was due  primarily  to
increased   incentive   compensation   and  the   acquisition  of  computer  and
communications technology.

Other Income (Expense):

     Interest expense was $4,000, $31,000 and $155,000 for fiscal 1998, 1997 and
1996, respectively.  These decreases were a result of lower outstanding balances
on the Company's credit line and capital leases and the pay-off of the term loan
on April 1, 1997.

Net Income:

     Net income was $567,000 in 1998,  $593,000 in 1997 and $92,000 in 1996. The
decrease  in 1998 from 1997 was due  primarily  to the  decrease  in net service
revenue (gross revenue less subcontract  costs) as discussed above. The increase
in 1997 over 1996 was due  primarily  to increased  net service  revenue and the
downsizing in fiscal 1996 of the Greensboro,  North Carolina office as described
below.

     In fiscal 1996 the  Greensboro,  North  Carolina  office was  significantly
downsized as a result of continuing net losses.  That office's  restructure  was
completed in 1997. As a result of the Greensboro office restructure, the Company
made a  provision  of  $286,000  in  fiscal  1996 to cover  related  costs.  The
Greensboro,  NC office's net losses from  operations was $812,000 for the fiscal
year ended March 31, 1996.


LIQUIDITY AND CAPITAL RESOURCES

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

                                          March 31
                                      ---------------
                                   1998     1997     1996
                                 ------   ------   ------

Working capital (in thousands)   $3,926   $2,781   $1,935

Current ratio                    1.59:1   1.42:1   1.28:1

Ratio of liabilities to equity   1.25:1   1.38:1   1.64:1

     Cash flows from operations were positive for each of the fiscal years ended
March 31, 1998, 1997 and 1996. The Company has made a significant  investment of
working capital in information

                                       10

<PAGE>



technology  over the last three years.  Payments on notes  payable and long-term
debt totalled $69,000 in fiscal 1998.

     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, 1998,  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, 1998. 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 LIBOR  plus  2.55%.  These
borrowing  agreements  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 1999.

YEAR 2000

     The  Company  is  in  process  of  preparing   its  computer   systems  and
applications  for the  Year  2000.  This  process  involves  communicating  with
external service providers to ensure that they are taking the appropriate action
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 systems
were purchased from vendors who have  represented that these systems are already
Year 2000 compliant.  Management expects to have substantially all of the system
and application changes completed in early 1999.

     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.


Item 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The  consolidated  Financial  Statements  of the  registrant  are set forth
beginning on page 15 of this report.

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

         None.

                                       11

<PAGE>



                                    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 20, 1998 and is incorporated
herein by reference.


                                     PART IV

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

(a)(1)   Financial Statements

         Independent Auditors' Report                                     15

         Consolidated Statements of Income, years ended
                  March 31, 1998, 1997 and 1996                           16

         Consolidated Balance Sheets as of March 31,
                  1998 and 1997                                           17

         Consolidated Statements of Common Shareholders'
                  Equity, years ended March 31, 1998, 1997
                  and 1996                                                18

         Consolidated Statements of Cash Flows, years
                  ended March 31, 1998, 1997 and 1996                     19

         Notes to Consolidated Financial Statements                       20


(a)(2)   Financial Statement Schedule

         Independent Auditors' Report                                     28

         Schedule II - Valuation and Qualifying Accounts                  29


                                       12

<PAGE>


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

21        List of Subsidiaries                                           30

23        Consent of Deloitte & Touche LLP                               31

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 this conforming
          paper filing.

*         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, 1998.

                                       13

<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 20, 1998                       By /s/David K. Robertson
        -------------                          ---------------------
                                                  David K. Robertson
                                                  Executive Vice President,
                                                  Secretary, Treasurer, Chief
                                                  Financial 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 20, 1998
-----------------------------
Leerie T. Jenkins, Jr.              and Chief Executive Officer
                                    (Principal Executive Officer)

/s/ David K. Robertson              Executive Vice President,                   June 20, 1998
---------------------------
David K. Robertson                  Treasurer, Chief Financial
                                    Officer, Secretary, and
                                    Director (Principal Financial
                                    and Accounting Officer)

/s/ Charles W. Gregg                Executive Vice President                    June 20, 1998
----------------------------
Charles W. Gregg                    Chief Operating Officer, and
                                    Director

/s/ Darold F. Cole                  Director                                    June 20, 1998
-------------------------------
Darold F. Cole


/s/ J. Ronald Ratliff 
                                    Director                                    June 20, 1998
-------------------------------
J. Ronald Ratliff


                                    Director
-------------------------------
David E. Thomas, Jr.


                                    Director
-------------------------------
Alexander P. Zechella
</TABLE>

                                       14

<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,  1998 and 1997 and the
related consolidated  statements of income,  shareholders' equity and cash flows
for  each  of the  three  years  in the  period  ended  March  31,  1998.  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  compliance  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  position.  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,  1998 and  1997  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
March 31, 1998 in conformity with generally accepted accounting principals.

/s/ Deloitte and Touche LLP

Jacksonville, Florida
June 5, 1998

<PAGE>

REYNOLDS, SMITH AND HILLS, INC.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED MARCH 31
--------------------------------------------------------------------------------

                                           1998          1997           1996
                                           ----          ----           ----

GROSS REVENUE                         $37,122,000    $39,065,000    $34,070,000
SUBCONTRACT AND OTHER DIRECT COSTS     10,388,000     11,668,000      8,475,000
                                       ----------     ----------      ---------
 Net service revenue                   26,734,000     27,397,000     25,595,000
COST OF SERVICES                       10,482,000     10,817,000     10,357,000
                                       ----------     ----------     ----------
Gross profit                           16,252,000     16,580,000     15,238,000

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES               15,337,000     15,581,000     14,839,000
                                       ----------     ----------     ----------
Operating income                          915,000        999,000        399,000


OTHER INCOME (EXPENSE):
Interest and other income (expense)       109,000         90,000         (4,000)
Interest expense                           (4,000)       (31,000)      (155,000)
                                       ----------     ----------     ----------

 Income before income taxes             1,020,000      1,058,000        240,000

INCOME TAX EXPENSE                        453,000        465,000        148,000
                                       ----------     ----------     ----------

 NET INCOME                           $   567,000    $   593,000    $    92,000
                                       ==========     ==========     ==========

BASIC EARNINGS PER SHARE              $      1.25    $      1.30    $      0.20
                                       ==========     ==========     ==========

AVERAGE COMMON SHARES OUTSTANDING         455,000        455,000        451,000
                                       ==========     ==========     ==========



See accompanying notes to consolidated financial statements.

                                       16

<PAGE>

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

ASSTS                                                            1998         1997
-----                                                            ----         ----
CURRENT ASSETS:
<S>                                                         <C>           <C>        
Cash                                                         $2,364,000   $ 1,459,000
Accounts receivable, net of allowance for
 doubtful accounts of $162,000 and $127,000                   4,113,000     3,682,000
Unbilled service revenue                                      3,680,000     3,955,000
Prepaid expenses and other current assets                       225,000       210,000
Deferred income taxes                                           219,000       166,000
                                                             ----------   -----------

Total current assets                                         10,601,000     9,472,000
PROPERTY AND EQUIPMENT, net                                   1,798,000     2,202,000
OTHER ASSETS                                                     47,000        62,000
IDENTIFIABLE INTANGIBLE ASSETS, net of accumulated
 amortization of $909,000 and $852,000                          128,000       186,000
COST IN EXCESS OF NET ASSETS OF ACQUIRED BUSINESS,
 net of accumulated amortization of $177,000 and $154,000       736,000       758,000
                                                             ----------   -----------
                                                            $13,310,000   $12,680,000
                                                            ===========   ===========

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


DURRENT LIABILITIES:
Notes payable and current portion of
 long-term debt                                             $     7,000   $    69,000
Accounts payable                                              1,933,000     2,080,000
Accrued expenses                                              2,681,000     2,604,000
Unearned service revenue                                      2,054,000     1,938,000
                                                             ----------   -----------

 Total current liabilities                                    6,675,000     6,691,000

LONG-TERM DEBT                                                        0         7,000

DEFERRED INCOME TAXES                                           206,000       281,000

OTHER LIABILITIES                                               521,000       364,000
                                                             ----------   -----------
 Total liabilities                                            7,402,000     7,343,000
                                                             ----------   -----------

COMMITMENTS AND CONTINGENCIES (Notes 6 and 7)
SHAREHOLDERS' EQUITY:

Common Stock, $.01 par value, 4,000,000 shares
 authorized, 455,000 issued and outstanding                       5,000         5,000
Paid-in capital                                               3,541,000     3,537,000
Retained earnings                                             2,362,000     1,795,000
                                                             ----------   -----------
  Total shareholders' equity                                  5,908,000     5,337,000
                                                             ----------   -----------
                                                            $13,310,000   $12,680,000
                                                            ===========   ===========
</TABLE>



See accompanying notes to consolidated financial statements.

                                       17

<PAGE>
<TABLE>
<CAPTION>

REYNOLDS, SMITH AND HILLS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
--------------------------------------------------------------------------------



                                  Common Stock
                                  ------------
                                                       paid-in        Retained
                              Shares         Amount    Capital        Earnings     Total
------------------------------------------------------------------------------------------
<S>                            <C>       <C>          <C>          <C>          <C>       
BALANCE, MARCH 31, 1995        448,000   $    5,000   $3,461,000   $1,110,000   $4,576,000

Issuance of common stock,
 net of issuance costs           7,000         --         73,000         --         73,000

Net income                                                             92,000       92,000

                               -----------------------------------------------------------
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
                               ===========================================================
</TABLE>



See accompanying notes to consolidated financial statements.

                                       18

<PAGE>
<TABLE>
<CAPTION>

REYNOLDS, SMITH AND HILLS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
YEARS ENDED MARCH 31
--------------------------------------------------------------------------------

                                                               1998           1997          1996
                                                               ----           ----          ----

<S>                                                       <C>            <C>            <C>        
OPERATING ACTIVITIES:
Net income                                                $   567,000    $   593,000    $    92,000
Adjustments to reconcile net income to net
cash provided by operating activities:
 Depreciation and amortization                                760,000        747,000        714,000
 Deferred income taxes                                       (128,000)      (131,000)       101,000
 (Gain) loss on disposal of fixed assets                       (2,000)        11,000         28,000
 Deferred rent charges                                        155,000        (97,000)       (82,000)
Change in operating assets and liabilities:
 Accounts receivable and unbilled service revenue            (156,000)       853,000       (801,000)
 Other assets and prepaid expenses                             (9,000)         6,000        (30,000)
 Accounts payable and accrued expenses                        (67,000)       605,000        869,000
 Unearned service revenue                                     116,000       (115,000)         9,000
                                                          -----------    -----------    -----------

 Net cash provided by operating activities                  1,236,000      2,472,000        900,000
                                                          -----------    -----------    -----------

INVESTING ACTIVITES:
 Capital expenditures                                        (269,000)      (422,000)      (905,000)
 Proceeds from sale of fixed assets                             4,000          8,000         16,000
                                                          -----------    -----------    -----------
  Net cash used by investing activities                      (265,000)      (414,000)      (889,000)
                                                          -----------    -----------    -----------


FINANCING ACTIVITIES:
 Repayments of long-term debt                                 (69,000)      (448,000)      (510,000)
 Net increase (decrease) in credit line payable to bank             0       (415,000)       136,000
 Net proceeds from issuance of common stock                     3,000          1,000         49,000
                                                          -----------    -----------    -----------

  Net cash used by financing activities                       (66,000)      (862,000)      (325,000)
                                                          -----------    -----------    -----------


NET INCREASE (DECREASE) IN CASH                               905,000      1,196,000       (314,000)
CASH AT BEGINNING OF PERIOD                                 1,459,000        263,000        577,000
                                                          -----------    -----------    -----------
CASH AT END OF PERIOD                                     $ 2,364,000    $ 1,459,000    $   263,000
                                                          ===========    ===========    ===========

SUPPLEMENTAL CASH FLOW DISCLOSURES:
 Interest paid                                            $     4,000    $    36,000    $   155,000
 Income taxes paid                                        $   471,000    $   444,000    $   360,000

</TABLE>


See accompanying notes to consolidated financial statements.

                                       19

<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.

         Income  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.



                                       20

<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  Business - Cost in excess of
          net  assets  of  acquired   businesses  is  being   amortized  on  the
          straight-line  method over 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  taxes  primarily  result  from
         accelerated  depreciation  methods  used for tax  purposes and deferred
         rent charges.

         New Accounting Standards - For the fiscal year ended March 31, 1998 the
         Company  adopted SFAS No. 128 "Earnings  Per Share".  The impact on the
         financial statements is not material.

         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.

         Reclassifications  -  Certain  reclassifications  have been made in the
         1996  financial  statements to conform to  classifications  used in the
         1998 financial statements.


2.       PROPERTY AND EQUIPMENT

         Property and equipment consist of the following at March 31:

                                                  1998                  1997
                                                  ----                  ----

Leasehold improvements                          $   168,000         $   165,000
Equipment                                         5,519,000           5,321,000
                                                -----------         -----------
                                                  5,687,000           5,486,000
Accumulated depreciation                         (3,889,000)         (3,284,000)
                                                -----------         -----------
                                                $ 1,798,000         $ 2,202,000
                                                ===========         ===========

                                       21

<PAGE>



REYNOLDS, SMITH AND HILLS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

3.       ACCRUED EXPENSES

         Accrued expenses consist of the following at March 31:

                                                       1998               1997
                                                       ----               ----
Accrued payroll                                     $  646,000        $  633,000
Accrued incentive compensation                         548,000           570,000
Other                                                1,487,000         1,401,000
                                                    ----------        ----------

                                                    $2,681,000        $2,604,000
                                                    ==========        ==========


4.       DEBT

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

                                               1998           1997
                                               ----           ----
Installment note; interest at
 9.25%, matured April 1, 1997                 $  --        $31,000

Capital lease obligations                       7,000       45,000
                                              -------      -------

                                                7,000       76,000
Less current portion                           (7,000)     (69,000)
                                              -------      -------

Total long-term debt                          $  --        $ 7,000
                                              =======      =======


         At March 31, 1998, 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 LIBOR plus 2.55%.  These
         borrowing  agreements,  which expire July 31, 1998, 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.


                                       22

<PAGE>



REYNOLDS, SMITH AND HILLS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

5.       INCOME TAXES

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

                                    1998               1997              1996
                                    ----               ----              ----
Current:
 Federal                         $ 454,000          $ 495,000          $  37,000
 State                              93,000            101,000             10,000
Deferred:
 Federal                           (78,000)          (109,000)            84,000
 State                             (16,000)           (22,000)            17,000
                                 ---------          ---------          ---------
                                 $ 453,000          $ 465,000          $ 148,000
                                 =========          =========          =========

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

                                            1998           1997           1996
                                            ----           ----           ----
Amount computed using
  the statutory rate                      $347,000       $360,000       $ 82,000
Increase in
 taxes resulting from:
State income taxes                          44,000         51,000         15,000
Goodwill amortization                        9,000          9,000          9,000
Meals and entertainment                     40,000         37,000         34,000
Other                                       13,000          8,000          8,000
                                          --------       --------       --------
                                          $453,000       $465,000       $148,000
                                          ========       ========       ========

         The following  table  identifies net deferred  taxes  recognized in the
         Company's balance sheet at March 31:
                                                      1998               1997
                                                      ----               ----
Deferred tax asset                                 $ 633,000          $ 505,000
Deferred tax liability                              (620,000)          (620,000)
                                                   ---------          ---------
Total deferred taxes                               $  13,000          $(115,000)
                                                   =========          ---------

                                       23

<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:

                                             1998             1997
                                             ----             ----
Assets:
  Allowance for doubtful accounts           $  62,000    $  49,000
  Allowance for warranty claims               131,000      111,000
  Excess rental expense over payments         119,000       59,000
  Accruals not currently deductible           321,000      286,000
                                            ---------    ---------
                                            $ 633,000    $ 505,000
                                            =========    =========
Liability:
  Excess of tax over book depreciation      $(324,000)   $(309,000)
  Accrued Liabilities                        ( 85,000)    (108,000)
  Capitalized expenses                       (211,000)    (203,000)
                                             ---------    ---------
                                            $(620,000)   $(620,000)
                                            =========    ========= 


6.       LEASES

         The   Company   leases   certain   facilities   and   equipment   under
         noncancellable  leases  expiring in various years through 2004. 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, 1998,  1997 and 1996  amounted to
         $2,157,000, $2,109,000 and $1,808,000, respectively.

         Future  minimum  payments  under  capital  leases  and   noncancellable
         operating leases are as follows:
                              Capital            Operating
                              Leases               Leases
                              ------               ------

               1999         $    7,000         $2,014,000
               2000               --            1,897,000
               2001               --            1,685,000
               2002               --            1,345,000
               2003               --            1,064,000
               Future years       --               35,000
                            ----------         ----------
Total minimum payments           7,000         $8,040,000
                                               ==========
Amount representing
  interest                        --
                           -----------

Present value of net
  minimum lease payments      $  7,000
                              ========

                                       24

<PAGE>

REYNOLDS, SMITH AND HILLS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

7.       COMMITMENTS AND 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, 1998, 1997 and 1996 approximately
         80%,  80% and 75% of the  Company's  business  is with  departments  or
         agencies of Federal, state and local governments.  For the same periods
         35%, 35% and 40% 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.


8.       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, 1998,  1997
         and 1996 the  Company  contributed  $163,000,  $167,000  and  $158,000,
         respectively.  Participants  in the plan have the  option  to  purchase
         shares of the Company's common stock. At March 31, 1998,  96,000 shares
         of Company  stock have been issued and 294,000  shares are reserved for
         future issuance under the plan.


9.       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, 1998,
         39,000 shares are reserved for future issuance under the plan.


                                       25

<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.

                                             1998                   1997
                                     --------------------  ---------------------
                                                 Weighted               Weighted
                                                 Average                 Average
                                                 Exercise               Exercise
                                     Options      Price      Options      Price
                                     -------      -----      -------      -----
Outstanding at
  beginning of year                   28,300     $    11      31,400     $    11
Options granted                       22,400          13         500          12
Options exercised                        200          11         100          10
Options forfeited                     14,100          12       3,500          11
                                     -------                 -------
Outstanding at
  end of year                         36,400     $    12      28,300     $    11
                                      =======                =======
Options exercisable at
  year end                            11,600                  21,300


The following table summarizes  information  about stock options  outstanding at
March 31, 1998:

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

                                 Weighted
                                  Average    Weighted                 Weighted
   Range of          Number      Remaining    Average     Number       Average
   Exercise       Outstanding   Contractual  Exercise   Exercisable    Exercise
    Prices         at 3/31/98   Life (years)   Price    at 3/31/98      Price
    ------         ----------   ------------   -----    ----------      -----

$10.25-$10.99         7,000         1.1    $   10.44      7,000     $   10.44
$11.00-$11.99        17,200         6.5        11.34      4,300         11.08
$12.00-$12.99         5,100         8.3        12.59        300         12.10
$13.00-$13.99           --           --          --         --            --
$14.00-$14.99         7,100         4.5        14.00        --            --
                     ------                              ------
                     36,400         5.3        11.86     11,600         10.73
                     ======                              ======



                                       26

<PAGE>


REYNOLDS, SMITH AND HILLS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     Remaining  non-exercisable  stock  options  as of  March  31,  1998  become
available as follows:

                                    1999               7,700
                                    2000               5,600
                                    2001               5,500
                                    2002               3,000
                                    2003               3,000
                                                     -------
                                                      24,800
                                                     =======

     At March 31, 1998,  113,600 stock options are reserved for future  issuance
under the plans.


10.      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.

                          *****************************



                                       27

<PAGE>



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, 1998 and 1997 and for
each of the three years in the period ended March 31, 1998,  and have issued our
report  thereon  dated June 5, 1998;  such report is included  elsewhere in this
Form 10-K.  Our audits also  included the  consolidated  financial  statement 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
June 5, 1998

                                       28

<PAGE>

                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                        REYNOLDS, SMITH AND HILLS, INC.


                                         ADDITIONS: DEDUCTIONS:

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

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


Year ended March 31, 1996:
 Allowance for
  doubtful accounts          $151,000   $ 56,000   ($59,000)   $148,000


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