AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 4, 1997

REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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OCI HOLDINGS CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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DELAWARE 7312 38-3286430
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)

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512 TAYLOR STREET
CORINTH, MS 38834
(601) 286-3334
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)

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JOHN C STANLEY IV
CHAIRMAN
OCI HOLDINGS CORP.
512 TAYLOR STREET
CORINTH, MS 38834
(601) 286-3334
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

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COPIES TO:
DAVID F. DIETZ, P.C. JONATHAN A. SCHAFFZIN, ESQ.
GOODWIN, PROCTER & HOAR LLP CAHILL GORDON & REINDEL
EXCHANGE PLACE 80 PINE STREET
BOSTON, MA 02109 NEW YORK, NY 10005
(617) 570-1000 (212) 701-3000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(1) REGISTRATION FEE
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Common Stock, $0.01 par value
per share..................... $57,500,000 $17,425

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(1) Estimated pursuant to Rule 457(o) solely for the purpose of calculating
the amount of the registration fee.

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.

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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED , 1997

PROSPECTUS
, 1997

[LOGO]
OCI HOLDINGS CORP.

COMMON STOCK

All of the shares of Common Stock ("Common Stock") offered hereby (the
"Offering") are being sold by OCI Holdings Corp. (the "Company").

Prior to the Offering, there has been no public market for the Common Stock.
It is currently estimated that the initial public offering price of the Common
Stock will be between $ and $ per share. See "Underwriting" for information
relating to the factors considered in determining the initial public offering
price.

The Company has applied for listing of the Common Stock on the Nasdaq
National Market, subject to official notice of issuance, under the symbol
"OCIC."

The Company has also filed a registration statement with respect to the
offering (the "Notes Offering") of $125.0 million of its % Senior Subordinated
Notes due 2007 (the "Notes"). The Offering is conditioned upon the simultaneous
consummation of the Notes Offering.

SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OF COMMON
STOCK OFFERED HEREBY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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PRICE UNDERWRITING PROCEEDS
TO THE DISCOUNTS AND TO THE
PUBLIC COMMISSIONS(1) COMPANY(2)
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Per Share...................................... $ $ $
Total(3)....................................... $ $ $

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(1) See "Underwriting" for indemnification arrangements with the Underwriters.

(2) Before deducting estimated expenses of $ , which will be paid by the
Company.

(3) The Company has granted the Underwriters a 30-day option to purchase up to
additional shares at the Price to the Public, less Underwriting
Discounts and Commissions, solely to cover over-allotments, if any. If such
option is exercised in full, the Price to the Public, Underwriting
Discounts and Commissions and Proceeds to the Company will be $ , $
and $ , respectively. See "Underwriting."

The shares offered hereby are offered by the several Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that
delivery of the shares will be made in New York, New York, on or about ,
1997.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALEX. BROWN & SONS
INCORPORATED
SALOMON BROTHERS INC

[ART WORK WILL CONSIST OF A MAP OF THE COMPANY'S LOCATIONS.]

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK
OFFERED HEREBY. SUCH TRANSACTIONS MAY INCLUDE STABILIZATION, THE PURCHASE OF
COMMON STOCK TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY
BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to the more
detailed information and financial statements, including the notes thereto,
appearing elsewhere in this Prospectus. As used in this Prospectus, unless the
context otherwise requires, references to "OCI" or the "Company" mean OCI
Holdings Corp. together with all of its direct and indirect subsidiaries and
businesses; "OCI North" refers to the Company's subsidiary, OCI (N) Corp; "OCI
South" refers to the Company's subsidiary, Mass Communications Corp. ("MCC"),
together with MCC's subsidiary, Outdoor Communications, Inc.; and
"Predecessors" refers to each of OCI North and OCI South. Unless otherwise
indicated, references to financial or operating results of the Company
occurring in any fiscal year are to the twelve months ended on June 30 of such
indicated fiscal year. The information in this Prospectus assumes (i) the
completion of the Notes Offering, (ii) no exercise of the over-allotment option
granted to the Underwriters in the Offering, (iii) the reclassification of all
outstanding shares of the Company's Class A Common Stock, par value $.01 per
share, and Class B Common Stock, par value $.01 per share, prior to the date of
the Offering into shares of Common Stock, and (iv) the effectiveness of an
for 1 stock split effected on , 1997. The pro forma financial information in
this Prospectus reflects only the acquisitions of Georgia Outdoor, Alabama
Outdoor, Skoglund, Outdoor West and the Ragan Companies (each, as defined
below, and collectively, the "Significant Acquisitions") and excludes other
individually insignificant operations acquired by the Company since its
formation.

THE COMPANY

OCI is a leading provider of outdoor advertising services, operating
approximately 15,000 advertising displays in 13 midwestern and southeastern
states. The Company focuses on small- to medium-sized markets with populations
ranging from 15,000 to 150,000, and is the largest outdoor advertising company
in most of the markets in which it operates. Management believes that operating
in small- to medium-sized markets provides certain advantages over operating in
large markets, including lower and more stable lease costs, greater new build
opportunities and more attractive acquisition opportunities. For the twelve
months ended March 31, 1997, on a pro forma basis, the Company had net revenues
and EBITDA of $56.1 million and $22.5 million, respectively, excluding the
results of certain individually insignificant operations prior to their
acquisition by the Company. See "Summary Pro Forma Financial Information."

Outdoor advertising offers repetitive impact and relatively low cost-per-
thousand impressions compared to alternative media, including television,
radio, newspapers, magazines and direct mail marketing. The outdoor advertising
industry in the United States has experienced increased advertiser interest and
revenue growth during the 1990s. According to recent estimates by the Outdoor
Advertising Association of America (the "OAAA"), the trade association for the
outdoor advertising industry, outdoor advertising generated total revenues of
approximately $2.0 billion in 1996, or approximately 1.1% of total advertising
expenditures in the United States. While the industry has experienced some
consolidation within the past few years, the OAAA estimates that there are
still approximately 600 companies in the outdoor advertising industry operating
approximately 396,000 billboard displays. The Company expects the trend of
consolidation in the outdoor advertising industry to continue.

The Company's objective is to be a leading provider of outdoor advertising
services in small- to medium-sized markets across the United States. To achieve
this objective, the Company plans both to increase its penetration in its
existing markets and expand into attractive new markets. The Company has
historically implemented, and intends to continue to pursue, the following
operating strategy:

enhance local market operating efficiencies. In most instances, in-
market acquisitions involve the purchase of display faces only and
require no incremental personnel. The Company also intends to pursue new
market acquisitions that are either within its existing regions or in
new regions where attractive growth and consolidation opportunities
exist.

Leverage Operational Structure. The Company's operational structure
provides significant operating leverage to support increased penetration
of existing markets and new market expansion. The Company's operations
are comprised of 11 divisions, each with its own headquarters to service
its display structures and customers. OCI has centralized management
operations in Traverse City, Michigan and Corinth, Mississippi to
provide administrative oversight of the divisions through centralized
purchasing, a detailed budgeting process, management information systems
and strict cost controls. With this infrastructure in place, the Company
can generate revenues from newly acquired or constructed display faces
at a very attractive incremental margin.

Focus on Local Advertisers. The Company seeks to continue its local
advertiser focus, which management believes provides the Company with a
diverse and stable advertiser base, fewer sales subject to agency
commissions and greater rate integrity. Local advertising constituted
over 84% of the Company's gross revenues for the nine months ended March
31, 1997, which is higher than the industry average of 70% as estimated
by the OAAA. The Company believes that the diversity of its local
customer base insulates it from dependence on any one customer or
industry. During the nine months ended March 31, 1997, no single
customer represented more than 2.5% of the Company's gross revenues.

Emphasize Twelve-Month Advertising Contracts. The Company seeks to
maximize occupancy levels and sales force and production efficiency by
focusing on twelve-month advertising contracts. The Company believes
that these long-term contracts enhance occupancy levels at stable
advertising rates, generate higher renewal rates, increase the
predictability of revenues and allow its sales personnel time to devote
greater attention to servicing their accounts.

Capitalize on Experienced Management Team. The Company believes that one
of the keys to continuing its growth is its experienced management team.
The Company's three-person senior management team has over 70 years of
combined experience in the outdoor advertising industry which provides
the Company with the market knowledge and local relationships necessary
to identify and evaluate acquisition candidates. Management's local
relationships also provide OCI with the ability to identify and obtain
municipal approval for new build opportunities.

RECENT ACQUISITIONS

The Company was created in April 1996 to complete the acquisition and
consolidation of two well-established outdoor advertising companies: OCI North
and OCI South. Since its formation the Company has pursued an aggressive
acquisition strategy, completing 16 acquisitions of outdoor advertising
companies (collectively, the "Acquired Companies") over a 15-month period. The
Company's acquisition integration approach is different for new market and in-
market acquisitions. In new market acquisitions, the Company generally
eliminates administrative and accounting positions, maintains a sales and
production capability and institutes the Company's operating philosophy,
systems and controls. In-market acquisitions typically involve the purchase of
display faces only, resulting in the elimination of all personnel and related
costs.

The following summarizes the Significant Acquisitions, which are included in
the summary pro forma financial information included herein:

The Ragan Acquisition. In May 1997, the Company entered into agreements to
acquire substantially all of the assets of The Ragan Outdoor Advertising
Company of Rockford, L.L.C., The Ragan Outdoor Advertising Company and The
Ragan Outdoor Advertising Company of Cedar Rapids (collectively, the "Ragan
Companies") for an aggregate cash purchase price of $27.0 million. The
properties represent approximately 1,470 display faces in Rockford,
Illinois, Cedar Rapids, Iowa and the Quad Cities of Moline, Illinois, Rock
Island, Illinois, Davenport, Iowa and Bettendorf, Iowa. The acquisition of
the Ragan Companies is scheduled to close in June 1997.

The Outdoor West Acquisition. On March 31, 1997, OCI acquired substantially
all of the assets of Outdoor West, Inc. of Tennessee ("Outdoor West") for a
cash purchase price of $11.8 million. As a result of this acquisition, the
Company acquired approximately 960 display faces in Tennessee and a right
of first refusal to purchase Outdoor West, Inc. of Georgia, an affiliate of
Outdoor West.

The Skoglund Acquisition. On October 31, 1996, OCI completed the
acquisition of substantially all of the assets of Skoglund Communications,
Inc. and Skoglund Communications of St. Cloud, Inc. (together, "Skoglund")
for a cash purchase price of $21.0 million. As a result of the acquisition
of Skoglund, the Company acquired approximately 1,500 display faces in
Minnesota and Wisconsin.

The Georgia Outdoor Acquisition. On April 3, 1996, OCI completed the
acquisition of substantially all of the assets of Georgia Outdoor
Advertising Company ("Georgia Outdoor") for a cash purchase price of $11.6
million. As a result of this transaction, the Company acquired
approximately 800 display faces in Georgia and South Carolina in the
vicinity of Athens, Georgia.

In addition to the Significant Acquisitions, since September 1996 the Company
has completed 11 individually insignificant in-market acquisitions for an
aggregate purchase price of approximately $17.5 million. The pro forma
financial information in this Prospectus does not fully reflect the effect of
these acquisitions, as the results of these operations are only included from
the date of acquisition. If all such acquisitions were included in the pro
forma financial information for a full twelve months, management estimates the
Company's net revenues and EBITDA for the twelve months ended March 31, 1997
would have been approximately $60.2 million and $24.6 million, respectively, as
compared to $56.1 million and $22.5 million as presented in the pro forma
financial information included herein. See "Unaudited Pro Forma Consolidated
Financial Statements."

FINANCING PLAN

The Company is entering into a financing plan to provide greater flexibility
in pursuing its growth strategy. This financing plan will consist of (i) the
Offering; (ii) the Notes Offering; and (iii) the New Credit Facility (as
defined below) (collectively, the "Financing Plan"). Simultaneously with the
Offering, the Company intends to offer $125.0 million of % Senior Subordinated
Notes due 2007 by a separate prospectus in the Notes Offering which is expected
to generate net cash proceeds to the Company of approximately $121.3 million.
The Offering is conditioned upon consummation of the Notes Offering. The
Company also intends to enter into an amendment to and restatement of its
senior credit facility which will increase its loan commitment to $ million
(the "New Credit Facility"). The Company intends to use the net proceeds of the
Offering and the Notes Offering (together, the "Offerings") to repay
substantially all of its existing indebtedness. See "Use of Proceeds."

THE OFFERING

Common Stock offered by the Company.......... shares

Common Stock to be outstanding after the
Offering.................................... shares(1)

Use of Proceeds.............................. Repayment of all amounts outstanding under
the existing credit facility, redemption of
the Series A Notes and Series B Notes
(each, as defined) and for working capital
and general corporate purposes.

Proposed Nasdaq National Market Symbol....... OCIC

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(1) Excludes shares of Common Stock reserved for issuance upon exercise of
options granted under the Company's 1997 Stock Option Plan (as defined).
See "Management--Stock Option Plan."

RISK FACTORS

Prospective investors should carefully consider all of the information set
forth in this Prospectus and, in particular, should evaluate the specific
factors under "Risk Factors" for risks involved with an investment in the
Common Stock.

SUMMARY PRO FORMA FINANCIAL INFORMATION

The following sets forth summary pro forma financial information derived from
the information contained under the caption "Unaudited Pro Forma Consolidated
Financial Statements" elsewhere in this Prospectus. Because of the extent to
which the Company has grown through acquisitions since April 1996, management
believes that this summary pro forma financial information, which gives effect
to the Significant Acquisitions for the periods presented, is the most
meaningful information for use in evaluating an investment in the Company.

The summary pro forma statement of operations data for the fiscal year ended
June 30, 1996 and for the twelve months ended March 31, 1997 give effect to (i)
the Formation Transactions (as defined); (ii) the Offerings and the application
of the estimated net proceeds therefrom; (iii) the Significant Acquisitions as
if each had occured at the beginning of the respective periods; and (iv) the
elimination of duplicative administrative and other costs as if each
acquisition had occurred at the beginning of the respective periods. The
summary pro forma balance sheet data as of March 31, 1997 has been prepared as
if the acquisition of the Ragan Companies (the only significant acquisition
consummated subsequent to that date) and the Offerings had occurred on March
31, 1997. All pro forma financial information included herein excludes the pre-
acquisition results of operations of 11 individually insignificant in-market
acquisitions completed by the Company since September 1996. Consequently, the
two pro forma periods are not comparable because the pro forma financial
information for the twelve months ended March 31, 1997 includes partial period
results of acquisitions completed after June 30, 1996.

The summary pro forma financial information does not purport to present the
actual financial position or results of operations of the Company had the
transactions and events assumed therein in fact occurred on the dates
specified, nor are they necessarily indicative of the results of operations
that may be achieved in the future. The summary pro forma financial information
is based on certain assumptions and adjustments described in the notes
contained in "Unaudited Pro Forma Consolidated Financial Statements" and should
be read in conjunction therewith. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the financial statements and
the notes thereto included elsewhere in this Prospectus.

SUMMARY PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
UNAUDITED

PRO FORMA
-------------------------------------
FISCAL YEAR ENDED TWELVE MONTHS ENDED
JUNE 30, 1996(1) MARCH 31, 1997(1)

STATEMENT OF OPERATIONS DATA:
Net revenues (2)........................ $51,308 $56,124
Direct operating expenses .............. 12,124 13,070
Selling, general and administrative
expenses............................... 20,536 20,559
Depreciation and amortization........... 9,838 10,961
------- -------
Operating income...................... 8,810 11,534
Interest expense........................ 13,000 13,000
Other expenses (income), net............ 338 119
Income tax expense (benefit)............ (1,537) 95
------- -------
Net loss.............................. $(2,991) $(1,680)
======= =======
OTHER DATA:
EBITDA (3).............................. $18,648 $22,495
EBITDA margin (4)....................... 36.3% 40.1%
Ratio of EBITDA to interest expense..... -- 1.7x(5)
Ratio of total debt to EBITDA........... -- 5.8x(5)

AS OF MARCH 31, 1997
-----------------------
ACTUAL PRO FORMA

BALANCE SHEET DATA:
Working capital(6).................................... $12,071 $ 21,520
Total assets.......................................... 140,175 178,608
Long-term debt, including current installments........ 136,002 130,877(5)
Stockholders' equity (deficit)........................ (5,314) 39,562

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(1) Excludes the pre-acquisition results of operations for 11 individually
insignificant acquisitions completed since September 1996. Consequently,
the two pro forma periods are not comparable because the pro forma
financial information for the twelve months ended March 31, 1997 includes
partial period results of acquisitions completed after June 30, 1996. If
all Acquired Companies were included in the pro forma operating results for
the full twelve months ended March 31, 1997, management estimates the
Company's net revenues and EBITDA during such period would have been
approximately $60.2 million and $24.6 million, respectively.
(2) Net revenues are gross revenues less agency commissions.
(3) "EBITDA" is operating income before depreciation and amortization. EBITDA
is not intended to represent net cash provided by operating activities as
defined by generally accepted accounting principles and should not be
considered as an alternative to net income (loss) as an indicator of the
Company's operating performance or to net cash provided by operating
activities as a measure of liquidity. The Company believes EBITDA is a
measure commonly reported and widely used by analysts, investors and other
interested parties in the outdoor advertising industry. Accordingly, this
information has been disclosed herein to permit a more complete comparative
analysis of the Company's operating performance relative to other companies
in the outdoor advertising industry.
(4) EBITDA margin is EBITDA stated as a percentage of net revenues.
(5) Pro forma long-term debt and interest expense include all borrowings in
conjunction with the Company's acquisitions, including those consummated
subsequent to the periods shown. The 11 individually insignificant in-
market acquisitions are not reflected in the pro forma statement of
operations data for the full twelve months ended March 31, 1997. Had these
acquisitions been fully reflected for such period, management estimates pro
forma EBITDA to interest expense and total debt to EBITDA would have been
1.9x and 5.3x, respectively.
(6) Working capital is defined as current assets less current liabilities
excluding current installments of long-term debt and obligations under non-
compete agreement.

RISK FACTORS

In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the
Common Stock offered by this Prospectus.

Substantial Leverage; Ability to Service Indebtedness. The Company has
substantial indebtedness. As of March 31, 1997, after giving effect to the
Financing Plan, the Company's total long-term debt was approximately $130.9
million. The Company's level of indebtedness could have important consequences
to holders of the Common Stock, including the following: (i) a substantial
portion of the Company's cash flow from operations must be dedicated to the
payment of the principal of and interest on its indebtedness and will not be
available for other purposes; (ii) the ability of the Company to obtain
financing in the future for working capital needs, capital expenditures,
acquisitions, investments, general corporate purposes or other purposes may be
materially limited or impaired; and (iii) the Company's level of indebtedness
may reduce the Company's flexibility to respond to changing business and
economic conditions. The Company believes that cash provided by operating
activities will be sufficient to meet payment requirements under the New
Credit Facility and the Notes; however, a decline in cash flow from operations
could impair the Company's ability to meet its obligations, including for debt
service, and to make scheduled principal repayments. See "Selected Historical
Consolidated Financial and Other Information," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Description of
Indebtedness."

Restrictions Imposed by the Company's Indebtedness. The restrictions imposed
by the Company's indebtedness could have important consequences to
stockholders. The Company's debt instruments contain restrictions on the
Company's ability to incur additional indebtedness, create liens, pay
dividends, sell assets and make acquisitions. Furthermore, the New Credit
Facility contains certain maintenance tests. There can be no assurance that
the Company and its subsidiaries will be able to comply with the provisions of
their respective debt instruments, including compliance by the Company with
the financial ratios and tests contained in the New Credit Facility. In
addition, any event of default or declaration of acceleration under one debt
instrument could also result in an event of default under one or more of the
Company's other debt instruments. See "--Substantial Leverage; Ability to
Service Indebtedness" and "Description of Indebtedness--New Credit Facility."
Other indebtedness of the Company that may be incurred in the future may
contain financial or other covenants more restrictive than those applicable to
the Notes and the New Credit Facility. See "Description of Indebtedness--New
Credit Facility."

Acquisition Strategy; Challenges of Integration. The Company's growth has
been facilitated by strategic acquisitions that have substantially increased
the Company's inventory of advertising display faces. One aspect of the
Company's operating strategy is to make acquisitions in new and existing
markets. While the Company believes that the outdoor advertising industry is
highly fragmented and that significant acquisition opportunities are available
there can be no assurance that suitable acquisition candidates can be found.
The Company is likely to face competition from other outdoor advertising and
media companies for acquisition opportunities. In addition, the prices sought
by sellers of outdoor advertising display faces and companies have been rising
and if they continue to rise, the Company may find fewer acceptable
acquisition opportunities. As part of its on-going evaluation of strategic
acquisition opportunities, the Company may from time to time engage in
discussions concerning possible acquisitions for which the Company may require
additional debt or equity financing. There can be no assurance that the
Company will have sufficient capital resources to complete acquisitions or
that acquisitions can be completed on terms acceptable to the Company. While
management has gained considerable experience in assimilating such
acquisitions into the structure of the Company, future acquisitions may
require substantial attention from the Company's management to integrate
acquired company operations. There can be no assurance the Company will be
able to integrate such operations successfully. Furthermore, diversion of
management attention from the Company's existing business could have an
adverse impact on the revenues and operating results of the Company.

Tobacco Industry Regulation. Approximately 9.1% of the Company's gross
revenues for the nine months ended March 31, 1997 were derived from tobacco
advertising. In August 1996, the U.S. Food and Drug Administration issued final
regulations governing certain marketing practices in the tobacco industry.
Among other things, the regulations prohibit tobacco product billboard
advertisements within 1,000 feet of schools and playgrounds and require that
tobacco product advertisements on billboards be in black and white and contain
only text. Enforcement of such regulations has been stayed indefinitely by a
federal court in North Carolina. There can be no assurance as to the effect of
these regulations on the Company's business and on its net revenues, EBITDA and
financial position. A reduction in billboard advertising by the tobacco
industry could cause an immediate reduction in the Company's direct revenue
from such advertisers and would simultaneously increase the available space on
the existing inventory of billboards in the outdoor advertising industry. This
could in turn result in a lowering of rates throughout the industry or limit
the ability of industry participants to increase rates for some period of time.
In early 1997, a majority of the major tobacco companies in the United States
and certain state attorneys general entered into litigation settlement
discussions. Terms of any such settlement could involve acceptance by the
tobacco companies of limits on outdoor advertising of cigarettes. At this time,
however, it is unclear whether any such settlement will be reached and what
effect, if any, such a settlement would have on OCI's operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business--Customers" and "Business--Government Regulation."

Regulation of Outdoor Advertising. Outdoor advertising displays are subject
to governmental regulation at the federal, state and local levels. These
regulations, in some cases, limit the height, size, location and operation of
billboards and, in limited circumstances, regulate the content of the
advertising copy displayed on the billboards. Some governmental regulations
prohibit the construction of new billboards or the replacement, relocation,
enlargement or upgrading of existing structures. Some cities have adopted
amortization ordinances under which, after the expiration of a specified period
of time, billboards must be removed at the owner's expense and without the
payment of compensation. Ordinances requiring the removal of a billboard
without compensation, whether through amortization or otherwise, are being
challenged in various state and federal courts with conflicting results.
Amortization ordinances have not materially affected operations in the
Company's markets. There can be no assurance that these limitations on new
construction will not adversely affect the Company's results of operations. In
addition, no assurance can be given as to the effect on the Company of existing
laws and regulations or of new laws and regulations that may be adopted in the
future. See "--Tobacco Industry Regulation," "Business--Customers" and
"Business--Government Regulation."

Potential Losses from Natural Disasters. A significant portion of the
Company's structures are located in the southeast and midwest regions of the
United States. These areas are susceptible to flooding, tornadoes and
hurricanes during certain periods of the year. The Company has determined that
it is not economically feasible at this time to obtain insurance against losses
from hurricanes or other weather-related casualties. OCI has not incurred
material losses in the past due to weather-related incidents; however, there
can be no assurance that the Company will not suffer such losses in the future
or that, in pursuing its acquisition strategy, the Company will not acquire
companies or properties that are particularly susceptible to weather-related
incidents.

Economic Conditions; Advertising Trends. The Company relies on sales of
advertising space for its revenues, and its operating results therefore are
affected by general economic conditions as well as trends in the advertising
industry. A reduction in advertising expenditures available for the Company's
displays could result
from a general decline in economic conditions, a decline in economic conditions
in particular markets where the Company conducts business or a reallocation of
advertising expenditures to other available media by significant users of the
Company's displays.

Competition. The Company faces competition for advertising revenues from
other outdoor advertising companies, as well as from other media such as radio,
television, print and direct mail marketing. The Company also competes with a
wide variety of other out-of-home advertising media, the range and diversity of
which have increased substantially over the past several years, including
highway logo signs, advertising displays in shopping centers and malls,
airports, stadiums, movie theaters and supermarkets, and on taxis, trains,
buses and subways. Some of the Company's competitors are substantially larger,
better capitalized and have access to

greater resources than the Company. There can be no assurance that outdoor
advertising media will be able to compete with other types of media, or that
the Company will be able to compete either within the outdoor advertising
industry or with other media. See "Business--Competition."

History of Operating Losses. The Company has historically had net losses
which have resulted in significant part from substantial depreciation and
amortization expenses relating to assets purchased in the Company's
acquisitions, interest expense associated with related indebtedness and
deferred financing costs charged to extraordinary losses. Moreover, additional
acquisitions will result in increased depreciation, amortization and interest
expenses. There can be no assurance that the Company will generate net income
in the future. See "Selected Historical Consolidated Financial and Other
Information."

Reliance on Key Executives. The Company's success depends to a significant
extent upon the continued services of its executive officers and other key
management and sales personnel, in particular its Chairman and
Chief Executive Officer, John C Stanley IV, and its President and Chief
Operating Officer, A.B. Isbell. Although the Company believes it has incentive
and compensation programs designed to retain key employees, the Company has no
employment contracts with its employees, and very few of its employees are
bound by non-competition agreements. The unavailability of the continuing
services of its executive officers and other key management and sales personnel
could have a material adverse effect on the Company's business. The Company
maintains key man insurance on Messrs. Stanley and Isbell. See "Management."

Environmental Matters. As the owner, lessee or operator of various real
properties and facilities, the Company is subject to various federal, state and
local environmental laws and regulations. To date, compliance with such laws
and regulations has not had a material adverse effect on the historical
business of the Company. See "Business--Environmental."

Controlling Stockholders. Upon consummation of the Offering, the current
executive officers and directors of the Company, or entities affiliated with
such persons, will beneficially own shares of the Company's Common Stock having
approximately % of the total voting power of the Common Stock. As a result,
such persons, acting as a group, will effectively be able to control the
outcome of matters requiring a stockholder vote, including election of
directors, adopting or amending certain provisions of the charter and by-laws
and approving or preventing certain mergers or other similar transactions. To
the extent that the current officers and directors of the Company act as a
group, purchasers of the shares of Common Stock offered in the Offering hereby
will become minority stockholders of the Company and will be unable to control
the management or business policies of the Company. Moreover, subject to
contractual restrictions and general fiduciary obligations, the Company is not
prohibited from engaging in transactions with its management and principal
stockholders, or with entities in which such persons are interested. The
Company's charter does not provide for cumulative voting in the election of
directors and, as a result, the controlling stockholders can elect all the
directors if they so choose.

Absence of Public Market. Prior to the Offering, there has been no
established trading market for the shares and there can be no assurance that,
following the Offering, an active trading market for the Common Stock will
develop or be sustained or that the market price of the Common Stock will not
decline below the initial public offering price. The initial public offering
price will be determined by negotiations between the Company and the
Underwriters and will not necessarily be indicative of the market price of the
Common Stock
after the Offering. See "Underwriting" for a discussion of the factors to be
considered in determining the initial public offering price. From time to time,
the stock market experiences significant price and volume volatility, which may
affect the market price of the Common Stock for reasons unrelated to the
Company.

Certain Anti-Takeover Provisions. Prior to the completion of the Offering,
the Company will adopt an amended and restated certificate of incorporation and
amended and restated by-laws. Certain provisions of these documents may have
the effect of discouraging a third party from making an acquisition proposal
for the Company and thereby inhibit a change in control of the Company in
circumstances that could give holders of the Common Stock the opportunity to
realize a premium over the then prevailing market price of such stock. Such
provisions may also adversely affect the market price of the Common Stock. For
example, the Company's

certificate of incorporation will authorize the issuance of "blank check"
preferred stock (the "Preferred Stock") with such designations, rights and
preferences as may be determined from time to time by the Board of Directors.
In the event of issuance, such Preferred Stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company. In addition, the issuance of Preferred Stock may
adversely affect the voting and dividend rights, rights upon liquidation and
other rights of the holders of Common Stock (including the purchasers of Common
Stock in the Offering). Although the Company has no present intention to issue
any shares of such Preferred Stock, the Company retains the right to do so in
the future. See "Description of Capital Stock--Preferred Stock." Furthermore,
the Company is subject to Section 203 of the Delaware General Corporation Law.
The existence of this provision could be expected to have an anti-takeover
effect, including possibly discouraging takeover attempts that might result in
a premium over the market price of the shares of Common Stock. See "Description
of Capital Stock" and "Principal Stockholders."

Absence of Dividends. The Company does not anticipate paying dividends on its
Common Stock in the foreseeable future. In addition, as stated above, the
Company's New Credit Facility and the Notes place limitations on the Company's
ability to pay dividends and make other distributions on its Common Stock. See
"Dividend Policy," "Description of Capital Stock" and "Description of
Indebtedness."

Potential Impact of Shares Eligible for Future Sale. Sales of substantial
amounts of Common Stock in the public market following the Offering could have
an adverse effect on the market price of the Common Stock. Approximately
shares will become eligible for sale in the public market 90 days after the
effective date of the Registration Statement, and approximately additional
shares will become eligible for sale in the public market upon the expiration
of agreements with the Underwriters not to sell such shares until 180 days
after the effective date of the Registration Statement, in each case subject to
compliance with Rule 144 or Rule 701 under the Securities Act. Holders of
approximately of these shares have contractual rights to have those shares
registered with the Securities and Exchange Commission for resale to the
public. In addition, 30
days after the effective date of the Registration Statement, the Company
intends to file a registration statement covering the shares of Common
Stock issued or reserved for issuance under the Company's 1997 Stock Option
Plan, and, upon filing, any shares subsequently issued under such Plan will be
eligible for sale in the public market, subject to compliance with Rule 144 in
the case of affiliates of the Company. See "Shares Eligible for Future Sale."

Dilution. Purchasers of the Common Stock offered hereby will experience
immediate and substantial dilution of the net tangible book value of the Common
Stock. See "Dilution."

USE OF PROCEEDS

The net proceeds to the Company from the Offering are estimated to be
approximately $46.5 million ($53.5 million if the underwriters' over-allotment
option is exercised in full), and the net proceeds to the Company from the
Notes Offering are estimated to be approximately $121.3 million.

The Company intends to use the net proceeds of the Offerings, together with
borrowings under the New Credit Facility, to refinance indebtedness
outstanding under the Company's amended and restated $140.0 million credit
facility dated October 30, 1996 (the "Existing Credit Facility") and to redeem
the Company's Series A 10% subordinated notes (the "Series A Notes") and
Series B 10% subordinated notes (the "Series B Notes") at 100% of their
principal amount, plus accrued and unpaid interest.

The estimated sources and uses of funds in connection with the Financing
Plan are set forth below as of an assumed closing date of June 30, 1997:

(DOLLARS IN THOUSANDS)

Sources of Funds:
% Senior Subordinated Notes due 2007............... $125,000
Common Stock offered hereby......................... 50,000
New Credit Facility ................................ 170
--------
Total Sources..................................... $175,170
========
Uses of Funds:
Repay Existing Credit Facility (1).................. $142,500(2)
Redeem Series A Notes and Series B Notes (3)........ 24,320
Fees and expenses of the Offerings.................. 8,350
--------
Total Uses........................................ $175,170
========

- ---------------------
(1) The Existing Credit Facility was used by the Company to (a) acquire OCI
North and OCI South; (b) purchase the Acquired Companies; and (c) fund
working capital and transaction costs. The Existing Credit Facility
consists of (a) a $40.0 million A tranche term loan and a $40.0 million B
tranche term loan (collectively, the "Term Loans"); and (b) a $60.0
million revolving credit facility (the "Revolving Credit Facility").
(2) This amount includes approximately $33.7 million in borrowings to fund
acquisitions consummated after March 31, 1997 and $1.1 million in
borrowings incurred after March 31, 1997 for working capital purposes. The
Company expects to amend its Existing Credit Facility to permit borrowings
in conjunction with such acquisitions prior to entering into the New
Credit Facility.
(3) The proceeds of the Series A Notes and Series B Notes were used by the
Company to finance, in part, the acquisitions of OCI North and OCI South.
The Series A Notes and the Series B Notes mature on December 31, 2003 and
were issued in April 1996, September 1996 and January 1997 in an aggregate
principal amount of $22.4 million. The Series A Notes and the Series B
Notes accrue interest at a rate of 10% per annum. The Series A Notes and
Series B Notes are held by the principal stockholders and executive
officers of the Company. See "Certain Relationships and Related
Transactions."

DIVIDEND POLICY

Since its formation in April 1996, the Company has not declared or paid cash
dividends on its Common Stock and will be largely restricted from doing so
under the New Credit Facility and the Notes. The Company intends to continue
this policy for the foreseeable future and retain earnings for repayment of
indebtedness and investment in its business. Any future determination to pay
cash dividends will be at the discretion of the Board of Directors of the
Company and will be dependent on the Company's results of operations,
financial condition, contractual restrictions (including restrictions in the
New Credit Facility and the Notes), legal restrictions and other factors
deemed to be relevant by the Board of Directors. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."

CAPITALIZATION

The following table sets forth (i) the historical capitalization of the
Company as of March 31, 1997; (ii) as adjusted to give effect to those
acquisitions of the Acquired Companies completed after March 31, 1997; and
(iii) further adjusted to give effect to the Offerings and the application of
the net proceeds therefrom. See "Use of Proceeds." This table should be read
in conjunction with the "Unaudited Pro Forma Consolidated Financial
Statements," "Selected Historical Consolidated Financial and Other
Information," "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources" and the financial
statements of the Company, including notes thereto, included elsewhere in this
Prospectus.

AS OF MARCH 31, 1997
----------------------------------------
AS ADJUSTED AS ADJUSTED
ACTUAL FOR ACQUISITIONS FOR OFFERINGS
(DOLLARS IN THOUSANDS)

Long-term debt, including current installments:
Existing Credit Facility.......................................... $107,700 $141,350(1) $ --
New Credit Facility(2)............................................ -- -- --
% Senior Subordinated Notes...................................... -- -- 125,000
Series A Notes and Series B Notes, including accrued interest(3).. 23,743 23,743 --
Notes payable--stockholders(4).................................... 5,877 5,877 5,877
-------- -------- --------
Total long-term debt, including current installments............ 137,320 170,970 130,877
Stockholders' equity (deficit):
Preferred stock shares authorized;
none issued and outstanding...................................... -- -- --
Common Stock, $0.01 par value. shares authorized;
shares issued and outstanding(5) ............................ -- --
Additional paid-in capital ....................................... 3,812 3,812
Retained deficit ................................................. (9,126) (9,126)
-------- -------- --------
Total stockholders' equity (deficit)............................ (5,314) (5,314) 39,562
-------- -------- --------
Total capitalization................................................ $132,006 $165,656 $170,439
======== ======== ========

- ---------------------
(1) Reflects borrowing of $33.7 million incurred after March 31, 1997 to
reflect acquisitions consummated by the Company after such date.
(2) The Company will enter into the New Credit Facility, which will become
effective upon consummation of the Offering and will provide for
borrowings of up to $ million. See "Description of Indebtedness."
(3) Includes long-term accrued interest of $1.3 million. The Series A Notes
and Series B Notes are held by the principal stockholders and executive
officers of the Company. See "Certain Relationships and Related
Transactions."
(4) The notes payable--stockholders are held by John C Stanley IV, the
Company's Chairman and Chief Executive Officer, a Director and one of its
principal stockholders, and A.B. Isbell, the Company's President, a
Director, and one of its principal stockholders. These notes are due in
April 1998 and are secured by a letter of credit under the Existing Credit
Facility which reduces the amount available to the Company under such
facility.
(5) Adjusted to reflect (a) the recapitalization of the Company to change all
outstanding shares of Class A Common Stock and Class B Common Stock into
shares of Common Stock, and (b) the for 1 stock split effected
immediately prior to the Offering.

DILUTION

The net tangible book value of the Company as of March 31, 1997 was
approximately $ million, or $ per share of Common Stock. "Net tangible
book value per share" represents the amount of the Company's total tangible
assets less total liabilities divided by the number of shares of Common Stock
outstanding. Without taking into account any other changes in the net tangible
book value after March 31, 1997, other than to give effect to (i) the receipt
by the Company of the net proceeds from the sale of the shares of Common
Stock offered by the Company hereby at an assumed public offering price of
$ per share and after deducting the estimated underwriting discount and
offering expenses; and (ii) the receipt of the net proceeds from the issuance
of the Notes in the Notes Offering, the pro forma net tangible book value of
the Company as of March 31, 1997 would have been approximately $ , or $ per
share. This represents an immediate increase in pro forma net tangible book
value of $ per share to existing stockholders and an immediate dilution of
$ per share to new investors. The following table illustrates this per share
dilution:

Assumed initial public offering price per share.................... $
Net tangible book value per share before the Offering............ $
Increase per share attributable to new investors.................
Net tangible book value per share after the Offering...............
----
Dilution per share to new investors................................ $
====

The following table summarizes on a pro forma basis, as of March 31, 1997,
the differences between existing stockholders and purchasers of shares in the
Offering (at an assumed initial public offering price of $ per share) with
respect to the number of shares of Common Stock purchased from the Company,
the total consideration paid and the average price per share paid:

SHARES TOTAL
PURCHASED CONSIDERATION
-------------- -------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE

Existing stockholders(1)....... % $ % $
New investors(1)...............
--- --- ---- --- ----
Total........................ 100% $ 100%
=== === ==== === ====

- ---------------------
(1) Excludes shares of Common Stock reserved for issuance upon exercise of
options granted under the 1997 Stock Option Plan. See "Capitalization" and
"Management--Stock Option Plan."

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

The following sets forth the unaudited pro forma consolidated financial
statements of the Company. The unaudited pro forma consolidated statements of
operations for the twelve months ended March 31, 1997, the nine months ended
March 31, 1997, and the fiscal year ended June 30, 1996 give effect to the
following transactions, as if such transactions had occurred on July 1, 1995:
(i) the Formation Transactions (as defined); (ii) the Significant
Acquisitions; (iii) the elimination of duplicative administrative and other
costs; and (iv) the Offerings and the application of the net proceeds
therefrom. The unaudited pro forma consolidated balance sheet as of March 31,
1997 has been prepared as if the acquisition of the Ragan Companies (the only
significant acquisition consummated subsequent to that date) and the Offerings
had occurred on March 31, 1997.

The unaudited pro forma consolidated statement of operations data for OCI
for the twelve months ended March 31, 1997, the nine months ended March 31,
1997, and the fiscal year ended June 30, 1996 set forth in the unaudited pro
forma consolidated statement of operations data under the column "Historical
OCI" reflect the historical results of operations of OCI and its consolidated
subsidiaries, including the Acquired Companies since the dates of such
acquisitions. The unaudited pro forma consolidated statement of operations
data under the column "Significant Acquisitions" reflect the historical
statements of operations data of the Significant Acquisitions as if such
acquisitions had occurred on July 1, 1995 and present their respective results
from the beginning of the respective periods presented through the respective
dates of their acquisition by the Company.

The unaudited pro forma consolidated financial statements are based, in
part, on the historical financial statements of OCI, its Predecessors and
certain Acquired Companies, and should be read in conjunction with their
respective financial statements and notes thereto appearing elsewhere in this
Prospectus. The pro forma data are not necessarily indicative of the results
of operations or financial condition of OCI had these acquisitions occurred on
July 1, 1995, nor are they indicative of the results of future operations.

The unaudited pro forma consolidated financial statements reflect purchase
price allocations for the acquisitions of Georgia Outdoor, Alabama Outdoor and
Skoglund using fair market values of the assets and liabilities of such
companies, based on completed appraisals as of the dates of each of the
acquisitions. The unaudited pro forma consolidated financial statements also
reflect purchase price allocations for the acquisitions of Outdoor West and
the Ragan Companies, using estimated fair market values of the assets and
liabilities of such companies as of the assumed merger dates based on
appraisals and other studies, which are not yet complete. Accordingly, the
final allocations will likely be different than the amounts included in the
accompanying pro forma consolidated financial statements. Although the final
allocations may differ, the pro forma consolidated financial statements
reflect management's best estimate based on currently available information as
if the aforementioned transactions had occurred on the assumed merger dates.
Management does not believe that any differences between estimated and final
allocations will be material.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE TWELVE MONTHS ENDED MARCH 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

ADJUSTMENTS
HISTORICAL SIGNIFICANT ACQUISITION SUBTOTAL FOR THE PRO FORMA
OCI ACQUISITIONS ADJUSTMENTS OCI OFFERINGS OCI

Net revenues............ $40,490 $15,609 $ 25 (1) $56,124 $ -- $56,124
Direct operating
expenses............... 8,562 4,596 (88)(2) 13,070 -- 13,070
Selling, general and
administrative
expenses............... 16,072 6,049 (1,562)(3) 20,559 -- 20,559
Depreciation and
amortization........... 7,767 1,179 1,863 (4) 10,809 152 (5) 10,961
------- ------- ------- ------- ------- -------
Operating income
(loss)................. 8,089 3,785 (188) 11,686 (152) 11,534
Other (income) expense:
Interest expense...... 9,445 1,288 -- 10,733 2,267 (6) 13,000
Loss (gain) on
disposal of assets,
net.................. -- (7,995) 8,072 (7) 77 -- 77
Other non-operating
expenses............. (309) 351 -- 42 -- 42
------- ------- ------- ------- ------- -------
Total other (income)
expense, net....... 9,136 (6,356) 8,072 10,852 2,267 13,119
------- ------- ------- ------- ------- -------
Income (loss) before
income taxes........... (1,047) 10,141 (8,260) 834 (2,419) (1,585)
Income tax expense
(benefit).............. 223 4,143 (3,304)(8) 1,062 (967)(9) 95
------- ------- ------- ------- ------- -------
Net income (loss)....... $(1,270) $ 5,998 $(4,956) $ (228) $(1,452)(10) $(1,680)
======= ======= ======= ======= ======= =======
Net income (loss) per
common share...........
Weighted average common
shares outstanding.....

See accompanying Notes to Unaudited Pro Forma Consolidated Statements of
Operations

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED MARCH 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

ADJUSTMENTS
HISTORICAL SIGNIFICANT ACQUISITION SUBTOTAL FOR THE PRO FORMA
OCI ACQUISITIONS ADJUSTMENTS OCI OFFERINGS OCI

Net revenues............ $31,741 $10,059 $ -- (1) $41,800 $ -- $41,800
Direct operating
expenses............... 6,715 3,137 (64)(2) 9,788 -- 9,788
Selling, general and
administrative
expenses............... 12,119 3,891 (912)(3) 15,098 -- 15,098
Depreciation and
amortization........... 6,103 771 1,263 (4) 8,137 153 (5) 8,290
------- ------- ------- ------- ------- -------
Operating income
(loss)................. 6,804 2,260 (287) 8,777 (153) 8,624
Other (income) expense:
Interest expense...... 7,597 861 -- 8,458 1,292 (6) 9,750
Loss (gain) on
disposal of assets,
net.................. -- (8,003) 8,072 (7) 69 -- 69
Other non-operating
expenses............. (53) 464 -- 411 -- 411
------- ------- ------- ------- ------- -------
Total other (income)
expense, net....... 7,544 (6,678) 8,072 8,938 1,292 10,230
------- ------- ------- ------- ------- -------
Income (loss) before
income taxes........... (740) 8,938 (8,359) (161) (1,445) (1,606)
Income tax expense
(benefit).............. 22 3,211 (3,344)(8) (111) (578)(9) (689)
------- ------- ------- ------- ------- -------
Net income (loss)....... $ (762) $ 5,727 $(5,015) $ (50) $ (867)(10) $ (917)
======= ======= ======= ======= ======= =======
Net income (loss) per
common share...........
Weighted average common
shares outstanding.....

See accompanying Notes to Unaudited Pro Forma Consolidated Statements of
Operations

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE FISCAL YEAR ENDED JUNE 30, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

ADJUSTMENTS
HISTORICAL SIGNIFICANT ACQUISITION SUBTOTAL FOR THE PRO FORMA
OCI ACQUISITIONS ADJUSTMENTS OCI OFFERINGS OCI

Net revenues............ $22,617 $28,602 $ 89 (1) $51,308 $ -- $51,308
Direct operating
expenses............... 5,043 7,091 (10)(2) 12,124 -- 12,124
Selling, general and
administrative
expenses............... 9,378 12,049 (891)(3) 20,536 -- 20,536
Depreciation and
amortization........... 3,969 2,985 2,692 (4) 9,646 192 (5) 9,838
------- ------- ------- ------- ------- -------
Operating income
(loss)................. 4,227 6,477 (1,702) 9,002 (192) 8,810
Other (income) expense:
Interest expense...... 4,308 2,637 -- 6,945 6,055 (6) 13,000
Loss (gain) on
disposal of assets,
net.................. (1) (23) -- (7) (24) -- (24)
Other non-operating
expenses............. (173) 535 -- 362 -- 362
------- ------- ------- ------- ------- -------
Total other (income)
expense, net....... 4,134 3,149 -- 7,283 6,055 13,338
------- ------- ------- ------- ------- -------
Income (loss) before
income taxes........... 93 3,328 (1,702) 1,719 (6,247) (4,528)
Income tax expense
(benefit).............. 700 942 (681)(8) 961 (2,498)(9) (1,537)
------- ------- ------- ------- ------- -------
Net income (loss)....... $ (607) $ 2,386 $(1,021) $ 758 $(3,749)(10) $(2,991)
======= ======= ======= ======= ======= =======
Net income (loss) per
common share...........
Weighted average common
shares outstanding.....

See accompanying Notes to Unaudited Pro Forma Consolidated Statements of
Operations

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(DOLLARS IN THOUSANDS)

The following notes describe the adjustments to present the pro forma
statements of operations of OCI for the twelve months ended March 31, 1997, for
the nine months ended March 31, 1997 and for the fiscal year ended June 30,
1996, as if the Significant Acquisitions and the Offerings had occurred on July
1, 1995.

TWELVE MONTHS NINE MONTHS FISCAL YEAR
ENDED ENDED ENDED
MARCH 31, 1997 MARCH 31, 1997 JUNE 30, 1996

(1) Entry records pro forma
changes in revenues for
company acquired by
Skoglund prior to OCI's
acquisition of Skoglund.... $ 25 $ -- $ 89
======= ====== ======
(2) Entry records a net
decrease in operating
expenses due to elimination
of employee costs upon
completion of acquisitions,
capitalization of certain
costs expensed by certain
acquired companies and
recognition of costs
incurred by a company
acquired by Skoglund prior
to OCI's acquisition of
Skoglund:
Payroll and payroll related
costs...................... $ (56) $ (42) $ --
Other operating costs...... (32) (22) (10)
------- ------ ------
Total operating costs...... $ (88) $ (64) $ (10)
======= ====== ======
(3) Entry records a net
decrease in general and
administrative expenses due
to elimination of employee
costs upon completion of
acquisitions, addition of
employees to operate
acquired divisions,
elimination of legal costs
related to the acquisition
transactions incurred by
certain acquired companies,
and elimination of
duplicative administrative
and other costs:
Payroll and payroll related
costs...................... $ (899) $ (514) $ (392)
Legal costs................ (326) (198) (184)
Other general and
administrative costs....... (337) (200) (315)
------- ------ ------
Total general and
administrative costs....... $(1,562) $ (912) $ (891)
======= ====== ======
(4) Entry records the increase
in depreciation and
amortization expense
arising from purchase
accounting adjustments
relating to the Significant
Acquisitions to advertising
structures, customer lists
and goodwill over periods
of 15, 22 and 25 years,
respectively............... $ 1,863 $1,263 $2,692
======= ====== ======
(5) Entry records the net
effect on amortization of
deferred financing costs
related to extinguishment
of existing debt and
issuance of the Notes...... $ 152 $ 153 $ 192
======= ====== ======
(6) Entry eliminates historical
interest expense on the
existing debt and records
interest expense on the
Notes at a rate of 10.00%
(a difference of 0.125% in
the rate of interest would
have changed net income
(loss) by $94 for the
twelve months ended March
31, 1997 and the fiscal
year ended June 30, 1996
and $70 for the nine months
ended March 31, 1997)...... $ 2,267 $1,292 $6,055
======= ====== ======

(Continued)

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(CONTINUED)

TWELVE MONTHS NINE MONTHS FISCAL YEAR
ENDED ENDED ENDED
MARCH 31, 1997 MARCH 31, 1997 JUNE 30, 1996

(7) Entry eliminates the gain
on sale of assets to
OCI...................... $ 8,072 $ 8,072 $ --
======= ======= =======
(8) Entry records the income
tax effect of pro forma
adjustments using a
blended rate of 40%...... $(3,304) $(3,344) $ (681)
======= ======= =======
(9) Entry records the income
tax effect of pro forma
adjustments using a
blended rate of 40%...... $ (967) $ (578) $(2,498)
======= ======= =======
(10) The accompanying pro
forma results of
operations do not give
effect to the
extraordinary loss on the
extinguishment of debt of
$469, $524 and $524 for
the twelve months ended
March 31, 1997, nine
months ended March 31,
1997 and fiscal year
ended June 30, 1996,
respectively; however,
such amounts have been
reflected as adjustments
to pro forma retained
earnings (deficit).

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

AS OF MARCH 31, 1997
(DOLLARS IN THOUSANDS)

ADJUSTMENTS
FOR
ACQUISITION ADJUSTMENTS PRO
HISTORICAL OF RAGAN SUBTOTAL FOR THE FORMA
OCI COMPANIES(1) OCI OFFERINGS(2) OCI

ASSETS:
Cash and cash
equivalents............ $ 4,566 $ -- $ 4,566 $ 8,317 $ 12,883
Accounts receivable,
net.................... 6,318 751 7,069 -- 7,069
Other current assets.... 3,978 381 4,359 -- 4,359
Property and equipment,
net.................... 63,185 9,830 73,015 -- 73,015
Intangible assets, net.. 57,309 16,238 73,547 2,916 76,463
Other assets............ 4,819 -- 4,819 -- 4,819
-------- ------- -------- -------- --------
Total assets.......... $140,175 $27,200 $167,375 $ 11,233 $178,608
======== ======= ======== ======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY:
Current liabilities,
excluding current
installments of long-
term debt.............. $ 2,791 $ -- $ 2,791 $ -- $ 2,791
Deferred federal income
tax.................... 5,331 -- 5,331 -- 5,331
Other long-term
liabilities............ 1,365 -- 1,365 (1,318) 47
Long-term debt,
including current
installments:
Existing Credit
Facility.............. 107,700 27,200 134,900 (134,900) --
% Senior Subordinated
Notes................. -- -- -- 125,000 125,000
Series A and Series B
Notes................. 22,425 -- 22,425 (22,425) --
Notes payable--
stockholders.......... 5,877 -- 5,877 -- 5,877
-------- ------- -------- -------- --------
Total long-term debt.. 136,002 27,200 163,202 (32,325) 130,877
-------- ------- -------- -------- --------
Total liabilities..... 145,489 27,200 172,689 (33,643) 139,046
Stockholders' equity
(deficit).............. (5,314) -- (5,314) 44,876 39,562
-------- ------- -------- -------- --------
Total liabilities and
stockholders' equity
(deficit)............ $140,175 $27,200 $167,375 $ 11,233 $178,608
======== ======= ======== ======== ========

See accompanying Notes to Unaudited Pro Forma Consolidated Balance Sheet

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

(DOLLARS IN THOUSANDS)

The following notes describe the adjustments to present the pro forma
balance sheet of OCI as of March 31, 1997, as if the acquisition of the Ragan
Companies (the only significant acquisition consummated subsequent to that
date) and the Financing Plan had occurred on March 31, 1997.

(1) Entries reflect the effects of purchase accounting for the acquisition of
the Ragan Companies, to show the step-up in basis of property and
equipment, establishment of goodwill, increased long-term debt and
elimination of assets, liabilities and stockholders' deficit not
acquired:

ADJUSTMENTS
FOR
HISTORICAL PURCHASE ACQUISITION
RAGAN ACCOUNTING OF RAGAN
COMPANIES ADJUSTMENTS COMPANIES

Cash and cash equivalents............... $ 377 $ (377) $ --
Accounts receivable, net................ 751 -- 751
Other current assets.................... 381 -- 381
Property and equipment, net............. 4,903 4,927 9,830
Intangible assets, net.................. 385 15,853 16,238
Current liabilities..................... 247 (247) --
Long-term debt, including current
installments........................... 8,068 19,132 27,200
Stockholders' equity (deficit).......... (1,518) 1,518 --

(2) Entry records the effects of the proceeds from the issuance of the Notes,
capitalized debt issuance costs, repayment of existing debt and related
long-term accrued interest, and loss on early extinguishment of debt:

Cash and cash equivalents......................................... $ 8,317
Intangible assets, net............................................ 2,916
Other long-term liabilities....................................... (1,318)
Existing Credit Facility.......................................... (134,900)
% Senior Subordinated Notes...................................... 125,000
Series A and Series B Notes....................................... (22,425)
Stockholders' equity (deficit).................................... 44,876

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER INFORMATION

The selected data presented on the following page under the captions
"Statement of Operations Data," "Balance Sheet Data" and "Other Data,"
excluding "Number of display faces--period end" for, and as of the end of, the
period August 1, 1995 to April 3, 1996 and each of the years in the four-year
period ended July 31, 1995, are derived from the consolidated financial
statements of OCI North, which financial statements have been audited by KPMG
Peat Marwick LLP, independent certified public accountants. The consolidated
financial statements as of April 3, 1996 and July 31, 1995, and for the period
August 1, 1995 to April 3, 1996 and each of the years in the two-year period
ended July 31, 1995, and the report thereon, are included elsewhere in this
Prospectus.

The selected data presented on the following page under the captions
"Statement of Operations Data," "Balance Sheet Data" and "Other Data,"
excluding "Number of display faces--period end" for, and as of the end of, the
period September 1, 1995 to April 3, 1996, are derived from the consolidated
financial statements of OCI South, which financial statements have been
audited by KPMG Peat Marwick LLP, independent certified public accountants.
The selected data presented on the following page under the captions
"Statement of Operations Data" and "Balance Sheet Data," "Other Data,"
excluding "Number of display faces--period end" for, and as the end of, each
of the years in the four-year period ended August 31, 1995, are derived from
the consolidated financial statements of OCI South, which financial statements
have been audited by Moore & Gray, independent certified public accountants.
The consolidated financial statements as of April 3, 1996 and August 31, 1995,
and for the period September 1, 1995 to April 3, 1996 and each of the years in
the two-year period ended August 31, 1995, and the reports thereon, are
included elsewhere in this Prospectus.

The selected data presented on the following page as of and for the nine
months ended March 31, 1997 are derived from the consolidated financial
statements of OCI. The consolidated financial statements include all
adjustments, consisting of normal recurring adjustments, which management
considers necessary for a fair presentation of the financial position and the
results of operations for this period. The results of operations for any such
period are not necessarily indicative of the results of operations for a full
year.

The selected historical consolidated financial and other information set
forth on the following page should be read in conjunction with the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," the historical consolidated financial statements of the Company
and its Predecessors, including the notes thereto, and other financial
information included elsewhere in this Prospectus.

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

PREDECESSORS (1)
----------------------------------------------------------------------------------------------------------
FISCAL YEAR ENDED
-----------------------------------------------------------------------------------
AUGUST 1, SEPTEMBER 1,
1995 TO 1995 TO
JULY 31, AUGUST 31, JULY 31, AUGUST 31, JULY 31, AUGUST 31, JULY 31, AUGUST 31, APRIL 3, APRIL 3,
1992 1992 1993 1993 1994 1994 1995 1995 1996 1996
OCI NORTH OCI SOUTH OCI NORTH OCI SOUTH OCI NORTH OCI SOUTH OCI NORTH OCI SOUTH OCI NORTH OCI SOUTH

STATEMENT OF
OPERATIONS DATA:
Net revenues
(4).............. $ 9,199 $6,891 $ 9,155 $7,105 $ 9,500 $7,127 $10,369 $8,153 $ 6,683 $4,957
Operating
expenses:
Direct
operating....... 2,376 2,778 2,497 2,754 2,468 1,616 2,436 1,880 1,651 1,167
Selling, general
and
administrative.. 3,828 2,011 4,048 2,059 3,897 2,913 3,953 2,908 3,019 2,039
Depreciation and
amortization.... 2,154 1,252 2,540 1,200 2,276 930 2,111 1,064 1,430 647
------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Total operating
expenses........ 8,358 6,041 9,085 6,013 8,641 5,459 8,500 5,852 6,100 3,853
Operating
income........... 841 850 70 1,092 859 1,668 1,869 2,301 583 1,104
Interest
expense.......... 2,120 1,040 2,030 845 2,042 853 2,127 1,173 1,461 645
Other expense
(income), net.... 291 -- 327 -- 656 (65) (21) (180) 17 (11)
Income tax
expense
(benefit)........ -- 14 (723) 170 (473) 340 (133) 524 156 201
------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Net income
(loss).......... $(1,570) $ (204) $(1,564) $ 77 $(1,366) $ 540 $ (104) $ 784 $(1,051) $ 269
======= ====== ======= ====== ======= ====== ======= ====== ======= ======
Net income (loss)
per share (5).... -- -- -- -- -- -- -- -- -- --
Weighted average
common and
equivalent shares
outstanding (5).. -- -- -- -- -- -- -- -- -- --
OTHER DATA:
EBITDA (6)....... $ 2,995 $2,102 $ 2,610 $2,292 $ 3,135 $2,598 $ 3,980 $3,365 $ 2,013 $1,751
EBITDA margin
(7).............. 32.6% 30.5% 28.5% 32.3% 33.0% 36.5% 38.4% 41.3% 30.1% 35.3%
Capital
expenditures..... $ 614 $ 426 $ 622 $ 546 $ 610 $ 642 $ 522 $1,313 $ 588 $ 746
Number of display
faces--
period end....... 3,469 2,660 3,350 2,598 2,851 2,542 2,859 2,609 2,858 2,644

AS OF
----------------------------------------------------------------------------------------------------------
APRIL 3,
JULY 31, AUGUST 31, JULY 31, AUGUST 31, JULY 31, AUGUST 31, JULY 31, AUGUST 31, ----------------------
1992 1992 1993 1993 1994 1994 1995 1995 1996 1996
OCI NORTH OCI SOUTH OCI NORTH OCI SOUTH OCI NORTH OCI SOUTH OCI NORTH OCI SOUTH OCI NORTH OCI SOUTH

BALANCE SHEET
DATA:
Working capital
(8).............. $ 896 $ 590 $ 1,389 $ 889 $ 930 $1,494 $ 1,299 $1,092 $ 1,326 $1,134
Total assets..... 18,180 8,005 19,948 9,069 15,992 8,701 14,715 8,590 14,496 8,854
Long-term
obligations (9).. 19,148 11,148 18,948 10,290 15,200 11,750 12,900 10,750 12,400 10,750
Stockholders'
equity
(deficit)........ (4,023) (4,302) (4,758) (2,622) (6,112) (3,681) (6,217) (2,997) (7,041) (2,728)

OCI
------------------------------------------
UNADJUSTED
UNADJUSTED COMBINED NINE
APRIL 4, COMBINED PERIOD MONTHS
1996 TO PERIOD ENDED ENDED ENDED
JUNE 30, JUNE 30, MARCH 31, MARCH 31,
1996 1996 (2) 1996 (3) 1997

STATEMENT OF
OPERATIONS DATA:
Net revenues
(4).............. $8,549 $20,189 $11,640 $31,741
Operating
expenses:
Direct
operating....... 1,758 4,576 2,818 6,715
Selling, general
and
administrative.. 3,304 8,362 5,058 12,119
Depreciation and
amortization.... 1,639 3,716 2,077 6,103
-------- ------------ ---------- ---------
Total operating
expenses........ 6,701 16,654 9,953 24,937
Operating
income........... 1,848 3,535 1,687 6,804
Interest
expense.......... 1,826 3,932 2,106 7,597
Other expense
(income), net.... -- 6 6 (53)
Income tax
expense
(benefit)........ 106 463 357 22
-------- ------------ ---------- ---------
Net income
(loss).......... $ (84) $ (866) $ (782) $ (762)
======== ============ ========== =========
Net income (loss)
per share (5).... -- --
Weighted average
common and
equivalent shares
outstanding (5).. -- --
OTHER DATA:
EBITDA (6)....... $3,487 $ 7,251 $ 3,764 $12,907
EBITDA margin
(7).............. 40.8% 35.9% 32.3% 40.7%
Capital
expenditures..... $ 589 $ 1,923 $ 1,334 $ 1,612
Number of display
faces--
period end....... 9,346 9,346 5,502 13,774

AS OF
---------------------
JUNE 30, MARCH 31,
1996 1997

BALANCE SHEET
DATA:
Working capital
(8).............. $5,001 $12,071
Total assets..... 95,120 140,175
Long-term
obligations (9).. 90,577 136,002
Stockholders'
equity
(deficit)........ (4,726) (5,314)

See Notes to Selected Historical Consolidated Financial and Other Information.

NOTES TO SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER INFORMATION

(1) The historical information set forth under the caption "Predecessors"
represents the separate financial information of OCI North and OCI South.

(2) The historical statement of operations data for OCI for the period April
4, 1996 through June 30, 1996 has been added to the historical statement
of operations data of OCI North and OCI South for the period August 1,
1995 through April 3, 1996 and September 1, 1995 through April 3, 1996,
respectively, to arrive at the unadjusted combined information for the
period ended June 30, 1996.

(3) The historical statement of operations data of OCI North and OCI South for
the period August 1, 1995 through April 3, 1996 and September 1, 1995
through April 3, 1996, respectively, have been combined to arrive at the
unadjusted combined information for the period ended March 31, 1996.

(4) Net revenues are gross revenues less agency commissions.

(5) Net income (loss) per share for OCI North and OCI South have not been
presented because the companies are closely held and owned by private
investor groups and accordingly, an earnings per share calculation is not
required or meaningful.

(6) EBITDA is operating income (loss) before depreciation and amortization.
EBITDA is not intended to represent net cash provided by operating
activities as defined by generally accepted accounting principles and
should not be considered as an alternative to net income (loss) as an
indicator of the Company's operating performance or to net cash provided
by operating activities as a measure of liquidity. The Company believes
EBITDA is a measure commonly reported and widely used by analysts,
investors and other interested parties in the outdoor advertising
industry. Accordingly, this information has been disclosed herein to
permit a more complete comparative analysis of the Company's operating
performance relative to other companies in the outdoor advertising
industry.

(7) EBITDA margin is EBITDA stated as a percentage of net revenues.

(8) Working capital is defined as current assets less current liabilities
excluding current installments of long-term debt and obligation under non-
compete agreement.

(9) Long-term obligations are long-term debt and obligation under non-compete
agreement.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with "Selected
Historical Consolidated Financial and Other Information" and the financial
statements of OCI, its Predecessors and certain acquired companies, including
notes thereto, appearing elsewhere in this Prospectus. The following
discussion contains certain forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed herein. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in "Risk Factors," "Business"
and elsewhere in this Prospectus, including, without limitation, risks and
uncertainties relating to leverage, the need for additional funds,
consummation and integration of future acquisitions, the ability of the
Company to achieve certain cost savings, the management of growth and the
popularity of outdoor advertising as an advertising medium.

BACKGROUND

The Company was formed in April 1996 to acquire the Predecessors. OCI South
was formed in 1972 to acquire outdoor advertising assets in the region around
Memphis, Tennessee. OCI North was formed in 1989 for the purpose of acquiring
Dingeman Advertising, Inc., an outdoor advertising company based in Traverse
City, Michigan, whose operations had been in existence since 1922.

The historical information set forth in the table below is based upon the
separate financial performance of OCI North and OCI South prior to the
formation of OCI. The following table sets forth the unadjusted combined
statement of operations and other data for OCI North and OCI South for the
periods indicated, representing the sum of the corresponding amounts appearing
in their respective historical statements of operations appearing herein,
without pro forma and other adjustments, including adjustments to match the
fiscal year ends of the Predecessors. Because the Predecessors had different
accounting policies, cost bases, capital structures and fiscal year ends, the
unadjusted combined statements are not in all material respects comparable,
with respect to matters such as depreciation, amortization, interest expense
and other items, to the consolidated financial statements of the Company; nor
are the Predecessors' financial statements in all material respects comparable
to each other. Such unadjusted combined statements do not represent the
results which would have been achieved or reported had the Predecessors been
acquired by OCI or otherwise combined at the beginning of the periods
presented.

PREDECESSORS
----------------------------------
UNADJUSTED COMBINED
FISCAL YEAR (1)
----------------------------------
1992 1993 1994 1995
(DOLLARS IN THOUSANDS)

STATEMENT OF OPERATIONS DATA:
Net revenues (2)........................ $16,090 $16,260 $16,627 $18,522
Operating expenses:
Direct operating....................... 5,154 5,251 4,084 4,316
Selling, general and administrative.... 5,839 6,107 6,810 6,861
Depreciation and amortization.......... 3,406 3,740 3,206 3,175
------- ------- ------- -------
Total operating expenses.............. 14,399 15,098 14,100 14,352
Operating income........................ 1,691 1,162 2,527 4,170
Interest expense........................ 3,160 2,875 2,895 3,300
Other income (expense), net............. (291) (327) (591) 201
Income tax expense (benefit)............ 14 (553) (133) 391
------- ------- ------- -------
Net income (loss)..................... $(1,774) $(1,487) $ (826) $ 680
======= ======= ======= =======
OTHER DATA:
EBITDA (3).............................. $ 5,097 $ 4,902 $ 5,733 $ 7,345
EBITDA margin (4)....................... 31.7% 30.1% 34.5% 39.7%
Capital expenditures.................... $ 1,040 $ 1,168 $ 1,252 $ 1,835
Number of display faces................. 6,129 5,948 5,393 5,468

- -------------------
(1) The historical statement of operations data for OCI North for fiscal years
ending July 31 and OCI South for fiscal years ending August 31 have been
added together to arrive at the unadjusted combined information for the
fiscal years indicated above.
(2) Net revenues are gross revenues less agency commissions.
(3) "EBITDA" is operating income before depreciation and amortization. EBITDA
is not intended to represent net cash provided by operating activities as
defined by generally accepted accounting principles and should not be
considered as an alternative to net income (loss) as an indicator of the
Company's operating performance or to net cash provided by operating
activities as a measure of liquidity. The Company believes EBITDA is a
measure commonly reported and widely used by analysts, investors and other
interested parties in the outdoor advertising industry. Accordingly, this
information has been disclosed herein to permit a more complete
comparative analysis of the Company's operating performance relative to
other companies in the outdoor advertising industry.
(4) "EBITDA margin" is EBITDA stated as a percentage of net revenues.

Since its formation, the Company has completed 16 acquisitions of outdoor
advertising companies.

APPROXIMATE
NUMBER OF
DATE OF DISPLAYS ACQUISITION
NAME OF ACQUIRED COMPANY ACQUISITION DISPLAY LOCATIONS ACQUIRED TYPE

Summey Outdoor ......... June 1997 North Carolina/ South Carolina 900 In-market
Ragan Companies......... June 1997 Iowa/Illinois/Wisconsin 1,470 New market
Ellis Outdoor........... April 1997 Alabama 80 In-market
Quality Outdoor......... April 1997 Kentucky 180 In-market
Outdoor West............ March 1997 Tennessee 960 New market
Raven Outdoor........... February 1997 Michigan 12 In-market
Scout Outdoor........... February 1997 Tennessee 100 In-market
Amor Sign Studios....... February 1997 Michigan 120 In-market
Pabian Outdoor.......... December 1996 Georgia 40 In-market
D&S Outdoor............. December 1996 Georgia 16 In-market
Crowder Outdoor......... November 1996 Georgia 110 In-market
Skoglund................ October 1996 Minnesota/Wisconsin 1,500 New market
Hawthorne of
Birmingham............. October 1996 Alabama 23 In-market
Hawthorne of Georgia.... September 1996 Georgia 110 In-market
Alabama Outdoor......... April 1996 Alabama 2,900 New market
Georgia Outdoor......... April 1996 South Carolina/Georgia 800 New market
-----
Total.................. 9,321
=====

The Company has completed 11 in-market acquisitions since September 1996.
The pro forma financial information contained herein does not include the
results of operations for these businesses prior to their respective dates of
acquisition as these acquisitions were individually insignificant. Although
these in-market acquisitions did not have audited financial statements,
management has estimated the pro forma impact of these acquisitions for the
most recent twelve-month period in order to provide a potential investor with
the most meaningful information possible. In order to estimate revenues and
EBITDA for these acquisitions, management reviewed the advertising contracts
and site leases of such acquired companies to determine revenues and rental
expense, respectively. Management then estimated, by expense category, the
amount of incremental costs which would have been incurred by the Company if
the acquired operations had been operated by the Company for the full period.
Because the majority of these acquisitions involved the purchase of display
faces only and the assumption of no incremental personnel, management believes
that its EBITDA margin estimate on the incremental revenues of approximately
50% is conservative.

OVERVIEW OF REVENUES AND EXPENSES

Revenues are a function of the number of display faces operated by the
Company, as well as the occupancy levels of the Company's display faces and
the rates that the Company charges for their use. The Company focuses its
sales efforts on twelve-month contracts to maximize both the occupancy of its
display inventory and its sales force efficiency. The Company believes that it
has opportunities to improve the occupancy levels and rate structure of its
display faces. The Company utilizes substantial creative resources and
aggressive sales and marketing techniques to generate demand for outdoor
advertising, including targeting customers currently using other forms of
media. The Company relies on sales of advertising space for its revenues, and
its operating results are therefore affected by general economic conditions,
as well as trends in the advertising industry.

Net revenues are gross revenues less commissions paid to advertising
agencies that contract for the use of advertising displays on behalf of
advertisers. Agency commissions on revenues that have been contracted through
advertising agencies are approximately 15% of gross revenues. Agency
commissions amounted to approximately 8.5% of gross revenues for the nine
months ended March 31, 1997. Because of the Company's reliance on local
advertisers, many of which do not employ agencies, the Company depends less on
placement of advertising

through agencies than most other major outdoor advertising companies;
therefore, its aggregate agency commission payments are relatively lower. The
Company does not consider agency commissions as "operating expenses" and
measures its operating performance based upon percentages of net revenues
rather than gross revenues.

Direct operating expenses consist of the following categories: maintenance,
production and illumination. The maintenance category includes minor repairs
and miscellaneous maintenance of display structures as well as labor for
installation of display faces. The production category includes labor related
to paint and poster production and purchases of supplies. The illumination
category consists of electricity costs to light the display faces. The
majority of these direct expenses are variable costs that tend to fluctuate
with revenues. For the nine months ended March 31, 1997, these expenses
amounted to the following approximate percentages of net revenues: maintenance
7.5%, production 10.8% and illumination 2.9%.

Selling, general and administrative expenses occur at both the division and
corporate levels. At the division level, these costs include lease expense,
which consists mainly of rental payments to owners of the land underlying the
display structures, and related administrative overhead. At the corporate
level, these costs represent staff and facility expenses for the Company's
executive offices, insurance and the Company's accounting function. Selling
expenses consist mainly of salaries and commissions for the Company's sales
force, travel and entertainment relating to sales, sales administration and
other related costs. The Company's bonus expense is primarily accounted for at
the division level. For the nine months ended March 31, 1997, selling, general
and administrative expenses amounted to the following approximate percentages
of net revenues: selling 10.1%, division general and administrative 22.2% and
corporate general and administrative 5.9%.

THE COMPANY'S NINE MONTHS ENDED MARCH 31, 1997 COMPARED TO PREDECESSORS'
UNADJUSTED COMBINED PERIOD ENDED MARCH 31, 1996

References to the unadjusted combined period ended March 31, 1996 reflect
the combined operations of OCI North for the period August 1, 1995 through
March 31, 1996 and OCI South for the period September 1, 1995 through March
31, 1996.

Net revenues increased $20.1 million to $31.7 million for the nine months
ended March 31, 1997 compared to $11.6 million for the unadjusted combined
period ended March 31, 1996. This increase was primarily due to the purchase
of certain of the Acquired Companies and the accompanying increase in the
number of displays generating revenues for the Company.

Operating expenses, exclusive of depreciation and amortization, increased
$11.0 million to $18.8 million for the nine months ended March 31, 1997
compared to $7.9 million for the unadjusted combined period ended March 31,
1996, while operating expenses, exclusive of depreciation and amortization, as
a percentage of net revenues decreased from 67.7% for the period ended March
31, 1996 to 59.3% for the nine months ended March 31, 1997. The decrease in
operating expenses as a percentage of net revenues reflected the increased
operating efficiencies resulting from the Company's revenue growth.

Depreciation and amortization expense increased $4.0 million to $6.1 million
for the nine months ended March 31, 1997 compared to $2.1 million for the
unadjusted combined period ended March 31, 1996. Such increase was primarily
related to the inclusion of depreciation and amortization generated by certain
of the Acquired Companies.

Due to the above factors, operating income increased $5.1 million to $6.8
million for the nine months ended March 31, 1997 compared to $1.7 million for
the unadjusted combined period ended March 31, 1996, while operating income as
a percentage of net revenues increased to 21.4% from 14.5% over such periods.

Interest expense increased $5.5 million to $7.6 million for the nine months
ended March 31, 1997 from $2.1 million for the unadjusted combined period
ended March 31, 1996. Such increase primarily reflects the higher level of
indebtedness resulting from the acquisition of certain of the Acquired
Companies.

As a result of the foregoing factors, the net loss for the nine months ended
March 31, 1997 was $0.8 million, which was comparable to the Company's net
loss for the unadjusted combined period ended March 31, 1996.

THE COMPANY'S UNADJUSTED COMBINED PERIOD ENDED JUNE 30, 1996 COMPARED TO THE
PREDECESSORS' UNADJUSTED COMBINED FISCAL YEAR 1995

References to the Company's operations for the unadjusted combined period
ended June 30, 1996 refer to the combined operations of OCI North for the
period August 1, 1995 through April 3, 1996, OCI South for the period
September 1, 1995 through April 3, 1996 and the Company for the period April
4, 1996 through June 30, 1996. Accordingly, the period ended June 30, 1996
does not include a full fiscal year's results for the Company due to the
Predecessors' differing fiscal year ends. References to the Company's
operations for the unadjusted combined fiscal year 1995 refer to the combined
operations of OCI North for the fiscal year ended July 31, 1995 and OCI South
for the fiscal year ended August 31, 1995.

The Company's net revenues increased $1.7 million or 9.0% to $20.2 million
for the unadjusted combined period ended June 30, 1996 compared to $18.5
million for the unadjusted combined fiscal year 1995. This increase was
primarily due to increases in the number of display faces, through new
construction and the acquisitions of Georgia Outdoor and Alabama Outdoor, as
well as an increase in revenues received per display face, offset by the
inclusion of less than a full year's results in the 1996 period.

The Company's operating expenses, exclusive of depreciation and
amortization, increased $1.7 million or 15.8% to $12.9 million for the
unadjusted combined period ended June 30, 1996 compared to $11.2 million for
the same period in 1995, while operating expenses, exclusive of depreciation
and amortization, as a percentage of net revenues increased to 64.1% for the
unadjusted combined period ended June 30, 1996 from 60.3% for the unadjusted
combined fiscal year 1995. This increase was primarily the result of the
inclusion of expenses associated with operating Georgia Outdoor and Alabama
Outdoor and one-time costs associated with, and charges taken to reflect
redundancies created by, the Formation Transactions.

Depreciation and amortization expense of the Company increased $0.5 million
or 17% to $3.7 million for the unadjusted combined period ended June 30, 1996
from $3.2 million for the unadjusted combined fiscal year 1995. A significant
portion of this increase was due to a step-up in basis resulting from purchase
accounting adjustments in connection with the acquisitions of Georgia Outdoor
and Alabama Outdoor.

Due to the above factors, the Company's operating income decreased $0.6
million or 15.2% to $3.5 million for the unadjusted combined period ended June
30, 1996 compared to $4.2 million for the same period in 1995 and operating
income as a percentage of net revenues decreased from 22.5% to 17.5% over such
period.

The Company's interest expense increased $0.6 million or 19.2% to $3.9
million for the unadjusted combined period ended June 30, 1996 from $3.3
million for the unadjusted combined fiscal year 1995. Such increase primarily
reflects the higher level of indebtedness resulting from the acquisitions of
Georgia Outdoor and Alabama Outdoor.

As a result of the foregoing factors, the Company's net loss for the
unadjusted combined period ended June 30, 1996 was $0.9 million as compared to
net income of $0.7 million for the unadjusted fiscal year 1995.

PREDECESSORS' UNADJUSTED COMBINED FISCAL YEAR 1995 COMPARED TO PREDECESSORS'
UNADJUSTED COMBINED FISCAL YEAR 1994

References to the Predecessors' operations for the unadjusted combined
fiscal years 1995 and 1994 reflect the combined operations of OCI South for
the years ended August 31 and OCI North for the years ended July 31 and shall
hereinafter be referred to as the applicable "fiscal year."

The Predecessors' net revenues increased $1.9 million or 11.4% to $18.5
million for the fiscal year ended 1995 compared to $16.6 million for the same
period in 1994. This increase was primarily due to a combination

of rate and occupancy increases at both OCI North and OCI South. OCI North's
net revenues increased $0.9 million or 9.1% to $10.4 million for the fiscal
year 1995 as compared to $9.5 million for the same period in 1994. OCI South's
net revenues increased $1.0 million or 14.4% to $8.2 million for the fiscal
year ended 1995 as compared to $7.1 million for the same period in 1994.

The Predecessors' operating expenses, exclusive of depreciation and
amortization, increased $0.3 million or 2.6% to $11.2 million for the fiscal
year 1995 compared to $10.9 million for the same period in 1994, while
operating expenses, exclusive of depreciation and amortization, as a
percentage of net revenues decreased as a percentage of net revenues to 60.3%
for the fiscal year 1995 from 65.5% for the fiscal year 1994. The decrease in
operating expenses as a percentage of revenues was primarily due to a large
revenue increase with limited associated incremental cost. OCI North's
operating expenses, exclusive of depreciation and amortization, did not
increase materially for the fiscal year 1995 as compared to the same period in
1994. OCI South's operating expenses increased $0.3 million or 5.7% to $4.8
million for the fiscal year 1995 as compared to $4.5 million for the same
period in 1994.

Depreciation and amortization expense of the Predecessors decreased 0.9% to
$3.2 million for the fiscal year 1995. OCI North's depreciation and
amortization expense decreased $0.2 million or 7.2% to $2.1 million for the
fiscal year 1995 as compared to $2.3 million for the same period in 1994. OCI
South's depreciation and amortization expense increased $0.1 million or 14.4%
to $1.1 million for the fiscal year 1995 as compared to $0.9 million for the
same period in 1994.

Due to the above factors, the Predecessors' operating income increased $1.6
million or 65.0% to $4.2 million for the fiscal year 1995 compared to $2.5
million for the same period in 1994. The Predecessors' operating income as a
percentage of net revenues increased to 22.5% from 15.2% between such periods.
OCI North's operating income increased $1.0 million or 118% to $1.9 million
for the fiscal year 1995 as compared to $0.9 million for the same period in
1994. OCI South's operating income increased $0.6 million or 37.9% to $2.3
million for the fiscal year 1995 as compared to $1.7 for the same period in
1994.

The Predecessors' interest expense increased $0.4 million or 14% to $3.3
million for the fiscal year 1995 from $2.9 million for the same period in
1994. OCI North's interest expense did not materially change in fiscal year
1995 as compared to the same period in 1994. OCI South's interest expense
increased $0.3 million or 37.5% to $1.2 million for the fiscal year 1995 as
compared to $0.9 million for the same period in 1994.

As a result of the foregoing factors, net income for the fiscal year 1995
was $0.7 million as compared to a net loss of $0.8 million for the same period
in 1994. OCI North's net loss for the fiscal year 1995 was $0.1 million as
compared to a loss of $1.4 million for the same period in 1994. OCI South's
net income increased $0.2 million or 45.2% to $0.8 million for the fiscal year
1995 as compared to net income of $0.5 million for the same period in 1994.

LIQUIDITY AND CAPITAL RESOURCES

The Company financed the consolidation of OCI North and OCI South and the
acquisitions of Georgia Outdoor and Alabama Outdoor through the combination of
a $90 million credit facility (the "Old Credit Facility") and an equity and
subordinated debt investment of approximately $34 million from certain
individual investors, funds managed by Media/Communications Partners and Chase
Venture Capital Associates, L.P. See "Certain Relationships and Related
Transactions." Since that time, the Company has satisfied its working capital
requirements with cash from operations and to a lesser extent borrowings under
its credit facilities. Its acquisitions have been financed primarily with
borrowings under its credit facilities.

In October 1996, the Old Credit Facility was amended and restated as the
Existing Credit Facility in order to increase the available credit to $140
million. The Company financed its acquisitions of Skoglund, Outdoor West and
several smaller outdoor advertising operations through borrowings under the
Existing Credit Facility. The Company intends to use the proceeds of the
Offerings to repay substantially all amounts owed under the Existing Credit
Facility and the Series A Notes and Series B Notes.

Upon consummation of the Offerings, the Company intends to enter into the
New Credit Facility. The New Credit Facility will provide for a total
commitment of approximately $ million. Approximately $ million of the
New Credit Facility will mature on , 1997, with the remaining amount
maturing on . The revolving credit loans and term loans under the New
Credit Facility will bear interest at various rates tied to base rates. The
Company is entering into the New Credit Facility for the purpose of financing
acquisitions and capital expenditures relating to the development and
improvement of advertising structures. The Company believes that its cash from
operations, together with available borrowings under the New Credit Facility,
will be sufficient to satisfy its cash requirements, including anticipated
capital expenditures, for the foreseeable future. However, in the event that
cash from operations, together with available funds under the New Credit
Facility are insufficient to satisfy cash requirements, the Company may
require additional indebtedness to finance its operations including, without
limitation, additional acquisitions. There can be no assurance that such
additional debt will be available or that the Company will be able to incur
such additional debt. See "Description of Indebtedness--New Credit Facility."

The Company has low maintenance capital expenditure requirements. Such
capital expenditures are required to maintain and upgrade the Company's
existing display faces. Management estimates that maintenance capital
expenditures will total approximately $1.5 million in fiscal 1998. In addition
to maintenance capital expenditures, the Company incurs discretionary capital
expenditures for the construction of new display faces. Management estimates
that discretionary capital expenditures will total an additional $2.5 million
in fiscal 1998.

Net cash provided by operating activities was $2.3 million for the nine
months ended March 31, 1997. Net cash used in investing activities was $42.9
million for the nine months ended March 31, 1997, resulting primarily from
acquisitions and capital expenditures. Net cash provided by financing
activities was $43.9 million for the nine months ended March 31, 1997,
resulting primarily from net borrowings under the Existing Credit Facility.

INFLATION

In the last three years, inflation has not had a significant impact on the
Company or its Predecessors.

NEW ACCOUNTING PRONOUNCEMENTS

The Company adopted the provisions of SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,
on April 4, 1996. This statement requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events of changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows
expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the assets exceeds the fair value of the assets. Assets
to be disposed of are reported at the lower of the carrying amount or fair
value less costs to sell. Adoption of this statement did not have a material
impact on the Company's financial position, results of operations or
liquidity.

In October, 1995, SFAS No. 123 Accounting for Stock-Based Compensation was
issued by the Financial Accounting Standards Board. This statement encourages,
but does not require, companies to measure stock-based compensation cost using
a fair value method, rather than the intrinsic value method prescribed by the
Accounting Principles Board (APB) Opinion No. 25. Companies choosing to
continue to measure stock-based compensation using the intrinsic value method
must disclose on a pro forma basis net income (loss) and net income (loss) per
share as if the fair value method were used. Management has determined that
upon formation of the 1997 Stock Option Plan, they will adopt the disclosure-
only provisions of SFAS No. 123. As such, the adoption of this Statement is
not expected to have an impact on the Company's results of operations.

In February, 1997, SFAS No. 128 Earnings per Share was issued by the
Financial Accounting Standards Board. This statement is effective for both
interim and annual periods ending after December 15, 1997, earlier adoption is
not permitted. This standard replaces the presentation of primary earnings per
share with a

presentation of basic earnings per share and also requires dual presentation
of basic and diluted earnings per share for all entities with complex capital
structures. Because early adoption of SFAS No. 128 is not permitted, there is
no impact on the Company's earnings per share amounts for the interim periods
presented herein. However, upon adoption in the third quarter of 1998, all
prior interim and annual period earnings per share data presented will be
restated to conform with the provisions of SFAS No. 128. The Company does not
expect the impact of the adoption of SFAS No. 128 to be material to previously
reported earnings per share amounts.

TAXES

As of June 30, 1996, the Company had net operating loss carryforwards for
federal income tax purposes of approximately $943,000. As a result of the
Formation Transactions in April 1996, future utilization of such net operating
loss carryforwards is limited to approximately $580,000 annually. The Company
expects that the net operating loss carryforwards will be exhausted during
fiscal 1998 and the Company's effective tax rate will rise in fiscal 1999 and
thereafter.

BUSINESS

THE COMPANY

OCI is a leading provider of outdoor advertising services, operating
approximately 15,000 advertising displays in 13 midwestern and southeastern
states. The Midwest and Southeast are attractive markets for outdoor
advertising with stable, growing economies and a significant number of
advertisers in diverse industries such as retail sales, health care,
agriculture and manufacturing. The Company focuses on small- to medium-sized
markets with populations ranging from 15,000 to 150,000 and is the largest
outdoor advertising company in most of the markets in which it operates.
Management believes that operating in small- to medium-sized markets provides
certain advantages over operating in large markets, including lower and more
stable lease costs, greater new build opportunities and more attractive
acquisition opportunities. For the twelve months ended March 31, 1997, on a
pro forma basis, the Company had net revenues and EBITDA of $56.1 million and
$22.5 million, respectively, excluding the results of certain individually
insignificant operations prior to their acquisition by the Company. See
"Summary Pro Forma Financial Information."

On April 3, 1996, the Company's current structure emerged with its
acquisition and consolidation of OCI North and OCI South. See "Certain
Relationships and Related Transactions--The Formation Transactions." OCI South
was founded in 1972 by John C Stanley IV and A.B. Isbell upon their
acquisition of certain outdoor advertising assets in the region around
Memphis, Tennessee. Over the next 25 years, Messrs. Stanley and Isbell and the
other employees steadily increased the sales and geographic reach of OCI
South. Through dedication to customer service and product quality and the
consummation of numerous acquisitions, OCI South grew its operations to more
than 2,600 display faces in six states by April 1996. In 1989, OCI North was
formed by Messrs. Stanley and Isbell to complete the acquisition of Dingeman
Advertising, Inc., an outdoor advertising company based in Traverse City,
Michigan whose operations had been in existence since 1922. Through additional
acquisitions and new construction, OCI North grew substantially after 1989 so
that by April 1996, OCI North had more than 2,800 display faces in three
states. The Company believes that the success of its management team in
developing and expanding its operations has made OCI a significant competitor
in the outdoor advertising industry.

INDUSTRY OVERVIEW

Although the outdoor advertising industry has gained increased prominence in
recent years, the industry itself dates back to the late nineteenth century
when companies began renting spaces on wooden boards or fences for advertising
"bills" which were pasted or posted to the rented spaces. The industry grew
dramatically from the 1920s to the 1960s, with the significant increase in
automobile travel and highway and freeway construction and improvement. As
roadside advertising became more popular with advertisers, the displays used
by the industry evolved from posters to more permanent billboards in standard
sizes located in highly visible, high-traffic locations.

In more recent times, the outdoor advertising industry has experienced
significant changes due to a number of factors. First, the outdoor advertising
industry has increased its visibility with and attractiveness to a diversified
set of local advertisers as well as national retail and consumer product-
oriented companies to offset the decline in the use of tobacco advertising in
recent years. Second, the industry has benefitted significantly

from improvements in production technology, including the use of computer
printing, vinyl advertising copy and improved lighting techniques, which have
facilitated a more dynamic, colorful and creative use of the medium. These
technological advances have permitted the outdoor advertising industry to
respond more promptly and cost effectively to the changing needs of its
advertising customers and make greater use of advertising copy used in other
media. Third, the outdoor advertising industry has benefitted from the growth
in automobile travel time for business and leisure due to increased highway
congestion and continued demographic shifts of residences and businesses from
the cities to outlying suburbs. The study most recently published by the
Office of Highway Information Management of the Federal Highway Administration
indicated that, during the period from 1983 to 1990, licensed drivers in the
United States increased by 11%, vehicles owned increased by 15%, the number of
vehicle trips increased by 25% and vehicle miles increased by 40%. The Company
believes that these trends demonstrate that consumer exposure to existing
billboard structures also increased during this period.

Advertisers purchase outdoor advertising for a number of reasons. Outdoor
advertising offers repetitive impact and a relatively low cost per-thousand
impressions, a commonly used media measurement, as compared to television,
radio, newspapers, magazines and direct mail marketing. This cost-
effectiveness makes outdoor advertising a good vehicle to build mass market
support. In addition, outdoor advertising can be used to target a defined
audience in a specific location and, therefore, can be relied upon by local
businesses concentrating on a particular geographic area where customers have
specific demographic characteristics. For instance, restaurants, motels,
service stations and similar roadside businesses use outdoor advertising to
reach potential customers close to the point of sale and provide directional
information. Other local businesses such as television and radio stations and
consumer products companies may wish to appeal more broadly to customers and
consumers in the local market. National brand name advertisers may use the
medium to attract customers generally and build brand awareness. In all cases,
outdoor advertising can be combined with other media such as radio and
television to reinforce messages being provided to consumers.

The outdoor advertising industry is comprised of several large outdoor
advertising and media companies with operations in multiple markets, as well
as many smaller and local companies operating a limited number of structures
in a single or few local markets. While the industry has experienced some
consolidation within the past few years, the OAAA estimates that there are
still approximately 600 companies in the outdoor advertising industry
operating approximately 396,000 billboard displays. The Company expects the
trend of consolidation in the outdoor advertising industry to continue.

OPERATING STRATEGY

The Company's objective is to be a leading provider of outdoor advertising
services in small- to medium-sized markets across the United States. To
achieve this objective, the Company plans to both increase its penetration in
its existing markets and expand into attractive new markets. The Company has
historically implemented, and intends to continue to pursue, the following
operating strategy:

Pursue Strategic Acquisitions. The Company seeks to continue its growth by
pursuing an aggressive acquisition strategy emphasizing both in-market and
new market acquisitions. The Company believes it has attractive in-market
acquisition opportunities which will serve to increase market penetration
and enhance local market operating efficiencies. In most instances, in-
market acquisitions involved the purchase of display faces only and require
no incremental personnel. The Company also intends to pursue new market
acquisitions that are either within its existing regions or in new regions
where attractive growth and consolidation opportunities exist.

Leverage Operational Structure. The Company's operational structure
provides significant operating leverage to support increased penetration of
existing markets and new market expansion. The Company's operations are
comprised of 11 divisions, each with its own division headquarters to
service its display structures and customers. OCI has centralized
management operations in Traverse City, Michigan and Corinth, Mississippi
to provide administrative oversight of the divisions through centralized
purchasing, a detailed budgeting process, management information systems
and strict cost controls. With this infrastructure in place, the Company
can generate revenues from newly acquired or constructed display faces at a
very attractive incremental margin.

Focus on Local Advertisers. The Company seeks to continue its local
advertiser focus, which management believes provides the Company with a
diverse and stable advertiser base, fewer sales subject to agency
commissions and greater rate integrity. Local advertising constituted over
84% of the Company's gross revenues for the nine months ended March 31,
1997, which is higher than the industry average of 70% as estimated by the
OAAA. The Company believes that the diversity of its local customer base
insulates it from dependence on any one customer or industry. During the
nine months ended March 31, 1997, no single customer represented more than
2.5% of the Company's gross revenues.

Emphasize Twelve-Month Advertising Contracts. The Company seeks to maximize
occupancy levels and sales force and production efficiency by focusing on
twelve-month advertising contracts. The Company believes that these long-
term contracts enhance occupancy levels at stable advertising rates,
generate higher renewal rates, increase the predictability of revenues and
allow its sales personnel time to provide greater attention to servicing
their accounts.

Capitalize on Experienced Management Team. The Company believes that one of
the keys to continuing its growth is its experienced management team. The
Company's three-person senior management team has over 70 years of combined
experience in the outdoor advertising industry which provides the Company
with the market knowledge and relationships necessary to identify and
evaluate acquisition candidates. Management's local relationships also
provide OCI with the ability to identify and obtain municipal approval for
new build opportunities.

RECENT ACQUISITIONS

The Company has historically relied on an acquisition-based growth strategy
that has provided its management with considerable experience in analyzing and
negotiating potential acquisitions. In addition, the Company's management has
consistently demonstrated its ability to assimilate its acquisitions into the
existing structure of the Company. The Company has acquired the assets of 16
outdoor advertising companies over a 15-month period, totaling in excess of
9,000 display faces. The Company believes that these completed acquisitions
have significantly strengthened its market presence in the Midwest and
Southeast and have allowed the Company to capitalize on the operating
efficiencies and cross-market sales opportunities associated with operating in
contiguous markets. The following summarizes the Significant Acquisitions,
which are included in the pro forma financial information in this Prospectus:

The Ragan Acquisition. In May 1997, OCI entered into agreements to acquire
substantially all of the assets of the Ragan Companies for an aggregate cash
purchase price of $27.0 million. Upon consummation of this acquisition, the
Company will acquire approximately 1,470 display faces in Rockford, Illinois;
Cedar Rapids, Iowa and the Quad Cities of Moline, Illinois, Rock Island,
Illinois, Davenport, Iowa and Bettendorf, Iowa. The Ragan Companies are
attractive to OCI for several reasons, including the price, locations and size
of the companies' markets. The acquisition of the Ragan Companies is scheduled
to close in June 1997.

The Outdoor West Acquisition. On March 31, 1997, OCI acquired substantially
all of the assets of Outdoor West for a cash purchase price of $11.8 million.
As a result of this acquisition, the Company acquired approximately 960
display faces in Tennessee and a right of first refusal to purchase Outdoor
West, Inc. of Georgia, an affiliate of Outdoor West. The acquisition of
Outdoor West has strengthened the Company's presence in eastern and central
Tennessee.

The Skoglund Acquisition. On October 31, 1996, OCI completed the acquisition
of substantially all of the assets of Skoglund for a cash purchase price of
$21.0 million. As a result of the acquisition of Skoglund, the Company
acquired approximately 1,500 display faces in Minnesota and Wisconsin. These
new market areas strengthen OCI's presence in the Midwest.

The Alabama Outdoor Acquisition. On April 30, 1996, OCI acquired
approximately 2,900 display faces across North and Central Alabama through its
purchase of substantially all of the assets of Alabama Outdoor for a cash
purchase price of $34.2 million. By purchasing display faces in the regions
around and between Birmingham and Gadsden, Alabama, the Company has been able
to strengthen its presence in a growing market.

The Georgia Outdoor Acquisition. On April 3, 1996, OCI completed the
acquisition of substantially all of the assets of Georgia Outdoor for a cash
purchase price of $11.6 million. As a result of this transaction, the Company
acquired approximately 800 display faces in Georgia and South Carolina in the
vicinity of Athens, Georgia. This complemented the Company's existing
operations in the region around Rome, Georgia.

In addition to the Significant Acquisitions, since September 1996 the
Company has consummated 11 in-market acquisitions, acquiring 1,691 display
faces in Alabama, Georgia, Kentucky, North Carolina, South Carolina, Michigan
and Tennessee for aggregate cash payments totaling approximately $17.5
million.

APPROXIMATE
NUMBER OF
DATE OF DISPLAYS ACQUISITION
NAME OF ACQUIRED COMPANY ACQUISITION DISPLAY LOCATIONS ACQUIRED TYPE

Summey Outdoor.......... June 1997 North Carolina/South Carolina 900 In-market
Ragan Companies......... June 1997 Illinois/Iowa/Wisconsin 1,470 New market
Ellis Outdoor........... April 1997 Alabama 80 In-market
Quality Outdoor......... April 1997 Kentucky 180 In-market
Outdoor West............ March 1997 Tennessee 960 New market
Raven Outdoor........... February 1997 Michigan 12 In-market
Scout Outdoor........... February 1997 Tennessee 100 In-market
Amor Sign Studios....... February 1997 Michigan 120 In-market
Pabian Outdoor.......... December 1996 Georgia 40 In-market
D&S Outdoor............. December 1996 Georgia 16 In-market
Crowder Outdoor......... November 1996 Georgia 110 In-market
Skoglund................ October 1996 Minnesota/Wisconsin 1,500 New market
Hawthorne of
Birmingham............. October 1996 Alabama 23 In-market
Hawthorne of Georgia.... September 1996 Georgia 110 In-market
Alabama Outdoor......... April 1996 Alabama 2,900 New market
Georgia Outdoor......... April 1996 South Carolina/Georgia 800 New market
------
Total.................. 9,321
======

The Company's acquisition integration approach is different for in-market
and new market acquisitions. In-market acquisitions typically involve the
purchase of display faces only, resulting in the elimination of all personnel
and related costs. The functions relating to sales, production, leasing and
administration are assumed by existing operations. In new markets, the Company
generally eliminates administrative and accounting positions, maintains a
sales and production capability, and institutes the Company's operating
philosophy, systems and controls. In addition, the Company immediately
implements its sales strategy which involves converting the compensation
program of the sales force from salary plus incentive to straight commission
and redirects the sales effort toward twelve-month advertising contracts.

MARKETS

The Company operates primarily in small- to medium-sized markets in the
midwest and southeast regions of the country. Each market has local
industries, businesses and special events that are frequent users of outdoor
advertising. The Company has 11 administrative and sales divisions
headquartered in the locations listed in the table below.

The following sets forth certain information (on a pro forma basis as set
forth in the Unaudited Pro Forma Consolidated Financial Statements of OCI) for
each of the Company's markets as of and for the twelve months ended March 31,
1997, excluding the pre-acquisition operating results from the 11 individually
insignificant acquisitions by the Company since September 1996.

NUMBER OF DISPLAYS
-----------------------------------------------
PRO FORMA NET REVENUES
12 MONTHS ENDED
MARCH 31, 1997 PERCENTAGE OF JUNIOR 30-SHEET 8-SHEET
MARKET (IN THOUSANDS) NET REVENUES BULLETINS BULLETINS POSTERS POSTERS TOTAL

Birmingham, AL.......... $10,533 18.8% 420 101 1,120 308 1,949
Quad Cities, IA/IL...... 6,717 12.0 940 --(1) 192 359 1,491
Duluth, MN.............. 6,150 11.0 318 390 864 12 1,584
Athens, GA.............. 6,037 10.8 301 415 822 98 1,636
Traverse City, MI....... 4,830 8.6 161 520 746 -- 1,427
Saginaw, MI............. 4,466 8.0 155 217 630 8 1,010
Corinth, MS............. 3,946 7.0 191 111 719 1 1,022
Johnson City, TN........ 3,878 6.9 160 136 651 -- 947
Paducah, KY............. 3,305 5.9 70 281 617 2 970
Huntsville, AL.......... 3,241 5.8 223 126 591 -- 940
Tuscaloosa, AL.......... 3,022 5.4 276 138 384 -- 798
------- ----- ----- ----- ----- --- ------
Total................. $56,125 100.0% 3,215 2,435 7,336 788 13,774(2)
======= ===== ===== ===== ===== === ======

- ---------------------
(1) Separate information on the number of junior bulletins included among
bulletins is unavailable.
(2) Excludes approximately 1,180 displays acquired after March 31, 1997.

The following is an overview of the economies and significant features of
the Company's 11 markets:

Birmingham, Alabama. The Company's Birmingham market includes the region in
and around Birmingham, Alabama, the largest city and the leading trade center
in the State of Alabama. This market area is one of the Southeast's major
centers of finance, health care, manufacturing, research and engineering,
transportation and education. Unlike the other markets in which OCI operates,
Birmingham is one of the sixty largest metropolitan areas in the country.

Quad Cities, Iowa/Illinois. The Company's Quad Cities market consists of
Rockford, Illinois; Cedar Rapids, Iowa; and the Quad Cities of Moline,
Illinois, Rock Island, Illinois, Davenport, Iowa and Bettendorf, Iowa. The
Quad Cities region features several major construction and farming machinery
manufacturers as well as the University of Iowa. The Rockford, Illinois
region, which is located approximately 90 miles from Chicago, is an important
center for tool and die manufacturing for the automobile industry. Cedar
Rapids, Iowa has over 278 manufacturing plants and approximately 20 Fortune
500 companies.

Duluth, Minnesota. The Company's Duluth market includes the areas in and
around Duluth, Minnesota; St. Cloud, Minnesota; and Eau Claire, Wisconsin.
Important components of the Duluth area's economy include tourism, shipping,
medical services, manufacturing, mining and education. St. Cloud is located
approximately 65 miles from Minneapolis/St. Paul and is one of the state's
leading agricultural areas. It is also the home of a variety of medical and
light manufacturing companies. Eau Claire is located between Chicago and
Milwaukee and is one of Wisconsin's most rapidly growing cities. Its
industrial base includes computer manufacturing, insurance, environmental
cleaning products and meat and dairy products.

Athens, Georgia. The Company's Athens market encompasses 31 counties
throughout northwest Georgia, a region with a healthy economy well positioned
for growth. Much of this growth will emanate from the expansion of nearby
Atlanta. In addition to the large number of commuters to greater Atlanta who
live in this market area, there are a significant number of tourists who
frequent the region including visitors to the University of Georgia.

Traverse City, Michigan. The Company's Traverse City market includes the
areas of Traverse City, Muskegon and Michigan's Upper Peninsula, some of that
state's most popular tourist destinations. The greater Traverse City area
attracts more than 2 million visitors annually to its numerous recreational
offerings and events. The area's 20 championship golf courses as well as
plentiful fishing and camping opportunities draw thousands of tourists during
the summer, while premier ski resorts and hundreds of groomed snowmobile
trails are popular in the winter. The tourism and retail sectors of the
Traverse City Division's economy are balanced by stable manufacturing and
natural resource-related sectors.

Saginaw, Michigan. The Company's Saginaw market encompasses the "Tri-Cities"
of Saginaw, Midland and Bay City, Michigan as well as the region in and around
Port Huron, Michigan. The region's solid retail sectors are complemented by a
robust tourism industry. For example, in Mount Pleasant, Michigan, the Soaring
Eagle Casino attracts many people from across the state and nearby Canada.
Other significant industry sectors in this region include automotive
manufacturing, chemical production, agriculture processing and electric power
and gas production.

Corinth, Mississippi. The Company's Corinth market covers north and central
Mississippi, northwest Alabama and west Tennessee. While this region's economy
has traditionally been rooted in the timber, pulp and paper and railroad
industries, other industries such as furniture and electronics manufacturing
have emerged in recent years. In addition, the growing presence of casino
gambling is boosting the region's economy dramatically. This market's Alabama
region features a strong mix of industries, including apparel mills, metal
casting houses and food processing plants. In addition, the lakes in this
region have made tourism an increasingly important attraction for potential
consumers in the region.

Johnson City, Tennessee. The Company's Johnson City market is centered on
the "Tri-Cities" area of Tennessee: Johnson City, Kingsport and Bristol. Local
industries include electronics, pharmaceuticals, mining, machinery, apparel,
textiles and aluminum products. The region also features many recreational
areas with boating, skiing, white water rafting and fishing which make it a
tourist destination.

Paducah, Kentucky. The Company's Paducah market encompasses parts of
Kentucky, Missouri and Illinois. The local economies within this division are
driven by a diverse collection of industries including retail, health care and
transportation. This market also includes the area in and around Decatur,
Illinois, which is centrally located among Chicago, St. Louis and
Indianapolis.

Huntsville, Alabama. The Company's Huntsville market is centered in a region
where defense and aerospace technology, research and manufacturing play an
important role in the local economy. In addition, the area's economic base
includes numerous electronics and other industrial firms. The Company's
Huntsville market also includes the Murfreesboro, Tennessee region.
Murfreesboro's proximity to Nashville generates substantial commuter and
tourist traffic in this market. This region is also the location of companies
involved in heavy manufacturing, health care and education.

Tuscaloosa, Alabama. The Company's Tuscaloosa market covers the region in
and around Tuscaloosa, Alabama, home of the main campus of the University of
Alabama which serves as the focal point for much of the activity in and around
this market area. Tuscaloosa is located fifty miles southwest of Birmingham,
and large cities such as Atlanta, Memphis and Nashville are within a two-
hundred mile radius of the city.

LOCAL MARKET OPERATIONS

In addition to the sales operations in each of its divisions, the Company
maintains a complete outdoor advertising operation including a general
manager, a production, construction and maintenance facility, a creative
department equipped with advanced technology, a real estate unit and support
staff. The Company conducts its outdoor advertising operations through these
local offices, consistent with senior management's belief that an organization
with decentralized sales and operations is more responsive to local market
demand and provides greater incentives to employees. The decentralized sales
operations are balanced by administrative oversight through OCI's centralized
accounting and financial controls based in the Company's primary
administrative offices in Corinth, Mississippi and Traverse City, Michigan.
These controls allow OCI to closely monitor the operating and financial
performance of its operations in each market. Mr. Isbell is the President of
the Company and its Chief Operating Officer, and four regional Vice Presidents
report directly to him. The 11 division general managers in turn report
directly to one of the four regional Vice Presidents. Such division general
managers are responsible for the day-to-day operations of their respective
markets and are compensated according to the financial performance of such
markets. In general, these local managers oversee market development,
production and local sales.

Although site leases (for land underlying an advertising structure) are
administered from the Company's primary administrative offices in Mississippi
and Michigan, each local division office is solely responsible for locating
and ultimately procuring leases for appropriate sites in its market. Site
lease contracts vary in term but typically run from five to twenty years with
various termination and renewal provisions. Each division office maintains a
leasing department, which maintains records containing information on local
property ownership, lease contract terms, zoning ordinances and permit
requirements. The Company believes that by relying on personnel in its local
offices to study market conditions and procure new site leases it is better
able to respond to increases in customer demand.

The Company has also established fully staffed and equipped creative
departments in each of its divisions. Using technologically advanced computer
hardware and software, the creative departments are able to develop original
design copy for local advertisers and exchange work and concepts with each
other or directly with clients or their agencies. This capability has
encouraged some advertising agencies to rely on the Company for the creation
of their clients' outdoor campaigns. The Company believes that its creative
departments' implementation of continuing technological advances provides a
significant competitive advantage in its sales and service area.

SALES AND SERVICE

The Company has long focused on providing a low cost, high-quality
advertising vehicle to local businesses. During the nine months ended March
31, 1997, local advertising revenues accounted for 84% of gross revenues. The
Company believes that outdoor advertising will typically be the most efficient
means for local advertisers to reach consumers. Management believes that its
local advertiser focus provides the Company with a diverse and stable
advertiser base, fewer agency commission sales and greater rate integrity. The
Company also believes that the diversity of its customer base insulates the
Company from dependence on any one customer or industry. For the nine months
ended March 31, 1997, no single customer represented more than 2.5% of the
Company's gross revenues.

The Company believes that the development of partner-like relationships with
local business owners is a key component to successful operation in smaller
markets. Management therefore encourages its sales personnel to become
acquainted with these local business persons to learn about the needs of its
small business customers and spend time discussing the benefits of outdoor
advertising with them. Few of the local advertisers in small markets have
relationships with advertising agencies; therefore, the Company obtains many
of its contracts with such advertisers through direct sales. As a result, a
lower percentage of the Company's revenues are subject to advertising agency
commissions than those of major market outdoor advertising companies.
Elimination of the payment of agency commissions on some local sales,
typically 15% of gross revenues, increases the profitability of contracts with
local businesses or, under some circumstances, enhances the Company's ability
to offer incentive programs to its customers.

The Company emphasizes the use of advertising contracts with a term of
twelve months. The Company believes that such contracts provide the Company
with considerable stability with respect to both occupancy and advertising
rates. Long-term contracts also increase the predictability of revenues and
allow sales personnel time to devote greater attention to servicing their
accounts. The Company believes that once its customers enter into twelve-month
contracts they tend to view their outdoor advertising expenses as a routine
cost of doing business. As a result, such customers are more likely to renew
their contracts. The Company has experienced renewal rates of approximately
75% of advertising contracts, with average annual rate increases at or above
the annual rate of inflation.

To encourage customers to sign twelve-month poster contracts, the Company
has consistently used two promotions: an incentive program and a rotation
program. Under the incentive program, customers who enter into a twelve-month
poster contract are eligible for certain incentives which may be applied to a
twelve-month renewal of such contract. Under the rotation program, customers
of the Company who have entered into twelve-month contracts can change the
location of their poster advertising display from one of the Company's
structures to another Company-owned structure every 30 to 60 days. This
affords such customers with more varied exposure and access to some of the
Company's most attractive locations which might otherwise be unavailable.

In each of its 11 divisions, the Company maintains teams of sales
representatives with defined territories who report to a general manager in
each of its markets. The Company's sales teams are experienced, with
individual sales persons averaging six years of service with the Company or
operations acquired by the Company. Each sales representative is compensated
exclusively on a commission basis, and the local general manager's
compensation is tied to the performance of his or her sales team. The Company
believes that this incentive structure, together with the experience of its
personnel, is a significant factor in its ability to maintain a solid base of
local advertisers in the communities where it operates. In addition, the
Company's national sales manager works with advertising agencies across the
country to solicit national advertising with the Company.

CUSTOMERS

Approximately 84% of the Company's gross revenues in the first nine months
of fiscal 1997 were generated from local advertisers. The Company believes
that focusing on local advertising offers several advantages over national
advertising. In local sales, the Company often deals directly with the
customer without an agency acting as an intermediary. The Company expends
considerable sales efforts on educating local customers regarding the benefits
of outdoor media and helping potential customers develop an outdoor
advertising strategy. Hence, the Company has an opportunity to develop a long-
term working relationship with local advertisers and influence their
purchasing decisions. The direct relationship also gives the Company an
advantage in obtaining renewals, as is evidenced by its advertising contract
renewal rate of 75%. In addition, the Company's experience has been that local
advertisers are more likely to enter into twelve-month contracts. See "--Sales
and Service". Local advertisers tend to have smaller advertising budgets and
are more dependent on the Company's production and creative personnel to
design and produce advertising copy. While price and availability are
important competitive factors, service and customer relationships are also
critical components of local sales. The Company's reliance on local
advertisers is particularly beneficial from a diversification standpoint. No
one customer accounted for more than 2.5% of the Company's gross revenues
during the nine months ended March 31, 1997.

The close proximity of the Company's displays to several large metropolitan
areas allows it to attract national advertisers. One strategy employed by the
Company to attract national advertisers has been the establishment of "rings"
around several major metropolitan areas including Atlanta, Detroit, Memphis,
Minneapolis and Nashville. Rather than locate signs within such metropolitan
areas, the Company operates display faces in smaller communities surrounding
these markets. National advertisers who want access to commuters who work in
metropolitan areas but live outside them are therefore attracted to OCI. The
Company competes for national advertisers primarily as compared to the outdoor
advertising industry as a whole on the basis of price, location of displays,
availability and service.

Tobacco revenues have historically accounted for a significantly lower
portion of the Company's outdoor advertising revenues than the outdoor
advertising industry as a whole. For the nine months ended March 31, 1997,
tobacco advertisers accounted for less than 10% of the Company's gross
revenues, well below the estimated 13.6% for the outdoor advertising industry
as a whole in 1996, as reported by Competitive Media Reporting and Publishers
Information Bureau Inc. Thus, the reduction by the leading tobacco companies
in their expenditures for outdoor advertising due to a declining population of
smokers, societal pressures, consolidation in the tobacco industry and price
competition from generic brands has had a less dramatic effect on the
Company's inventories than on the outdoor advertising industry as a whole. See
"--Government Regulation."

The following table illustrates the diversity of the Company's advertising
base for the nine months ended March 31, 1997:

GROSS REVENUES BY ADVERTISER CATEGORY

PERCENTAGE OF
GROSS REVENUES

Retail/Consumer Products...................................... 12.8%
Hospitality................................................... 12.4
Automotive and Related........................................ 11.8
Tobacco....................................................... 9.1
Media/Communications.......................................... 7.8
Restaurants................................................... 7.4
Gaming and other Recreation................................... 5.9
Financial Services/Insurance.................................. 5.5
Health Care................................................... 4.8
Beverages (alcoholic and non-alcoholic)....................... 4.3
Real Estate................................................... 2.3
Other......................................................... 15.9
-----
Total....................................................... 100.0%
=====

INVENTORY

The Company operates four standard types of outdoor advertising display
faces:

Bulletins generally are 36 feet long by 10 1/2 feet high or 48 feet long by
14 feet high and consist of panels on which advertising copy is displayed.
The advertising copy is either hand painted onto the panels at the
facilities of the Company in accordance with design specifications supplied
by the advertiser and attached to the outdoor advertising structure, or is
hand-painted or printed with the computer-generated graphics on a single
sheet of vinyl that is wrapped around the structure. On occasion, to
attract more attention, some of the panels may extend beyond the linear
edges of the display face and may include three-dimensional embellishments.
Because of their greater impact and higher cost, bulletins are usually
located on major highways.

Junior Bulletins are smaller bulletins, measuring 25 feet long by 12 feet
high or smaller, with panels on which advertising copy is displayed. As
with standard bulletins, the advertising copy is either hand painted onto
the panels at the facilities of the Company in accordance with design
specifications supplied by the advertiser and attached to the outdoor
advertising structure, or is hand-painted or printed with the computer-
generated graphics on a single sheet of vinyl that is wrapped around the
structure. Junior bulletins may also feature panels extending beyond the
linear edges of the display face or other three-dimensional embellishments.
Junior bulletins are generally located on secondary roads and highways.

30-Sheet Posters generally are 25 feet long by 12 feet high and are the
most common type of billboard. Advertising copy for 30-sheet posters
consists of lithographed or silk-screened paper sheets supplied by the

advertiser that are pasted and applied like wallpaper to the face of the
display. Thirty-sheet posters are primarily located on major traffic
arteries.

Junior (8-Sheet) Posters usually are 12 feet long by 6 feet high. Displays
are prepared and mounted in the same manner as 30-sheet posters. Most
junior posters, because of their smaller size, are primarily located on
city streets.

Billboards generally are mounted on structures owned by the Company and
located on sites that are either owned or leased by it or on which it has
acquired a permanent easement. Billboard structures are durable, have long
useful lives and do not require substantial maintenance. When disassembled,
they typically can be moved and relocated at new sites. The Company's outdoor
advertising structures are made of steel and other durable materials built to
withstand variable climates, including the rigors of the midwestern climate.
The Company expects its structures to last 15 years or more without
significant refurbishment.

PRODUCTION

The Company has internal production facilities and staff in each of its 11
divisions to perform the full range of activities required to develop, create
and install outdoor advertising in all of its markets. Production work
includes creating the advertising copy design and layout, painting the design
or coordinating its printing and installing the designs on its displays. The
Company usually provides its full range of production services to local
advertisers and to advertisers that are not represented by advertising
agencies, since national advertisers and advertisers represented by
advertising agencies often use preprinted designs that require only
installation. However, the Company's creative and production personnel
frequently are involved in production activities even when advertisers are
represented by agencies due to the development of new designs or adaptation of
copy from other media for use on billboards. The Company's artists also assist
in the development of marketing presentations, demonstrations and strategies
to attract new advertisers.

With the increased use of vinyl and pre-printed advertising copy furnished
to the outdoor advertising company by the advertiser or its agency, outdoor
advertising companies are becoming less responsible for labor-intensive
production work since vinyl and pre-printed copy can be installed quickly. The
vinyl sheets are reusable, thereby reducing the Company's production costs,
and are easily transportable. Due to the geographic proximity of the Company's
principal markets and the transportability of vinyl sheets, the Company can
shift materials among markets to promote efficiency. The Company believes that
this trend over time will reduce operating expenses associated with production
activities.

COMPETITION

The Company is the leading outdoor advertising provider in most of its
markets. In each of its markets, the Company faces competition from other
media, including broadcast and cable television, radio, print media and direct
mail marketers. In addition, the Company also competes with a wide variety of
"out-of-home" media, including highway logo signs, advertising in shopping
centers and malls, airports, stadiums, movie theaters and supermarkets, as
well as on taxis, trains, buses and subways. Advertisers compare relative
costs of available media and cost-per-thousand impressions, particularly when
delivering a message to customers with distinct demographic characteristics.
In competing with other media, outdoor advertising relies on its low cost-per-
thousand-impressions and its ability to reach repetitively a broad segment of
the population in a specific market or to target a particular geographic area
or population with a particular set of demographic characteristics within that
market.

The outdoor advertising industry is highly fragmented, consisting of several
large outdoor advertising and media companies with operations in multiple
markets as well as smaller and local companies operating a limited number of
structures in single or a few local markets. Although some consolidation has
occurred over the past few years, according to the OAAA there are
approximately 600 companies in the outdoor advertising industry operating
approximately 396,000 billboard displays. In several of its markets, the
Company encounters direct competition from other major outdoor media
companies, including 3M Media, which has agreed to be acquired by Outdoor
Systems, Inc., Whiteco, Inc., and Lamar Advertising Company, each of which has
a larger

national network and greater total resources than the Company. The Company
believes that its emphasis on local advertisers and its position as a major
provider of advertising services in each of its markets enable it to compete
effectively with the other outdoor media operators, as well as other media,
both within those markets and in the midwest region. The Company also competes
with other outdoor advertising companies for sites on which to build new
structures. See "Risk Factors--Competition."

GOVERNMENT REGULATION

The outdoor advertising industry is subject to governmental regulation at
the federal, state and local levels. Federal law, principally the Highway
Beautification Act, encouraged states, by the threat of withholding federal
appropriations for the construction and improvement of highways within such
states, to implement legislation to restrict billboards located within 660
feet of, or visible from, interstate and primary highways except in commercial
or industrial areas. All of the states have implemented regulations at least
as restrictive as the Highway Beautification Act, including prohibitions on
the construction of new billboards adjacent to federally-aided highways and
the removal at the owner's expense and without any compensation of any illegal
signs on such highways. The Highway Beautification Act, and the various state
statutes implementing it, require the payment of just compensation whenever
government authorities require legally erected and maintained billboards to be
removed from federally-aided highways.

The states and local jurisdictions have, in some cases, passed additional
and more restrictive regulations on the construction, repair, upgrading,
height, size and location of, and, in some instances, content of advertising
copy being displayed on outdoor advertising structures adjacent to federally-
aided highways and other thoroughfares. Such regulations, often in the form of
municipal building, sign or zoning ordinances, specify minimum standards for
the height, size and location of billboards. In some cases, the construction
of new billboards or relocation of existing billboards is prohibited. Some
jurisdictions also have restricted the ability to enlarge or upgrade existing
billboards, such as converting from wood to steel or from non-illuminated to
illuminated structures. From time to time governmental authorities order the
removal of billboards by the exercise of eminent domain. Thus far, the Company
has been able to obtain satisfactory compensation for any of its structures
removed at the direction of governmental authorities, although there is no
assurance that it will be able to continue to do so in the future.

In recent years, there have been movements to restrict billboard advertising
of certain products, including tobacco and alcohol. It is uncertain whether
additional legislation of this type will be enacted on the national level or
in any of the Company's markets. The Company derives significant revenues from
advertisers in the gaming industry. The Company is not aware of any concerted
efforts to enact legislation limiting the advertisement of casino gaming, but
there can be no assurance that there will not be such efforts in the future.

In August 1996, the U.S. Food and Drug Administration issued final
regulations governing certain marketing practices in the tobacco industry.
Among other things, the regulations prohibit tobacco product billboard
advertisements within 1,000 feet of schools and playgrounds and require that
tobacco product advertisements on billboards be in black and white and contain
only text. Enforcement of such regulations has been stayed indefinitely by a
federal court in North Carolina. A reduction in billboard advertising by the
tobacco industry could cause an immediate reduction in the Company's direct
revenue from such advertisers and would simultaneously increase the available
space on the existing inventory of billboards in the outdoor advertising
industry. In early 1997, the major tobacco manufacturers in the United States
and certain state attorneys general entered into litigation settlement
discussions. At this time, it is unclear whether any such settlement will be
reached and what effect, if any, such a settlement would have on OCI's
operations. See "--Customers" and "Risk Factors--Tobacco Industry Regulation."

Amortization of billboards has also been adopted in varying forms in certain
jurisdictions. Amortization permits the billboard owner to operate its
billboard as a non-conforming use for a specified period of time until it has
recouped its investment, after which it must remove or otherwise conform its
billboard to the applicable regulations at its own cost without any
compensation. Amortization and other regulations requiring the removal

of billboards without compensation have been subject to vigorous litigation in
state and federal courts and cases have reached differing conclusions as to
the constitutionality of these regulations. To date, regulations in the
Company's markets have not materially adversely affected its operations.

The outdoor advertising industry is heavily regulated and, at various times
and in various markets, the Company can expect to be subject to varying
degrees of regulatory pressure affecting the operation of advertising
displays. Accordingly, although the Company's experience to date is that the
regulatory environment has not adversely impacted the Company's business, no
assurance can be given that existing or future laws or regulations will not
materially adversely affect the Company at some time in the future.

OUTDOOR ADVERTISING PROPERTIES

Outdoor Advertising Sites. The Company owns or has permanent easements on
approximately 158 parcels of real property that serve as the sites for its
outdoor displays. The Company's remaining approximately 5,273 advertising
display sites are leased or licensed. The Company's site leases are for
varying terms ranging from month-to-month or year-to-year to terms of 10 years
or longer, and many provide for renewal options. With the exception of
approximately 150 leases between the Company and John H. Dingeman in Michigan,
there is no significant concentration of displays under any one lease or
subject to negotiation with any one landlord. The Company believes that an
important part of its management activity is to manage its lease portfolio and
negotiate suitable lease renewals and extensions. Through the use of double-
side structures and the erection of multiple structures on individual sites,
the Company averages approximately three display faces for every occupied site
it owns or leases.

Office and Production Facilities. The Company's principal executive and
administrative offices are located in Corinth, Mississippi and Traverse City,
Michigan. In Corinth, Mississippi, OCI leases approximately 5,000 square feet
of office space to house its administrative operations. In its Traverse City,
Michigan office, the Company leases approximately 4,500 square feet of office
space. The Company owns office and production facilities in Rome, Georgia,
Duluth, Minnesota and Corinth, Mississippi. The Company is exploring the
benefits of selling such real estate. In addition to these properties, the
Company owns or leases other office space and production and maintenance
facilities in each of its 11 divisions. The Company considers its facilities
to be well maintained and adequate for its current and reasonably anticipated
future needs.

EMPLOYEES

At March 31, 1997, the Company employed approximately 316 people, of whom
approximately 67 were primarily engaged in sales and marketing, 162 were
engaged in painting, bill posting and construction and maintenance of displays
and the balance were employed in financial, administrative and similar
capacities. The Duluth Division has 13 employees who belong to a union. The
Company considers its relations with the union and with its employees to be
good.

LEGAL PROCEEDINGS

From time to time, the Company may be involved in various legal proceedings
that are incidental to the conduct of its business. The Company is not
involved in any pending or, to its knowledge, threatened legal proceedings
which the Company believes could reasonably be expected to have a material
adverse effect on the Company's financial condition or results of operations.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of the Company are as follows:

NAME AGE POSITION

John C Stanley IV.......... 49 Chairman of the Board of Directors,
Chief Executive Officer and Director
A.B. Isbell................ 61 President, Chief Operating Officer and Director
Richard W. Ebersole........ 44 Treasurer and Chief Financial Officer
Steven B. Dodge............ 51 Director
Douglas W. Ferris, Jr.*.... 53 Director
Stephen F. Gormley*+....... 47 Director
John G. Hayes*+............ 34 Director
Brian J. Richmand+......... 43 Director
John G. Andrews............ 43 Regional Vice President
G. Robert Joiner........... 52 Regional Vice President
Gerald P. Scott............ 46 Regional Vice President
Mark K. Sherwood........... 36 Regional Vice President
David F. Dietz............. 47 Secretary

- ---------------------
* Member of Audit Committee
+ Member of Compensation Committee

John C Stanley IV has served as Chairman of the Board of Directors and Chief
Executive Officer of the Company and its direct and indirect subsidiaries
since April 1996. From 1972 through 1994, Mr. Stanley was Vice President and
Secretary of OCI South. Since 1994, Mr. Stanley has served as Chairman of OCI
South.

A.B. Isbell has served as a Director and President and Chief Operating
Officer of the Company and its direct and indirect subsidiaries since April
1996. Mr. Isbell has also served as President of OCI South since 1972.

Richard W. Ebersole has served as a Director and Treasurer and Chief
Financial Officer of the Company and its direct and indirect subsidiaries
since April 1996. Mr. Ebersole was President of OCI North from 1991 until the
consummation of the Formation Transactions in April 1996.

Steven B. Dodge has served as a Director of the Company since May 1997. Mr.
Dodge has been the Chairman of the Board, President and Chief Executive
Officer of American Radio Systems Corporation, a national radio broadcasting
company, since November 1993. Mr. Dodge also serves as a Director of American
Radio Systems Corporation and American Media, Inc.

Douglas W. Ferris, Jr. has been a Director of the Company since May 1997.
Mr. Ferris has been Chairman of the Board of National Commerce Bank Services,
Inc., a financial institution based in Memphis, Tennessee, since 1987.
National Commerce Bank Services, Inc. is an affiliate of National Commerce
Bank Corporation.

Stephen F. Gormley has served as a Director of the Company and its direct
and indirect subsidiaries since April 1996. Mr. Gormley has been a partner of
Media/Communications Partners, a venture capital firm, since 1985.

John G. Hayes has served as a Director of the Company and its direct and
indirect subsidiaries since April 1996. Mr. Hayes has been associated with
Media/Communications Partners since 1989 and has served as a partner since
1993.

Brian J. Richmand has served as a Director of the Company and its direct and
indirect subsidiaries since April 1996. Mr. Richmand has been a general
partner of Chase Capital Partners, the general partner of Chase Venture
Capital Associates, L.P., a venture capital firm, since August 1993. From
January 1986 to August 1993, Mr. Richmand was a partner at the law firm of
Kirkland & Ellis. Mr. Richmand is also a director of Riverwood Holding, Inc.

John G. Andrews has been a Regional Vice President of the Company since April
1996. Mr. Andrews was President of Alabama Outdoor from March 1994 until
Alabama Outdoor was acquired by OCI in April 1996. From March 1993 through
November 1993, Mr. Andrews served as a Vice President and Regional Manager of
Gateway Outdoor Advertising's Carolina Division, an outdoor advertising
company.

G. Robert Joiner has been a Regional Vice President of the Company since
April 1996, having previously served as a division General Manager since March
1996. Prior to joining OCI, Mr. Joiner was employed by Waste Management, Inc.,
a waste disposal company, serving as such company's State President of its
Mississippi operations from February 1993 to March 1996 and as general manager
of its Winston-Salem, North Carolina division from January 1991 to February
1993.

Gerald P. Scott has been a Regional Vice President of the Company since March
1996, having previously served as a division General Manager since 1992.

Mark K. Sherwood has been a Regional Vice President of the Company since
September 1996, having previously served as a division manager of the Company
since September 1992. Prior to joining OCI, Mr. Sherwood was employed as a
sales manager at Coca Cola Bottling Co. of Michigan, a soft drink bottler.

David F. Dietz has served as the Secretary of the Company since April 1996.
Mr. Dietz has been a partner in the law firm of Goodwin, Procter & Hoar LLP
since 1984.

The number of directors of the Company is currently fixed at seven. Following
the Offering, the Company's Board of Directors will consist of three Class I
Directors (Messrs. Dodge, Ferris and Richmand), two Class II Directors (Messrs.
Hayes and Isbell) and two Class III Directors (Messrs. Gormley and Stanley)
whose initial terms will expire upon the election and qualification of
directors at the annual meetings of stockholders to be held in 1998, 1999 and
2000, respectively. Messrs. Stanley, Isbell, Gormley, Hayes and Richmand were
initially elected to serve as Directors of the Company pursuant to a voting
agreement among all shareholders of the Company at the time of the Formation
Transactions. Such voting agreement will terminate upon the closing of this
Offering. See "Certain Relationships and Related Transactions--Formation
Transactions".

The Board of Directors has established an audit committee (the "Audit
Committee") and a Compensation Committee (the "Compensation Committee"). The
Audit Committee recommends the firm to be appointed as independent auditors of
the Company's financial statements and to perform services related to the
audit, reviews the scope and results of the audit with the independent
auditors, reviews with management and the independent auditors the Company's
annual operating results, considers the adequacy of the internal accounting
procedures, considers the effect of such procedures on the auditors'
independence and establishes policies for business values, ethics and employee
relations. Messrs. Ferris, Gormley and Hayes constitute the members of the
Audit Committee. The Compensation Committee, which consists of Messrs. Gormley,
Hayes and Richmand, reviews and recommends the compensation arrangements for
all directors and officers and approves such arrangements for other senior
level employees. The Compensation Committee also administers and takes such
other action as may be required in connection with the incentive plans of the
Company, including the 1997 Stock Option Plan (as defined below).

DIRECTOR COMPENSATION

Directors who are employees of the Company serve without compensation (other
than reimbursement of expenses) in connection with rendering services as a
Director. Non-employee directors receive $2,500 per board or committee meeting,
plus reimbursement of expenses.

EXECUTIVE COMPENSATION

Prior to the establishment of the Compensation Committee, the compensation of
executive officers of the Company was determined by the Board of Directors of
the Company. The Compensation Committee is currently responsible for reviewing
and recommending the compensation of senior executives of the Company. The

following table sets forth certain information concerning compensation
received by the Chief Executive Officer and the other four most highly-
compensated executive officers of the Company for services rendered to the
Company in all capacities (including service as an officer or director) in
fiscal 1996. No stock options or similar awards had been granted as of the end
of fiscal 1996.

Summary Compensation. The following table shows compensation paid to the
executive officers of the Company listed below for services rendered to the
Company and its predecessors in all capacities during the fiscal year ended
June 30, 1996 (collectively, the "Named Executives").

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION
-------------------- ALL OTHER
NAME AND PRINCIPAL POSITION SALARY(1) BONUS COMPENSATION

John C Stanley IV $ 137,500 $ -- $75,386(2)
Chairman and Chief
Executive Officer
A.B. Isbell 116,666 -- 75,386(2)
President and Chief
Operating Officer
Richard W. Ebersole 108,425 108,742(3) 79,106(2)(4)
Treasurer and Chief
Financial Officer

- ---------------------
(1) The current annual salaries of Messrs. Stanley, Isbell and Ebersole are
$225,000, $175,000 and $125,000, respectively.
(2) Pursuant to an agreement dated August 9, 1994 among OCI North and Messrs.
Stanley, Isbell and Ebersole in connection with the acquisition of OCI
North by the Company on April 3, 1996 OCI North issued one share of its
common stock to each of Messrs. Stanley, Isbell and Ebersole as
compensation. The market value of such share of common stock was
calculated to be $75,386.
(3) Consists of a cash bonus paid to Mr. Ebersole by OCI North upon the
acquisition of OCI North by the Company.
(4) Includes $3,720 contributed by OCI North to Mr. Ebersole's account under a
401(k) plan maintained by OCI North.

No other executive officers of the Company earned in excess of $100,000
during the fiscal year ended June 30, 1996.

STOCK OPTION PLAN

On , 1997, the Board of Directors adopted, and the stockholders of the
Company approved, the Company's 1997 Stock Option and Incentive Plan (the
"1997 Stock Option Plan"), which authorizes the issuance of up to shares
of Common Stock. The 1997 Stock Option Plan permits the grant of (i) options
to purchase shares of Common Stock intended to qualify as incentive stock
options under Section 422 of the Internal Revenue Code of 1986, as amended,
(the "Code"), (ii) options that do not so qualify, (iii) stock appreciation
rights and (iv) restricted and unrestricted stock awards.

The 1997 Stock Option Plan is designed and intended as a performance
incentive for officers, directors, employees, consultants and other key
persons performing services for the Company to encourage such persons to
acquire or increase a proprietary interest in the success of the Company. The
1997 Stock Option Plan provides that it shall be administered by the
Compensation Committee, which shall be comprised of non-employee directors who
are to be appointed by the Board of Directors from time to time. The
Compensation Committee

determines the terms of each individual stock option and stock award, subject
to the terms of the 1997 Stock Option Plan, including the exercise price or
purchase price of such awards. The exercise price for incentive stock options
must be equal to the fair market value of the Common Stock on the date of
grant. The exercise price for non-qualified stock options and the purchase
price for Common Stock awards is determined at the discretion of the
Compensation Committee. On , 1997, there were options to purchase an
aggregate of shares of Common Stock outstanding, of which shares had been
granted to executive officers of the Company. The exercise price of such
options is .

EMPLOYEE STOCK PURCHASE PLAN

On , 1997, the Board of Directors adopted and the stockholders of the
Company approved, the Company's Employee Stock Purchase Plan (the "Employee
Stock Purchase Plan"). The Company has reserved a total of shares of
Common Stock for issuance under the Employee Stock Purchase Plan. The
Compensation Committee of the Board of Directors shall administer the Employee
Stock Purchase Plan. The Employee Stock Purchase Plan which is intended to
qualify as an "employee stock purchase plan" within the meaning of Section
423(b) of the Code, as amended, permits eligible employees of the Company to
purchase Common Stock through payroll deductions of up to 10% of their
compensation. The price of the Common Stock purchased under the Employee Stock
Purchase Plan will be 85% of the lower of the fair market value of the Common
Stock on the first or last day of each six month purchase period. Employees
are eligible to participate if they are customarily employed by the Company or
any designated subsidiary for at least 20 hours per week and for more than six
months.

401(K) PLAN

The Company has adopted a 401(k) Employee Savings Plan (the "401(k) Plan").
All full-time employees of the Company are eligible to participate in the
401(k) Plan once they have accumulated 12 months of qualified service with the
Company. The Company currently matches employee contributions to the 401(k)
Plan at a rate of 50% of each employee's contribution up to a total of 3% of
the employee's total compensation.

KEY MAN INSURANCE

The Company maintains key man life insurance policies on Messrs. Stanley and
Isbell.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company formed its Compensation Committee in May 1997. Previously,
compensation decisions were made by the entire Board of Directors. Messrs.
Gormley, Hayes and Richmand comprise the Company's Compensation Committee. No
director of the Company serves on the compensation committee of the board of
directors of any other Company.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

THE FORMATION TRANSACTIONS

On April 3, 1996, the Company's current structure emerged through an equity
financing and the simultaneous acquisition and consolidation of OCI North and
OCI South (collectively, the "Formation Transactions").

Acquisition of OCI North. Pursuant to an Asset Purchase Agreement dated as
of April 3, 1996 (the "OCI North Purchase Agreement"), the Company acquired
from all of the shareholders of OCI North, including Media/Communications
Partners Limited Partnership, Chestnut Street Partners, Inc., Milk Street
Partners, Inc. and TA Investors (collectively, the "Original MCP Investors"),
John C Stanley IV, A.B. Isbell and Richard W. Ebersole, all of the outstanding
capital stock of OCI North. Under the terms of the OCI North Purchase
Agreement, the shares of OCI North common stock and preferred stock held by
Messrs. Stanley, Isbell and Ebersole were initially purchased for cash by M/C
II and M/C Investors (together, the "MCP Investors"). The MCP Investors
subsequently assigned all shares of OCI North common stock and preferred stock
to OCI in exchange for shares of Common Stock of the Company. At the time of
the Formation Transactions, OCI North also paid 100% of the principal and
accrued interest on subordinated notes issued in August 1989 to each of the
Original MCP Investors. Messrs. Gormley and Hayes are partners of entities
affiliated with each of the MCP Investors and the Original MCP Investors.

Acquisition of OCI South. On April 3, 1996, under the terms of a Stock and
Warrant Purchase Agreement, the Company, in conjunction with New South
Holdings Corp., a wholly-owned subsidiary of the Company ("New South
Holdings"), acquired all of the outstanding capital stock of OCI South,
including shares held by Mr. Stanley, A.B. Isbell, Norman Isbell, Priscilla S.
Denton, the JCS Trust and the LWS Trust, in exchange for (i) the issuance by
New South Holdings of $5.9 million aggregate principal amount of notes payable
to Messrs. Stanley and A.B. Isbell and (ii) the issuance of shares of Common
Stock and Series A Notes of OCI to Messrs. Stanley, A.B. Isbell, Norman
Isbell, the JCS Trust and the LWS Trust. Norman Isbell is the son of A.B.
Isbell. Ms. Denton is the sister of Mr. Stanley. Mr. Stanley is the trustee of
the JCS Trust and the LWS Trust. The New South Notes will remain outstanding
and payable by New South Holdings after this Offering.

Equity Financing of OCI. On April 3, 1996, under the terms of a Securities
Purchase Agreement (the "OCI Agreement"), the MCP Investors and CVCA purchased
for cash shares of Common Stock and Series B Notes of the Company. Mr.
Richmand is a partner of the general partner of CVCA. In addition, Mr.
Ebersole purchased for cash shares of Common Stock and Series A Notes. On
April 30, 1996, pursuant to the terms of the OCI Agreement and in connection
with the acquisition of Alabama Outdoor, the MCP Investors and CVCA purchased
for cash additional shares of Common Stock and additional Series B Notes in
exchange for certain cash payments. On September 10, 1996, Gerald P. Scott and
G. Robert Joiner, under the same terms as the April 3, 1996 transactions,
purchased for cash shares of Common Stock and Series A Notes of the Company.
On January 27, 1997, John Andrews and Mark Sherwood, under the same terms as
the April 3, 1996 transactions, purchased for cash shares of Common Stock and
Series A Notes.

REGISTRATION RIGHTS AGREEMENT

In connection with the initial capitalization of the Company, OCI entered
into a Registration Rights Agreement with the holders (the "Holders") of
12,075 shares of Common Stock ("Registrable Shares") which provides that,
subject to certain limitations, upon a written request by the Holders of at
least fifty-one percent (51%) of the Registrable Shares at any time after the
earlier of six months after the first public offering of securities of the
Company or April 3, 1999, the Company shall use its best efforts to effect the
registration of all or a portion of the shares of Common Stock of such
requesting Holders. If the Company becomes eligible to use a shelf
registration statement, the Holders of at least ten percent (10%) of the
Registrable Shares shall have the right to request, and the Company shall use
its best efforts to have declared effective, not more than two (2) shelf
registration statements per year for a public offering of Registrable
Securities having an aggregate proposed offering price of not less than
$250,000.

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of May 31, 1997, and as
adjusted to reflect the sale by the Company of the shares offered in the
Offering, (i) by each person who is known by the Company to own beneficially
five percent or more of the outstanding shares of Common Stock, (ii) by each
of the Company's directors, (iii) by each of the Named Executives, and (iv) by
all current directors and executive officers of the Company as a group.

SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
THE OFFERING THE OFFERING
NAME AND ADDRESS -------------------- -----------------------
NUMBER PERCENT(1) NUMBER PERCENT(1)

Entities affiliated with
Media/Communications Partners(2).. 5,463.50 45.25%
75 State Street
Boston, MA 02109
Media/Communications
Partners II Limited
Partnership(2)................. 5,244.96 43.44
Media/Communications
Investors Limited
Partnership(2)................. 218.54 1.81 *
Chase Venture Capital
Associates, L.P.(3)............... 3,636.51 30.12
c/o Chase Capital Partners
380 Madison Avenue
12th Floor
New York, NY 10017
John C Stanley IV(4).............. 1,400.54 11.60
512 Taylor Street
Corinth, MS 38834
A.B. Isbell....................... 1,050.00 8.70
512 Taylor Street
Corinth, MS 38834
Richard W. Ebersole............... 35.00 * *
Steven B. Dodge................... -- -- -- --
Douglas W. Ferris................. 87.50 * *
Stephen F. Gormley(5)............. 5,463.50 45.24
John G. Hayes(6).................. 5,463.50 45.24
Brian J. Richmand(7).............. 3,636.51 3,636.51
All directors and executive
officers
as a group (13 persons)(8)........ 11,848.05 98.12%

- ---------------------
*Represents less than 1% of the outstanding shares

(1) Total capital stock prior to the Offering consists of 12,075 shares of
Common Stock. Total capital stock after the Offering includes shares
of Common Stock and 5,000,000 shares of authorized but unissued preferred
stock.
(2) Includes (i) 5,244.96 shares of Common Stock held by Media/Communications
Partners II Limited Partnership ("M/C II") and (ii) 218.54 shares of
Common Stock held by Media/Communications Investors Limited Partnership
("M/C Investors"). Messrs. Gormley and Hayes are general partners of
Media/Communications Partners.

(3) Includes 3,636.51 shares of Common Stock held by Chase Venture Capital
Associates, L.P. ("CVCA"). Mr. Richmand is a partner of the general
partner of CVCA.
(4) Includes (i) 1,204.16 shares of Common Stock held by Mr. Stanley, (ii)
98.19 shares held by the JCS Trust of which Mr. Stanley serves as trustee
and (iii) 98.19 shares held by the LWS Trust of which Mr. Stanley serves
as trustee.
(5) Consists of shares held by M/C II and the M/C Investors. As a general
partner of Media/Communications Partners, Mr. Gormley may be deemed to be
the beneficial owner of such shares. Mr. Gormley disclaims beneficial
ownership of such shares.
(6) Consists of shares held by M/C II and the M/C Investors. As a general
partner of Media/Communications Partners, Mr. Hayes may be deemed to be
the beneficial owner of such shares. Mr. Hayes disclaims beneficial
ownership of such shares.
(7) Consists of shares held by CVCA. As a general partner of CVCA, Mr.
Richmand may be deemed to be the beneficial owner of such shares. Mr.
Richmand disclaims beneficial ownership of such shares.
(8) Includes (i) 5,463.50 shares of Common Stock held by entities affiliated
with Media/Communications Partners, (ii) 3,636.51 shares of Common Stock
held by CVCA and (iii) 98.19 shares of Common Stock held by each of the
JCS Trust and the LWS Trust of which Mr. Stanley serves as trustee.

DESCRIPTION OF CAPITAL STOCK

AUTHORIZED AND OUTSTANDING CAPITAL STOCK

The authorized capital stock of the Company upon completion of the Offering
will consist of shares of Common Stock, of which shares will be
issued and outstanding and shares of undesignated preferred stock
issuable in one or more series by the Board of Directors, of which no shares
will be issued and outstanding. The following summary description of the
capital stock of the Company is qualified in its entirety by reference to the
Company's Second Amended and Restated Certificate of Incorporation, as amended
(the "Certificate"), and Amended and Restated By-laws (the "By-laws"), copies
of which are filed as exhibits to the Registration Statement of which this
Prospectus is a part.

Common Stock. The holders of the Common Stock are entitled to one vote per
share on all matters to be voted on by stockholders and are entitled to
receive such dividends, if any, as may be declared from time to time by the
Board of Directors from funds legally available therefor. Any issuance of
Preferred Stock with a dividend preference over the Common Stock could
adversely affect the dividend rights of holders of the Common Stock. Holders
of the Common Stock are not entitled to cumulative voting rights. Therefore,
the holders of a majority of the shares voted in the election of directors can
elect all of the directors then standing for election, subject to any voting
rights of the holders of any then outstanding Preferred Stock. The holders of
the Common Stock have no preemptive or other subscription rights, and there
are no conversion rights or redemption or sinking fund provisions with respect
to the Common Stock. All outstanding shares of the Common Stock, including the
shares offered hereby, are, or will be upon completion of the Offering, fully
paid and non-assessable.

The Certificate and By-laws provide that the number of directors shall be
fixed by the Board of Directors. The directors are divided into three classes,
as nearly equal in number as possible, with each class serving for a three-
year term. Any director of the Company may be removed from office only with
cause and by the affirmative vote of at least two-thirds of the total votes
which would be eligible to be cast by stockholders in the election of
directors.

Undesignated Preferred Stock. The Board of Directors of the Company is
authorized, without further action of the stockholders, to issue up to
shares of Preferred Stock in one or more series and to fix the designations,
powers, preferences and the relative, participating, optional or other special
rights of the shares of each series and any qualifications, limitations and
restrictions thereon as set forth in the Certificate. Any such Preferred Stock
issued by the Company may rank prior to the Common Stock as to dividend
rights, liquidation preference or both, may have full or limited voting rights
and may be convertible into shares of Common Stock.

The issuance of Preferred Stock could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
acquiring or seeking to acquire, a significant portion of the outstanding
Common Stock.

CERTAIN PROVISIONS OF THE SECOND AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION AND AMENDED AND RESTATED BY-LAWS

A number of provisions of the Company's Certificate and By-laws concern
matters of corporate governance and the rights of stockholders. Certain of
these provisions, as well as the ability of the Board of Directors to issue
shares of Preferred Stock and to set the voting rights, preferences and other
terms thereof, may be deemed to have an anti-takeover effect and may
discourage takeover attempts not first approved by the Board of Directors,
including takeovers which stockholders may deem to be in their best interests.
To the extent takeover attempts are discouraged, temporary fluctuations in the
market price of the Company's Common Stock, which may result from actual or
rumored takeover attempts, may be inhibited. These provisions, together with
the classified Board of Directors and the ability of the Board to issue
Preferred Stock without further stockholder action, also could delay or
frustrate the removal of incumbent Directors or the assumption of control by
stockholders, even if such removal or assumption would be beneficial to
stockholders of the Company. These provisions also could discourage or make
more difficult a merger, tender offer or proxy contest, even if favorable

to the interests of stockholders and could depress the market price of the
Common Stock. The Board of Directors believes that these provisions are
appropriate to protect the interests of the Company and all of its
stockholders. The Board of Directors has no present plans to adopt any other
measures or devices which may be deemed to have an "anti-takeover effect."

Meetings of Stockholders. The Company's By-laws provide that a special
meeting of stockholders may be called only by the Board of Directors unless
otherwise required by law and subject to the rights of the holders of any
Preferred Stock then outstanding. The Company's By-laws provide that only those
matters set forth in the notice of the special meeting may be considered or
acted upon at that special meeting unless otherwise provided by law. In
addition, the Company's By-laws set forth certain advance notice and
informational requirements and time limitations on any director nomination or
any new proposal which a stockholder wishes to make at an annual meeting of
stockholders.

No Stockholder Action by Written Consent. The Certificate provides that any
action required or permitted to be taken by the stockholders of the Company at
an annual or special meeting of stockholders must be effected at a duly called
meeting and may not be taken or effected by a written consent of stockholders
in lieu thereof.

Indemnification and Limitation of Liability. The By-laws of the Company
provide that directors and officers of the Company shall be, and in the
discretion of the Board of Directors non-officer employees may be, indemnified
by the Company to the fullest extent authorized by Delaware law, as it now
exists or may in the future be amended, against all expenses and liabilities
reasonably incurred in connection with service for or on behalf of the Company.
The By-laws of the Company also provide that the right of directors and
officers to indemnification shall be a contract right and shall not be
exclusive of any other right now possessed or hereafter acquired under any
statute, charter, by-law, agreement, vote of stockholders or otherwise. The
Certificate contains a provision permitted by Delaware law that generally
eliminates the personal liability of Directors for monetary damages for
breaches of their fiduciary duty, including breaches involving negligence or
gross negligence in business combinations, unless the director has breached his
or her duty of loyalty, failed to act in good faith, engaged in intentional
misconduct or a knowing violation of law, paid a dividend or approved a stock
repurchase in violation of the Delaware General Corporation Law or obtained an
improper personal benefit. This provision does not alter a Director's liability
under the federal securities laws and does not affect the availability of
equitable remedies, such as an injunction or rescission, for breach of
fiduciary duty.

Amendment of the Certificate. The Certificate provides that an amendment
thereof must first be approved by a majority of the Board of Directors and
(with certain exceptions) thereafter approved by a majority of the shares
entitled to vote on such amendment.

Amendment of By-laws. The Certificate provides that the By-laws may be
amended or repealed by the Board of Directors or by the stockholders. Such
action by the Board of Directors requires the affirmative vote of a majority of
the Directors then in office. Such action by the stockholders requires the
affirmative vote of at least two-thirds of the shares present in person or
represented by proxy and entitled to vote on such amendment or repeal at an
annual meeting of stockholders or a special meeting called for such purpose
unless the Board of Directors recommends that the stockholders approve such
amendment or repeal at such meeting, in which case such amendment or repeal
shall only require the affirmative vote of a majority of shares present in
person or represented by proxy and entitled to vote on such amendment or
repeal.

STATUTORY BUSINESS COMBINATION PROVISION

Upon completion of the Offering, the Company will be subject to the
provisions of Section 203 of the Delaware General Corporation Law ("Section
203"). Section 203 provides, with certain exceptions, that a Delaware
corporation may not engage in any of a broad range of business combinations
with a person or affiliate, or associate of such person, who is an "interested
stockholder" for a period of three years from the date that such person became
an interested stockholder unless: (i) the transaction resulting in a person
becoming an interested stockholder, or the business combination, is approved by
the board of directors of the corporation

before the person becomes an interested stockholder; (ii) the interested
stockholder acquired 85% or more of the outstanding voting stock of the
corporation in the same transaction that makes it an interested stockholder
(excluding shares owned by persons who are both officers and directors of the
corporation, and shares held by certain employee stock ownership plans); or
(iii) on or after the date the person becomes an interested stockholder, the
business combination is approved by the corporation's board of directors and by
the holders of at least 66 2/3% of the corporation's outstanding voting stock
at an annual or special meeting, excluding shares owned by the interested
stockholder. Under Section 203, an "interested stockholder" is defined (with
certain limited exceptions) as any person that is (i) the owner of 15% or more
of the outstanding voting stock of the corporation or (ii) an affiliate or
associate of the corporation and was the owner of 15% or more of the
outstanding voting stock of the corporation at any time within the three-year
period immediately prior to the date on which it is sought to be determined
whether such person is an interested stockholder.

A corporation may, at its option, exclude itself from the coverage of Section
203 by amending its certificate of incorporation or by-laws by action of its
stockholders to exempt itself from coverage, provided that such by-law or
charter amendment shall not become effective until 12 months after the date it
is adopted. Neither the Certificate nor the By-laws contains any such
exclusion.

TRANSFER AGENT AND REGISTRAR

The will be the transfer agent and registrar for the Common Stock.

SHARES ELIGIBLE FOR FUTURE SALE

GENERAL

Upon completion of the Offering, the Company will have a total of shares
of Common Stock outstanding (excluding shares of Common Stock issuable
upon exercise of the Underwriters' over-allotment option and shares that
may be issuable upon exercise of options granted under the Stock Option
Plans). See "Capitalization." Of these shares, shares ( shares if the
Underwriters' over-allotment option is exercise in full) of Common Stock will
be freely tradeable without restriction under the Securities Act except for
any shares purchased by "affiliates", as that term is defined in the
Securities Act, of the Company. The remaining shares are "restricted
securities" as that term is defined by Rule 144 adopted under the Securities
Act (the "Restricted Shares"). The Restricted Shares were issued by the
Company in private transactions in reliance upon exemptions from registration
under the Securities Act and generally may not be sold unless they are
registered under the Securities Act or are sold pursuant to an exemption from
registration, such as the exemption provided by Rule 144 under the Securities
Act.

Subject to the terms of lock-up agreements, the material terms of which are
described below, between certain stockholders of the Company and the
Underwriters, of the Restricted Shares Restricted Shares will be
eligible for resale in the public market 90 days after the date of this
Prospectus, subject in certain cases to volume limitations and other
conditions, pursuant to Rule 144; and the remaining Restricted Shares will
be eligible for sale in the public market upon expiration of their respective
one-year holding periods. Such holding periods expire on September 10, 1997
for shares and January 27, 1998 for shares. Beginning on April 4,
1998, Restricted Shares will be eligible for sale in the public market
pursuant to the provisions of Rule 144(k).

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned restricted securities
for at least one year, including persons who may be deemed "affiliates" of the
Company, would be entitled to sell within any three-month period a number of
shares that does not exceed the greater of one percent of the number of shares
of Common Stock then outstanding (approximately shares upon completion of
the Offering) or the average weekly trading volume of the Common Stock during
the four calendar weeks preceding the filing of a Form 144 with respect to
such sale. Sales under Rule 144 are also subject to certain manner of sale
provisions and notice requirements, and to the availability of current public
information about the Company. In addition, a person who is not deemed to have
been an affiliate of the Company at any time during the 90 days preceding a
sale, and who has beneficially owned the shares proposed to be sold for at
least two years, would be entitled to sell such shares under Rule 144(k)
without regard to the requirements described above. Rule 144 also provides
that affiliates who are selling shares that are not Restricted Shares must
nonetheless comply with the same restrictions applicable to Restricted Shares
with the exception of the holding period requirement. The Securities and
Exchange Commission is currently contemplating amendments to Rule 144 which,
if enacted, would permit the Company's current stockholders to sell their
shares of Common Stock upon such enactment.

Certain of the Company's stockholders, including the MCP Investors and CVCA
and all of its executive officers and Directors (who in the aggregate will
hold Restricted Shares upon completion of the Offering) have agreed,
subject to certain limited exceptions, not to sell or offer to sell or
otherwise dispose of any shares of Common Stock currently held by them, any
right to acquire any shares of Common Stock or any securities exercisable for
or convertible into any shares of Common Stock for a period of 180 days after
the date of this Prospectus without the prior written consent of Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ"). DLJ may, in its sole
discretion and at any time without notice, release all or any portion of the
securities subject to these lock-up agreements. In addition, the Company has
agreed that for a period of 180 days after the date of this Prospectus it will
not, without the prior written consent of DLJ, issue, offer, sell, grant
options to purchase or otherwise dispose of any equity securities or
securities convertible into or exchangeable for equity securities except for
shares of Common Stock offered hereby and shares issued pursuant to the 1997
Stock Option Plan.

Prior to the Offering, there has been no public market for the Common Stock
and no predictions can be made as to the effect, if any, that the sale or
availability for sale of shares of additional Common Stock will have on the
market price of the Common Stock. Nevertheless, sales of substantial amounts of
such shares in the public market, or the perception that such sales could
occur, could materially and adversely affect the market price of the Common
Stock and could impair the Company's future ability to raise capital through an
offering of its equity securities. See "Risk Factors--Absence of Public
Market."

DESCRIPTION OF INDEBTEDNESS

The following is a description of the principal agreements that will govern
the indebtedness of the Company following the consummation of the Financing
Plan. The following summaries of certain provisions of the Notes and the New
Credit Facility are qualified in their entirety by reference to the agreement
to which each summary relates, a copy of which is filed or incorporated by
reference as an exhibit to the registration statement of which this Prospectus
is a part. Capitalized terms used below and not defined have the meanings set
forth in the respective agreements.

THE NOTES

The Notes being offered in the Notes Offering are to be issued under an
indenture (the "Indenture") among the Company, the Guarantors and a trustee to
be selected by the Company. The Indenture will provide for the issuance of up
to $125.0 million aggregate principal amount of the Notes, which will be
general unsecured obligations of the Company subordinate in right of payment
to all existing and future senior indebtedness of the Company. The Notes will
be unconditionally guaranteed, on an unsecured senior subordinated basis, as
to payment of principal, premium, if any, and interest, jointly and severally,
by all of the Guarantors.

The Notes will be redeemable at the option of the Company, in whole or in
part, at any time on or after the fifth anniversary of the date of original
issuance thereof, at the redemption prices set forth in the Indenture, plus
accrued and unpaid interest, if any, to the date of redemption. Also, on or
prior to the third anniversary of the date of original issuance thereof, the
Company may redeem up to 33 1/3% of principal amount of the Notes with the net
proceeds of one or more future public equity offerings, in cash, at % of the
principal amount thereof, together with accrued and unpaid interest, if any,
to the date of redemption; provided that at least 66 2/3% of the original
aggregate principal amount of the Notes remain outstanding immediately after
any such redemption. Upon the occurrence of a change of control, the Company
will be required to make an offer to purchase all Notes then outstanding at a
purchase price, in cash, equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the date of purchase.

The Indenture will contain certain restrictive covenants, including
limitations on (i) the incurrence of additional indebtedness; (ii) the payment
of dividends on, and redemption of, capital stock of the Company and its
subsidiaries and the redemption of certain subordinated obligations of the
Company and its subsidiaries; (iii) certain sales of assets; (iv) mergers,
consolidations and transfer of assets; and (v) transactions with affiliates.

The Indenture will contain customary events of default, including, without
limitation, the following: (i) the failure to pay principal or interest when
due; (ii) certain defaults under agreements relating to other indebtedness;
(iii) the material breach of any covenant; (iv) the levy of certain judgments;
and (v) certain bankruptcy, reorganization and insolvency events. The
occurrence of an event of default will permit the holders of the Notes to
accelerate the Notes and to pursue other remedies.

NEW CREDIT FACILITY

The Company and all of its Subsidiaries have entered into the New Credit
Facility which will become effective upon consummation of the Offering. The
terms and conditions of the New Credit Facility are as set forth below.

REVOLVING CREDIT FACILITY

Commitment; Interest. The Revolving Credit Facility is a revolving line of
credit facility providing for borrowings of up to $ million that may be
used for general corporate purposes including working capital requirements.
Borrowings under the Revolving Credit Facility may be in the form of
Eurodollar loans or

announced base rate loans as determined by the Company. The Company may prepay
borrowings under the Revolving Credit Facility, and may re-borrow (up to the
amount of the commitment then in effect) any amounts that are repaid or
prepaid.

Termination of Commitment. The initial commitment of $ million terminates
on , 2004, unless extended, or upon the occurrence of a "change of control"
(as defined in the New Credit Facility). On each of these dates, the Company is
required to repay borrowings (together with fees and interest accrued thereon
and any additional amounts owing under the Revolving Credit Facility) in excess
of the commitment as reduced.

Covenants. The Revolving Credit Facility restricts the Company and its
subsidiaries from, among other things: (i) changes in business; (ii) with
certain exceptions, consolidation, mergers, sales or purchases of assets; (iii)
with certain exceptions, incurring, creating, assuming or suffering to exist
any liens or encumbrances upon property of the Company or assigning any right
to receive income; (iv) with certain exceptions, creating, incurring, assuming
or suffering to exist any indebtedness; (v) making investments or loans in any
other person or entity or acquiring or establishing any subsidiaries except for
investments and subsidiaries permitted under the Revolving Credit Facility;
(vi) selling, assigning or otherwise encumbering or disposing of the capital
stock or other securities of any subsidiary; (vii) making any optional or
voluntary prepayments on indebtedness; (viii) with certain exceptions,
redeeming, retiring or purchasing capital stock of the Company or declaring or
paying dividends on the capital stock of the Company; and (ix) except as to
certain transactions that comply with the terms of the Revolving Credit
Agreement, entering into transactions with affiliates.

Change of Control. A change of control of the Company constitutes an event of
default permitting the lenders to accelerate indebtedness under and terminate
the Revolving Credit Facility.

ACQUISITION CREDIT FACILITY

Commitment; Interest. The Acquisition Credit Facility (as defined in the New
Credit Facility) consists of an acquisition credit line in the amount of $
million pursuant to which $ million is available under a term loan facility
available on the closing date and $ million which is available under a
revolving/term loan facility. The revolving/term loan facility may be re-
borrowed from time to time; the $ million term loan may not be re-borrowed.
Borrowings under the Acquisition Credit Facility may be in the form of
Eurodollar loans or announced base rate loans as determined by the Company. See
"Use of Proceeds."

Covenants. The Acquisition Credit Facility restricts the Company and its
subsidiaries from, among other things: (i) changes in business; (ii) with
certain exceptions, consolidation, mergers, sales or purchases of assets; (iii)
with certain exceptions, incurring, creating, assuming or suffering to exist
any liens or encumbrances upon property of the Company or assigning any right
to receive income; (iv) with certain exceptions, creating, incurring, assuming
or suffering to exist any indebtedness; (v) making investments or loans in any
other person or entity or acquiring or establishing any subsidiaries except for
investments and subsidiaries permitted under the Acquisition Credit Facility;
(vi) selling, assigning or otherwise encumbering or disposing of the capital
stock or other securities of any subsidiary; (vii) making any optional or
voluntary prepayments on indebtedness; (viii) with certain exceptions,
redeeming, retiring or purchasing capital stock of the Company or declaring or
paying dividends on the capital stock of the Company; and (ix) except as to
certain transactions that comply with the terms of the Acquisition Credit
Agreement, entering into transactions with affiliates. With respect to
additional acquisitions, such additional acquisitions require the consent of
the lenders unless such acquisitions do not exceed $ in the aggregate or the
Holdings Leverage Ratio (as defined in the Credit Agreements) is less than to
1.0. In addition, the Acquisition Credit Facility also requires the Company to
maintain certain levels of Operating Cash Flow and interest expense coverage,
and limits the Company's capital expenditures to $ million in each fiscal
year (in addition to additional permitted expenditures not in excess of the
"basket" amount set forth therein), which amount is increased to 105% of the
maximum amount for the immediately preceding twelve-month period.

Change of Control. A "change of control" of the Company constitutes an event
of default permitting the lenders to accelerate indebtedness under and
terminate the Acquisition Credit Facility.

UNDERWRITING

Subject to the terms and conditions contained in the underwriting agreement
(the "Underwriting Agreement") by and among the Company and the Underwriters
named below (the "Underwriters"), for whom DLJ, Alex. Brown & Sons
Incorporated and Salomon Brothers Inc are acting as representatives (the
"Representatives"), the Underwriters have severally agreed to purchase from
the Company an aggregate of shares of Common Stock. The number of shares
that each Underwriter has agreed to purchase is set forth opposite its name
below.

NUMBER OF
UNDERWRITER SHARES

Donaldson, Lufkin & Jenrette Securities Corporation................
Alex. Brown & Sons Incorporated....................................
Salomon Brothers Inc...............................................
---
Total............................................................
===

The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase shares of Common Stock are subject to the approval of
certain legal matters by counsel to the Underwriters and certain other
conditions. The Underwriting Agreement also provides that the Company will
indemnify the Underwriters and their respective controlling persons against
certain liabilities and expenses, including liabilities under the Securities
Act. The Underwriters are obligated to purchase all of the shares of Common
Stock (other than the shares of Common Stock covered by the over-allotment
option described below) if any of the shares of Common Stock are purchased.

The Underwriters propose to offer the shares of Common Stock directly to the
public at the initial public offering price set forth on the cover page of
this Prospectus and to certain dealers at such price less a concession not in
excess of $ per share. The Underwriters may allow and such dealers may
reallow a concession not in excess of $ per share to certain other dealers.
After the initial public offering of the shares of Common Stock, the offering
price and other selling terms may be changed by the Representatives. The
Common Stock is offered subject to receipt and acceptance by the Underwriters,
and to certain other conditions, including the right to reject orders in whole
or in part.

In connection with the Offering, the Underwriters may engage in transactions
that stabilize, maintain or otherwise affect the price of the Common Stock.
Specifically, the Underwriters may over-allot the Offering, creating a
syndicate short position. Underwriters may bid for and purchase Common Stock
in the open market to cover syndicate short positions. In addition, the
Underwriters may bid for and purchase Common Stock in the open market to
stabilize the price of the Common Stock. These activities may stabilize or
maintain the market price of the Common Stock above independent market levels.
The Underwriters are not required to engage in these activities, and may end
these activities at any time.

The Company has granted to the Underwriters an option, exercisable no later
than 30 days after the date of this Prospectus, to purchase up to
additional shares of Common Stock at the initial public offering price, less
the underwriting discount, set forth on the cover page of this Prospectus. To
the extent that the Underwriters exercise this option, each of the
Underwriters will be committed, subject to certain conditions, to purchase
such additional shares in approximately the same proportion as set forth in
the above table. The Company will be obligated, pursuant to the option, to
sell shares to the Underwriters to the extent the option is exercised. The
Underwriters may exercise such option only to cover over-allotments made in
connection with the Offering.

The Company, its officers, directors and security holders have agreed that
it will not, without the prior written consent of DLJ, offer, sell or
otherwise dispose of any shares of Common Stock, options or warrants to
acquire shares of Common Stock or securities exchangeable for or convertible
into shares of Common Stock, during the 180-day period following the date of
this Prospectus.

Prior to the Offering, there has been no public market for the Common Stock.
The initial public offering price for the Common Stock will be determined by
negotiation between the Company and the Representatives. Among the factors to
be considered in determining the initial public offering price are prevailing
market conditions, revenues and earnings of the Company, market valuations of
other companies engaged in activities similar to the Company, estimates of the
business potential and prospects of the Company, the present state of the
Company's business operations, the Company's management and other factors
deemed relevant. The estimated initial public offering price range set forth
on the cover of this preliminary prospectus is subject to change as a result
of market conditions and other factors.

Concurrently with the Offering, the Company is offering $125.0 million of %
Senior Subordinated Notes due 2007. The Underwriters of the Notes Offering are
Chase Securities Inc., DLJ, and Salomon Brothers Inc. DLJ is serving as
qualified independent underwriter in connection with the Notes Offering in
accordance with Section (b)(15) of Rule 2720 of the NASD Conduct Rules.

CERTAIN LEGAL MATTERS

Certain legal matters with respect to the validity of the shares of Common
Stock offered hereby will be passed upon for the Company by Goodwin, Procter &
Hoar LLP, Boston, Massachusetts. Cahill Gordon & Reindel (a partnership
including a professional corporation) will pass upon certain legal matters
relating to the Offering for the Underwriters.

EXPERTS

The consolidated financial statements of (i) OCI as of June 30, 1996, and
for the period April 4, 1996 to June 30, 1996; (ii) OCI North as of April 3,
1996 and for the period August 1, 1995 to April 3, 1996 and as of July 31,
1995, and for each of the years in the two-year period ended July 31, 1995;
and (iii) OCI South as of April 3, 1996 and for the period September 1, 1995
to April 3, 1996 and the financial statements of Georgia Outdoor as of
December 31, 1995 and 1994, and for each of the years in the two-year period
ended December 31, 1995 have been included herein and in the Registration
Statement in reliance upon the applicable reports, of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.

The consolidated financial statements of OCI South as of August 31, 1995 and
for each of the years in the two-year period ended August 31, 1995, included
in this Prospectus and the Registration Statement of which it is a part have
been audited by Moore & Gray, independent certified public accountants, and
have been included herein and in the Registration Statement in reliance upon
the report, appearing elsewhere herein, of Moore & Gray and upon the authority
of said firm as experts in giving said report.

The consolidated financial statements of Alabama Outdoor at December 31,
1995 and the related consolidated statements of income, changes in members'
equity and cash flows for the year then ended and for the two months ended
December 31, 1994, appearing in this Prospectus and the Registration Statement
of which it is a part have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon appearing elsewhere herein, and
are included in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.

The combined financial statements of Skoglund as of December 31, 1995 and for
the year ended December 31, 1995 and the financial statements of (i) The Ragan
Outdoor Advertising Company of Rockford, L.L.C. as of December 31, 1996 and
1995 and for each of the years in the two-year period ended December 31, 1996;
and (ii) The Ragan Outdoor Advertising Company as of December 31, 1996 and 1995
and for each of the years in the two-year period ended December 31, 1996,
included in this Prospectus and the Registration Statement of which it is a
part have been included herein and in the Registration Statement in reliance
upon the applicable reports, appearing elsewhere herein, of McGladrey & Pullen,
LLP, independent certified public accountants, and upon the authority of said
firm as experts in giving said reports.

The combined financial statements of Skoglund as of December 31, 1994 and for
the year then ended included in this prospectus and elsewhere in the
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and is
included herein in reliance upon the authority of said firm as experts in
giving said report.

The financial statements of Outdoor West as of December 31, 1996 and 1995 and
for each of the years in the two-year period ended December 31, 1996, included
in this Prospectus and the Registration Statement of which it is a part have
been audited by Morrison and Smith, independent public accountants, and have
been included herein and in the Registration Statement in reliance upon the
report, appearing elsewhere herein, of Morrison and Smith and upon the
authority of said firm as experts in giving said report.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form S-
1 (including all amendments thereto, the "Registration Statement") under the
Securities Act with respect to the Notes offered hereby. As permitted by the
rules and regulations of the Securities and Exchange Commission (the
"Commission"), this Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. Statements
contained in this Prospectus as to the contents of any agreement or other
document referred to are not necessarily complete. With respect to each such
agreement or other document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in all respects by
such reference.

The Registration Statement, including the exhibits and schedules thereto, may
be inspected at the public reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, NW, Washington, DC 20549 and at
the following regional offices of the Commission: Seven World Trade Center, New
York, New York 10048, and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such materials may be obtained from the public
reference section of the Commission at its Washington address upon payment of
the prescribed fees. In addition, the Company is required to file electronic
versions of these documents with the Commission through the Commission's
Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system, and such
electronic versions are available to the public at the Commission's World-Wide
Web Site, http://www.sec.gov.

The Company is subject to the informational reporting requirements of the
Exchange Act and, in accordance therewith, files reports and other information
with the Commission. The Company intends to furnish its stockholders with
annual reports containing financial statements audited by the Company's
independent accountants and quarterly reports for the first three fiscal
quarters of each fiscal year containing unaudited interim financial
information.

INDEX TO FINANCIAL STATEMENTS

PAGE
THE COMPANY

CONSOLIDATED FINANCIAL STATEMENTS OF OCI HOLDINGS CORP. AND SUBSIDIARIES
. Independent Auditors' Report for the period April 4, 1996 to June 30,
1996................................................................... F-3
. Consolidated Balance Sheets as of March 31, 1997 and June 30, 1996..... F-4
. Consolidated Statements of Operations for the nine months ended March
31, 1997 and the period April 4, 1996 to June 30, 1996................. F-6
. Consolidated Statements of Stockholders' Deficit for the nine months
ended March 31, 1997 and the period April 4, 1996 to June 30, 1996..... F-7
. Consolidated Statement of Cash Flows for the period April 4, 1996 to
June 30, 1996.......................................................... F-8
. Condensed Consolidated Statement of Cash Flows for the nine months
ended March 31, 1997................................................... F-9
. Notes to Consolidated Financial Statements............................. F-10

THE PREDECESSORS

OCI NORTH

CONSOLIDATED FINANCIAL STATEMENTS OF OCI CORP. OF MICHIGAN (NOW KNOWN AS
OCI (N) CORP.) AND SUBSIDIARIES
. Independent Auditors' Report for the period August 1, 1995 to April 3,
1996 and for the years ended July 31, 1995 and 1994.................... F-22
. Consolidated Balance Sheets as of April 3, 1996 and July 31, 1995...... F-24
. Consolidated Statements of Operations for the period August 1, 1995 to
April 3, 1996 and for the years ended July 31, 1995 and 1994........... F-26
. Consolidated Statements of Stockholders' Deficit for the period August
1, 1995 to April 3, 1996 and for the years ended July 31, 1995 and
1994................................................................... F-27
. Consolidated Statements of Cash Flows for the period August 1, 1995 to
April 3, 1996 and for the years ended July 31, 1995 and 1994........... F-28
. Notes to Consolidated Financial Statements............................. F-29

OCI SOUTH

CONSOLIDATED FINANCIAL STATEMENTS OF MASS COMMUNICATIONS CORP. AND
SUBSIDIARY
. Independent Auditors' Report for the period September 1, 1995 to April
3, 1996................................................................ F-38
. Independent Auditors' Report for the years ended August 31, 1995 and
1994................................................................... F-39
. Consolidated Balance Sheets as of April 3, 1996 and August 31, 1995... F-40
. Consolidated Statements of Income for the period September 1, 1995 to
April 3, 1996 and for the years ended August 31, 1995 and 1994......... F-42
. Consolidated Statements of Stockholders' Deficit for the period
September 1, 1995 to April 3, 1996 and for the years ended August 31,
1995 and 1994.......................................................... F-43
. Consolidated Statements of Cash Flows for the period September 1, 1995
to April 3, 1996 and for the years ended August 31, 1995 and 1994...... F-44
. Notes to Consolidated Financial Statements............................. F-45

ACQUIRED COMPANIES

GEORGIA OUTDOOR

FINANCIAL STATEMENTS OF GEORGIA OUTDOOR ADVERTISING COMPANY INC.
. Independent Auditors' Report for the years ended December 31, 1995 and
1994................................................................... F-53
. Balance Sheets as of December 31, 1995 and 1994........................ F-54
. Statements of Operations for the years ended December 31, 1995 and
1994................................................................... F-55
. Statements of Stockholders' Deficit for the years ended December 31,
1995 and 1994.......................................................... F-56
. Statements of Cash Flows for the years ended December 31, 1995 and
1994................................................................... F-57
. Notes to Financial Statements.......................................... F-58

F-1

PAGE
ALABAMA OUTDOOR

CONSOLIDATED FINANCIAL STATEMENTS OF AOA HOLDING L.L.C.
. Report of Independent Auditors for the year ended December 31, 1995
and for the two months ended December 31, 1994........................ F-61
. Consolidated Balance Sheet as of December 31, 1995.................... F-62
. Consolidated Statements of Income for the year ended December 31, 1995
and the two months ended December 31, 1994............................ F-63
. Consolidated Statements of Changes in Members' Equity for the year
ended December 31, 1995 and the two months ended December 31, 1994.... F-64
. Consolidated Statements of Cash Flows for the year ended December 31,
1995 and the two months ended December 31, 1994....................... F-65
. Notes to Consolidated Financial Statements............................ F-66

SKOGLUND

COMBINED FINANCIAL STATEMENTS OF SKOGLUND COMMUNICATIONS, INC. AND
SKOGLUND COMMUNICATIONS OF ST. CLOUD, INC.
. Independent Auditor's Report for the year ended December 31, 1995..... F-72
. Independent Auditor's Report for the year ended December 31, 1994..... F-73
. Combined Balance Sheets as of December 31, 1995 and 1994.............. F-74
. Combined Statements of Operations and Retained Earnings (Deficit) for
the years ended
December 31, 1995 and 1994............................................ F-75
. Combined Statements of Cash Flows for the years ended December 31,
1995 and 1994......................................................... F-76
. Notes to Combined Financial Statements................................ F-77

OUTDOOR WEST

FINANCIAL STATEMENTS OF OUTDOOR WEST, INC. OF TENNESSEE
. Report of Independent Public Accountants for the years ended June 30,
1996 and 1995......................................................... F-82
. Balance Sheets as of March 31, 1997 and 1996 and June 30, 1996 and
1995.................................................................. F-83
. Statements of Operations and Retained Earnings (Deficit) for the nine
months ended March 31, 1997 and 1996 and for the years ended June 30,
1996 and 1995......................................................... F-84
. Statements of Cash Flows for the nine months ended March 31, 1997 and
1996 and for the years ended June 30, 1996 and 1995................... F-85
. Notes to Financial Statements......................................... F-86

RAGAN

FINANCIAL STATEMENTS OF THE RAGAN OUTDOOR ADVERTISING COMPANY
.Independent Auditor's Report for the years ended December 31, 1996 and
1995................................................................... F-93
.Balance Sheets as of December 31, 1996 and 1995........................ F-94
.Statements of Income for the years ended December 31, 1996 and 1995.... F-96
.Statements of Stockholders' Equity for the years ended December 31,
1996 and 1995.......................................................... F-97
.Statements of Cash Flows for the years ended December 31, 1996 and
1995................................................................... F-98
.Notes to Financial Statements.......................................... F-99
FINANCIAL STATEMENTS OF THE RAGAN OUTDOOR ADVERTISING COMPANY OF
ROCKFORD, L.L.C.
.Independent Auditor's Report for the years ended December 31, 1996 and
1995................................................................... F-103
.Balance Sheets as of December 31, 1996 and 1995........................ F-104
.Statements of Income for the years ended December 31, 1996 and 1995.... F-105
.Statements of Members' (Deficit) for the years ended December 31, 1996
and 1995............................................................... F-106
.Statements of Cash Flows for the years ended December 31, 1996 and
1995................................................................... F-107
.Notes to Financial Statements.......................................... F-108

F-2

When the transactions referred to in Notes 16 and 17 of the Notes to
Consolidated Financial Statements have been consummated, we will be in a
position to render the following report.

/s/ KPMG Peat Marwick LLP

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders OCI Holdings Corp.:

We have audited the accompanying consolidated balance sheet of OCI Holdings
Corp. and subsidiaries (the Company) as of June 30, 1996, and the related
consolidated statements of operations, stockholders' deficit, and cash flows
for the period April 4, 1996 to June 30, 1996. 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 audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the 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 principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the
Company as of June 30, 1996, and the results of its operations and its cash
flows for the period April 4, 1996 to June 30, 1996, in conformity with
generally accepted accounting principles.

East Lansing, Michigan
September 5, 1996, except as to notes 16 and 17
which are as of May 27, 1997

F-3

OCI HOLDINGS CORP.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF AS OF
MARCH 31, 1997 JUNE 30, 1996
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents....................... $ 4,566,387 $ 1,259,441
Trade accounts receivable, less allowance for
doubtful accounts of $536,763 and $273,110 in
1997 and 1996, respectively.................... 6,318,149 5,050,490
Refundable income taxes......................... -- 185,893
Inventories..................................... 1,075,228 389,458
Prepaid rent expense............................ 1,786,469 1,077,830
Other assets.................................... 644,205 382,521
Deferred income taxes (note 9).................. 471,818 276,703
------------ -----------
Total current assets........................ 14,862,256 8,622,336
------------ -----------
Property and equipment, net (note 3).............. 63,185,184 37,765,591
Intangible assets, less accumulated amortization
(note 4)......................................... 57,309,152 45,446,523
Deferred financing costs.......................... 4,704,888 3,169,224
Other assets...................................... 114,250 116,638
------------ -----------
Total assets................................ $140,175,730 $95,120,312
============ ===========

(Continued)

F-4

OCI HOLDINGS CORP.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS--(CONTINUED)

AS OF
MARCH 31, AS OF
1997 JUNE 30, 1996
(UNAUDITED)

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current installments of long-term debt (note 5).. $ 4,500,000 $ 4,750,000
Obligation under non-compete agreement........... -- 100,000
Trade accounts payable........................... 313,858 770,147
Income taxes payable............................. 190,217 179,822
Accrued salaries, wages and benefits............. 566,529 708,252
Accrued interest................................. 870,344 1,038,833
Other accrued expenses........................... 520,591 620,318
Deferred advertising revenues and non-compete in-
come............................................ 329,385 303,512
------------ -----------
Total current liabilities.................... 7,290,924 8,470,884
------------ -----------
Long-term debt:
Credit facility, excluding current installments
(note 5)........................................ 103,200,000 57,750,000
Subordinated debt (note 6)....................... 22,425,000 22,100,000
Notes payable--stockholders (note 7)............. 5,876,875 5,876,875
------------ -----------
Total long-term debt......................... 131,501,875 85,726,875
Accrued interest (note 6).......................... 1,318,171 262,488
Deferred non-compete income, less current portion.. 46,667 106,667
Deferred income taxes (note 9)..................... 5,331,567 5,280,079
------------ -----------
Total liabilities............................ 145,489,204 99,846,993
------------ -----------
Stockholders' deficit (note 10):
Class A common stock, $.01 par value. Authorized
10,000 shares; issued and outstanding 8,410.72
and 8,210.72 shares, respectively............... 84 82
Class B common stock, $.01 par value. Authorized
10,000 shares; issued and outstanding 3,689.28
shares.......................................... 37 37
Additional paid-in capital....................... 3,811,475 3,636,477
Accumulated deficit.............................. (9,125,070) (8,363,277)
------------ -----------
Total stockholders' deficit.................. (5,313,474) (4,726,681)
------------ -----------
Commitments and contingencies (notes 10, 11, and
12)
Total liabilities and stockholders' deficit.. $140,175,730 $95,120,312
============ ===========

See accompanying notes to consolidated financial statements.

F-5

OCI HOLDINGS CORP.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE NINE FOR THE PERIOD
MONTHS ENDED APRIL 4, 1996 TO
MARCH 31, 1997 JUNE 30, 1996
(UNAUDITED)

Gross revenues................................. $35,105,189 $9,535,542
Less agency commissions........................ 3,363,915 987,032
----------- ----------
Net revenues............................... 31,741,274 8,548,510
----------- ----------
Operating expenses:
Direct operating expenses.................... 6,714,666 1,758,070
Selling, general, and administrative (notes
11 and 12).................................. 12,118,720 3,304,213
Depreciation and amortization................ 6,103,479 1,638,417
----------- ----------
Total operating expenses................... 24,936,865 6,700,700
----------- ----------
Operating income........................... 6,804,409 1,847,810
Interest expense............................. (7,597,020) (1,826,137)
Loss on disposal of equipment................ (94,816) (67,328)
Other income, net............................ 147,365 67,347
----------- ----------
Income (loss) before income tax expense.... (740,062) 21,692
Income tax expense (note 9).................... 21,731 105,718
----------- ----------
Net loss................................... $ (761,793) $ (84,026)
=========== ==========
Net loss per common share...................... $ $
=========== ==========
Weighted average number of shares..............
=========== ==========

See accompanying notes to consolidated financial statements.

F-6

OCI HOLDINGS CORP.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

FOR THE NINE MONTHS ENDED MARCH 31, 1997
AND THE PERIOD APRIL 4, 1996 TO JUNE 30, 1996

CLASS A CLASS B ADDITIONAL TOTAL
COMMON COMMON PAID-IN ACCUMULATED STOCKHOLDERS'
STOCK STOCK CAPITAL DEFICIT DEFICIT

Balances at April 3,
1996................... $ 82 2 136,512 (8,279,251) (8,142,655)
Issuance of common
stock.................. -- 35 3,499,965 -- 3,500,000
Net loss................ -- -- -- (84,026) (84,026)
---- --- --------- ---------- ----------
Balances at June 30,
1996................... 82 37 3,636,477 (8,363,277) (4,726,681)
Issuance of common stock
(unaudited)............ 2 -- 174,998 -- 175,000
Net loss (unaudited).... -- -- -- (761,793) (761,793)
---- --- --------- ---------- ----------
Balances at March 31,
1997 (unaudited)....... $ 84 37 3,811,475 (9,125,070) (5,313,474)
==== === ========= ========== ==========

See accompanying notes to consolidated financial statements.

F-7

OCI HOLDINGS CORP.
AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD
APRIL 4, 1996
TO JUNE 30, 1996

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss...................................................... $ (84,026)
Adjustments to reconcile net loss to net cash used in operat-
ing activities:
Allowance for doubtful accounts............................. 163,265
Depreciation of equipment................................... 903,191
Amortization of intangible assets........................... 735,226
Loss on disposal of equipment............................... 67,328
Deferred income taxes....................................... 3,756
Changes in assets and liabilities, net of effects from pur-
chase of company, which increase (decrease) cash flows:
Trade accounts receivable................................. (2,976,742)
Refundable income taxes................................... (81,182)
Inventories............................................... (143,526)
Prepaid rent expense...................................... (430,821)
Other assets.............................................. 64,329
Trade accounts payable.................................... 294,939
Income taxes payable...................................... 179,822
Accrued expenses.......................................... 944,233
Deferred advertising revenues and non-compete income...... (142,665)
-----------
Net cash used in operating activities................... (502,873)
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of companies......................................... (32,000,000)
Capital expenditures.......................................... (562,232)
Proceeds from sale of property and equipment.................. 2,625
Other......................................................... (541,283)
-----------
Net cash used in investing activities................... (33,100,890)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt...................... 31,700,000
Repayment of long-term debt................................... (1,000,000)
Deferred financing costs...................................... (250,000)
Proceeds from issuance of common stock........................ 3,500,000
Payments on obligation under non-compete agreement............ (100,000)
-----------
Net cash provided by financing activities............... 33,850,000
-----------
Net increase in cash and cash equivalents..................... 246,237
Cash and cash equivalents at beginning of the period.......... 1,013,204
-----------
Cash and cash equivalents at end of the period................ $ 1,259,441
===========

See accompanying notes to consolidated financial statements.

F-8

OCI HOLDINGS CORP.
AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

FOR THE
NINE MONTHS
ENDED MARCH
31, 1997

Net cash provided by operating activities.......................... $ 2,306,133
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of companies.............................................. (39,781,187)
Deferred acquisition costs......................................... (1,478,222)
Capital expenditures............................................... (1,611,510)
-----------
Net cash used in investing activities............................ (42,870,919)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on long-term debt................................... 45,100,000
Deferred acquisition costs......................................... (1,728,268)
Issuance of subordinated notes..................................... 325,000
Issuance of common stock........................................... 175,000
-----------
Net cash provided by financing activities........................ 43,871,732
-----------
Net increase in cash and equivalents............................... 3,306,946
Cash and cash equivalents at beginning of the period............... 1,259,441
-----------
Cash and cash equivalents at end of the period..................... $ 4,566,387
===========

See accompanying notes to consolidated financial statements.

F-9

OCI HOLDINGS CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 1997 AND JUNE 30, 1996
(THE NINE MONTHS ENDED MARCH 31, 1997 IS UNAUDITED)

(1) ORGANIZATION AND ACQUISITION OF ASSETS

At the close of business on April 3, 1996, the stockholders of OCI Corp. of
Michigan ("OCIM") and Mass Communications Corp. ("MCC") (collectively the
"companies") entered into a plan of reorganization (the "Reorganization Plan")
to restructure and merge the companies. Pursuant to the Reorganization Plan,
the stockholders agreed to sell their entire interests in the common and
preferred stock of the companies. In conjunction with the Reorganization Plan,
OCI Holding Corp. ("Holdings") was incorporated for the purpose of effecting
the reorganization and merger.

Certain outside investors of OCIM (the "Investors") purchased 24.67 shares
and 60 shares of OCIM's common and preferred stock, respectively, from the
minority stockholders of OCIM for $1,990,463. These same shares were
subsequently assigned by the Investors to Holdings in exchange for 5,410.73
and 3,689.28 shares of Holding's Class A and B common stock, respectively. The
remaining 75.33 shares and 840 shares of OCIM's common and preferred stock,
respectively, were purchased by Holdings for $7,508,367, which resulted in
Holdings being the sole stockholder of OCIM's common and preferred stock.

The stockholders of MCC exchanged 7,371.01 shares of common stock with a
value of $7,562,656 and 308.78 shares of preferred stock with a value of
$337,344 for 2,764.99 shares of Class A common stock and $5,135,000 in Series
A subordinated notes of Holdings. The stockholders of MCC also sold 657.895
warrants, 5,128.99 shares of common stock, and 691.22 shares of preferred
stock for cash and new subordinated notes totaling $6,692,500. This
transaction resulted in Holdings ultimately owning all of the stock of MCC.
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 value at the date of
acquisition as follows:

Adjusted working capital........................................ $ 1,133,774
Goodwill........................................................ 8,309,952
Property and equipment.......................................... 11,529,274
Customer list................................................... 4,027,000
-----------
$25,000,000
===========

The business operations of OCI Holdings Corp. and subsidiaries (the
"Company") consist of outdoor billboard advertising in the states of Alabama,
Georgia, Illinois, Kentucky, Michigan, Mississippi, Tennessee, and Wisconsin.
Georgia Acquisition

At the close of business on April 3, 1996, Outdoor Communications, Inc., a
subsidiary of MCC, completed the purchase of certain assets of Georgia Outdoor
Advertising ("GOA"), pursuant to an Asset Purchase Agreement dated March 8,
1996, for cash of $11,650,000. The acquisition has been accounted for using
the purchase method of accounting and, accordingly, the purchase price has
been allocated to the net assets based upon their fair values at the date of
acquisition as follows:

Adjusted working capital........................................ $ 415,864
Goodwill........................................................ 2,968,896
Property and equipment.......................................... 2,282,240
Non-compete agreement........................................... 700,000
Customer list................................................... 5,283,000
-----------
Purchase price.................................................. $11,650,000
===========

F-10

OCI HOLDINGS CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Alabama Acquisition

On April 30, 1996, Outdoor Communications, Inc. completed the purchase of
certain assets and assumed certain liabilities of AOA Acquisition, L.L.C.
("AOA"), pursuant to an Asset Sale Agreement dated March 19, 1996, for cash of
$34,132,908. 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 value at the
date of acquisition. The excess of the purchase price over the fair values of
the net assets acquired was $9,911,190 and has been recorded as goodwill. The
net purchase price was allocated as follows:

Adjusted working capital........................................ $ 2,132,908
Goodwill........................................................ 9,911,190
Property and equipment.......................................... 15,012,810
Customer list................................................... 7,076,000
-----------
Purchase price.................................................. $34,132,908
===========

The consolidated financial statements include the operating results of each
business from the date of acquisition.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the Company, as summarized below, conform with
generally accepted accounting principles and reflect practices appropriate to
the business in which it operates.

(a) PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the financial statements of
OCI Holdings Corp. and its wholly owned subsidiaries, OCI Corp. of Michigan,
New South Holdings Corp., and Mass Communications Corp. and its subsidiary
Outdoor Communications, Inc. All significant intercompany balances and
transactions have been eliminated in consolidation.

(b) CASH EQUIVALENTS

Cash equivalents consist of repurchase agreements and money market funds.
For purposes of the consolidated statement of cash flows, the Company
considers all highly liquid debt instruments with maturities of three months
or less at the time of purchase to be cash equivalents.

Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out method.

(d) PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation on plant and
equipment is computed using the straight-line method over the estimated useful
lives of the assets.

(e) INTANGIBLE ASSETS

Intangible assets include goodwill, non-compete agreements and customer
lists. Goodwill, which represents the excess of purchase price over fair value
of net assets acquired on their dates of acquisition, is amortized on a

F-11

OCI HOLDINGS CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

straight-line basis over the expected periods to be benefited, ranging from 20
to 25 years. The non-compete agreements are amortized over the terms of the
respective agreements, which range from 4 to 10 years. Customer lists
resulting from acquisitions are amortized on the straight-line method ranging
from 21 to 27 years.

The Company assesses the recoverability of all long-lived intangible assets
by determining whether the amortization of the intangible assets over their
remaining lives can be recovered through undiscounted future operating cash
flows of the acquired operation. The amount of impairment, if any, is measured
based on projected discounted future operating cash flows using a discount
rate reflecting the Company's average cost of funds.

(f) DEFERRED FINANCING COSTS

Financing costs incurred as a result of obtaining long-term debt are
recorded as deferred financing costs and are amortized on a straight-line
basis over the term of the related debt (see note 5).

(g) EMPLOYEE BENEFITS

The Company is self-insured for its employee health care plan. The liability
for self-insurance reflects the estimated cost for the uninsured portion of
claims not paid prior to year end. The liability is based on estimates for
losses reported prior to year end and estimates for incurred but unreported
losses.

(h) RETIREMENT PROGRAM

OCIM provides a defined contribution 401(k) plan, which covers all of its
full-time employees with one or more years of service. Eligible employees can
contribute up to 12% of their compensation through payroll deductions. OCIM
will contribute an amount equal to 50% of each employee's contribution up to
3% of the employee's total compensation.

(i) REVENUE RECOGNITION

The Company recognizes revenue from advertising contracts on an accrual
basis ratably over the term of the contracts, as advertising services are
provided.

(j) INCOME TAXES

Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

(k) OTHER ASSETS

Other assets consist principally of the cash surrender value of officer life
insurance.

(l) USE OF ESTIMATES

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.

F-12

OCI HOLDINGS CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(m) FINANCIAL INSTRUMENTS

The Company utilizes a hedged interest rate swap agreement. The interest
rate swap agreement involves the exchange of fixed- and floating-rate interest
payments periodically over the life of the agreement without the exchange of
the underlying principal amounts. The differential to be paid or received, on
a quarterly basis, is accrued as interest rates change and is recognized as an
adjustment to interest expense.

(n) NET LOSS PER SHARE

Net loss per share is computed by dividing net loss applicable to common
stock by the weighted average number of common shares outstanding during each
period presented. Such amounts have been adjusted to reflect the approximately
-for-1 stock split and the concurrent exchanges of shares in a
recapitalization that occurred in connection with the Offering referred to in
Note 16.

(3) PROPERTY AND EQUIPMENT

Major categories of property, plant and equipment at April 3, 1996 were as
follows:

ESTIMATED
LIFE (YEARS)

Land.............................................. -- $ 1,204,494
Building and improvements......................... 10-25 564,274
Advertising structures............................ 8-15 38,309,049
Leasehold improvements............................ 2-20 832,203
Equipment......................................... 3-10 2,737,091
Construction in progress.......................... -- 41,256
------------
43,688,367
Less accumulated depreciation..................... 5,922,776
------------
Net property and equipment...................... $ 37,765,591
============

(4) INTANGIBLE ASSETS

Intangible assets at June 30, 1996 consist of the following:

Covenants not to compete........................................ $ 3,935,667
Goodwill........................................................ 29,756,723
Customer lists.................................................. 16,386,000
-----------
50,078,390
Less accumulated amortization................................... 4,631,867
-----------
$45,446,523
===========

(5) CREDIT FACILITY

The Company entered into a credit agreement (the "Credit Facility") with
Chase Manhattan Bank, N.A. and a syndicate consisting of various other
financial institutions (collectively called the "Bank") on the close of
business on April 3, 1996. The Credit Facility consists of a Term Loan A
Commitment for $40,000,000, Term Loan B Commitment for $20,000,000, (the "Term
Loans") and a Revolving Loan Commitment (the "Revolver") of $30,000,000
(collectively the "Borrowings"). The Term Loans are due June 30, 2003.
Collateral includes a first lien on all tangible and intangible property of
the Company, assignment of all leases, and a guaranty by Holdings, OCIM, and
MCC.

F-13

OCI HOLDINGS CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Credit Facility enables the Company to borrow funds at a rate equal to
3% plus the London Interbank Offered Rate (LIBOR) or 1.75% over the Bank's
prime lending rate. The Credit Facility also enables the Company to realize a
lower interest rate if its leverage ratio meets certain levels as stipulated
in the Credit Facility. At June 30, 1996, the interest rate was 8.5%. Accrued
interest is payable in quarterly installments on March 31, June 30, September
30, and December 31. The Credit Facility also requires payment of a commitment
fee of 1/2 of 1% per annum on the daily average aggregate unutilized
commitment from the Bank. Accrued commitment fees are due quarterly on March
31, June 30, September 30, and December 31.

Available borrowings under the Revolver are permanently reduced on the last
day of each fiscal quarter beginning September 30, 1997 by $1,250,000, thereby
reducing the availability to zero on June 30, 2003. At June 30, 1996, the
Company had borrowed $2,500,000, and $27,500,000 of the Revolver was available
for additional borrowings by the Company.

The Credit Facility contains certain warranties and affirmative covenants
that must be complied with on a continuing basis. In addition, the Credit
Facility contains certain restrictive covenants which, among other things,
restrict the Company from incurring additional debt and liens on assets,
limits the amount of capital expenditures during any fiscal year, and
prohibits the consolidation, merger or sale of assets, or issuance of common
stock except as permitted by the Credit Facility. The Credit Facility also
requires the Company to maintain certain financial ratios.

The Company has the right to prepay the Borrowings in whole or in part,
without premium or penalty, as stipulated in the Credit Facility. Annual
maturities of the long-term borrowings under the term loans at June 30, 1996,
are as follows: 1997: $4,750,000; 1998: $6,000,000; 1999: $6,750,000; 2000:
$7,750,000; 2001: $8,750,000; and $28,250,000 thereafter.

(6) SUBORDINATED DEBT

The Company entered into a Securities Purchase Agreement (the "Agreement")
at the close of business on April 3, 1996 with certain management investors
and outside investors. In connection with the reorganization discussed in note
1, the Company issued its 10% subordinated notes ("notes") due December 31,
2003 in the aggregate principal amount of $22,100,000. The subordinated notes
at June 30, 1996, were comprised of two series; Series A 10% subordinated
notes in the amount of $5,200,000, and Series B 10% subordinated notes in the
amount of $16,900,000.

Accrued interest on the outstanding principal balance of the notes is
payable at a rate of 10% per annum, computed on the basis of a 365 day year,
and is payable annually on March 31, commencing in 1997. The Agreement allows
the Company to only pay 46% of the accrued and unpaid interest on an annual
basis. The remaining 54% is deferred and bears interest at a rate of 10% per
annum and is due in accordance with the terms of the Agreement, but in any
event no later than December 31, 2003. Accrued interest at June 30, 1996
amounted to $489,370.

The Agreement contains certain warranties and affirmative covenants that
must be complied with on a continuing basis. The Agreement also contains
certain restrictive covenants which, among other things, restricts the Company
from entering into transactions with affiliates outside the ordinary course of
business, consummating a sale of the Company, or engaging in any new lines of
business.

F-14

OCI HOLDINGS CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(7) NOTES PAYABLE--STOCKHOLDERS

On the close of business on April 3, 1996, New South Holdings Corp. (a
wholly owned subsidiary of Holdings) entered into written agreements with the
Company's chairman and president, borrowing in total $5,876,875. The entire
principal balance is due in full on April 3, 1998. The notes bear interest at
a rate which fluctuates quarterly based on the interest rate per the Credit
Agreement less the sum of the applicable eurodollar margin (as defined in the
Credit Agreement) and 1/8 of 1%. The interest rate at June 30, 1996 was 5.41%.
Accrued interest on the outstanding principal balance of the notes is payable
quarterly, commencing June 30, 1996. The notes are secured by a Letter of
Credit issued by The Chase Manhattan Bank, N.A.

(8) FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosure of the estimated fair value of the Company's
financial instruments is made in accordance with the requirements of FASB
Statement No. 107, "Disclosure about Fair Value of Financial Instruments"
("Statement 107"). Statement 107 defines the fair value of a financial
instrument as the amount at which the instrument could be exchanged in a
current transaction between willing parties.

The carrying values of cash and cash equivalents, trade accounts receivable,
due from affiliated entity, trade accounts payable, accrued expenses, and
obligations under non-compete agreements approximate fair values due to the
short-term maturities of these instruments. Long-term debt instruments and
notes payable stockholders are estimated to approximate fair values as rates
are tied to short-term indices. The subordinated debt bears interest at a rate
which approximates market for unsecured debt.

(9) INCOME TAXES

Income tax expense (benefit) attributable to loss before income tax expense
for the period ended June 30, 1996 consists of:

CURRENT DEFERRED TOTAL

Federal........................................... $ 81,962 26,164 108,126
State and local................................... 20,000 (22,408) (2,408)
-------- ------- -------
Total........................................... $101,962 3,756 105,718
======== ======= =======

Income tax expense differed from the amounts computed by applying the
federal income tax rate of 34% for the period ended June 30, 1996 to income
before income tax expense as a result of the following:

Computed "expected" tax expense................................... $ 7,375
Increase (reduction) in income taxes resulting from:
State and local income taxes, net of federal income tax ex-
pense.......................................................... 1,589
Non-deductible expenses......................................... 6,599
Nondeductible goodwill.......................................... 44,242
Adjustment of prior period accrual.............................. 74,292
Other, net...................................................... 11,621
Change in the beginning-of-the-year balance of the valuation al-
lowance for deferred tax assets allocated to income tax ex-
pense.......................................................... (40,000)
--------
$105,718
========

F-15

OCI HOLDINGS CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The tax effect of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at June 30,
1996 is presented below:

Deferred tax assets:
Net operating loss carryforwards............................. $ 320,576
Alternative minimum tax credit carryforwards................. 60,606
Investment tax credit carryforwards.......................... 12,949
Deferred revenue, principally related to advertising leases.. 72,944
Accrued expenses, principally related to compensated
absences, health care claims and sales discounts............ 158,346
Deferred noncompete income................................... 63,466
Other........................................................ 45,413
-----------
Total gross deferred tax assets............................ 734,300
Less valuation allowance................................... (160,000)
-----------
Net deferred tax assets.................................... 574,300
-----------
Deferred tax liabilities:
Property and equipment, principally due to differences in
financial statement carrying amounts and tax basis.......... (3,952,655)
Intangible assets, principally due to differences in length
of amortization period...................................... (1,625,021)
-----------
Total gross deferred tax liabilities....................... (5,577,676)
-----------
Net deferred tax liabilities............................... $(5,003,376)
===========

The net change in the total valuation allowance for the period ended June
30, 1996 was a decrease of $40,000.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the scheduled reversals of deferred taxes, projected future taxable
income, and tax planning strategies in making this assessment. In order to
fully realize the deferred tax assets, the Company will need to generate
future taxable income of approximately $833,000 and $110,000 for OCIM and MCC,
respectively, prior to the expiration of the net operating loss carryforwards
in 2010. Based upon the level of historical taxable income and projections for
future taxable income over the periods which the deferred tax assets are
deductible, management believes it is more likely than not that the Company
will realize the benefits of these deductible differences, net of the existing
valuation allowance at June 30, 1996. The amount of the deferred tax assets
considered realizable, however, could be reduced in the near term if estimates
of future taxable income during the carryforward period are reduced.

The Company also has an alternative minimum tax credit carryforward of
$60,606, which is available to reduce future regular income taxes, if any,
over an indefinite period. In addition, the Company has an investment tax
credit carryforward of $12,949, which is available to reduce future regular
income taxes, if any, through 2001.

At June 30, 1996, the Company had net operating loss carryforwards for
federal income tax purposes of approximately $943,000, of which approximately
$833,000 and $110,000 were incurred prior to the restructuring of the
ownership of OCIM and MCC, respectively, with Holdings becoming the common
parent. As a result of

F-16

OCI HOLDINGS CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

the restructuring, future utilization of the net operating loss carryforwards
is limited under Internal Revenue Code Section 382 to approximately $487,000
and $110,000 annually for OCIM and MCC, respectively. Additionally, these net
operating loss carryforwards can only be utilized to offset future taxable
income of OCIM and MCC, respectively, if any, through the year 2010.

(10) STOCKHOLDERS' EQUITY

All general voting power is vested in the holders of Class A common stock.
The holders of Class B common stock are not entitled to vote at any
stockholders' meetings. Any share of Class B common stock can be converted, at
the option of the holder, into Class A common stock at the rate of one share
of Class A common stock for each share of Class B common stock, subject to
certain approvals.

Also, any share of Class A common stock can be converted, at the option of
the holder, into Class B common stock at the rate of one share of Class B
common stock for each share of Class A common stock, subject to and upon
compliance with the provisions of the Certificate of Incorporation of OCI
Holdings Corp.

Dividends or distributions of common stock shall be payable on shares of
Class A and B common stock, share and share alike.

In the event of liquidation, the holders of Class A and B common stock shall
be entitled to share ratably in the net assets of the Company after payment of
debts and other liabilities.

The Corporation shall not take any action (e.g., redeem, purchase, or
acquire) affecting outstanding shares of common stock if after giving effect
to such action any one, as defined, stockholder would own more than 24.95% of
Class A common stock.

(11) LEASES

The Company leases substantially all of the land presently used as sites for
poster panels under various terms. The leases are classified as operating
leases. These leases generally contain renewal options ranging from 1 to 15
years and require the Company to pay all executory costs, such as maintenance
and insurance. Rental expense for operating leases amounted to approximately
$931,000 for the period April 4, 1996 to June 30, 1996.

Future minimum lease payments under noncancellable operating leases with
non-related parties (with initial or remaining lease terms in excess of one
year) as of June 30, 1996 are:

YEAR ENDING JUNE 30:

1997........................................................... $ 3,467,502
1998........................................................... 2,843,614
1999........................................................... 2,322,841
2000........................................................... 1,957,953
2001........................................................... 1,295,727
-----------
$11,887,637
===========

(12) RELATED PARTY TRANSACTIONS

MCC leases real property from a trust for which Holdings' chairman, who is a
stockholder of the Company, serves as trustee. Rental expense to the trust
amounted to approximately $6,800 for the period April 4, 1996 to June 30,
1996. The Company also leases a sign location from the chairman and president
of Holdings. The rental payment for the sign location amounted to
approximately $250 for the period April 4, 1996 to June 30, 1996.

F-17

OCI HOLDINGS CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Future minimum lease payments under noncancellable operating leases with
related party (with initial or remaining lease terms in excess of one year) as
of June 30, 1996 are:

YEAR ENDING JUNE 30:

1997............................................................... $27,320
1998............................................................... 27,320
1999............................................................... 27,320
2000............................................................... 13,660
2001............................................................... --
-------
$95,620
=======

(13) RETIREMENT PROGRAM

Retirement program expense with respect to OCIM's defined contribution
401(k) plan approximated $11,000 for the period April 4, 1996 to June 30,
1996.

(14) SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid $3,322 for income taxes during the period April 4, 1996 to
June 30, 1996. Cash payments for interest approximated $6,981,000 for the
period April 4, 1996 to June 30, 1996, of which $6,531,384 pertained to the
interest paid on the junior and senior subordinated debt and senior debt
existing prior to the close of business on April 3, 1996.

Net proceeds for the acquisition of AOA were as follows:

Fair value of assets acquired................................... $32,000,000
Working capital acquired........................................ 2,132,908
-----------
Net proceeds.................................................... $34,132,908
===========

(15) FINANCIAL INSTRUMENTS

On May 30, 1996, the Company entered into a three-year interest swap
agreement, expiring on June 30, 1999, with First Union National Bank of North
Carolina to manage its interest rate exposure. Interest rate exchange
transactions generally involve the exchange of fixed and floating-rate
interest payment obligations without the exchange of the underlying principal
amounts. Entering into interest rate exchange agreements involves the risk of
dealing with counterparties and their ability to meet the terms of the
contracts. Notional principal amounts are used to express the volume of these
transactions. The floating interest rate on the interest swap agreement is
based on three month U.S. dollar LIBOR. The fixed-for-floating interest rate
swap agreement as of June 30, 1996 is summarized as follows:

Notional principal amount....................................... $15,000,000
Fixed rate paid................................................. 6.34%
Floating rate................................................... 5.49219%

F-18

OCI HOLDINGS CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(16) SUBSEQUENT EVENTS

Acquisitions

On September 3, 1996, the Company completed the purchase of advertising
structures located in Georgia previously owned by Hawthorne Outdoor
Advertising, Inc. pursuant to an Asset Purchase Agreement for cash of
$3,800,000. The acquisition was accounted for by the purchase method.

On October 1, 1996, the Company completed the purchase of advertising
structures located in Alabama previously owned by Hawthorne Outdoor
Advertising, Inc. pursuant to an Asset Purchase Agreement for cash of
$500,000. The acquisition was accounted for by the purchase method.

The Company entered into an asset purchase agreement with Skoglund
Communications, Inc. and Skoglund Communications of St. Cloud, Inc.
("Skoglund"), in the amount of $21,246,850. The Company expects this
transaction, which includes business operations in Minnesota and Wisconsin, to
be consummated by October 31, 1996. This acquisition will be accounted for by
the purchase method.

Stock Split

On June , 1997, the Board of Directors is expected to authorize a for
stock split on June , 1997 to holders of record on June , 1997. All share
and per share data in these financial statements have been adjusted to reflect
the split.

(17) UNAUDITED NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Basis of Presentation

The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
applicable to interim financial statements. Accordingly, they do not include
all of the information and notes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments and reclassifications considered necessary for a fair and
comparable presentation have been included and are of a normal recurring
nature. Operating results for the nine months ended March 31, 1997, are not
necessarily indicative of the results that may be expected for the year ending
June 30, 1997.

Acquisitions

The Company entered into an asset purchase agreement with Skoglund in the
amount of $21,246,850. The transaction, which includes business operations in
Minnesota and Wisconsin, was consummated on October 31, 1996. This acquisition
was accounted for by the purchase method and, accordingly, the purchase price
has been allocated to the assets purchased and the liabilities assumed based
upon the fair value at the date of acquisition as follows:

Adjusted working capital........................................ $ 1,336,989
Goodwill........................................................ 7,953,899
Property and equipment.......................................... 7,537,470
Customer list................................................... 4,418,492
-----------
Purchase price.................................................. $21,246,850
===========

F-19

OCI HOLDINGS CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Acquisitions, Continued

On March 31, 1997, the Company acquired substantially all of the assets of
Outdoor West for $11.8 million. As a result of this acquisition, the Company
acquired display faces in Tennessee and a right of first refusal to purchase
Outdoor West, Inc. of Georgia, an affiliate of Outdoor West. This purchase
will be accounted for by the purchase method.

In May 1997, the Company entered into agreements to acquire, in June 1997,
substantially all of the assets of The Ragan Outdoor Advertising Company of
Rockford, L.LC., The Ragan Outdoor Advertising Company, d/b/a Robinswood
Outdoor Advertising, and The Ragan Outdoor Advertising Company of Cedar Rapids
for an aggregate purchase price of $27 million. Upon consummation of this
acquisition, the Company will acquire display faces in Rockford, Illinois,
Cedar Rapids, Iowa and the Quad Cities of Moline, Illinois, Rock Island,
Illinois, Davenport, Iowa and Bettendorf, Iowa. This purchase will be
accounted for by the purchase method.

In addition to the acquisition described above, the Company has recently
consummated numerous smaller acquisitions for aggregate cash payments totaling
more than $8.5 million.

Stock Option Plan

Employee Stock Purchase Plan

On , 1997, the Board of Directors adopted and the stockholders of the
Company approved, the Company's Employee Stock Purchase Plan (the "Plan"). The
Company has reserved a total of shares of common stock for issuance under
the Plan. The Plan permits eligible employees of the Company to purchase
common stock through payroll deductions of up to 10% of their compensation.
The price of the common stock purchased under the Plan will be 85% of the
lower of the fair market value of the common stock on the first or last day of
each six month purchase period. Employees are eligible to participate if they
are customarily employed by the Company or any designated subsidiary for at
least 20 hours per week and for more than six months.

New Accounting Pronouncements

In October, 1995, SFAS No. 123 Accounting for Stock-Based Compensation was
issued by the Financial Accounting Standards Board. This Statement encourages,
but does not require, companies to measure stock-based compensation cost using
a fair value method, rather than the intrinsic value method prescribed by the
Accounting Principle Board (APB) Opinion No. 25. Companies choosing to
continue to measure stock-based compensation using the intrinsic value method
must disclose on a pro forma basis net earnings and net earnings per share as
if the fair value were used. Management has determined that upon formation of
the 1997 Stock Option Plan, they will adopt the disclosure-only provisions of
SFAS No. 123. As such, the adoption of this Statement is not expected to have
an impact on the Company's results of operations.

F-20

OCI HOLDINGS CORP.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

In February, 1997, SFAS No. 128 Earnings per Share was issued by the
Financial Accounting Standards Board. This Statement is effective for both
interim and annual periods ending after December 15, 1997, earlier adoption is
not permitted.

Offerings

On , 1997, the Board of Directors of the Company authorized a Note
Offering of $125 million aggregate principal amount of subordinated notes. The
Board of Directors also authorized the offering of up to $50 million of Class A
$0.01 par value Common Stock. The filings will be registered with the
Securities and Exchange Commission pursuant to the Securities Act of 1933.

F-21

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
OCI Corp. of Michigan:

We have audited the accompanying consolidated balance sheets of OCI Corp. of
Michigan and subsidiaries (the Company) as of April 3, 1996 and July 31, 1995,
and the related consolidated statements of operations, stockholders' deficit,
and cash flows for the period August 1, 1995 through April 3, 1996 and for the
years ended July 31, 1995 and 1994. 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 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 principles 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, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the
Company as of April 3, 1996 and July 31, 1995, and the results of their
operations and their cash flows for the period August 1, 1995 through April 3,
1996 and for the years ended July 31, 1995 and 1994 in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

East Lansing, Michigan
June 4, 1996

F-22

[THIS PAGE INTENTIONALLY LEFT BLANK]

F-23

OCI CORP. OF MICHIGAN
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

APRIL 3, JULY 31,
1996 1995

ASSETS
Current assets:
Cash and cash equivalents............................. $ 259,200 396,061
Trade accounts receivable, less allowance for doubtful
accounts of $48,900 in 1996 and $18,000 in 1995...... 1,268,800 1,293,742
Due from affiliated entity (note 12).................. 98,374 144,651
Income taxes receivable............................... 7,159 --
----------- ----------
Inventories:
Construction material................................. 113,741 76,572
Electrical supplies................................... 39,634 29,810
----------- ----------
Total inventories................................... 153,375 106,382
Prepaid rent expense.................................. 441,990 370,296
Other prepaid expenses................................ 85,005 30,977
Deferred tax assets................................... 229,929 162,647
----------- ----------
Total current assets................................ 2,543,832 2,504,756
----------- ----------
Property, plant, and equipment, net (note 3)........ 9,316,562 9,763,900
Intangible assets, less accumulated amortization
(note 4)........................................... 1,999,607 2,346,039
Other deferred costs (note 17)...................... 635,551 100,028
----------- ----------
Total assets........................................ $14,495,552 14,714,723
=========== ==========

(Continued)

F-24

OCI CORP. OF MICHIGAN
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS--(CONTINUED)

APRIL 3, JULY 31,
1996 1995

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current installments of long-term debt (notes 5 and
17)................................................ $ 1,045,000 4,900,000
Obligations under noncompete agreements............. 200,000 400,000
Trade accounts payable.............................. 175,183 115,880
Income taxes payable (note 9)....................... -- 1,309
Due to stockholder (note 12)........................ -- 50,000
Accrued expenses:
Salaries and wages................................ 211,780 401,421
Payroll and other taxes........................... 82,013 21,194
Employee benefits................................. 114,420 104,820
Interest.......................................... 104,139 214,826
Other............................................. 103,856 70,310
----------- ----------
Total accrued expenses.......................... 616,208 812,571
Deferred advertising revenues....................... 346,177 145,671
Deferred noncompete income.......................... 80,000 80,000
----------- ----------
Total current liabilities....................... 2,462,568 6,505,431
Long-term debt, excluding current installments (notes
5 and 17)............................................ 3,555,000 --
Senior subordinated debt (notes 6 and 17)............. 4,000,000 4,000,000
Junior subordinated debt, stockholders (notes 7 and
17).................................................. 3,600,000 3,600,000
Accrued interest (notes 5, 6, 7 and 17)............... 6,332,869 5,409,848
Deferred noncompete income, less current portion...... 126,667 180,000
Deferred income taxes (note 9)........................ 1,459,420 1,236,064
----------- ----------
Total liabilities............................... 21,536,524 20,931,343
----------- ----------
Stockholders' deficit (notes 10 and 17):
12.5% cumulative preferred stock, $.10 par value.
Authorized 1,000 shares; issued and outstanding 900
shares............................................. 90 90
Class A common stock, $.10 par value. Authorized
2,000 shares; issued and outstanding 100 and 97
shares at April 3, 1996 and July 31, 1995,
respectively....................................... 10 10
Class B common stock, $.10 par value. Authorized
2,000 shares; issued and outstanding -0- shares.... -- --
Additional paid-in capital.......................... 1,235,326 1,009,168
Accumulated deficit................................. (8,276,398) (7,225,888)
----------- ----------
Total stockholders' deficit..................... (7,040,972) (6,216,620)
----------- ----------
Commitments and contingencies (notes 10, 11 and 12)
Total liabilities and stockholders' deficit..... $14,495,552 14,714,723
=========== ==========

See accompanying notes to consolidated financial statements.

F-25

OCI CORP. OF MICHIGAN
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE PERIOD
AUGUST 1, 1995 FOR THE YEARS ENDED JULY 31,
THROUGH ------------------------------
APRIL 3, 1996 1995 1994

Revenues:
Poster........................ $ 3,581,596 6,076,107 5,219,208
Painted....................... 3,406,560 4,833,174 4,566,124
Other......................... 447,319 653,456 708,093
----------- -------------- --------------
Gross revenues.............. 7,435,475 11,562,737 10,493,425
Less commissions and dis-
counts....................... 752,093 1,193,283 992,995
----------- -------------- --------------
Net operating revenues...... 6,683,382 10,369,454 9,500,430
----------- -------------- --------------
Operating expenses:
Operations (note 12).......... 1,651,583 2,435,839 2,467,755
Selling, general, and adminis-
trative (note 12)............ 3,019,373 3,952,785 3,897,229
Depreciation.................. 1,021,901 1,472,053 1,550,296
Amortization of intangible as-
sets......................... 346,432 535,408 620,455
Amortization of other deferred
costs........................ 61,248 105,182 105,418
----------- -------------- --------------
Total operating expenses.... 6,100,537 8,501,267 8,641,153
----------- -------------- --------------
Operating income............ 582,845 1,868,187 859,277
Other income (deductions):
Gain (loss) on disposal of
property, plant, and equip-
ment......................... (9,973) 87,274 (55,160)
Loss on sale of Mansfield Di-
vision (note 16)............. -- -- (446,299)
Interest expense.............. (1,460,671) (2,126,614) (2,041,862)
Interest income............... 8,142 44,951 16,371
Management fees (note 12)..... (68,649) (195,998) (248,815)
Miscellaneous, net............ 319 4,849 17,992
Noncompete income............. 53,333 80,000 60,000
----------- -------------- --------------
Loss before income tax (ben-
efit) expense.............. (894,654) (237,351) (1,838,496)
Income tax expense (benefit)
(note 9)....................... 155,856 (132,666) (472,748)
----------- -------------- --------------
Net loss.................... $(1,050,510) (104,685) (1,365,748)
=========== ============== ==============

See accompanying notes to consolidated financial statements.

F-26

OCI CORP. OF MICHIGAN
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

FOR THE PERIOD AUGUST 1, 1995 THROUGH APRIL 3, 1996
AND FOR THE YEARS ENDED JULY 31, 1995 AND 1994

12.5% UNEARNED
CUMULATIVE CLASS A ADDITIONAL RESTRICTED TOTAL
PREFERRED COMMON PAID-IN ACCUMULATED STOCK STOCKHOLDERS'
STOCK STOCK CAPITAL DEFICIT COMPENSATION DEFICIT

Balances at July 31,
1993................... $ 90 10 1,009,168 (5,755,455) (12,081) (4,758,268)
Restricted stock
compensation
(note 15).............. -- -- -- -- 12,081 12,081
Net loss................ -- -- -- (1,365,748) -- (1,365,748)
---- --- --------- ---------- ------- ----------
Balances at July 31,
1994................... 90 10 1,009,168 (7,121,203) -- (6,111,935)
Net loss................ -- -- -- (104,685) -- (104,685)
---- --- --------- ---------- ------- ----------
Balances at July 31,
1995................... 90 10 1,009,168 (7,225,888) -- (6,216,620)
Issuance of 3 shares of
Class A common stock
(note 15).............. -- -- 226,158 -- -- 226,158
Net loss................ -- -- -- (1,050,510) -- (1,050,510)
---- --- --------- ---------- ------- ----------
Balances at April 3,
1996................... $ 90 10 1,235,326 (8,276,398) -- (7,040,972)
==== === ========= ========== ======= ==========

See accompanying notes to consolidated financial statements.

F-27

OCI CORP. OF MICHIGAN
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS
FOR THE PERIOD ENDED JULY 31,
ENDED AUGUST 1, 1995 ----------------------
TO APRIL 3, 1996 1995 1994

CASH FLOWS FROM OPERATING ACTIVI-
TIES:
Net loss......................... $(1,050,510) (104,685) (1,365,748)
Adjustments to reconcile net loss
to net cash provided by
operating activities:
Stock compensation expense..... 226,158 -- 12,081
Depreciation of plant and
equipment..................... 1,021,901 1,472,053 1,550,296
Amortization of intangible as-
sets.......................... 346,432 535,408 620,455
Amortization of other deferred
costs......................... 61,248 105,182 105,418
Noncurrent accrued interest.... 1,027,160 1,213,927 1,083,604
Loss (gain) on disposal of
property, plant, and equip-
ment.......................... 9,973 (87,274) 55,160
Loss on sale of Mansfield Divi-
sion.......................... -- -- 446,299
Changes in assets and
liabilities which increase
(decrease) cash flows:
Trade accounts receivable.... 24,942 (13,860) (83,341)
Due from affiliated entity... 46,277 48,599 (117,465)
Refundable income taxes...... (7,159) -- --
Inventories.................. (46,993) (10,266) (6,671)
Prepaid rent expense......... (71,694) (29,861) 24,843
Other prepaid expenses....... (54,028) 1,738 (2,752)
Other deferred costs......... (596,771) -- --
Trade accounts payable....... 59,303 66,196 (36,111)
Income taxes payable......... (1,309) (88,691) 90,000
Due to stockholder........... (50,000) -- 48,050
Accrued expenses............. (300,502) (5,286) 188,617
Deferred advertising reve-
nues........................ 200,506 (17,956) 6,067
Deferred noncompete income... (53,333) (80,000) 340,000
Deferred income taxes........ 156,074 (123,685) (574,352)
----------- ---------- ----------
Net cash provided by oper-
ating activities.......... 947,675 2,881,539 2,384,450
----------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVI-
TIES:
Capital expenditures............. (587,537) (521,964) (609,745)
Proceeds from sale of property,
plant, and equipment............ 3,001 177,222 26,710
Proceeds from sale of Mansfield
Division........................ -- -- 1,600,000
----------- ---------- ----------
Net cash (used in) provided
by investing activities... (584,536) (344,742) 1,016,965
----------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVI-
TIES:
Principal payments on long-term
debt............................ (300,000) (2,200,000) (3,648,207)
Payments on obligations under
noncompete agreements........... (200,000) (100,000) (100,000)
----------- ---------- ----------
Net cash used in financing
activities................ (500,000) (2,300,000) (3,748,207)
----------- ---------- ----------
Net increase (decrease) in cash
and cash equivalents............ (136,861) 236,797 (346,792)
Cash and cash equivalents at be-
ginning of the period........... 396,061 159,264 506,056
----------- ---------- ----------
Cash and cash equivalents at end
of the period................... $ 259,200 396,061 159,264
=========== ========== ==========

See accompanying notes to consolidated financial statements.

F-28

OCI CORP. OF MICHIGAN
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 3, 1996, JULY 31, 1995 AND JULY 31, 1994

(1) BUSINESS OPERATIONS

The business operations of OCI Corp. of Michigan and subsidiaries (the
"Company") consist of outdoor billboard advertising in the states of Michigan,
Illinois, and Wisconsin.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the Company, as summarized below, conform with
generally accepted accounting principles and reflect practices appropriate to
the business in which it operates.

(a) PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the financial statements of OCI
Corp. of Michigan and its two wholly owned subsidiaries, OCI Corp. of Port
Huron and OCI Management Corp. All significant intercompany balances and
transactions have been eliminated in consolidation.

(b) CASH EQUIVALENTS

Cash equivalents of $183,718 and $148,916 at April 3, 1996 and July 31, 1995,
respectively, consist of overnight repurchase agreements. For purposes of the
consolidated statements of cash flows, the Company considers all highly liquid
debt instruments with maturities of three months or less at the time of
purchase to be cash equivalents.

Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out method.

(d) PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment are stated at cost. Depreciation on plant and
equipment is computed using straight-line and accelerated methods over the
estimated useful lives of the assets.

(e) INTANGIBLE ASSETS

Intangible assets include noncompete agreements and goodwill. Goodwill, which
represents the excess of purchase price over fair value of net assets acquired
on their dates of acquisition, is amortized on a straight-line basis over the
expected periods to be benefited, generally 20 years. The noncompete agreements
are amortized over the terms of the respective agreements, which range from 4
to 10 years.

The Company assesses the recoverability of goodwill by determining whether
the amortization of the goodwill balance over its remaining life can be
recovered through undiscounted future operating cash flows of the acquired
operation. The amount of goodwill impairment, if any, is measured based on
projected discounted future operating cash flows using a discount rate
reflecting the Company's average cost of funds.

(f) OTHER DEFERRED COSTS

Other deferred costs consist principally of organizational costs and debt
acquisition costs related to the reorganization plan discussed in note 17.

F-29

OCI CORP. OF MICHIGAN
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(g) EMPLOYEE BENEFITS

The Company participates in a self-insured employee health care plan as
provided for in an agreement with an affiliated entity. The liability for
self-insurance reflects the estimated cost for the uninsured portion of claims
not paid prior to year end. The liability is based on estimates for losses
reported prior to year end and estimates for incurred but not reported losses.

(h) RETIREMENT PROGRAM

The Company provides a defined contribution 401(k) plan, which covers all
full-time employees of the Company with one or more years of service. Eligible
employees can contribute up to 12% of their compensation through payroll
deductions. The Company contributes an amount equal to 50% of each employee's
contribution up to 3% of the employee's total compensation.

(i) REVENUE RECOGNITION

The Company recognizes revenue from advertising contracts on an accrual
basis ratably over the term of the contracts, as advertising services are
provided.

(j) INCOME TAXES

(k) USE OF ESTIMATES

(l) EARNINGS PER SHARE

An earnings per share calculation had not been presented because the Company
is closely held and owned by a private investor group and accordingly,
earnings per share is not required or meaningful.

(3) PROPERTY, PLANT, AND EQUIPMENT

Major categories of property, plant, and equipment at April 3, 1996 and July
31, 1995 were as follows:

ESTIMATED
LIFE (YEARS) 1996 1995

Land.................................... -- $ 256,300 212,800
Advertising structures.................. 12-15 15,925,151 15,486,536
Leasehold improvements.................. 10-20 743,938 731,238
Equipment............................... 5-10 1,215,309 1,196,342
----------- ----------
18,140,698 17,626,916
Less accumulated depreciation........... 8,824,136 7,863,016
----------- ----------
Net property, plant, and equipment.... $ 9,316,562 9,763,900
=========== ==========

F-30

OCI CORP. OF MICHIGAN
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(4) INTANGIBLE ASSETS

Intangible assets at April 3, 1996 and July 31, 1995 consist of the
following:

1996 1995

Covenants not to compete................................ $3,235,667 3,235,667
Goodwill................................................ 2,829,688 2,829,688
---------- ---------
6,065,355 6,065,355
Less accumulated amortization........................... 4,065,748 3,719,316
---------- ---------
$1,999,607 2,346,039
========== =========

(5) LONG-TERM DEBT

The Company has a loan agreement with a bank which provides for a revolving
credit commitment (the "Revolving Commitment") of up to $12,000,000, which
decreases through the expiration of the loan in July 1996, and a special
purpose revolving credit commitment (the "Acquisition Commitment") not to
exceed $1,500,000, to be used solely to finance the cost of an acquisition and
permitted future acquisitions (collectively called the "Commitment"). However,
the Acquisition Commitment will be temporarily reduced by the principal amount
of any additional seller debt incurred by the Company. The Commitment is
available through July 1996. At April 3, 1996, the Company had borrowings of
$875,000 under the Acquisition Commitment and $3,725,000 under the Revolving
Commitment due July 31, 1996. At April 3, 1996, $625,000 of the Acquisition
Commitment was available for additional borrowings to finance permitted future
acquisitions. The remaining $1,475,000 of the Revolving Commitment was
available to support additional borrowings by the Company at April 3, 1996.

The loan agreement, in general, enables the Company to borrow funds at a
rate equal to either the London Interbank Offered Rate (LIBOR) plus 2.9% or
the bank's base rate plus 1.5%. The loan agreement also enables the Company to
realize a lower interest rate if certain financial results, as stipulated in
the loan agreement, are achieved. At April 3, 1996, the interest rate for the
individual loans underlying the loan agreement amounted to 9.25%. Generally,
accrued interest is payable in quarterly installments on each October 31,
January 31, April 30, and July 31, with a final payment due July 31, 1996.

The Company is obligated to pay a commitment fee to the bank for the loan
agreement. This fee is payable quarterly, and is equal to 1/2 of 1% of the
average daily unused portion of the Commitment. Collateral includes a first
lien on all tangible and intangible property of the Company, assignment of
substantially all leases, a pledge of all common stock, and a guaranty by the
subsidiaries.

The loan agreement contains certain warranties and affirmative covenants
that must be complied with on a continuing basis. In addition, the loan
agreement contains certain restrictive covenants which, among other things,
restricts the Company from incurring additional debt and liens on assets,
prohibits it from paying dividends, and limits the amount of capital
expenditures. The loan agreement also contains certain restrictions on working
capital and subordinated debt, and requires the maintenance of certain
financial ratios.

At the close of business on April 3, 1996, the Company, along with related
affiliates, entered into a Credit Agreement with Chase Manhattan Bank N.A.
(see note 17). Funds from the Credit Agreement were used to pay off the long-
term and subordinated debt as of the close of business on April 3, 1996. The
current portion of long-term debt as of April 3, 1996 reflects the current
portion due as noted in the new Credit Agreement. Interest on the debt is
payable at a rate equal to LIBOR plus 3.0% or the bank's base rate. Maturities
of long-term debt under the Credit Agreement during the next five years are:
1997, $1,045,000; 1998, $2,022,500; 1999, $2,170,625; 2000, $2,475,000; and
2001, $2,805,000.

F-31

OCI CORP. OF MICHIGAN
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(6) SENIOR SUBORDINATED DEBT

The Company entered into a Note Purchase Agreement in 1989 and issued
$4,000,000 of its 14.825% senior subordinated notes due August 31, 1996.
Accrued interest on the senior subordinated notes is payable at a rate of 10%
on February 28 and August 31 of each year commencing in 1990. Interest on the
notes at a rate of 4.825% will accrue and payment of such interest is deferred
until the due date of the senior subordinated notes. The deferred interest
portion of such notes bears interest at 14.825% and is payable upon maturity
of the senior subordinated notes. At April 3, 1996 and July 31, 1995, interest
deferred on the senior subordinated notes amounted to $2,092,396 and
$1,776,908, respectively.

The Note Purchase Agreement contains certain warranties and affirmative
covenants that must be complied with on a continuing basis. The Note Purchase
Agreement also contains certain restrictive covenants which, among other
things, restricts the Company from incurring additional debt and liens on
assets, limits stock payments and purchases, and prohibits the Company from
amending its charter or by-laws.

The Note Purchase Agreement includes cross-default provisions which specify
that if the Company is in default under the terms of the loan agreement (see
note 5) or Securities Purchase Agreement (see note 7), the senior subordinated
debt holders have the right, under the provisions of an intercreditor
agreement, to demand immediate payment of the senior subordinated debt if the
long-term debt is accelerated by the bank.

(7) JUNIOR SUBORDINATED DEBT, STOCKHOLDERS

The Company entered into a Securities Purchase Agreement (the "Agreement")
in 1989 and issued $3,600,000 of its 12.5% junior subordinated notes due
August 31, 1996 to holders of its preferred stock. Accrued interest on the
junior subordinated notes is payable at a rate of 12.5%. However, such
interest is deferred and added to the outstanding principal amount on each
anniversary date of the junior subordinated notes. At April 3, 1996 and July
31, 1995, interest deferred on the junior subordinated notes amounted to
$4,240,473 and $3,632,940, respectively.

The Agreement contains certain warranties and affirmative covenants that
must be complied with on a continuing basis. The Agreement also contains
certain restrictive covenants which, among other things, restricts the Company
from incurring additional debt and liens on assets, limits stock payments and
purchases, and prohibits the Company from amending its charter or by-laws.

The Agreement includes cross-default provisions which specify that if the
Company is in default under the terms of the loan agreement (see note 5) and
Note Purchase Agreement (see note 6), the junior subordinated debt holders
have the right, under the provisions of an intercreditor agreement, to demand
immediate payment of the junior subordinated debt if the long-term debt is
accelerated by the bank.

(8) FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents, trade accounts receivable,
due from affiliated entity, trade accounts payable, accrued expenses, and
obligations under noncompete agreements approximate fair values due to the
short-term maturities of these instruments. Long-term debt instruments are
estimated to approximate fair

F-32

OCI CORP. OF MICHIGAN
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

values as rates are tied to short-term indices. Senior subordinated debt and
junior subordinated debt instruments are estimated to approximate fair values
due to their current maturity dates.

(9) INCOME TAXES

Income tax expense (benefit) attributable to loss before income tax expense
(benefit) for the period ended April 3, 1996 and the year ended July 31, 1995
and 1994 consists of:

1996 1995 1994

Federal--current............................... $ (1,718) 12,220 16,089
Federal--deferred.............................. 156,074 (123,685) (574,352)
State and local................................ 1,500 (21,201) 85,515
-------- -------- --------
Total........................................ $155,856 (132,666) (472,748)
======== ======== ========

Income tax expense (benefit) differed from the amounts computed by applying
the federal income tax rate of 34% for the period ended April 3, 1996 and the
year ended July 31, 1995 and 1994 to loss before income tax benefit as a
result of the following:

1996 1995 1994

Computed "expected" tax benefit.............. $(304,182) (80,699) (625,089)
Increase (reduction) in income taxes result-
ing from:
State and local income taxes, net of fed-
eral income tax benefit (expense)......... 990 (13,999) 56,440
Non-deductible expenses.................... 32,237 51,177 50,736
Adjustment of prior year accrual........... 226,811 (89,145) 45,165
Change in the beginning-of-the-year balance
of the valuation allowance for deferred
tax assets allocated to income tax ex-
pense..................................... 200,000 -- --
--------- -------- --------
$ 155,856 (132,666) (472,748)
========= ======== ========

The tax effect of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at April 3,
1996 and July 31, 1995 are presented below:

1996 1995

Deferred tax assets:
Net operating loss carryforwards................... $ 323,001 364,257
Alternative minimum tax credit carryforwards....... 22,479 23,664
Deferred revenue, principally due to advertising
leases............................................ 117,700 49,528
Deferred noncompete income......................... 70,267 88,400
Accrued expenses, principally due to compensated
absences, health care claims and sales discounts.. 95,048 75,154
Other.............................................. 17,181 37,965
----------- ----------
Total gross deferred tax assets.................. 645,676 638,968
Less valuation allowance......................... 200,000 --
----------- ----------
Net deferred tax assets.......................... 445,676 638,968
----------- ----------
Deferred tax liabilities--property, plant, and
equipment, principally due to differences in
financial statement carrying amounts and tax bases.. (1,675,167) (1,712,385)
----------- ----------
Net deferred tax liabilities..................... $(1,229,491) (1,073,417)
=========== ==========

F-33

OCI CORP. OF MICHIGAN
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The net change in the total valuation allowance for the period ended April
3, 1996 was an increase of $200,000, none for the year ended July 31, 1995.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the scheduled reversals of deferred taxes, projected future taxable
income, and tax planning strategies in making this assessment. In order to
fully realize the deferred tax asset, the Company will need to generate future
taxable income of approximately $1,900,000 prior to the expiration of the net
operating loss carryforwards in 2011. Based upon the level of historical
taxable income and projections for future taxable income over the periods
which the deferred tax assets are deductible, management believes it is more
likely than not that the Company will realize the benefits of these deductible
differences, net of the existing valuation allowance at April 3, 1996. The
amount of the deferred tax asset considered realizable, however, could be
reduced in the near term if estimates of future taxable income during the
carryforward period are reduced.

At April 3, 1996, the Company had net operating loss carryforwards for
federal income tax purposes of $950,003, which are available to offset future
federal taxable income, if any, through 2011. The Company has an alternative
minimum tax credit carryforward of $22,479, which is available to reduce
future regular income taxes, if any, over an indefinite period.

(10) STOCKHOLDERS' EQUITY

All general voting power is vested in the holders of Class A common stock.
The holders of Class B common stock and preferred stock are not entitled to
vote at any stockholders' meetings. Any share of Class B common stock can be
converted, at the option of the holder, into Class A common stock at the rate
of one share of Class A common stock for each share of Class B common stock,
subject to certain approvals.

No dividends will be declared or paid on the common stock during any year
unless the full amount of dividends on the preferred stock accrued to the
proposed date of declaration has been paid. Upon declaration, the holders of
the preferred stock are entitled to receive an annual cumulative dividend at a
rate of 12.5% of the liquidation value of the preferred stock, as defined
below. Dividends, if declared, are payable in cash annually on each August 31.
If any accrued and unpaid dividends exist as of August 31 of any year, the
amount of the dividends payable in respect to the preferred stock will be
increased at a rate of 12.5%, compounded annually as of August 31. Cumulative
preferred stock dividend rights were unaccrued and unpaid at April 3, 1996 and
July 31, 1995, in the amount of $1,060,185 and $907,665, respectively.

In the event of liquidation or dissolution of the Company, the holders of
the preferred stock are entitled to receive a preferential amount equal to
$1,000 per share of the issued and outstanding preferred stock ("liquidation
value") and a further preferential amount equal to all declared and unpaid
dividends thereon. This liquidation value will be paid before the payment or
distribution of any assets of the Company to the holders of common stock.

(11) LEASES

F-34

OCI CORP. OF MICHIGAN
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

expense for operating leases amounted to approximately $655,000, $922,000, and
$911,000 during the period ended April 3, 1996 and the years ended July 31,
1995 and 1994, respectively.

Future minimum lease payments under noncancelable operating leases with non-
related parties (with initial or remaining lease terms in excess of one year)
as of April 3, 1996 are:

YEAR ENDING APRIL 3:

1997............................................................ $ 783,962
1998............................................................ 661,937
1999............................................................ 568,413
2000............................................................ 486,875
2001............................................................ 331,651
----------
$2,832,838
==========

(12) RELATED PARTY TRANSACTIONS

The Company has entered into an agreement with an affiliated entity that
requires the Company to purchase specific employee benefits. The Company and
certain affiliated entities are primarily self-insured for employee health
care costs. Employee benefit payments, for costs incurred under this
agreement, approximated $158,000, $206,000 and $230,000 during the period
ended April 3, 1996 and the years ended July 31, 1995 and 1994, respectively.
As a result of this arrangement, the consolidated balance sheets reflected
$98,374 and $144,651 due from an affiliated entity at April 3, 1996 and July
31, 1995, respectively, resulting primarily from payments in excess of
estimated employee benefit costs incurred.

The Company receives management and accounting consultation services from
certain stockholders and an affiliated entity related through common
ownership. The affiliated entity and the Company have entered into a
continuing agreement which may be canceled by either party upon 30 days
written notice. Total management fee expense incurred under the above
arrangements amounted to $68,649, $195,998 and $248,815 during the period
ended April 3, 1996 and the years ended July 31, 1995 and 1994, respectively.

The Company has several noncancelable operating leases with a stockholder
for administrative offices, operating facilities, and land presently used as
sites for billboard structures. The leases are classified as operating leases.
These leases generally contain renewal options ranging from two to five years
and require the Company to pay all executory costs such as maintenance and
insurance. Rental expense for operating leases with the stockholder amounted
to approximately $100,000, $146,000 and $153,000 during the period ended April
3, 1996 and the year ended July 31, 1995 and 1994, respectively.

Future minimum lease payments under noncancelable operating leases with the
stockholder (with initial or remaining lease terms in excess of one year) as
of April 3, 1996 are:

YEAR ENDING APRIL 3:

1997.............................................................. $156,898
1998.............................................................. 163,579
1999.............................................................. 170,928
2000.............................................................. 118,951
2001.............................................................. 97,814
--------
$708,170
========

As a result of all the above transactions, the consolidated balance sheet
reflects $50,000 due to stockholder at July 31, 1995.

F-35

OCI CORP. OF MICHIGAN
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(13) RETIREMENT PROGRAM

Retirement program expense with respect to the Company's defined
contribution 401(k) plan approximated $29,000, $40,000 and $37,000 during the
period ended April 3, 1996 and the years ended July 31, 1995 and 1994,
respectively.

(14) SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid $8,250, $59,735 and $10,000 for income taxes during the
period ended April 3, 1996 and the years ended July 31, 1995 and 1994,
respectively. Cash payments for interest approximated $648,000, $865,000 and
$967,000 during the period ended April 3, 1996 and the years ended July 31,
1995 and 1994, respectively.

(15) STOCK COMPENSATION

The Company has a restricted stock award plan whereby the Company can issue
restricted common stock to retain key employees, including officers. The
shares are awarded in the name of the employee, who has all rights of a
stockholder, subject to certain restrictions and forfeitures. Restrictions on
awards to date lapsed on July 31, 1994. Such stock awarded is subject to an
agreement requiring forfeiture by the employee in the event of termination of
employment within five years of the date of grant other than as a result of
death or disability.

The market value of shares awarded under the plan is recorded as unearned
restricted stock compensation on the date of award and is shown as a separate
component of stockholders' deficit until earned. The compensation is charged
to the consolidated statements of operations over the period in which the
employees are expected to perform services and amounted to $12,081 for the
year ended July 31, 1994. There were no such awards during the period August
1, 1995 through April 3, 1996 or for the year ended July 31, 1995.

Under a written agreement dated August 9, 1994 between the Company and
certain members of management, three shares of Class A common stock would be
granted to them upon accomplishing certain goals. The terms of the agreement
were met and the three shares of stock were issued during the period ended
April 3, 1996 at $75,386 per share, which was determined to be the fair market
value at the date of transaction. This transaction was treated as compensation
expense.

(16) SALE OF MANSFIELD DIVISION

During November 1993, the Company sold its Mansfield Division Outdoor
Advertising Plant (the "Mansfield Division") located in Ohio under an asset
purchase agreement. Through this transaction, the buyer acquired specific
tangible and intangible assets from the Company for $1,600,000 cash proceeds.
The sale resulted in a pretax loss of $446,299.

The Company agreed not to engage in competition with the buyer in the Ohio
area, for a period of five years from November 1993. In consideration for
entering into this non-compete agreement, the Company received a cash payment
of $400,000, of which $340,000 has been deferred and recognized at the rate of
$6,667 per month over the five year agreement.

The $2,000,000 cash proceeds from the sale of the Mansfield Division and
non-compete agreement were used for principal payments on long-term debt.

During fiscal 1994 and 1993, the Mansfield Division's revenues approximated
$420,000 and $1,150,000, respectively, and operating income before
depreciation approximated $50,000 and $240,000, respectively.

F-36

OCI CORP. OF MICHIGAN
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(17) SUBSEQUENT EVENT

At the close of business on April 3, 1996, the Company's stockholders (the
"Stockholders") entered into a plan of reorganization (the "Reorganization
Plan") to restructure and merge the Company with an affiliated entity in the
same line of business. Pursuant to the Reorganization Plan, the Stockholders
agreed to sell and/or exchange their entire interests in the common and
preferred stock of the Company. In conjunction with the Reorganization Plan,
OCI Holdings Corp. ("Holdings") was incorporated for the purpose of effecting
the reorganization and merger.

Certain outside investors (the "Investors") purchased 24.67 shares and 60
shares of the Company's common and preferred stock, respectively, from the
Stockholders. These same shares were subsequently assigned by the Investors to
Holdings in exchange for Holdings' common stock. The remaining 75.33 shares
and 840 shares of the Company's common and preferred stock, respectively, were
purchased for cash by Holdings, which resulted in Holdings' being the sole
stockholder of all the Company's outstanding common and preferred stock.

Concurrent with the reorganization and merger, the Company, Holdings, and
Outdoor Communications, Inc. (collectively the "Borrowers") entered into a
Credit Agreement with Chase Manhattan Bank N.A. Under the Credit Agreement,
the Company borrowed $20,000,000 under a term loan which was principally used
to pay off the existing long-term debt, senior subordinated debt, and junior
subordinated debt, including all accrued interest. In addition to the
aforementioned term loan, the Credit Agreement also provides a revolving loan
commitment to the Borrowers, collectively.

The effects of the aforementioned transactions have not been included in the
financial statements as they occurred subsequent to the closing balance sheet.

F-37

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Mass Communications Corp.:

We have audited the accompanying consolidated balance sheet of Mass
Communications Corp. and subsidiary (the Company) as of April 3, 1996 and the
related consolidated statements of income, stockholders' deficit, and cash
flows for the period September 1, 1995 through April 3, 1996. 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 audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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 principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as of April 3, 1996 and the results of their operations and their cash flows
for the period September 1, 1995 through April 3, 1996 in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

East Lansing, Michigan
May 31, 1996

F-38

October 18, 1995

INDEPENDENT AUDITOR'S REPORT

The Officers and Directors
Mass Communications Corp.
Corinth, Mississippi

We have audited the accompanying consolidated balance sheets of Mass
Communications Corp. and subsidiary as of August 31, 1995, and the related
consolidated statements of income, stockholders' deficit, and cash flows for
each of the years ended August 31, 1995 and 1994. 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
consolidated financial statements. An audit also includes assessing the
accounting principles 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, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Mass
Communications Corp. and subsidiary as of August 31, 1995, and the results of
their operations and their cash flows for the years ended August 31, 1995 and
1994 in conformity with generally accepted accounting principles.

Moore & Gray
Corinth, Mississippi

F-39

MASS COMMUNICATIONS CORP.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

APRIL 3, AUGUST 31,
1996 1995

ASSETS
Current assets:
Cash and cash equivalents.............................. $ 453,202 476,636
Trade accounts receivable, less allowance for doubtful
accounts of $60,945 in 1996 and $88,817 in 1995....... 851,531 682,514
Income taxes receivable................................ 97,552 --
Other receivables...................................... 14,043 109,365
Due from affiliated entity (note 9).................... 54,310 --
Inventory--construction material....................... 92,557 106,670
Prepaid rent expense................................... 205,019 223,762
Other prepaid expenses................................. 131,118 61,448
Deferred income taxes (note 6)......................... 65,930 267,895
---------- ---------
Total current assets............................... 1,965,262 1,928,290
---------- ---------
Property, plant, and equipment, net (note 3)............. 3,439,990 3,238,981
Goodwill, less accumulated amortization.................. 2,025,973 2,066,984
Deferred financing fees, less accumulated amortization... 468,914 523,799
Deferred income taxes (note 6)........................... 801,218 723,394
Other assets (notes 4 and 13)............................ 152,315 108,564
---------- ---------
Total assets....................................... $8,853,672 8,590,012
========== =========

(Continued)

F-40

MASS COMMUNICATIONS CORP.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS--(CONTINUED)

APRIL 3, 1996 AND AUGUST 31, 1995

APRIL 3, AUGUST 31,
1996 1995

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current installments of long-term debt (note 5)...... $2,121,600 1,050,000
Trade accounts payable............................... 300,026 186,653
Income taxes payable................................. -- 303,632
Accrued expenses:
Salaries and wages................................. 165,244 142,971
Payroll and other taxes............................ 32,766 39,812
Employee benefits.................................. 65,714 --
Interest........................................... 97,229 --
Other.............................................. 170,509 163,665
---------- ----------
Total accrued expenses........................... 531,462 346,448
---------- ----------
Total current liabilities........................ 2,953,088 1,886,733
Long-term debt, excluding current installments (note
5).................................................... 8,628,400 9,700,000
---------- ----------
Total liabilities................................ 11,581,488 11,586,733
---------- ----------
Stockholders' deficit (notes 7, 12 and 13):
10% cumulative preferred stock, $1 par value.
Authorized 5,000 shares; issued and outstanding
1,000 shares........................................ 1,000 1,000
Class A common stock, no par value. Authorized 30,000
shares; issued and outstanding 12,500 shares........ 3,500 3,500
Additional paid-in capital........................... 999,000 999,000
Accumulated deficit.................................. (3,731,316) (4,000,221)
---------- ----------
Total stockholders' deficit...................... (2,727,816) (2,996,721)
---------- ----------
Commitments and contingencies (notes 7, 8 and 12)
Total liabilities and stockholders deficit....... $8,853,672 8,590,012
========== ==========

See accompanying notes to consolidated financial statements.

F-41

MASS COMMUNICATIONS CORP.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

FOR THE PERIOD FOR THE YEARS ENDED
SEPTEMBER 1, 1995 AUGUST 31,
THROUGH ---------------------
APRIL 3, 1996 1995 1994

Revenues:
Poster.............................. $3,097,607 5,084,371 4,795,353
Painted............................. 2,306,790 3,686,379 3,019,976
Other............................... 98,142 263,905 95,036
---------- ---------- ---------
Gross revenues.................... 5,502,539 9,034,655 7,910,365
Less commissions and discounts...... 545,537 881,273 783,551
---------- ---------- ---------
Net operating revenues............ 4,957,002 8,153,382 7,126,814
---------- ---------- ---------
Operating expenses:
Operations (note 9)................. 1,166,765 1,879,777 1,616,015
Selling, general, and administrative
(note 9)........................... 2,039,476 2,908,412 2,912,833
Depreciation........................ 550,869 897,804 848,159
Amortization of intangible assets... 41,011 70,304 70,304
Amortization of deferred financing
costs.............................. 54,885 95,995 11,124
---------- ---------- ---------
Total operating expenses.......... 3,853,006 5,852,292 5,458,435
---------- ---------- ---------
Operating income.................. 1,103,996 2,301,090 1,668,379
Other income (deductions):
Loss on disposal of property, plant,
and equipment...................... (832) (39,087) (72,040)
Interest expense.................... (644,606) (1,172,645) (852,415)
Interest income..................... 3,876 11,392 16,483
Management fee income (note 9)...... 58,333 150,000 150,000
Miscellaneous, net.................. (50,449) 56,878 (30,278)
---------- ---------- ---------
Income before income tax expense.. 470,318 1,307,628 880,129
Income tax expense (note 6)........... 201,413 523,620 339,773
---------- ---------- ---------
Net income........................ $ 268,905 784,008 540,356
========== ========== =========

See accompanying notes to consolidated financial statements.

F-42

MASS COMMUNICATIONS CORP.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

FOR THE PERIOD SEPTEMBER 1, 1995 THROUGH APRIL 3, 1996
AND FOR THE YEARS ENDED AUGUST 31, 1995 AND 1994

5% 10%
NONCUMULATIVE CUMULATIVE ADDITIONAL TOTAL
PREFERRED PREFERRED COMMON PAID-IN ACCUMULATED STOCKHOLDERS'
STOCK STOCK STOCK CAPITAL DEFICIT DEFICIT

Balances at August 31,
1993................... $ 5,000 -- 5,000 495,000 (3,127,335) (2,622,335)
Stock redemption........ (5,000) -- (1,500) (495,000) (2,097,250) (2,598,750)
Issuance of 1,000
shares................. -- 1,000 -- 999,000 -- 1,000,000
Net income.............. -- -- -- -- 540,356 540,356
------- ----- ------ -------- ---------- ----------
Balances at August 31,
1994................... -- 1,000 3,500 999,000 (4,684,229) (3,680,729)
Net income.............. -- -- -- -- 784,008 784,008
Dividend................ -- -- -- -- (100,000) (100,000)
------- ----- ------ -------- ---------- ----------
Balances at August 31,
1995................... -- 1,000 3,500 999,000 (4,000,221) (2,996,721)
Net income.............. -- -- -- -- 268,905 268,905
------- ----- ------ -------- ---------- ----------
Balances at April 3,
1996................... $ -- 1,000 3,500 999,000 (3,731,316) (2,727,816)
======= ===== ====== ======== ========== ==========

See accompanying notes to consolidated financial statements.

F-43

MASS COMMUNICATIONS CORP.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS
FOR THE PERIOD ENDED AUGUST 31,
SEPTEMBER 1, 1995 -------------------------
THROUGH
APRIL 3, 1996 1995 1994

CASH FLOWS FROM OPERATING ACTIVI-
TIES:
Net income........................ $ 268,905 784,008 540,356
Adjustments to reconcile net in-
come to net cash provided by op-
erating activities:
Depreciation of plant and equip-
ment........................... 550,869 897,804 848,159
Amortization of intangible as-
sets........................... 41,011 70,304 70,304
Amortization of deferred financ-
ing costs...................... 54,885 95,995 11,124
Decrease in deferred income tax-
es............................. 124,141 264,827 259,193
Loss on disposal of plant and
equipment...................... 832 39,087 72,040
Changes in assets and liabili-
ties which increase (decrease)
cash flows:
Trade accounts receivable..... (169,017) (80,185) (39,609)
Income taxes receivable....... (97,552) -- --
Due from affiliated entity.... (54,310) -- --
Inventory--construction mate-
rial......................... 676 (42,414) (5,110)
Prepaid rent expense.......... 18,743 (18,614) (970)
Other prepaid expenses........ (69,670) 52,315 (41,280)
Other assets.................. 51,571 (145,152) (666,741)
Trade accounts payable........ 113,373 (10,234) 37,139
Income taxes payable.......... (303,632) 246,590 39,206
Accrued expenses.............. 185,014 (31,768) (845,220)
--------- ----------- ------------
Net cash provided by operat-
ing activities............. 715,839 2,122,563 278,591
--------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVI-
TIES:
Capital expenditures.............. (745,996) (1,313,239) (642,283)
Proceeds from sale of plant and
equipment........................ 6,723 33,930 86,294
--------- ----------- ------------
Net cash used in investing
activities................. (739,273) (1,279,309) (555,989)
--------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVI-
TIES:
Principal payments on long-term
debt............................. (500,000) (1,000,000) (10,540,000)
Proceeds from issuance of long-
term debt........................ 500,000 -- 12,000,000
Proceeds from assurance of stock.. -- -- 1,000,000
Stock redemption.................. -- -- (2,598,750)
Dividends......................... -- (100,000) --
--------- ----------- ------------
Net cash used in financing
activities................. -- (1,100,000) (138,750)
--------- ----------- ------------
Net decrease in cash and cash
equivalents...................... (23,434) (256,746) (416,148)
Cash and cash equivalents at be-
ginning of the period............ 476,636 733,382 1,149,530
--------- ----------- ------------
Cash and cash equivalents at end
of the period.................... $ 453,202 476,636 733,382
========= =========== ============
Supplemental schedule of noncash
investing activities:
Transfer of salvage materials
from inventory to property,
plant, and equipment........... $ 13,437 15,113 23,616
========= =========== ============

See accompanying notes to consolidated financial statements.

F-44

MASS COMMUNICATIONS CORP.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 3, 1996 AND AUGUST 31, 1995

(1) BUSINESS OPERATIONS

The business operations of Mass Communications Corp. and subsidiary (the
"Company") consist of outdoor billboard advertising in the states of
Mississippi, Tennessee, Georgia, and Kentucky.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the Company, as summarized below, conform with
generally accepted accounting principles and reflect practices appropriate to
the business in which it operates.

(a) PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the financial statements of
Mass Communications Corp. and its wholly owned subsidiary, Outdoor
Communications, Inc. All significant intercompany balances and transactions
have been eliminated in consolidation.

(b) CASH EQUIVALENTS

Cash equivalents of $286,705 and $268,661 at April 3, 1996 and August 31,
1995, respectively, consist of money market funds. For purposes of the
consolidated statements of cash flows, the Company considers all highly liquid
debt instruments with maturities of three months or less at the time of
purchase to be cash equivalents.

Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out method.

(d) PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment are stated at cost. Depreciation on plant and
equipment is computed using straight-line and accelerated methods over the
estimated useful lives of the assets.

(e) GOODWILL

Goodwill, which represents the excess of purchase price over the fair value
of net assets acquired, is being amortized on a straight-line basis over a 40
year period.

(f) DEFERRED FINANCING COST

Debt financing costs incurred as a result of debt restructuring are recorded
as deferred financing costs and amortized on a straight-line basis over the
term of the related debt.

F-45

MASS COMMUNICATIONS CORP.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(g) EMPLOYEE BENEFITS

(h) INCOME TAXES

(i) RECLASSIFICATIONS

Certain reclassifications have been made to the 1995 and 1994 amounts to
conform to the current period presentation.

(j) REVENUE RECOGNITION

The Company recognizes revenue from advertising contracts on an accrual
basis ratably over the term of the contracts, as advertising services are
provided.

(k) USE OF ESTIMATES

(l) EARNINGS PER SHARE

An earnings per share calculation has not been presented, because the
Company is closely held and owned by a private investor group, and
accordingly, earnings per share is not required or meaningful.

F-46

MASS COMMUNICATIONS CORP.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(3) PROPERTY, PLANT, AND EQUIPMENT

Major categories of property, plant, and equipment at April 3, 1996 and
August 31, 1995 were as follows:

ESTIMATED
LIFE (YEARS) 1996 1995

Land................................... -- $ 228,878 228,878
Building............................... 10-25 399,414 397,745
Advertising structures................. 8 11,517,231 11,026,147
Leasehold improvements................. 2-5 100,185 100,186
Equipment.............................. 3-5 1,004,635 957,019
Construction in progress............... -- 35,617 2,080
---------- ----------
13,285,960 12,712,055
Less accumulated depreciation.......... (9,845,970) (9,473,074)
---------- ----------
Net property, plant, and equipment... $3,439,990 3,238,981
========== ==========

(4) OTHER ASSETS

Other assets consist principally of the cash surrender value of officer life
insurance and deferred acquisition costs related to the acquisition of Georgia
Outdoor Advertising as discussed in note 13.

(5) LONG-TERM DEBT

Long-term debt at April 3, 1996 and August 31, 1995 consists of the
following:

1996 1995

Term loans payable in quarterly installments with
the final payment due May 31, 2001; interest at
prime plus 1.5%; secured by the outstanding stock
and a first lien on all assets of the Company.
Loans payable to:
IBJ Schroder Bank and Trust Company, New York, New
York............................................. $5,125,000 5,375,000
Shawmut Bank Connecticut, National Association,
Hartford, Connecticut............................ 5,125,000 5,375,000
Revolving credit loans payable on demand with the
final payment due upon termination of the
agreement; interest at prime plus 1.5%; secured by
the outstanding stock and a first lien on all
assets of the Company. Loans payable to:
IBJ Schroder Bank and Trust Company, New York, New
York............................................. 250,000 --
Shawmut Bank Connecticut, National Association,
Hartford, Connecticut............................ 250,000 --
---------- ----------
Total long-term debt............................ 10,750,000 10,750,000
Less current portion................................ 2,121,600 1,050,000
---------- ----------
Long-term debt, excluding current installments.. $8,628,400 9,700,000
========== ==========

The revolving credit and term loan agreement (the "loan agreement")
contains, among other things, restrictions with respect to payment of
dividends, additional borrowings, current ratios, acquisitions or issuance of
capital stock, capital expenditures, sale of assets, and mergers or
consolidations or formation of subsidiaries. The loan agreement contains
minimum requirements for current ratios, consolidated earnings before
interest, taxes, depreciation and amortization, and fixed charge coverage.

F-47

MASS COMMUNICATIONS CORP.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The loan agreement limits the capital expenditures for the period ended
April 3, 1996 to $550,000. Capital expenditures are defined as expenditures
for property, plant and equipment, less salvage materials from billboards
reused, and proceeds from the sale of billboards reinvested in new billboards.
Any unspent portion of the limitation can be deposited to a capital
expenditure account and used to increase the following year's capital
expenditure limitation.

On April 3, 1996, subsequent to the Company's closing balance sheet, the
Company, along with related affiliates, entered into a Credit Agreement with
Chase Manhattan Bank N.A. (see note 13). Funds from the Credit Agreement were
used to pay off the existing term loans and revolving credit loans as of April
3, 1996. The current portion of long-term debt as of April 3, 1996 reflects
the current portion due as noted in the new Credit Agreement. Maturities of
long-term debt under the Credit Agreement during the next four years are:
1997, $2,121,600; 1998, $4,060,900; 1999, $4,391,875; and 2000, $175,625.

(6) INCOME TAXES

Income tax expense attributable to income before income tax expense consists
of:

CURRENT DEFERRED TOTAL

Period ended April 3, 1996:
Federal........................................ $ 80,043 108,321 188,364
State and local................................ (2,771) 15,820 13,049
-------- ------- -------
Total........................................ $ 77,272 124,141 201,413
======== ======= =======
Year ended August 31, 1995:
Federal........................................ $237,390 165,198 402,588
State and local................................ 31,455 89,577 121,032
-------- ------- -------
Total........................................ $268,845 254,775 523,620
======== ======= =======
Year ended August 31, 1994:
Federal........................................ $ 44,050 254,391 298,441
State and local................................ 36,530 4,802 41,332
-------- ------- -------
Total........................................ $ 80,580 259,193 339,773
======== ======= =======

Income tax expense differed from the amounts computed by applying the
federal income tax rate of 34% for the period ended April 3, 1996 and the year
ended August 31, 1995 to income before income tax expense as a result of the
following:

1996 1995 1994

Computed "expected" tax expense................ $159,908 444,593 299,244
Increase (reduction) in income taxes resulting
from:
State and local income taxes, net of federal
income tax expense.......................... (4,436) (41,151) (14,053)
Non-deductible expenses...................... 18,900 28,096 27,563
Alternative minimum tax expense.............. 59,693 68,866 --
Other, net................................... (32,652) 23,216 27,019
-------- ------- -------
$201,413 523,620 339,773
======== ======= =======

F-48

MASS COMMUNICATIONS CORP.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The tax effect of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at April 3,
1996 and August 31, 1995 are presented below:

1996 1995

Deferred tax assets:
Allowance for doubtful accounts....................... $ 23,769 34,639
Property, plant, and equipment, principally due to
differences in depreciation.......................... 779,270 734,165
Net operating loss carryforwards...................... 53,258 134,730
Alternative minimum tax credit carryforwards.......... 138,993 79,300
Other................................................. 12,950 8,455
---------- -------
Total gross deferred tax assets..................... 1,008,240 991,289
Deferred tax liabilities--accrued expenses.............. 141,092 --
---------- -------
Net deferred tax assets............................. $ 867,148 991,289
========== =======

The Company recorded no valuation allowance for deferred tax assets as of
April 3, 1996 and August 31, 1995. In assessing the realizability of deferred
tax assets, management considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of future
taxable income during the periods in which those temporary differences become
deductible. Management considers the scheduled reversals of deferred taxes,
projected future taxable income, and tax planning strategies in making this
assessment. Based upon the level of historical taxable income and projections
for future taxable income over the periods which the deferred tax assets are
deductible, management believes it is more likely than not that the Company
will realize the benefits of these deductible differences.

At April 3, 1996, the Company had net operating loss carryforwards for
federal income tax purposes of approximately $156,600, which are available to
offset future federal taxable income, if any, through 2006. The Company has an
alternative minimum tax credit carryforward of approximately $139,000, which
is available to reduce future regular income taxes, if any, over an indefinite
period. The Company also has an investment tax credit carryforward of
approximately $13,000, which is available to reduce future regular income
taxes, if any, through 2001.

(7) STOCKHOLDERS' EQUITY

All general voting power is vested in the holders of Class A common stock.
The holders of preferred stock are not entitled to vote at any stockholders'
meetings.

No dividends will be declared or paid on the common stock during any year
unless the full amount of dividends on the preferred stock accrued to the
proposed date of declaration has been paid. Upon declaration, the holders of
the preferred stock are entitled to receive an annual cumulative dividend at a
rate of 10% per annum of the liquidation value of the preferred stock, as
defined below. Dividends, if declared, are payable in cash annually on each
April 30. Cumulative preferred stock dividend rights were unaccrued and unpaid
at April 3, 1996 and August 31, 1995, in the amount of $92,500 and $33,333,
respectively.

F-49

MASS COMMUNICATIONS CORP.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(8) LEASES

The Company leases substantially all of the land presently used as sites for
poster panels under various terms. The leases are classified as operating
leases. These leases generally contain renewal options ranging from one to 15
years and require the Company to pay all executory costs such as maintenance
and insurance. Rental expense for operating leases amounted to approximately
$398,000, $607,000 and $689,000 during the period ended April 3, 1996 and the
years ended August 31, 1995 and 1994, respectively.

Future minimum lease payments under noncancelable operating leases with non-
related parties (with initial or remaining lease terms in excess of one year)
as of April 3, 1996 are:

YEAR ENDING APRIL 3:

1997............................................................ $ 497,163
1998............................................................ 440,915
1999............................................................ 386,368
2000............................................................ 321,829
2001............................................................ 280,954
----------
$1,927,229
==========

(9) RELATED PARTY TRANSACTIONS

The Company leases real property from a trust for which the president, who
is a major stockholder of the Company, serves as trustee. Rental expense to
the trust amounted to approximately $18,000, $27,000, and $25,000 for the
period ended April 3, 1996 and the years ended August 31, 1995 and 1994,
respectively. The Company also leases a sign location from the president and
vice president of the Company. The rental payment for the sign location
amounted to approximately $600, $1,000 and $1,000 for the period ended April
3, 1996 and the years ended August 31, 1995 and 1994, respectively.

Future minimum lease payments under noncancelable operating leases with the
stockholder (with initial or remaining lease terms in excess of one year) as
of April 3, 1996 are:

YEAR ENDING APRIL 3:

1997.............................................................. $ 27,320
1998.............................................................. 27,320
1999.............................................................. 27,320
2000.............................................................. 20,996
--------
$102,956
========

The Company provides management and accounting consultation services to an
affiliated entity related through common ownership. The affiliated entity and
the Company have entered into a continuing agreement which may be canceled by
either party upon 30 days written notice. Total management fee income incurred
under the above arrangements have been included as a component of other income
(deductions) in the accompanying consolidated statement of operations.

(10) SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid approximately $482,000, $65,500 and $43,000 for income
taxes during the period ended April 3, 1996 and the years ended August 31,
1995 and 1994, respectively. Cash payments for interest

F-50

MASS COMMUNICATIONS CORP.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

approximated $547,000, $1,173,000 and $1,829,000 for the period ended April 3,
1996 and the years ended August 31, 1995 and 1994, respectively.

(11) FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents, trade accounts receivable,
due from affiliated entity, trade accounts payable, and accrued expenses
approximate fair values due to the short-term maturities of these instruments.
Long-term debt instruments are estimated to approximate fair values, as rates
are tied to short-term indices.

(12) STOCK WARRANTS OUTSTANDING

In accordance with the loan agreement, the Company issued common stock
warrants to the lenders of the Company. The warrants can be exercised at any
time or from time to time prior to April 30, 2004. The exercise price of the
warrants shall be the current market price of the stock (as defined in the
stock warrants) on the date the warrants are exercised. The common stock
warrants outstanding as of April 3, 1996 and August 31, 1995 are as follows:

IBJ Schroder Bank and Trust Company........................... 328.947 shares
Shawmut Bank Connecticut, National Bank Association........... 328.947 shares

(13) SUBSEQUENT EVENT

At the close of business on April 3, 1996, the Company's stockholders (the
"Stockholders") entered into a plan of reorganization (the "Reorganization
Plan") to restructure and merge the Company with an affiliated entity in the
same line of business. Pursuant to the Reorganization Plan, the Stockholders
agreed to sell their entire interests in the common and preferred stock of the
Company. In conjunction with the Reorganization Plan, OCI Holdings Corp.
("Holdings") was incorporated for the purpose of effecting the reorganization
and merger.

The Stockholders of the Company exchanged 7,371.01 shares of common stock,
308.78 shares of preferred stock, and their Series A subordinated notes for
2,764.99 shares of Class A common stock of OCI Holdings Corp. The Stockholders
of the Company also sold 657,895 warrants, 5,128.99 shares of common stock and
691.22 shares of preferred stock for cash and new subordinated notes totaling
$6,692,500. This transaction resulted in Holdings ultimately owning all of the
stock of the Company.

Concurrent with the reorganization and merger, the Company, Holdings, and
OCI North (collectively, the "Borrowers") entered into a Credit Agreement with
Chase Manhattan Bank N.A. Under the Credit Agreement, the Company borrowed
$40,000,000 under a term loan which was used to pay off the existing long-term
debt, including all accrued interest, and the acquisitions discussed below. In
addition to the aforementioned term loan, the Credit Agreement also provides a
revolving loan commitment to the Borrowers, collectively.

The effects of the aforementioned transactions have not been included in the
financial statements as they occurred subsequent to the closing balance sheet.

F-51

MASS COMMUNICATIONS CORP.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Georgia Acquisition

At the close of business on April 3, 1996, Outdoor Communications, Inc.
completed the purchase of certain assets of Georgia Outdoor Advertising,
pursuant to an Asset Purchase Agreement dated March 8, 1996, for cash of
$11,650,000. The acquisition was accounted for by the purchase method.

Alabama Acquisition

On April 30, 1996, Outdoor Communications, Inc. completed the purchase of
certain assets and assumed certain liabilities of AOA Acquisition, L.L.C.,
pursuant to an Asset Sale Agreement dated March 19, 1996, for cash of
$32,000,000. The acquisition was accounted for by the purchase method.

F-52

INDEPENDENT AUDITORS' REPORT

The Stockholders
Georgia Outdoor Advertising Company, Inc.:

We have audited the accompanying balance sheets of Georgia Outdoor
Advertising Company, Inc. as of December 31, 1995 and 1994, and the related
statements of operations, stockholders' deficit, and cash flows for the years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Georgia Outdoor
Advertising Company, Inc. as of December 31, 1995 and 1994, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

Atlanta, Georgia
May 16, 1997

F-53

GEORGIA OUTDOOR ADVERTISING COMPANY, INC.

BALANCE SHEETS

DECEMBER 31, 1995 AND 1994

1995 1994

ASSETS (NOTE 2)
Current assets:
Cash and cash equivalents.......................... $ 468,168 298,197
Receivables:
Trade accounts.................................... 317,068 294,512
Other............................................. 1,106 175
Prepaid rent expense............................... 131,986 133,294
Other prepaid expenses............................. 3,995 15,511
----------- ----------
Total current assets............................. 922,323 741,689
----------- ----------
Property and equipment:
Land............................................... 8,108 39,123
Buildings and improvements......................... 359,001 359,001
Advertising structures............................. 5,556,489 5,613,786
Equipment.......................................... 370,702 337,617
----------- ----------
6,294,300 6,349,527
Less accumulated depreciation...................... 5,407,871 4,980,816
----------- ----------
Net property and equipment....................... 886,429 1,368,711
----------- ----------
Goodwill, net of accumulated amortization of $96,667
and $86,667 in 1995 and 1994, respectively.......... 153,333 163,333
Other assets......................................... 20,876 18,745
----------- ----------
$ 1,982,961 2,292,478
=========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current installments of long-term debt (note 2).... $ 376,971 767,347
Trade accounts payable............................. 63,104 53,444
Accrued expenses:
Salaries and wages................................ 83,242 63,783
Interest payable to related parties............... -- 25,820
Other............................................. 1,264 1,394
----------- ----------
Total accrued expenses........................... 84,506 90,997
----------- ----------
Deferred advertising revenues...................... 16,631 20,171
----------- ----------
Total current liabilities........................ 541,212 931,959
Long-term debt, excluding current installments (note
2).................................................. 555,081 588,078
Long-term debt to related parties (notes 2 and 3).... 3,500,000 3,335,732
Interest payable to related parties.................. -- 62,843
----------- ----------
Total liabilities................................ 4,596,293 4,918,612
----------- ----------
Stockholders' deficit:
Common stock, no par value. Authorized 100,000
shares; issued and outstanding 1,320 shares....... -- --
Additional paid-in capital......................... 430,000 430,000
Accumulated deficit................................ (3,043,332) (3,056,134)
----------- ----------
Total stockholders' deficit...................... (2,613,332) (2,626,134)
----------- ----------
Commitments and contingencies (note 4)...............
$ 1,982,961 2,292,478
=========== ==========

See accompanying notes to financial statements.

F-54

GEORGIA OUTDOOR ADVERTISING COMPANY, INC.

STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1995 AND 1994

1995 1994

Revenues:
Poster and paint....................................... $3,512,944 3,209,740
Other.................................................. 210,096 202,239
---------- ---------
Gross revenues....................................... 3,723,040 3,411,979
Less commissions and discounts......................... 575,648 496,479
---------- ---------
Net operating revenues............................... 3,147,392 2,915,500
---------- ---------
Operating expenses:
Operations............................................. 858,728 805,578
Selling, general, and administrative................... 976,137 976,513
Depreciation........................................... 529,652 546,283
Amortization........................................... 20,750 13,583
---------- ---------
Total operating expenses............................. 2,385,267 2,341,957
---------- ---------
Operating income..................................... 762,125 573,543
Other income (expense):
(Loss) gain on disposal of equipment................... (15,480) 8,577
Interest expense....................................... (129,832) (115,558)
Interest expense to related parties.................... (303,433) (297,844)
Other income........................................... 11,360 7,330
---------- ---------
Net income........................................... $ 324,740 176,048
========== =========

See accompanying notes to financial statements.

F-55

GEORGIA OUTDOOR ADVERTISING COMPANY, INC.

STATEMENTS OF STOCKHOLDERS' DEFICIT

YEARS ENDED DECEMBER 31, 1995 AND 1994

ADDITIONAL TOTAL
COMMON PAID-IN ACCUMULATED STOCKHOLDERS'
STOCK CAPITAL DEFICIT DEFICIT

Balances at December 31, 1993..... $-- 430,000 (3,016,388) (2,586,388)
Net income........................ -- -- 176,048 176,048
Distributions..................... -- -- (215,794) (215,794)
---- ------- ---------- ----------
Balances at December 31, 1994..... -- 430,000 (3,056,134) (2,626,134)
Net income........................ -- -- 324,740 324,740
Distributions..................... -- -- (311,938) (311,938)
---- ------- ---------- ----------
Balances at December 31, 1995..... $-- 430,000 (3,043,332) (2,613,332)
==== ======= ========== ==========

See accompanying notes to financial statements.

F-56

GEORGIA OUTDOOR ADVERTISING COMPANY, INC.

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1995 AND 1994

1995 1994

Cash flows from operating activities:
Net income............................................ $ 324,740 176,048
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization........................ 554,643 570,580
Loss (gain) on disposal of equipment................. 15,488 (8,578)
(Increase) decrease in:
Receivables......................................... (23,487) (80,500)
Prepaid rent expense................................ 1,308 (18,493)
Other prepaid expenses and other assets............. 9,385 39,250
(Increase) decrease in:
Trade accounts payable.............................. 9,660 (23,879)
Accrued expenses--salaries.......................... 19,459 9,790
Accrued expenses--interest payable to related par-
ties............................................... (88,663) 26,307
Accrued expenses--other............................. (130) (1,764)
Deferred advertising revenues....................... (3,540) 11,657
---------- --------
Net cash provided by operating activities.......... 818,863 700,418
---------- --------
Cash flows from investing activities:
Purchases of property and equipment................... (130,889) (364,120)
Proceeds from sale of property and equipment.......... 53,040 31,278
---------- --------
Net cash used in investing activities.............. (77,849) (332,842)
---------- --------
Cash flows from financing activities:
Proceeds from issuance of long-term debt.............. 3,554,486 354,291
Repayment of long-term debt........................... (3,813,591) (887,386)
Distributions to stockholders......................... (311,938) (215,794)
---------- --------
Net cash used in financing activities.............. (571,043) (748,889)
---------- --------
Net increase (decrease) in cash and cash equiva-
lents............................................. 169,971 (381,313)
Cash and cash equivalents at beginning of year.......... 298,197 679,510
---------- --------
Cash and cash equivalents at end of year................ $ 468,168 298,197
========== ========
Supplemental disclosure of cash flow information--cash
paid during the year for interest...................... $ 521,930 389,687
========== ========

See accompanying notes to financial statements.

F-57

GEORGIA OUTDOOR ADVERTISING COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995 AND 1994

(1) PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Presentation

Georgia Outdoor Advertising Company, Inc. (the "Company") operates outdoor
billboard advertising in the States of Georgia and South Carolina. Management
of the Company has made a number of estimates and assumptions relating to the
reporting of assets and liabilities and the disclosure of contingent assets
and liabilities to prepare these financial statements in conformity with
generally accepted accounting principles. Actual results could differ from
those estimates.

(b) Cash Equivalents

Cash equivalents consist of money market funds. For purposes of the
statement of cash flows, the Company considers all highly liquid debt
instruments with maturities of three months or less at the time of purchase to
be cash equivalents.

Property and equipment are stated at cost less accumulated depreciation.
Depreciation on property and equipment is provided using straight-line and
accelerated methods over the estimated useful lives of the assets. The
estimated useful lives for the major categories of property and equipment are
summarized below:

Buildings and improvements........................................ 31.5 years
Advertising structures............................................ 7-15 years
Equipment......................................................... 3-7 years

(d) Goodwill

Goodwill, which represents the excess purchase price over fair value of net
assets acquired, is amortized using the straight-line basis over 25 years.

(e) Deferred Advertising Revenues

Amounts received from outdoor billboard advertising contracts in advance are
deferred and amortized into revenue over the life of the related contracts.

(f) Revenue Recognition

The Company recognizes revenue from advertising contracts on the accrual
basis ratably over the term of the contracts, as advertising services are
provided.

(g) Income Taxes

The Company, with the consent of its stockholders, has elected to be taxed
as an S Corporation under the Internal Revenue Code. As a result of this
election, the Company has been taxed in a manner similar to a partnership and
has not provided for any Federal or state income taxes in the financial
statements as the results of operations are passed through to, and the related
income taxes become the individual responsibility of the Company's
stockholders.

(h) Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, trade and other accounts
receivable, trade accounts payable, accrued expenses, and interest payable
approximate fair values due to the short-term maturities of these instruments.
The carrying values of long-term debt instruments approximate fair value as
they bear interest at rates which approximate market.

F-58

GEORGIA OUTDOOR ADVERTISING COMPANY, INC,

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(2) LONG-TERM DEBT

Long-term debt at December 31, 1995 and 1994 consists of the following:

1995 1994

10.5% installment notes payable in monthly
installments of $16,222, including interest......... $ 792,354 897,729
Installment note payable to bank with interest at 80%
of prime plus a margin rate factor (1.204 at
December 31, 1995), payable in monthly installments
of $1,666, plus accrued interest, secured by
mortgage............................................ 72,601 92,593
Installment notes payable to stockholders with
interest at prime plus .75%, payable in monthly
installments, refinanced in 1995.................... -- 3,156,250
Installment notes payable to stockholders with
interest at prime plus 1%, payable in monthly
installments of $24,306, plus interest.............. 3,500,000 --
11.5% installment note payable to bank in monthly
installments of $1,504, including interest, due
January 1996........................................ 1,499 18,304
9.5% installment note payable to bank in monthly
installments of $887, including interest, paid
December 1995....................................... -- 10,000
12% subordinated promissory note payable to
stockholders, refinanced in 1995.................... -- 179,482
10% subordinated promissory note payable, refinanced
in 1995............................................. -- 275,000
Various installment notes payable in varying monthly
installments, including interest.................... 65,598 61,799
---------- ---------
Total long-term debt............................. 4,432,052 4,691,157
Less current maturities.............................. (376,971) (767,347)
---------- ---------
Long-term debt, excluding current maturities..... $4,055,081 3,923,810
========== =========

Substantially all of the assets of the Company are pledged as security on
the debt outstanding. Certain of the debt agreements impose financial
covenants which require, among other things, provisions for the maintenance of
a minimum liquidation value and restrictions on the ability of the Company to
incur additional indebtedness. Management of the Company has stated that these
covenant restrictions have been met by the Company or waived by the creditors
as of December 31, 1995 and 1994.

The aggregate maturities of long-term debt based on amounts outstanding at
December 31, 1995 are as follows:

1996.............................................................. $ 376,971
1997.............................................................. 463,039
1998.............................................................. 470,152
1999.............................................................. 470,510
2000.............................................................. 2,587,896
Thereafter........................................................ 63,484
----------
$4,432,052
==========

(3) RELATED PARTY TRANSACTIONS

In December 1995, the Company refinanced several loans (including balances
outstanding at December 31, 1994 of $3,156,250 payable to stockholders and
$179,482 payable to stockholders under "Keep Well" provisions of stockholder
loan agreements) by executing a $3,500,000 loan with an entity related to the
Company through partial common ownership. The $3,500,000 balance was
outstanding as of December 31, 1995.

F-59

GEORGIA OUTDOOR ADVERTISING COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

The Company leases property from an entity related to the Company through
common ownership. Total related party lease expense was $9,350 and $-0- during
the years ended December 31, 1995 and 1994, respectively.

The Company paid management fees to its stockholders of approximately
$10,000 and $8,000 during the years ended December 31, 1995 and 1994,
respectively.

One of the stockholders of the Company received an annual salary for his
position as President of the Company during the years ended December 31, 1995
and 1994.

(4) COMMITMENTS AND CONTINGENCIES

(a) Leases

The Company leases substantially all of the land presently used as sites for
its advertising structures under operating leases. These leases generally
contain renewal options ranging from 1 to 10 years and require the Company to
pay all executory costs such as maintenance and insurance. Rental expense for
operating leases was approximately $364,000 and $334,000 during the years
ended December 31, 1995 and 1994, respectively.

Future minimum lease payments under noncancelable operating leases (with
initial or remaining lease terms in excess of one year) as of December 31,
1995 are summarized as follows:

YEAR ENDING DECEMBER 31,

1996............................................................ $ 277,000
1997............................................................ 270,000
1998............................................................ 262,000
1999............................................................ 254,000
2000............................................................ 13,000
Thereafter...................................................... --
----------
$1,076,000
==========

(b) Contingencies

The Company is involved in various lawsuits arising in the normal course of
its business. In the opinion of management, the ultimate outcome of these
matters will not have a material adverse effect on the financial position or
results of operations of the Company.

(5) SALE OF OPERATIONS

On April 3, 1996, certain assets of the Company's operations were purchased
by Outdoor Communications, Inc. for cash of $11,650,000, pursuant to an asset
purchase agreement dated March 6, 1996. Substantially all of the Company's
indebtedness was repaid as a result of this transaction.

F-60

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Members
AOA Holding, L.L.C.

We have audited the accompanying consolidated balance sheet of AOA Holding,
L.L.C. as of December 31, 1995, and the related consolidated statements of
income, changes in members' equity and cash flows for the year then ended and
for the two months ended December 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of AOA Holding, L.L.C. at
December 31, 1995, and the consolidated results of its operations and its cash
flows for the year then ended and for the two months ended December 31, 1994,
in conformity with generally accepted accounting principles.

Ernst & Young LLP

February 20, 1996
Birmingham, Alabama

F-61

AOA HOLDING, L.L.C.

CONSOLIDATED BALANCE SHEET

DECEMBER 31
1995

ASSETS
Current assets:
Cash............................................................. $ 255,755
Accounts receivable, net of allowance of $72,800................. 1,595,288
Receivable from officers......................................... 110,587
Prepaid expenses................................................. 382,993
-----------
Total current assets............................................... 2,344,623
Property, plant and equipment, net................................. 14,057,279
Debt issuance cost, net of accumulated amortization of $142,156.... 467,094
Deposits and prepaid miscellaneous................................. 182,199
-----------
Total assets....................................................... $17,051,195
===========
LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Accounts payable................................................. $ 138,643
Accrued interest................................................. 258,625
Accrued and other liabilities.................................... 612,913
-----------
Total current liabilities.......................................... 1,010,181
Long-term debt, net of debt discount of $182,499................... 11,780,647
Deferred compensation.............................................. 158,858
Members' equity:
Class A units, no par value; 498,240 units authorized, 255,007
units issued and outstanding.................................... 211,912
Class B units, no par value; 8,466,743 units authorized,
3,250,000 units issued and outstanding.......................... 2,689,766
Unit warrants subject to put option.............................. 1,199,831
Retained earnings................................................ --
-----------
Total members' equity.............................................. 4,101,509
-----------
Total liabilities and members' equity.............................. $17,051,195
===========

See accompanying notes.

F-62

AOA HOLDING, L.L.C.

CONSOLIDATED STATEMENTS OF INCOME

TWO MONTHS
YEAR ENDED ENDED
DECEMBER 31 DECEMBER 31
1995 1994

Advertising revenues.................................... $13,372,651 $2,185,119
Less commissions and discounts.......................... 1,313,514 232,130
----------- ----------
12,059,137 1,952,989
Expenses:
Operating............................................. 2,562,678 377,085
Real estate........................................... 2,122,395 360,907
Selling............................................... 1,501,219 214,492
General and administrative............................ 1,854,792 340,366
Depreciation and amortization......................... 1,829,947 153,344
Deferred compensation................................. 368,858 --
----------- ----------
10,239,889 1,446,194
----------- ----------
Income from operations.................................. 1,819,248 506,795
Other expense:
Interest expense...................................... 1,317,555 258,060
Other expenses, net................................... 27,016 5,960
----------- ----------
1,344,571 264,020
----------- ----------
Net income.............................................. $ 474,677 $ 242,775
=========== ==========

See accompanying notes.

F-63

AOA HOLDING, L.L.C.

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS' EQUITY

TOTAL
CLASS CLASS UNIT RETAINED MEMBERS'
A UNITS B UNITS WARRANTS EARNINGS EQUITY

Members' contribution on
October 28, 1994....... $255,007 $3,250,000 $ -- $ -- $3,505,007
Issuance of unit
warrants subject to put
option................. -- -- 238,043 -- 238,043
Net income.............. -- -- -- 242,775 242,775
-------- ---------- ---------- -------- ----------
Balances at December 31,
1994................... 255,007 3,250,000 238,043 242,775 3,985,825
Net income.............. -- -- -- 474,677 474,677
Distributions to mem-
bers................... -- -- -- (358,993) (358,993)
Increase in redemption
price of unit warrants
subject to put option.. (43,095) (560,234) 961,788 (358,459) --
-------- ---------- ---------- -------- ----------
Members' equity at De-
cember 31, 1995........ $211,912 $2,689,766 $1,199,831 $ -- $4,101,509
======== ========== ========== ======== ==========

See accompanying notes.

F-64

AOA HOLDING, L.L.C.

CONSOLIDATED STATEMENTS OF CASH FLOWS

TWO MONTHS
YEAR ENDED ENDED
DECEMBER 31 DECEMBER 31
1995 1994

OPERATING ACTIVITIES:
Net income......................................... $ 474,677 $ 242,775
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.................... 1,829,947 153,344
Amortization of debt discount.................... 55,544 --
Provision for bad debts.......................... 59,936 19,465
Changes in operating assets and liabilities:
Accounts receivable............................. (164,709) 12,026
Prepaid expenses................................ 10,501 (40,490)
Other assets.................................... (86,479) --
Accounts payable................................ 66,131 (56,138)
Deferred compensation........................... 158,858 --
Accrued interest................................ 81,877 176,748
Accrued and other liabilities................... (357,299) 2,545
----------- ------------
Net cash provided by operating activities.......... 2,128,984 510,275
INVESTING ACTIVITIES:
Business acquisition............................... -- (14,263,750)
Acquisition of property, plant and equipment....... (479,822) (23,157)
----------- ------------
Net cash used in investing activities.............. (479,822) (14,286,907)
FINANCING ACTIVITIES:
Proceeds from issuance of members' equity.......... $ -- $ 3,505,007
Capital lease payments............................. -- (48,890)
Buy-out capital lease obligation................... (1,077,045) --
Proceeds from issuance of debt, net of cost........ -- 10,868,246
Net payments on revolving credit agreement......... (200,000) (305,100)
Distributions to members........................... (358,993) --
----------- ------------
Net cash (used in) provided by financing activi-
ties.............................................. (1,636,038) 14,019,263
----------- ------------
Net increase in cash and cash equivalents.......... 13,124 242,631
Cash and cash equivalents at beginning of period... 242,631 --
----------- ------------
Cash and cash equivalents at end of period......... $ 255,755 $ 242,631
----------- ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW:
Cash paid for interest............................. $1,180,134 $ 81,312
=========== ============

See accompanying notes.

F-65

AOA HOLDING, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1995 AND 1994

(1) ORGANIZATION

AOA Holding, L.L.C. (Holding) was formed on October 28, 1994 to acquire
Alabama Outdoor Advertising, Inc. through its majority-owned subsidiary AOA
Acquisition L.L.C. (Acquisition) (collectively referred to as the Company).
The Company maintains and operates outdoor advertising displays throughout
northern Alabama. The display structures are the property of the Company and
the real estate on which the structures are built is leased by the Company
under cancelable leases with terms ranging from one to twenty years. The
Company's marketing department actively seeks out businesses and organizations
to sell billboard space for defined periods of time. Sales are negotiated on
term contracts. The Company's art department creates and assembles designs for
the operations department to hang on billboard locations.

The debts, obligations and liabilities of the Company will be solely the
debts, obligations and liabilities of the Company, and no member of the
Company is liable or will be obligated personally for any such debt,
obligation or liability of the Company solely by reason of such status.

(2) ACCOUNTING POLICIES

Consolidation

The financial statements include the accounts of AOA Holding, L.L.C. and its
majority-owned subsidiary, AOA Acquisition, L.L.C. All significant
intercompany accounts and transactions have been eliminated.

PROPERTY, PLANT AND EQUIPMENT

For income tax and financial reporting purposes, the Company uses the
Modified Accelerated Cost Recovery System for fixed asset depreciation. The
estimated useful lives of the various classes of assets are as follows:

Buildings........................................................ 40 years
Advertising structures........................................... 16 years
Trucks and automobiles........................................... 5 years
Furniture and equipment.......................................... 5 years

Replacement parts, grouped with work-in-progress (see Note 4) are not
depreciated until placed in service.

ADVERTISING REVENUES

Advertising revenues are recognized ratably on a monthly basis over the
period in which advertisement displays are posted on the advertising
structures. Discounts are granted to customers who contract for specified
levels of advertising and longer term contracts, generally at least 12 months.
Commissions represent the portion of revenues paid to the agency placing the
advertisement.

REAL ESTATE LEASES

Real estate lease payments are generally paid in advance and charged to
expense over the life of the lease. For most lease agreements, the lease term
renews if payment is accepted subsequent to the original lease term. Operating
lease expense related to real estate totaled $2,000,315 and $336,301 for 1995
and the two months ended December 31, 1994, respectively.

INCOME TAXES

The accompanying consolidated financial statements do not include provision
for income taxes because the taxable income or loss of the Company is included
in the tax returns of the members.

F-66

AOA HOLDING, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

STATEMENT OF CASH FLOWS

For purposes of the statement of cash flows, the Company considers all
highly liquid securities with maturities of three months or less at the time
of purchase to be cash equivalents.

RECENT ACCOUNTING PRONOUNCEMENTS

In March 1995, the FASB issued Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. Statement 121 also addresses the accounting for long-lived
assets that are expected to be disposed of. The Company will adopt Statement
121 in the first quarter of 1996 and, based on current circumstances, does not
believe the effect of adoption will be material.

RISKS AND UNCERTAINTIES

The use of estimates developed by management is inherent in the preparation
of financial statements in conformity with generally accepted accounting
principles.

(3) BUSINESS ACQUISITION

The Company acquired substantially all of the assets and assumed certain
liabilities of Alabama Outdoor Advertising, Inc. in October 1994. Funds for
the acquisition were provided from a $1,600,000 seller note (see Note 6),
proceeds from the issuance of 3,505,007 total Class A and Class B units at $1
per unit and from the Company's initial borrowing of approximately
$11,000,000. The purchase price was allocated as follows:

Assets:
Accounts receivable........................................... $ 1,632,593
Prepaid expenses.............................................. 353,004
Property, plant and equipment................................. 15,395,435
Debt issue costs.............................................. 609,250
Other......................................................... 95,720
-----------
18,086,002
Less:
Liability assumed............................................. 2,222,252
-----------
$15,863,750
===========

The acquisition was accounted for using the purchase method of accounting
and is included in the Company's financial statements from the date of
acquisition.

(4) PREPAID EXPENSES

Prepaid expenses consist of the following at December 31:

1995
--------

Real estate leases.................................................. $272,172
Insurance........................................................... 83,023
Other............................................................... 27,798
--------
$382,993
========

F-67

AOA HOLDING, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(5) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost and consist of the
following at December 31:

1995
-----------

Land............................................................ $ 750,923
Buildings....................................................... 271,846
Advertising structures.......................................... 13,751,018
Trucks and automobiles.......................................... 412,555
Furniture and equipment......................................... 310,271
Replacement parts and work-in-progress.......................... 401,702
-----------
15,898,315
Less accumulated depreciation................................... 1,841,036
-----------
$14,057,279
===========

(6) LONG-TERM DEBT

Long-term debt at December 31, 1995 consisted of the following:

Revolving credit facility, net of discount of $182,499........... $10,180,647
Seller note...................................................... 1,600,000
-----------
$11,780,647
Less current portion............................................. --
$11,780,647
===========

The revolving credit facility is provided under a financing agreement with a
bank which expires October 28, 1999. Under the revolving credit facility, the
Company may borrow up to $14,500,000. Borrowing limits under the revolving
credit facility are reduced over the term of the agreement to the following:

1996............................................................. $12,500,000
1997............................................................. 10,500,000
1998............................................................. 7,500,000
1999............................................................. --

Borrowings under the facility bear interest, at the Company's option, at the
bank's eurodollar rate, LIBOR plus 3.25%, or base rate, prime plus 2%. The
eurodollar rate and base rate in effect at December 31, 1995 was 9.00% and
10.25%, respectively.

The revolving credit facility agreement is collateralized with substantially
all the assets of the Company and restricts distributions to its members to
those necessary for payment of taxes. If the Company's cash balance exceeds
$500,000 for three consecutive business days, the Company must pay down the
revolving credit balance by the excess amount. The agreement also restricts
the amount of capital expenditures and requires that the Company maintain
certain financial performance measures and financial ratios related to EBITDA
on a quarterly basis (as defined).

The $1,600,000 seller note accrues interest at a rate equal to the six-month
Treasury Bill (6% at December 31, 1995), and all accrued interest is due and
payable upon maturity on October 28, 1999. Quarterly principal payments of
$50,000 are due beginning January 15, 1997. The note is secured by a letter of
credit issued in

F-68

AOA HOLDING, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

conjunction with the revolving credit facility described above. The $1,600,000
seller note reduces the borrowing limits of the revolving credit facility.

The fair value of the Company's financing arrangements approximates their
carrying values.

(7) MEMBERS' EQUITY

The members' interest in the Company is divided into Class A units and Class
B units. The Company has reserved 17,175 Class A units and 297,825 Class B
units for issuance upon exercise of the unit warrants related to the financing
agreement (see unit warrants below). Each holder of Class A and Class B units
shall have the right to one vote for each unit held.

DISTRIBUTIONS

Prior to dissolution, liquidation or the occurrence of a sale transaction,
the holders of the Class B units shall be entitled to receive distributions,
when and if declared by the Management Committee. No periodic distributions
may be paid on Class A units unless, simultaneously, an identical or greater
amount is distributed with respect to each Class B unit then outstanding.

Upon dissolution, either voluntary or involuntary, the holders of the Class
B units shall be entitled to receive a distribution amount equal to $1 per
unit (original Class B purchase price) in preference to any distributions to
the Class A units. The remaining proceeds of such transaction shall be
distributed to the holders of the Class A units in accordance with their
respective holdings.

CLASS B UNIT REDEMPTION

At any time after repayment in full of all obligations under the debt
agreement, the holders of a majority of the outstanding Class B units may
elect to have the Class B units redeemed, in whole or in part as indicated in
the election, to the extent of funds legally available therefore, by paying in
cash a price equal to the original Class B purchase price of $1 per unit.

CLASS B UNIT EXCHANGE

At any time following repayment in full of the obligations under the debt
agreement, the holders of the Class B units may, by affirmative vote of the
holders of a majority of the Class B units then outstanding, require the
Company to exchange their Class B units for subordinated, interest-only notes
of the Company having other terms and conditions as follows:

(a) an aggregate principal amount equal to the original Class B purchase
price of such Class B units;

(b) a variable interest rate equal to LIBOR plus five percent (5%);

(d) such other reasonable and customary terms as the Management Committee
shall determine.

CLASS B UNIT CONVERSION

Each Class B unit shall be convertible to a Class A unit, at any time upon
written notice by the Company of an impending sale transaction, pursuant to
the vote of the holders of a majority of the Class B units. Such a conversion
shall not actually take place until immediately prior to the consummation of
such sale transaction and if such sale transaction shall not occur then no
conversion shall occur.

F-69

AOA HOLDING, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

UNIT WARRANTS

In connection with the financing agreement discussed in Note 6, the Company
issued 17,175 Class A unit warrants and 223,272 Class B unit warrants to an
affiliate of the lending institution. Each warrant entitles the holder to
purchase one unit at an exercise price of $.01 at any time after the warrants
are issued until the earlier of October 14, 2004 or the sixth anniversary of
the date in which all other units owned by the holder of the warrants have
been repurchased by the Company. Pursuant to the Warrant Agreement, under
certain circumstances the Company may in its sole discretion repurchase all
outstanding warrants for cash, on a pro rata basis among the holders of all
warrants. The Warrant Agreement contains a put option, exercisable after
October 31, 1999, which allows the holder of the warrants to require the
Company to purchase the warrants at fair market value.

A portion of the proceeds from the financing agreement (see Note 6) were
allocated to the warrants resulting in a debt discount of $238,043. The debt
discount is amortized over the term of the debt. The warrants have been
subsequently adjusted to their fair market value of $5 per warrant as
determined at December 31, 1995.

UNIT OPTION AGREEMENTS

The Company entered into unit option agreements with its President and CFO
for Class A units. The options are granted based on the Company reaching
certain performance measures in 1995 and 1996, with catch-up provisions in
1997 and 1998 if not previously reached. The options have an exercise price of
$.005 and vest over three years (25%, 25% and 50%). Total Units of 14,630 are
available to be awarded and the 1995 compensation expense related to these
options was $18,125. The unit option agreements also contain provisions for
substantially more options in the event a class B unit conversion occurs as
described above, and upon a liquidity event, as defined, if the Company meets
the stated internal rate of return.

(8) RELATED PARTY TRANSACTIONS

An affiliate of the bank providing the financing agreement (see Note 6) owns
approximately 41% of the total outstanding Class A and B units. The bank was
paid fees of $25,000 and the bank's affiliate was paid a distribution of
$146,190 during 1995.

(9) EMPLOYEE RETIREMENT PLAN

The Company maintains a 401(k) retirement plan in which all employees are
eligible upon reaching twenty one years of age and after providing one year of
service. The Company matches a percentage of the employee's contributions up
to certain limits. The Company incurred $13,527 of expense in 1995 relating to
this retirement plan.

(10) DEFERRED COMPENSATION

The Company maintains a deferred compensation award plan for employees in
the management group as determined by the Management Committee. The President
and CFO are not eligible for the plan. The award is based on a percentage of
earnings in any plan year provided the Company meets certain financial
performance measures as outlined in the plan document. Awards under the plan,
effective January 1, 1995, accrue over the vesting period which is one to five
years from the effective date of the plan or when the Company is sold, if
sooner. After vesting, the Management Committee shall allocate such bonus
awards to each participant in accordance with the plan document. Deferred
compensation expense related to this plan totaled $140,733 for 1995.

F-70

AOA HOLDING, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Company maintains a deferred compensation award plan for the President
and CFO as part of the acquisition agreement. The award is calculated as a
percentage of the executives annual salary and is paid annually. The
percentage paid is up to 100% based on the Company's EBITDA, as defined, at
year end. Deferred compensation expense related to this agreement totaled
$210,000 for the year ended December 31, 1995.

F-71

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
Skoglund Communications, Inc. and Skoglund Communications of St. Cloud, Inc.
Duluth, Minnesota
We have audited the accompanying combined balance sheet of Skoglund
Communications, Inc. and Skoglund Communications of St. Cloud, Inc. as of
December 31, 1995, and the related combined statements of operations, retained
earnings (deficit) and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Skoglund
Communications, Inc. and Skoglund Communications of St. Cloud, Inc. as of
December 31, 1995, and the results of their operations and their cash flows
for the year then ended in conformity with generally accepted accounting
principles.

McGLADREY & PULLEN, LLP

Duluth, Minnesota
February 2, 1996

F-72

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Skoglund Communications, Inc. and
Skoglund Communications of St. Cloud, Inc.:

We have audited the accompanying combined balance sheet of Skoglund
Communications, Inc. and Skoglund Communications of St. Cloud, Inc. (Minnesota
corporations) as of December 31, 1994 and the related combined statements of
operations and retained earnings (deficit) and cash flows for the year then
ended. The combined financial statements referred to below are the
responsibility of the Company's management. Our responsibility is to express
an opinion on the combined financial statements based on our audit.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Skoglund
Communications, Inc. and Skoglund Communications of St. Cloud, Inc. as of
December 31, 1994 and the results of their operations and their cash flows for
the year then ended, in conformity with generally accepted accounting
principles.

Arthur Andersen LLP

Minneapolis, Minnesota
March 24, 1995

F-73

SKOGLUND COMMUNICATIONS, INC. AND
SKOGLUND COMMUNICATIONS OF ST. CLOUD, INC.

COMBINED BALANCE SHEETS

DECEMBER 31,

1995 1994

ASSETS (Note 3)
Current Assets:
Cash and cash equivalents............................ $ 239,629 $ 406,553
Trade receivables, less allowance for doubtful
accounts of $141,000 in 1995 and $116,000 in 1994... 728,900 740,530
Note receivable from shareholder (Note 6)............ -- 300,000
Note receivable, current maturities (Note 8)......... 3,185 --
Inventories, at cost................................. 63,882 74,671
Prepaid rent expense................................. 202,103 217,091
Other prepaid expenses............................... 109,889 176,432
---------- ----------
Total current assets............................. 1,347,588 1,915,277
---------- ----------
Property and Equipment, at cost:
Land................................................. 529,380 529,163
Advertising display structures....................... 6,336,340 6,078,081
Buildings............................................ 1,122,984 1,112,349
Equipment............................................ 1,215,987 1,190,230
---------- ----------
9,204,691 8,909,823
Accumulated depreciation............................. (4,574,251) (4,218,413)
---------- ----------
Net property and equipment....................... 4,630,440 4,691,410
---------- ----------
Other Assets:
Investment in partnership............................ 166,127 163,197
Note receivable, less current maturities (Note 8).... 144,598 --
Property held for resale............................. -- 140,888
Other................................................ 131,660 158,510
---------- ----------
Total other assets............................... 442,385 462,595
---------- ----------
$6,420,413 $7,069,282
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Current maturities of long-term debt (Note 3)........ $ 527,443 $ 467,253
Accounts payable..................................... 52,509 88,230
Accrued expenses:
Salaries and wages................................. 162,680 139,492
Payroll and other taxes............................ 74,021 63,861
Employee benefits.................................. 90,661 113,496
Other.............................................. 64,966 50,984
Distributions payable (Note 6)....................... 200,000 300,000
---------- ----------
Total current liabilities........................ 1,172,280 1,223,316
Long-Term Debt, less current maturities (Note 3)..... 3,211,591 3,839,385
Subordinated Note Payable to Stockholder (Note 6).... 1,100,000 1,100,000
---------- ----------
Total liabilities................................ 5,483,871 6,162,701
---------- ----------
Stockholder's Equity (Note 6):
Common stock....................................... 130,000 130,000
Additional paid-in capital......................... 2,800,000 2,800,000
Retained earnings (deficit)........................ (1,993,458) (2,023,419)
---------- ----------
Total stockholder's equity....................... 936,542 906,581
---------- ----------
$6,420,413 $7,069,282
========== ==========

See Notes to Combined Financial Statements.

F-74

SKOGLUND COMMUNICATIONS, INC. AND
SKOGLUND COMMUNICATIONS OF ST. CLOUD, INC.

COMBINED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31,

1995 1994

REVENUES:
Poster................................................ $2,558,572 $2,439,560
Painted............................................... 3,363,323 3,126,131
Other................................................. 192,865 225,786
---------- ----------
Gross revenues...................................... 6,114,760 5,791,477
Less commissions and discounts........................ 623,542 638,890
---------- ----------
Net operating revenues.............................. 5,491,218 5,152,587
---------- ----------
OPERATING EXPENSES:
Operations............................................ 1,926,350 1,885,250
Selling, general, and administrative.................. 1,833,347 1,779,297
Depreciation.......................................... 435,240 433,337
Amortization.......................................... 50,835 106,117
---------- ----------
Total operating expenses............................ 4,245,772 4,204,001
---------- ----------
Operating income.................................... 1,245,446 948,586
---------- ----------
OTHER INCOME (EXPENSE):
Interest expense...................................... (509,483) (453,357)
Interest income....................................... 33,578 25,942
Miscellaneous, net.................................... 9,614 31,721
---------- ----------
(466,291) (395,694)
---------- ----------
Net income.......................................... $ 779,155 $ 552,892
========== ==========
PRO FORMA DATA (UNAUDITED):
Net income, as reported............................... $ 779,155 $ 552,892
Pro forma provision for income taxes.................. 315,300 223,738
---------- ----------
Pro forma net income................................ $ 463,855 $ 329,154
========== ==========
Pro forma net income per common share................. $ 579.82 $ 411.44
========== ==========
Weighted average shares outstanding................... 800 800
========== ==========

COMBINED STATEMENTS OF RETAINED EARNINGS (DEFICIT)

YEARS ENDED DECEMBER 31,

1995 1994

(Deficit), beginning of year......................... $(2,023,419) $(2,276,311)
Distributions to stockholder....................... (749,194) (300,000)
Net income......................................... 779,155 552,892
----------- -----------
(Deficit), end of year (Note 6)...................... $(1,993,458) $(2,023,419)
=========== ===========

See Notes to Combined Financial Statements.

F-75

SKOGLUND COMMUNICATIONS, INC. AND
SKOGLUND COMMUNICATIONS OF ST. CLOUD, INC.

COMBINED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31,

1995 1994

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.............................................. $ 779,155 $552,892
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 486,075 539,454
Gain on sale of property and equipment................. (10,816) --
Equity in earnings of partnership...................... (2,930) (18,137)
Change in working capital components
(Increase) decrease in:
Trade receivables.................................... (33,965) (74,089)
Inventories.......................................... 10,789 (27,818)
Prepaid rent expense and other prepaid expenses...... 81,531 (99,676)
Increase (decrease) in:
Accounts payable..................................... (35,721) (125,561)
Accrued expenses..................................... 20,896 97,194
---------- --------
Net cash provided by operating activities........... 1,295,014 844,259
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment..................... (399,614) (301,458)
Proceeds from sale of property and equipment............ 23,426 --
Payments received on notes receivable................... 2,217 --
Increase in other assets................................ (33,097) --
Condemnation proceeds................................... 12,734 22,647
Payment for asset acquisitions.......................... -- (154,773)
---------- --------
Net cash used for investing activities.............. (394,334) (433,584)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on term note......................... (516,796) (381,737)
Principal payments on other long-term debt.............. (50,808) (378,317)
Proceeds from long-term debt............................ -- 300,000
Net payments on revolving credit note................... -- (48,482)
Distributions paid to stockholder....................... (500,000) --
---------- --------
Net cash used for financing activities.............. (1,067,604) (508,536)
---------- --------
Net decrease in cash and cash equivalents........... (166,924) (97,861)
CASH AND CASH EQUIVALENTS:
Beginning of year ...................................... 406,553 504,414
---------- --------
End of year............................................. $ 239,629 $406,553
========== ========

See Notes to Combined Financial Statements.

F-76

SKOGLUND COMMUNICATIONS, INC. AND
SKOGLUND COMMUNICATIONS OF ST. CLOUD, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

NOTE 1. NATURE OF BUSINESS AND PRESENTATION

Nature of business: The Company is engaged in outdoor advertising through
the display of posters and painted bulletins, principally in Duluth and St.
Cloud, Minnesota, and Eau Claire, Wisconsin. The Company extends credit to its
customers, all on an unsecured basis, on terms that it establishes for
individual customers.

Presentation: The accompanying combined financial statements include the
accounts of Skoglund Communications, Inc. (SCI) and Skoglund Communications of
St. Cloud, Inc. (SCSC), collectively referred to as the Company. Combined
financial statements are being presented due to the common ownership and
interdependence of SCI and SCSC. All significant intercompany accounts and
transactions have been eliminated in combination. Both companies are wholly-
owned by the same individual.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

Cash and cash equivalents: The Company considers all investments with an
original maturity of 90 days or less to be cash equivalents. The Company
invests primarily in short-term money market instruments.

Disclosures about fair value of financial instruments: The following methods
and assumptions were used to estimate the fair value of each class of
financial instruments for which it is practicable to estimate that value:

Cash and cash equivalents--The carrying amount approximates fair value
because of the short maturity of those instruments.

Note receivable--The carrying amount approximates fair value because the
note was received in 1995 and no significant changes have occurred since
that time.

Long-term debt and note payable to shareholder--The carrying amount
approximates fair value because the interest rate is at a variable rate
corresponding to the prime rate.

Property and equipment: Depreciation of advertising display structures,
buildings and equipment was provided principally on a straight-line basis for
financial reporting purposes, using the following estimated lives:

YEARS

Advertising display structures......................................... 15
Buildings.............................................................. 25
Equipment.............................................................. 3-10

The Company follows the composite method of depreciation for advertising
display structures whereby the cost and related accumulated depreciation of
advertising display structures retired or otherwise disposed of are eliminated
from the respective accounts and the resulting gains or losses are credited or
charged to the allowance for accumulated depreciation. In addition, proceeds
received for the condemnation of advertising display structures are credited
to accumulated depreciation to the extent such proceeds exceed the direct
legal and other related costs incurred during the condemnation proceedings.

Accumulated depreciation included in the accompanying combined balance
sheets consists of the following:

1995 1994

Advertising display structures........................ $3,018,310 $2,736,202
Buildings............................................. 504,166 457,817
Equipment............................................. 1,051,775 1,024,394
---------- ----------
$4,574,251 $4,218,413
========== ==========

F-77

SKOGLUND COMMUNICATIONS, INC. AND
SKOGLUND COMMUNICATIONS OF ST. CLOUD, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

Investment in partnership: The Company owns a 1% general and 41.5% limited
partnership interest in a partnership that engages in outdoor advertising
activities in Florida. These partnership interests are accounted for by the
equity method of accounting under which the Company's share of the income or
loss of the partnership is recognized as income in the Company's income
statement and added to the investment account and distributions received are
deducted from the investment account.

Revenue recognition: The Company recognizes revenue from advertising
contracts on an accrual basis ratably over the term of the contract, as
advertising services are provided.

Amortization: Deferred financing costs are amortized on a straight-line
basis over the term of the related debt. The cost of noncompete agreements are
amortized on a straight-line basis over the term of the agreements, generally
three to five years.

Income taxes: SCI and SCSC have elected to be taxed as S corporations. As
such, the taxable income of SCI and SCSC is includable in the individual
returns of the shareholder for federal and state tax purposes. The Company
reports certain income and expense items, principally depreciation methods and
lives, for income tax purposes on a basis different from that reflected in the
combined financial statements. Total accumulated taxable temporary differences
amounted to $2,100,000 as of December 31, 1995. The Company also has federal
investment tax credit carryforwards of $152,000 and net operating loss
carryforwards of $1,816,000 as of December 31, 1995 which relate to years
prior to the S corporation election and expire in varying amounts from 1998 to
2003. These carryforwards will only be available for use if the Company
reverts to a C corporation during the carryforward period and generates
taxable income.

Use of estimates in the preparation of financial statements: 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 reporting period. Actual
results could differ from those estimates.

Pro forma net income per common share (unaudited): Pro forma net income per
common share is computed based upon the total weighted average number of
common shares outstanding during the period of Skoglund Communications, Inc.
and Skoglund Communications of St. Cloud, Inc.

Pro forma income taxes (unaudited): The unaudited pro forma adjustment to
reflect income taxes in the accompanying statement of operations is for
informational purposes only and has been calculated based on the estimated
effective tax rate in each year, assuming the Company had been subject to
corporate income taxes.

F-78

SKOGLUND COMMUNICATIONS, INC. AND
SKOGLUND COMMUNICATIONS OF ST. CLOUD, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 3. LONG-TERM DEBT

1995 1994

Term note, interest at 0.75% over bank's base rate
(base rate 8.5% at December 31, 1995 and 1994), due
in monthly installments of $65,000 including
interest, through December 1997 when the remaining
balance of the note is due........................... $3,501,841 $4,018,263
Industrial development revenue note, interest at 85%
of the bank's base rate (base rate 9.5% at December
31, 1995 and 1994), due in monthly installments of
$3,944, plus interest, through March 2000,
collateralized by certain property and equipment and
personally guaranteed by the shareholder............. 198,191 245,519
Other................................................. 39,002 42,856
---------- ----------
3,739,034 4,306,638
Current maturities................................ (527,443) (467,253)
---------- ----------
$3,211,591 $3,839,385
========== ==========

The Company has a credit agreement with a bank which provides the Company
with a revolving credit note and a term note. Under the revolving credit note
the amount of funds available to the Company ($368,000 as of December 31,
1995) is based on the Company's qualified trade receivables, as defined in the
agreement, with a maximum borrowing level of $500,000. In addition, the
Company may borrow any amounts which have been prepaid on the term note
($100,000 as of December 31, 1995) up to an additional $500,000. The credit
agreement is collateralized by substantially all the Company's assets and is
guaranteed by the shareholder.

The credit agreement and the industrial development revenue note contain
restrictive covenants which require, among other matters, that the Company
maintain a defined level of combined tangible net worth and meet other
financial performance measures. The covenants also restrict additional
indebtedness and certain payments, including dividends (except for
distribution of current year profits) and officers' compensation. As of
December 31, 1995 the Company was in compliance with the terms of these
agreements.

Aggregate annual maturities required on long-term debt as of December 31,
1995 are approximately as follows:

YEAR ENDING DECEMBER 31,

1996............................................................ $ 527,000
1997............................................................ 3,078,000
1998............................................................ 52,000
1999............................................................ 53,000
2000............................................................ 15,000
Thereafter........................................................ 14,000
----------
$3,739,000
==========

NOTE 4. RETIREMENT PLANS

The Company has an employee retirement savings 401(k) plan for employees not
covered by a collective bargaining agreement. Employees become eligible for
participation in the plan upon completion of one year of service and
attainment of age 21. Under the terms of the plan, participants may elect to
contribute up to 10% of their salaries to the plan. The Company matches 50% of
all participant contributions until the participant's

F-79

SKOGLUND COMMUNICATIONS, INC. AND
SKOGLUND COMMUNICATIONS OF ST. CLOUD, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

contribution reaches 6% of eligible wages. Company contributions to an
individual participant's account vest after three years of service;
forfeitures are reallocated among the remaining plan participants. The
Company's contributions totaled approximately $29,000 in 1995 and $26,000 in
1994.

The Company also contributes to a multiemployer defined benefit pension plan
covering union employees. These contributions are determined in accordance
with the provisions of a negotiated labor contract and are based on the number
of employee hours worked. The Company's contributions totaled approximately
$26,000 in 1995 and $23,000 in 1994.

NOTE 5. OPERATING LEASES

The Company leases certain facilities, equipment and vehicles under
operating leases which expire at various dates through 2000. Rent expense
related to these operating leases was approximately $162,000 in 1995 and
$128,000 in 1994. Future minimum lease commitments for all noncancelable
operating leases with initial or remaining terms in excess of one year are
approximately as follows:

YEAR ENDING DECEMBER 31,

1996.............................................................. $101,000
1997.............................................................. 76,000
1998.............................................................. 76,000
1999.............................................................. 78,000
2000.............................................................. 46,000
--------
$377,000
========

A number of the Company's advertising display structures are located on
leased property. Total expense applicable to these leases was approximately
$682,000 in 1995 and $611,000 in 1994.

NOTE 6. RELATED PARTY AND INTERCOMPANY TRANSACTIONS

STOCKHOLDER'S EQUITY:

1995 1994

SCI common stock, no par value, 2,500 shares autho-
rized; 300 shares issued and outstanding........... $ 30,000 $ 30,000
SCSC common stock, no par value, 25,000 shares
authorized; 500 shares issued and outstanding...... 100,000 100,000
----------- -----------
130,000 130,000
----------- -----------
SCI additional paid-in capital...................... -- --
SCSC additional paid-in capital..................... 2,800,000 2,800,000
----------- -----------
2,800,000 2,800,000
----------- -----------
SCI retained earnings............................... 82,357 200,742
SCSC retained earnings (deficit).................... (2,075,815) (2,224,161)
----------- -----------
(1,993,458) (2,023,419)
----------- -----------
$ 936,542 $ 906,581
=========== ===========

F-80

SKOGLUND COMMUNICATIONS, INC. AND
SKOGLUND COMMUNICATIONS OF ST. CLOUD, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

Stockholder transactions: SCI declared a $300,000 distribution to the
stockholder in 1994 that was paid in 1995. During 1995 SCI declared
distributions to the stockholder of $749,194 of which $200,000 was paid in
1995, $349,194 was distributed in the form of cancellation of a note
receivable and accrued interest from the stockholder in 1995 and $200,000 was
paid in January 1996.

The note receivable from the stockholder was collected in the form of a
distribution to the stockholder during 1995. Interest income on the note
receivable was approximately $23,000 and $26,000 for the years ended December
31, 1995 and 1994, respectively.

The subordinated note payable to the stockholder of $1,100,000 at December
31, 1995 and 1994 bears interest at prime rate plus 1% (prime 8.5% at December
31, 1995 and 1994). The note is due on demand after January 1, 1997 and is
subordinated to the revolving credit note and the term note. Interest expense
on the note payable was approximately $108,000 and $90,000 for the years ended
December 31, 1995 and 1994, respectively.

Management agreement: SIC has an agreement with SCSC to provide management,
accounting, advertising, maintenance and other services as required for the
day-to-day operations of the business. All direct costs incurred on behalf of
SCI or SCSC are charged directly to the respective company. The indirect costs
of these services are allocated between SCI and SCSC based on their pro-rata
share of revenues. Total allocated expenses to SCSC were approximately
$272,000 and $272,000 for the years ended December 31, 1995 and 1994,
respectively, and have been eliminated in the combination.

NOTE 7. SUPPLEMENTARY CASH FLOW INFORMATION

YEARS ENDED DECEMBER 31, 1995 1994

Supplemental Disclosures of Cash Flow Information:
Cash paid for interest..................................... $509,485 $463,966
======== ========
Supplemental Schedule of Noncash Investing and Financing Ac-
tivity:
Note receivable............................................ $150,000 $ --
======== ========
Note receivable and accrued interest distributed to stock-
holder.................................................... $349,194 $ --
======== ========

NOTE 8. NOTE RECEIVABLE

The note requires monthly installments of $1,302, including interest at
8.5%, through March 2000 when the remaining balance of the note is due.

NOTE 9. EVENT SUBSEQUENT TO DECEMBER 31, 1995 (UNAUDITED)

On October 31, 1996, OCI (N) Corp. acquired substantially all of the assets
of Skoglund Communications, Inc. and Skoglund Communications of St. Cloud,
Inc. (the Companies). The Companies ceased operations in the outdoor
advertising industry at that time.

F-81

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

Board of Directors
Outdoor West, Inc. of Tennessee
Atlanta, Georgia
We have audited the accompanying balance sheets of Outdoor West, Inc. of
Tennessee as of June 30, 1996 and 1995 and the related statements of
operations and retained earnings (deficit), and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Outdoor West, Inc. of
Tennessee as of June 30, 1996 and 1995 and the results of its operations and
its cash flows for the years then ended in conformity with generally accepted
accounting principles.

MORRISON AND SMITH
Certified Public Accountants

Tuscaloosa, Alabama
August 22, 1996
(Except for Note 14, as to which the date is February 7, 1997,
and Note 15, as to which the date is May 26, 1997)

F-82

OUTDOOR WEST, INC. OF TENNESSEE

BALANCE SHEETS

JUNE 30, JUNE 30, MARCH 31, MARCH 31,
1996 1995 1997 1996
(UNAUDITED) (UNAUDITED)

ASSETS
Current Assets
Cash in Banks.............. $ 207,137 $ 96,971 $4,142,342 $ 128,779
Receivables, Net of
Allowance for Doubtful
Accounts.................. 507,722 367,279 2,444 429,512
Materials Inventory........ 17,802 5,743 5,743
Prepayments................ 59,206 54,424 65,871
Insurance Escrow Deposits.. 24,376 31,680
----------- ----------- ---------- ----------
791,867 548,793 4,144,786 661,585
----------- ----------- ---------- ----------
Properties and Facilities--
Cost........................ 4,336,972 4,198,697 470,521 4,360,755
Less: Accumulated Deprecia-
tion and Amortization....... (3,549,183) (3,546,803) (172,500) (3,572,706)
----------- ----------- ---------- ----------
787,789 651,894 298,021 788,049
----------- ----------- ---------- ----------
Other Assets
Cash Held in Escrow........ 4,480,383
Receivables, Affiliates.... 587,903 612,254
Intangible Assets.......... 63,778 115,472 66,927
Deposits................... 1,555 1,555 1,755 1,555
Deferred Tax Benefit....... 97,820 999,935 97,820
----------- ----------- ---------- ----------
751,056 1,116,962 4,482,138 778,556
----------- ----------- ---------- ----------
TOTAL ASSETS............. $ 2,330,712 $ 2,317,649 $8,924,945 $2,228,190
=========== =========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable........... $ 106,893 $ 94,291 $ 197,156 $ 100,808
Long-term Debt, Current
Portion................... 241,534 1,453,577 37,748 216,338
Net Obligations under
Capital Leases--Current
Portion................... 7,208 6,606 7,864 6,606
Accrued Expenses........... 98,748 120,913 83,852 15,537
Unearned Income............ 177,107 98,544 161,282
Income Taxes Payable....... 70,099 1,684,039 40,195
----------- ----------- ---------- ----------
701,589 1,773,931 2,010,659 540,766
----------- ----------- ---------- ----------
Long-Term Liabilities
Notes Payable.............. 1,095,618 1,178,754 180,456 1,130,233
Notes Payable, Affiliates.. 2,560,282 1,067,402 2,244,420 2,802,915
Net Obligations Under Capi-
tal Leases................ 77,284 84,491 71,892 79,591
Deferred Income Tax Pay-
able...................... 1,350,121
----------- ----------- ---------- ----------
3,733,184 2,330,647 3,846,889 4,012,739
----------- ----------- ---------- ----------
TOTAL LIABILITIES........ 4,434,773 4,104,578 5,857,548 4,553,505
----------- ----------- ---------- ----------
Stockholders' Equity (Defi-
cit)
Common Stock ($1 par value,
250,000 shares authorized;
1,000 shares issued and
outstanding).............. 1,000 1,000 1,000 1,000
Retained Earnings (Defi-
cit)...................... (2,105,061) (1,787,929) 3,066,397 (2,326,315)
----------- ----------- ---------- ----------
Total Stockholders' Eq-
uity (Deficit).......... (2,104,061) (1,786,929) 3,067,397 (2,325,315)
----------- ----------- ---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY
(DEFICIT)............... $ 2,330,712 $ 2,317,649 $8,924,945 $2,228,190
=========== =========== ========== ==========

The accompanying notes are an integral part of these financial statements.

F-83

OUTDOOR WEST, INC. OF TENNESSEE

STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)

NINE MONTHS NINE MONTHS
YEAR ENDED YEAR ENDED ENDED ENDED
JUNE 30, JUNE 30, MARCH 31, MARCH 31,
1996 1995 1997 1996
(UNAUDITED) (UNAUDITED)

Revenues:
Outdoor Advertising........ $ 3,982,830 $ 3,706,759 $3,219,089 $ 2,951,323
Less: Agency Commissions... (383,611) (367,214) (269,224) (280,328)
----------- ----------- ---------- -----------
3,599,219 3,339,545 2,949,865 2,670,995
Other Income................ 38,275 (7,100) 2,259 37,709
----------- ----------- ---------- -----------
Net Revenues.............. 3,637,494 3,332,445 2,952,124 2,708,704
----------- ----------- ---------- -----------
Operating Expenses:
Direct Advertising......... 1,263,620 1,083,245 1,068,156 896,543
General and
Administrative............ 1,424,764 1,476,097 1,371,035 1,176,417
Depreciation and
Amortization.............. 138,338 153,838 107,309 114,921
----------- ----------- ---------- -----------
Total Operating Expenses.. 2,826,722 2,713,180 2,546,500 2,187,881
----------- ----------- ---------- -----------
Operating Income............ 810,772 619,265 405,624 520,823
Gain on Sale of
Substantially all Operating
Assets..................... 8,072,220
Interest expense............ (172,048) (279,167) (95,451) (142,768)
Net loss on sale of fixed
assets..................... (9,511) (319) (71)
----------- ----------- ---------- -----------
Net income before income
taxes and extraordinary
item....................... 629,213 339,779 8,382,322 378,055
----------- ----------- ---------- -----------
Provision for income tax
expense:
Current.................... 60,427 981 1,762,923 30,523
Deferred................... 902,115 132,691 1,447,941 902,115
----------- ----------- ---------- -----------
Total provision for income
taxes...................... 962,542 133,672 3,210,864 932,638
----------- ----------- ---------- -----------
Net income before
extraordinary items........ (333,329) 206,107 5,171,458 (554,583)
Extraordinary item--gain on
early extinguishment of
debt (net of income taxes
of $9,671)................. 16,197 16,197
----------- ----------- ---------- -----------
Net income (loss)........... (317,132) 206,107 5,171,458 (538,386)
Retained earnings
(deficit)--beginning....... (1,787,929) (1,994,036) (2,105,061) (1,787,929)
----------- ----------- ---------- -----------
Retained earnings
(deficit)--ending.......... $(2,105,061) $(1,787,929) $3,066,397 $(2,326,315)
=========== =========== ========== ===========

The accompanying notes are an integral part of these financial statements.

F-84

OUTDOOR WEST, INC. OF TENNESSEE

STATEMENTS OF CASH FLOWS

NINE MONTHS NINE MONTHS
YEAR ENDED YEAR ENDED ENDED ENDED
JUNE 30, JUNE 30, MARCH 31, MARCH 31,
1996 1995 1997 1996
(UNAUDITED) (UNAUDITED)

CASH FLOWS FROM OPERATING
ACTIVITIES:
Cash received from
customers & affiliates.... $3,537,339 $3,290,228 $2,842,136 $2,671,500
Cash paid for direct
advertising............... (1,275,679) (1,086,654) (1,050,354) (896,543)
Cash paid for general &
administrative............ (1,372,937) (1,390,195) (1,312,974) (1,270,217)
Interest expense........... (188,013) (286,943) (96,295) (159,577)
Income taxes paid.......... (981) (148,983)
Interest & dividends
received.................. 1,685 390 2,220 515
Other income (expense)..... 62,459 (7,490) 39 63,063
---------- ---------- ---------- ----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES........ 764,854 518,355 235,789 408,741
---------- ---------- ---------- ----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from sale of
property & equipment...... 6,499 526 9,150,000
Proceeds from sale placed
in escrow................. (4,480,383)
Payments for purchase of
property & equipment...... (245,052) (162,900) (118,358) (209,532)
Payments from deposits..... (125) (200)
Payments (to) from
employees for advances.... 109
Payments (to) from
affiliates for advances... 898,023 (95,403) 278,995 1,123,259
Payments (for) from
investments &
intangibles............... (19,328) 16,602
---------- ---------- ---------- ----------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES........ 640,142 (241,191) 4,830,054 913,727
---------- ---------- ---------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from borrowings... 1,421,511 64,464 163,973 1,421,511
Repayment of debt.......... (2,716,341) (323,330) (1,294,611) (2,712,171)
---------- ---------- ---------- ----------
NET CASH USED BY FINANCING
ACTIVITIES.................. (1,294,830) (258,866) (1,130,638) (1,290,660)
---------- ---------- ---------- ----------
NET CHANGE IN CASH AND CASH
EQUIVALENTS................. 110,166 18,298 3,935,205 31,808
CASH AND CASH EQUIVALENTS--
BEGINNING................... 96,971 78,673 207,137 96,971
---------- ---------- ---------- ----------
CASH AND CASH EQUIVALENTS--
ENDING...................... $ 207,137 $ 96,971 $4,142,342 $ 128,779
========== ========== ========== ==========
Reconciliation of net income
to net cash provided by
operating activities:
Net income (loss).......... $ (317,132) $ 206,107 $5,171,458 $ (554,583)
Depreciation and
Amortization.............. 138,338 153,838 107,309 114,921
(Gain) loss on sale of
property & equipment...... 9,511 319 (8,072,149)
(Gain) loss on early
extinguishment of debt.... 25,831 25,831
(Increase) decrease in
accounts receivable....... (140,443) (28,693) 55,659 (62,233)
(Increase) decrease in
inventory................. (12,059) (3,409) 9,827
(Increase) decrease in
prepayments & escrow...... 19,594 (31,484) 3,544 (18,751)
Increase (decrease) in
accounts payable, accrued
expenses & unearned
income.................... 139,099 88,986 1,512,200 1,441
Increase (decrease) in
deferred taxes ........... 902,115 132,691 1,447,941 902,115
---------- ---------- ---------- ----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES........ $ 764,854 $ 518,355 $ 235,789 $ 408,741
========== ========== ========== ==========

The accompanying notes are an integral part of these financial statements.

F-85

OUTDOOR WEST, INC. OF TENNESSEE

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 1996

NOTE 1: ORGANIZATIONAL HISTORY OF THE COMPANY

Outdoor West, Inc. of Tennessee ("the Company"), organized in 1980, operates
an outdoor advertising business in the east Tennessee market. The Company
currently has 958 displays.

The Company is a wholly owned subsidiary of Outdoor West, Inc., a management
and holding company. Outdoor West, Inc. also owns one other subsidiary which
operates in the outdoor advertising business, Outdoor West, Inc. of Georgia,
and Data Management Business Records Storage, Inc., a subsidiary formerly in
the data management and storage service business.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Method of Accounting

The Company's financial statements are presented on the accrual basis.

Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include
money market accounts and highly liquid debt instruments purchased with a
maturity of three months or less.

The Company maintains cash balances at several financial institutions.
Accounts at each institution are insured by the Federal Deposit Insurance
Corporation up to $100,000. Uninsured balances held in accounts aggregate to
$55,843 at June 30, 1996.

Allowance for Doubtful Trade Receivables

Bad debts are accounted for on the reserve method. The allowances for
doubtful accounts at June 30, 1996 and 1995 were $640 and $1,860,
respectively.

Materials Inventory

Materials inventory is construction and maintenance materials on hand, new
and used. New materials are valued at original cost. Used materials are priced
at cost when purchased or one-half estimated new cost, when original cost is
not available.

Billboard Capitalization and Depreciation Policy

Billboards are capitalized at materials cost, freight, subcontract fees,
direct labor and related overhead. Depreciation on billboards is calculated
using the straight-line method at estimated useful lives ranging from five to
twenty years, depending on the tax law in effect at the time of
capitalization.

Property and Depreciation

Property and equipment are recorded at cost. Depreciation is provided on the
straight-line method over the estimated useful lives of the respective assets.
Maintenance and repairs are charged to expense as incurred; major renewals and
betterments are capitalized. When items of property and equipment are sold or
retired, the related cost and accumulated depreciation are removed from the
accounts and any gain or loss is recognized.

F-86

OUTDOOR WEST, INC. OF TENNESSEE

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Intangible Assets

In acquisitions of billboard businesses, agreements not to compete were part
of the purchase price. Non-compete agreements are amortized over the lives of
the agreements. Loan costs are amortized over the lives of the loans.

Income Taxes

The Company is included in a consolidated federal income tax return of an
affiliated group. Income tax expense in the Company's statement of operations
has been allocated based on the ratio that each member's separate taxable
income bears to the sum of the separate taxable incomes of all members having
taxable income for the year. Unused net operating losses and tax credits
available for carryforward to future years are detailed in Note 4.

Use of Estimates

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

NOTE 3: INTANGIBLE ASSETS

Intangible assets as of June 30, 1996 and 1995 consist of:

1996 1995

Non-compete agreements...................................... $45,834 $ 58,335
Loan costs.................................................. 17,944 57,137
------- --------
Total..................................................... $63,778 $115,472
======= ========

NOTE 4: INCOME TAXES

The Company accounts for income taxes in accordance with the provisions of
Statements of Financial Accounting Standards Number 109, "Accounting for
Income Taxes". Under the provisions of Statement 109, a current tax liability
or asset should be recognized for the estimated taxes currently payable or
refundable for the current year and a deferred tax liability or asset should
be recognized for the estimated future tax effects attributable to temporary
differences and carryforwards. Temporary differences represent the difference
between the book and tax bases of assets or liabilities that will result in
taxable or deductible amounts in future years when the asset or liability is
recovered or settled.

Summaries of the provision for income tax expense for the years ended June
30, 1996 and 1995 are as follows:

1996 1995

Currently payable.......................................... $ 60,427 $ 981
Deferred................................................... 26,948 4,605
Utilization of operating loss carryforward................. 875,167 128,086
-------- --------
Provision for income tax expense......................... $962,542 $133,672
======== ========

F-87

OUTDOOR WEST, INC. OF TENNESSEE

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

A reconciliation of income tax at the statutory rate to the Company's
effective rate for the years ended June 30, 1996 and 1995 is as follows:

1996 1995

Computed at the expected statutory rate............................ 38.0% 38.0%
Utilization of deferred tax asset by affiliate..................... 114.0
Other differences.................................................. 1.0 1.3
----- ----
Effective rate..................................................... 153.0% 39.3%
===== ====

During the fiscal year ended June 30, 1996, a member of the Company's
affiliated group recognized a significant gain on the sale of substantially
all operating assets. As a result, a significant portion of net operating loss
carryforwards generated by the Company and recorded as a deferred tax asset
was utilized by the affiliate.

For the year ended June 30, 1996, the Company was included in a consolidated
federal income tax return. The Company has carryovers as follows:

CARRYOVER AMOUNT EXPIRATION

Net operating loss--state only............................ $1,739,537 1999-2008

The deferred tax benefit comprised the following at June 30, 1996:

Deferred tax benefit:
Net operating loss carryforward..................................... $104,372
Other temporary differences......................................... (6,552)
Valuation Allowance................................................. -0-
--------
Net deferred tax benefit.............................................. $ 97,820
========

Management believes it is more likely than not that it will generate taxable
income sufficient to realize the tax benefit associated with state net
operating loss carryforwards. This belief is based upon, among other factors,
expectations of continued growth in sales, changes in operations, and the
significant reduction of notes payable which occurred during the fiscal year
ended June 30, 1996. If the Company is unable to generate sufficient taxable
income in the future through operating results, increases in the valuation
allowance will be required through a charge to income tax expense.

NOTE 5: CAPITAL STOCK

The par value of the common stock of the Company is $1. 250,000 shares are
authorized, 1,000 shares are issued and outstanding.

NOTE 6: PROPERTIES AND FACILITIES

ESTIMATED
JUNE 30, JUNE 30, LIVES
1996 1995 (IN YEARS)

Leasehold improvements......................... $ 96,985 $ 96,985 5-40
Billboards and vinyl........................... 3,633,028 3,578,053 15-20
Autos and trucks............................... 315,208 224,943 3-6
Equipment...................................... 25,963 32,407 5-12
Computer equipment............................. 92,639 92,639 5
Office furniture and fixtures.................. 54,999 55,520 5-10
Leased assets.................................. 118,150 118,150 7-25
---------- ----------
4,336,972 4,198,697
Less accumulated depreciation.................. 3,549,183 3,546,803
---------- ----------
$ 787,789 $ 651,894
========== ==========

F-88

OUTDOOR WEST, INC. OF TENNESSEE

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

NOTE 7: NOTES PAYABLE

BALANCE
JUNE 30,
MATURITY COLLATERAL INTEREST RATE 1996

12/00-12/02 Substantially all assets of the
Company except those subject to prior
liens................................. 8.125%-8.375% $1,141,324
8/97-10/02 Rolling stock and equipment........... Various 195,828

Principal maturities of notes payable for the five years ending after June
30, 1996 are:

6/30/97.......................................................... $ 241,534
6/30/98.......................................................... 242,849
6/30/99.......................................................... 217,339
6/30/00.......................................................... 235,174
6/30/01.......................................................... 190,132
Maturities after 5 years......................................... 210,124
----------
Total Maturities............................................... 1,337,152
Less: current maturities......................................... 241,534
----------
Long-Term Maturities........................................... $1,095,618
==========

Additional Restrictions Required by Long-Term Debt

The Company entered into loan agreements with First American National Bank.
The Company is required to comply with certain restrictive covenants which
require, among other things, minimum net worth and a maximum debt to net worth
ratio. While the Company was in violation of these two covenants, the lender
has issued a waiver for these violations as of June 30, 1996.

NOTE 8: TRANSACTIONS WITH RELATED PARTIES

The Company has various lease and management agreements with affiliates.
Amounts included in the statement of income with respect to transactions with
affiliates for June 30, 1996 and 1995 are:

1996
---------------------------------
OUTDOOR THE EAGLE PEACHTREE
WEST, INC. GROUP PROPERTIES

Expenses
Land lease................................. $ $ 74,520 $ 27,650
Interest................................... 1,033
Management fees............................ 275,000
--------- -------- --------
Net transactions with related parties........ $(275,000) $(75,553) $(27,650)
========= ======== ========

1995
---------------------------------
OUTDOOR THE EAGLE PEACHTREE
WEST, INC. GROUP PROPERTIES

Expenses
Land lease................................. $ $ 34,800 $ 25,500
Management fees............................ 275,000
--------- -------- --------
Net transactions with related parties........ $(275,000) $(34,800) $(25,500)
========= ======== ========

F-89

OUTDOOR WEST, INC. OF TENNESSEE

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Receivables from and payables to affiliates as of June 30, 1996 and 1995
are:

1996 1995

RECEIVABLES FROM:
Outdoor West, Inc. of Georgia....................... $ 587,903 $
========== ==========
NOTES PAYABLE TO:
The Eagle Group..................................... $ 18,774 $
Outdoor West, Inc................................... 753,234 995,358
Data Management Business Records Storage, Inc....... 1,788,274
Outdoor West, Inc. of Georgia....................... 72,044
---------- ----------
$2,560,282 $1,067,402
========== ==========

Charles H. Renfroe is the Chairman of the Board of Directors of Outdoor
West, Inc. The Eagle Group is a sole proprietorship, owned by Mr. Renfroe,
which operates a mini-warehouse project and leases office and warehouse space
to Outdoor West, Inc. of Georgia. In addition, The Eagle Group owns 19 parcels
of land leased to Outdoor West, Inc. of Georgia and the Company.

Peachtree Properties, a general partnership, was created by Charles H.
Renfroe to allow key personnel to participate in acquiring parcels of land to
be leased to the outdoor advertising companies for billboard sites. Ten
billboard sites were leased to Outdoor West, Inc. of Georgia and Tennessee.
Peachtree Properties was liquidated effective April 1, 1996.

In the opinion of management, all of the transactions with related parties
are at rates and terms equivalent to those that prevail in arm's-length
transactions.

NOTE 9: UNEARNED INCOME

Unearned income represents primarily income billed one month in advance for
billboard advertising. Most of this was recognized as income in July, 1996.

NOTE 10: OBLIGATIONS UNDER CAPITAL LEASE

The Company is the lessee of property under capital leases with expirations
as disclosed in the following table. Assets and liabilities under capital
leases are recorded at the lower of the present value of the minimum lease
payments or the fair value of the asset. The assets are depreciated over the
lower of their related lease terms or their estimated productive lives.
Depreciation of assets under capital leases is included in depreciation
expense for 1996 and 1995.

Interest rates on capitalized leases are imputed based on the lower of the
Company's incremental borrowing rate at the inception of the lease or the
lessor's implicit rate of return.

F-90

OUTDOOR WEST, INC. OF TENNESSEE

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

General Description of Capital Leases

JUNE 30, 1996
LEASED PROPERTY BALANCE TERMINATION DATE

Land and building................................ $84,492 11/01/04
=======

Net Obligations Under Capital Leases

at June 30, 1996:

CAPITAL LESS: BALANCE
LEASE IMPUTED SHEET
BALANCE INTEREST VALUES

Current liabilities................................. $ 14,316 $ 7,108 $ 7,208
======== ======= =======
Long-term liabilities............................... $106,177 $28,893 $77,284
======== ======= =======

Gross Assets and Accumulated Depreciation

JUNE 30, 1996

Land and office building........................................ $118,150
Less accumulated depreciation................................... (59,990)
--------
$ 58,160
========

Minimum Future Lease Payments

YEARS ENDED JUNE 30

1997.............................................................. $14,316
1998.............................................................. 14,316
1999.............................................................. 14,316
2000.............................................................. 14,316
2001.............................................................. 14,316
After 2001........................................................ 48,913
-------
Total Minimum Lease Payments...................................... 120,493
Less imputed interest............................................. 36,001
-------
Present value of net minimum lease payments....................... $84,492
=======

NOTE 11: OPERATING LEASES

The Company leases equipment and ground space for billboard sites under
cancelable operating leases. Rental expense under operating leases for the
fiscal years ended June 30, 1996 and 1995 was $380,853 and $335,196,
respectively.

NOTE 12: PROFIT SHARING PLAN

Effective January 1, 1994, the Company implemented a profit sharing plan
described in Internal Revenue Code Section 401(k). All employees of the
Company are eligible to participate once they meet the eligibility and
participation requirements of the plan. Employees become eligible for
participation in the plan after attaining age 21 and completed 12 months of
service.

F-91

OUTDOOR WEST, INC. OF TENNESSEE

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Under the terms of the plan, participants may contribute a portion of their
compensation to the plan on a tax deferred basis. Employee contributions may
not exceed the annual limitations established by the Treasury. The Company
matches 10% of the first 6% of compensation contributed by each participant.
During the years ended June 30, 1996 and 1995, the cost of the plan to the
Company totaled $7,165 and $3,777, respectively.

NOTE 13: EXTRAORDINARY ITEM

At June 30, 1995, the Company was obligated to pay its major lenders an
amendment fee of $79,599 at such time that all debts with the major lenders
are repaid. The entire amendment fee of $79,599 is included in notes payable
due within one year as of June 30, 1995. However, the major lenders agreed to
forgive $59,199 of the amendment fee if all debts were repaid by December 31,
1995. In December, 1995, the Company repaid all debts to the major lenders and
amendment fee was forgiven. The debt forgiveness of $59,199 less $33,331
unamortized loan costs and $9,671 income taxes resulted in an extraordinary
gain of $16,197 which was recognized during the fiscal year ended June 30,
1996.

NOTE 14: SUBSEQUENT EVENTS

On February 7, 1997, the Company entered into an agreement to sell
substantially all of its operating assets. The sale is expected to result in a
gain of approximately $8,000,000.

NOTE 15: UNAUDITED NOTES TO INTERIM FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles applicable to interim
financial statements. Accordingly, they do not include all of the information
and notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments and
reclassifications considered necessary for a fair and comparable presentation
have been included and are of normal recurring nature. Operating results for
the nine months ended March 31, 1997 are not necessarily indicative of the
results that may be expected for the year ending June 30, 1997.

F-92

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
The Ragan Outdoor Advertising Company
Rock Island, Illinois

We have audited the accompanying balance sheets of The Ragan Outdoor
Advertising Company as of December 31, 1996 and 1995, and the related
statements of income, stockholders' equity and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Ragan Outdoor
Advertising Company as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

McGladrey & Pullen, LLP
Moline, Illinois
January 10, 1997

F-93

THE RAGAN OUTDOOR ADVERTISING COMPANY

BALANCE SHEETS

DECEMBER 31, 1996 AND 1995

1996 1995

ASSETS (NOTE 2)
Current Assets:
Cash................................................... $ 219,418 $ 151,159
Receivables:
Trade accounts, less allowance for doubtful accounts
1996 and 1995 none................................... 417,525 260,225
Other................................................. 8,667 4,787
Inventories............................................ 16,247 13,877
Prepaid expenses....................................... 78,066 82,159
---------- ----------
Total current assets................................. 739,923 512,207
---------- ----------
Long-Term Officer-Stockholder Receivable, unsecured...... 16,000 18,703
---------- ----------
Property and Equipment:
Land................................................... 174,966 174,966
Buildings and improvements............................. 301,191 302,454
Advertising display structures......................... 2,344,844 2,348,811
Office furniture and equipment......................... 169,187 160,734
Leasehold improvements................................. 1,972 1,972
Transportation equipment............................... 122,529 118,738
---------- ----------
3,114,689 3,107,675
Less accumulated depreciation.......................... 1,468,366 1,400,114
---------- ----------
1,646,323 1,707,561
---------- ----------
Intangibles:
Goodwill, net of accumulated amortization 1996
$100,000; 1995 $91,667................................ 35,000 43,333
Covenants not-to-compete, net of accumulated
amortization 1996 $59,488; 1995 $29,739 (Note 3)...... 59,512 89,261
---------- ----------
94,512 132,594
---------- ----------
$2,496,758 $2,371,065
========== ==========

See Notes to Financial Statements.

F-94

THE RAGAN OUTDOOR ADVERTISING COMPANY

BALANCE SHEETS--(CONTINUED)

DECEMBER 31, 1996 AND 1995

1996 1995

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt (Note 2):
Related party........................................... $ 215,396 $ 162,708
Other................................................... 23,538 114,707
Accounts payable......................................... 11,914 11,013
Accrued expenses:
Property taxes.......................................... 31,700 36,613
Salaries and wages...................................... 30,376 39,600
Payroll and other taxes................................. 8,749 5,753
Interest................................................ 12,540 2,272
Other................................................... 7,229 --
Dividends payable........................................ 8,531 --
---------- ----------
Total current liabilities.............................. 349,973 372,666
---------- ----------
Long-Term Debt, Less Current Maturities (Note 2):
Related parties.......................................... 1,132,740 1,330,785
Other.................................................... 220,628 121,489
---------- ----------
1,353,368 1,452,274
---------- ----------
Commitment and Contingencies (Notes 2 and 4)
Stockholders' Equity:
Common stock, par value $1 per share; authorized and
issued 1,000 shares..................................... 1,000 1,000
Additional paid-in capital............................... 1,658,077 1,658,077
Retained earnings (deficit).............................. (731,382) (978,674)
---------- ----------
927,695 680,403
Less cost of treasury stock 1996 and 1995 100 shares..... 134,278 134,278
---------- ----------
793,417 546,125
---------- ----------
$2,496,758 $2,371,065
========== ==========

See Notes to Financial Statements.

F-95

THE RAGAN OUTDOOR ADVERTISING COMPANY

STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31, 1996 AND 1995

1996 1995

Revenue, advertising display rentals.................... $2,810,369 $2,437,288
Less commissions........................................ 266,842 228,790
---------- ----------
Net operating revenue............................... 2,543,527 2,208,498
---------- ----------
Operating expenses:
Operations............................................ 729,039 708,225
Selling, general and administrative................... 873,722 768,762
Depreciation and amortization......................... 204,190 284,489
---------- ----------
1,806,951 1,761,476
---------- ----------
Operating income.................................... 736,576 447,022
---------- ----------
Nonoperating income (expense):
Interest expense...................................... (157,032) (179,885)
Miscellaneous, net.................................... 3,015 295
(Loss) on disposal of property and equipment.......... (30,735) (25,056)
---------- ----------
(184,752) (204,646)
---------- ----------
Net income.......................................... $ 551,824 $ 242,376
========== ==========
Pro forma data (unaudited):
Net income as reported................................ $ 551,824 $ 242,376
Pro forma provision for income taxes.................. 224,060 100,550
---------- ----------
Pro forma net income................................ $ 327,764 $ 141,826
========== ==========
Pro forma net income per common share................... $ 364.18 $ 157.58
========== ==========
Weighted average shares outstanding..................... 900 900
========== ==========

See Notes to Financial Statements.

F-96

THE RAGAN OUTDOOR ADVERTISING COMPANY

STATEMENTS OF STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1996 AND 1995

ADDITIONAL RETAINED
COMMON PAID-IN EARNINGS TREASURY
STOCK CAPITAL (DEFICIT) STOCK TOTAL

Balance, December 31, 1994... $1,000 $1,658,077 $(964,355) $(134,278) $560,444
Net income................. -- -- 242,376 -- 242,376
Dividends ($285.22 per
share).................... -- -- (256,695) -- (256,695)
------ ---------- ---------- --------- --------
Balance, December 31, 1995... 1,000 1,658,077 (978,674) (134,278) 546,125
Net income................. -- -- 551,824 -- 551,824
Dividends ($338.37 per
share).................... -- -- (304,532) -- (304,532)
------ ---------- ---------- --------- --------
Balance, December 31, 1996... $1,000 $1,658,077 $(731,382) $(134,278) $793,417
====== ========== ========== ========= ========

See Notes to Financial Statements.

F-97

THE RAGAN OUTDOOR ADVERTISING COMPANY

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1996 AND 1995

1996 1995

Cash Flows From Operating Activities:
Net income........................................... $ 551,824 $ 242,376
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation........................................ 166,108 166,469
Amortization........................................ 38,082 118,020
Loss on sale of property and equipment.............. 30,735 25,056
(Increase) decrease in:
Trade accounts and other receivables............... (161,180) (8,415)
Inventories........................................ (2,370) 2,188
Prepaid expenses................................... 4,093 (1,390)
Increase in accounts payable and accrued expenses... 7,257 4,995
--------- -----------
Net cash provided by operating activities......... 634,549 549,299
--------- -----------
Cash Flows From Investing Activities:
Purchase of property and equipment................... (162,525) (86,704)
Proceeds from sale of property and equipment......... 26,920 5,000
Principal collections on note receivable............. 2,703 341
--------- -----------
Net cash (used in) investing activities........... (132,902) (81,363)
--------- -----------
Cash Flows From Financing Activities:
Proceeds from long-term borrowings................... 25,000 1,429,000
Principal payments on debt........................... (162,387) (1,629,144)
Cash dividends paid.................................. (296,001) (256,695)
--------- -----------
Net cash (used in) financing activities........... (433,388) (456,839)
--------- -----------
Net increase in cash.............................. 68,259 11,097
Cash, beginning........................................ 151,159 140,062
--------- -----------
Cash, ending........................................... $ 219,418 $ 151,159
========= ===========
Supplemental Disclosure of Cash Flow Information, cash
payments for interest................................. $ 146,764 $ 180,028
Supplemental Disclosure of Noncash Financing
Activities, dividend payable.......................... 8,531 --

See Notes to Financial Statements.

F-98

THE RAGAN OUTDOOR ADVERTISING COMPANY

NOTES TO FINANCIAL STATEMENTS

NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS:

The operations of the Company are in outdoor advertising in the Quad Cities
area of Illinois and Iowa. Revenue is derived primarily from poster panel and
painted bulletin rentals on credit terms that the Company establishes for
individual customers. A significant portion of the Company's customers are
local businesses.

The Company has used the trade name of "Schwab Advertising Systems, Inc."
for certain of its operations.

SIGNIFICANT ACCOUNTING POLICIES:

Accounting estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount 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 reporting period. Actual results could differ from those estimates.

Inventories: Inventories are stated at the lower of cost (first-in, first-
out method) or market.

Property and equipment: Property and equipment is carried at cost.
Depreciation is computed by the straight-line method over the following
estimated useful lives of the related assets:

Buildings and improvements..................................... 7-20 years
Advertising display structures................................. 15 years
Office furniture and equipment................................. 3-10 years
Leasehold improvements......................................... 5 years
Transportation equipment....................................... 5 years

Intangibles: Goodwill represents the cost of a business combination in
excess of the fair value of the net assets acquired and is being amortized
over a period of fifteen years by the straight-line method. The covenants not-
to-compete are being amortized over the life of the agreements by the
straight-line method.

Revenue recognition: The Company recognizes revenue from advertising
contracts on an accrual basis ratably over the term of the contract, as
advertising services are provided.

Income taxes: The Company, with the consent of its stockholders, has elected
to be taxed as an S-Corporation which provides that, in lieu of corporation
income taxes, the stockholders separately account for their pro rata shares of
the Company's items of income, deductions and losses. Therefore, these
statements do not include any provision for corporation income taxes.

The Company pays dividends to assist the individual stockholders in paying
their federal and state income tax liabilities resulting from the taxation of
their proportionate share of the Company's S-Corporation income and
deductions. Total dividends paid in 1996 include $203,590 for expected 1996
taxes.

Pro forma net income per common share (unaudited): Pro forma net income per
common share is computed based upon the total weighted average number of
common shares outstanding during the period.

F-99

THE RAGAN OUTDOOR ADVERTISING COMPANY

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Fair value of financial instruments: The carrying amount of cash,
receivables, accounts payable and accrued expenses approximates fair value
because of the short maturity of these instruments. The carrying amount of
long-term debt which carries current interest rates, approximates fair value.

NOTE 2. LONG-TERM DEBT

Long-term debt as of December 31, 1996 is as follows:

Notes payable, stockholders, subordinated, due in monthly
principal installments of $17,361 with interest payable monthly
at prime rate plus 1.0%, (9.25% at December 31, 1996) balance
due December 31, 2000.(A)....................................... $1,290,111
Contract payable, individual, due in monthly installments of
$1,621 including 8.75% interest with the balance due May 1,
2001.(B)........................................................ 121,488
Note payable, individual, due in monthly installments of $1,305
including 9.5% interest, balance due May 1, 2001.(B)............ 100,472
Note payable, stockholder, unsecured, due in monthly installments
of $1,000 including 9% interest, balance due December 31, 2001.. 58,025
Note payable, bank, due in monthly installments of $472,
including 8.25% interest, balance due April 4, 1999............. 12,451
Note payable, bank, due in monthly installments of $314,
including 8.25% interest, balance due October 23, 1999.......... 9,755
----------
1,592,302
Less current maturities.......................................... 238,934
----------
Long-term portion................................................ $1,353,368
==========

(A) The notes payable are subject to the terms of a loan agreement between the
Company, its stockholders and a third-party lender. The loan agreement
provides for up to $2,500,000 of stockholder debt of which $2,361,111 is
currently outstanding. The Company intends to pay dividends to assist the
stockholders for the purpose of making required principal and interest
payments on their personal debt. The loan agreement prohibits payment of
dividends in excess of these amounts and the distributions for income
taxes described in Note 1.

The loan agreement also has various requirements and restrictions which
include a minimum net worth level. As of December 31, 1996, the Company was
in compliance with these covenants.

Substantially all assets of the Company are pledged as collateral under
this agreement, which covers the corporate and stockholder debt.

The stockholders of the Company have also pledged their stock in the
Company as security for the stockholder debt and the Company has guaranteed
the stockholder debt.

(B) The note and contract payable are both collateralized by land and
buildings with a carrying value of approximately $105,000.

Future annual maturities of the long-term debt are as follows:

Years ending December 31:
1997........................................................... $ 238,934
1998........................................................... 241,750
1999........................................................... 241,051
2000........................................................... 694,779
2001........................................................... 175,788
----------
$1,592,302
==========

F-100

THE RAGAN OUTDOOR ADVERTISING COMPANY

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

NOTE 3. COVENANTS NOT-TO-COMPETE

During 1991, the Company entered into a noncompetition agreement with the
purchaser of certain assets located in the Galesburg, Illinois market area.
Under this agreement, the Company had agreed not to directly or indirectly
compete with the purchaser in outdoor advertising in the Galesburg market for
a period of five years from the date of sale and had received $2,365 per month
in exchange through October 1996.

The Company entered into an agreement in the amount of $119,000 with a
former stockholder not to compete in the Quad Cities market for a period of
four years commencing January 1, 1995. This covenant is being amortized over
the life of the agreement.

NOTE 4. LEASE COMMITMENTS AND RENT EXPENSE

The Company leases, primarily on a short-term basis, the land on which it
may erect advertising display structures. The total rent expense applicable to
these display structures for the years ended December 31, 1996 and 1995 was
$189,136 and $164,902, respectively.

Certain transportation equipment and office space are also being leased
under agreements which require monthly cash rentals and monthly trade-out
rentals. These leases expire on various dates between July 1997 and March
2000. The total rent expense applicable to these leases for the years ended
December 31, 1996 and 1995 was $40,894 and $30,865, respectively.

As of December 31, 1996, future minimum lease payments due under these
operating leases are as follows:

NONCASH
TRADE-OUT
YEARS ENDING DECEMBER 31: RENTALS CASH RENTALS TOTAL

1997....................................... $21,510 $ 6,825 $28,335
1998....................................... -- 7,125 7,125
1999....................................... -- 7,425 7,425
2000....................................... -- 1,875 1,875
------- ------- -------
Total...................................... $21,510 $23,250 $44,760
======= ======= =======

NOTE 5. RELATED PARTIES AND RESTRICTIONS ON TRANSFER OF SHARES

The Company is affiliated through common ownership with The Ragan Outdoor
Advertising Company of Rockford and The Ragan Outdoor Advertising Company of
Cedar Rapids, Inc. There were no material transactions with these affiliates
during the years ended December 31, 1996 and 1995.

The Company's bylaws grant the Company the first option to purchase, in
whole but not in part, any shares of its common stock which a stockholder
proposes to sell, transfer or otherwise dispose of. The price per share to be
paid by the Company upon the exercise of its option shall be an amount
established by the unanimous vote of the entire Board of Directors applicable
to all outstanding shares of the Company.

NOTE 6. PROFIT-SHARING PLAN

Effective August 1, 1995, the Company has a profit-sharing plan under
Section 401(k) of the Internal Revenue Code for eligible employees. The Plan
provides for both employee and company contributions. Contributions to the
Plan are determined at the discretion of the Board of Directors. The Company
did not make contributions to the Plan for the years ended December 31, 1996
and 1995.

F-101

THE RAGAN OUTDOOR ADVERTISING COMPANY

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

NOTE 7. EVENT SUBSEQUENT TO DECEMBER 31, 1996 (UNAUDITED)

In May 1997 the Company entered into an agreement to sell substantially all
of its assets to OCI Holdings Corp. Upon consummation of the sale, the Company
will cease operations in the outdoor advertising industry.

F-102

INDEPENDENT AUDITOR'S REPORT

To the Board of Governors
The Ragan Outdoor Advertising Company of Rockford, L.L.C.
d/b/a Robbinswood Outdoor Advertising
(A Limited Liability Company)
Rockford, Illinois

We have audited the accompanying balance sheets of The Ragan Outdoor
Advertising Company of Rockford, L.L.C. d/b/a Robbinswood Outdoor Advertising
(A Limited Liability Company) as of December 31, 1996 and 1995, and the
related statements of income, members' (deficit), and cash flows for the years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Ragan Outdoor
Advertising Company of Rockford, L.L.C. d/b/a Robbinswood Outdoor Advertising
(A Limited Liability Company) as of December 31, 1996 and 1995, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

McGladrey & Pullen, LLP
Rockford, Illinois
February 27, 1997

F-103

THE RAGAN OUTDOOR ADVERTISING COMPANY OF ROCKFORD, L.L.C.
D/B/A ROBBINSWOOD OUTDOOR ADVERTISING
(A LIMITED LIABILITY COMPANY)

BALANCE SHEETS

DECEMBER 31, 1996 AND 1995

1996 1995

ASSETS
Current Assets
Cash................................................... $ 281,923 $ 153,277
Trade accounts receivable, less allowance for doubtful
accounts 1996 $25,000; 1995 $10,000................... 267,514 306,538
Prepaid rent expenses.................................. 80,021 74,932
Other prepaid expenses................................. 61,806 55,629
----------- -----------
Total current assets................................. 691,264 590,376
----------- -----------
Property and Equipment
Land................................................... 268,100 255,100
Building............................................... 394,312 382,582
Advertising structures................................. 3,955,263 3,848,388
Leasehold improvements................................. -- 14,079
Equipment.............................................. 251,509 245,678
----------- -----------
4,869,184 4,745,827
Less accumulated depreciation and amortization......... 2,418,109 2,240,842
----------- -----------
Net property and equipment........................... 2,451,075 2,504,985
Intangible and Other Assets
Goodwill, less accumulated amortization 1996 $131,822;
1995 $110,932......................................... 232,178 39,068
Deferred financing costs, less accumulated amortization
1996 $13,852; 1995 $11,234............................ 6,877 1,266
----------- -----------
$ 3,381,394 $ 3,135,695
=========== ===========
LIABILITIES AND MEMBERS' (DEFICIT)
Current Liabilities
Current maturities of long-term debt:
Notes payable, other.................................. $ 489,499 $ 28,288
Note payable, affiliated corporation.................. 226,083 149,375
Note payable, member.................................. 47,626 43,541
Trade accounts payable................................. 68,581 32,327
Accrued expenses:
Salaries and wages.................................... 18,059 41,080
Payroll and other taxes............................... 1,240 555
Interest.............................................. 34,176 14,273
Other................................................. 19,787 17,898
Deferred advertising revenues.......................... 37,812 19,181
----------- -----------
Total current liabilities............................ 942,863 346,518
Long-Term Debt, less current maturities
Notes payable, other................................... 297,285 486,787
Note payable, affiliated corporation................... 2,336,195 2,540,625
Note payable, member................................... 1,181,787 1,229,089
----------- -----------
Total liabilities.................................... 4,758,130 4,603,019
Members' (Deficit)....................................... (1,376,736) (1,467,324)
----------- -----------
$ 3,381,394 $ 3,135,695
=========== ===========

See Notes to Financial Statements.

F-104

THE RAGAN OUTDOOR ADVERTISING COMPANY OF ROCKFORD, L.L.C.
D/B/A ROBBINSWOOD OUTDOOR ADVERTISING
(A LIMITED LIABILITY COMPANY)

STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31, 1996 AND 1995

1996 1995

Revenues:
Poster................................................ $1,352,333 $1,291,174
Painted............................................... 1,044,741 1,045,620
Other................................................. 23,885 19,122
---------- ----------
2,420,959 2,355,916
Less commissions...................................... 237,266 225,321
---------- ----------
Net operating revenues.............................. 2,183,693 2,130,595
---------- ----------
Operating expenses:
Operations............................................ 723,014 703,437
Selling, general and administrative................... 626,168 620,069
Depreciation.......................................... 245,021 244,041
Amortization.......................................... 23,508 10,308
---------- ----------
Total operating expenses............................ 1,617,711 1,577,855
---------- ----------
Operating income.................................... 565,982 552,740
Other income (expense):
(Loss) on disposal of property and equipment.......... (41,205) (42,246)
Interest expense...................................... (440,001) (416,595)
Interest income....................................... 5,812
---------- ----------
Net income.......................................... $ 90,588 $ 93,899
========== ==========
Pro forma data (unaudited):
Net income, as reported............................... $ 90,588 $ 93,899
Pro forma provision for income taxes.................. 23,300 24,600
---------- ----------
Pro forma net income.................................. $ 67,288 $ 69,299
========== ==========

See Notes to Financial Statements.

F-105

THE RAGAN OUTDOOR ADVERTISING COMPANY OF ROCKFORD, L.L.C.
D/B/A ROBBINSWOOD OUTDOOR ADVERTISING
(A LIMITED LIABILITY COMPANY)

STATEMENTS OF MEMBERS' (DEFICIT)

YEARS ENDED DECEMBER 31, 1996 AND 1995

1996 1995

Balance, beginning................................... $(1,467,324) $(1,498,123)
Net income......................................... 90,588 93,899
Distributions to members........................... -- (63,100)
----------- -----------
Balance, ending...................................... $(1,376,736) $(1,467,324)
=========== ===========

See Notes to Financial Statements.

F-106

THE RAGAN OUTDOOR ADVERTISING COMPANY OF ROCKFORD, L.L.C.
D/B/A ROBBINSWOOD OUTDOOR ADVERTISING
(A LIMITED LIABILITY COMPANY)

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1996 AND 1995

1996 1995

Cash Flows From Operating Activities
Net income............................................. $ 90,588 $ 93,899
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization......................... 245,021 244,041
Amortization of intangibles and other assets.......... 23,508 10,308
Loss on disposal of property and equipment............ 41,205 42,246
Change in operating assets and liabilities, net of
effects from purchase of Stan-Mor Outdoor
Advertising, Inc.
Decrease (increase) in receivables.................... 39,024 (4,701)
(Increase) in prepaid expenses........................ (11,266) (1,765)
Increase in accounts payable and accrued expenses..... 35,710 1,504
Increase in deferred advertising revenues............. 18,631 11,606
--------- ---------
Net cash provided by operating activities............ 482,421 397,138
--------- ---------
Cash Flows From Investing Activities
Purchase of property and equipment..................... (134,176) (479,173)
Purchase of certain assets of Stan-Mor Outdoor
Advertising, Inc...................................... (323,000) --
Proceeds from sale of property and equipment........... 10,860 1,800
--------- ---------
Net cash (used in) investing activities.............. (446,316) (477,373)
--------- ---------
Cash Flows From Financing Activities
Proceeds from long-term borrowings..................... 323,000 355,360
Principal payments on long-term borrowings............. (222,230) (237,419)
Loan origination costs incurred........................ (8,229) --
Cash distributions paid................................ -- (63,100)
--------- ---------
Net cash provided by financing activities............ 92,541 54,841
--------- ---------
Net increase (decrease) in cash...................... 128,646 (25,394)
Cash:
Beginning.............................................. 153,277 178,671
--------- ---------
Ending................................................. $ 281,923 $ 153,277
========= =========
Supplemental Disclosures of Cash Flow Information
Cash payments for interest............................. $ 420,098 $ 447,065
========= =========
Supplemental Schedule of Noncash Investing and Financing
Activities:
Notes payable refinanced as long-term debt............. $ -- $ 452,000
========= =========
Acquisition of certain assets of Stan-Mor Outdoor Adver-
tising, Inc.:
Cash purchase price.................................... $ 323,000 $ --
========= =========
Composition of assets purchased:
Land, property and equipment.......................... $ 109,000 $ --
Excess of purchase price over net assets acquired..... 214,000 --
--------- ---------
Cash paid............................................. $ 323,000 $ --
========= =========

See Notes to Financial Statements.

F-107

THE RAGAN OUTDOOR ADVERTISING COMPANY OF ROCKFORD, L.L.C.
D/B/A ROBBINSWOOD OUTDOOR ADVERTISING
(A LIMITED LIABILITY COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 1. NATURE OF BUSINESS, ORGANIZATIONAL CHANGE AND SIGNIFICANT ACCOUNTING
POLICIES

Nature of business: The Company's operations are in outdoor advertising with
revenue derived primarily from poster and paint board rentals throughout
Northern Illinois and Southern Wisconsin. The Company extends credit on terms
established on an individual customer basis.

On December 20, 1995 the Company changed from a partnership to a limited
liability company and changed its name from The Ragan Outdoor Advertising
Company of Rockford to The Ragan Outdoor Advertising Company of Rockford,
L.L.C. All assets and liabilities of the partnership were transferred to the
Company at historical cost. This had no effect on the amounts reported on the
financial statements. The organizational change had the effect of limiting the
member's liability and limited the life of the Company to December, 2045.

A summary of significant accounting policies follows:

Accounting estimates: The preparation of financial statements requires
management to make estimates and assumptions that affect the reported amounts
in the financial statements and accompanying notes. Actual results could
differ from those estimates.

Fair value of financial instruments: Financial instruments include cash,
trade accounts receivables and trade accounts payables, and long-term debt.
For each class of financial instruments, the carrying amount approximates fair
value.

Personal assets and liabilities and members' compensation: In accordance
with the generally accepted method of presenting limited liability company
financial statements, the financial statements do not include the personal
assets and liabilities of the members, including their obligations for income
taxes on its net income or their rights to income tax refunds on its net
(loss), nor any provision for income tax expense or refunds.

The expenses shown in the income statement include $50,200 and $72,230 of
salary expense paid to the managing member for the years ended December 31,
1996 and 1995, respectively.

Cash: The Company maintains all of its cash in one financial institution.
The Company does not believe this exposes the Company to any significant
risks.

Property and equipment: Property and equipment is carried at cost.
Depreciation and amortization is computed primarily by the straight-line
method over the following estimated useful lives:

YEARS

Building........................................................... 40
Advertising structures............................................. 16-20
Equipment.......................................................... 3-8
Leasehold improvements............................................. 5

Intangible: Goodwill represents the cost of the assets acquired in excess of
their fair values at the date of purchase of Robbinswood, Inc. and certain
assets of Stan-Mor Outdoor Advertising, Inc. and is being amortized over a
period of sixteen years and fifteen years, respectively, by the straight-line
method.

Other assets: Deferred financing costs are being amortized over the life of
the loan by the straight-line method.

Revenue Recognition: The Company recognizes revenue from advertising
contracts on an accrual basis ratebly over the term of the contract, as
advertising services are provided.

Barter transactions: Revenue from barter transactions (advertising provided
in exchange for goods and services) is recognized as income when the outdoor
advertisements are run and merchandise or services received

F-108

THE RAGAN OUTDOOR ADVERTISING COMPANY OF ROCKFORD, L.L.C.
D/B/A ROBBINSWOOD OUTDOOR ADVERTISING
(A LIMITED LIABILITY COMPANY)

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

are charged to expense (or capitalized as appropriate) when received or used.
The transactions are recorded at the fair market value of the asset or service
received.

Pro forma income taxes (unaudited): The unaudited pro forma adjustment to
reflect income taxes in the accompanying statements of income is for
informational purposes only and has been calculated based on the estimated
effective tax rate in each year, assuming the Company had been subject to
corporate income taxes.

Reclassification: Certain items in the financial statements for the year
ended December 31, 1995 have been reclassified to conform with the
classifications adopted for the year ended December 31, 1996.

NOTE 2. PLEDGED ASSETS, RELATED PARTY DEBT AND LONG-TERM DEBT

Long-term debt is as follows:

Notes payable related parties:
Affiliated Corporation through common ownership, due in monthly
principal payments of $18,840 plus interest at prime rate plus
1% with final payment due December 31, 2000, collateralized by
all assets of the Company and personally guaranteed by the
members....................................................... $2,562,278
Member, due in monthly installments of $13,000, including
interest at 9% with the final payment due December 31, 2001,
collateralized by a secondary lien on substantially all assets
of the Company except those acquired in the purchase of the
Cherry Valley Company and guaranteed by the other members for
70% of the balance............................................ 1,229,413
----------
3,791,691
Less current maturities........................................ 273,709
----------
Long-term portion.............................................. $3,517,982
==========
Notes payable other:
Cherry Valley Company and related parties of the Cherry Valley
Company, interest due monthly at 10%, principal due September
15, 1997, collateralized by a secondary lien on all assets
acquired in the purchase of the Cherry Valley Company and
guaranteed by the members..................................... $ 464,404
Bank, due in monthly installments of $318, including interest
at 8.75%, maturing in 1997, collateralized by equipment with a
depreciated cost of $884 1,472
Individual, due in monthly installments of $2,860, including
interest at 9.75%, maturing April 3, 2000, collateralized by
land and commercial property with a depreciated cost of
$364,712...................................................... 255,594
Bank, due in monthly installments of $1,017, including interest
at 10.5%, maturing April 3, 2000, collateralized by
substantially all assets of the Company....................... 49,309
Bank, due in monthly installments of $643, including interest
at 9.9%, maturing April 1, 1999, collateralized by
transportation equipment with a depreciated cost of $16,484... 16,005
----------
786,784
Less current maturities........................................ 489,499
----------
Long-term portion.............................................. $ 297,285
==========

F-109

THE RAGAN OUTDOOR ADVERTISING COMPANY OF ROCKFORD, L.L.C.
D/B/A ROBBINSWOOD OUTDOOR ADVERTISING
(A LIMITED LIABILITY COMPANY)

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

At December 31, 1996, the prime rate was 8.25%.

Aggregate maturities of the long-term debt as of December 31, 1996 are due
as follows:

YEAR ENDING DECEMBER 31,

1997............................................................ $ 763,208
1998............................................................ 304,278
1999............................................................ 306,599
2000............................................................ 2,194,002
2001............................................................ 1,010,388
----------
$4,578,475
==========

NOTE 3. LEASE COMMITMENTS AND RENT EXPENSE

The Partnership has leased properties on which it builds advertising
displays under various agreements which expire between 1997 and 2011 and
require various minimum rentals.

The total minimum rental commitment at December 31, 1996 is as follows:

YEAR ENDING DECEMBER 31,

1997................................................................ $186,923
1998................................................................ 139,992
1999................................................................ 119,277
2000................................................................ 95,544
2001................................................................ 79,510
During the remaining term of the leases............................. 365,836
--------
$987,082
========

Total rental expense for the years ended December 31, 1996 and 1995 was
approximately $228,000 and $222,000, respectively.

NOTE 4. EMPLOYEE BENEFIT PLAN

On August 1, 1995, the Company established a profit-sharing plan under
Section 401(k) of the Internal Revenue Code, covering all employees who have
completed at least one year of full-time service and are at least 21 years of
age. Eligible employees may contribute compensation up to the maximum amount
allowed in accordance with Internal Revenue Service regulations ($9,500 for
1996). The Company's contribution is determined annually on a discretionary
basis. There was no Company contribution for the years ended December 31, 1996
and 1995.

NOTE 5. INCOME TAX MATTERS

The Company is taxed in a manner similar to a partnership. For income tax
purposes the Company had income of approximately $72,800 and $133,000 for the
years ended December 31, 1996 and 1995, respectively. The difference between
the net income for financial reporting purposes and for income tax purposes is
due primarily to the use of accelerated depreciation methods and basis
differences in the allowance for doubtful

F-110

THE RAGAN OUTDOOR ADVERTISING COMPANY OF ROCKFORD, L.L.C.
D/B/A ROBBINSWOOD OUTDOOR ADVERTISING
(A LIMITED LIABILITY COMPANY)

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

accounts and accrued expenses for income tax purposes. At December 31, 1996,
accumulated depreciation for income tax purposes is approximately $385,000
greater than for financial reporting purposes and the total accumulated
taxable temporary difference amounted to approximately $351,000.

NOTE 6. ACQUISITION OF BUSINESS

On January 30, 1996, the Company purchased certain assets and the operations
of Stan-Mor Outdoor Advertising, Inc., an outdoor advertising company that
sells billboard space to customers in the Rockford, Illinois area, for a cash
purchase price of $323,000. A summary of the assets acquired follows:

Assets acquired:
Land, property and equipment.................................... $109,000
Excess of purchase price over net assets acquired (amortized
over 15 years on the straight-line method).................... 214,000
--------
Net assets acquired............................................... $323,000
========

The acquisition has been accounted for using the purchase method of
accounting and, accordingly, the purchase price has been allocated to the
assets purchased based upon the fair values at the date of acquisition. The
results of operations of the acquired business since the date of acquisition
are being included in these financial statements.

Pro forma supplemental information on the results of operations assuming the
acquisition had occurred at the beginning of 1996 and 1995 has not been
provided as the effect would not be material.

NOTE 7. EVENT SUBSEQUENT TO DECEMBER 31, 1996 (UNAUDITED)

In May 1997, the Company entered into an agreement to sell substantially all
of its assets to OCI Holdings Corp. Upon consummation of the sale, the Company
will cease operations in the outdoor advertising industry.

F-111

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

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AU-
THORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTI-
TUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SHARES OF
COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAW-
FUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPEC-
TUS NOR ANY OFFER OR SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CRE-
ATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH
IN THIS PROSPECTUS OR THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

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

TABLE OF CONTENTS

PAGE

Prospectus Summary....................................................... 3
Risk Factors............................................................. 9
Use of Proceeds.......................................................... 13
Dividend Policy.......................................................... 13
Capitalization........................................................... 14
Dilution................................................................. 15
Unaudited Pro Forma Consolidated Financial Statements.................... 16
Selected Historical Consolidated Financial and Other Information......... 24
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 27
Business................................................................. 34
Management............................................................... 46
Certain Relationships and Related Transactions........................... 50
Principal Stockholders................................................... 51
Description of Capital Stock............................................. 53
Shares Eligible for Future Sale.......................................... 56
Description of Indebtedness.............................................. 58
Underwriting............................................................. 60
Certain Legal Matters.................................................... 61
Experts.................................................................. 61
Additional Information................................................... 62
Index to Financial Statements............................................ F-1

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

UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDI-
TION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UN-
DERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

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

OCI HOLDINGS CORP.

[LOGO]

COMMON STOCK

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

PROSPECTUS

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

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALEX. BROWN & SONS
INCORPORATED
SALOMON BROTHERS INC

, 1997

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

PART II

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Set forth below is an estimate of the fees and expenses payable by the
Company in connection with the issuance and distribution of the shares of
Common Stock:

Securities and Exchange Commission registration fee................... $
NASD filing fees......................................................
Blue Sky fees and expenses............................................
Printing expenses.....................................................
Legal fees and expenses...............................................
Accounting fees and expenses..........................................
Indenture Trustee fees................................................
Miscellaneous.........................................................
-----
Total............................................................... $
=====

---------------------
* To be completed by Amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Reference is made to Article V of the Amended and Restated By-laws of the
Company which provides for indemnification by the Company of its directors and
officers under certain circumstances against expenses (including attorneys'
fees, judgments, fines and amounts paid in settlement) actually and reasonably
incurred in connection with the defense or settlement of any threatened,
pending or completed legal proceeding in which any such person is involved by
reason of the fact that such person is or was a director or officer of the
Company if such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to criminal actions or proceedings, if such person
had no reasonable cause to believe that his or her conduct was unlawful.

Reference is made to the form of Underwriters Agreement (to be attached as
Exhibit 1 to this Registration Statement) which provides for indemnification
by the Underwriters of the directors and officers of the Company signing the
Registration Statement and certain controlling persons of the Company against
certain liabilities, including those arising under the Securities Act.

The Company carries directors' and officers' liability insurance covering
its directors and officers.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

During the past three years, the Company has issued unregistered securities
to a limited number of persons, as described below. No underwriters or
underwriting discounts or commissions were involved. There was no public
offering in any such transaction, and the Company believes that each
transaction was exempt from registration requirements of the Securities Act,
by reason of Section 4(2) thereof, based on the private nature of the
transactions and the financial sophistication of the purchasers, all of whom
had access to complete information concerning the Company and acquired the
securities for investment and not with a view to the distribution thereof.

On April 3, 1996, under the terms of a Securities Purchase Agreement (the
"Holdings Agreement"), (i) Mr. A.B. Isbell purchased from the Company 1,050
shares of Class A Common Stock, par value $.01 per share, of the Registrant
("Class A Common Stock") and $1,950,000 principal amount of Series A 10%
Subordinated Notes ("Series A Notes") in exchange for 2,923.98 shares of
Common Stock of Mass Communication Corp. ("OCI South Common Stock"); (ii) Mr.
John C Stanley IV purchased from the Company 1,204.16 shares of Class A Common
Stock and $2,236,304.68 principal amount of Series A Notes in exchange for
3,353.28 shares of OCI South Common Stock; (iii) Mr. Norman Isbell purchased
from the Company 51.95 shares of Class A Common Stock and $96,481.04 principal
amount of Series A Notes in exchange for 78.12 shares of OCI South

II-1

Common Stock and 62.50 shares of 10% Cumulative Preferred Stock, par value $1
per share, of Mass Communication Corp. ("OCI South Preferred Stock"); (iv) Ms.
Priscilla S. Denton purchased from the Company 87.50 shares of Class A Common
Stock and $162,500 principal amount of Series A Notes in exchange for 156.25
shares of OCI South Common Stock and 82.09 shares of OCI South Preferred
Stock; (v) Mr. William Hull Davis purchased from the Company 87.50 shares of
Class A Common Stock and $162,500 principal amount of Series A Notes in
exchange for 156.25 shares of OCI South Common Stock and 82.09 shares of OCI
South Preferred Stock; (vi) Mr. Douglas W. Ferris, Jr. purchased from the
Company 87.50 shares of Class A Common Stock and $162,500 principal amount of
Series A Notes in exchange for 156.25 shares of OCI South Common Stock and
82.09 shares of OCI South Preferred Stock; (vii) Mr. Richard W. Ebersole
purchased from the Company 35.00 shares of Class A Common Stock and $65,000
principal amount of Series A Notes in exchange for $100,000 cash; (viii) John
C Stanley IV, as trustee of the JCS Trust, purchased from the Company 98.19
shares of Class A Common Stock and $182,357.14 principal amount of Series A
Notes in exchange for 273.44 shares of OCI South Common Stock; (ix) John C
Stanley, as trustee of the LWS Trust, purchased from the Company 98.19 shares
of Class A Common Stock and $182,357.14 principal amount of Series A Notes in
exchange for 273.44 shares of OCI South Common Stock; (x) Media/Communications
Partners II Limited Partnership ("M/C II") purchased from the Company 3,227.67
shares of Common Stock and $5,994,236.05 principal amount of Series B 10%
Subordinated Notes of the Registrant ("Series B Notes") in exchange for 23.68
shares of common stock of OCI (N) Corp. ("OCI North Common Stock"), 57.60
shares of 12.5% Cumulative Preferred Stock of OCI (N) Corp. ("OCI North
Preferred Stock"), and $7,389,455.47 cash; (xi) Media/Communications Investors
Limited Partnership ("M/C Investors") purchased from the Company 134.49 shares
of Class A Common Stock and $249,759.99 principal amount of Series B Notes in
exchange for 0.99 shares of OCI North Common Stock, 2.40 shares of OCI North
Preferred Stock, and $307,894.21 cash; and (xii) Chase Venture Capital
Associates, L.P. ("CVCA") purchased from the Company 2,048.57 shares of
Class A Common Stock, 189.28 shares of Class B Common Stock, par value $.01
per share, of the Registrant ("Class B Common Stock"), and $4,156,003.96
principal amount of Series B Notes in exchange for $6,393,852.24 cash.

On April 30, 1996, pursuant to the terms of the OCI Agreement, and in
connection with the acquisition of Alabama Outdoor: (i) M/C II purchased from
the Company 2,017.29 shares of Class B Common Stock and $3,746,397.53
principal amount of Series B Notes from the Company in exchange for
$5,763,687.53 cash; (ii) M/C Investors purchased from the Company 84.05 shares
of Class B Common Stock and $156,100 principal amount of Series B Notes in
exchange for $240,150 cash; (iii) CVCA purchased from the Company 1,398.66
shares of Class B Common Stock and $2,597,502.47 principal amount of Series B
Notes in exchange for $3,996,162.47 cash.

On September 10, 1996, each of Mr. Gerald P. Scott and Mr. G. Robert Joiner,
pursuant to an amendment to the OCI Agreement, purchased from the Company
52.50 shares of Common Stock and $97,500 principal amount of Series A Notes of
the Company in exchange for a payment of $150,000 cash.

On January 27, 1997, each of Mr. John Andrews and Mr. Mark Sherwood,
pursuant to an amendment to the OCI Agreement, purchased from the Company 35
shares of Common Stock and $65,000 principal amount of Series A Notes in
exchange for a cash payment of $100,000 cash.

II-2

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits. The following is a complete list of Exhibits filed as part of
this Registration Statement.

EXHIBIT NO. DESCRIPTION

1 Form of Underwriting Agreement among the Underwriters named
therein and the Company
*3.1 Second Amended and Restated Certificate of Incorporation of the
Company
*3.2 Amended and Restated By-laws of the Company
*4.1 Form of Indenture among the Company the Guarantors named therein
and the Trustee
*4.2 Form of Note
*4.3 Form T-1
*5 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
shares of the Company's Class Common Stock
10.1 Registration Rights Agreement dated as of April 3, 1996 among the
Registrant, certain management investors and certain venture
investors
*10.2 OCI Holdings Corp. 1997 Stock Option and Grant Plan
*10.3 OCI Holdings Corp. Employee Stock Purchase Plan
*11.1 Statement regarding computation of earnings per share
21.1 Subsidiaries of the Company
*23.1 Consent of Goodwin, Procter & Hoar LLP (included in their opinion
filed as Exhibit 5 hereto)
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of KPMG Peat Marwick LLP
23.4 Consent of KPMG Peat Marwick LLP
23.5 Consent of Moore & Gray
23.6 Consent of KPMG Peat Marwick LLP
23.7 Consent of Ernst & Young LLP
23.8 Consent of McGladrey & Pullen, LLP
23.9 Consent of Arthur Andersen LLP
23.10 Consent of Morrison and Smith
23.11 Consent of McGladrey & Pullen, LLP
23.12 Consent of McGladrey & Pullen, LLP
24 Power of Attorney (included on signature page of Registration
Statement as filed)
27 Financial Data Schedule

- ---------------------
* To be filed by amendment.

(b) Financial Statement Schedules.

SCHEDULE NO. DESCRIPTION

Other financial schedules have not been included because they are not
applicable.

II-3

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referred to in Item 14 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-4

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THE REGISTRANT HAS DULY
CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CORINTH, STATE OF
MISSISSIPPI ON THE 4TH DAY OF JUNE, 1997.

OCI Holdings Corp.

/s/ John C Stanley IV
By: _________________________________
JOHN C STANLEY IV
CHAIRMAN AND CHIEF EXECUTIVE
OFFICER

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of OCI Holdings Corp. hereby severally constitute John C Stanley IV
and Richard W. Ebersole and each of them singly, our true and lawful attorneys
with full power to them, and each of the singly, to sign for us and in our
names in the capacities indicated below, the Registration Statement filed
herewith and any and all amendments (including any post-effective amendments)
to said Registration Statement (or any other registration statement for the
same offering that is to be effective upon filing pursuant to Rule 462(b)
under the Securities Act), and generally to do all such things in our names
and in our capacities as officers and directors to enable OCI Holdings Corp.
to comply with the provisions of the Securities Act of 1933, and all
requirements of the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by our said attorneys, or any
of them, to said Registration Statement and any and all amendments (including
any post-effective amendments) thereto (or any other registration statement
for the same offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act).

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REPORT HAS BEEN
SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT IN THE
CAPACITIES AND ON THE DATES INDICATED.

SIGNATURE TITLE DATE

/s/ John C Stanley IV Director, Chief June 4, 1997
- ------------------------------------- Executive Officer
JOHN C STANLEY IV and Chairman
(Principal
Executive Officer)

/s/ A.B. Isbell Director, Chief June 4, 1997
- ------------------------------------- Operating Officer
A.B. ISBELL and President

/s/ Richard W. Ebersole Treasurer and Chief June 4, 1997
- ------------------------------------- Financial Officer
RICHARD W. EBERSOLE (Principal
Financial Officer
and Principal
Accounting Officer)

II-5

SIGNATURE TITLE DATE

/s/ Steven B. Dodge Director June 4, 1997
- -------------------------------------
STEVEN B. DODGE

/s/ Douglas W. Ferris, Jr. Director June 4, 1997
- -------------------------------------
DOUGLAS W. FERRIS, JR.

/s/ Stephen F. Gormley Director June 4, 1997
- -------------------------------------
STEPHEN F. GORMLEY

/s/ John G. Hayes Director June 4, 1997
- -------------------------------------
JOHN G. HAYES

/s/ Brian J. Richmand Director June 4, 1997
- -------------------------------------
BRIAN J. RICHMAND

II-6

EXHIBIT INDEX

EXHIBIT NO. DESCRIPTION

1 Form of Underwriting Agreement among the Underwriters named
therein and the Company
*3.1 Second Amended and Restated Certificate of Incorporation of the
Company
*3.2 Amended and Restated By-laws of the Company
*4.1 Form of Indenture among the Company, the Guarantors named therein
and the Trustee
*4.2 Form of Note
*4.3 Form T-1
*5 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
shares of the Company's Class Common Stock
10.1 Registration Rights Agreement dated as of April 3, 1996 among the
Registrant, certain management investors and certain venture
investors
*10.2 OCI Holdings Corp. 1997 Stock Option and Grant Plan
*10.3 OCI Holdings Corp. Employee Stock Purchase Plan
*11.1 Statement regarding computation of earnings per share
21.1 Subsidiaries of the Company
*23.1 Consent of Goodwin, Procter & Hoar LLP (included in their opinion
filed as Exhibit 5 hereto)
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of KPMG Peat Marwick LLP
23.4 Consent of KPMG Peat Marwick LLP
23.5 Consent of Moore & Gray
23.6 Consent of KPMG Peat Marwick LLP
23.7 Consent of Ernst & Young LLP
23.8 Consent of McGladrey & Pullen, LLP
23.9 Consent of Arthur Andersen LLP
23.10 Consent of Morrison and Smith
23.11 Consent of McGladrey & Pullen, LLP
23.12 Consent of McGladrey & Pullen, LLP
24 Power of Attorney (included on signature page of Registration
Statement as filed)
27 Financial Data Schedule

- ---------------------
* To be filed by amendment.