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

                                  FORM 10-K

(Mark One)

[X]   Annual  report  pursuant  to  Section  13 or  15(d)  of  the  Securities
Exchange Act of 1934 (Fee
      Required) For the fiscal year ended October 31, 1996

[  ]  Transition  report under Section 13 or 15(d) of the Securities  Exchange
Act of 1934 (No Fee Required) For the transition period from ____________   to
____________________.

Commission file number 0-21986

                          ABLE TELCOM HOLDING CORP.
            (Exact name of registrant as specified in its charter)

FLORIDA                                 65-0013218
(State or other jurisdiction of         (IRS Employer
incorporation or organization)          Identification No.)

1601 Forum Place, Suite 1110, West Palm Beach, Florida             33401
    (Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code:  (561) 688-0400

Securities registered under Section 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Act:  Common Stock

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

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

      As of January 29, 1997,  6,097,621 shares of the registrant's Common Stock
were  held by  non-affiliates  of the  registrant  (assuming,  solely  for these
purposes,  such persons to be all persons  other than (i) current  directors and
executive  officers  off  the  registrant  and  (ii)  persons  believed  by  the
registrant to  beneficially  own more than 10% of the  registrant's  outstanding
Common  Stock,  based on reports,  if any,  submitted to the  registrant by such
persons). As of such date, the aggregate market value of the voting stock of the
registrant held by non-affiliates,  computed by reference to the average closing
bid and asked prices on that date, was $53,902,970.

      There were 8,311,701 shares of Common Stock  outstanding as of January 29,
1997.

                     DOCUMENTS INCORPORATED BY REFERENCE
None


<PAGE>


                                    PART 1

ITEM 1.     BUSINESS

OVERVIEW

     Able Telcom Holding Corp.  ("Able Telcom" or the "Company")  specializes in
the  design,  installation,  maintenance  and  systems  integration  of advanced
communication  networks for voice,  data, and video systems.  These services are
provided  for an  array  of  complementary  applications,  presently  those  for
telecommunications   infrastructure,   traffic  management  systems,   automated
manufacturing  systems and utility networks.  The Company is currently organized
into  four  operating  groups:   telecommunication  services,  cable  television
services,  traffic  management  services and  communications  development.  Each
group,  excluding cable television services, is comprised of subsidiaries of the
Company  with  each  having  local  executive  management  functioning  under  a
decentralized  operating  environment.  The Company formed the cable  television
services group to facilitate planned expansion during 1997.

STRATEGY

     The  Company's  overall  strategy is to capture an  increased  share of the
market for outsourced network  installation,  maintenance and system integration
services.  The Company  believes  that  customers  will continue to require such
services  to deploy and  upgrade the fiber  optic,  coaxial and digital  network
infrastructure  associated  with  advancements in technology and the competition
created  by  the  convergence  of the  telecommunications,  computer  and  media
industries.  The Company intends to accomplish this objective  primarily through
continued   strategic   acquisitions   and  internal   growth  of  existing  and
complementary  lines of business.  The Company  believes that the  communication
services industry is highly fragmented, consisting of a large number of smaller,
regional businesses,  and presents significant  opportunities for consolidation.
The Company plans to target those  businesses  with high quality  management and
strong  performance  records and to integrate such acquired  operations into the
Company's operating groups.

     Additionally,   the  Company  intends  to  expand  its  businesses  through
increased  marketing  efforts by  broadening  the range of services it offers to
customers.  The Company  believes its current  expertise in  telecommunications,
traffic  management  and systems  integration  services can be expanded to cable
television  and other cable and wireless  communication  systems and is actively
seeking acquisition  candidates in areas that complement its existing strengths.
The Company  expects to achieve  margin  improvement  through  cross-utilization
among operating  groups of people,  equipment and  technologies  and through the
centralization of certain financial controls, cash and risk management.

HISTORICAL DEVELOPMENT OF BUSINESS

     The Company  was  incorporated  in 1987 as "Delta  Venture  Fund,  Inc.," a
Colorado  corporation.  The Company adopted its current name in 1989 and changed
its corporate domicile to Florida in 1991.

     Commencing in mid-1992 until  mid-1994,  95% of the Company's  revenues and
profits were derived from telecommunication  services provided primarily through
two majority owned  subsidiaries  located in Caracus,  Venezuela.  Such services
were provided to one customer, CANTV, the Venezuelan national telephone company.
During the second half of the fiscal year ended  October  31,  1994,  Venezuelan
operations  decreased  dramatically  due to the economic climate in that country
and other  factors.  See  "Management's  Discussion  and  Analysis of  Financial
Condition and Results of Operations"  and Note 15 to the Company's  Consolidated
Financial  Statements,   included  elsewhere  in  this  report,  for  additional
information concerning Latin American operations.

     To reduce the effect of  conditions  outside the  Company's  control in its
Latin American  operations,  the Company  expanded its business focus to include
marketing its services in the United States.  The Company commenced this process
in June 1994, with the acquisition of Transportation  Safety  Contractors,  Inc.
and its affiliates  ("Transportation  Safety" or "TSCI"),  an established Tampa,
Florida  based group of  companies  that install and  maintain  traffic  control
signage,  signalization  and  lighting  systems and that perform  outside  plant
telecommunication  services.  The  majority of TSCI's  business is  conducted in
Florida and Virginia with the state  departments of  transportation  and various
city and county municipalities.

     In anticipation  of further  expansion in the domestic  market,  during the
fourth  quarter of fiscal  1995,  the Company  reorganized  its  management  and
operational   structure  into  four  operating   groups,   each   consisting  of
subsidiaries  of the  Company,  and  embarked  on a series of  acquisitions.  On
December 8, 1995, the Company  acquired the common stock of H.C.  Connell,  Inc.
("Connell").  Connell,  a twenty year old business,  performs  primarily outside
plant  telecommunication  and electric  power  services for local  telephone and
utility companies in central Florida providing the Company expanded market share
and a significant  new customer.  On October 12, 1996, the Company  acquired the
common stock of Georgia Electric Company ("GEC"), a forty-five year old business
headquartered  in Albany,  Georgia.  GEC operates in eight  southeastern  states
specializing in the installation, testing and maintenance of intelligent highway
and communication  systems including  computerized traffic management,  wireless
and fiber optic data networks, weather sensors, voice data and video systems and
computerized  manufacturing  and control systems.  Subsequent to the fiscal year
ended  October  31,  1996,  the  Company  acquired  the  common  stock  of  Dial
Communications,  Inc.  ("Dial") of Tallahassee,  Florida.  Operating in northern
Florida,  Alabama and Georgia  for more than  twenty five years,  Dial  provides
outside  and  inside  plant  telecommunication  services  to the  regional  Bell
operating  company,  other  local and long  distance  phone  companies , private
businesses  and  universities.  Reference  is made  to  Note 3 to the  Company's
Consolidated  Financial Statements,  "Acquisitions",  included elsewhere in this
report for additional information.



SERVICES, MARKETS AND CUSTOMERS

     Telecommunication  service  activities,  presently  performed through three
subsidiaries,  include a full line of network  technical  services  for building
both `outside plant' and `inside plant' telecommunication systems. Outside plant
services consist  principally of the large scale installation and maintenance of
coaxial and fiber optic cable and ancillary  equipment for digital  voice,  data
and video transmissions  installed aerially or underground to upgrade or replace
existing telephone networks.  During fiscal year 1996, through an acquisition in
December  1995,  the Company  expanded its outside plant services to include the
maintenance  and  installation  of  electric  utility  grids and water and sewer
utilities.  The Company  provides such services  primarily  under hourly and per
unit  basis  contracts  to  local  telephone   companies  including  Bell  South
Telecommunications,  Inc., U.S. West, Inc., United Telephone Company,  GTE Corp.
and Sprint  Corp.  The Company also  provides  these  services to long  distance
telephone   companies  such  as  AT&T,   electric   utility   companies,   local
municipalities  and cable  television  multiple  system  operators in the United
States.

     Inside plant services,  developed through internal  expansion during fiscal
1996,  consist of the  engineering,  design,  installation  and  integration  of
telecommunication  networks  and  delivery  systems  for  voice,  data and video
providing  connectivity  and networking to offices for large private  businesses
including banks, universities and hospitals. The Company's inside plant services
tend to be less  capital  intensive,  but  requires a more  technically  skilled
workforce.

<PAGE>

     Presently, the Company's telecommunication service activities are primarily
focused  in the  southeastern  United  States.  Telecommunication  services  and
related activities accounted for 50%, 35% and 62% of the Company's  consolidated
revenues  for fiscal  years 1996,  1995 and 1994,  respectively.  Revenues  from
telecommunication  services  are expected to increase in 1997 as a result of the
acquisition of Dial in December 1996.

     During fiscal year 1996,  the Company  formed a cable  television  services
group in  anticipation  of internal  expansion and planned  acquisitions  during
1997. This group presently has no material operations.

     Traffic Management Services.  The Company's traffic management services are
provided  through  its  TSCI and GEC  subsidiaries,  acquired  in June  1994 and
October 1996, respectively.  The Company's traffic management group installs and
maintains traffic control and signalization  devices. These services include the
design and installation of signal devices (such as stoplights, crosswalk signals
and other traffic  control  devices) for rural and urban traffic  intersections,
drawbridge  and railroad track signals and gate systems,  and traffic  detection
and data  gathering  devices.  The Company also designs,  installs and maintains
"intelligent highway"  communication systems that involve the interconnection of
data  and  video  systems,  fog  detection  devices,   remote  signalization  or
computerized signage. These systems monitor traffic conditions, communicate such
conditions to central traffic control computers, and provide real-time responses
to dynamic changes in traffic patterns and climate  conditions by changing speed
limit display  devices,  lowering traffic control gates, or changing the text on
remote signs and signals.  Through GEC, the Company also  installs and maintains
computerized  manufacturing systems for various industrial  businesses.  Many of
the functions of the traffic  management group,  particularly  those involved in
intelligent highway systems, complement those of the telecommunications services
group.

     The Company's traffic  management  services are provided primarily to state
and  local  governments,   in  six  southeastern  states.   Beginning  with  the
acquisition  of TSCI in the third  quarter of fiscal  1994,  traffic  management
services accounted for 50%, 65% and 38% of the Company's  consolidated  revenues
during  fiscal  years 1996,  1995 and 1994,  respectively.  The Company  expects
revenues from traffic management  services to increase in fiscal 1997 due to the
operations of GEC,  which the Company  acquired  during the last month of fiscal
1996.

     In October 1996, the Company placed Gerry Hall, a former  principal of GEC,
in charge of its traffic management group and replaced certain management of its
TSCI operations with experienced managers from GEC. These personnel changes were
initiated with a view towards increasing  revenues,  improving  productivity and
reducing  overhead costs at TSCI and as part of the  integration of the business
operations of GEC into the Company's  existing  traffic  management  operations.
(See "Management's Discussion and Analysis of Financial Condition and Results of
Operations-Overview").  Mr. Hall  managed  GEC, as well as other  companies in a
similar  line of  business,  for  more  than 20  years  prior  to the  Company's
acquisition of GEC and Mr. Hall's employment with the Company. Mr. Hall has also
been appointed to the Company's board of directors.

     Communications  Development Group. The Company's communications development
group  manages  the  Company's  joint  venture  arrangements  in Latin  America,
primarily Venezuela, which were formed to provide telecommunication installation
and  maintenance  services to privatized  local phone  companies.  During fiscal
years 1996, 1995 and 1994, the Company's Latin American operations accounted for
8%, 9% and 53% of the Company's revenues on a consolidated basis.


<PAGE>

     During fiscal year 1996,  the Company's  communications  development  group
expanded  its  business to include the  marketing  to Latin  American  telephone
companies of "Neurolama",  an internally  developed  proprietary  telephone call
record and data collection system. The Company also began to acquire and upgrade
existing  mobile radio  networks to provide a localized  wireless  communication
service in the southeastern  United States. To date, both such business ventures
have incurred only start-up and marketing costs with no  corresponding  revenues
and there  can be no  assurance  that  either  business  will  develop  revenues
sufficient to offset such costs.

     The  Company's  statement  of its  expectations  of  future  revenues  is a
"forward-looking"  statement  based on the past financial  performance of recent
acquisitions.  The Company  knows of no  presently  existing  factors that would
cause such company's revenues to decrease from historical  levels.  Still, there
can be no assurance  that past  performance  is  indicative  of future  results.
Should revenues  decline  substantially  due to foreseen or unforeseen  factors,
such as failures in the  integration of recent  acquisitions  into the Company's
operations,  losses of significant  customers,  changes in the overall  economic
climate in the areas in which such company does business, loss of key employees,
or  other   factors,   such  decline  in  revenues  could  cause  the  Company's
expectations to differ materially from those stated.

CONTRACTS

      TELECOMMUNICATION AND RELATED SERVICES

     The  Company  generally  provides   telecommunication,   cable  television,
electric  utility and  manufacturing  system  services  (i.e.,  non-governmental
business)  under  comprehensive  master  service  contracts that either give the
Company  the  right to  perform  certain  services  at  negotiated  prices  in a
specified  geographic area during the contract period or pre-qualify the Company
to bid on projects  being  offered by a customer.  Contracts  for  projects  are
awarded based on a number of factors such as price  competitiveness,  quality of
work,  on-time  completion  and the ability to mobilize  equipment and personnel
efficiently. The Company is typically compensated on an hourly or per unit basis
or, less frequently, at a fixed price for services performed.  Contract duration
either is for a specified  term,  usually one to three years, or is dependent on
the size and scope of the project. In most cases, the Company's customers supply
most of the materials required for a particular project, generally consisting of
cable, equipment and hardware and the Company supplies the expertise, personnel,
tools and equipment necessary to perform its services.

      TRAFFIC MANAGEMENT AND GENERAL UTILITY SERVICES

     For traffic  management  and general  utility  services  (i.e.,  government
funded  business)  the  Company  generally  obtains  fixed price  contracts  for
projects, either as a prime or, more often, as a subcontractor, on a competitive
bid basis. Typically,  for prime contracts, a state department of transportation
("DOT") or other  governmental  body provides to qualified  contractors a set of
specifications  for the project.  The company then  estimates  the total project
cost based on input  from  engineering,  production  and  materials  procurement
personnel.  A bid is then  submitted by the Company  along with a bid bond.  For
most government funded projects,  the scope of work extends across many industry
segments.  In such cases,  the Company  subcontracts  its  expertise  to a prime
contractor.  The Company  must submit  performance  bonds on  substantially  all
contracts obtained.  The Company believes its relations with its bonding company
are good and that its  bonding  capacity is  adequate.  However,  the  financial
viability of the Company is dependent on maintaining  adequate  bonding capacity
and any loss of such would have a material adverse effect on the Company.

     Contract  duration  is  dependent  on the size and scope of the project but
typically  is  from  six  to  nine  months.   Contracts   generally   set  forth
date-specific  milestones and provide for severe liquidated  damages for failure
to meet the milestone by the specified dates. At January 29, 1997, the Company


<PAGE>

was not  aware of any  contracts  for  which it may be  subject  to  significant
liquidated  damages.  The failure to complete the contract backlog on time could
have a material  adverse impact on the financial  condition of the Company.  The
Company is typically paid based on "completed units". Retainage is normally held
on contracts (usually 5% to 10% of the contract amount),  until approximately 90
days after the services are rendered and accepted by the customer.  The majority
of the contracts are bonded/guaranteed as to payment by the DOT upon performance
by the Company.

     In  addition  to  generating  revenues  from the  installation  of  traffic
management  systems  under fixed price  contracts,  the Company  performs  under
maintenance  contracts  with  the  DOT  obtained  through  competitive  bidding.
Maintenance contracts are normally for a renewable one to three year term. Under
such  contracts,  the Company  generally is assigned a section of highway  along
which to maintain traffic control devices and is paid on a per unit basis.

     In most  cases,  the  Company  must  supply the  materials  required  for a
particular  project,  including  materials and component  parts required for the
production  of  highway  signage  and  guardrails  and the  assembly  of various
electrical and computerized systems.  Aluminum sheeting,  steel poles, concrete,
reflective adhesive,  wood products,  cabling and electrical  components are the
principal materials purchased domestically for the production of highway signage
and  guardrailing.  Generally,  the supply and costs of these materials has been
and is expected to continue to be stable,  and the Company is not dependent upon
any one  supplier  for these  materials.  The  Company  also  purchases  various
components  for the assembly of various  electrical,  lighting and  computerized
traffic  control  systems.  Many of these materials must be certified as meeting
specifications  established  by the DOT and are  generally  only  supplied  by a
limited number of vendors.  The unavailability of those components could have an
adverse  impact on meeting  deadlines for the  completion of projects  which may
subject the Company to liquidated  damages.  However,  the availability of these
materials, generally, has been adequate.

COMPETITION

     The market for communication  network and related services is characterized
by a large number of smaller size  private  companies  that compete for business
generally  in a  limited  geographic  area  or with a few  principal  customers.
However,  there are also several competitors which compete with the Company on a
much larger scale,  some of which are larger in size and have greater  financial
resources  than the Company.  There are no competitors  controlling  substantial
market  share  either  domestically  or in the  countries  in which the  Company
operates in Latin America.  The Company's  ability to assemble a large,  trained
work  force,  offer a turnkey  service  mix and  satisfy  the  requirements  for
capital,  bonding,  technical,  administrative and financial  pre-qualifications
allows  it  to  bid  on  larger  projects  and  to  compete  on a  national  and
international level. Management believes that the factors required for continued
success  with a  limited  number of key  customers  include  financial  ability,
quality  and  breadth of  services,  reliability  and the  ability to mobilize a
competent work force promptly for large projects.

     Changes in the level of customer capital expenditures,  customers utilizing
their own  personnel to perform  services,  technological  advancement,  federal
funding  and state  spending  may  affect the  volume of work  available  to the
Company as well as the Company's profitability.

BACKLOG

     As of January 29, 1997, the Company had a total backlog of business, giving
effect to the acquisition of Dial and including  estimates  related to "per unit
basis"  contracts,  of  approximately  $105  million  compared to $44 million on
February  1, 1996.  Approximately  70% of the total  backlog is  expected  to be
completed within the next fiscal year. Contract backlog of $24 million relating


<PAGE>

to the installation of traffic management systems is under performance bonds and
the  Company  may be subject to  liquidated  damages for failure to perform in a
timely manner.



SEASONALITY

     Operations of the Company are seasonal,  resulting in reduced  revenues and
profits during the first quarter  (November,  December and January)  relative to
other quarters.  Factors affecting the seasonality of the Company's business are
holiday season shut-downs,  winter weather and capital  expenditure  patterns by
telephone companies that can impede outside plant construction  activities.  The
impact of  seasonality  is  mitigated  somewhat  by the  presence  of  Company's
operations primarily in the southern United States.

EMPLOYEES

     At January 29, 1997,  the Company and its  subsidiaries  had  approximately
1,510  employees  of which  approximately  93  represents  a  nucleus  of senior
executive,  technical and managerial  personnel.  Approximately 366 of the total
employees are affiliated with Latin American operations. The number of employees
considered  as  laborers  can  vary  significantly  according  to  contracts  in
progress.  Such  employees  are  generally  available to the Company  through an
extensive network of contacts within the communications industry.

     No  employees  of the  Company  are  represented  by a labor  union and the
Company considers relations with key and other employees to be good.

ITEM 2.     PROPERTIES

     The Company leases 3,349 square feet for its corporate offices in West Palm
Beach, Florida. The Company also leases regional offices in Albany and Norcross,
Georgia and several cities in Florida including Tampa, Tallahassee, Leesburg and
Ft.  Lauderdale.  The regional office located in Albany,  Georgia is leased from
shareholders/directors  of the Company.  See  "Committee  Interlocks and Insider
Participation",  for additional  information.  The Company also leases  numerous
smaller offices, temporary equipment yards or storage locations in various areas
as necessary to enable it to efficiently perform its service contracts which are
generally subject to short-term or cancelable leases.

     The Company owns and operates a 10,000 square foot facility for  operations
based in Chesapeake,  Virginia.  Such facility is encumbered  pursuant to a loan
agreement.  The Company's Venezuelan  subsidiaries own and operate from a 33,000
square foot floor of an office building located in Caracas, Venezuela and leases
an additional 50,000 square feet of covered parking and shop facilities to store
tools,  equipment and approximately 120 licensed vehicles,  substantially all of
which are owned.  The Company also owns two small  condominiums  near Maracaibo,
Venezuela, utilized principally for housing non-Venezuelan personnel.

     The Company believes that its properties are in good condition and adequate
for current  operations  and, if additional  capacity  becomes  necessary due to
growth,  other suitable  locations are available in all areas where it currently
does  business.  See  "Commitments  and  Contingencies"  in  the  Notes  to  the
Consolidated  Financial Statements for additional information relating to leased
facilities.  Certain of the Company's  properties are subject to federal,  state
and local  provisions  involving the protection of the  environment.  Compliance
with these  provisions has not has and is not expected to have a material effect
upon the Company's financial position.

<PAGE>

ITEM 3.     LEGAL PROCEEDINGS

     The  Company  is  party  to  various  legal  proceedings,  including  suits
involving certain acquisition agreements and notes payable relating to TSCI. The
notes  payable,  including  accrued  interest,  are classified as current in the
accompanying  balance sheet. In the opinion of management,  the ultimate outcome
of the  legal  proceedings  will  not  have a  material  adverse  effect  on the
financial position of the Company.

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

      There were no matters  submitted to shareholders  for a vote during Fiscal
Year 1996.

                                   PART II

ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
            SHAREHOLDERS MATTERS

     The  Company's  Common Stock,  par value $.001 per share,  began trading on
NASDAQ on  February  24,  1994  under the  symbol  "ABTE."  Prior to the  NASDAQ
listing,  the Company's Common Stock was sporadically  traded  over-the-counter,
under the same  symbol,  since  September  15, 1988,  the date of the  Company's
initial  public  offering.  Set  forth  below  is the  range of the high and low
closing bid quotations of the Company's Common Stock for each quarter within the
last three fiscal  years as reported by one of the  Company's  principal  market
makers in the over-the-counter  market through February 24, 1994 and as reported
by NASDAQ thereafter.

      The quotations set forth below through  February 24, 1994 are  interdealer
prices and do not reflect  retail  markups,  markdowns or commission and may not
necessarily  represent actual  transactions.  Because of the sporadic trading in
the Company's  Common Stock prior to February 24, 1994,  the  quotation  through
February  24,  1994  may  not  reflect  prices  that  would  be  obtained  in an
established public trading market.

<TABLE>
<CAPTION>

Fiscal Year:                1996              1995                1994
                            ----              ----                ----
                       High      Low       High     Low       High      Low
                       ----     ----       ----    ----       ----     ----
<S>                  <C>       <C>       <C>      <C>       <C>       <C>

First Quarter         7 3/8     5         8 15/16  5 4/8     13 1/4     8 1/8
Second Quarter        6 3/4     5         8 3/4    4 1/16    15 7/8    10
Third Quarter         7 3/4     4 7/8     7 1/2    5         13 1/4     7 1/2
Fourth Quarter        9 7/8     5 1/4     7        5          9 3/4     6 13/16
</TABLE>

     At January 29, 1997, there were 478 shareholders of record of the Company's
Common  Stock.  No cash  dividends  have been  declared by the Company since its
inception  and the  Company  has no  present  intention  to  declare or pay cash
dividends on the Common Stock in the foreseeable  future. The Company intends to
retain any earnings  which it may realize in the  foreseeable  future to finance
its  operations.  Except  for  certain  provisions  relating  to  the  Company's
convertible preferred stock offering in December 1996, there are no restrictions
that prohibit the payment of cash dividends on the Company's  Common Stock.  See
"Management  Discussion  and  Analysis  of  Financial  Condition  and  Result of
Operations" for a further discussion.

ITEM 6.     SELECTED FINANCIAL DATA

      The following  table sets forth certain  selected  consolidated  financial
data of the  Company  for the five years  ended  October 31, 1996 which has been
derived from the audited  consolidated  financial  statements of the Company and
its  subsidiaries.  Financial  data  includes  the  results  of  operations  and


<PAGE>

financial  position  relating to the  commencement  of Venezuela  operations  in
August of 1992 and the impact of adverse  economic events occurring in Venezuela
since  mid-1994.  This data  should be read in  conjunction  with  "Management's
Discussion and Analysis of Financial  Condition and Results of  Operations"  and
the Consolidated Financial Statements included elsewhere in this report.

<TABLE>
<CAPTION>

                                    Years Ended October 31,
                            (in thousands except per share amounts)
<S>                      <C>       <C>       <C>       <C>       <C>    

                            1996     1995      1994       1993     1992
                            ----     ----      ----       ----     ----
Revenues                 $48,906   $35,408   $25,784   $20,048    $1,889
Net (loss) income         (5,910)     (281)      946     4,558      (606)
Average shares                 
 outstanding               8,361     8,284     7,736     6,907     3,482
(Loss) earnings per
 share                      (.71)     (.03)      .12       .66      (.17)

Current assets            21,449    18,573    18,635     9.487     1,414
Current liabilities       17,155    11,175     9,942     1,163     1,255

Property and equipment, 
 net                      10,667     6,120     5,314     1,447       914
Total assets              38,918    32,482    36,604    11,571     3,256
Long-term debt             8,150     3,033     6,768       261       473

Shareholders equity      $11,598   $17,467   $15,832    $7,346    $1,086
</TABLE>




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

     The following  discussion and analysis  relates to the financial  condition
and results of  operations  of the Company for the three years ended October 31,
1996.  This  information  should  be  read in  conjunction  with  the  Company's
Consolidated  Financial Statements appearing elsewhere in this document.  Except
for historical information contained herein, the matters discussed below contain
forward looking statements that involve risks and  uncertainties,  including but
not limited to economic,  competitive,  governmental and  technological  factors
affecting  the Company's  operations,  markets and  profitability.  In addition,
expectations are based on certain assumptions, among them that revenues from the
acquired  businesses  will not decline  materially from prior years and that the
Company's  contract  backlog  will  not  be  materially  adversely  impacted  by
unforeseen events.  Should these assumptions prove to be in error, the Company's
results could differ materially from those expected.

OVERVIEW

GENERAL

     The Company's  strategy is to capture an increased  share of the market for
outsourced network  installation,  maintenance and system  integration  services
related to fiber optic, coaxial and digital network infrastructure.  The Company
believes  that   customers  will  continue  to  require  such  services  due  to
advancements in technology and developments in the telecommunications,  computer
and  media  industries.  This  strategy  includes  plans  to grow  existing  and
complimentary  lines of business  and to acquire  other  communication  services
companies  with high quality  management and strong  performance  records and to
integrate  such  acquired  operations  into the Company's  existing  operations.
Management  believes that such  acquisitions  will enable the Company to improve
economies of scale,  increase  gross margins,  and become a leading  provider of
communications infrastructure services.

<PAGE>

     During  fiscal  1996,  the  Company   implemented  a  number  of  strategic
initiatives  to  achieve   growth  and  improve   operating   efficiencies   and
profitability.  Such  initiatives  commenced  with  the  reorganization  of  the
Company's  corporate  structure into operational  groups and was followed by the
completion  of  several  strategic  acquisitions  and the  integration  of those
businesses  into the  Company's  operations.  For fiscal year 1997,  the Company
expects to continue an aggressive growth strategy with a portfolio of profitable
core and complementary businesses.

     The success of the Company's  growth  strategy will depend in part upon the
Company's  obtaining an expanded debt facility,  which it is currently  seeking,
and additional  equity capital.  In December 1996, the Company raised $6,000,000
through the issuance of convertible preferred equity securities effected through
a  private  placement  and  $3,000,000  from a bank loan in  connection  with an
acquisition,  both of which are more fully described below. Although the Company
believes that additional  financing will be obtained,  there can be no assurance
that such can be  obtained or obtained on terms  favorable  to the  Company.  In
addition,   the  Company's  growth  strategy  contains  certain  inherent  risks
including maintaining the organizational  infrastructure to support rapid growth
and  the  integration  and  management  of  new  acquisitions.  There  can be no
assurance that the Company's growth strategy will be successful.

ACQUISITIONS

     In December  1995,  the Company  acquired  the common  stock of Connell for
approximately $2,300,000 (book-value). Connell, operating for over twenty years,
provides  outside  plant  telecommunication,  electric  power and other  utility
services in central  Florida.  The purchase price was paid with seller notes and
loans from two directors of the Company aggregating  $500,000.  The seller notes
and the loans from  directors  were  repaid as of January 2, 1997,  through  the
proceeds of the private placement.

     In  October  1996,  the  Company  acquired  the  common  stock of GEC for a
$3,000,000  initial cash purchase price and a five year earn-out  arrangement to
be paid in a number of common  shares of the Company to be determined at the end
of each of the  respective  years  based on  actual  pretax  earnings.  The cash
portion of the purchase price was funded from a term loan with a bank. There was
no  material  goodwill  recorded in  connection  with the payment of the initial
purchase  price.  GEC,  in  business  for over  forty-five  years  installs  and
maintains  intelligent highway,  computerized  manufacturing and voice, data and
video communication systems throughout the southeastern United States.

     In  December  1996,  the  Company  acquired  the  common  stock of Dial for
approximately $4,600,000,  paid through the Company's existing line of credit, a
$1,900,000 term loan with a bank,  108,489 shares of the Company's  common stock
and a promissory  note in the amount of $892,000.  The Company expects to record
approximately  $1,500,000 of goodwill in connection with the  transaction  which
will be amortized  over twenty  years.  Dial  provides  inside and outside plant
telecommunication  services  in  Florida,  Georgia  and  Alabama and has been in
business over twenty-five years.

     See   Note  3  to  the   Company's   Consolidated   Financial   Statements,
"Acquisitions."

LATIN AMERICAN OPERATIONS

     Historically,  the  Company  has  experienced  severe  earnings  volatility
relating  to its Latin  American  operations,  primarily  as a result of foreign
currency  devaluations  and  currency  exchange  controls.  To  mitigate  future
earnings risk, the Company recorded  significant charges during fiscal year 1996
totaling  $3,553,373 to write down certain  assets and to establish  appropriate
reserves.  Such  charges  include a $920,551  non-cash  charge  relating  to the
write-off of certain  goodwill,  a $1,179,769  foreign currency loss relating to
Venezuelan  operations,  provisions  totaling  $353,053  to write  down  various


<PAGE>

investments,  accounts  receivables  and deferred  tax assets to net  realizable
value and $1.1 million of marketing  expense relating to a proprietary  product,
discussed below.

     Revenues and net (loss) income pertaining to Latin American  operations are
presented below for the years ended October 31, 1996, 1995, and 1994:

<TABLE>

<S>                                <C>          <C>          <C>
                                      1996         1995         1994
                                      ----         ----         ----

            Revenues                3,745,858    3,227,750   13,782,986
            Net (loss)income       (3,628,503)     (54,835)   3,746,578
</TABLE>

The Company's net assets of Latin American  subsidiaries  totaled $2,080,053 and
$5,150,292 at October 31, 1996 and 1995, respectively.

RESTRUCTURING OF TRAFFIC MANAGEMENT OPERATIONS

      During  fiscal  1996,  a  decline  in  revenues,  labor  productivity  and
profitability  at TSCI resulted in the  replacement of all its senior  operating
and  financial  management.   This  was  accomplished  in  connection  with  the
acquisition  of GEC.  This  further  culminated  into the Company  substantially
revising its  estimates of reserves  required  for TSCI's  accounts  receivable,
inventories and contracts in progress.  Such revisions resulted in a pretax loss
relating to TSCI of  $3,679,594  during the fourth  quarter.  In  addition,  the
Company  restructured  TSCI's  operations  during  the  fourth  quarter  and the
accompanying  change  in  group  management.  Such  restructuring  included  the
centralization of purchasing,  job estimating,  certain administrative functions
and various  productivity  enhancing  measures which are expected to result in a
significant reduction of general and administrative  expenses and improved gross
margins for the traffic management group in 1997.

PRODUCT DEVELOPMENT EXPENDITURES

      During  fiscal year 1996,  the Company  began to market to Latin  American
telephone companies an internally  developed  proprietary  telephone call record
and data  collection  system,  termed  "Neurolama".  To date,  the  business has
incurred  only  start-up and marketing  costs  aggregating  $1.1 million with no
corresponding  revenues.  Such costs are  primarily  included  in  "Charges  and
transaction/translation  losses  related to Latin  American  operations"  in the
accompanying  Consolidated Statements of Operations.  Also, the Company began to
acquire  and  upgrade  existing  mobile  radio  networks  to provide a localized
wireless  communication  service with only  immaterial  costs  incurred  through
October 31,  1996.  There can be no  assurance  that the Company  will  generate
sufficient revenues from either business to offset its startup costs.

RESULTS OF OPERATIONS

      The  following  table sets  forth,  for the  periods  indicated,  selected
elements of the Company's Consolidated  Statements of Operations as a percentage
of its revenues.
<TABLE>
<CAPTION>

                  YEAR ENDED OCTOBER 31
<S>                                   <C>        <C>        <C>

                                        1996       1995       1994
                                        ----       ----       ----
Revenues                               100.0%     100.0%     100.0%

  Cost of revenues                      82.8       78.3       63.6
                                       
  General and administrative            17.2       15.4       16.2
                                        
  Depreciation and amortization          5.6        5.4        3.3
                                        
  Charges and transaction/translation
   losses related to Latin American   
   operations                           7.3         0.3        9.3
   
  Operating (loss) income             (12.9)        0.6        7.7

  Interest expense                      2.8         3.2        1.5

  Interest and dividend income          0.5         1.6        1.6

(Loss) income before income taxes                   
  and minority interest               (15.1)       (0.9)       7.8
  Income tax (benefit) expense         (1.8)       (1.0)       2.4
                               
Minority interest                       1.2         0.9        1.7
                 
Net (loss) income                     (12.1)       (0.8)       3.7
</TABLE>

        YEAR ENDED OCTOBER 31, 1996 COMPARED TO YEAR ENDED OCTOBER 31, 1995.

     The Company reported a net loss of ($5,910,248) or ($.71) per share for the
year ended  October 31, 1996  compared to a net loss of ($281,166) or ($.03) per
share  for 1995.  The net loss for  fiscal  1996 is  attributable  primarily  to
charges recorded in connection with Latin American  operations,  including costs
associated with marketing the Company's  proprietary  telephone  billing system,
and  with the  restructuring  of  TSCI.  See  "Latin  American  Operations"  and
"Restructuring of Traffic Management Operations".

Revenues and Gross Margins

     The Company's  revenues are derived primarily from hourly or per unit basis
contracts for telecommunication and related services.  For products and services
performed relating to the installation of traffic management and certain general
utility  services,  the Company is compensated  largely under  competitively bid
fixed price  contracts with time of  performance  dependent upon the size of the
project, normally three months to one year. The Company's profitability on fixed
price contracts is partially dependent upon its ability to control material, and
particularly,  labor costs  incurred  under such  contracts.  The award of fixed
price contracts are often accompanied by one to three year maintenance contracts
which compensate on a per unit basis and typically provide higher margins.

     Revenues for the year ended October 31, 1996, were $48,906,170 representing
an  increase of  $13,498,589  or 38%  compared  to  revenues  for the year ended
October  31, 1995 of  $35,407,581.  The  overall  increase in total  revenues is
primarily a result of the  acquisition of Connell which provided  $12,138,224 of
revenues  since the  acquisition  date of  December  8, 1995.  The  decrease  in
revenues  from  existing  businesses  is  primarily  attributable  to TSCI which
provided  revenues of  $21,181,435  for fiscal year 1996 compared to revenues of
$22,872,331  for fiscal 1995.  Revenues from Latin American  operations  totaled
$3,745,858 and $3,227,750 in 1996 and 1995, respectively.

     The Company expects revenues to continue to increase in fiscal year 1997 as
a result of recent  acquisitions,  internal  growth,  and the  completion of its
current  contract  backlog.  The Company  had a contract  backlog at January 29,
1997,  giving effect to the acquisition of Dial and including  estimates related
to "per unit" basis  contracts,  of  approximately  $105 million compared with a
contract backlog of $44 million at February 1, 1996.

     Costs of revenues increased to $40,486,018 in 1996 from $27,719,750 for the
year ended  October 31,  1995 and was 82.8% and 78.3% of revenues  for the years
ended  October 31,  1996 and 1995,  respectively.  The  decline in gross  margin
percentage  in  fiscal  year 1996 is  primarily  attributable  to a  significant
decline in labor  productivity  at TSCI.  The Company has put in place  measures
that are  designed to improve  labor  productivity,  control  costs and generate
other operational efficiencies from the assimilation of recent acquisitions. See
"Restructuring  of  Traffic  Management  Operations".   If  these  measures  are
successful,  the Company's  gross margins are expected to improve  during fiscal
year 1997. Cost of revenues for Latin American operations totaled $2,130,683 and
$1,636,009 in 1996 and 1995, respectively.

<PAGE>

OPERATING EXPENSES AND OTHER

     General and  administrative  expenses  for the year ended  October 31, 1996
were $8,403,491 or 17.2% of revenues compared to $5,464,338 or 15.4% of revenues
for 1995. The increase in general and administrative  expenses in fiscal 1996 is
primarily  attributable  to the  acquisition  of  Connell  which  accounted  for
$800,000 of such expenses and the inclusion of $900,000 of charges  representing
the write-off of various assets at TSCI, primarily accounts receivable.  General
and  administrative  expenses  for Latin  America  were  $1,613,569  in 1996 and
$1,175,811 in 1995.


     Depreciation  and  amortization  expense was  $2,749,804 for the year ended
October 31, 1996 or 5.6% of revenues  compared to $1,914,064 or 5.4% of revenues
for  1995.  The  increase  in  such  expenses  is  primarily   attributable  the
acquisition of Connell and additional  depreciation  resulting from the purchase
during 1996 of $2,557,258 of equipment  required to meet growth primarily in the
Company's   telecommunication  services  group.  Depreciation  and  amortization
expense  relating  to Latin  American  operations  totaled  $498,589 in 1996 and
$465,492 in 1995.

     Charges  and  transaction/translation  losses  related  to  Latin  American
operations  includes charges and costs totaling $3,553,373 for fiscal year 1996.
Such amounts  includes a $920,551  non-cash  charge relating to the write-off of
certain  goodwill,  a $1,179,769  foreign  currency  loss relating to Venezuelan
operations,  a provision of $353,053  which  consists of a write-down of various
investments,  accounts  receivable and other assets to net realizable  value and
$1,100,000  of  marketing  expense  associated  with the  Company's  proprietary
billing system.

     Interest  expense was $1,350,440  for 1996 or 2.8% of revenues  compared to
$1,117,932  or 3.2% of revenues  for 1995.  This  increase is due  primarily  to
approximately  $2,300,000 of debt incurred in connection with the acquisition of
Connell and additional equipment debt of $600,000.

     For fiscal year 1996,  the Company  recorded a benefit for income  taxes of
$890,695 on a pretax loss of $7,398,826 or an effective income tax rate of (12)%
compared  to an income tax  benefit of $368,105 on pretax loss of $332,082 or an
effective tax rate of (111)% in 1995.  The rate in 1995 results  primarily  from
the reduction in taxes provided on foreign operations.

     Minority interest,  prior to August 1, 1995, represents a shareholder's 20%
share of the earnings of the  Company's  Venezuelan  corporations.  On August 1,
1995,  the  Company  entered  into  an  agreement   whereby  the   shareholder's
proportionate share of any future earnings increased from 20% to 50%. For fiscal
year 1996,  losses  were  allocated  to  minority  interest to the extent of its
invested capital.


     YEAR ENDED OCTOBER 31, 1995 COMPARED TO YEAR ENDED OCTOBER 31, 1994

     The Company  reported a net loss of  ($281,166) or ($.03) per share for the
year ended October 31, 1995 compared to net income of $946,013 or $.12 per share
for 1994.  The net operating loss for fiscal 1995 is primarily  attributable  to
gross margins which were lower than expectations relating to TSCI.

REVENUES AND GROSS MARGINS

     For  the  year  ended   October  31,  1995,   consolidated   revenues  were
$35,407,581,  representing an increase of $9,623,431 or 37% compared to revenues
for the year ended  October 31,  1994 of  $25,784,150.  The overall  increase in
total revenues is primarily a result of increased revenue from the Company's


<PAGE>

domestic   telecommunication  services  business  from  $2,250,618  in  1994  to
$8,992,454 in 1995 and the inclusion of a full year's revenues from the June 22,
1994  acquisition of TSCI. The  acquisition of TSCI accounted for $31,864,785 or
90% of  consolidated  revenues  in  1995  compared  with  $11,028,673  or 43% of
consolidated  revenues in 1994.  These  increases in revenues were offset by the
significant  decline in revenues from the Company's  Latin American  operations,
from  $13,782,986  in 1994 to $3,227,750  in 1995.  The  significant  decline in
revenues  was  primarily   attributable  to  the  severe   economic   conditions
experienced in Venezuela commencing in July, 1994.

     Costs of revenues increased to $27,719,750 in 1995 from $16,395,098 for the
year ended  October 31,  1994 and was 78.3% and 63.6% of revenues  for the years
ended  October 31,  1995 and 1994,  respectively.  The  decline in gross  margin
percentage  in  fiscal  year 1995 is  primarily  attributable  to the  change in
business mix from the  relatively  high profits  associated  with Latin American
operations to more  competitive  domestic  work.  Additionally,  in fiscal 1995,
margins continued to be lower than expectations on certain fixed price contracts
relating to TSCI.

OPERATING  EXPENSES AND OTHER

     General and  administrative  expenses  for the year ended  October 31, 1995
were $5,464,338 or 15.4% of revenues compared to $4,166,694 or 16.2% of revenues
for 1994.  Included in general and administrative  expenses for fiscal 1995 were
various overhead costs, aggregating  approximately $350,000 incurred to maintain
operations  in  Venezuela  during a period  for  which  there  were no  material
corresponding  revenues.  In addition,  non-recurring  legal expenses associated
with  various  capital  raising  efforts in fiscal  1995  totaled  approximately
$90,000. The Company also incurred $300,000 of costs in 1995 relating to a joint
venture  arrangement  established  to pursue the  development  and  marketing of
certain  telecommunication  equipment (Neurolama) in Latin America.  General and
administrative expenses for 1995 reflect a full year inclusion of costs relating
to the mid-1994 acquisition of TSCI.

     Depreciation and  amortization  expenses were $1,914,064 for the year ended
October 31,  1995 or 5.4% of  revenues  compared to $854,251 or 3.3% of revenues
for 1994.  The  increase in such  expenses is primarily  attributable  to a full
year's  inclusion  of  the  acquisition  of  TSCI  and  additional  depreciation
resulting  from  $2,250,904  of equipment  acquired  during  fiscal 1995 to meet
growth in the Company's domestic telecommunication services business.

     For fiscal year 1995, charges and transaction/translation losses related to
Latin   American    operations   of   $95,798    represents   foreign   currency
translation/transaction  losses.  For the  year  ended  October  31,  1994,  the
Company's Venezuelan  operations incurred certain charges totaling $2,381,515 of
which  $858,326  represents   translation/transaction   losses,  and  $1,523,189
represents severance and certain bad debt charges.

     In the third quarter of fiscal 1995,  the Company  incurred a $100,379 loss
on the sale of its  investment in certain  municipal  bond fund units that had a
carrying value of $1,408,000.

     Interest  expense was $1,117,932  for 1995 or 3.2% of revenues  compared to
$397,167 or 1.5% of revenues for 1994.  This increase is due primarily to a full
year's inclusion of debt assumed and incurred in connection with the acquisition
of TSCI.

     For fiscal year 1995,  the Company  recorded a benefit for income  taxes of
$368,105  on a pretax  loss of  $332,082  or an  effective  income tax credit of
(111)% compared to income tax expense of $632,384 on pretax income of $2,007,727
or an effective tax rate of 40% in 1994. The rate in 1995 results primarily from
the  reduction  in  taxes   provided  on   undistributed   earnings  of  foreign
subsidiaries.


<PAGE>

     Minority interest in the Company's Venezuelan corporations,  decreased from
$429,330 in 1994 to $317,189 in 1995, reflecting,  in part, the dramatic decline
in business in Venezuela.

LIQUIDITY AND CAPITAL RESOURCES

     At October 31, 1996, the Company's net working capital  totaled  $4,294,080
compared to $7,397,897 at year-end 1995. Cash and  equivalents  were $ 3,267,161
at October  31, 1996  compared  to  $2,952,239  at October  31,  1995.  Cash was
impacted  during  1996  primarily  by  cash  acquired  through  acquisitions,  a
reduction of accounts receivable and inventories,  capital  expenditures and the
repayment of debt.

     In 1996,  cash of $3,322,242  was  generated  from  operations  compared to
$473,795 in 1995. The positive cash flow from operations for fiscal year 1996 is
primarily  attributable  to a  $3,725,739  decrease in accounts  receivable  and
inventories. Losses relating to Latin American operations and TSCI, were largely
of a non-cash nature.

     Net cash of  $2,606,060  was used in  investing  and  financing  activities
during 1996 which represents  primarily the addition of $2,557,258 of equipment,
primarily  purchased to meet growth in the Company's domestic  telecommunication
operations,  cash acquired through  acquisitions of $1,760,970 and the repayment
of $1,954,192 of long-term debt, net of additional  borrowings for  acquisitions
of  $3,500,000.  The  cash  portion  of  the  purchase  price  relating  to  the
acquisitions  of Connell and GEC during  fiscal  year 1996 were funded  entirely
through  the  proceeds  of bank loans  totaling  $3  million  and loans from two
directors totaling $500,000.

     On November  29, 1995,  the Company  entered  into a $12.5  million  credit
facility (the "Credit  Facility")  comprised of a $6,000,000  revolving  line of
credit collateralized by receivables and inventory,  a $2,500,000 equipment loan
facility to be secured by new or used  equipment  purchased,  a 60-month  Term A
loan in the amount of  $2,750,000  secured by  equipment,  and a 36-month Term B
loan in the amount of $1,250,000. Each loan accrues interest at either the prime
rate or, at the Company's election, the one month LIBOR rate, plus two and seven
tenths percent.  The Credit  Facility  contains  covenants,  which require among
other conditions,  that the Company maintain certain tangible net worth,  funded
debt and  debt  service  amounts.  At  October  31,  1996,  the  Company  was in
non-compliance with such covenants ; however,  the Company obtained a waiver and
amended  covenants  from the lender  effective  as of October  31,  1996 and for
fiscal year 1997. The Company anticipates that it will be in compliance with the
modified covenants.

     On December 2, 1996 the Company  entered into a  $3,000,000  Term Loan (the
Term Loan) with a bank in connection with  refinancing the acquisition of GEC on
October 12,  1996.  The Term Loan is payable in sixty  monthly  installments  of
$50,000 plus  interest at prime.  Excess cash flow of GEC, as defined,  is to be
paid to the Bank.  The Term Loan contains  covenants,  which require among other
conditions,  that the  Company  maintain  certain  tangible  net worth,  working
capital and debt service amounts.  The Term Loan is  collateralized  by all real
and personal property of GEC. Proceeds from the term loan were partially used to
repay a $1,500,000  note payable to a bank,  outstanding at October 31, 1996 and
due on December 2, 1996. The remaining proceeds were used to repay the Company's
lines of credit.

     Effective  December  20,  1996 the Company  completed  a private  placement
transaction  of 1,000 shares of $.10 par value,  Series A Convertible  Preferred
Stock (the  Preferred  Stock) and  warrants  to purchase  200,000  shares of the
Company's  common stock.  Gross proceeds from the offering  totaled  $6,000,000.
Each share of Preferred  Stock is convertible to shares of the Company's  common
stock  after  April 30,  1997 at the  lesser of $9.82 per share or at a discount
(ranging from 10% to 20% depending  upon the date of  conversion) of the average
closing bid price of a share of common stock for three days  proceeding the date
of conversion. The Preferred Stock accrues dividends at an annual rate of 5% and


<PAGE>

is payable  quarterly  in arrears  in cash or through a dividend  of  additional
shares of Preferred Stock. The warrants are exercisable at $9.82 per share after
one year  provided  that the  Preferred  Stock is not  converted to common stock
prior to the first anniversary of the private placement.  Upon the occurrence of
certain events, including failure to effect a timely registration statement, the
Company may be required  to redeem the  preferred  stock at a price equal to the
liquidation  preference,  plus any accrued and unpaid  dividends  plus an amount
determined  by formula.  The proceeds  from the private  placement  were used to
repay a  $1,869,050  note  payable to the  sellers of Connell,  a $250,000  note
payable to a  director  in  connection  with the  acquisition  of  Connell,  and
$2,015,895 due the former  principals of GEC by GEC at the date of  acquisition,
all of which were outstanding at October 31, 1996.

     Accordingly,  certain  borrowings have been reclassified in the October 31,
1996 balance  sheet to reflect the  refinancing  of such debt with proceeds from
the  preferred  stock and the term  loan.  See Notes 3 and 8 of the Notes to the
Consolidated Financial Statements.

     In addition,  on December 2, 1996, the Company acquired all the outstanding
common stock of Dial.  As  consideration,  the Company paid  $3,000,000 in cash,
issued  108,489  shares of common stock (fair value of  $620,421)  and issued an
$892,000  promissory note with a three year term bearing  interest at prime plus
1/2%.  The cash  component of the purchase was funded in part from the Company's
line of credit and the remainder through a $1,900,000 term loan from a bank with
interest at prime plus 1/2%.  The principal  balance of this note,  plus accrued
interest, is due March 2, 1997.

     The success of the Company's  growth strategy will depend,  in part, on the
Company's   obtaining  an  expanded  debt  facility  and   refinancing   certain
acquisition  related  debt, as well as,  obtaining  additional  equity  capital.
Although the Company believes that additional financing will be obtained,  there
can be no assurance that such can be obtained or obtained on terms  favorable to
the Company.  However,  the Company  believes that its operations  will generate
sufficient  cash  flow  to  service  debt  and  maintain  existing   businesses.
Nevertheless increased interest rates or other adverse developments could impair
the Company's ability to service its indebtedness, which in turn, may reduce its
ability to fund internal growth and capital expenditures.

RECENTLY ISSUED ACCOUNTING STANDARDS

     During 1995, the Financial  Accounting Standards Board issued Statement No.
123,  "Accounting for Stock Based  Compensation,"  which is effective for fiscal
years beginning after December 15, 1995. The Company  believes that the adoption
of this standard will not have a material  effect on the Company's  consolidated
results of operations or financial position.

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The  Company's  consolidated  financial  statements  and related  notes and
independent auditors' reports are included herein under Item 14.

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

     The Company's former independent accountant, KPMG Peat Marwick LLP, who had
been engaged by the Company to audit its consolidated  financial  statements for
the fiscal year ended October 31, 1994,  was dismissed by the Company on October
9,  1995.  The report of KPMG Peat  Marwick  LLP on the  Consolidated  Financial
Statements of the Company contained no adverse opinion or disclaimer of opinion,
nor was the report  qualified or modified as to  uncertainty,  audit  scope,  or
accounting  principles  used,  with the  exception  of the adoption of Financial


<PAGE>

Accounting  Standards No. 109,  "Accounting for Income Tax". The decision by the
Company  to  change  accountants  was  recommended  by the audit  committee  and
approved by its Board of Directors.  From their  appointment to the dismissal of
the former  accountants there were no disagreements on any matters of accounting
principles or practice,  financial  statement  disclosure,  or auditing scope or
procedure in connection with their reports.

     The Board of Directors of the Company  approved the  appointment of Ernst &
Young  LLP as its  principal  accountant  to audit  the  Company's  Consolidated
Financial Statements for the years ended October 31, 1995 and 1996.



                                   PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS

                        DIRECTORS AND EXECUTIVE OFFICERS

     Certain  biographical   information   concerning  the  Company's  executive
officers and directors is presented below. Name Age Position


<TABLE>
<S>                                   <C>                                     
      William J. Mercurio...........  55  President, Chief Executive Officer,
                                             Chief Financial Officer and
                                             Director
      Joseph P. Powers..............  51  President, Telecommunication
      Services Group, Inc
      Gerry W. Hall.................  51  President, Traffic Management
                                             Group, Inc. and Director
      Frazier L. Gaines.............  57  President, Able Telcom International,
                                             Inc.  ("ATI") and Director
      Daniel L. Osborne.............  39  Chief Accounting  Officer and
                                          Assistant Secretary
      William D. Callahan...........  61  Acting Secretary and Director
      Billy B. Caudill..............  50  Director
      Robert C. Nelles..............  58  Director
      Gideon D. Taylor..............  54  Director
</TABLE>

     William J. Mercurio has been the President and Chief  Executive  Officer of
the Company since June 29, 1995 and the Chief Financial  Officer since March 26,
1996. Mr.  Mercurio was Sr. Vice  President and Director of Burnup & Sims,  Inc.
(n/k/a Mastec, Inc.), a telecommunication and utility service company,  where he
served  from 1971 until  1986.  From 1986 until June 1995,  he was the  Managing
Partner of Mercurio & Associates, P.A., Certified Public Accountants.

     Joseph P.  Powers has been  President  of the  Company's  Telecommunication
Services Group ("TSG") since  November 1995.  From January 1990 to October 1995,
Mr. Powers was Director of Operations for Volt Information  Sciences,  Inc. From
1979 to 1990 he held  various  management  positions  with  Burnup & Sims,  Inc.
(n/k/a Mastec, Inc.).

     Gerry W. Hall has been a Director and  President of the  Company's  Traffic
Management  Group ("TMG")  since  October  1996.  He also has been  President of
Georgia  Electric  Company  since  1983.  GEC  installs  and  maintains  traffic
management  systems  primarily  in the  Southeast  United  States.  The  Company
acquired GEC in October 1996.

     Frazier L. Gaines has been a Director of the Company  since August 1992 and
President of ATI since June 22, 1994.  From August of 1992 to June 22, 1994, Mr.
Gaines was Chief Operating  Officer of the Company.  Mr. Gaines developed and is
in charge of the Company's  Latin  American  Operations.  From 1987 to 1992, Mr.
Gaines was vice President of Judycom, Inc. and Judycom Construction Corporation,
both of which were  located in  Lexington,  Kentucky  and engaged in fiber optic
installation.

<PAGE>

     Daniel L.  Osborne  has been the Chief  Accounting  Officer of the  Company
since  January  1993.  From  January  1993 to March 26,  1996 he was also  Chief
Financial  Officer and  Secretary.  From  February  1991 to December  1992,  Mr.
Osborne was an operations analyst for BTR P.L.C.

     William D. Callahan has been a Director  since  September,  1995 and Acting
Secretary since October 1996. Mr. Callahan retired from Deloitte & Touche,  LLP,
as an audit partner where he served for more than 23 years, having SEC reporting
responsibility for a variety of publicly-traded companies

     Billy B.  Caudill  has been a  Director  since  August  1992.  Mr.  Caudill
resigned  as  President  of  Telecommunications  Technologies,  Inc.  (a  former
subsidiary of the Company) in July 1995.  He was  President and Chief  Executive
Officer of the Company from August 1992 to June 22, 1994. From 1988 to 1992, Mr.
Caudill   was   the   President   of   Teletronics    Technologies,    Inc.,   a
telecommunications engineering,  maintenance and installation company located in
Lexington, Kentucky.

   Robert C. Nelles was elected to the Board of Directors in February  1995. Mr.
Nelles is the President and owner of Nelles & Associates, Inc., an international
telecommunications consulting company he founded in 1991. Prior to founding this
company,  Mr.  Nelles held senior  executive  positions  both  domestically  and
internationally for Northern Telcom for over 35 years.

     Gideon D. Taylor was  Chairman of the Board of the Company  from 1988 until
May 1995.  From October 1988 to August 1992,  Mr. Taylor was also  President and
Chief Executive Officer of the Company.

ITEM 11. EXECUTIVE COMPENSATION

     The  following  table sets forth  certain  information  with respect to the
annual and long-term  compensation of the Company's Chief Executive  Officer and
the Company's  other  executive  officers for the fiscal years ended October 31,
1996, 1995, and 1994.

<TABLE>
<CAPTION>

                                         SUMMARY COMPENSATION TABLE
 
                                        Long-Term Compensation Awards

<S>                             <C>     <C>     <C>           <C>        <C>  
                                                              Restricted Securities
 Name and                                                     Stock      Underlying
 Principal                      Fiscal          Other Annual  Awards     Options
 Position                       Year   Salary   Compensation                (#)
 ------------------------------ ------ -------- ------------- --------   ----------

 William J. Mercurio            1996   $204,000    $6,000                 20,000
    President and Chief         1995     66,600     2,000                100,000
     Executive Officer

 Joseph P. Powers               1996   115,000      5,125                 20,000
    President of TSG  

 Gerry W. Hall                  1996     5,770
    President of TMG  and         
    Director

 Frazier L. Gaines              1996   110,000    34,000
    President of ATI and        1995   104,000    35,000
    Director                    1994   104,000    62,125       $75,000
                                          
</TABLE>
<PAGE>
<TABLE>
<S>                             <C>     <C>     <C>           <C>        <C>  
                                                              Restricted Securities
 Name and                                                     Stock      Underlying
 Principal                      Fiscal          Other Annual  Awards     Options
 Position                       Year   Salary   Compensation                (#)
 ------------------------------ ------ -------- ------------- --------   ----------

 Daniel L. Osborne              1996   66,000
    Chief Accounting Officer    1995   60,000                             25,000
    and Asst. Secretary         1994   60,000                   9,000

 Clark W. Barlow(1)             1996   10,154
    Former Chairman of the      1995  117,185       2,954 
    Board                       1994   81,731       4,057

 Douglas Hubbard                1996   57,700
   Former President of          1995  150,000       3,048
   TSCI and  Director (2)       1994   54,814       4,186
</TABLE>

                                      
     (1) Resigned effective March 1, 1996. 

     (2) Mr. Hubbard  resigned  as a Director  effective  March 26,  1996 and as
          President of TSCI on May 1, 1996.

<TABLE>
<CAPTION>
                                          OPTIONS GRANTED TABLE


                                                                          Potential
                               % of                                       Realized Value
                               Total                                      at Assumed Annual
                               Options                                    Rates
                               Granted                                    of Stock Price
                   No. of         to                                      Appreciation
                   Securities  Employees Exercise Market                  for Option Term(2)
                   Underlying  in Fiscal Or Base  Price/Date 
 Name              Granted     Year      Price    of Grant   Expiration       
                                                             Date         5%          10%
---------------------------------------------------------------------------------------------

<S>               <C>          <C>       <C>     <C>         <C>          <C>         <C>
William J.       
Mercurio           20,000       7.4%     $6.375  $6.375      06/11/06     $80,184     $203,202

Joseph P. Powers   15,000       5.5%      6.875   6.875      11/27/05      64,855      164,355
                    5,000       1.9%      7.813   7.813      12/19/06      24,568       62,260
</TABLE>

     (1) Options vest ratably over a three year period.

     (2) The potential  realizable  values set forth under these columns  result
from  calculations  assuming 5% and 10% annualized stock price growth rates from
grant dates to expiration dates as set by the Commission and are not intended to
forecast  future price  appreciation  of the  Company's  Common Stock based upon
growth at these prescribed  rates. The Company is not aware of any formula which
will determine with reasonable  accuracy a present value based on future unknown
factors.  Actual gains,  if any, on stock option  exercises are dependent on the
future  performance  of the Company.  There can be no assurance that the amounts
reflected in this table will be achieved. Options vest ratably over a three year
period.


              AGGREGATED OPTION EXERCISES AND OPTION VALUE TABLE

   The following table provides  information on options  exercised in the fiscal
year ended  October 31, 1996 by the  executive  officers  named in the  "Summary
Compensation  Table" above, the number of unexercised  options each of them held
at October 31, 1996 and the value of the unexercised "in-the-money" options each
of them held as of that date.
<PAGE>
<TABLE>
<CAPTION>
                                                 Number of
                                                 Securities         Value of
                                                 Underlying         Unexercised
                                                 Unexercisable      In-the-Money
                       Acquired    Value         Options at Fiscal  Options at Fiscal
           Name           on      Realized       Year-End(#)        Year-End($) (1)
                       Exercise                  Exercisable/       Exercisable/
                                                 Unexercisable      Unexercisable
    ----------------------------------------------------------------------------------

<S>                   <C>        <C>             <C>                <C>          
William J. Mercurio     -0-       -0-             50,000/70,000      189,750/234,750
                                  
Joseph P. Powers        -0-       -0-              5,000/15,000        8,750/21,560

Frazier L. Gaines       -0-       -0-            110,000/-0-         943,250/ -0-

Daniel L. Osborne       -0-       -0-             33,833/16,667      225,396/36,447
</TABLE>


(1)Options are  "in-the-money"  at the fiscal  year-end if the fair market value
   of the  underlying  securities on such date exceeds the exercise price of the
   option.  The  amounts set forth  represent  the  difference  between the fair
   market value of the securities underlying the options at the close of trading
   on October 31,  1996,  based on the average of the bid and the asked price of
   $8.625 per share of Common  Stock on that date (as quoted on NASDAQ)  and the
   exercise  price  of the  options,  multiplied  by the  applicable  number  of
   options.


COMPENSATION OF EXECUTIVE OFFICERS

     The Compensation of the Company's  executive  officers is determined by the
Board  of  Directors.   The  Company  has  not   established  a  formal  sitting
Compensation  Committee.  The Board also reviews the grant of stock  options and
compensation  for all officers of the Company.  See  "Committee  Interlocks  and
Insider Participation."

     William J. Mercurio,  the Company's President,  Chief Executive Officer and
Chief Financial Officer, is party to an employment agreement dated June 29, 1995
(the "Mercurio Employment  Agreement") with the Company. The Mercurio Employment
Agreement  expires on June 28, 1998 and is renewable for an additional  one-year
term at the option of Mr. Mercurio.  The Mercurio Employment  Agreement provides
for Mr.  Mercurio to be paid a base salary of at least  $200,000 per year, to be
increased by at least 5% per year.  Mr.  Mercurio  also  receives  insurance and
other benefits. The Mercurio Employment Agreement also provides for Mr. Mercurio
to be granted options to purchase  100,000 shares of the Company's  common stock
at a price equal to 90% of the fair  market  value for such stock at the date of
the grant,  50,000 of which become  exercisable on the first  anniversary of the
Mercurio  Employment  Agreement and the remainder  become  exercisable  in equal
installments on the second and third anniversary, respectively.

     Gerry W. Hall, who serves as President of the Company's Traffic  Management
Group (which consists of Transportation Safety Contractors, Inc., Transportation
Safety Contractors of Virginia,  Inc., and Georgia Electric Company ("GEC")), is
party to an employment agreement (the "Hall Employment Agreement") dated October
12, 1996 with GEC. The Hall Employment  Agreement terminates on October 11, 2001
and  provides  for Mr.  Hall to be paid a salary  of  $150,000  per  year,  plus
insurance and other  benefits.  The Hall  Employment  Agreement  also contains a
covenant by Mr.  Hall not to compete  with the Company for a period of two years
following his employment  with the Company,  unless the Company  terminates Hall
Employment  Agreement for cause or Mr. Hall  terminates  the agreement with good
reason, in which case the non-competition period will terminate after six months
(which  period may be extended  by the  Company up to one year in  exchange  for
additional compensation).

<PAGE>

     None of the Company's executive officers are parties to any agreements that
are triggered upon a "change of control" of the Company.


STOCK INCENTIVE PLAN

     The  Company  has  adopted  the 1996 Stock  Option  Plan ("the  Plan"),  as
amended,  pursuant to which 550,000 shares of Common Stock have been  authorized
for issuance.  The primary  purpose of the Plan is to attract and retain capable
executives  and  employees by offering them a greater  personal  interest in the
Company's  business through stock  ownership,  The Plan is administered by those
members of the Board of Directors of the Company who are "disinterested persons"
within the meaning of Rule 16b-3 promulgated  under the Securities  Exchange Act
of 1934,  as amended,  which  committee  selects the persons who will be granted
options  under the Plan,  prescribes  the terms and  provisions  of each  option
granted(which need not be identical),  specifies the number of shares subject to
each  option,  sets the option  price and  determines  the maximum  period which
options may be exercised.

     Options  granted  under  the Plan  may  either  be  options  qualifying  as
incentive  stock options (the  "Incentive  Options") under Section 422(a) of the
Internal  Revenue  Code  of  1986,  as  amended,   or   non-qualifying   options
("Nonqualified  Options").  Any  Incentive  Option  granted  under the Plan must
provide for an exercise  price of not less than 100% of the fair market value of
the underlying  shares on the date of such grant;  provided,  however,  that the
exercise price of any Incentive  Option granted to an eligible  employee  owning
more than 10% of the  outstanding  Common  Stock of the Company must not be less
than 110% of such fair market value as determined on the date of the grant.  The
term of each option and the manner in which it may be exercised is determined by
the Board of Directors, provided that no option may be exercisable more that ten
years  after  the date of its  grant  and,  in the case of an  Incentive  Option
granted to an eligible  employee  owning more than 10% of the Common  Stock,  no
more than five years after the date of the grant.

     The  individuals  eligible to receive options under the Plan are employees,
non-employee  directors,  advisors  and  consultants  of  the  Company  and  its
subsidiaries.  Non-employee  directors,  advisors and consultants  shall only be
eligible to receive Nonqualified Options. Employees are eligible to receive both
Incentive  Options and  Nonqualified  Options.  The Company  currently  has five
non-employee  directors  and  approximately  930  employees  who are eligible to
participate in the Plan. In the event that an outstanding  option terminates for
any reason,  the shares of Common Stock  subject to the  unexercised  portion of
such option shall again be available for grants under the Plan.


COMPENSATION OF DIRECTORS

     Directors  who are not  employees of the Company are paid $12,000  annually
and are  reimbursed  for expenses  associated  with Board  responsibilities.  In
addition,  non-employee directors were granted 5,000 stock options each, with an
exercise price of fair market value at the date of grant.

     Directors  who  also  serve  as  executive  officers  receive  no  fees  or
remuneration  for  acting  in  their  capacity  as a  Director  of the  Company.
Directors who serve on Board committees receive $750 per committee meeting.

<PAGE>

COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     Compensation  for the  Company's  officers is determined by the entirety of
the  Company's  Board of  Directors.  Of the members of the Board of  Directors,
Messrs.  Mercurio,  Gaines  and Hall also  serve as  executive  officers  of the
Company.

     On December 8, 1995, the Company acquired the issued and outstanding  stock
of Connell  for an  aggregate  purchase  price of  approximately  $2.2  million,
consisting  of $500,000 in cash and  approximately  $1.8  million in  promissory
notes.  The Company  obtained the cash portion of the purchase price through the
issuance of two promissory notes in the amount of $250,000 each to Messrs. Billy
B.  Caudill  and  Frazier L.  Gaines,  both of whom are  members of the Board of
Directors of the Company.  These  notes,  which bore  interest at the prime rate
plus 1%,  became due and were paid by the Company prior to December 31, 1996. As
additional consideration for their agreeing to lend $500,000 to the Company, the
Company  issued  to each of  Messrs.  Caudill  and  Gaines  5,000  shares of the
Company's  common  stock for $.001 per share.  The closing  market price for the
Registrant's  common stock on the Nasdaq  National  Market System on December 8,
1995 was $7.187 per share.

     On October 12, 1996, the Company,  acquired all the issued and  outstanding
capital stock of GEC, which prior to the  acquisition was owned equally by Gerry
W. and J. Barry Hall (collectively, the "Halls"). Following the acquisition, the
Halls  were  employed  by the  Company  and Gerry W. Hall was  appointed  to the
Company's  Board of Directors.  The purchase price for the GEC  acquisition  was
$3,000,000 to be paid in cash,  plus the issuance at the end of each of the next
five years of a number of shares of common stock of the Registrant having a then
discounted current market value of $1,000,000,  subject to adjustment,  based on
the pretax  earnings  performance of GEC. In connection  with the acquisition of
GEC, the Company  entered into  employment  agreements  with the Halls,  each of
which  expires  on  October  11,  2001,  that  provide  for the  Halls to serve,
respectively,  as President of the  Company's  traffic  management  group and of
TSCI.

     GEC operates in an Albany,  Georgia  facility  leased from the Halls for an
aggregate  annual  rent of  $60,000.  The  Company  has agreed to  purchase  the
facility from the Hall's for  $350,000,  which the Company  believes  represents
fair  market  value for the  property.  The  purchase  is subject to the Company
obtaining  acceptable  financing  and other  factors.  The  Company  expects  to
complete the purchase of the facility by June 1997.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES AND EXCHANGE ACT OF 1934

     To the Company's  knowledge,  and based on a review of available  forms and
reports  filed with the Company by the Company's  directors  and officers,  such
officers and directors  complied with the filing  requirements  of Section 16(a)
during fiscal year 1996.

ITEM 12. SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT

     The following sets forth, as of January 29, 1997  information  with respect
to the  beneficial  ownership of the Company's  common stock by: (i) each person
known by the Company to beneficially own more than 5% of the outstanding  shares
of the Company's Common Stock; (ii) each director of the Company;  (iii) each of
the Company's named executive  officers  (excluding those executive officers who
resigned during fiscal year 1996); and (iv) all directors and executive officers
as a group. Unless otherwise  indicated,  each of the shareholders named in this
table:  (a) has sole voting and  investment  power with respect to all shares of
common stock beneficially owned and (b) has the same address as the Company.

<PAGE>

<TABLE>         
<S>                                              <C>           <C>
                                                  Number of    Percent
Name/Address                                      Shares       of Class

William J. Mercurio(1)..........................    52,000        *
Joseph P. Powers................................     5,000        *
Gerry W. Hall...................................         0        *
Frazier L. Gaines(2)............................   681,912        8%
Daniel L. Osborne(3)............................    33,833        *
William D. Callahan.............................         0        *
Billy B. Caudill................................   421,983        5%
Robert C. Nelles................................         0        *
Gideon D. Taylor(4).............................   827,352       10%
All directors and officers as a group
     (9) persons ............................... 2,022,080       24%
</TABLE>
(1)Includes options that are currently  exercisable to purchase 50,000 shares of
   common stock.
(2)Includes  the  options  that  are  currently  exercisable  to  purchase
   110,000  shares of common  stock.  Does not include an  aggregate  of 9,000
   shares  held  as  trustee  for  four  minors  and as to  which  Mr.  Gaines
   disclaims beneficial ownership.
(3)Represents  options that are currently  exercisable to purchase  common
   stock.
(4)Includes 21,619 shares owned by Mr. Taylor's wife.

* Less than 1%


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

            See "Item 11--Committee Interlocks and Insider Participation."

                                   PART IV

ITEM 14.    EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON
            FORM 8-K

      (a)1. The following consolidated financial statements of Able Telcom
            Holding Corp. and subsidiaries are included as part of this report.

            Reports of Independent Certified Public Accountants
               Consolidated Financial Statements
               Consolidated Balance Sheets - October 31, 1996 and 1995
               Consolidated Statements of Operations - Years ended October
               31, 1996, 1995 and 994
               Consolidated  Statements  of  Shareholders'  Equity - Years ended
               October 31, 1996, 1995 and 1994
               Consolidated  Statements  of Cash Flows - Years ended October 31,
               1996, 1995 and 1994
               Notes to Consolidated Financial Statements - October 31, 1996

      (a)2. The financial statement schedule for the years ended October 31,
            1996, 1995 and 1994 is filed as part of this report and should be
            read in conjunction with the Consolidated Financial Statements of
            the Company.

            Schedule II-Valuation and Qualifying Accounts ............... F- 24

            Schedules  not listed above have been  omitted  because they are not
            applicable  or not  required or the  information  required to be set
            forth therein is included in the Consolidated  Financial  Statements
            or Notes thereto.

      (a)3. The  exhibits  listed  on  the  accompanying   Index  to  Exhibits
            immediately following the     Financial  Statement  Schedules  are
            filed as part of, or incorporated by reference into, this Report.
<PAGE>

<TABLE>
<S>                   <C>
             No.       Description
             3.1       Articles of Incorporation  of the Registrant,  as amended
                       to date(1)
             3.2       Amendment   to   Articles   of   Incorporation   of   the
                       Registrant,  as filed with the  Secretary of the State of
                       Florida on December 20, 1996(7)
             3.3       Bylaws of the Registrant, as amended to date(1)
             4.1       Articles of  Incorporation  (incorporated by reference to
                       Exhibit 3.2)(7)
             4.2       Specimen Common Stock Certificate(1)
             4.3       Specimen Series A Preferred Stock Certificate
             4.4       Forms of Warrant  issued to Credit  Suisse  First  Boston
                       Corporation and Silverton International Fund Limited(7)
             4.5       Gaines Option(1)
             4.6       Osborne Option(1)
             4.7       Able Telcom Holding Corp. 1995 Stock Option Plan(8)
             10.2      Stock Option Agreement with Daniel L. Osborne(1)
             10.3      Stock Option Agreement with Frazier L. Gaines(1)
             10.8      Employment Agreement with Gerry W. Hall(5)
             10.9      Employment Agreement with William J. Mercurio(3)
             10.10     Master Agreement with AT&T(1)
             10.11     Master Agreement with GTE(1)
             10.13     Note  restructuring  agreements with former principals of
                       TSCI(2)
             10.14     Stock Purchase  Agreement between the Registrant and H.C.
                       and Lois A. Connell, dated November 6, 1995(4)
             10.15     Amendment  to  Stock  Purchase   Agreement   between  the
                       Registrant  and H.C. and Lois A. Connell,  dated December
                       8, 1995(4)
             10.16     Consulting  Agreement  between  the  Registrant  and H.C.
                       Connell, dated November 6, 1995(4)
             10.17     Stock Purchase Agreement between the Registrant,  Traffic
                       Management Group, Inc.,  Georgia Electric Company,  Gerry
                       W. Hall and J. Barry Hall(5)
             10.18     Stock   Purchase   Agreement   between  the   Registrant,
                       Telecommunications    Services    Group,    Inc.,    Dial
                       Communications,  Inc.,  William  E.  Newton  and Sybil C.
                       Newton(6)
             10.19     Promissory  Note of the Registrant  payable to William E.
                       and Sybil C. Newton(6)
             10.20     Term Loan and Revolving Line of Credit  Facility  between
                       the  Registrant  and SunTrust  Bank,  South  Florida N.A.
                       effective as of November 29, 1995(4)
             10.21     First  Modification  to Term Loan and  Revolving  Line of
                       Credit  Facility  between  the  Registrant  and  SunTrust
                       Bank, South Florida N.A. effective as of May 20, 1996.
             10.22     Second  Modification  to Term Loan and Revolving  Line of
                       Credit  Facility  between the  Registrant  and  SunTrust,
                       South Florida N.A. effective as of October 30, 1996
             10.23     Third  Modification  to Term Loan and  Revolving  Line of
                       Credit  Facility  between  the  Registrant  and  SunTrust
                       Bank,  South  Florida  N.A.  effective  as of December 2,
                       1996.
             10.24     Term Loan and  Security  Agreement  between  Able  Telcom
                       Holding Corp.,  Georgia Electric Company,  Inc.,  Traffic
                       Management    Group,    Inc.,    Transportation    Safety
                       Contractors,  Inc.,  Transportation Safety Contractors of
                       Virginia,  Inc. and  SunTrust  Bank South  Florida  N.A.,
                       effective December 2, 1996
             10.25     Stock Purchase Agreement(7)
             11        Computation of Per Share Earnings
             23.1      Consent of Ernst and Young, LLP
             21        List of subsidiaries as of October 31, 1996
             27        Financial Data Schedule (for SEC use only)
</TABLE>

 (1)  Previously  filed with the  Commission  as an exhibit to the Company's
 Registration Statement on Form S-1 (Registration #33-65854) ordered effective
 by the Commission on February 26, 1994, as a amended.

 (2)  Previously   filed  with  the  Commission  as  an  exhibit  to  the
 Company's Annual Report on Form 10-K filed for fiscal year 1994.

 (3) Previously filed with the Commission as an exhibit to the
 Company's Annual Report on Form 10-K filed for fiscal year 1995.

 (4) Previously filed with the Commission as an exhibit to the Company's Current
 Report Form 8-K dated December 22, 1995.

 (5) Previously filed with the Commission as an exhibit to the Company's Current
 Report Form 8-K as filed with the Commission on October 25, 1996.

 (6) Previously filed with the Commission as an exhibit to the Company's Current
 Report Form 8-K as filed with the Commission on December 13, 1996.

 (7) Previously filed with the Commission as an exhibit to the Company's Current
 Report Form 8-K as filed with the Commission on December 31, 1996.

 (8) Previously filed with the Commission as an exhibit to the Company's 
 Registration Statement on Form S-8 (Registration #333-04377)  ordered effective
 by the Commission: June, 1996.


(b)    Reports on Form 8-K

     A Current Report on Form 8-K dated October 25, 1996 was filed on such date;
under Item 2 thereof,  the Company  reported the acquisition of Georgia Electric
Company.

<PAGE>


SIGNATURES

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

                                          ABLE TELCOM HOLDING CORP.



                                 By: /s/ William J. Mercurio  February 12, 1997
                                     ------------------------------------------
                                         WILLIAM J. MERCURIO, President and CEO

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated:

<TABLE>
<S>                        <C>                              <C>    
        Signatures                   Title                   Date Signed

/s/  William J. Mercurio   President and Chief
------------------------   Executive and Financial
WILLIAM J. MERCURIO        Officer and Director              February 12, 1997

/s/  Daniel L. Osborne     Chief Accounting Officer,
------------------------   and Assistant Secretary           February 12, 1997
DANIEL L. OSBORNE          

/s/  William D. Callahan   Secretary and Director
------------------------                                     February 12, 1997
WILLIAM D. CALLAHAN     

/s/  Frazier L. Gaines     Director                          February 12, 1997
------------------------
FRAZIER L. GAINES                                            

/s/  Billy B. Caudill      Director
------------------------                                     February 12, 1997
BILLY B. CAUDILL 

/s/  Robert Nelles         Director                          February 12, 1997
------------------------
ROBERT NELLES                                                

/s/  Gideon Taylor         Director                          February 12, 1997
------------------------
GIDEON TAYLOR                                             

/s/  Gerry W. Hall         Director                          February 12, 1997
------------------------
GERRY W. HALL                                                

</TABLE>
<PAGE>

<PAGE>

                              INDEX TO FINANCIAL STATEMENTS AND
                                FINANCIAL STATEMENT SCHEDULES

<TABLE>
<S>                                                                        <C>
                                                                           PAGE
                                                                           ----

Reports of Independent Certified Public Accountants                        F-2

Consolidated Financial Statements:

    Consolidated Balance Sheets - October 31, 1996 and 1995                F-4

    Consolidated Statements of Operations - Years ended October 31,
     1996, 1995 and 1994                                                   F-6

    Consolidated Statements of Shareholders' Equity - Years ended
     October 31, 1996, 1995 and 1994                                       F-7

    Consolidated Statements of Cash Flows - Years ended October 31,
     1996, 1995 and 1994                                                   F-8

    Notes to Consolidated Financial Statements - October 31, 1996          F-10

Financial Statement Schedule:

    II.  Valuation and Qualifying Accounts - Years ended October
          31, 1996, 1995, and 1994                                         F-24

</TABLE>
<PAGE>

                      REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Shareholders and Board of Directors
Able Telcom Holding Corp.:


We have  audited the  accompanying  consolidated  balance  sheets of Able Telcom
Holding Corp. and subsidiaries  (the "Company") as of October 31, 1996 and 1995,
and the related consolidated statements of operations, shareholders' equity, and
cash flows for the two years in the period ended  October 31,  1996.  Our audits
also included the financial statement schedule listed in the Index at Item 14(a)
for the years ended October 31, 1996 and 1995.  These  financial  statements and
schedule are the responsibility of the Company's management.  Our responsibility
is to express and opinion on these  financial  statements  and schedule 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 consolidated  financial position of Able
Telcom  Holding Corp.  and  subsidiaries  at October 31, 1996 and 1995,  and the
consolidated  results of their  operations  and their cash flows for each of the
two years in the period ended  October 31, 1996, in  conformity  with  generally
accepted  accounting  principles.  Also, in our opinion,  the related  financial
statement  schedule  for the  years  ended  October  31,  1996  and  1995,  when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents fairly in all material respects the information set forth therein.



                                                          /s/ Ernst & Young LLP
                                                          ---------------------
                                                              Ernst & Young LLP
West Palm Beach, Florida
January 22, 1997, except for the last
  paragraph of Note 8,as to which the
  date is January 31, 1997





<PAGE>

                      REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Shareholders and Board of Directors
Able Telcom Holding Corp.:


We  have  audited  the  accompanying   consolidated  statements  of  operations,
shareholders'   equity,  and  cash  flows  of  Able  Telcom  Holding  Corp.  and
subsidiaries  (the "Company") for the year ended October 31, 1994. In connection
with our audit of the consolidated  financial  statements,  we also have audited
the 1994  financial  statement  schedule  as  listed  in the Item  14(a).  These
consolidated  financial  statements and the financial statement schedule are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated  financial  statements and the financial statement
schedule 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 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 audit  provided a  reasonable  basis for our
opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the results of operations and cash flows of
Able Telcom Holding Corp. and  subsidiaries  for the year ended October 31, 1994
in  conformity  with  generally  accepted  accounting  principles.  Also, in our
opinion,  the related 1994  financial  statement  schedule,  when  considered in
relation  to the  basic  consolidated  financial  statements  taken  as a whole,
presents fairly in all material respects the information set forth therein.

The Company adopted the provisions of the Financial Accounting Standards Board's
Statement of Financial  Accounting  Standards  No. 109,  "Accounting  for Income
Taxes", effective as of November 1, 1993.




                                                      /s/ KMPG Peat Marwick LLP
                                                      -------------------------
                                                          KMPG Peat Marwick LLP
Tampa, Florida
February 16, 1995



<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                        OCTOBER 31,
ASSETS                                                             1996               1995
------                                                             ----               ----

Current assets:
<S>                                                         <C>                <C>
  Cash and cash equivalents                                 $3 ,267,161        $ 2,952,239
  Investments                                                   571,010            571,875
  Accounts receivable, net                                   13,617,792         10,529,124
  Inventories                                                 1,374,698          3,535,622
  Costs and profits in excess of  billings on  uncompleted
    contracts                                                   954,269                ---
  Prepaid expenses and other                                    757,883            831,908
  Deferred income taxes                                         905,898            151,879
                                                             -----------        -----------

    Total current assets                                     21,448,711         18,572,647

Property and equipment, net                                  10,667,357          6,119,608

Other assets:
  Deferred income taxes                                         269,942            331,739
  Goodwill, net                                               5,919,880          7,203,761
  Other                                                         612,941            254,461
                                                             -----------        -----------

    Total other assets                                        6,802,763          7,789,961




                                                             -----------        -----------
    Total assets                                            $38,918,831        $32,482,216
                                                             ===========        ===========
</TABLE>


See accompanying notes to consolidated financial statements.


<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                         OCTOBER 31,
LIABILITIES AND SHAREHOLDERS' EQUITY                               1996               1995
------------------------------------                               ----               ----

Current liabilities:
<S>                                                         <C>                <C>
  Current portion of long-term debt                         $ 1,965,611        $ 2,222,369
  Notes payable - shareholders                                1,307,976          1,557,976
  Lines of credit                                             4,626,178          3,220,000
  Accounts payable and accrued liabilities                    8,036,142          4,174,405
  Billings in excess of costs and  profits on  uncompleted
    contracts                                                 1,218,724                ---
                                                             -----------        -----------

    Total current liabilities                                17,154,631         11,174,750


Long-term debt, excluding current portion                     8,149,807          3,033,000
Other liabilities                                             2,015,895                ---
                                                             -----------        -----------

    Total liabilities                                        27,320,333         14,207,750

Minority interest                                                   ---            807,955

Commitments and contingencies                                       ---                ---

Shareholders' equity:
  Common  stock,  $.001 par value,  authorized  25,000,000
    shares;  8,203,212  and  8,193,212  shares  issued and
    outstanding in 1996     and 1995, respectively                8,203              8,193
  Additional paid-in capital                                 12,833,286         12,790,196
  Unrealized loss on investments, net of tax                    (53,990)           (53,125)
  (Deficit) retained earnings                                (1,189,001)         4,721,247
                                                             -----------        -----------

    Total shareholders' equity                               11,598,498         17,466,511
                                                             -----------        -----------

    Total liabilities and shareholders' equity              $38,918,831        $32,482,216
                                                             ===========        ===========
</TABLE>


See accompanying notes to consolidated financial statements.


<PAGE>
                            ABLE TELCOM HOLDING CORP.
                               AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                            FOR THE YEARS ENDED OCTOBER 31,

                                                      1996               1995               1994
                                                      ----               ----               ----

<S>                                          <C>                  <C>               <C>
Revenues                                     $  48,906,170        $35,407,581       $ 25,784,150
                                                ----------         ----------        -----------
Costs and expenses:
  Costs of revenues                             40,486,018         27,719,750         16,395,098
  General and administrative                     8,403,491          5,464,338          4,166,694
  Depreciation and amortization                  2,749,804          1,914,064            854,251
  Charges and transaction/translation
    losses related to Latin American
    operations                                   3,553,373             95,798          2,381,515
                                                -----------        -----------       ------------

    Total costs and expenses                    55,192,686         35,193,950         23,797,558
                                                -----------        -----------       ------------

       (Loss) income from operations            (6,286,516)           213,631          1,986,592
                                                -----------        -----------       ------------

Other expense (income):
  Loss on sale of investments                          ---            100,379                ---
  Interest expense                               1,350,440          1,117,932            397,167
  Interest and dividend income                    (270,163)          (672,598)          (418,302)
  Other expenses                                    32,033                ---                ---
                                                -----------        -----------       ------------
    Total other expense (income)                 1,112,310            545,713            (21,135)
                                                -----------        -----------       ------------

(Loss) income before income taxes and
 minority interest                              (7,398,826)          (332,082)         2,007,727

Income tax (benefit) expense                      (890,695)          (368,105)           632,384
                                                -----------        -----------       ------------

(Loss) income before minority interest          (6,508,131)            36,023          1,375,343

Minority interest                                 (597,883)           317,189            429,330

                                                -----------        -----------       ------------
Net (loss) income                              $(5,910,248)       $  (281,166)      $    946,013
                                                ===========        ===========       ============


(Loss) income per common share:                $      (.71)       $      (.03)      $        .12
                                                ===========        ===========       ============

Weighted average common shares and
common    stock equivalents outstanding          8,361,458          8,283,668          7,736,122
                                                ===========        ===========       ============
</TABLE>

See accompanying notes to consolidated financial statements.


<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


<TABLE>
<CAPTION>
                             Common Stock                      Unrealized
                                                  Additional    Loss on      (Deficit)
                                                   Paid-in    Investments,   Retained
                        -----------------------
                        -----------  -----------
                          Shares       Amount      Capital       Net of     Earnings      Total
                                                                 Taxes
                                                  ------------------------- ----------  ----------
                        -----------  -----------

<S>                      <C>        <C>          <C>         <C>            <C>         <C>
Balance at October
 31, 1993                6,176,548  $     6,177  $ 3,283,576 $         ---  $4,056,400  $ 7,346,153

  Issuance of common
    stock for
    exercise of stock
    options                199,500          199       32,051           ---         ---       32,250
  Tax benefit for
    exercise of stock
    options                    ---          ---      812,525           ---         ---      812,525
  Issuance of common
    stock for
    services rendered       30,000           30       29,970           ---         ---       30,000
  Tax benefit on
    issuance of
    common stock for
    services rendered          ---          ---      116,889           ---         ---      116,889
  Issuance of common
    stock for
    exercise of
    warrants             1,192,993        1,193    4,364,129           ---         ---    4,365,322
  Issuance of common
    stock for
    acquisition            272,730          273    2,249,720           ---         ---    2,249,993
  Remittance by
    officer relating
    to profits on
    stock transactions         ---          ---       80,261           ---         ---       80,261
  Unrealized loss on
    investments,
    restricted                 ---          ---          ---      (146,950)        ---     (146,950)
  Net income                   ---          ---          ---           ---     946,013      946,013
                        -----------  -----------  ----------- -------------  ----------  -----------
Balance at October       7,871,771        7,872   10,969,121      (146,950)  5,002,413   15,832,456
 31, 1994

  Issuance of common
    stock to
    liquidate notes
    payable to
    shareholders /
    directors              259,434          259    1,499,741           ---         ---    1,500,000
  Issuance of common
    stock for
    exercise of
    warrants                67,007           67      334,829           ---         ---      334,896
  Cancellation of
    common stock
    previously issued
    for acquisition         (5,000)          (5)     (13,495)          ---         ---      (13,500)
  Change in
    unrealized loss
    on investments             ---          ---          ---        93,825         ---       93,825
   Net loss                    ---          ---          ---           ---    (281,166)    (281,166)
                        -----------  -----------  ----------- -------------  ---------- -----------
Balance at October       8,193,212        8,193   12,790,196       (53,125)  4,721,247   17,466,511
 31, 1995

  Issuance of common
    stock to
    directors in
    connection with
    acquisition             10,000           10       43,090           ---         ---       43,100
  Change in
    unrealized loss
    on investments             ---          ---          ---          (865)        ---         (865)
   Net loss                    ---          ---          ---           ---   (5,910,248) (5,910,248)
                        ===========  ===========  =========== =============  ==========  ===========
Balance at October
 31, 1996                8,203,212   $    8,203   $12,833,286 $    (53,990)  $(1,189,00) $11,598,498
                        ===========  ===========  =========== =============  ==========  ===========
</TABLE>


See accompanying notes to consolidated financial statements.


<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                         For the years ended October 31,

                                                     1996              1995               1994
                                                     ----              ----               ----

Operating Activities:
<S>                                          <C>                <C>                <C>
  Net (loss) income                          $ (5,910,248)      $  (281,166)       $   946,013

  Adjustments  to reconcile  net (loss)
   income to net cash provided by operating
   activities, net of effects of acquisitions:
    Depreciation and amortization               2,749,804         1,914,064            854,251
    Bad debt expense                            1,094,503            86,593          1,012,202
    Provision for inventory losses                290,500               ---                ---
    Write down of Latin American assets         1,593,480               ---                ---
    Deferred income taxes                        (890,695)         (439,341)        (1,423,195)
    Loss on sale of equipment                      21,805               ---                ---
    Loss on sale of investments                       ---           100,379                ---
    Translation/transaction losses              1,179,769            95,798            858,326
    Minority interest                            (597,883)          317,189            429,330
    Common stock issued for services                  ---               ---             30,000

  Changes in assets and liabilities, net
   of effects from acquisitions:
    Decrease in accounts receivable             1,854,735           796,530          1,474,805
    Decrease (increase) in inventories          1,871,004          (353,318)           448,597
    Increase in costs and profits in excess
     of billings on uncompleted contracts        (828,553)              ---                ---
    Decrease (increase) in prepaid expenses
     and other                                    339,711          (223,811)            (8,692)
    Increase in other assets                     (286,996)          (24,373)            (3,873)
    Increase (decrease) in accounts payable
     and accrued expenses                         159,861        (1,514,749)          (423,423)
    Increase in billings in excess of costs
     and estimated profits on uncompleted
     contracts                                    681,446               ---                ---
                                               -----------       -----------        -----------
      Net cash provided by operating
       activities                               3,322,242           473,795          4,194,341
                                               -----------       -----------        -----------

Investing Activities:
    Purchases of property and equipment        (2,557,258)       (2,250,904)        (1,835,377)
    Proceeds from the sale of equipment           128,823               ---                ---
    Purchases of investments                          ---          (350,000)        (4,972,920)
    Sales of investments                              ---         4,418,233                ---
    Investments under the equity method               ---               ---             50,000
    Cash acquired in acquisitions               1,760,970               ---                ---
    Cash paid in acquisitions                  (3,500,000)              ---         (6,422,610)
                                               -----------       -----------        ----------
      Net cash (used in)provided by
       investing activities                    (4,167,465)        1,817,329        (13,280,907)
                                               -----------       -----------        -----------
</TABLE>
See accompanying notes to consolidated financial statements

<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>



Financing Activities:
<S>                                             <C>                 <C>                <C>
    Net borrowing under lines of credit         1,254,178           378,000            495,999
    Payment of shareholders/directors loans      (500,000)              ---           (260,846)
    Borrowings from shareholders/directors        500,000            57,976                ---
    Proceeds from long-term debt                4,547,148           737,758          7,954,175
    Proceeds from debt to finance
     acquisition                                3,000,000               ---                ---
    Payments on long-term debt                 (6,251,340)       (3,775,168)        (1,610,346)
    Distributions to minority interests          (210,072)         (500,795)          (745,962)
    Foreign currency translation adjustment      (778,509)              ---           (277,764)
    Tax benefit for exercise of stock
     options and issuance of common stock
     for services rendered                            ---               ---            929,414
    Proceeds from exercise of warrants and
     options                                          ---           334,896          4,397,572
    Proceeds from officer relating to
     profits on stock transactions                    ---               ---             80,261
                                               -----------       -----------        -----------
      Net cash provided by (used in)
       financing activities                     1,561,405        (2,767,333)        10,962,503


Effect of exchange rate changes on cash and
equivalents                                      (401,260)           (3,901)          (580,562)
                                               -----------       -----------        -----------

Increase (decrease) in cash and cash
equivalents                                       314,922          (480,110)         1,295,375

Cash and cash equivalents at beginning of
year                                            2,952,239         3,432,349          2,136,974
                                               -----------       -----------        -----------

Cash and cash equivalents at end of year      $ 3,267,161       $ 2,952,239        $ 3,432,349
                                               ===========       ===========        ===========



Supplemental disclosures of cash flow
 information:
  Non-cash transactions affecting
   operating, investing and financing
   activities:
    Operating activities:
      Issuance of common stock for services   $       ---       $       ---        $    30,000
                                               ===========       ===========        ===========

    Financing activities:
      Issuance of common stock for                    ---               ---          2,249,993
       acquisition
      common stock issued to repay
       shareholders/directors loans                   ---        (1,500,000)               ---
      Issuance of notes payable to
       shareholders/directors                         ---               ---          3,000,000
                                               ===========       ===========        ===========
        Total financing activities            $       ---       $(1,500,000)       $ 5,249,993
                                               ===========       ===========        ===========

See Note 3 for information on non-cash
investing and  financing activities
associated with acquisitions


Interest paid                                 $ 1,120,465       $   933,302        $   322,167
                                               ===========       ===========        ===========
Income taxes paid, net of refunds             $       ---       $   168,460        $   816,143
                                               ===========       ===========        ===========
</TABLE>

See accompanying notes to consolidated financial statements.


<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1996


(1)     THE COMPANY

        Able Telcom Holding Corp.  ("Able Telcom" or the "Company")  specializes
        in the  design,  installation,  maintenance  and system  integration  of
        advanced  communication  networks for voice,  data,  and video  systems.
        These services are provided for an array of complimentary  applications,
        including telecommunications infrastructure, traffic management systems,
        automated  manufacturing  systems and utility  networks.  The Company is
        currently  organized  into  four  operating  groups:   telecommunication
        services,  cable television  services,  traffic management  services and
        communications  development.  Each  group,  excluding  cable  television
        services,  is comprised of  subsidiaries of the Company with each having
        local executive management  functioning under a decentralized  operating
        environment.  The Company formed the cable televisions services group to
        facilitate planned expansion during 1997.

        Able is  headquartered  in West Palm Beach,  Florida,  and  operates its
        subsidiaries  throughout the Southeastern  United States,  as well as in
        areas of South America.

(2)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        (A)    PRINCIPLES OF CONSOLIDATION

               The consolidated financial statements include the Company and its
               subsidiaries. All material intercompany accounts and transactions
               have been eliminated.  Operations for  subsidiaries  acquired are
               included in the consolidated results of operations since the date
               of acquisition.
 .

        (B)    REVENUE RECOGNITION

               Revenues from "per unit basis"  contracts  are  recognized at the
               time services are rendered and accepted by the customer. Revenues
               from installation  contracts are recognized as contract costs are
               incurred under the  percentage-of-completion  method  measured on
               the  cost  to cost  basis.  Contract  costs  include  all  direct
               material and labor costs as well as those indirect costs relating
               to the contract  such as indirect  labor,  supplies and equipment
               costs.  The balance sheet was reclassified at October 31, 1996 to
               present under separate  headings  "Costs and profits in excess of
               billings on  uncompleted  contracts"  and  "Billings in excess of
               costs and profits on uncompleted contracts".  At October 31, 1995
               and 1994 such amounts were  included in accounts  receivable  and
               inventory.

               Changes  in  job   performance,   condition   and  the  estimated
               profitability  may result in revisions to costs and profits which
               are recognized in the period in which the changes are determined.

        (C)    INVENTORIES

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

        (D)    PROPERTY AND EQUIPMENT

               Property  and  equipment  are recorded at cost.  Depreciation  is
               provided for using the  straight-line  method over the  estimated
               useful lives of the assets.


<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1996


        (E)    INCOME TAXES

               Income  taxes have been  provided  using the asset and  liability
               method in  accordance  with  Statement  of  Financial  Accounting
               Standards No. 109, "Accounting for Income Taxes" (Statement 109).

        (F)    GOODWILL

               Goodwill  represents  the amount by which the  purchase  price of
               businesses  acquired  exceeds the fair market  value of their net
               assets under the purchase method of accounting. Goodwill is being
               amortized on a straight-line  basis over 10-20 years. The Company
               periodically  evaluates the  realizability  of goodwill and other
               intangible   assets  to  determine  whether  any  impairment  has
               occurred in the value of such assets based on the  provisions  of
               Statement of Financial  Accounting  Standards No. 121 "Accounting
               for the Impairment of Long-Lived Assets and for Long-Lived Assets
               to be Disposed Of" (Statement  No. 121). The initial  adoption of
               Statement  No. 121 in 1996 did not have a material  impact on the
               Company's financial condition or results of operations.  See Note
               15 regarding  certain  impairment  writedowns  that were recorded
               during 1996 as a result of applying the  provisions  of Statement
               No. 121.

               Goodwill  is net of  accumulated  amortization  of  $791,329  and
               $733,934 at October 31, 1996 and 1995, respectively. Amortization
               expense for the years ended  October 31, 1996,  1995 and 1994 was
               $338,859, $468,684 and $188,894, respectively.

         (G)   CASH AND CASH EQUIVALENTS

               The Company  considers all unrestricted  highly liquid securities
               (consisting  principally of short-term  money market  investments
               and treasury notes) with a maturity or redemption option of three
               months or less at the date of purchase to be cash equivalents.


        (H)    FOREIGN CURRENCY TRANSLATION

               In  accordance  with  Statement of Financial Accounting Standards
               No. 52,"Foreign Currency Translation",  the financial  statements
               of the  Company's  Latin  American  subsidiaries  are  remeasured
               using the U.S. dollar as the functional currency. Monetary assets
               and liabilities denominated in a foreign currency are  remeasured
               into U.S. dollars at the year end  exchange  rate.   Non-monetary
               assets and  liabilities,  and  related  income  statement amounts
               are  remeasured  at historical exchange rates.

        (I)    INVESTMENTS

               As  of  November  1,  1994,  the  Company  adopted  Statement  of
               Financial  Accounting  Standards No. 115, "Accounting for Certain
               Investments in Debt and Equity Securities". Under this statement,
               the Company's  investments are classified as "available for sale"
               and,  accordingly,  are recorded at the quoted market value as of
               the   fiscal   year  end  with  an   offsetting   adjustment   to
               shareholders' equity, net of tax.

        (J)    STOCK COMPENSATION

               The  Company  currently  follows  Accounting   Principles   Board
               Opinion No. 25, "Accounting  for Stock Issued to  Employees",  in
               accounting  for employee stock options.  During October 1995, the
               Financial  Accounting  Standards Board issued Statement  No. 123,
               "Accounting for Stock Based Compensation",   which  is  effective
               for fiscal years beginning after December 15, 1995.
<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1996


               The adoption of this statement is not expected to have a material
               impact on the financial condition or results of operations of the
               Company.

        (K)            FINANCIAL STATEMENTS

               The  carrying  amounts  of cash  and cash  equivalents,  accounts
               receivable  (generally  unsecured),  accounts  payable  and notes
               payable  approximate  fair value due to the short maturity of the
               instruments and the provision for what management  believes to be
               adequate  reserves  for  potential  losses.  The  fair  value  of
               long-term debt is estimated using quoted market prices,  whenever
               available, or an appropriate valuation method. The carrying value
               of long-term debt approximates its fair value due to the variable
               interest rates associated with the debt.

        (L)    RECLASSIFICATION

               Certain  items  in  the  1995  and  1994  consolidated  financial
               statements  have  been   reclassified  to  conform  to  the  1996
               presentation.

        (M)    USE OF ESTIMATES

               The  preparation  of  financial  statements  in  conformity  with
               generally  accepted  accounting  principles require management to
               make certain  estimates and assumptions  that affect the reported
               amounts of assets and  liabilities,  revenues  and costs.  Actual
               results could differ from those estimates.

(3)     ACQUISITIONS


        On October 12,  1996,  the Company,  through a wholly owned  subsidiary,
        acquired all of the outstanding common stock of Georgia Electric Company
        (GEC). As initial consideration, the Company paid $3,000,000 in cash. As
        subsequent consideration,  the Company will issue shares of common stock
        over the next five years  beginning in fiscal 1997,  contingent upon the
        operating  performance  of GEC and the  market  value  of the  Company's
        stock.  The  acquisition  was accounted for using the purchase method of
        accounting.  The results of operations are included in the  consolidated
        statements of operations since the date of acquisition.

        The following  summarizes  the fair values of the assets of GEC acquired
        and the liabilities of GEC assumed:

<TABLE>
<S>                                                                <C>
             Cash and cash equivalents                              $1,366,619
             Accounts receivable                                     4,422,983
             Costs  and   profits   in  excess of billings on           27,645
               uncompleted contracts
             Prepaid expenses                                          221,105
             Property and equipment                                  2,258,672
             Other assets                                               44,258
             Accounts payable and accrued liabilities               (2,095,942)
             Billings   in  excess  of  costs and profits  on         (529,445)
               uncompleted contracts
             Undistributed S Corp earnings due to former owners     (2,715,895)
                                                                     ---------
                   Net assets                                       $3,000,000
                                                                     =========
</TABLE>


        On December 8, 1995,  the Company,  through a wholly  owned  subsidiary,
        acquired  all of the  outstanding  common  stock of H.C.  Connell,  Inc.
        ("Connell").  As  consideration,  the Company paid  $500,000 in cash and


<PAGE>
                           ABLE TELCOM HOLDING CORP.
                               AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1996

        issued a $1,869,049  promissory  note. The acquisition was accounted for
        using the purchase  method of  accounting.  The results of operations of
        Connell are included in the consolidated  statements of operations since
        the date of the acquisition.

        The  following  summarized  the fair  values of the  assets  of  Connell
        acquired and the liabilities of Connell assumed:
<TABLE>
<S>                                                                  <C>
                 Cash and cash equivalents                           $  394,351
                 Accounts receivable                                  1,614,923
                 Costs  and  profits  in  excess of  billings  on
                 uncompleted contracts                                   98,071
                 Prepaid expenses                                       109,661
                 Property and equipment                               1,957,195
                 Other assets                                            27,226
                 Accounts payable and accrued expenses                 (847,928)
                 Billings   in  excess  of  costs   and  profits  on
                 uncompleted contracts                                   (7,833)
                 Borrowings                                            (663,017)
                 Other liabilities                                     (313,600)
                                                                       =========
                   Net assets                                        $2,369,049
                                                                      =========
</TABLE>


        On June 22, 1994,  the Company  acquired all of the  outstanding  common
        stock of  Transportation  Safety  Contractors,  Inc. and its  affiliates
        ("TSCI"). As consideration,  the Company paid $6,000,000 in cash, issued
        $3,000,000 in promissory  notes and issued  272,300 shares of restricted
        common  stock of the  Company.  In  November  1994,  the  $3,000,000  in
        promissory  notes  were  renegotiated  resulting  in  $1,500,000  of the
        promissory notes being converted to 259,434 shares of restricted  common
        stock of the Company with no gain or loss  recognized on the conversion.
        The   acquisition  was  accounted  for  using  the  purchase  method  of
        accounting  and  $6,777,017  in  goodwill  was  recorded  which is being
        amortized  over 20 years under the  straight-line  method.  Amortization
        expense amounted to approximately $339,000 in 1996 and 1995 and $102,408
        in 1994.  The results of  operations  are  included in the  consolidated
        statements of operations since the date of the acquisition.

        In June  1994,  the  Company  acquired  a 75%  interest  in a  Brazilian
        telecommunications company for $144,000 plus $356,000 in working capital
        contributions.  The  acquisition  was  accounted  for using the purchase
        method and $496,606 in goodwill was recorded and is being amortized over
        10 years using the straight-line  method.  The results of operations are
        included in the consolidated  statements of operations since the date of
        acquisition.  During fiscal year 1996, the Company  reduced the carrying
        value of the goodwill of $447,010 to zero in accordance  with provisions
        of  Statement  no.  121.  Such  charge  is  reflected  in  "Charges  and
        transaction/translation  losses related to Latin American operations" in
        the  Consolidated  Statements  of Operations  for fiscal year 1996.  The
        acquisition did not have a material impact on 1994 operations.


        Unaudited pro forma  financial  information for the Company is presented
        as if the  Company's  acquisitions  of GEC,  Connell  and TSCI had taken
        place as of November 1, for each of the respective years.

<TABLE>
<CAPTION>
                                            YEARS ENDED OCTOBER 31,
                                            ----------------------
<S>                               <C>              <C>              <C>
                                      1996             1995             1994
                                      ----             ----             ----
         Revenues                 $75,174,571      $69,833,590       $69,196,722
         Net (loss) income          (1,391,59)       2,332,280         2,197,673
         Net (loss) income per
          share                          (.17)             .28               .28
</TABLE>

        This unaudited pro forma  information  does not purport to be indicative
        of  the  results  of  operations  which  would  have  resulted  had  the
        acquisitions been consummated at the dates assumed.

<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1996


(4)     INVESTMENTS

        At October 31, 1996 and 1995,  investments consisted of preferred stock.
        These  securities are classified as  available-for-sale  and have a cost
        basis of  $625,000.  The fair market value as  determined  by the quoted
        market  prices,  at October 31, 1996 and 1995 was $571,010 and $571,875,
        respectively.  The unrealized losses on these investments of $53,990 and
        $53,125,   net  of  tax,  is  included  as  a  separate   component   of
        shareholders' equity.

        Investment  income  consisted  of dividends  and  interest  income which
        amounted to $180,015,  $263,502 and $187,724 for the years ended October
        31, 1996, 1995 and 1994, respectively. During the year ended October 31,
        1995, the Company sold investment securities;  the proceeds and realized
        loss on the sale totaled $4,418,233 and $100,379, respectively.

(5)     ACCOUNTS RECEIVABLE

        Accounts  receivable  are  recorded  net of an  allowance  for  doubtful
        accounts  of  $828,186  and  $535,914  at  October  31,  1996 and  1995,
        respectively.  Accounts  receivable  includes  retainage  which has been
        billed but is not due until approximately 90 days after the services are
        rendered and accepted by the customer.  Retainage totaled $1,675,698 and
        $1,410,832  at October 31, 1996 and 1995,  respectively.  A  significant
        portion of accounts  receivable is derived from several major customers.
        (See Note 11)

 (6)    UNCOMPLETED CONTRACTS

        Uncompleted contracts consist of the following at October 31, 1996:
<TABLE>
<S>                                                                  <C>
                 Costs incurred on uncompleted contracts             $15,989,067
                 Earnings recognized on uncompleted contracts
                                                                      2,706,996
                                                                      ----------
                     Total                                            18,696,063
                 Billings to date
                                                                      18,960,518
                                                                      ==========
                     Net                                             $   264,455
                                                                      ==========
</TABLE>

        Included  in  the  accompanying   balance  sheets  under  the  following
headings:
<TABLE>
<S>                                                                  <C>
                 Costs and profits in excess of billings on
                  uncompleted contracts                              $   954,269
                 Billings in excess of costs and profits on
                  uncompleted contracts                                1,218,724
                                                                      ==========
                     Net                                             $   264,455
                                                                      ==========
</TABLE>

(7)     PROPERTY AND EQUIPMENT, NET

        Property and equipment, net, consists of the following at October 31,

<TABLE>
<CAPTION>
                                                      1996              1995
<S>                                                <C>              <C>
            Land and buildings                     $ 1,398,884      $ 1,367,121
            Equipment, furniture and fixtures       13,493,828        7,204,304
            Equipment under capital lease              637,407              ---
                                                    ----------       ----------
                                                    15,530,119        8,571,425
            Less accumulated depreciation           (4,862,762)      (2,451,817)
                                                    ----------       -----------
            Property and equipment, net            $10,667,357      $ 6,119,608
                                                    ==========       ===========
</TABLE>


<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1996



        Depreciation and amortization expense relating to property and equipment
        amounted to $2,410,945,  $1,445,380 and $665,357 in 1996, 1995 and 1994,
        respectively.

(8)     BORROWINGS

        The  Company's  borrowings  consist of the following at October 31, 1996
        and 1995:
<TABLE>
<CAPTION>
                                                                                     1996          1995
                                                                                 ------------  ------------
           LINES OF CREDIT:
<S>                                                                              <C>           <C>
             Bank lines of credit ($6,600,000 aggregate maximum limit at October
               31, 1996)  $6,200,000  maturing on February  28,  1997;  $400,000
               maturing on September 30, 1997, interest payable monthly at prime
              (8.25% at October 31,  1996) to prime plus 1/2%,  secured
               by  substantially   all  the  assets  of  the Company             $ 6,126,178    $  3,220,000

             Less effect of  December 2, 1996  refinancing
               transaction                                                        (1,500,000)            ---
                                                                                 -----------     -----------

                                                                                 $ 4,626,178    $  3,220,000
                                                                                 ===========     ===========

           NOTES PAYABLE TO SHAREHOLDERS/DIRECTORS:

             Notes  payable to  shareholders,  principal and interest  due   on
               demand at 18%, unsecured, personally guaranteed by a shareholder/
               director of the Company                                           $ 1,307,976    $  1,307,976

             Note payable to a director,  principal due on demand,  interest due
               quarterly at prime (8.25% at October 31, 1996), unsecured             250,000         250,000
                                                                                 -----------     -----------

                                                                                   1,557,976       1,557,976
             Less  effect  of  December   20,  1996  private
               placement of preferred stock                                         (250,000)            ---
                                                                                 -----------     -----------
                                                                                 $ 1,307,976    $  1,557,976
                                                                                 ===========     ===========

           LONG-TERM DEBT:

             Notes   payable  to  a  bank,   payable  in  monthly   installments
               aggregating  approximately  $158,000,  interest  payable  monthly
               ranging from prime (8.25% at October 31, 1996) to prime plus1/2%,
               secured by  substantially  all the assets of the Company          $ 4,061,987    $        ---

             Note payable to a  bank,  principal and interest  due  December  2,
               1996,  at prime  (8.25%  at  October  31,  1996),   secured   by
               substantially all the assets of the Company                         1,500,000             ---

             Note  payable to the  sellers of  Connell,  principle  and  accrued
               interest due January 2, 1997, interest at 9%, secured by certain
               accounts  receivable  and  all property  and equipment of Connell
               not  otherwise  pledged to a bank                                   1,869,049             ---

</TABLE>


<PAGE>


                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1996
<TABLE>
<CAPTION>
                                                                                     1996          1995
                                                                                 ------------  ------------
           (CONTINUED)
<S>                                                                              <C>           <C>
             Mortgage note payable to a bank,  payable  in monthly  installments
             of $1,604 plus interest at prime (8.25% at October 31, 1996)   plus
             1/2%, secured by land and building with a carrying  value  of
             approximately  $425,000 as of October 31, 1996                          288,750       308,000

             Notes  payable  to  banks,  payable  in  monthly installments   of
               principal  and interest ranging  from  8.25% to 14.9% at  October
               31,  1996, secured by related equipment                                91,477        92,828

             Notes   payable  to  a  bank,   payable  in  monthly   installments
               aggregating  approximately  $133,000,  interest  payable  monthly
               ranging from the 30 day  commercial  paper rate (5.25% at October
               31, 1995) plus 3% to prime (8.75% at  October  31,  1995),
               secured  by  certain  investments and Company common shares owned
               by two shareholders/directors                                             ---     3,618,710

             Term loan  payable  to a bank,  interest  based on LIBOR  (5.94% at
               October 31, 1995) plus 3/4%,  secured by certain  investments and
               Company common shares owned by two shareholders/directors                 ---     1,235,831
                                                                                  ----------    ----------

                                                                                   7,811,263     5,255,369

             Plus  effect of December 1996 refinancing and
             private placement of preferred stock                                  1,750,000           ---

             Capital leases (see Note 14)                                            554,155           ---
                                                                                  ----------     ----------

                 Total long-term debt                                             10,115,418     5,255,369

             Less  current  portion,  giving  effect  to  the December   1996
               refinancing   and   private placement of preferred stock           (1,965,611)   (2,222,369)
                                                                                  ==========     ==========

                 Long-term debt, excluding current portion                       $ 8,149,807   $ 3,033,000
                                                                                  ==========     ==========
</TABLE>

        Effective  December 2, 1996 the Company  entered into a $3,000,000  Term
        Loan  Credit  Facility  (the Term  Loan)  with a bank.  The Term Loan is
        payable in sixty monthly installments of $50,000 plus interest at prime.
        Additionally,  excess cash flow of GEC, as defined, is to be paid to the
        bank.  The Term Loan  contains  covenants,  which  require  among  other
        conditions,  that the  Company  maintain  certain  tangible  net  worth,
        working   capital   and  debt   service   amounts.   The  Term  Loan  is
        collateralized  by all real  and  personal  property  of GEC  which  was
        acquired on October 12, 1996.  Proceeds  from the term loan were used to
        repay  $1,500,000  of a bank line of credit  outstanding  at October 31,
        1996 and to repay the $1,500,000  note payable to a bank due on December
        2, 1996.

        Effective  December 20, 1996 the Company  completed a private  placement
        transaction  of 1,000  shares of $.10 par  value,  Series A  Convertible
        Preferred Stock (the Preferred  Stock) and warrants to purchase  200,000
        shares of the Company's  common stock at $9.82 per share.  Proceeds from
        the  offering  totaled  $6,000,000.  Each  share of  Preferred  Stock is
        convertible to shares of the Company's common stock after April 30, 1997
        at the lesser of $9.82 per share or at a discount  (ranging  from 10% to
        20% depending upon the date of  conversion)  of the average  closing bid
        price of a share of common stock for three days  proceeding  the date of
        conversion.  The Preferred Stock accrues  dividends at an annual rate of
        5% and is payable  quarterly in arrears in cash or through a dividend of
        additional shares of
<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1996



        Preferred  Stock.  The warrants are exercisable  after one year provided
        that the  Preferred  Stock is not converted to common stock prior to the
        first anniversary date of the private placement.  Upon the occurrence of
        certain  events,  including  failure  to  effect a  timely  registration
        statement  related to the  conversion  features and warrants  associated
        with the  preferred  stock,  the  Company  may be required to redeem the
        Preferred Stock at a price equal to the liquidation preference, plus any
        accrued  and unpaid  dividends  plus an amount  determined  by  formula.
        Proceeds from the private placement were used to repay a $1,869,050 note
        payable  to the  sellers  of  Connell,  a  $250,000  note  payable  to a
        director,  and $2,015,895  due the former  principals of GEC. The amount
        due  to  the  former  principals  of  GEC  represented  undistributed  S
        corporation  profits  existing  at  the  date  of  acquisition,  and  is
        presented  as  "Other  liabilities"  in  the  accompanying  Consolidated
        Balance Sheet at October 31, 1996.

        The aggregate  maturities of long-term debt and capital leases for years
        subsequent  to October 31,  1996,  giving  effect to the  December  1996
        refinancing and private placement, are as follows:
<TABLE>
<S>                  <C>                                         <C>
                     1997                                        $1,965,611
                     1998                                         1,945,387
                     1999                                         1,593,910
                     2000                                         1,372,192
                     2001                                           779,024
                     Thereafter                                     340,244
                                                                  ----------
                                                                  7,996,368
                     Proceeds from the December 20, 1996
                     private placement used to repay debt         2,119,050
                                                                  ==========
                                                                 $10,115,418
                                                                  ==========
</TABLE>

        At October 31,  1996,  the Company was in  non-compliance  with  various
        financial loan  convenants  relating to its credit facility with a bank.
        The Company obtained amended covenants from the lender effective October
        31, 1996 and through fiscal year 1997. The Company  anticipates  that it
        will be in compliance with the modified covenants in 1997.


(9)     STOCK OPTIONS


        During  1996,  the  Company's  shareholders  adopted a stock option plan
        comprised of incentive  stock options for  employees  and  non-qualified
        stock  options  for  non-affiliated  directors  (the  "Plan").  The Plan
        provides  for the  issuance of up to 550,000  options to  employees  and
        non-affiliated directors. The exercise price for incentive options under
        the Plan will not be less than the fair  value of the  Company's  common
        stock on the  date of the  grant.  The  purchase  price  for  grants  of
        non-qualified stock options will be determined by the Company's Board of
        Directors.  At October  31,  1996,  a total of 186,000  options,  net of
        canceled  shares,  have been granted under the Plan.  Incentive  options
        granted to  employees  generally  become  exercisable  over a three year
        period in equal  installments  beginning  the year after the date of the
        grant.  Non-qualified options granted to non-affiliated directors become
        exercisable one year after the date of the grant.

        In  addition,  specific  stock  options  have been  granted  to  certain
        officers  prior to or  outside  the  Plan,  a  portion  of which  remain
        unexercised  at October 31, 1996.  During the fiscal year ended  October
        31, 1992, an option to purchase  260,000  shares of Common Stock at $.05
        per share was  granted to a director of the  Company.  In  addition,  in
        fiscal 1993 an officer was granted an option to purchase  100,000 shares
        of common stock at $.50 per share. For the years ended October 31, 1996,
        1995  and  1994,  160,500  of these  options  remained  outstanding  and
        available for exercise.
<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1996


        During 1995,  options to purchase 100,000 shares at $4.83 per share were
        granted  to an  officer,  pursuant  to  employment  agreement.  All such
        options  were  granted at the fair market value on the date of grant and
        are outstanding as of October 31, 1996.


(10)    INCOME TAXES

        An analysis of the  components  of (loss) income before income taxes and
        minority  interest  and the  related  income  tax  (benefit)  expense is
        presented below:
<TABLE>
<CAPTION>

                                       1996            1995             1994
                                       ----            ----             ----

<S>                               <C>             <C>             <C>
       Domestic                   $ (3,770,323)   $   (817,790)   $  1,693,176
       Foreign                      (3,628,503         485,708         314,551
                                    ----------      ----------      ----------
                                  $ (7,398,826)   $   (332,082)   $  2,007,727
                                    ==========      ==========      ==========

       Provision for income
         taxes:
           Federal
             Current              $       ---     $       ---     $    792,440
             Deferred                (969,353)       (202,074)        (252,402)
           State
             Current                      ---             ---          153,142
             Deferred                (165,934)            ---          (60,796)
           Foreign                        ---             ---              ---
             Current                      ---          71,236        1,027,689
             Deferred                 244,592        (237,267)      (1,027,689)
                                    =========       =========       ==========
       Provision for income tax
        (benefit) expense         $  (890,695)   $   (368,105)    $    632,384
                                    =========       =========       ==========
</TABLE>

        Reconciliation of the federal statutory income tax rate to the Company's
        effective income tax rate is as follows:

<TABLE>
<S>                                   <C>             <C>              <C>
                                       1996            1995             1994
                                       ----            ----             ----

        (Benefit) tax at
         federal statutory rate        (34)%           (34)%             34%
        State income tax, net           (4)            ---                4
        Non-deductible goodwill          2              35                2
        Reduction in
         valuation    allowance         (1)             (7)             ---
        Reduction in (benefit)
         tax provided on
         foreign operations             22             (92)             ---
        Other                            3             (13)             ---
                                      ------          ------           ------
       Effective income tax rate       (12)%          (111)%             40%
                                      ======          ======           ======
</TABLE>
<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1996.


        The tax effects of temporary  differences  that give rise to significant
        portions of the deferred tax assets and  deferred  tax  liabilities  are
        presented below:
<TABLE>
<CAPTION>
                                                        1996             1995
                                                        ----             ----
            Deferred tax assets:
<S>                                               <C>              <C>
              Unrealized loss on investments      $   18,388       $   18,063
              Reserve for bad debts                  295,804          148,382
              Net operating loss carry forward     1,452,313          460,270
              Foreign tax credit carryforwards           ---          423,914
              Other
                                                      55,281           10,297
                                                   ----------       ----------
                                                   1,821,786        1,060,926
                Less valuation allowance                 ---          (44,989)
                                                   ----------       ----------
                                                   1,821,786        1,015,937

            Deferred tax liabilities:
              Plant, property and equipment         (645,946)        (195,939)
              Investment in foreign subsidiaries         ---         (329,580)
              Other                                      ---           (6,800)
                                                   ----------       ----------
                                                    (645,946)        (532,319)
                                                   ----------       ----------
                 Net deferred tax asset            $1,175,840       $  483,618
                                                   ==========       ==========
</TABLE>

        The Company has not  provided  deferred  taxes for tax that could result
        from the  remittance  of $999,115 of  undistributed  earnings of foreign
        subsidiaries  since the  Company has  sufficient  foreign tax credits to
        offset any taxes  related  to these  undistributed  earnings.  It is not
        practical  to estimate  the amount of taxes that might be payable on the
        eventual remittance of such earnings.  If the foreign  subsidiaries were
        to remit the above amount, the taxes withheld would approximate $89,000.

        At October  31,  1996,  the  Company  has  Federal  net  operating  loss
        carryforwards  of  approximately  $3,990,043.  These net operating  loss
        carryforwards  begin to  expire  at the end of the  fiscal  year  ending
        October 31, 2009..

        The valuation allowance decreased by $44,989 during 1996.


(11)    MAJOR CUSTOMERS/CONCENTRATION OF CREDIT RISK

        A significant  portion of the  Company's  business is derived from three
        major customers including a governmental agency, a telephone company and
        an industrial  manufacturer.  At October 31, 1996 and 1995,  the Company
        had  accounts   receivable   from  these  customers  of  $5,453,885  and
        $1,543,514 or 42% and 15% of total  accounts  receivable,  respectively.
        Revenues  from  these  customers  totaled  $22,786,000,  $9,498,000  and
        $6,044,000 or 50%, 27% and 23% of consolidated  revenues in fiscal years
        1996, 1995 and 1994, respectively.

        Approximately  60% of the Company's Latin American  revenues are derived
        from one  customer  in  Venezuela.  Revenues  from  this  customer  were
        approximately  4% of  consolidated  revenues in 1996 (6% in 1995; 53% in
        1994).  Accounts receivable  outstanding for this customer were $257,994
        and $1,483,630 at October 31, 1996 and 1995, respectively.


 (12)   INDUSTRY AND GEOGRAPHIC AREA SEGMENT INFORMATION

        The Company  currently  operates  primarily  in two  industry  segments:
        telecommunication network services for the years ended October 31, 1996,
        1995 and 1994, and traffic  management systems and devices for the years
        ended  October  31,  1996,  1995  and the  period  from  June  22,  1994
        (acquisition date of TSCI) through October 31, 1994.
        Traffic management operations are conducted in the United
<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1996.


        States while  telecommunication  network  services are conducted both in
        the United  States and Latin  America  (mainly in Venezuela and Brazil).
        Revenues,  (loss) income from operations,  identifiable assets,  capital
        expenditures  and  depreciation  and  amortization   pertaining  to  the
        industries  and  geographic  areas in which  the  Company  operates  are
        presented below.
<TABLE>
<CAPTION>

INDUSTRY SEGMENTS                           1996            1995            1994
                                            ----            ----            ----
Revenues:
<S>                                  <C>             <C>           <C>         
 Traffic management operations       $ 22,661,644    $ 22,872,331  $  9,750,546
 Telecommunication network services    26,244,526      12,535,250    16,033,604
                                       ----------      ----------    ----------
  Total                              $ 48,906,170    $ 35,407,581  $ 25,784,150
                                       ==========      ==========    ==========

(Loss) income from operations:
 Traffic management operations       $ (3,454,076)   $    286,149  $    531,401
 Telecommunication network services    (2,832,440)         23,280     2,313,517
                                       ----------      ----------    ----------
  Total                              $ (6,286,516)        309,429     2,844,918
                                       ==========      ==========    ==========
Identifiable Assets:
 Traffic management operations       $ 25,099,066    $ 21,701,922  $ 20,480,935
 Telecommunication network services    13,819,765      10,780,294    16,122,137
                                       ----------      ----------    ----------
  Total                              $ 38,918,831    $ 32,482,216  $ 36,603,072
                                       ==========      ==========    ==========

Capital Expenditures:
 Traffic management operations       $  1,275,451    $    353,148  $    160,000
 Telecommunication network services     2,216,097       1,897,756     1,675,377
                                       ----------      ----------    ----------
  Total                              $  3,491,548    $  2,250,904  $  1,835,377
                                       ==========      ==========    ==========


Depreciation and amortization:
 Traffic management operations       $  1,228,647    $    996,249  $    218,550
 Telecommunication network services     1,521,157         917,815       635,701
                                       ----------      ----------    ----------
  Total                              $  2,749,804    $  1,914,064  $    854,251
                                       ==========      ==========    ==========


GEOGRAPHIC AREAS
Revenues:
 United States                       $ 45,160,312    $ 32,179,831  $ 12,001,164
 Latin America                          3,745,858       3,227,750    13,782,986
                                       ----------      ----------    ----------
  Total                              $ 48,906,170    $ 35,407,581  $ 25,784,150
                                       ==========      ==========    ==========
(Loss) income from operations:
  United States                      $ (2,072,678)   $    364,264  $   (901,660)
  Latin America                        (4,213,838)        (54,835)    3,746,578
                                       ----------      ----------    ----------
   Total                             $ (6,286,516)   $    309,429  $  2,844,918
                                       ==========      ==========    ==========
Identifiable assets:
 United States                       $ 36,409,993    $ 26,955,667  $ 28,847,774
 Latin America                          2,508,838       5,526,549     7,755,898
                                       ----------      ----------    ----------
  Total                              $ 38,918,831    $ 32,482,216  $ 36,603,672
                                       ==========      ==========    ==========
</TABLE>

<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1996.


(13)    QUARTERLY FINANCIAL DATA (UNAUDITED)

        (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                       First      Second       Third      Fourth
                                     Quarter      Quarter     Quarter     Quarter
                                     --------     -------     -------     -------

         1996
<S>                                <C>          <C>         <C>         <C>
        Revenues                   $ 11,578     $12,592     $11,860     $12,876
        Operating (loss) income      (1,036)     (2,095)        199      (3,355)
        Net (loss) income              (533)     (2,562)        137      (2,952)
       (Loss) income per share     $   (.06)    $  (.31)    $   .02     $  (.35)

        1995
        Revenues                   $  7,625     $ 8,234     $ 9,014     $10,535
        Operating (loss) income        (793)        139         231         637
        Net (loss) income              (842)         68         160         333
        (Loss)income per share     $   (.10)    $   .01     $   .02     $   .04
</TABLE>

Certain  adjustments  were recorded in the fourth quarter of 1996 which included
adjustments to provide  allowances  for  uncollectible  accounts  receivable and
obsolete  inventory.  These adjustments  resulted in charges against  operations
aggregating approximately $1,351,000.


(14)    COMMITMENTS AND CONTINGENCIES

        (A)    LEASED PROPERTIES

               As of October 31,  1996,  the  Company  leased  office  space and
               equipment under various non-cancelable  long-term operating lease
               arrangements.

               During fiscal year 1996,  the Company  leased  certain  equipment
               under an agreement  which is classified as a capital lease.  Cost
               and  accumulated  amortization  of such  assets as of October 31,
               1996 totaled $637,407 and $90,308.

               Future  minimum  lease  payments  required  under  operating  and
               capital  leases with  initial  terms in excess of one year are as
               follows:
<TABLE>
<CAPTION>

                                                   Capital          Operating
                  YEARS ENDING OCTOBER 31,          Leases           Leases
                                                   ----------       ----------
<S>                                               <C>              <C>
                  1997                            $  155,825       $  361,370
                  1998                               155,825          273,303
                  1999                               155,825           83,903
                  2000                               155,825           45,103
                  2001                                38,937            1,800
                                                   ----------       ----------
                  Total minimum lease payments       662,237       $  765,479
                                                                    ==========

                  Less amount representing
                   interest                          108,082
                                                   ----------
                  Present value of net minimum
                   lease payments                    554,155

                  Less current installments of
                   obligations under capital
                   leases                            113,059
                                                   ----------
                  Obligations under capital
                   leases, excluding current
                   installments                   $  441,096
                                                   ==========
</TABLE>

<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1996.

               Rental  expense  for  operating   leases  amounted  to  $631,706,
               $323,180 and $168,000 for the years ended October 31, 1996,  1995
               and 1994, respectively. The Company paid rent to former directors
               of the Company  totaling  $89,460 for fiscal years 1996, 1995 and
               1994. In addition, the Company has entered into an agreement with
               the  former  principals  of GEC to  purchase,  by  June  1997,  a
               facility for $350,000 subject to the Company obtaining  favorable
               financing and other terms.


               (B)    LITIGATION

               The  Company  is  involved  in various  claims and legal  actions
               arising  in the  ordinary  course of  business  including  claims
               relating  to notes  payable to the former  owners of TSCI.  These
               notes  payable and related  accrued  interest are  classified  as
               current in the  accompanying  balance  sheets.  In the opinion of
               management,  the ultimate  disposition  of these matters will not
               have a  material  adverse  effect on the  Company's  consolidated
               financial position or results of operations.


(15)    LATIN AMERICAN OPERATIONS

        Revenues,  costs and expenses and net (loss) income from Latin  American
        operations  for the years ended  October 31, 1996,  1995 and 1994 are as
        follows:
<TABLE>
<CAPTION>
                                                Years ended October 31,
                                            1996        1995         1994
                                        ----------   ----------   -----------
<S>                                     <C>          <C>          <C>
                Revenues                $3,745,858   $3,227,750   $13,782,986
                Costs and expenses       7,374,361    3,282,585    10,036,408
                Net (loss) income       (3,628,503)     (54,835)    3,746,578
</TABLE>

        Included  in the net loss for  fiscal  year 1996 are  charges  and costs
        totaling  $3,553,373.  Such amount  includes a $920,551  non-cash charge
        relating to the write-off of certain goodwill and contractual  rights, a
        $1,179,769  foreign currency loss relating to Venezuelan  operations,  a
        $353,053 provision to write down of other assets to net realizable value
        and $1,100,000 of marketing  expense relating to a proprietary  product.
        As a result of such changes, the Company expects to mitigate any further
        earnings risks associated with Latin American  operations.  In addition,
        effective  August 1, 1995 the  Company  reached  an  agreement  with the
        shareholders   of  its   Venezuelan   subsidiaries   to  increase  their
        proportionate share of (losses) earnings from 20% to 50%. In April 1996,
        the  Venezuelan  government  ended  foreign  currency  exchange  control
        restrictions and the fixing of statutory exchange rates.

        During the year ended October 31, 1994, the Company  incurred a total of
        $1,523,189 in severance and bad debt expenses  related to the Venezuelan
        operations.  The  personnel  severance  costs were $693,189 and bad debt
        expense  was  $830,000.  During  fiscal year  ending  1995,  the Company
        recovered  approximately  $350,000  in  accounts  receivable  that  were
        written off in 1994.

        The Company's  investment in Latin American  entities,  which  primarily
        consist of property and equipment,  totaled $2,080,053 and $5,150,292 at
        October 31, 1996 and 1995. respectively.


(16)    OTHER SUBSEQUENT EVENTS

        On December 2, 1996, the Company,  through a wholly owned   subsidiary,
        acquired all the outstanding

<PAGE>
                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1996.

        common stock of Dial Communications,  Inc. (Dial). As consideration, the
        Company paid  $3,000,000 in cash,  issued 108,489 shares of common stock
        and issued an $892,000  promissory  note. The  acquisition was accounted
        for using the purchase method of accounting and approximately $1,500,000
        of goodwill was recorded.  The cash component of the purchase was funded
        in part from the Company's  line of credit and the  remainder  through a
        $1,900,000  term  loan  from a bank with  interest  at prime  plus 1/2 %
        (8.75% at December 2, 1996) with a balloon  payment for the  outstanding
        principal balance plus accrued interest due March 2, 1997.

        In addition, in December 1996, the Company completed a private placement
        transaction  issuing  $6,000,000  of  preferred  stock and  obtaining  a
        $3,000,000   term  debt  facility   with  a  bank.   Proceeds  from  the
        transactions  were used to refinance  certain of the  Company's  debt at
        October 31, 1996. See Note 8.



<PAGE>



                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES


                                   SCHEDULE II


                        Valuation and Qualifying Accounts

                   Years ended October 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>

                              Balance                       Charged                     Balance at
                                 at                            to                       end of
                              beginning      Acquisitions   costs         Deductions      period
                              of period                     and
                                                            expenses
                              ----------     ----------     ----------    ---------     -----------
Allowance for doubtful
  accounts:
<S>                          <C>            <C>            <C>           <C>           <C>
October 31, 1996             $  535,914     $    2,882     $ 746,283     $ 456,893     $  828,186
October 31, 1995             $1,278,933     $      ---     $  86,593     $ 829,612     $  535,914
October 31, 1994             $   32,894     $  233,837     $1,012,202    $     ---     $1,278,933
</TABLE>