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

                                 FORM 10-K/A

(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




<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.
<PAGE>

             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  42%,  26%  and  9%  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.  These joint
ventures are in the form of  subsidiaries in which the Company has an 80% voting
and  ownership  interest  and a 50% share of profits and losses.  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.

Significant Customers

      Revenues  derived from the  Company's  largest  customers are presented as
follows:

<TABLE>
<CAPTION>

                                                     % of Revenues of:
                                            -------------------------------
                                            Traffic
                                            Management         The Company
                                            Services
       <S>                                  <C>                <C>
                                            -----------------  ------------
       1996
       Florida Department of Transportation       24%              12%

       1995
       Florida Department of Transportation       14%               9%
       Virginia Department of Transportation      14%               9%

       1994
       Florida Department of Transportation       37%              14%
       Virginia Department of Transportation      13%               5%
</TABLE>

<TABLE>
<CAPTION>




                                            Telecommunication  The Company
                                            Services
                                            -----------------  ------------
       <S>                                  <C>                <C>

       1996
       United Telephone of Florida                48%              20%
       Florida Power Corp.                        31%              13%

       1995
       United Telephone of Florida                69%              18%

       1994
       United Telephone of Florida                100%             9%
</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                                                  % of Revenues of:
                                            -------------------------------
                                             Communications
                                             Development
                                             Services          The Company
                                            -----------------  ------------
       <S>                                   <C>               <C>

       1996
       Compania  Anonima  Nacional de
       Telefonos de Venezuela (CANTV)             63%              5%

       1995
       CANTV                                      67%              6%

       1994
       CANTV                                      98%              52%

</TABLE>

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.
<PAGE>

At January 29, 1997, the Company 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
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.
<PAGE>

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 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 totaling approximately $1,308,000 and
$235,000  respectively,  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.


                                   PART II

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.


<PAGE>


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.

         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.
<PAGE>

      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

      For the year ended  October  31,  1996 the  Company's  net loss from Latin
American  operations  increased  by  $3,573,668  as  compared  to the year ended
October 31, 1995 due primarily to an approximate $921,000 charge relating to the
write-off  of  certain  goodwill  related  to  Latin  American  operations,   an
approximate  $1,180,000 foreign currency loss relating to the devaluation of the
Venezuelan Bolivar and provisions  totaling  approximately  $353,000 relating to
the  write-down of various  investments,  accounts  receivable  and deferred tax
assets (see Note 15 to the Company's consolidated  financial statements,  "Latin
American Operations").  Additionally, during the year ended October 31, 1996 the
Company's  Latin  American  operations  supported  approximately  $1,100,000  of
marketing expenses relating to a proprietary product, discussed below.

      For the year ended  October 31,  1995 Latin  American  revenues  decreased
$10,555,236 as compared to the year ended October 31, 1994.  Revenues  generated
by the Company's Venezuelan  operations are dependent upon one customer.  During
November  1994 this  customer  stopped  outsourcing  its inside plant  services.
Inside plant services represented approximately 90% of the revenues generated by
the Company's  Venezuelan  operations  from this customer  during the year ended
October 31, 1994.

      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.

Reorganization of Traffic Management Operations

      The Company's TSCI subsidiary  installs and maintains  traffic control and
signal devices.  These devices include  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.

      TSCI's  contracts  are  generally  for a fixed  price,  most  often,  as a
subcontractor on large  transportation  construction  projects.  Each contract's
duration  depends  upon the size and scope of the project but  typically  ranges
from six to nine months.  Contracts generally set forth date-specific milestones
and call for periodic payments from prime contractors.
<PAGE>

      The    Company     accounts    for    TSCI's     contracts    using    the
percentage-of-completion  method. Under this method,  revenues are recognized as
contract  costs are incurred.  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.  Inherent  in this method are
estimates  determined  by  management as to the total costs to be incurred for a
given  contract and the level of completion  as of a given date.  Changes in job
performance,  condition and estimated  profitability  may result in revisions to
costs and profits  which are  recognized  in the period in which the changes are
determined.

      During  the fourth  quarter of fiscal  year  1996,  the  Company  recorded
adjustments  pertaining to TSCI to provide allowances for uncollectible accounts
receivable and obsolete inventory.  These adjustments  aggregated  approximately
$1,351,000.  Additionally,  the Company  revised  estimates  of  completion  and
remaining costs to complete certain TSCI contracts.  The adverse effect of these
revisions  on the  Company's  consolidated  statement of  operations  aggregated
approximately $1,330,000.

      The Company recorded the fourth quarter  adjustments  after observing that
accounts  receivable  collection,  labor  productivity and inventory utility had
declined  relative to the prior  fiscal  quarters of 1996.  Further,  of the 133
contracts entered into during fiscal year 1996, 30 were substantially  completed
during the fourth quarter. As these contracts matured, the Company observed that
costs relating to such contracts were higher,  collections on the contracts were
lower,  and inventory  management  had been less efficient than in the Company's
past experience.

      The principal  reasons for the change in contract  performance  during the
fourth  quarter of fiscal year 1996 is due to  remedial  expenses  incurred  and
increased costs of production.  During the fiscal year, the Company expanded its
operations in Southern Florida.  The Company's  customer base and labor force in
this geographic area was markedly  different from those areas where the Company,
since  its  inception,  had an  existing  work  force and  established  customer
relationships.  In this expanded geographic area, the Company encountered slower
payment practices, increased cost of labor and materials, and decreased rates of
production.  Remedial costs incurred in the fourth quarter approximated $200,000
of which $110,000 can be attributed to contracts in Southern Florida.  Increased
production  costs  approximated  $930,000 of which $600,000 can be attributed to
contracts in Southern Florida.

      Additionally,  the  Company  replaced  its TSCI senior  management  in the
fourth  quarter  of fiscal  year  1996.  As a result,  the  Company  experienced
employee  turnover  in  several  mid-level  field  manager  positions  causing a
slowdown in  production.  This change in management  contributed  to lower labor
productivity,  and other fourth  quarter  operational  inefficiencies  that were
experienced throughout TSCI. The costs incurred in the fourth quarter associated
with the employee turnover aggregated approximately $200,000.

      The  Company  has  implemented  a number of  measures  designed to reverse
TSCI's  experience during the fourth quarter of 1996. The Company's current TSCI
managers  are  experienced  managers  who were  associated  with GEC,  which the
Company  purchased  during  the fourth  quarter  of 1996 as part of its  traffic
management services group. In addition,  the Company has implemented strict cost
controls, centralized contract decision making and review, and inventory control
procedures.  The  Company  believes  that these  controls  will  result in lower
contract costs, increased margins, and increased operational  efficiencies.  The
Company expects to continue to expand its traffic management services into other
markets,  and believes that its current management has the experience to operate
effectively in the Company's current and future markets.
<PAGE>


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      7.3       0.3      9.3
    operations
  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.
<PAGE>

               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.


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.
<PAGE>

      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% (see Note
15  to  the  Company's  consolidated   financial  statements,   "Latin  American
Operations").  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
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.
<PAGE>

      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.
      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.
<PAGE>


      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
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.

<PAGE>


      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.


<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   May 30,1997
                                       -------------------------------------
                                       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



________________________   President and Chief
WILLIAM J. MERCURIO        Executive and Financial
                           Officer and Director          May 30, 1997


________________________   Secretary and Director        May 30, 1997
WILLIAM D. CALLAHAN



____________________       Director                      May 30, 1997
FRAZIER L. GAINES



__________________         Director                      May 30, 1997
ROBERT NELLES



__________________         Director                      May 30, 1997
GIDEON TAYLOR                                                                        


_________________          Director                      May 30, 1997
GERRY W. HALL

</TABLE>



<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


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/ KPMG 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
------                                                 ----            ----
<S>                                              <C>             <C>

Current assets:
  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
------------------------------------                   ----            ----
<S>                                              <C>             <C>

Current liabilities:
  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 end 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          (6,508,131)        36,023       1,375,343
interest

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 Taxes  Earnings  Total
                  ---------  --------  ---------  -----------   -------- ------
<S>             <C>         <C>      <C>        <C>      <C>          <C>

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

  Issuance of
   common stock    199,500     199       32,051     ---          ---      32,250
   for exercise of
   stock options

  Tax benefit for
   exercise of         ---     ---      812,525     ---          ---     812,525
   stock options

  Issuance of
   common stock     30,000      30       29,970     ---           ---     30,000
   for services
   rendered

  Tax benefit on
   issuance of
   common stock        ---        ---    116,889    ---           ---    116,889
   for services
   rendered

  Issuance of
   common stock   1,192,993     1,193  4,364,129    ---          ---   4,365,322
   for exercise of
   warrants

  Issuance of
   common stock     272,730        273  2,249,720   ---          ---   2,249,993
   for acquisition

  Remittance by
   officer
   relating to           ---        ---    80,261   ---          ---      80,261
   profits on
   stock
   transactions

  Unrealized loss
   on                    ---        ---        ---  (146,950)    ---   (146,950)
   investments,
   restricted
  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   259,434       259  1,499,741     ---        ---   1,500,000
   payable to
   shareholders /
   directors

  Issuance of
   common stock       67,007        67    334,829     ---        ---     334,896
   for exercise of
   warrants

  Cancellation of
   common stock
   previously         (5,000)       (5)   (13,495)    ---        ---    (13,500)
   issued for
   acquisition

  Change in
   unrealized loss       ---        ---        ---   93,825       ---     93,825
   on investments
   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        10,000       10      43,090     ---        ---     43,100
   connection with
   acquisition

  Change in
   unrealized loss       ---        ---        ---    (865)       ---      (865)
   on investments

   Net loss              ---        ---        ---    --- (5,910,248)(5,910,248)
                    =========  ========= ========== ========= ========= ========
Balance at       8,203,212  $8,203  $12,833,286 $(53,990)$(1,189,001)$11,598,498
October 31, 1996
                 ========== =======  ==========  ========== ========= ==========


</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
                                           ----            ----           ----
<S>                                  <C>            <C>             <C>

Operating Activities:
  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>
<S>                                   <C>               <C>           <C>


Financing Activities:
   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         314,922        (480,110)      1,295,375
cash equivalents

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

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



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
      acquisition                            ---             ---       2,249,993
     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 the net assets
            acquired under the purchase method of accounting.  Goodwill is being
            amortized on a straight-line basis over 10 - 20 years.

            The   Company,   at  each   balance   sheet  date,   evaluates   the
            recoverability  of the carrying amount of goodwill if  circumstances
            suggest it has been impaired. If this review indicates that goodwill
            is not recoverable, as principally determined based on the estimated
            undiscounted  cash  flows  of the  entity  which  gave  rise  to the
            goodwill,over the remaining  amortization period, then the Company's
            carrying value of the goodwill is reduced by the estimated shortfall
            in cash flows.

            The recoverability of goodwill  associated with assets acquired in a
            purchase business combination is evaluated together with the related
            asset if circumstances indicate the carrying amount of the asset may
            not  be  recoverable.  As  required  under  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), if the assets and goodwill are not  recoverable
            their  carrying  value is reduced  to  estimated  fair value  based,
            generally,  on a discounted cash flow analysis. The initial adoption
            of Statement  No. 121 in 1996 did not have a material  impact on the
            Company's consolidated financial condition or results of operations.

            See Note 15  regarding  certain  impairment  write-downs  that  were
            recorded during 1996.

            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.

<PAGE>

                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                Notes to the Consolidated Financial Statements

                                October 31, 1996


(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.
            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.
      Such amounts  will be accounted  for as purchase  price  adjustments.  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
              uncompleted contracts                               27,645
              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>

<PAGE>

                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                Notes to the Consolidated Financial Statements

                                October 31, 1996


      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
      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
      of  accounting.  Approximately  $497,000 in goodwill  was recorded and was
      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  the  second  quarter  of  fiscal  1996,  the  Company   identified
      circumstances  which  suggested the carrying value of goodwill  related to
      its Brazilian telecommunications company had been impaired. These included
      continuing  losses from  operations,  consistent  failure to meet budgeted
      operating  results despite the Company's  attempts to improve  performance
      and the Company's  resulting decision during the second quarter of 1996 to
      substantially curtail its telecommunications  maintenance and construction
      operations.  As a result,  the Company estimated the expected income to be
      derived in future periods and the expected  undiscounted future cash flows
      of the Brazilian  telecommunications  company.  The results indicated that
      goodwill would not be recovered.  Accordingly,  during the second quarter,
      the carrying  value of goodwill  related to this  acquisition  was reduced
      from   $447,010  to  zero.   This  charge  is  included  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.

<PAGE>

                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

                                October 31, 1996


<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     (1,391,591)     2,332,280      2,197,673
              Net (loss) income           (.17)          .28            .28
               per share
</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.


(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>


<PAGE>




                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

                                October 31, 1996


(7)   Property and equipment, net

      Property and equipment, net, consists of the following at October 31,
<TABLE>
             <S>                             <C>                <C>


                                                  1996                1995

             Land and buildings              $1,398,884         $1,367,121
             Equipment, furniture and        13,493,828          7,204,304
              fixtures
             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>
                                             ==========         ==========

      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
            maturingon  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      (1,500,000)           ---
             refinancing transaction
                                                        ==========    ==========

                                                       $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             ---
</TABLE>

<PAGE>




                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

                                October 31, 1996

<TABLE>
<CAPTION>

         (Continued)                                        1996            1995

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

           Mortgage note payable to a bank,  payable
            in monthly  installments of $1,604 plus
            interest at prime (8.25% at   October 31,
            1996) plus1/2%, 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        1,750,000            ---
           preferred stock

           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.
<PAGE>


                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

                                October 31, 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
      Company  will  recognize  the  discount  attributable  to  the  beneficial
      conversion  privilege of  approximately  $660,000 by accreting  the amount
      from the date of issuance,  December 20, 1996,  through the earliest  date
      conversion  can  occur,  May 20,  1997,  as an  adjustment  of net  income
      attributable to common shareholders. This accretion adjustment, which also
      represents the adjustment needed to accrete to the redemption value of the
      Preferred  Stock,  will  result  in a  charge  to  retained  earnings  and
      accompanying  credit to the Preferred  Stock.  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 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>

                  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       2,119,050
                  repay debt
                                                       =========
                                                     $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

<PAGE>

                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

                                October 31, 1996


      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.

      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>
<CAPTION>

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


                  (Benefit) tax at
                   federal statutory
                   rate                      (34)%         (34)%           34%
                  State income tax,net        (4)          ---              4
                  Non-deductible               2            35              2
                  goodwill
                  Reduction in
                  valuation allowance         (1)           (7)           ---
                  Reduction in
                   (benefit) tax
                   provided on
                   foreign operations         22           (92)           ---
                  Other                        3           (13)           ---
                                           ========     =========     ========
                  Effective income           (12)%        (111)%         40%
                  tax rate                 ========     =========     ========

</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:
                                                    1996           1995
                                                    ----           ----
<TABLE>
               <S>                            <C>             <C>

                Deferred tax assets:
                  Unrealized loss on            $ 18,388       $ 18,063
                  investments
                  Reserve for bad debts          295,804        148,382
                  Net operating loss carry     1,452,313        460,270
                  forward
                  Foreign tax credit                 ---        423,914
                  carryforwards
                  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
                                              ----         ----          ----
         <S>                             <C>           <C>           <C>
          Revenues:
            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      (2,832,440)     (72,518)    1,455,191
             services                      -----------   ----------    --------- 
                                            
             Total                       $ (6,286,516)  $  213,631  $  1,986,592
                                           ==========    =========     =========
          Identifiable Assets:
           Traffic management
            operations                   $ 25,099,066   $21,701,922 $20,480,935
            Telecommunication network      13,819,765    10,780,294  16,122,137
            services                       ----------   -----------  ----------
               
               Total                     $ 38,918,831   $32,482,216 $36,603,072
                                           =========     =========   ==========

          Capital Expenditures:
            Traffic management            $ 1,275,451      353,148       160,000
              operations
            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)     (150,633)    2,888,252
                                           ---------      --------     --------
             Total                       $(6,286,516)     $213,631    $1,986,592


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

           1996
           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  totaling  approximately  $1,308,000  and
            $235,000,   respectively,   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,
              <S>                   <C>          <C>            <C>

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

               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>

      The net loss  for  fiscal  year  1996  includes  charges  relating  to the
      write-off  of  certain  goodwill  related  to Latin  American  operations,
      foreign  currency  losses as a result of the devaluation of the Venezuelan
      Bolivar and provisions for the write-down of certain investments, accounts
      receivable  and deferred tax assets.  Such amounts  approximate  $921,000,
      $1,180,000 and $353,000, respectively. Additionally, during the year ended
      October 31,  1996,  the  Company's  Latin  American  operations  supported
      approximately  $1.1 million of marketing expenses related to a proprietary
      product.

      During  the  second  quarter  of  fiscal  1996,  the  Company   identified
      circumstances  which  suggested the carrying value of goodwill  related to
      its  Brazilian   subsidiary   and  master   contracts  of  its  Venezuelan
      subsidiaries  had been  impaired.  These included  continuing  losses from
      operations,  consistent failure to meet budgeted operating results despite
      the Company's  attempts to improve  performance,  the  determination  that
      certain revenue producing contracts would not be renewed in the forseeable
      future and the Company's  resulting  decision during the second quarter of
      1996 to  substantially  curtail  its  telecommunications  maintenance  and
      construction  operations  in  Latin  America.  As a  result,  the  Company
      estimated  the  expected  income to be derived in future  periods  and the
      expected  undiscounted future cash flows of its Latin American operations.
      The results  indicated that the goodwill and master contracts would not be
      recovered.  Accordingly,  during the second  quarter of 1996, the carrying
      value of these  assets was reduced  from  approximately  $921,000 to zero.
      This charge is included in  "Charges  and  transaction/translation  losses
      related to Latin  American  operations" in the Consolidated  Statements of
      Operations for fiscal year 1996.
<PAGE>



                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

                                October 31, 1996


      Effective  August 1,  1995,  the  Company  reached an  agreement  with the
      minority  shareholders  of its Venezuelan  subsidiaries to compensate them
      for assuming executive management and day-to-day  responsibilities for the
      Company's Venezuelan operations by increasing their proportionate share of
      earnings  and losses from 20% to 50%.  The  Company  made this change as a
      result  of a  demand  by the  minority  partners  for  such an  agreement.
      Management  believes  such a change  is  necessary  in that  the  minority
      partners are  Venezuelan  nationals  who reside in Venezuela  and maintain
      relationships with the customer and the workforce and are essential to the
      future viability of the Company's Venezuelan operations. The agreement did
      not change the  Company's  share of  ownership  and voting  control in its
      Venezuelan subsidiaries which remains at 80%.

      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  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                      to                      at
                         beginning   Acquisitions costs      Deductions  end of
                         of                       and                    period
                         period                   expenses
                         ---------   ---------    --------    --------  --------
<S>                    <C>         <C>          <C>        <C>       <C> 

Allowance for doubtful
  accounts:
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>