EXPLANATORY NOTE

The purpose of this Amendment No. 1 is to amend and restate the Registrant's
Annual Report on Form 10-K for the fiscal year ended October 31, 1998 in its
entirety, including by filing information responsive to Part III of Form 10-K in
that the Registrant does not anticipate filing definitive proxy material within
120 days of the end of its fiscal year. The Registrant has refiled all exhibits
previously filed with its Form 10-K for the fiscal year ended October 31, 1998
and has included additional exhibits not previously filed.
    


<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549-1004
                                    FORM 10-K/A
   

                                   (Mark One)

    
   [X] Annual report pursuant to Section 13 or 15(d) of the Securities 
      Exchange Act of 1934 For the fiscal year ended October 31, 1998

                                       OR

        [ ] Transition report under Section 13 or 15(d) of the Securities
                              Exchange Act of 1934
        For the transition period from ______________ to _______________.

                         Commission file number 0-21986

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

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

      1601 FORUM PLACE, SUITE 1110, WEST PALM BEACH, FLORIDA           33401
          (Address of principal executive offices)                   (Zip Code)

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

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

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

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

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

As of February 19, 1999, 8,649,590 shares of the registrant's Common Stock were
held by non-affiliates of the registrant (assuming, solely for these purposes,
such persons to be all persons other than (i) current directors and executive
officers off the registrant and (ii) persons believed by the registrant to
beneficially own more than 10% of the registrant's outstanding Common Stock,
based on reports, if any, submitted to the registrant by such persons). As of
such date, the aggregate market value of the voting stock of the registrant held
by non-affiliates, computed by reference to the average closing bid and asked
prices on that date, was $74,602,714.

There were 11,747,593 shares of Common Stock outstanding as of February 19,
1999.

       

                                       1
<PAGE>

                                     PART 1

ITEM 1.  BUSINESS

OVERVIEW

Able Telcom Holding Corp. ( the "Company") is a contractor for the construction
and maintenance of facilities-based communications systems for both public and
private sector customers in the United States and South America. The Company has
three operating groups: (i) Network Services, (ii) Transportation Services, and
(iii) Communications Development. Through the Company's Network Services Group,
it provides development, design, engineering, project management, installation,
construction, operation and maintenance services for telecommunications systems.
In addition, the Company's Transportation Services Group provides services for
the design, development, integration, installation, construction, project
management, maintenance and operation of advanced intelligent transportation
systems, automated toll collection systems and electronic traffic management and
control systems. The Company's Communication Development Group provides
communications design, installation and maintenance services to foreign
telephone companies.

   
In the discussion below regarding the Company's business, any statement of its
future expectations, including without limitation, future revenues and earnings,
plans and objectives for future operations, future agreements, future economic
performance or expected operational developments and all other statements
regarding the future are "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, Section 21E of the
Securities Exchange Act of 1934, as amended, and as that term is defined in the
Private Securities Litigation Reform Act of 1995. The Company intends that the
forward-looking statements be subject to the safe harbors created thereby. These
forward-looking statements are based on the past financial performance of recent
acquisitions and the Company's strategic plans. The Company knows of no
presently existing factors that would cause the Company's revenues to decrease
from historical levels. Although the Company believes that its expectations are
based on reasonable assumptions, it can give no assurance that its expectations
will be achieved. The important factors, risks and uncertainties that could
cause actual results to differ materially from those in the forward-looking
statements herein (the "Cautionary Statements") include, without limitation, the
Company's reliance on third parties to complete the transactions contemplated by
the Company, the Company's degree of financial leverage, risks associated with
debt services requirements and interest rate fluctuations, risks associated with
acquisitions and the integration thereof, risks of international business,
dependence on availability of transmission facilities, regulations risks
including the impact of the Telecom Act, contingent liabilities and the impact
of competitive services and pricing, as well as other risks referenced from time
to time in the Company's filings with the Securities and Exchange Commission.
All subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Statements. The Company does not undertake any
obligations to release publicly any revisions to such forward-looking statements
to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
    

STRATEGY

The Company's 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 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
Caracas, Venezuela. Such services were provided to one customer, CANTV, the
Venezuelan national telephone


                                       2
<PAGE>

company. To decrease its exposure to foreign markets, in 1994, the Company
expanded its business focus by marketing its services in the southeastern United
States, with the acquisition of Florida based Transportation Safety Contractors,
Inc. and its affiliates (collectively "TSCI"). TSCI installs and maintains
traffic control signage, signalization and lighting systems and performs outside
plant telecommunication services. The majority of TSCI's business is conducted
in Florida and Virginia with these states' respective departments of
transportation and various city and county municipalities.

To further expand in the domestic market and to facilitate a continued
acquisition program, during the fourth quarter of fiscal 1995 the Company
reorganized its management and operational structure into three operating groups
described above 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. The Connell acquisition provided the Company
expanded market share and a significant number of new customers. 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 and specializes 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. On December 2, 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.

   
Substantially all of the Company's assets and operations are held by or
conducted through domestic and foreign subsidiaries. Each of TSCI, Connell, GEC,
Dial, Patton Management Corporation and MFS Network Technologies ("MFSNT") (See
"Fiscal Year 1998 and Recent Developments") continue to operate as wholly-owned
subsidiaries of the Company.

FISCAL YEAR 1998 AND RECENT DEVELOPMENTS

MFSNT ACQUISITION. On July 2, 1998, the Company acquired the network
construction and transportation systems business of MFS Network Technologies,
Inc. ("MFSNT") from WorldCom, Inc. ("WorldCom") pursuant to a merger agreement
dated April 26, 1998 ("Plan of Merger"). On September 9, 1998, the Company and
WorldCom finalized the terms of the Plan of Merger through the execution of an
amended agreement, which agreement was subsequently amended on January 26, 1999
(as amended, the "September Agreement"). The acquisition of MFSNT was accounted
for using the purchase method of accounting at a total price of approximately
$67.5 million comprised of a $58.8 million contract price, costs associated with
the acquisition and the value attributed to options and equity awards described
below. $38.8 million of the purchase price was paid in cash and the remainder
was paid by the issuance of a promissory note as described below (the "WorldCom
Note"). The MFSNT purchase price is subject to additional amounts payable as
contingent consideration on December 29, 2000, which relate to the resolution of
certain pre-acquisition contingencies for pending litigation, claims,
assessments and losses on certain projects.

In conjunction with the acquisition of MFSNT, the Company granted an option to
WorldCom (the "WorldCom Option") to purchase up to 2,000,000 shares of the
Company's common stock, at an exercise price of $7.00 per share, but subject to
a 1,817,941 share limitation, and the right to receive upon satisfaction of
certain conditions phantom stock awards (the "Phantom Stock Awards") equivalent
to 600,000 shares of common stock, payable in cash, stock, or a combination of
both at the Company's option. The WorldCom Phantom Stock Awards are exercisable
only on the following three days: July 2, 1999, July 2, 2000, or July 2, 2001.
WorldCom will be entitled to receive any appreciation of the Common Stock over a
base price of $5 3/32 per share, but in no event shall the maximum payment
exceed $25.00 per share. The fair values of the WorldCom Option and Phantom
Stock Awards were estimated at the date of grant at $3.5 million and $0.6
million, respectively, and are included as a component of the total
consideration paid for the acquisition of MFSNT.
    

   
On January 8, 1999, the Company and WorldCom entered into a modification to the
WorldCom Option (the "WorldCom Modification") which modified the WorldCom Option
into a stock appreciation right (an "SAR") unless and until such time as
shareholder approval is obtained by the Company (if ever), pursuant to the
Nasdaq Stock Market, Inc. ("Nasdaq") Marketplace Rule 4460(i)(1)(C) ("Rule
4460(i)(1)(C)"), to approve the issuance of 20% or more of the Common Stock in
connection with the MFSNT Acquisition. Rule 4460(i)(1)(C) addresses the issuance
of securities in connection with the acquisition of stock or assets of another
company if, due to the present or potential issuance of common stock, or
securities convertible into or exercisable for common stock, the aggregate
number of shares of common stock which may be issued is or may be equal to or
in excess of 20% of the number of shares of common stock outstanding before the
issuance of the stock or securities.

Under the WorldCom Modification, WorldCom is entitled to participate in an
increase in the value of an aggregate of 2,000,000 shares of Common Stock. For
each SAR exercised, WorldCom is entitled to receive an amount equal to the
excess of the fair market value of the Common Stock as of the applicable
exercise date over $7.00 (the "Appreciation Amount"). The Appreciation Amount
will be paid in cash within fifteen days of receipt of an exercise notice;
provided, however, that to the extent that the Company would be required to pay
in excess of $10 million in any twelve month period as a result of any exercises
of any SARs, then the amount of such excess shall be represented by a promissory
note with quarterly payments amortized ratably over a period of six months at
10% per annum. The exercise period for the SAR grants commences on the earlier
of: (i) one (1) business day after the date upon which the potential issuance of
Common Stock under this Agreement is voted upon by the shareholders of the
Company and (ii) May 1, 1999 (the "Commencement Date"), and ending on January 2,
2002. Payment of any SARs in cash only could materially and adversely affect the
Company's cash flow because (i) of the short time frame to pay for any SARs
exercised (between 15 and 30 days from the date notice is received by the
Company), and (ii) the payment owed could be a signiificant amount depending on
the number of SARs exercised and the then fair market value of the Company's
Common Stock.

The Company intends to submit a proposal to the Company's shareholders at the
1998 Annual Meeting of Shareholders to approve the issuance of more than 20% of
the outstanding Common Stock in connection with the MFSNT acquisition. If the
Company's shareholders approve such issuance (taking into account the issuances
pursuant to the Series B Offering, the WorldCom Equity Award, and the WorldCom
Options), as described below, the SAR grant automatically reverts back to the
WorldCom Option and the holder will have the right to purchase an aggregate of
2,000,000 shares of Common Stock at $7.00 per share through Januay 2, 2002.

As of January 26, 1999, approximately $30.0 million of principal and
approximately $1.4 million of accrued and unpaid interest were outstanding under
the WorldCom Note. The Company must repay the WorldCom Note in full on December
15, 2000. The WorldCom Note is dated September 1, 1998 and bears interest at
11.5% per year, payable every three months commencing February 28, 1999. The
principal amount of the WorldCom Note is to be prepaid in part by applying a
portion of certain fees (i) due to the Company by WorldCom and (ii) received by
the Company in connection with the sale and installation of certain conduit
projects. The Company pledged all of the shares of capital stock in MFSNT to
WorldCom and MFSCC to secure its obligations under the WorldCom Note. Other than
the pledge of the Company's stock in MFSNT, the obligations under the WorldCom
Note are junior to those under the Secured Credit Facility (as defined below)
and the Company's 12% Senior Subordinated Notes originally due January 6, 2005
(the "Senior Notes"). If the Company defaults on the obligations under the
WorldCom Note, it is expected that WorldCom will be able to do any or all of the
following:
    

         /bullet/ Accelerate all principal and interest the Company owes
                  WorldCom under the WorldCom Note
         /bullet/ Acquire all of the Company's stock in MFSNT
         /bullet/ Keep all principal and interest the Company may have already
                  paid on the WorldCom Note
         /bullet/ Require the Company to pay an 13.5% annual default rate of
                  interest as long as the Company is in default
         /bullet/ Cause WorldCom Network to apply 12% of the payment WorldCom
                  Network owes the Company at the time of default under the
                  WorldCom Master Services Agreement, described below, to the
                  outstanding principal and interest under the WorldCom Note

In addition, if the Company, does not repay the WorldCom note in full by
December 15, 2000, it is anticipated that WorldCom also

                                       3
<PAGE>
will be able to:

         /bullet/ Reduce the minimum yearly and aggregate revenues the Company
                  would otherwise receive under the WorldCom Master Services
                  Agreement
         /bullet/ Refuse to give the Company additional work under the WorldCom
                  Master Services Agreement while the Company is in default

   
As part of the MFSNT acquisition, the Company, WorldCom Network and MFSNT
entered into a Master Services Agreement, the "WorldCom Master Services
Agreement," pursuant to which the Company has agreed to provide
telecommunication infrastructure services to WorldCom Network on a cost-plus 12%
basis for a minimum of $40 million per year, and the aggregate sum payable to
the Company for the five-year contract is guaranteed to be no less than $325.0
million, subject to certain adjustments if the Company defaults on the WorldCom
Note. To achieve these established minimums, WorldCom Network has agreed to
award the Company at least 75% of all WorldCom Network's outside plant work
related to its local network projects up to $500 million and the Company has
agreed to accept and perform work orders from WorldCom Network for as much as
$130 million of services during each year of the five-year contract. The Company
has also agreed that WorldCom Network will have met all of its commitments to
the Company, to the extent that payments made to the Company reach an aggregate
of $500 million at any time during the five-year term of the contract.

Pursuant to the terms of the WorldCom Master Services Agreement, if the Company
is in default under the WorldCom Note, WorldCom Network will apply 12% of the
sums due from WorldCom Network to MFSNT toward partial prepayment of the
principal first and then to all other amounts owing under the WorldCom Note
until the it is paid in full. In addition, if the WorldCom Note is not paid in
full by December 15, 2000, WorldCom Network will not be obligated to execute
work orders and agreements for other work as provided for therein during the
period the WorldCom Note remains unpaid.

The Company is permitted to use the trade name "MFSNT" during the 18-month
transition period immediately following the MFSNT acquisition but will not be
entitled to use it after such 18-month period.
    

As part of the MFSNT Acquisition, the Company has agreed that MFSCC may
designate a representative to the Company's Board of Directors if it exercises
the WorldCom Option, as described below, for so long as MFSCC retains at least
5% of the Company's outstanding common stock, par value $.001 ("Common Stock").

       

                                       4
<PAGE>
       

ACQUISITION OF PATTON MANAGEMENT CORPORATION. On April 1, 1998 the Company
purchased all of the outstanding common stock of Patton Management Corporation
("Patton") for approximately $4.0 million cash and the assumption of $3.6
million in debt which was repaid by the Company. Patton provides advanced
telecommunication network services to upgrade existing networks and to provide
connectivity to office buildings, local and wide area networks.

   
ACQUISITION OF COMSAT CONTRACTS. On February 25, 1998, the Company, through a
wholly owned subsidiary, GEC, acquired 12 contracts ("COMSAT Contracts") with
the Texas Department of Transportation from CRSI Acquisition Inc., a subsidiary
of COMSAT Corporation ("COMSAT"). The COMSAT Contracts are for the installation
of intelligent traffic management systems and the design and construction of
wireless communication networks. In exchange for assuming the obligations to
perform under the COMSAT Contracts, GEC received consideration from COMSAT of
approximately $15.0 million.
    

JOINT VENTURE WITH CLARION RESOURCES COMMUNICATION CORP. On September 23, 1997,
the Company entered into a five-year joint venture with Clarion Resources
Communication Corp. ("Clarion"). Clarion is principally owned by Telenor, the
telephone company of Norway. The Company has agreed with Clarion to jointly
market, manufacture and license its proprietary telephone call record and data
collection technology, called NeuroLAMA, in Europe and Asia. Clarion has agreed
to provide international sales force and to obtain suitable financing to
purchase and install NeuroLAMA. The venture will not require a capital
investment from the Company but should provide a stable royalty stream if the
venture is successful. No material progress has been made in implementing this
joint venture.

   
SENIOR NOTES

Effective January 6, 1998, the Company issued $10.0 million of unsecured 12
percent Senior Notes originally due January 6, 2005 with detachable warrants to
purchase 409,505 shares of common stock at a price of $8.25 per share, which
were valued at approximately $1.2 million. The agreement pursuant to which the
Senior Notes were issued, contains covenants which require, among other things,
that the Company maintain certain tangible net worth, minimum fixed charge
coverage and limitations on total debt and which limit the Company's ability to
pay dividends and make certain other payments, make investments and sell assets
or subsidiaries. At October 31, 1998, the Company was in violation of certain of
the covenants and other terms in the Senior Note agreement, the maturity date of
which had been reduced first to August 31, 1998 and subsequently to November 30,
1998. These Senior Notes were purchased from the holder of these notes
subsequent to October 31, 1998, which will be accounted for by the Company as a
redemption. See "Sale of Senior Notes and Series B Preferred Stock."
    

                                       5
<PAGE>

SECURED CREDIT FACILITY. In June 1998, the Company replaced its previous bank
credit agreement with a new $35 million three year senior secured revolving
credit facility with a syndicate of lenders (the "Secured Credit Facility"). The
Secured Credit Facility has a letter of credit sublimit of $5 million. The
Company used a portion of the proceeds from the Secured Credit Facility to repay
the previous credit facility and to finance $10 million of the MFSNT acquisition
purchase price. On June 30, 1998, the Secured Credit Facility was amended to
permit (i) the Company's acquisition of MFSNT and the related financing of such
transaction, (ii) changes in financial covenants related thereto, and (iii)
other amendments relating to investments, pledging and intercompany matters.

The Company has granted a security interest in certain of its assets to the
lenders under the Secured Credit Facility, including:

         /bullet/ All of the stock in its existing and future Restricted
                  Subsidiaries (as defined in the Pledge Agreement with respect
                  to the Secured Credit Facility); and

         /bullet/ A pledge of all existing intercompany notes issued to any
                  Restricted Subsidiary by any of its subsidiaries

The Secured Credit Facility also includes covenants which, among other things,
restrict the Company's ability to:

         /bullet/ Incur additional debt

         /bullet/ Declare dividends or redeem or repurchase capital stock

         /bullet/ Prepay, redeem or purchase debt

                                       6
<PAGE>

         /bullet/ Incur liens

         /bullet/ Make loans and investments

         /bullet/ Make capital expenditures

         /bullet/ Engage in mergers, acquisitions and asset sales, and

         /bullet/ Engage in transactions with affiliates.

The Company is also required to comply with financial covenants with respect to
certain minimum ratios, including debt covenants, interest, fixed charges and
current ratio.

The Company is in technical violation of certain provisions of the Secured
Credit Facility, including, without limitation, certain covenants related to the
delivery of financial statements and certain covenants which required consent
for the Company to enter into the September Agreement, issue the SAR to WorldCom
and enter into the related WorldCom Modification and engage in certain of the
transactions effected in connection with the third party's purchase of the
Senior Notes and the Series B Preferred Stock. The Company has received
waivers of all existing violations.

   
SERIES B PREFERRED STOCK

Effective June 30, 1998 (the "Closing"), the Company completed a private
offering (the "Offering") of 4,000 shares of $0.10 par value, nonvoting Series B
Convertible Preferred Stock (the "Series B Preferred Stock") which bear annual
dividends of 4 percent, and warrants to purchase 1,000,000 shares of the
Company's common stock at $19.80 per share for a period of five years from the
date of grant (the "Warrants"). Net proceeds from the Offering totaled $18.1
million. In general, the conversion amount of each share of Series B Preferred
Stock is convertible into shares of the Company's common stock commencing on
June 30, 1998, at 97 percent of the lesser of the (i) average of the low trading
prices for any three days during the twenty-two (22) trading days immediately
preceding the conversion date, or (ii) the low trading price on the day
immediately preceding the conversion date, subject to a minimum equal to 95
percent of such conversion price. The conversion amount of each share of Series
B Preferred Stock is equal to $5,000 plus any unpaid dividends thereon. Unless
waived by a holder on not less than 61 days prior written notice, no holder may
convert an amount which would result in such holders and its affiliates'
beneficial ownership exceeding 4.99 percent of the then outstanding common stock
of the Company.

Of the $18.1 million of proceeds, $5.4 million was assigned to the value of the
warrants and $12.7 million was assigned as the Series B Preferred Stock. The
warrants are exercisable for a five-year period commencing June 30, 1998. In
addition, approximately $7.9 million was assigned to the beneficial conversion
privilege and has been reflected as a reduction in income available to common
stock for the fiscal year ended October 31, 1998.

The Warrants, which are generally exercisable through June 30, 2003, may be
exercised, in whole or in part, on a "cashless" basis. Subject to certain
adjustments, the Company may, at its option, repurchase the Warrants at a
purchase price per share of (a) $35.00 multiplied by (b) the number of Warrant
shares remaining exercisable, subject to adjustment.

The Company granted the holders of the Series B Preferred Stock and the Warrants
(the "Series B Securities") certain rights to cause the Company to register the
Common Stock underlying the Series B Securities. Under certain circumstances,
including if the registration statement that includes the shares of common stock
to be issued upon conversion of the Series B Securities is not declared
effective by December 27, 1998, or if the Company is delisted under certain
circumstances from any securities exchange, or any representation or warranty
made by the Company to holders of the Series B Securities was not true, then the
holders of the Series B Securities, in whole or part, have the option to require
the Company to redeem their securities at premium prices. Furthermore, so long
as any of the Series B Securities is outstanding, the Company is prohibited from
declaring or paying any dividends (other than to holders of Series B Preferred
Stock) or purchasing any of the Company's equity securities.

The Company filed a registration statement with the Securities and Exchange
Commission on October 22, 1998 to register the common stock underlying the
Series B Securities. The Company was not able to have a registration statement
declared effective by December 27, 1998. The holders of the Series B Preferred
Stock subsequently notified the Company to redeem the shares of Preferred Stock.
As a result of discussion between the holders of the Series B Preferred Stock,
the Company and a third party, the redemption notice was deferred from time to
time and in connection with the sale of a portion of the Series B Preferred
Stock, has been withdrawn. To the extent the holders of the Series B Securities
again become entitled to exercise a redemption right and seek to require the
redemption of their shares, such exercise could materially increase the
Company's cash requirements, would likely result in a default under the terms of
the Secured Credit Facility and, to the extent replacement financing is not
available on commercially reasonable terms (if at all), would likely have a
material adverse impact on the Company.

On February 17, 1999, a related entity purchased an aggregate of approximately
78 percent of the currently outstanding Series B Preferred Stock. The purchaser
did not acquire the Series B Preferred Stock Warrants. See "Sale of Senior
Notes and Series B Preferred Stock."

As of October 31, 1998, 436 shares of the Series B Preferred Stock were
converted into 1,007,927 shares of common stock at a price of $2.17 per share.
    

SALE OF SENIOR NOTES AND SERIES B PREFERRED STOCK

   
Subsequent to October 31, 1998, WorldCom advanced the Company $32.0 million for
purposes of facilitating the purchase of 2,785 shares, or approximately 78
percent, of the Series B Preferred Stock and the purchase of the outstanding
$10.0 million principal amount of Senior Notes. The advance accrues interest at
11.5 percent and is repayable on the earlier of (i) October 31, 2000 or (ii) the
dates of redemption and/or conversion of the Series B Preferred Stock or the
Senior Subordinated Notes.

In connection with these transactions and as a result of the loan of the
WorldCom funds to the Purchaser, as explained below, the Company expects to
recognize an extraordinary loss in the second quarter of fiscal year 1999 on the
purchase of the Senior Notes of approximately $3.3 million and a reduction in
income applicable to common stock of approximately $10.0 million on the purchase
of the Series B Preferred Stock.

In addition, the Company agreed to modify the terms of the existing Series B
Preferred Stock conversion and warrant agreements, as explained below, which
will result in a reduction in income applicable to common stock of approximately
$6.0 million during the second quarter of fiscal year 1999.

WorldCom also agreed to make available additional advances to the Company of up
to $15.0 million against amounts otherwise payable pursuant to the WorldCom
Master Services Agreement. These additional advances accrue interest at 11.5
percent and are repayable to WorldCom on October 31, 2000.

The funds advanced by WorldCom were loaned by the Company to Cotton
Communications, Inc. (the "Purchaser"), which may be deemed an affiliate of the
Company, and on February 17, 1999, the holders of all of the Senior Notes and
the holders of 78 percent of the Series B Preferred Stock transferred their
holdings to the Purchaser. In connection with the transfer of the Senior Notes
and the Series B Preferred Stock, the Purchaser and the remaining holders of the
Series B Preferred Stock agreed to either waive all outstanding defaults under
such securities or refrain from exercising any remedies with respect to any such
outstanding defaults for a period of 90 days from February 17, 1999. During such
period of time, the Company has agreed to use its best efforts to have declared
effective a registration statement covering the resale of shares of common stock
underlying the Series B Preferred Stock and the Warrants.

The Purchaser also agreed (i) not to exercise any default remedy until March 1,
2000, (ii) to extend the maturity date of the Senior Notes until March 1, 2000
and (iii) to establish a floor conversion price of $8.25 per share applicable in
all circumstances for all shares of Series B Preferred Stock held by the
Purchaser. In exchange for these additional agreements, the Company agreed to
reduce the conversion price of any Warrants subsequently purchased by the
Purchaser from the current holders thereof upon such purchase to a price per
share equal to the lesser of: (i) 85 percent of the closing price of the
Company's common stock on the date prior to such purchase or (ii) a price per
share equal to such closing price minus $3.00.

In connection with the sale of the Series B Preferred Stock, the Company agreed
with the original holders thereof to certain modifications in the conversion
price of the related warrants. The conversion price of (i) warrants to purchase
a total of 375,000 shares of the Company's common stock has been reduced to
$13.25 per share and (ii) warrants to purchase a total of 625,000 shares of
common stock has been reduced to $13.50 per share.
    

SERVICES, MARKETS AND CUSTOMERS

The Company conducts three distinct types of business activities, two of which
are primarily conducted in the United States and one of which is conducted
abroad. Domestically, the Company provides telecommunication services and
traffic management services. Abroad, principally in Venezuela, the Company
conducts communication development activities. Each of these activities is
discussed in more detail below.

NETWORK SERVICES GROUP. The Network Services Group provides telecommunications
network services through two divisions: (i) the Telecommunications Systems
Integration division that provides general contracting services for large-scale
telecommunications projects, and (ii) the Telecommunications Construction
division that specializes in the construction of network projects or project
phases.

                                       7
<PAGE>

The Company provides turn-key telecommunications infrastructure solutions
through the Telecommunications Systems Integration division. As a
telecommunications systems integrator, the Company provides "one-stop"
capabilities that include project development, procurement, design, engineering,
construction management, and on going maintenance and operations services for
telecommunications networks. The projects include the construction of fiber
networks that provide advanced digital voice, data and video communications and
wireless infrastructure deployment.

The Telecommunications Construction division provides construction and technical
services for building both outside plant and inside plant telecommunications
systems. Outside plant services are large-scale installation and maintenance of
coaxial and fiber optic cable (installed either aerially or underground) and
ancillary equipment for digital voice, data and video transmissions. These
installations are most often undertaken to upgrade or replace existing
communications networks. Inside plant services, also known as premise wiring,
include design, engineering, installation and integration of telecommunications
networks for voice, video and data inside customers' facilities. Additionally,
the Company provides maintenance and installation of electric utility grids and
water and sewer utilities. The Company provides outside plant telecommunications
services primarily under hourly and per unit basis contracts to local telephone
companies. The Company also provides these services to long distance telephone
companies, electric utility companies, local municipalities and cable television
multiple system operators.

Network Services Group accounted for 59%, 41% and 42% of the Company's
consolidated revenues during the fiscal years 1998, 1997 and 1996, respectively.

TRANSPORTATION SERVICES GROUP. Similar to the Telecommunications Systems
Integration division, the Transportation Services Group provides intelligent
transportation and traffic management services through two divisions: (i) the
Transportation Systems Integration division, that provides full-service general
contracting services for large-scale projects, and (ii) the Transportation
Construction division that specializes in the construction of network projects
phases.

The Transportation Systems Integration division provides "one-stop" electronic
toll and traffic management solutions for intelligent transportation system
infrastructure projects, including project development and management, design,
development, integration, installation, engineering, construction, and systems
operation and maintenance. Additionally, the Company developed proprietary
software and applications designed to support these systems. The electronic toll
and traffic management segment of the intelligent transportation system industry
uses technology to automate toll collection for bridges and highways allowing
for "non-stop" toll collection. Electronic toll and traffic management systems
use advanced scanning devices to identify a vehicle's type, combined with the
user's account information, as the vehicle passes a tolling station and
immediately debits the appropriate toll from the user's account. In addition,
significant support systems must be developed to maintain electronic toll and
traffic management accounts, and process violations. The Company developed
Automatic Vehicle Identification technology jointly with Texas Instruments and
used it in many of its electronic toll and traffic management projects. The
Transportation Systems Integration division markets its services to state and
local government transportation departments.

The Company's Transportation Construction division 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, develops, installs, maintains and
operates "intelligent highway" communications 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. 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. Traffic Management Group, Inc. accounted for 39%, 54% and 50%
of the Company's consolidated revenues during fiscal years 1998, 1997 and 1996,
respectively.

In October 1996, the Company placed Gerry W. 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. In June 1997, James B. Hall,
also a former owner of GEC, succeeded Gerry Hall as President of the Traffic
Management Group.

   
COMMUNICATIONS DEVELOPMENT GROUP. The Company's Communications Development Group
operates in Latin America, primarily Venezuela. These activities consist of
management of the joint venture arrangements, 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. In 1996, the Company expanded its communication development
activities to include the marketing to Latin American telephone companies of
NeuroLAMA, an internally developed proprietary telephone call record and data
collection system. Significant capital expenditures will be required to install
NeuroLAMA in South America. During fiscal years 1998, 1997 and 1996, the
Company's Latin American operations accounted for 2%, 5% and 8% of the
Company's revenues on a consolidated basis, respectively.
    

                                       8
<PAGE>

Certain risks are inherent in international operations, including exposure to
currency fluctuations, the imposition of government controls, restrictions on
the export of critical technology, political and economic instability, trade
restrictions, changes in tariffs, taxes and freight rates, generally longer
payment cycles, difficulties in staffing and managing international operations
and general economic conditions. From time to time in the past, the Company's
financial results have been affected both favorably and unfavorably by
fluctuations in currency exchange rates. Unfavorable fluctuations in currency
exchange rates could have an adverse impact on the Company's revenues and
operating results.

                                       9
<PAGE>


      INDUSTRY AND GEOGRAPHIC AREA SEGMENT INFORMATION

        The Company currently operates primarily in two industry segments:
        network services and transportation services. Transportation services
        are conducted primarily in the United States with small projects in
        South America, Canada, and Asia while telecommunication network services
        are conducted both in the United States and Latin America. Revenues,
        income (loss) 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 (in
        thousands).

<TABLE>
<CAPTION>
   

        INDUSTRY SEGMENTS                             1998           1997            1996
                                                   --------        -------         -------
<S>                                                <C>             <C>             <C>   
        Sales to unaffiliated customers:
            Transportation services                $ 84,022        $46,795         $22,661
            Network services                        133,459         39,539          26,245
                                                   --------        -------         -------
        Total                                      $217,481        $86,334         $48,906
                                                   ========        =======         =======

        Income (loss) from operations:
            Transportation services                $  8,220         $3,772         $(3,454)
            Network services                          3,189          1,069          (2,833)
                                                   --------        -------         -------
        Total                                      $ 11,409         $4,841         $(6,287)
                                                   ========        =======         =======
        Identifiable assets:
           Transportation services                 $ 88,340        $28,884         $25,099
           Network services                         202,420         21,462          13,820
                                                   --------        -------         -------
        Total                                      $290,760        $50,346         $38,919
                                                   ========        =======         =======
        Capital expenditures:
            Transportation services                $  3,238         $1,635          $1,275
            Network services                          6,728          2,852           2,216
                                                   --------        -------          ------
        Total                                      $  9,966         $4,487          $3,491
                                                   ========         ======          ======
        Depreciation and amortization:
            Transportation services                $  2,824         $1,710          $1,229
            Network services                          4,776          2,822           1,521
                                                   --------        -------          ------
        Total                                      $  7,600         $4,532          $2,750
                                                   ========         ======          ======
        GEOGRAPHIC AREAS 

        Revenues:
          United States                            $212,152        $82,171         $45,160
          Latin America                               5,329          4,163           3,746
                                                   --------        -------         -------
        Total                                      $217,481        $86,334         $48,906
                                                   ========        =======         =======
        Income (loss) from operations:
          United States                            $ 11,310        $ 4,824         $(2,073)
          Latin America                                  99             17          (4,214)
                                                   --------        -------        --------
        Total                                      $ 11,409        $ 4,841         $(6,287)
                                                   ========        =======        ========

        Identifiable assets:
          United States                            $287,569        $47,781         $36,410
          Latin America                               3,191          2,565           2,509
                                                   --------        -------         -------
        Total                                      $290,760        $50,346         $38,919
                                                   ========        =======         =======
</TABLE>
    

                                       10
<PAGE>


SIGNIFICANT CUSTOMERS

The Company derives a significant portion of its revenues from a few large
customers. The percentage of revenues derived from the Company's largest
customers are presented as follows:


                                   31-OCT-98

                                            1996          1997         1998
                                            ----          ----         ----
Cooper Tire                                  --%           15%           6%
Florida Department of Transportation         12             6            2
BellSouth                                    --            12            8 
United Telephone of Florida                  20             9            2
Florida Power Corp.                          13             7            4
WorldCom                                     --            --           14 

                                       11

<PAGE>

CONTRACTS

The Company has and will continue to execute various construction and other
contracts which may require the Company to, among other items, maintain specific
financial parameters, meet specific milestones and post adequate collateral
generally in the form of performance bonds. Failure by the Company to meet its
obligation under these contracts may result in the loss of the contract and
subject the Company to litigation and various claims, including liquidated
damages.

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 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.

   
The Company derived approximately 29% of its total revenues for the fiscal year
ended October 31, 1998 from contracts with state and local governments. No
individual government customer accounted for more than 6% of the Company's total
consolidated revenues. Government business is, in general, subject to special
risks, such as delays in funding, termination of contracts or subcontracts for
the convenience of the government or for the default by a contractor, reduction
or modification or contracts or subcontracts, changes in governmental policies,
and the imposition of budgetary constraints. The Company's contracts with
governmental agencies provide specifically that such contracts are cancelable
for the convenience of the government. Historically, the Company has not
experienced cancellations or renegotiations of its contracts in any material
amounts.

Contract duration is dependent on the size and scope of the project but
typically is from six to nine months. Contracts generally set forth
date-specific milestones and provide for severe liquidated damages for failure
to meet the milestone by the specified dates. At January 31, 1999, the Company
has one contract for which it is subject to liquidated damages at a rate of
$25,000 per day associated with obtaining an extension of time for completing a
phase of the project. Company management anticipates that this default will be
cured no later than March 31, 1999, resulting in total liquidated damages
associated with the violation of approximately $1.5 million.

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 guard
railing. 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.

                                       12
<PAGE>

COMPETITION

NETWORK SERVICES GROUP. The Telecommunications Systems Integration division of
the Network Services Group competes for business in two segments: the
traditional request for proposal ("RFP")/bid based segment for the installation
and integration of infrastructure projects and a less traditional "project
development" segment. The Company's largest competitors in the traditional
RFP/bid based segment are telecommunications service providers. The
Telecommunications Systems Integration division has identified and pursued the
"project development" segment as a "niche" market for its services, providing
network alternatives to large public agencies, utilities and telecommunications
service providers through the use of public-private memberships and other
financing models unique to the industry. These customers often must choose
between building their own networks or using an existing telecommunication
service provider's network. Once a customer has decided to build its own
network, the Company assists the customer in preparing a viable and customized
project business plan that addresses the customer's specific telecommunications
needs, including budgetary and other concerns. The Company also has focused on
"project development" opportunities presenting ownership or participation
opportunities that can generate recurring revenues. The Company believes that no
other company presently provides these kind of complete, turnkey project
development services for these customers. There can, however, be no assurance
that other systems integration companies will not develop the expertise,
experience and resources to provide services that achieve greater market
acceptance or that are superior in both price and quality to the Company's
services, or that it will be able to maintain its competitive position.

The Telecommunications Construction division competes for business with several
competitors on a much larger scale. In addition, the Telecommunications
Construction division also competes in a market characterized by a large number
of smaller size private companies that compete for business generally in a
limited geographic area or with few principal customers. The Telecommunications
Construction division's largest competitors are MasTec, Inc. and Dycom, Inc.

TRANSPORTATION SERVICES GROUP. The Transportation Systems Integration division
believes its major competitors in the North American market are Lockheed
Information Management Co., a division of Lockheed Martin, and Syntonic
Technology, Inc., doing business as Transcore ("Transcore"), a division of SAIC
Corporation.

The market in which the Transportation Construction division competes is
characterized by large competitors who meet the experience, bonding and
licensure requirements for larger projects and by small private companies
competing for projects of $3 million or less in limited geographic areas. The
Transportation Construction division's large competitors include Lockheed
Martin, Traffic Control Devices of Florida and MasTec, Inc. The Transportation
Construction division's smaller competitors are High Power of Florida, MICA
Corporation of Texas and Fishback & Moore.

COMMUNICATION DEVELOPMENT GROUP. The Communications Development Group competes
for business in the international market, primarily in Latin America. Presently,
the operations of Communications Development Group are in Venezuela and Brazil.
In Venezuela, the market is characterized by a single customer, CANTV, the
telephone company of Venezuela, and a large number of smaller sized private
companies that compete for business generally in a limited geographic area. In
Brazil, the market consists of a myriad of smaller companies competing for a
growing but limited market, which forces margins down. There are also several
products similar to the NeuroLAMA call data collection system for billing
purposes, which compete for the very large analog market, although the Company
is not aware of any that can produce the same results.

BACKLOG

As of January 31, 1999, backlog was approximately $1.0 billion, approximately
31% of which was attributable to WorldCom Network. The Company expects to
complete approximately 45% of the total backlog within the next fiscal year. Due
to the nature of the Company's contractual commitments, in many instances its
customers do not commit to the volume of services to be purchased under the
contract, but rather commit the Company to perform these services if requested
by the customer and commit to obtain these services from it if they are not
performed internally. Many of the contracts are multi-year agreements, and the
Company includes the full amount of services projected to be performed over the
life of the contract in backlog due to its historical relationships with its
customers and experience in the procurements of this nature. Contract backlog of
$549 million is under performance bonds and the Company may be subject to
liquidated damages for failure to perform in a timely manner. The Company's
backlog may fluctuate and does not necessarily indicate the amount of future
sales. A substantial amount of its order backlog can be canceled at any time
without penalty, except, in some cases, the Company can recover actual committed
costs and profit on work performed up to the date of cancellation. Cancellations
of pending purchase orders or termination or reductions of purchase orders in
progress from its customers could have a material adverse effect on its
business, operating results and financial condition. In addition, there can be
no assurance as to the customer's requirements during a particular period or
that such estimates at any point in time are accurate.

                                       13
<PAGE>

RESEARCH AND DEVELOPMENT; PROPRIETARY TECHNOLOGY AND RIGHTS

The Company acquired proprietary software from MFSNT in the MFSNT Acquisition
including applications at the lane, plaza, host, and customer service center
levels within a sophisticated electronic toll collection system architecture.
Prior to the MFSNT Acquisition, MFSNT had also developed a proprietary video and
data multiplexing system used for surveillance, monitoring, and system audit
purposes. The benefits of this proprietary software include reduced operating
costs, non-stop tolling, reduce traffic congestion, efficient traffic
management, and increase revenue accountability.

LANE SYSTEM APPLICATIONS. The lane system application is designed to be modular
in nature to allow and accommodate tolling operations in various configurations
in accordance with a customer's specific needs and operational requirements. The
lane controller application is the heart of the lane system. It runs on a
standard PC and under a real-time operating environment. The lane controller
controls the various in-lane equipment items and gathers data from the in-lane
sensors to provide transaction records for each vehicle that travels through a
toll lane. The lane controller coordinates and controls revenue collection
events and transactions. The lane controller also interacts with and can
recognize individual vehicles as well as cars that evade toll collection. The
transaction data created at the lane level is sent to the plaza computer system
for further processing. The lane controller also has the unique capability of
operating in a completely autonomous mode if communications to the plaza system
are disrupted.

PLAZA SYSTEM APPLICATIONS. The plaza system is the central repository of the
transaction data received from each toll lane. The data is stored in a
relational database and is then used for reporting and tracking purposes.
Traffic reports, revenue reports, and collector performance reports are among
several reports that can be generated from the plaza system. A real-time plaza
supervisor system allows client personnel to monitor traffic and collection
events (as well as equipment and security status) as each event actually occurs.
The data received at the lane plaza system level is forwarded to the host system
for further processing and review.

HOST SYSTEM APPLICATIONS. The primary role of the host application is to provide
the client with the capability to generate system-wide reports for traffic and
revenue, as well as audit and reconciliation capabilities. The host system also
acts as the primary interface to the customer service center ("CSC") system and
is the "conduit" for electronic toll transactions and patron account
information. The host application also controls the download of information to
the plaza and lane systems, such as toll schedules, employee identification
information, patron account status, time synchronization, and other information
required for daily operation of the system.

CSC SYSTEM APPLICATIONS AND SERVICES. The Company provides numerous CSC systems
and services, including hardware and software system applications and CSC
staffing, operations and management. The CSC application is highly reliable and
robust, user friendly, efficient and fully auditable software application. The
system incorporates automated internal controls for audit and reconciliation
purposes and also employs a flexible design to accommodate potential changes to
customer policies, procedures, and/or operations.

VIDEO TRANSPORTATION DATA MULTIPLEXER ("VTDM") PRODUCT. The VTDM system is a
patented product that compiles video and data based records for every vehicle
that travels through a monitored lane. The VTDM provides auditors, toll
supervisors and other Customer personnel with the unique capability to record,
review, and analyze lane event data in an efficient and cost-effective manner.
This system can also be used for problem resolution relating to system and/or
toll collector performance. The VTDM system provides information (lane event
data) in the form of video and transaction event text (text-over-video display).
Cameras and VCRs are used to visually record lane activity on a 24-hour basis.

The Company has spent an aggregate of approximately $1.0 million on research and
development activities during the prior three fiscal years, primarily in
connection with its development of NeuroLAMA. Management believes that the
acquisition of MFSNT will result in an increase in the Company's future research
and development expenditures.

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 the Company's
operations primarily in the southern United States.

EMPLOYEES

At January 31, 1999, the Company and its subsidiaries had approximately 2,200
employees. 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.

                                       14
<PAGE>

PROPERTIES

The Company's corporate offices are in West Palm Beach, Florida, where it
occupies 5,110 square feet under a lease that expires January 31, 2004. The
Company leases 33,571 square feet of office space in Omaha, Nebraska under a
lease that expires September 30, 1999, and which houses MFSNT's network
operations, and 40,111 square feet in Mt. Laurel, New Jersey under a lease that
expires February 28, 2003 and which houses MFSNT's transportation operations.
The Company leases 6,400 square feet of space in Fairbanks, Alaska for a network
operations center. The Company leases 6,800 square feet of space in Fort
Lauderdale, Florida under a lease, which expires September 30, 2003, which
facility houses the Company's corporate accounting offices and the general and
administrative offices for the Network Services Group. The Company leases
several field offices and numerous smaller offices. The Company also leases on a
short-term or cancelable basis temporary equipment yards or storage locations in
various areas as necessary to enable it to efficiently perform its service
contracts.

The Company owns (subject to a mortgage) and operates a 10,000 square foot
facility for operations based in Chesapeake, Virginia. The Company's Venezuelan
subsidiaries own and operate from a 33,000 square foot floor of an office
building located in Caracas, Venezuela, and lease an additional 50,000 square
feet of covered parking and shop facilities. The Company also owns a 15,000
square foot facility located on approximately three acres of land for operations
in Tampa, Florida.

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

LEGAL PROCEEDINGS

   
On May 21, 1998 SIRIT Technologies, Inc., ("SIRIT") filed a lawsuit in the
United States District Court for the Southern District of Florida, against the
Company and Thomas M. Davidson, who has since become a member of the Company's
Board of Directors. SIRIT asserts claims against the Company for tortuous
interference, fradulent inducement, negligent misrepresentation and breach of
contract in connection with the Company's agreement to purchase the shares of
MFSNT and seeks injunction relief and compensatory damages in excess of $100.0
million. At present, the parties are conducting discovery in this case. The
Company is vigorously defending the action and will continue to do so. The
Company does not believe that SIRIT's claims are well-founded.

On or about September 10, 1998, Shipping Financial Services Corp. ("SFSC") filed
a lawsuit in the United States District Court for the Southern District of
Florida against the Company, and former officers Gideon Taylor, Frazier L.
Gaines, Jesus Dominguez, and Mark A. Shain (collectively, the "Defendants"). At
or near that time, five additional plaintiffs filed substantially similar
lawsuits. By order dated December 30, 1998, all of these cases have been
consolidated with the SFCS case. Plaintiffs have not yet filed their
consolidated amended complaint. The Company expects the consolidated amended
complaint will be substantially similar to that filed by SFCS, and will assert
claims under the Federal Securities Laws against the Company and certain of its
former officers alleging that the Defendants caused the Company to falsely
represent and mislead the public with respect to two acquisitions, COMSAT and
MFSNT, and the ongoing financial condition of the Company as a result of the
acquisitions and the related financing of those acquisitions. Additionally,
plaintiffs are expected to seek certification of a class action on behalf of all
similarly situated investors and seek unspecified damages and attorneys' fees.
Management is currently assessing the allegations set forth in the lawsuits and
the Company intends to vigorously defend this matter.

The Company is aware that an additional shareholder lawsuit has been filed. To
date, this lawsuit has not been served on the Defendants. The allegations in
this lawsuit appear to be based on the same facts and circumstances as those
set forth in the SFCS lawsuit. The Company is currently assessing the
allegations in this lawsuit and intends to defend this matter vigorously when
and if the Defendants are served.
    

The Company is subject to a number of shareholder and other lawsuits and claims
for various amounts which arise out of the normal course of its business. The
Company intends to vigorously defend itself in these matters. The disposition of
all pending lawsuits and claims is not determinable and may have a material
adverse effect on the Company's financial position.

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

During the fourth quarter of the year covered by this report, no matters were
submitted to a vote of the Company's security holders.

                                       15
<PAGE>

                                     PART II

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

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

FISCAL QUARTER:                      1998                1997

                                 HIGH     LOW         HIGH    LOW

First Quarter                  9 13/16    9 5/8       9 5/8   7 3/8
Second Quarter                12 7/16     7 5/16      8 3/4   7 3/8
Third Quarter                 20 5/16     9 3/8       9       7 3/8
Fourth Quarter                10 5/8      1 3/4      10 5/8   7 9/16

At February 19, 1999, there were approximately 400 shareholders of record of the
Company's Common Stock. No cash dividends have been declared by the Company
since its inception and the Company has no present intention to declare or pay
cash dividends on the Common Stock in the foreseeable future. The Company
intends to retain any earnings which it may realize in the foreseeable future to
finance its operations. The terms of the Company's Series B Preferred Stock and
the Secured Credit Facility restrict the payment of cash dividends on the
Company's Common Stock.

SERIES A CONVERTIBLE PREFERRED STOCK CONVERSIONS. During the year ended October
31, 1998, the Company received conversion notices from the holders of the
Company's Series A Preferred Stock and converted 995 Series A Preferred Shares,
as defined below, into 920,946 shares of Common Stock. In addition, 30,000
warrants related to the Series A Preferred Stock were exercised during the year
ended October 31, 1998. In each case, the issuance of the common stock was
undertaken upon conversion of Series A Preferred Stock then held by the
purchaser and was issued pursuant to an exemption from registration under
Section 4(2) of the Securities Act of 1933. The resale of such common stock by
the purchaser is registered on a Registration Statement of Form S-3 (No.
333-22105).

The Series A Preferred Stock that was converted, as set forth above, was issued
on December 20, 1996 in a private placement transaction (the "Private
Placement"), exempt from registration, pursuant to Section 4(2) of the
Securities Act of 1933, as amended (the "Act") for a total of 1,000 shares (the
"Series A Preferred Shares") of the Company's Series A Preferred Stock, par
value $.10 per share. In connection with the Private Placement, the Company also
issued warrants totaling 200,000 shares of the Company's Common Stock (the
"Warrants"). The number of shares purchasable pursuant to the Warrants was
subsequently reduced pursuant to its terms to an aggregate of 62,000 shares at
October 31, 1998. The purchasers paid the Company $6.0 million for the Series A
Preferred Shares and the Warrants. The Private Placement was effected pursuant
to a Series A Preferred Stock Agreement by and among the purchasers and the
Company dated December 20, 1996 (the "Agreement"). The Warrants became
exercisable on December 20, 1997. No Series A Preferred Shares remain
outstanding following the conversions effected during fiscal 1998.

The Warrants are exercisable at a purchase price per share equal to $9.82;
provided, however, if there is an effective registration statement covering the
shares issuable upon the exercise of the Warrants, the purchasers may exercise
the Warrants in whole or in part in exchange for the number of shares of Common
Stock equal to the product of (i) the number of shares as to which the Warrants
are being exercised multiplied by (ii) a fraction, the numerator of which is the
"Market Price" (as defined in the Warrants) less $9.82, and the denominator of
which is the Market Price.

SERIES B CONVERTIBLE PREFERRED STOCK CONVERSIONS. During the fiscal year ended
October 31, 1998, the Company received conversion notices from certain holders
of the Company's Series B Preferred Stock to convert an aggregate of 436 shares
of Series B Preferred Stock. In connection with the conversion of such shares,
the Company issued an aggregate 1,007,927 shares of Common Stock, pursuant to an
exemption from registration under Section 4(2) of the Act. The conversion price
per share of Series B Preferred Stock was approximately $2.18. The shares of
Series B Preferred Stock were converted between September 14, 1998 and October
2, 1998.

   
Pursuant to the original terms of the Series B Offering, holders of the Series B
Preferred Stock have the right to convert their shares at any time into shares
of Common Stock at a conversion rate equal to 97% of the "market value" of the
Common Stock (the "Conversion Rate"). However, each holder of the Series B
Preferred Stock has agreed that it will convert its shares of Series B Preferred
Stock into Common Stock only to the extent that, after the conversion, the
holder and its affiliates would beneficially own 4.99% or less of the Common
Stock. This limitation may be waived, however, upon 61 days prior written
notice, at which time the Company may be required to seek shareholder approval
to issue additional shares of Common Stock, as required by certain rules and
regulations, including The Nasdaq Stock Market, Inc. Marketplace Rule 4460(i).
For these purposes, "market value" equals the lesser of: (i) the average of the
lowest intraday trading price of the Common Stock for any three trading days
within the 22 trading days prior to the 

                                       16
<PAGE>

date of conversion; or (ii) the lowest intraday trading price of the Common
Stock on the trading day immediately prior to the date of conversion; however,
this latter amount cannot be less than 95% of the lowest intraday trading price
of the Common Stock on the date of conversion. The Conversion Rate may be
further reduced to the extent the Company does not meet certain requirements or
is in default of certain terms of the agreements evidencing the Series B
Offering. See "Item 1. Business - Series B Preferred Stock and - Sale of Senior
Notes and Series B Preferred Stock."
    

ITEM 6.  SELECTED FINANCIAL DATA

The following table sets forth certain selected consolidated financial data of
the Company for the five years ended October 31, 1998 which has been derived
from the audited consolidated financial statements of the Company and its
subsidiaries. This data should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Consolidated Financial Statements included elsewhere in this report.

<TABLE>
<CAPTION>
   

                                    YEARS ENDED OCTOBER 31,
                      (in thousands, except share and per share amounts)

                                                   1998           1997        1996       1995      1994
<S>                                                <C>          <C>         <C>        <C>        <C>
Revenues                                           $217,481     $86,334     $48,906    $35,408    $25,784
Net income (loss)                                     2,514       2,857      (5,910)      (281)       946

Average shares outstanding                            9,907       8,505       8,361      8,284      7,736
Income (loss) per share
from operations - basic and diluted                    (.59)        .16       (.71)      (.03)        .12

Current assets                                      185,822     27,010       21,449     18,573     18,635
Current liabilities                                 160,434     12,969       17,155     11,175      9,942

Property and equipment, net                          32,074     13,114       10,667      6,120      5,314
Total assets                                        290,760     50,346       38,919     32,482     36,604
Long-term debt                                       91,094     17,294       10,115      5,255      8,293
Shareholders equity                                  40,217     15,247       11,598     17,467     15,832

</TABLE>
    

                                       17
<PAGE>

                                     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, 1998.
This information should be read in conjunction with the Company's Consolidated
Financial Statements appearing elsewhere in this document.

OVERVIEW
   

The Company specializes in the design, installation, maintenance, and system
integration services for advanced voice, data and video communication networks
which includes services within the telecommunication infrastructure, traffic
management systems, automated manufacturing systems and utility network areas.
Currently, the Company conducts business through three operating groups: The
Network Services Group, The Transportation Services Group, and The
Communications Development Group.
    

The Company was originally incorporated in 1987 as "Delta Venture Fund, Inc."
and changed its name to Able Telcom Holding Corp. in 1989. From 1992 to 1994,
the majority of the Company's operations were in the Venezuelan
telecommunications business. Beginning in 1994, the Company began expanding its
operations in other industries by implementing a plan of growth through
acquisition. This plan is ongoing and has resulted in several acquisitions over
the past four years. These acquisitions include operations relating to the
installation and maintenance of traffic control signage, signalization and
lighting systems, performance of outside plant telecommunication and electrical
power services, the installation, testing and maintenance of intelligent highway
and communication systems, as well as the erection of towers for wireless and
cellular service providers.

   
The following table sets forth, for the years ended October 31, selected
elements of the Company's condensed consolidated statements of operations as a
percentage of its revenues:

                             YEAR ENDED OCTOBER 31,

                                               1998          1997        1996
                                               ----          ----        ----
Revenues:                                     100.00%       100.00%     100.00%
Cost of revenues........................       82.54         78.95       82.78
General and administrative..............        8.59         10.17       17.18
Depreciation and amortization...........        3.49          5.25        5.62
Income (loss) from operations...........        5.25          5.60      (12.85)
Other expenses, net.....................        2.24          1.12        2.27

Net income (loss).......................        1.16          3.31      (12.08)

         The Company's results of operations reflect the operating results of
MFSNT and other acquired businesses only from the respective dates of
acquisition. Accordingly, the Company's results are not necessarily comparable
on a period-to-period basis. As a result of these acquisitions, the results of
Latin American operations for the fiscal year ended October 31, 1998 are no
longer significant to the consolidated results of operations.

<PAGE>

FISCAL YEAR ENDED OCTOBER 31, 1998 COMPARED WITH FISCAL YEAR ENDED
OCTOBER 31, 1997.
    

RESULTS OF OPERATIONS. The following discussion and analysis relates to the
financial condition and results of operations of the Company for the fiscal
years ended October 31, 1998 and 1997. This information should be read in
conjunction with the Company's condensed consolidated financial statements
appearing elsewhere in this document.

   
REVENUES. For the fiscal year ended December 31, 1998 revenues increased $131.2
million, from $86.3 million through October 31, 1997 to $217.5 million, for the
fiscal year ended October 31, 1998. This increase in revenues is due primarily
to growth in the Company's operations through the acquisition of MFSNT in the
third quarter and the acquisition of Patton and the COMSAT Contracts in the
second quarter of fiscal 1998, as well as increased demands for services in the
traffic management and telecommunications industry. For the fiscal year ended
October 31, 1998, revenues increased approximately $87.0 million, $17.6 million
and $17.4 million related to the acquisition of MFSNT, COMSAT and Patton
respectively.
    

   
COST OF REVENUES. For the fiscal year ended October 31, 1998 and 1997, cost of
revenues as a percentage of revenues increased from 78.95% to 82.54%. The
increase was due to increased costs related to the Network Services Group
resulting from tighter margins and competition in the telecommunications
industry, as well as inclement weather which restricted some work during the
winter months and extended completion dates into later periods, offset by
decreased costs as a result of COMSAT Contracts included in the Transportation
Services Group's operations.
    

GENERAL AND ADMINISTRATIVE EXPENSES. For the fiscal year ended October 31, 1998
general and administrative expenses were $18.7 million, an increase of $9.9
million over the same period in the prior year. This increase was due to the
overall increase in the management structure at the corporate level, as well as
the division offices, necessary to support the Company's increased revenue in
accordance with the Company's strategic objective of growth through acquisition,
and an increase in costs resulting from the acquisition of MFSNT. For the fiscal
year ended October 31, 1998, general and administrative expenses relating to the
operations of MFSNT were approximately $5.1 million.

DEPRECIATION AND AMORTIZATION. For the fiscal year period ended October 31,
1998, depreciation and amortization expense as a percentage of revenue decreased
from 5.25% to 3.49% as compared to the same period in 1997. This decrease as a
percentage of revenue, is due to the significant increase in revenues which did
not require the same percentage increase in capital assets to support the
operations of the Company.
   

INCOME FROM OPERATIONS. For the fiscal year ended October 31, 1998, income from
operations was $11.4 million compared to $4.8 million for the same period in the
prior year, primarily as a result of the Company's growth through acquisitions.
    

OTHER EXPENSE, NET. Other expense net increased by $3.9 million to $4.9 million
for the fiscal year ended October 31, 1998 as compared to $1.0 million for the
comparable period in 1997. This increase is due primarily to increased interest
costs related to the acquisition of MFSNT. Other expense, net was also impacted
by non-cash charges associated with stock options granted below market prices,
and amortization of loan costs associated with the Secured Credit Facility.

Income taxes increased from $0.7 million in fiscal 1997 to $3.4 million in
fiscal 1998. This increase is due to increased income from operations, state
taxes provided in the State of Georgia, and the write-off of foreign tax
credits.

<PAGE>

   
NET INCOME. For the fiscal year ended October 31, 1998, net income was $2.5
million compared to net income of $2.9 million for the comparable period in 1997
for the reasons described above. For the year ended October 31, 1998, the loss
applicable to common stock of $(5.8) million, or $(0.59) per share, is a result
of an $8.0 million charge associated with the beneficial conversion privileges
on the Series B Preferred Stock, other non-recurring adjustments associated with
the Company's obtaining financing for a portion of the purchase price of MFSNT
and preferred stock dividends. For the year ended October 31, 1997, income
applicable to common stock was $1.3 million, or $0.16 per share.
    

FISCAL YEAR ENDED OCTOBER 31, 1997 COMPARED TO FISCAL YEAR ENDED OCTOBER 31,
1996.

REVENUES. Revenues for the year ended October 31, 1997 increased $37.4 million
over the year prior period, from $48.9 million to $86.3 million, an increase of
76.5%. The acquisition of Georgia Electric Company ("GEC") in October 1996 and
Dial Communications, Inc. ("Dial") in December 1996 accounted for approximately
$35.0 million of the revenue increase between the 1996 and 1997 fiscal years.
The remaining increases in revenue for fiscal year 1997 over fiscal year 1996
were generated from increased demand for services from the other subsidiaries.
Revenue for Latin American operations totaled $4.2 million and $3.7 million in
the years ended October 31, 1997 and 1996, respectively.

COSTS OF REVENUES. Costs of revenues increased $27.7 million, from $40.5 million
for the 1996 fiscal year to $68.2 million for the 1997 fiscal year. Costs of
revenues as a percentage of revenues decreased from 82.8% in 1996 to 78.9% in
1997. The assimilation of GEC and Dial accounted for approximately $27.4 million
of the increase in costs of revenues. The increase in gross margin from 17.2% in
1996 to 21.1% in 1997 is due primarily to the increase in profitability in the
transportation services industry as a result of measures implemented during
fiscal year 1997 to improve labor productivity, control costs, and generate
other operational efficiencies as well as the assimilation of GEC. Costs of
revenues for Latin American operations totaled $2.2 million and $2.1 million in
1997 and 1996, respectively.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses for the
year ended October 31, 1997, were $8.8 million, or 10.2% of revenues, compared
to $8.4 million, or 17.2% of revenues, in 1996. The increase in general and
administrative expenses for the fiscal year 1997 can be attributed to the
assimilation of GEC and Dial which accounted for $1.0 million and $1.5 million,
respectively, of the total increase for 1997. This increase was partially offset
by a decline in general and administrative expenses from the implementation of
cost cutting and containment strategies at the subsidiary level. These expense
totals represent a significant decline as a percentage of revenues from prior
years as a result of the Company's efforts to enhance financial controls and the
implementation of its cost-containment program. General and administrative
expenses for Latin America were $1.3 million and $1.6 million in 1997 and 1996,
respectively.

<PAGE>

In 1997 and 1996, the Company incurred approximately $.2 million and $1.1
million, respectively, of start-up and marketing costs related to NeuroLAMA,
Able's proprietary telephone call data and billing system, with no corresponding
revenues. These amounts have been included in general and administrative
expenses for both 1997 and 1996. There can be no assurance that the Company will
generate sufficient revenues from this business to offset its start up costs.

DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization expense was
$4.5 million for the year ended October 31, 1997, or 5.2% of revenues, compared
to $2.7 million or 5.6% of revenues for 1996. The GEC and Dial acquisitions
accounted for $.6 million and $.8 million, respectively, of the total increase
in depreciation and amortization expense for 1997. The remaining increase
resulted from the continuing improvement and updating of the Company's
equipment. Depreciation and amortization expense relating to Latin American
operations totaled approximately $.5 million in both 1997 and 1996.

INTEREST EXPENSE. Interest expense was $1.6 million for 1997, or 1.8% of
revenues, compared to $1.4 million, or 2.8% of revenues, for 1996. This increase
in interest expense is a result of acquisition-related debt and the financing of
equipment purchases, which was partially offset by the payment of debt with the
proceeds from the issuance of the Series A Preferred Stock.

   
OTHER (INCOME) EXPENSE, NET. Other (income) expense, net decreased to $1.0
million in 1997 from $1.1 million in 1996. These changes reflect the $.3 million
non-cash charge for compensation recognized on stock options granted to certain
officers and directors at a discount to market during the year ended October 31,
1997. Additional income and expense items for fiscal year 1997 include a
reduction in reserves for settlement of litigation of $.5 million and interest
and dividend income of $.4 million.
    

NET INCOME. The Company reported a net income of $2.9 million, or $.34 per share
of Common Stock for both basic and diluted, for the year ended October 31, 1997,
compared to a net loss of $5.9 million, or a loss of $.71 per share of Common
Stock for both basic and diluted for 1996, before taking into account the
non-cash charge for a discounted conversion feature associated with the Series A
Preferred Stock (the "Accretive Dividend"). For fiscal 1997, the Accretive
Dividend was $1.3 million which resulted in income applicable to common stock of
$1.3 million, or $.16 per share of common stock for both basic and diluted.

The increase in net income for the fiscal year ended October 31, 1997, compared
to the previous year is due to the assimilation of GEC, the continued
improvement in margins within the Transportation Services Group, and the
improvement in margins within the Latin American operations coupled with a
reduction in special charges relating to these operations.

Revenues and net income (loss) from the Company's international operating
subsidiaries are presented below for the fiscal years ended October 31, 1997,
and 1996. These figures exclude costs associated with the continued marketing
and development cost of NeuroLAMA and general and administrative costs of the
international management group.

LATIN AMERICAN OPERATIONS. For the year ended October 31, 1997, Able's net
income from Latin American operations increased by $3.5 million over the year
ended October 31, 1996. In 1996, the Latin American operations incurred losses
of $2.8 million relating to the write-down of goodwill and other assets.
Additionally, costs associated with marketing NeuroLAMA decreased from $1.1
million in 1996 to $.2 million in 1997.

For the year ended October 31, 1997, Latin American revenues increased $.5
million as compared to the year ended October 31, 1996. Revenues generated by
the Company's Venezuelan operations are largely dependent upon one customer. In
the fiscal year ended October 31, 1997, the Company's Venezuelan operations were
expanded to include a reclamation project that was responsible for approximately
$1.0 million of the increase in revenues which was offset by a decrease in
activity under the existing contracts in Latin America.

   
Revenues and net income (loss) pertaining to Latin American operations are
presented below for the years ended October 31, 1997 and 1996:
    

<TABLE>
<CAPTION>
   
                                       1997             1996      
                                  -------------   --------------- 
<S>                               <C>             <C>             
   Revenues ...................    $4,163,317      $  3,745,858   
   Net income (loss) ..........        16,556        (3,628,503)  
</TABLE>
    

The Company's net assets of Latin American subsidiaries totaled $2.6 million and
$2.1 million at October 31, 1997 and 1996, respectively. In addition, the
Company's net equity in Latin American operations totaled $1.8 million and $1.6
million at October 31, 1997 and 1996, respectively.
<PAGE>
   

The foreign currency translation and transaction losses improved during fiscal
year 1997. The stabilization of the Venezuelan Bolivar resulted in a decrease in
foreign currency losses of $.9 million for the fiscal year ended October 31,
1997, as compared to 1996.

INCOME TAXES. Income tax expense (benefit) for the year ended October 31, 1997
and 1996, differs from the amounts that would result from applying federal and
state statutory tax rates to pre-tax income (loss) primarily due to
non-deductible goodwill and losses from foreign operations.

MINORITY INTEREST. Minority interest represents a shareholder's 50% interest in
the earnings of the Company's Venezuelan corporations for the fiscal year ended
October 31, 1997. For fiscal year 1996, losses were allocated to minority
interest to the extent of its invested capital.

LIQUIDITY AND CAPITAL RESOURCES

At October 31, 1998, cash and cash equivalents totaled $13.5 million, which
represents an increase of approximately $7.3 million from October 31, 1997. Cash
provided by operating activities of approximately $6.9 million is a result of
net income of $2.5 million, increased primarily by non-cash charges relating to
depreciation, amortization, deferred income taxes and minority interest of
approximately $8.9 million, decreases in receivables, inventory, other current
assets and other assets of approximately $6.3 million and increases in accounts
payable, accrued expenses, billings in excess of costs and estimated profits on
uncommitted contracts and other liabilities of approximately $5.6 million due to
the reduction of cash payments associated with operations, offset by an increase
in costs and profit in excess of billings on uncompleted contracts related to
work acquired in connection with the MFSNT acquisition of approximately $17.0
million.

Cash used in investing activities of $14.0 million is due to capital
expenditures of approximately $10.0 million made in order to support increased
operations as well as the replacement of existing equipment and approximately
$4.0 million in net expenditures for the acquisitions of businesses during the
fiscal year ended October 31, 1998.

Cash provided by financing activities of $14.3 million is a result of borrowings
under various financing sources of approximately $70.5 million used to fund
acquisitions and operations of the Company, net proceeds from the issuance of
the Series B Preferred Stock of approximately $18.1 million and approximately
$2.1 million in proceeds from the exercise of stock options, offset by
repayments of debt and other borrowings of approximately $74.4 million, of which
$38.8 million relates to payments made for the acquisition of MFSNT, and other
items.

In February 1999, WorldCom advanced the Company $32.0 million for the purposes
of arranging the purchase of 2,785 shares, or approximately 78% of the Series B
Preferred Stock and the purchase of the outstanding $10.0 million of Senior
Notes. This advance is due the earlier of (i) October 31, 2000 or (ii) the dates
of redemption and/or conversion of the Series B Preferred Stock or the Senior
Subordinated Notes.

In connection with this advance, the Company expects to recognize an
extraordinary loss on the purchase of the Senior Notes of approximately $3.3
million and a reduction in the income applicable to common stock of
approximately $10.0 million related to the purchase of the Series B Preferred
Stock. In addition, the Company agreed to modify the terms of the existing
Series B Preferred Stock conversion and warrant agreements which may have a
significant effect on the underlying value of these securities and result in a
material charge to income applicable to common stock in 1999.
    

WorldCom has also agreed to make available additional advances to the Company of
up to $15.0 million against amounts otherwise payable pursuant to the WorldCom
Master Services Agreement, which, if advanced, would be due on October 31, 2000.

At the date of this filing, the Company has obtained all necessary waivers which
cover various defaults under the Company's financing and preferred stock
agreements.

   
The Company believes that it has available cash, from operations as well as from
the additional advance available from WorldCom described above, sufficient to
meet the Company's operating and capital requirements for the next twelve
months. Nonetheless, pursuant to the terms of the documents relating to the
Series B Preferred Stock, under certain circumstances, including without
limitation, if the registration statement that includes the shares of common
stock underlying the Series B Securities is not declared effective on or before
May 18, 1999, the Company is delisted under certain circumstances from any
securities exchange, or any representation or warranty by the Company to the
holders is not true and correct, then the holders of certain outstanding shares
of Series B Preferred Stock, in whole or in part, have the option to require the
Company to redeem their securities at premium prices. Although the Company
intends to use its best efforts to comply with the provisions in the documents
relating to the Series B Preferred Stock, the failure of which would provide the
holder the right to exercise such redemption option, there can be no assurance
that the Company will be able to do so, in part, because certain of such matters
are dependent upon the efforts or approval of others (such as the Securities and
Exchange Commission with respect to the effectiveness of the aforementioned
registration statement). In addition, there can be no assurance that the Company
will not experience adverse operating results or other factors which could
materially increase its cash requirements or adversely affect its liquidity
position.
    

CAUTIONARY STATEMENTS

   
Certain of the information contained herein may contain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, as the same may be amended from time to time ("the Act") and in
releases made by the Securities and Exchange Commission ("SEC") from time to
time. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance,
or achievements expressed or implied by such forward-looking statements. The
words "estimate," "believes," "project," "intend," "expect" and similar
expressions when used in connection with the Company, are intended to identify
forward-looking statements. Any such forward-looking statements are based on
various factors and derived utilizing numerous important assumptions and other
important factors that could cause actual results to differ materially from
those on the forward-looking statements. These cautionary statements are being
made pursuant to the Act, with the intention of obtaining benefits of the "Safe
Harbor" provisions of the Act. The Company cautions investors that any
forward-looking statements made by the Company are not guarantees of future
performance and that actual results may differ materially from those in the
forward-looking statements as a result of various factors, including but not
limited to those set forth below. Important assumptions and other important
factors that could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to: (i) risks associated
with leverage, including cost increases due to rising interest rates: (ii) risks
associated with the Company's ability to continue its strategy of growth through
acquisitions; (iii) risks associated with the Company's ability to successfully
integrate all of its recent acquisitions; (iv) the Company's ability to make
effective acquisitions in the future and to successfully integrate newly
acquired businesses into existing operations and the risks associated with such
newly acquired businesses; (v)) changes in laws and regulations, including
changes in tax rates, accounting standards, environmental laws, occupational,
health and safety laws; (vi) access to foreign markets together with foreign
economic conditions, including currency fluctuations; (vii) the effect of, or
changes in, general economic conditions; (viii) economic uncertainty in
Venezuela; (ix) weather conditions that are adverse to the specific businesses
of the Company, and (x) the outcome of litigation, claims and assessments
involving the Company. Other factors and assumptions not identified above may
also be involved in the derivation of forward-looking statements, and the
failure of such other assumptions to be realized as well as other factors may
also cause actual results to differ materially from those projected. The Company
assumes no obligation to update these forward-looking statements to reflect
actual results, changes in assumptions or changes in other factors affecting
such forward-looking statements.
    

YEAR 2000
 
The Company's business is dependent upon various computer software programs and
operating systems that utilize dates and process data beyond the year 2000.  The
Company's actions to address the risks associated with the year 2000 are as
follows:

   
THE COMPANY'S STATE OF READINESS. The Company has established programs to
coordinate its year 2000 (Y2K) compliance efforts across all business functions
and geographic areas. The scope of the programs include addressing the risks
associated with the Company's i) information technology (IT) systems (including
the Company's products and services), ii) non-IT systems that include embedded
technology (e.g., equipment and other infrastructure), and iii) significant
vendors and their Y2K readiness. The Company is utilizing the following steps in
executing its Y2K compliance program: 1) awareness, 2) assessment, 3)
renovation, 4) validation and testing, and 5) implementation. The Company has
completed the awareness and assessment steps for all areas.

IT Systems. The Company's most significant renovation effort involves the
conversion of substantially all of MFSNT's IT Systems. The Company believes it
will be substantially completed with its testing and implementation for all IT
Systems by October 31, 1999.

Non-IT Systems. The Company expects to have all of its mission critical non-IT
systems Y2K compliant by October 31, 1999. The Company is currently formulating
its testing and implementation plans for its mission critical non-IT systems.

Significant Vendors. As part of the Company's Y2K compliance program, the
Company has contacted its significant vendors to assess their Y2K readiness. For
all mission critical third party software embedded in or specified for use in
conjunction with the Company's IT systems and products, the Company's
communications with the vendors indicates that the vendors believe they will be
Y2K compliant by October 31, 1999. Such third party software is being tested in
conjunction with the testing of the IT systems and products discussed above.
There can be no assurance that i) the Company's significant vendors will succeed
in their Y2K compliance efforts, or ii) the failure of vendors to address year
2000 compliance will not have a material adverse effect on the Company's
business or results of operations.

THE COSTS TO ADDRESS THE COMPANY'S YEAR 2000 ISSUES. Since inception of its
program through October 31, 1998, the costs related to the Company's Y2K
compliance efforts were not material. The total estimated costs to complete the
Company's Y2K compliance effort are approximately $2.0 million. The estimated
costs to complete, which does not include any costs which may be incurred by the
Company if its significant vendors fail to timely address Y2K compliance, is
based on currently known circumstances and various assumptions regarding future
events. However, there can be no assurance that these estimates will be achieved
and actual results could differ materially from those anticipated.

THE RISKS OF THE COMPANY'S YEAR 2000 ISSUES. The Company's failure to timely
resolve the Y2K risks could result in system failures, the generation of
erroneous information, and other significant disruptions of business activities.
Although the Company believes it will be successful in its Y2K compliance
efforts, there can be no assurance that the Company's systems and products
contain all necessary date code changes. In addition, the Company's operations
may be at risk if its vendors and other third parties fail to adequately address
the Y2K issue or if software conversions result in system incompatibilities with
these third parties. To the extent that either the Company or a third-party
vendor or service provider on which the Company relies does not achieve Y2K
compliance, the Company's results of operations could be materially adversely
affected. Furthermore, it has been widely reported that a significant amount of
litigation surrounding business interruption will arise out of Y2K issues. It is
uncertain whether, or to what extent, the Company may be affected by such
litigation.

THE COMPANY'S CONTINGENCY PLAN. The Company has not yet developed a
comprehensive contingency plan to address the situation that may result if the
Company or its vendors are unable to achieve Y2K compliance for its critical
operations. During fiscal 1999, based upon the status of the Company's Y2K
compliance efforts at that time and the Company's perceived risks to critical
business operations, the Company plans to evaluate what areas the Company
believes a contingency plan may be necessary, and execute such contingency plan
if warranted. The i) inability to timely implement a contingency plan, if deemed
necessary, and ii) the cost to develop and implement such a plan, may have a
material adverse effect on the Company's results of operations.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS. Except for
statements of existing or historical facts, the foregoing discussion of Y2K
consists of forward-looking statements and assumptions relating to
forward-looking statements, including without limitation the statements relating
to future costs, the timetable for completion of Y2K compliance efforts,
potential problems relating to Y2K, the Company's state of readiness, third
party representations, and the Company's plans and objectives for addressing Y2K
problems. Certain factors could cause actual results to differ materially from
the Company's expectations, including without limitation i) the failure of
vendors and service providers to timely achieve Y2K compliance, ii) system
incompatibilities with third parties resulting from software conversions, iii)
the Company's systems and products not containing all necessary date code
changes, iv) the failure of existing or future clients to achieve Y2K
compliance, v) potential litigation arising out of Y2K issues, the risk of which
may be greater for information technology based service providers such as the
Company, vi) the failure of the Company's validation and testing phase to detect
operational problems internal to the Company, in the Company's products or
services or in the Company's interface with service providers, vendors or
clients, whether such failure results from the technical inadequacy of the
Company's validation and testing efforts, the technological infeasibility of
testing certain non-IT systems, the perceived cost-benefit constraints against
conducting all available testing, or the unavailability of third parties to
participate in testing, or vii) the failure to timely implement a contingency
plan to the extent Y2K compliance is not achieved.
    

   
ITEM 7A. QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK

The Company is exposed to market risk from changes in interest rates on debt
obligations that impact the fair value of these obligations. The Company's
policy is to manage interest rates through a combination of fixed and variable
rate debt. Currently, the Company does not use derivative financial instruments
to manage its interest rate risk. The table below provides information about
the Company's risk exposure associated with changing interest rates (amounts in
thousands):

                                             EXPECTED MATURITY
                          ------------------------------------------------------
                            1999      2000      2001    2002   2003   THEREAFTER
                          ------------------------------------------------------
Fixed rate debt           $15,047   $18,225   $ 1,021   $935   $872    $21,081
Average interest rate      12.40%    13.00%    13.64% 13.61% 13.57%     13.54%

Variable rate debt        $     -   $     -   $35,000   $  -   $  -    $     -
Average interest rate          -%        -%     7.69%     -%     -%         -%

The Company has no cash flow exposure due to interest rate changes for its fixed
debt obligations. All of the Company's debt is non-trading. The fair value of
the Company's debt approximates its carrying value.

Although the Company conducts business in foreign countries, the international
operations were not material to the Company's consolidated financial position,
results of operations or cash flows as of October 31, 1998. Additionally,
foreign currency transaction gains and losses were not material to the Company's
results of operation for the fiscal year ended October 31, 1998. Accordingly,
the Company was not subject to material foreign currency exchange rate risk from
the effects that exchange rate movements of foreign currencies would have on the
Company's future costs or on future cash flows it would receive from its foreign
subsidiaries. To date, the Company has not entered into any significant foreign
currency forward exchange contracts or other derivative financial instruments to
hedge the effects of adverse fluctuations in foreign currency exchange rates.
    

                                       24
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

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

   
In October 1998, the Board of Directors of the Company approved the appointment
of Arthur Andersen LLP as its principal accountant to audit the Company's
Consolidated Financial Statements. Information regarding the resignation of the
Company's previous principal accountant and the engagement of Arthur Andersen
LLP was previously reported by the Company on Current Reports on Form 8-K filed
September 14, 1998 and October 16, 1998, respectively.
    

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

   
EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information concerning the executive
officers and directors of Able Telcom Holding Corp. as of January 31, 1999:
<TABLE>
<CAPTION>
         NAME                       AGE                                POSITION
         ----                       ---                                --------
<S>                                 <C>              <C>
C. Frank Swartz (1)(2)(3)           60               Chairman of the Board of Directors
Gideon D. Taylor (2)(3)             56               Director and Vice President of Special Projects
Frazier L. Gaines (3)               59               Director and President of Able Telcom International
Jonathan A. Bratt                   46               Director
Thomas M. Davidson (1)(2)           62               Director
Gerald Pye                          54               Director
Robert Young                        72               Director
Billy V. Ray, Jr.                   40               President, Chief Executive Officer and Acting Chief
                                                     Financial Officer
Jesus G. Dominguez                  54               Chief Accounting Officer
Michael Arp                         52               Financial Vice President
Curtis A. "Butch" Dale              51               Chief Operating Officer
Edward Z. Pollock                   59               In-House Counsel
Stacy Jenkins                       42               President - MFS Network Technologies
G. Vance Cartee                     56               President - MFS Transportation Systems
J. Barry Hall                       50               President - Traffic Management Group
Ralph Ouimette                      45               President - Able Telecommunications and Power Group
Richard A. Boyle                    44               President - Patton Management Group
</TABLE>
------------
(1) Member of the Audit Committee. Mr. C. Frank Swartz is the Chairman of the
    Audit Committee.
(2) Member of the Compensation Committee. Mr. Davidson is the Chairman of the
    Compensation Committee.
(3) Member of the Nominating Committee. Mr. Gaines is the Chairman of the
    Nominating Committee.

All directors are elected annually at the annual meeting of the stockholders of
Able Telcom Holding Corp. and hold office following election or until their
successors are elected and qualified. The chief executive officer is elected by
and serves at the discretion of the Company's Board of Directors. All other
executive officers are appointed by the Chief Executive Officer.

C. Frank Swartz has served as a Director of the Company since August 1998 and as
Chairman of the Board since November 30, 1998. Mr. Swartz has been retired since
November 1994. For the five (5) years prior to November 1994, Mr. Swartz was
employed by GTE as the Director of Internal Support, based in Caracas,
Venezuela.

GIDEON D. TAYLOR has served as a Director of the Company since its inception and
served as Chairman of the Board of the Company from March 25, 1997 through
November 30, 1998. In addition, Mr. Taylor has served as the Company's Chief
Administrative Officer from March 25, 1997 through November 30, 1998 and the
Company's Vice President of Special Projects since December 1998. From October
1988 to August 1992, Mr. Taylor was also President and Chief Executive Officer
of the Company. Mr. Taylor has also served in various executive capacities with
the Company for the past ten years.

FRAZIER L. GAINES has served as a Director of the Company since August 1992 and
served as Interim President and Chief Executive Officer of the Company from
March 6, 1998 to November 30, 1998. Mr. Gaines has also
<PAGE>

served as the President of the Company's subsidiary, Able Telcom International,
Inc. ("ATI") since June 1994. From 1992-1994, Mr. Gaines was Chief Operating
Officer of the Company. From 1987 to 1992, Mr. Gaines was Vice President of
Judycom, Inc. and Judycom Construction Corporation, both of which were located
in Lexington, Kentucky and engaged in fiber optic installation.

THOMAS M. DAVIDSON has served as a Director of the Company since August 1998.
Mr. Davidson was an investment banker with Washington Equity Partners from July
1997 to April 1998. From February 1997 to July 1997, Mr. Davidson practiced law
at Reed, Smith, Shaw and McClay, located in Washington, D.C. Prior to that, Mr.
Davidson practiced law at Coffield, Ungaretti and Harris, in Washington, D.C.
from April 1995 to January 1997 and at Verner, Liipfert, Bernhard, McPherson and
Hand, in Washington, D.C. from April 1993 to April 1995.

JONATHAN A. BRATT has served as a Director of the Company since June 1997. Mr.
Bratt, a Venezuelan businessman, is on the boards of several Venezuelan
companies in the oil and gas and telecommunications industries. Mr. Bratt is a
Director of BFGP Ingenieros, C.A., a software engineering firm ("BGFP") (from
January 1980 until the present); Infotrol, C.A., an engineering integration firm
(from January 1987 until the present); Cybertrol, C.A., a petroleum engineering
firm; Inversiones Tocolicao, D.A., a construction firm (from January 1986 until
the present); I.T.S., an engineering consulting joint venture; and Inacom, an
IBM wholesale dealer. He is also Managing Director of Able Telcom, C.A., a joint
venture of BFGP and the Company.

DR. GERALD PYE has served as a Director of the Company since January 1999. Mr.
Pye is a partner with Interfiducia, AG, a European investment firm.

ROBERT H. YOUNG has served as a Director of the Company since January 1999. Mr.
Young is a principal in the firm of Neos Communications, Inc. in Dallas, Texas.
Mr. Young is also a principal of Interfiducia Partners, LLC in Dallas, Texas.

BILLY V. RAY, JR. has been the Company's President, Chief Executive Officer and
acting Chief Financial Officer since November 30, 1998. From October 1, 1998 to
November 30, 1998, Mr. Ray was the Company's Executive Vice President of Mergers
and Acquisitions and Treasurer. From May 1998 to October 1998 and from January
1997 to June 1997, Mr. Ray served as a consultant to the Company. Mr. Ray served
as the Chief Financial Officer of the Company from June 1997 to April 1998. From
December 1995 to January 1997 and from April 1997 to July 1997, Mr. Ray was the
President of Ten-Ray Utility Construction, Inc., a utility construction company.
During a part of that period, he also served as a consultant to Alcatel, a maker
of intelligent highway systems. From September 1994 to November 1995, Mr. Ray
was the Controller of Tri-Duct, a utility construction company, and served as a
consultant to such company from November 1995 to March 1996. From March 1994 to
September 1994, Mr. Ray was the staff manager at Mastec, Inc. a utility
construction company and he was assistant to the president at Burnup & Sims, a
utility construction company, from January 1993 to March 1994.

EDWARD Z. POLLOCK has been the Company's In-House Counsel since November 1998.
From 1963 to 1998, Mr. Pollock was a sole practitioner at the law firm of Edward
Z. Pollock.

CURTIS A. "BUTCH" DALE has served as Chief Operating Officer of the Company
since August 1998. Prior to that time, from March 1998 until his appointment as
Chief Operating Officer, Mr. Dale was Vice President of Operations for the
Company. From March 1970 to October 1997, Mr. Dale was a Project/Staff Manager -
Support for Network Operations for GTE, a telecommunications company.

JESUS G. "JAY" DOMINGUEZ has been the Chief Accounting Officer since April 1998.
Mr. Dominguez has served as Vice President - Finance of Able Telcom
International since May 1995 and controller of the Company from October 1993 to
May 1995. From April 1993 to October 1993, Mr. Dominguez served as Vice
President - Finance of Novatek International Inc., a construction company. Mr.
Dominguez is a licensed certified public accountant.

MICHAEL ARP became the Company's Financial Vice President and principal
accounting officer in January 1999. From February 1997 through December 1998,
Mr. Arp was the group controller of the Company's Traffic Management Group. From
January 1994 to February 1997, Mr. Arp was President of American Turf
Manufacturing.
<PAGE>

STACY JENKINS was named President of MFS Network Technologies, Inc. ("MFSNT") in
July 1998. From 1990 to July 1996, Mr. Jenkins served as the Senior Vice
President, Operations Vice President, Engineering and Estimating; and as Project
Manager for the nationally recognized Iowa Communications Network. During this
time, he directed operations for more than 40 projects, with a combined value in
excess of $300 million, in the United States and abroad.

G. VANCE CARTEE has been the President of MFS Transportation Systems since
January 1999. From June 1998 to December 1998, Mr. Cartee served as a
telecommunications consultant, including performing consulting services for the
Company. From January 1996 to June 1998, Mr. Cartee was a business unit director
for Loral/Lockheed Martin Corp. From March 1993 to January 1996, Mr. Cartee was
Vice President and General Manager of Alcatel Contracting, N.A.
 
J. BARRY HALL has been the President of Georgia Electric Company, a subsidiary
of the Company, since October 1996. From 1990 to October 1996, Mr. Hall was
Vice President of Georgia Electric Company.

FRAZIER L. GAINES has been a Director of the Company since August 1992 and has
served as President of Able Telcom International, Inc., a wholly owned
subsidiary of the Company, since June 1994. Mr. Gaines served as President and
Chief Executive Officer of the Company from March 1998 to November 1998. From
1992 to 1994, Mr. Gaines was Chief Operating Officer of the Company. From 1987
to 1992, Mr. Gaines was Vice President of Judycom, Inc. and Judycom Construction
Corporation, both of which were located in Lexington, Kentucky, and engaged in
fiber optic installation.

RALPH OUIMETTE has been the President of Able Telecommunications and Power, Inc.
(formerly H.C. Connell, Inc.), a subsidiary of the Company, since February 1996.
From 1988 to February 1996, Mr. Ouimette was a project manager for Conklin
Porter and Holmes, Inc.

RICHARD A. BOYLE has been the President of Patton Management Corp. and
subsidiaries, a subsidiary of the Company since April 1998, since March 1996.
From May 1991 to March 1996, Mr. Boyle was Vice President and General Manager
of Wright & Lopez, Inc. and Pressure Concrete Construction Co. From
January 1990 to May 1991, Mr. Boyle was Vice President and General Manager
of Pressure Concrete Construction Company, a division of South Eastern Public
Services Co.

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

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and 10% stockholders to file reports regarding
initial ownership and changes in ownership with the Securities and Exchange
Commission and the Nasdaq Stock Market. Executive officers, directors and 10%
stockholders are required by Securities and Exchange Commission regulations to
furnish the Company with copies of all Section 16(a) forms they file. The
Company's information regarding compliance with Section 16(a) is based solely on
a review of the copies of such reports furnished to the Company by the Company's
executive officers, directors and 10% stockholders. The Company believes that
the majority of the Company's executive officers and directors were delinquent
in filing one or more Section 16(a) forms and may have failed to file certain
forms during the fiscal year ended October 31, 1998. The Company is currently
investigating such delinquent filings and failures to file and is verifying that
all forms that have been filed have been provided to the Company. Once the
Company's review is complete, a complete list of executive officers and
directors with Section 16(a) compliance violations will be provided in the
Company's proxy materials for its annual meeting to be held during 1999.

ITEM 11. EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

The following table sets forth certain summary information for the years
indicated concerning the compensation awarded to, earned by, or paid to (i)
those persons serving as the Chief Executive Officer during the 1998 fiscal
year, (ii) the other four most highly compensated Executive Officers of the
Company who were serving as such at October 31, 1998, and (iii) up to two
additional individuals who had served as an Executive Officer of the Company
during the 1998 fiscal year but who were not Executive Officers at October 31,
1998, except that persons referred to in clauses (ii) and (iii) above generally
are not included in the table if they received total annual salary and bonus of
$100,000 or less for the 1998 fiscal year end. The persons named in this table
shall be collectively referred to as the "Named Executive Officers."
<TABLE>
<CAPTION>

                                            SUMMARY COMPENSATION TABLE
                            FOR THE FISCAL YEARS ENDED OCTOBER 31, 1998, 1997 AND 1996 

                                                                                     LONG TERM
                                                                                    COMPENSATION
                                                     ANNUAL COMPENSATION               AWARDS           
                                                 -----------------------       -------------------------
                                                                                OTHER         SECURITIES
                                                                                ANNUAL        UNDERLYING       ALL OTHER
      NAME AND                                                                  COMPEN-        OPTIONS/         COMPEN-
PRINCIPAL POSITION               YEAR            SALARY($)      BONUS($)       SATION ($)      SARS (#)        SATION ($)
------------------               ----            ---------      --------       ----------     ----------       ----------
<S>                              <C>              <C>            <C>               <C>         <C>             <C>
Frazier L. Gaines (1)            1998             153,986                                      210,000            31,809
Chief Executive Officer;         1997             110,000                                        5,000         1,024,375
Current President - Able         1996             110,000                                                         36,000
Telcom International

Robert DuPuis (2)                1998               6,058
Former Chief Executive
Officer

Gerry W. Hall (3)                1998             103,846                                                          4,787
Former Chief Executive           1997             180,769        75,000                         27,500             3,200
Officer

Billy V. Ray, Jr. (4)            1998              48,462                                       35,000           110,818
Executive Vice President of      1997              34,615        40,000                                           56,961
Mergers and Acquisitions
and Treasurer; promoted to
Chief Executive Officer on
December 1, 1998

J. Barry Hall (5)                1998             209,173        75,000                                           33,906
President - Traffic              1997             161,538                                       27,500
Management Group

Gideon D. Taylor (6)             1998             133,846                          750         220,000            37,398
Chairman of the Board and        1997              45,308
Chief Administrative
Officer
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                                     LONG TERM
                                                                                    COMPENSATION
                                                     ANNUAL COMPENSATION               AWARDS           
                                                 -----------------------       -------------------------
                                                                                OTHER         SECURITIES
                                                                                ANNUAL        UNDERLYING       ALL OTHER
      NAME AND                                                                  COMPEN-        OPTIONS/         COMPEN-
PRINCIPAL POSITION               YEAR            SALARY($)      BONUS($)       SATION ($)      SARS (#)        SATION ($)
------------------               ----            ---------      --------       ----------     ----------       ----------
<S>                              <C>              <C>            <C>               <C>         <C>             <C>
Ralph Ouimette (7)               1998              93,267        48,000                                            6,500
President - Able                 1997              59,452        40,000
Telecommunications and
Power Group

Richard J. Sandulli (8)          1998             134,615                                       30,000            12,078
Former Vice President -          1997              71,000                                                          3,750
Finance
</TABLE>
------------
(1) Mr. Gaines served as the President and Chief Executive Officer of the
    Company from March 1998 through November 30, 1998. Prior thereto, Mr. Gaines
    was President of Able Telcom International, Inc. (a position which he
    continues to hold). For 1998, other compensation includes an automobile
    allowance of $4,500 and health insurance premiums paid by the Company on Mr.
    Gaines behalf in the amount of $109. For 1997, other compensation consists
    of an automobile allowance, a housing allowance and an amount of $991,375,
    which represents the difference between the price paid by Mr. Gaines upon
    the exercise of certain stock options and the fair market value of the
    underlying Common Stock on the date of exercise. For 1996, other
    compensation includes an automobile allowance and a housing allowance.
(2) Mr. DuPuis was appointed President and Chief Executive Officer of the
    Company on August 19, 1998 and resigned on August 31, 1998.
(3) Mr. Hall was President and Chief Executive Officer of the Company from June
    1997 to March 1998 at an annual salary of $200,000. Mr. Hall also served as
    President of Georgia Electric Company during the fiscal year ended October
    31, 1997. In 1998, other compensation consists of a living allowance of
    $3,000, a car allowance of $1,000, health insurance premiums paid on Mr.
    Hall's behalf of $227 and contributions of $560 to the Company's 401(k)
    plan. In 1997, other compensation consists of an automobile allowance.
(4) In 1998, other compensation includes consulting fees in the amount of
    $92,099, an automobile allowance of $5,400, a housing allowance of $12,600
    and health insurance premiums paid on Mr. Ray's behalf of $719. In 1997,
    other annual compensation includes compensation for consulting services
    rendered prior to Mr. Ray's appointment in June 1997 as the Company's Chief
    Financial Officer, and a travel and housing allowance.
(5) In 1998, other compensation includes a housing allowance of $24,000, an
    automobile allowance of $7,800 and contributions of $2,106 to the Company's
    401(k) plan.
(6) In 1998, other compensation includes a housing allowance of $6,000, use of a
    company vehicle estimated at $3,633 and health insurance premiums paid on
    Mr. Taylor's behalf of $565.
(7) In 1998, other compensation includes an automobile allowance.

DIRECTOR COMPENSATION

Directors who are not employees of the Company are paid $12,000 annually plus
$750 for each committee meeting attended and are reimbursed for expenses
associated with Board responsibilities. In addition, pursuant to the Company's
1995 Stock Option Plan, as amended, non-employee Directors receive one-time
automatic grants of options to purchase 5,000 shares of Common Stock having an
exercise price equal to the fair market value at the date of grant. To date, the
Company has not made any of these grants. However, in April 1998, the Company
granted an option to purchase 10,000 shares of the Company's common stock to all
Directors. Directors who are also employed by the Company receive no additional
fees or remuneration for acting in their capacity as a Director of the Company.
<PAGE>

THE ABLE TELCOM HOLDING CORP. 1995 STOCK OPTION PLAN, AS AMENDED

The Company has adopted the 1995 Stock Option Plan (the "Plan") pursuant to
which 550,000 shares of Common Stock were originally authorized for issuance. In
April 1998, the shareholders of the Company approved the amendment of the Plan
to increase the number of shares outstanding under the Plan to 1,300,000. The
Company intends to amend its registration statement on Form S-8 to register the
additional 750,000 shares of Common Stock reserved for issuance under the Plan.

The Company may grant stock options (both Nonqualified Stock Options and
Incentive Stock Options, as defined in the Plan) and restricted stock under the
Plan to Non-Affiliate Directors (as defined in the Plan), key employees,
advisors and consultants (the "Participants"). The Plan also provides for the
automatic grant to Non-Affiliate Directors, at such time as an individual
becomes a Non-Affiliate Director of the Company, of Nonqualified Stock Options
to purchase 5,000 shares of Common Stock at an exercise price per share equal to
100% of the fair market value of the shares on the date of grant.

With respect to the grant of awards under the Plan to persons other than
Non-Affiliate Directors, the Board of Directors, or a committee appointed by the
Board of Directors (in either case, the "Plan Administrators"), will determine
persons to be granted stock options and restricted stock, the amount of stock to
be optioned or granted to each such person, and the terms and conditions of any
stock options and restricted stock. Both Incentive Stock Options and
Nonqualified Stock Options may be granted under the Plan. An Incentive Option is
intended to qualify as an incentive stock option within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"). Any Incentive
Stock Option granted under the Plan will have an exercise price of not less than
100% of the fair market value of the shares on the date on which such option is
granted. With respect to an Incentive Stock Option granted to a Participant who
owns more than 10% of the total combined voting stock of the Company or any
parent or subsidiary of the Company, the exercise price for such option must be
at least 110% of the fair market value of the shares subject to the option on
the date the option is granted. A Nonqualified Stock Option granted under the
Plan (i.e., an option to purchase the Common Stock that does not meet the Code's
requirements for Incentive Options) shall be as determined by the Plan
Administrators.

Subject to the terms of the Plan, the Plan Administrators may award shares of
restricted stock to the Participants. Generally, a restricted stock award will
not require the payment of any option price by the Participant but will call for
the transfer of shares to the Participant subject to forfeiture, without payment
of any consideration by the Company, if the Participant's employment terminates
during a "restricted" period (which must be at least six months) specified in
the award of the restricted stock.

STOCK OPTIONS ISSUED OUTSIDE THE PLAN DURING FISCAL YEAR 1998

During the fiscal year ended 1998, the Company issued options to purchase an
aggregate of 892,000 shares of Common Stock to employees, Officers and Directors
of the Company and its subsidiaries at exercise prices ranging from $6.20 to
$14.00 per share. On December 31, 1998, all of these options were rescinded.
Immediately thereafter, the same number of options were issued on December 31,
1998 at an exercise price of $5.75, which was the average of the ten-day closing
market price for the Company's Common Stock for the period from December
16-December 30, 1998. The expiration for the exercise period for these options
range from December 31, 2000 to April 24, 2005. Of the 892,000 options granted
in the fiscal year ended October 31, 1998, all were immediately vested as of
December 31, 1998.

OPTION GRANTS DURING THE FISCAL YEAR ENDED OCTOBER 31, 1998

During the fiscal year ended October 31, 1998, the following options were
granted to the following Named Executive Officers:


<PAGE>
<TABLE>
<CAPTION>
                                                 INDIVIDUAL GRANTS

                                      % OF
                                      TOTAL                                                      POTENTIAL REALIZABLE
                                      OPTIONS                                                          VALUE AT
                                      GRANTED                       MARKET                       ASSUMED ANNUAL RATES
                        NUMBER OF     TO             EXERCISE       PRICE                           OF STOCK PRICE       
                        SHARES        EMPLOYEES      OR BASE        ON                               APPRECIATION        
                        UNDERLYING    IN FISCAL      PRICE          DATE OF         EXPIRATION       FOR OPTION TERM (2) 
         NAME           OPTIONS(# )   YEAR(4)        ($/SH) (1)     GRANT              DATE         5% ($)        10% ($)
         ----           -----------   ---------      ----------     -------         ----------   ------------------------
<S>                      <C>          <C>             <C>            <C>           <C>            <C>          <C>     
Frazier L. Gaines         10,000      28%             6.20           7.75           4/24/05       $ 47,100     $ 89,000
                          20,000                      11.9375        7.9375          7/3/04              -       47,600
                          80,000                      14.00          14.00           7/8/00        114,400      235,200
                         100,000                      6.00           11.1875       12/31/00        661,000      813,000
Gideon D. Taylor          10,000      29%             6.20           7.75           4/24/05         47,100       89,000
                          20,000                      11.9375        7.9375          7/3/04              -       47,600
                         120,000                      14.00          14.00           7/8/00        171,600      352,800
                          70,000                      6.00           11.1875       12/31/00        462,700      569,100
Billy V. Ray (3)          10,000       5%             14.00          14.00           7/8/00         14,300       29,400
                          25,000                      7.75           7.75           9/19/05         90,250      215,000
Richard J. Sandulli       10,000       7%             6.20           7.75           4/24/05         47,100       89,000
                          20,000                      11.9375        7.9375          7/3/04              -       47,600
</TABLE>
------------
Note: Mr. Robert DuPuis was also granted an option to purchase 125,000 shares of
      the Company's common stock on August 19, 1998. Due to the fact that Mr.
      DuPuis' employment with the Company was less than two weeks, the Company
      has not included a valuation of those options in the above table. At the
      time of Mr. DuPuis' separation from the Company, this option had not
      vested and the option was forfeited.

(1)   On December 31, 1998, in an effort to clear up a large number of
      ambiguities in the minutes of Board of Director meetings and in order to
      maintain compliance with various debtor documents as well as to keep the
      Company in substantial compliance with certain rules of the Securities and
      Exchange Commission and The Nasdaq Stock Market, Inc. ("Nasdaq") the Board
      of Directors rescinded all of the above options grants and reissued new
      options in the amounts set forth above at the then fair market value per
      share on December 31, 1998, which was $5.75.

(2)   The potential realizable values are based upon assumed 5% and 10%
      annualized stock price growth rates and are not intended to forecast
      future price appreciation of the Company's Common Stock. Actual gains, if
      any, on stock option exercises will depend on the amount, if any, by which
      the fair market value exceeds the option exercise price on the date the
      option is exercised. There is no assurance that the amounts reflected in
      this table will be achieved.

(3)   The option to purchase 25,000 shares of the Company's common stock were
      cancelled in August 1998 pursuant to the 1995 Stock Option Plan, as
      amended.

(4)   There were option grants to purchase 892,000 shares of the Company's
      Common Stock during the fiscal year ended October 31, 1998, of which
      762,000 related to employees of the Company. The percentage of total
      options granted to employees is based upon grants of options to
      purchase 762,000 shares.

OPTION EXERCISES AND PERIOD-END VALUES

The following table provides information on options exercised in the fiscal year
ended October 31, 1998 by the persons named in the "Summary Compensation Table"
above, the number of unexercised options each of them held at October 31, 1998
and the value of the unexercised "in-the-money" options each of them held as of
that date.
<PAGE>
<TABLE>
<CAPTION>
                                                               NUMBER OF SECURITIES            VALUE OF UNEXERCISED
                                                                    UNDERLYING                 IN-THE-MONEY OPTIONS
                               SHARES            VALUE          OPTIONS/AT FYE (#)                  AT FYE ($)
                             ACQUIRED ON     REALIZED              EXERCISABLE/                    EXERCISABLE/
          NAME              EXERCISE (#)           ($)             UNEXERCISABLE               UNEXERCISABLE(1) (2)
          ----              -------------    ---------         ---------------------           --------------------
<S>                              <C>               <C>            <C>                              <C>
Frazier L. Gaines                ---               ---              210,000/---                    $804,375/---
Gideon D. Taylor                 ---               ---              220,000/---                    $585,000/---
Billy V. Ray                     ---               ---            100,000/10,000                       $0/$0
Richard J. Sandulli              ---               ---              30,000/---                      $73,125/---
</TABLE>
------------
(1) On December 31, 1998, in an effort to clear up a large number of ambiguities
    in the minutes of Board of Director meetings and in order to maintain
    compliance with various debtor documents as well as to keep the Company in
    substantial compliance with certain rules of the Securities and Exchange
    Commission and The Nasdaq Stock Market, Inc. ("Nasdaq") the Board of
    Directors rescinded all of the above options grants and reissued new options
    in the amounts set forth above at the then fair market value per share on
    December 31, 1998, which was $5.75.

(2) For those options which were "In-the-Money" at October 31, 1998, the
    valuation is based on the closing price of the common stock of Able Telcom
    Holding Corp. of $ 7 5/16.

EMPLOYMENT AND CONSULTING AGREEMENTS

BILLY V. RAY, JR., President and Chief Executive Officer, is party to an
employment agreement, dated December 1, 1998 with the Company (the "Ray
Employment Agreement"). The Ray Employment Agreement terminates on November 30,
2000, and provides that Mr. Ray is to be paid a salary of $180,000 per year,
plus a monthly housing allowance of $1,500 per month and automobile allowance of
$500 per month, plus health insurance and other benefits. The Ray Employment
Agreement may be extended for an additional two year period. The Ray Employment
Agreement also contains a covenant by Mr. Ray not to compete with the Company
for a period of three years following his employment. The Ray Employment
Agreement also provides that if Mr. Ray's employment is terminated with cause,
Mr. Ray would be entitled to 90 days prior notice. However, should Mr. Ray be
terminated without cause, Mr. Ray would be paid out the remainder of his
contract, or for 90 days, whichever is greater. In addition, the Ray Employment
Agreement provides for the grant of 100,000 options to purchase 100,000 shares
of the Company's common stock, as approved by the Company's Board of Directors,
which vest immediately. On December 31, 1998, the Company's Board of Directors
rescinded the above grant of options and issued new options to purchase 100,000
shares through December 31, 2001 at an exercise price of $5.75 per share.

EDWARD POLLOCK, In-House Counsel, is party to an employment agreement, dated
January 1, 1999 with the Company (the "Pollock Employment Agreement"). The
Pollock Employment Agreement terminates on December 31, 2000 and provides that
Mr. Pollock is to be paid an initial salary of $10,000 per month for the period
from January 1, 1999 to June 30, 1999, increased to $11,000 per month for the
period from July 1, 1999-December 31, 1999, increased to $12,000 monthly for the
period from January 1, 2000 to June 30, 2000, and increased to $12,500 monthly
for the period from July 1, 2000 to December 31, 2000. In addition, the Pollock
Employment Agreement provides an automobile allowance of $300 per month, plus
health insurance and other benefits. The Pollock Employment Agreement may be
extended for an additional two year period. The Pollock Employment Agreement
also contains a covenant by Mr. Pollock not to compete with the Company for a
period of three years following his employment. The Pollock Employment Agreement
also provides that if Mr. Pollock is terminated with cause, Mr. Pollock would be
entitled to 90 days prior notice. However, should Mr. Pollock be terminated
<PAGE>

without cause, Pollock would be paid out the remainder of his contract. In
addition, the Pollock Employment Agreement provides for the grant of options to
purchase 40,000 shares of the Company's common stock, as approved by the
Company's Board of Directors, which vest over a three year period (15,000
options vested on January 1, 1999, 15,000 options will vest on January 1, 2000
and 10,000 options will vest on January 2, 2001), unless there is a change in
control/ownership of the Company, in which case, the options will vest
immediately.

CURTIS A. "BUTCH" DALE, Chief Operating Officer, is party to an employment
agreement, dated August 17, 1998 with the Company (the "Dale Employment
Agreement"). The Dale Employment Agreement terminates on August 16, 2001, and
provides that Mr. Dale is to be paid a salary of $150,000 per year, an
automobile allowance of $500 per month, plus health insurance and other
benefits. The Dale Employment Agreement also contains a covenant by Mr. Dale not
to compete with the Company for a period of one year following his employment.
The Dale Employment Agreement also provides that if Mr. Dale is terminated with
cause that Mr. Dale would be entitled to 90 days prior notice. However, should
Mr. Dale be terminated without cause, Mr. Dale would be paid out the remainder
of his contract, or for 180 days, whichever is greater. In addition, the Dale
Employment Agreement provides for the grant of options to purchase 100,000
shares of the Company's Common Stock, as approved by the Company's Board of
Directors, which vests after one year of employment, or immediately upon either
a change in control/ownership of the Company or Mr. Dale is terminated without
cause, in which case, the options will vest immediately. On December 31, 1998,
the Company's Board of Directors rescinded the above grant of options and issued
new options to purchase 100,000 shares, which options are fully vested and are
exercisable at $5.75 per share through December 31, 2004.

JESUS G. DOMINGUEZ, Chief Accounting Officer, is party to an employment
agreement, dated April 27, 1998 with the Company (the "Dominguez Employment
Agreement"). The Dominguez Employment Agreement terminates on April 26, 2001,
and provides that Mr. Dominguez is to be paid a salary of $125,000 per year,
plus an automobile allowance of $500 per month, plus health insurance and other
benefits. The Dominguez Employment Agreement also contains a covenant by Mr.
Dominguez not to compete with the Company for a period of one year following his
employment. The Dominguez Employment Agreement also provides that if Mr.
Dominguez is terminated with cause that Mr. Dominguez would be entitled to 90
days prior notice. However, should Mr. Dominguez be terminated without cause,
Mr. Dominguez would be paid out the remainder of his annual contract salary, or
for 180 days, whichever is greater. In addition, the Dominguez Employment
Agreement provides for the grant of options to purchase 50,000 shares of the
Company's common stock, as approved by the Company's Board of Directors, which
vests after one year of employment, or immediately upon either a change in
control/ownership of the Company or Mr. Dominguez is terminated without cause,
in which case, the options will vest immediately. On December 31, 1998, the
Company's Board of Directors rescinded the above grant of options and issued new
options to purchase 50,000 shares at an exercise price of $5.75 per share
through December 31, 2004.

GIDEON D. TAYLOR, Vice President of Special Projects, is party to an employment
agreement, dated December 7, 1998 with the Company (the "Taylor Employment
Agreement"). The Taylor Employment Agreeement terminates on June 6, 1999 and may
be extended for a one year term at the option of the Company, and provides that
Mr. Taylor is to be paid at a rate of $15,000 per month, plus an automobile
allowance of $500 per month, health and life insurance and other benefits. The
Taylor Employment Agreement also provides that the Company will also pay all
fringe benefits plus $75,000 per year for the number of years equal to Mr.
Taylor years of service, subject to a minimum of ten (10) years, and will
payable beginning at Mr. Taylor termination date. The Taylor Employment
Agreement also contains a covenant by Mr. Taylor not to compete with the Company
for a period of three years following his employment. The Taylor Employment
Agreement also provides that if Mr. Taylor is terminated with cause that Mr.
Taylor would be entitled to 30 days prior notice. However, should Mr. Taylor be
terminated without cause which can only be effected by a majority vote of the
Company's Board of Directors, Mr. Taylor would be paid one-year's severance of
the remaining balance on the employment contract plus regular Company fringe
benefits for a period of one year from the date of termination.

STACY JENKINS, President of MFS Network Technologies, Inc., is party to an
employment agreement, dated July
<PAGE>

16, 1998 with the Company (the "Jenkins Employment Agreement"). The Jenkins
Employment Agreement terminates on July 15, 2001, and provides that Mr. Jenkins
is to be paid a salary of $200,000 per year, an automobile allowance of $500 per
month, plus health insurance and other benefits. The Jenkins Employment
Agreement also contains a covenant by Mr. Jenkins not to compete with the
Company for a period of two years following his employment. The Jenkins
Employment Agreement also provides that if Mr. Jenkins is terminated with cause
that Mr. Jenkins would be entitled to 30 days prior notice. However, should Mr.
Jenkins be terminated without cause, Mr. Jenkins would be paid out the remainder
of his annual salary contract rate, or for 90 days, whichever is greater. In
addition, the Jenkins Employment Agreement provides for the grant of options to
purchase 100,000 shares of the Company's common stock, as approved by the
Company's Board of Directors, which vest after one year of employment, or
immediately upon either a change in control/ownership of the Company or Mr.
Jenkins is terminated without cause, in which case, the options will vest
immediately. On December 31, 1998, the Company's Board of Directors rescinded
the above grant of options and issued new options to purchase 100,000 shares at
$5.75 per share through December 31, 2000 or 90 days after termination of
employment, whichever is earlier.

G. VANCE CARTEE, President of MFS Transportation Systems, Inc., is party to an
employment agreement, dated January 4, 1999 with the Company (the "Cartee
Employment Agreement"). The Cartee Employment Agreement terminates on January 3,
1999, and provides that Mr. Cartee is to be paid a salary of $150,000 per year,
plus insurance and other benefits. The Cartee Employment Agreement also contains
a covenant by Mr. Cartee not to compete with the Company for a period of one
year following his employment. The Cartee Employment Agreement also provides
that if Mr. Cartee is terminated with cause that Mr. Cartee would be entitled to
90 days prior notice. However, should Mr. Cartee be terminated without cause,
Mr. Cartee would be paid out the remainder of his contract, or for 180 days,
whichever is greater. In addition, the Cartee Employment Agreement provides for
the grant of options to purchase 40,000 shares of the Company's common stock,
as approved by the Company's Board of Directors, which vest on January 1, 2000,
or immediately upon either a change in control/ownership of the Company or Mr.
Cartee is terminated without cause, in which case, the options will vest
immediately. On December 31, 1998, the Company's Board of Directors rescinded
the above grant of options and issued new options to purchase 40,000 shares at
$5.75 per share, all of which are fully vested, through December 31, 2001.

J. BARRY HALL, President of the Transportation Services Group, which includes
both Transportation Safety Contractors, Inc. ("TSCI") and Georgia Electric
Company, is party to an employment agreement dated October 12, 1996 with TSCI
(the "Hall Employment Agreement"). The Hall Employment Agreement terminates on
October 11, 2001, and provides that Mr. Hall is to be paid a salary of $150,000
per year, plus insurance and other benefits. The Hall Employment Agreement also
contains a covenant by Mr. Hall not to compete with the Company for a period of
two years following his employment, unless the Company terminates the Hall
Employment Agreement for cause of if Mr. Hall terminates the agreement with good
reason, in which case the non-competition period will terminate after six (6)
months (which period may be extended by the Company up to one year in exchange
for additional compensation). In addition, an additional $100,000 in annual
salary has been assigned to J. Barry Hall from Gerry Hall, a former Chief
Executive Officer of the Company currently under contract.

FRAZIER L. GAINES, President of Able Telcom International, is party to an
employment agreement, dated November 12, 1998 with the Company (the "Gaines
Employment Agreement"). The Gaines Employment Agreement terminates on November
11, 2001, may be extended for one additional year, allows for a consulting
agreement to be signed at the end of the initial three year term, and provides
that Mr. Gaines is to be paid a salary of $200,000 per year, health and life
insurance, other fringe benefits, and a monthly automobile allowance of $500.
The Gaines Employment Agreement also provides that the Company will also pay all
fringe benefits plus $60,000 per year for the number of years equal to Mr.
Gaines years of service and will payable beginning at Mr. Gaines termination
date. The Gaines Employment Agreement also contains a covenant by Mr. Gaines not
to compete with the Company for a period of three years following his
employment. The Gaines Employment Agreement also provides that if Mr. Gaines is
terminated with cause that Mr. Gaines would be entitled to 30 days prior notice.
However, should Mr. Gaines be terminated without cause, Mr. Gaines would be paid
one-year's severance plus regular Company fringe benefits. $100,000 of this
amount would be payable immediately upon termination with the
<PAGE>

remainder of $100,000 payable within 45 days from termination. In addition, the
Gaines Employment Agreement provides for the grant of options to purchase
100,000 shares of the Company's common stock, subject to approval by the
Company's Board of Directors, which vest over a three year period, or
immediately upon either a change in control/ownership of the Company. To date,
these options have not been approved by the Company's Board of Directors.

RICHARD A. BOYLE, President of the Patton Management Group, is party to an
employment agreement, dated April 1, 1998 with the Company (the "Boyle
Employment Agreement"). The Boyle Employment Agreement terminates on March 31,
2000, and provides that Mr. Boyle is to be paid a salary of $159,000 per year,
plus insurance and other benefits. The Boyle Employment Agreement also contains
a covenant by Mr. Boyle not to compete with the Company for a period of two
years following his employment. Also, per the terms of the Patton Management
Corporation acquisition, Mr. Boyle's non-competition agreement has been extended
for one additional year. The Boyle Employment Agreement also provides that if
Mr. Boyle is terminated with cause that Mr. Boyle would not be entitled to any
notice.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table shows, as of January 31, 1999, the Common Stock owned
beneficially by (i) Each Director of the Company, (ii) each Executive Officer,
(iii) all Directors and Executive Officers as a group, and (iv) each person
known by the Company to be the "beneficial owner" of more than five percent (5%)
of such Common Stock. "Beneficial ownership" is a technical term broadly defined
by the Securities and Exchange Commission to mean more than ownership in the
usual sense. For example, you "beneficially" own Common Stock not only if you
hold it directly, but also if you indirectly (through a relationship, a position
as a director or trustee, or a contract or understanding), have (or share the
power to vote the stock, or sell it) the right to acquire it within 60 days.
Except as disclosed in the footnotes below, each of the Directors and Executive
Officers listed have sole voting and investment power over his or her shares. As
of January 31, 1999, there were 11,065,670 shares of Common Stock issued and
outstanding and approximately 395 holders of record.
<TABLE>
<CAPTION>
                                                                                        SHARES              PERCENTAGE
                                                                                     BENEFICIALLY          BENEFICIALLY
           NAME (1)                                   TITLE                              OWNED                 OWNED
           --------                                   -----                          -------------         ------------
<S>                             <C>                                                     <C>                    <C>
C. Frank Swartz (2)             Chairman of the Board of Directors                       20,000                 *
Gideon D. Taylor (3)            Director and Vice President of Special Projects         946,638                8.4%
Frazier L. Gaines (4)           Director                                                684,430                6.1%
Jonathan A. Bratt (5)           Director                                                 36,500                 *
Thomas M. Davidson (2)          Director                                                 20,000                 *
Gerald Pye                      Director                                                   ---                  ---
Robert Young                    Director                                                   ---                  ---
Billy V. Ray, Jr. (2)           President, Chief Executive Officer and Acting
                                Chief Financial Officer                                 110,000                 *
Jesus G. Dominguez (2)          Chief Accounting Officer                                 97,000                 *
Michael Arp (2)                 Financial Vice President                                 20,000                 *
Curtis A. "Butch" Dale (6)      Chief Operating Officer                                 103,300                 *
Edward Z. Pollock (2)           In-House Counsel                                         15,000                 *
Stacy Jenkins (2)               President - MFS Network Technologies                    100,000                 *
G. Vance Cartee                 President - MFS Transportation Systems                     ---                  ---
J. Barry Hall (7)               President - Traffic Management Group                    433,500                3.9%
Ralph Ouimette (2)              President - Able Telecommunications and
                                Power Group                                               3,317                 *
Richard A. Boyle                President - Patton Management Group                        ---                  ---
All Directors and
Executive Officers as a
group (17 persons)                                                                    2,589,685               28.4%
</TABLE>
------------
*Less than 1%.
<PAGE>

(1) The address for each of Able's Directors and Executive Officers is 1601
    Forum Place, Suite 1110, West Palm Beach, Florida 33401.

(2) These represent stock options that are immediately exercisable.

(3) These include (i) 21,619 shares owned by Mr. Taylor's wife, and (ii) 220,000
    shares underlying stock options which are immediately exercisable at $5.75
    per share.

(4) These include 210,000 shares underlying stock options are immediately
    exercisable at $5.75 per share and 474,430 shares held in a trust controlled
    by Mr. Gaines. These do not include an aggregate of 9,000 shares held by Mr.
    Gaines as trustee to four minor children and for which Mr. Gaines disclaims
    any beneficial ownership.

(5) Includes 30,000 shares underlying options which are immediately exercisable
    at $5.75 per share and 6,500 shares owned by Mr. Bratt.

(6) Includes 3,300 shares owned by Mr. Dale and 100,000 shares underlying stock
    options which are immediately exercisable at $5.75 per share.

(7) Includes 107,500 shares owned by Mr. Hall, and 326,000 shares issued to
    Mr. Hall in February 1999 related to consideration on the Company's
    acquisition of Georgia Electric Company from Mr. Hall and his brother,
    Gerry W. Hall.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the fiscal year ended October 31, 1998, compensation for the Company's
Officers was determined by the Company's Compensation Committee, consisting of
Messrs. C. Frank Swartz, Thomas Davidson and Gideon Taylor, of which Messrs.
Swartz and Davidson are non-employee members of the Board of Directors. Mr.
Taylor was Chairman of the Compensation Committee from November 1, 1997 through
August 18, 1998. On August 18, 1998, Mr. Davidson became the Chairman of the
Company's Compensation Committee. During the year, Mr. Taylor was Chairman of
the Company's Board of Directors and the Company's Chief Administrative Officer.

In April 1998, the Company engaged Washington Equity Partners ("WEP") as an
advisor in connection with the acquisition of MFS Network Technologies, Inc., a
division of WorldCom, Inc. ("MFSNT Acquisition"), including the financing
thereof. At the time of the engagement, Mr. Thomas M. Davidson, a member of the
Company's Board of Directors and a member of the Compensation Committee, was
Managing Director of WEP. In connection with the engagement, the Company agreed
to pay WEP a fee if the Company consummated the financing of the MFSNT
Acquisition through an investor contacted by WEP. Such fee equals 2% of the
gross proceeds of any senior indebtedness issued by the Company, 3% of the gross
proceeds of any subordinated indebtedness issued by the Company, and 4% of the
gross proceeds of any equity securities issued by the Company. In addition, the
Company agreed to pay WEP, upon the consummation of the MFSNT Acquisition, a fee
of 2% of the aggregate purchase price paid by the Company for this acquisition
up to $50 million, and 1-1/2% of the aggregate purchase price in excess of $50
million. The Company also committed to reimburse WEP for its reasonable travel
and out-of-pocket expenses (up to a maximum of $20,000 without prior approval)
incurred in connection with its engagement. Under the agreement, the Company
agreed indemnify WEP and its permitted assigns against all losses and expenses,
including reasonable counsel fees and expenses, arising out of the MFSNT
Acquisition or the financing, except any losses or expenses found in a final
judgment by a court of competent jurisdiction to have resulted from WEP's bad
faith, gross negligence or breach of its agreement with the Company. Mr.
Davidson subsequently left his position as Managing Director of WEP in April
1998 and WEP assigned its rights in the agreement to Mr. Davidson, who became a
Director of the Company in June 1998. On October 21, 1998, Mr. Davidson and the
Company executed a letter agreement pursuant to which the Company agreed to pay
Mr. Davidson $1,332,000 in satisfaction of amounts owing under the agreement
with WEP with respect to the MFSNT Acquisition and the related financing.

On April 24, 1998, to finance part of the non-refundable deposit for the MFSNT
Acquisition, Frazier L. Gaines, the Company's then President and Chief Executive
Officer, and Gideon D. Taylor, the Company's then Chairman of the Board of
Directors, borrowed $5.0 million from a bank on an unsecured basis. This loan
was secured by a pledge of 1,047,000 shares of Common Stock owned by Messrs.
Taylor and Gaines. On July 2, 1998, to finance an additional non-refundable
deposit on the MFSNT Acquisition purchase price, Messrs. Taylor and Gaines
borrowed an additional $4.2 million. This loan was also secured by a pledge of
1,047,009 shares of Common Stock owned by Messrs. Taylor and Gaines. On June 11,
1998, the Company repaid both of these loans as well as agreed to pay Messrs.
Taylor and Gaines $25,000 each for interest related to the loans. On July 8,
1998, Messrs. Taylor and Gaines were granted two year options to purchase
120,000 and 80,000, respectively, of the Company's Common Stock, at an exercise
price of $14.00 per share, as compensation for providing the capital necessary
to fund the initial deposits required to consummate the MFSNT Acquisition.
<PAGE>

On August 11, 1998, Messrs. Taylor and Gaines each loaned the Company $1.0
million on an unsecured basis to cover certain expenses associated with the
MFSNT Acquisition. These loans were repaid in full on August 17, 1998 and
interest of $2,200 was paid to each Messrs. Taylor and Gaines.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

On October 12, 1996, the Company acquired all of the issued and outstanding
capital stock of Georgia Electric Company ("GEC"), which prior to the
acquisition was owned equally by Gerry W. and J. Barry Hall (collectively, the
"Halls"). Following the acquisition, Gerry Hall was elected to the board of
directors of the Company, and on June 12, 1997, was elected President and Chief
Executive Officer of the Company. Gerry Hall resigned as President, Chief
Executive Officer and a director of the Company on March 2, 1998. The purchase
price for the GEC acquisition was $3 million in cash, plus the issuance at the
end of each of the next five fiscal years of a number of shares of Common Stock
to be determined pursuant to a formula contained in the acquisition agreement by
dividing a dollar figure derived from GEC's actual pre-tax profits and operating
margins compared with target profits and margins for each such fiscal year by a
discounted per share price. In the event that GEC is sold by the Company prior
to the end of fiscal year 2001, the Company is obligated to issue to Gerry Hall
and Barry Hall a number of shares of Common Stock having a market value (as
determined in accordance with the contract) of $1 million for each year that
earn-out consideration remains payable. The GEC acquisition agreement was
amended in February 1998 to increase the percentage discount applicable to the
price of the Common Stock for purposes of determining the number of shares to be
issued with respect to each fiscal year and to limit the total market value of
the shares of Common Stock which could be issued under the agreement.

In November 1997, a subsidiary of the Company assumed the obligations of Ten-Ray
Utility Construction, Inc. ("Ten-Ray"), a North Carolina corporation, as
contractor under two network construction contracts and paid the costs Ten-Ray
had accrued under the contracts of approximately $131,000. On January 30, 1998,
the Company purchased from Ten-Ray certain construction equipment used in
connection with the contracts. The purchase price for the equipment was the
satisfaction of Ten-Ray's bank loans secured by the equipment in the amount of
$330,188, including principal and interest, which in the opinion of the
executives of the subsidiary was not more than the fair market value of the
equipment. Billy V. Ray, Jr., then the Company's Chief Financial Officer and
currently, the Company's Chief Executive Officer, President and Acting Chief
Financial Officer, beneficially owned approximately 7.7% of the voting stock of
Ten-Ray and had personally guaranteed the equipment loans to the bank.

On July 1, 1997, the Company entered into a six month consulting agreement with
Nelles & Associates, Inc. ("NAI"), an international telecommunications
consulting firm founded by Robert C. Nelles, a Director of the Company. The
consulting agreement provides for NAI to be paid $6,000 per month to provide
consulting services in support of the Company's business activities for eight
days per month and for Mr. Nelles to be granted options to purchase 15,000
shares of Common Stock. On January 1, 1998, the Company entered into a three
month consulting agreement with NAI which provides for NAI to be paid $2,000 per
month to provide consulting services in support of the Company's business
activities for up to three days per month and an hourly fee for additional
services. On March 6, 1998, the Company entered into a four month consulting
agreement with NAI, pursuant to which Mr. Nelles served as the interim Chief
Operating Officer of the Company for which the Company paid him consulting fees
of $12,500 per month, provided Mr. Nelles with the use of a leased automobile
and reimbursed NAI for temporary living, travel and related expenses incurred in
connection with Mr. Nelles' performance of services as interim Chief Operating
Officer.

See also "Compensation Committee Interlocks and Insider Participation" regarding
certain related party transactions with between the Company, members of the
Compensation Committee and with Mr. Frazier Gaines, the former President and
Chief Executive Officer of the Company and a Director of the Company.
    

                                     PART IV

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

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

     Reports of Independent Certified Public Accountants
     Consolidated Financial Statements:
       Consolidated Balance Sheets - October 31, 1998 and 1997
       Consolidated Statements of Operations - Years ended October 31,
         1998, 1997 and 1997
       Consolidated Statements of Shareholders' Equity - Years ended October 31,
         1998, 1997 and 1996
       Consolidated Statements of Cash Flows - Years ended October 31,
         1998, 1997 and 1996
       Notes to Consolidated Financial Statements
    

     (a) 2. The financial statement schedule for the years ended October 31,
     1998, 1997 and 1996 is filed as part of this report and should be read in
     conjunction with the Consolidated Financial Statements of the Company.

     Schedule II-Valuation and Qualifying Accounts

     Schedules not listed above have been omitted because they are not
     applicable or not required or the information required to be 

                                       25
<PAGE>

     set forth therein is included in the Consolidated Financial Statements or 
     Notes thereto.

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

     EXHIBIT
        NO.       DESCRIPTION
     --------     -----------

         2.1      Asset Purchase Agreement, dated November 26, 1997, among Able
                  Telcom Holding Corp., Georgia Electric Company, Transportation
                  Safety Contractors, Inc., COMSAT RSI Acquisitions, Inc. and
                  COMSAT Corporation (l)

         2.2      Indemnification Agreement, dated February 25, 1998, among Able
                  Telcom Holding Corp., Georgia Electric Company, Transportation
                  Safety Contractors, Inc., COMSAT RSI Acquisitions, Inc. and
                  COMSAT Corporation (l)

         2.3      Stock Purchase Agreement, dated as of April 1, 1998, among
                  Able Telcom Holding Corp., James P. Patton, Rick Boyle and
                  Claiborne K. McLemore III (2)

         2.4      Closing Memorandum and Schedule, dated April 1, 1998, among
                  Able Telcom Holding Corp., James P Patton, Rick Boyle and
                  Claiborne K. McLemore III (2)

   
         2.5      Agreement and Plan of Merger by and among MFS Acquisition
                  Corp., Able Telcom Holding Corp., MFS Network Technologies,
                  Inc. and MFS Communications Company, Inc. dated as of April
                  22,1998 (9)

         2.5.1    Amendment to Agreement and Plan of Merger among MFS
                  Acquisition Corp., Able Telcom Holding Corp., MFS Network
                  Technologies, Inc. and MFS Communications Company, Inc. dated
                  as of July 2, 1998 (10)

         2.5.1.1  Amendment No. 2 dated as of July 21, 1998 to Agreement and
                  Plan of Merger among WS Acquisition Corp., Able Telcom Holding
                  Corp., MFS Network Technologies, Inc. and MFS Communications
                  Company, Inc. (11)
    

         2.5.1.2  Agreement between WorldCom Network Services, Inc. and Able
                  Telcom Holding Corp. dated as of September 9, 1998 (13)

         2.5.1.3  Agreement between WorldCom Network Services, Inc. and Able
                  Telcom Holding Corp. dated January 26, 1999

   
         2.5.2    Promissory Note of Able Telcom Holding Corp. dated July 2,
                  1998 to MFS Communications Company, Inc. (10)
    

         2.5.2.1  11.5% Promissory Note between Able Telcom Holding Corp. and
                  WorldCom Network Services, Inc. dated as of September 1, 1998

         2.5.3    Stock Pledge Agreement dated as of July 2, 1998 by Able Telcom
                  Holding Corp. in favor of WorldCom, Inc. (10)

         2.5.4    Master Services Agreement between WorldCom Network Services,
                  Inc. and NIFS Network Technologies, Inc. dated as of July 2,
                  199 8 (exhibits omitted) (11)

   
         2.5.5    Assumption and Indemnity Agreement dated as of July 2, 1998
                  among Able Telcom Holding Corp., WorldCom, Inc., MFS
                  Communications Company, Inc., MFS Intelenet, Inc.,
                  MFS Datanet, Inc., MFS Telcom, Inc. and MFS Communications,
                  Ltd. (schedule omitted) (10)
    

         2.5.6    License Agreement between MFS Communications Company, Inc. and
                  Able Telcom Holding Corp. dated as of July 2, 1998 (10)

         2.5.7    Modification to Stock Option Agreement between the Company and
                  WorldCom, Inc. dated January 8, 1999

         2.5.8    Agreement to Enter Into Stock Appreciation Rights Agreement
                  between the Company and WorldCom, Inc. dated January 8, 1999

         2.5.9    Financing Agreement between WorldCom Network Services, Inc.
                  and Able Telcom Holding Corp. dated February 16, 1999

         3.1      Articles of Incorporation of the Able Telcom Holding Corp., as
                  amended (3)(4)

         3.1.1    Articles of Amendment to the Articles of Incorporation of Able
                  Telcom Holding Corp. (13)

         3.2      Bylaws of the Able Telcom Holding Corp., as amended (3)

         4.2      Specimen Common Stock Certificate (3)

         4.3      Specimen Series A Preferred Stock Certificate (6)

         4.4      Form of Warrant issued to Credit Suisse, First Boston and
                  Silverton International Fund Limited (4)

         4.6      Able Telcom Holding Corp. 1995 Stock Option Plan (13)

         4.7      Amendment to Able Telcom Holding Corp. 1995 Stock Option Plan,
                  dated April 24, 1998 (13)

         4.8      Series B Convertible Preferred Stock Purchase Agreement (13)

         4.9      Registration Rights Agreement for Series B Convertible
                  Preferred Stock Purchase Agreement and 350,000 Warrants (13)

         4.10     Registration Rights Agreement for 650,000 Warrants associated
                  with Series B Convertible Preferred Stock Purchase Agreement
                  (13)

         4.11     Form of Common Stock Purchase Warrants for 350,000 Shares in
                  connection with Series B Convertible Preferred Stock Purchase
                  Agreement (13)

         4.12     Form of Common Stock Purchase Warrants for 650,000 Shares in
                  connection with Series B Convertible Preferred Stock Purchase
                  Agreement (13)

         4.13     Preferred Stock Purchase Agreement by and among Able Telcom
                  Holding Corp., RGC International Investors, LDC, and Cotton
                  Communications, Inc. dated February 17, 1999

         4.14     Warrant Amendment between Able Telcom Holding Corp. and
                  Purchasers (as defined) dated February 17, 1999

   
         4.15     Securities Purchase Agreement by and between the Sellers, as
                  defined, and Cotton Communications, Inc. dated February 17,
                  1999
    

        10.15     Stock Purchase Agreement between Able Telcom Holding Corp.,
                  Traffic Management Group, Inc., Georgia Electric Company,
                  Gerry W. Hall and J. Barry Hall (5)

        10.16     Stock Purchase Agreement between Able Telcom Holding Corp.,
                  Telecommunications Services Group, Inc., Dial Communications,
                  Inc., William E. Newton and Sybil C. Newton (8)

        10.17     Promissory Note of Able Telcom Holding Corp. Payable to
                  William E. Newton and Sybil C. Newton (8)

        10.23     Form of Stock Purchase Agreement among Able Telcom Holding
                  Corp., Traffic Management Group, Inc., Georgia Electric
                  Company, Gerry W. Hall and Barry Hall (5)

        10.25     Securities Purchase Agreements, dated as of January 6, 1998,
                  between Able Telcom Holding Corp. and each of the Purchasers
                  named therein (6)

                                       26
<PAGE>

        10.25.1   Letter Agreement dated July 2, 1998 related to Securities
                  Purchase Agreements dated as of January 6, 1998 (13)

        10.26     Senior Secured Revolving Credit Agreement dated as of April
                  6,1998, between Able Telcom Holding Corp. and Suntrust Bank,
                  South Florida, N.A. and Bank of America, FSB (9)

        10.27     Credit Agreement among Able Telcom Holding Corp., NationsBank,
                  N.A. and The Several Lenders from Time to Time Parties Hereto
                  dated as of June 11, 1998 (exhibits and schedules omitted)
                  (13)

        10.29     Employment Agreement with Jesus G. Dominguez, dated April 27,
                  1998 (13)

        10.30     Employment Agreement with Stacy Jenkins, dated July 16, 1998
                  (13)

        10.32     Amendment to June 11, 1998 Credit Agreement among Able Telcom
                  Holding Corp., NationsBank N.A., and the Several Lenders from
                  Time to Time Parties thereto, dated as of June 30, 1998 (13)

        10.33     Employment Agreement with Billy V Ray, Jr., dated October 1,
                  1998

        10.34     Employment Agreement with Curtis A. "Butch" Dale, dated August
                  17, 1998 (14)

        10.35     Financial Advisor and Placement Engagement Letter, dated April
                  3, 1998, between Washington Equity Partners and Able Telcom
                  Holding Corp. (14)

        10.36     Employment Agreement with G. Vance Cartee, dated January 4,
                  1999

        10.37     Employment Agreement with Edward Pollock, dated January 1,
                  1999

        10.38     Employment Agreement with Frazier L. Gaines, dated November
                  12, 1998

        10.39     Employment Agreement with Gideon D. Taylor, dated December 7,
                  1998

        10.40     Employment Agreement with Rick Boyle, dated April 1, 1998

        10.41     Financing Agreement between Able Telcom Holding Corp. and
                  Cotton Communications, Inc. dated February 17, 1999 (without
                  exhibits)

        10.42     11.5% Non-Recourse Promissory Note between Cotton
                  Communications, Inc. and Able Telcom Holding Corp. dated
                  February 17, 1999

        10.43     Stock Pledge Agreement between Able Telcom Holding Corp. and
                  Cotton Communications, Inc. dated February 17, 1999

        16.1      Letter regarding change in certifying accountant (12)

        21        Subsidiaries of Able Telcom Holding Corp. (13)

        23.1      Consent of Ernst & Young LLP

        27        Financial Data Schedule
-------------------
(1)      Incorporated by reference from an exhibit to the Company's
         Current Report on Form 8-K (File No. 0-21986), dated February
         25, 1998, as filed with the Commission on March 12, 1998, as
         amended by Form S-KIA-1, dated May 11, 1998, as filed with the
         Commission on May 11, 1998.

(2)      Incorporated by reference from an exhibit to the Company's Current
         Report on Form 8-K (File No. 0-21986), dated April 1, 1998, as filed
         with the Commission on April 14, 1998.

(3)      Incorporated by reference from an exhibit to the Company's Registration
         Statement on Form S-1 (File No. 33-65854), as declared effective by the
         Commission on February 26,1994.

(4)      Incorporated by reference from an exhibit to the Company's Current
         Report on Form 8-K (File No. 0-21986), dated December 20, 1996, as
         filed with the Commission on December 31, 1996.

(5)      Incorporated by reference from an exhibit to the Company's Current
         Report on Form 8-K (File No. 0-21986), dated October 12, 1996, as filed
         with the Commission on October 25, 1996.

(6)      Incorporated by reference from an exhibit to the Company's Annual
         Report on Form 10-K (File No. 0-21986) for the fiscal year ended
         October 31,1997, as filed with the Commission on February 13,1998, as
         amended by Form 10-KIA, as filed with the Commission on March 20,1998.

   
(7)      Not used.

(8)      Incorporated by reference from an exhibit to the Company's Current
         Report on Form 8-K (File No. 0-21986), dated December 2, 1996, as filed
         with the Commission on December 13, 1996, as amended by Form 8-K/A-1,
         dated February 11, 1997, as filed with the Commission on February 11,
         1997.

(9)      Incorporated by reference from an exhibit to the Company's Quarterly
         Report on Form 10-Q (File No. 0-21986), for the quarter ended April 30,
         1998, as filed with the Commission on June 14, 1998.

(10)     Incorporated by reference from an exhibit to the Company's Current
         Report on Form 8-K (File No. 0-21986), dated July 2, 1998, as filed
         with the Commission on July 16, 1998.

(11)     Incorporated by reference from an exhibit to the Company's Current
         Report on Form 8-KIA (File No. 0-21986), dated July 2, 1998, as filed
         with the Commission on August 3, 1998.

(12)     Incorporated by reference to Exhibit I to the Company's Current Report
         on Form 8-K (File No. 0-21986), dated September 7, 1998, as filed with
         the Commission on September 14, 1998.

(13)     Incorporated by reference to an exhibit to the Company's Quarterly
         Report on Form 10-Q (File No. 0-21986), for the quarter ended July 31,
         1998, as filed with the Commission on September 21, 1998, as amended by
         Form 10-Q/A, as filed with the Commission on October 13,1998.

(14)     Incorporated by reference to an exhibit to the Company's Form S-1 (file
         no. 333-65991), as filed with the commission of October 22, 1998.
    

                                       27
<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/  BILLY V. RAY, JR.                March 1, 1999
                     ----------------------------
                     BILLY V. RAY, JR., President and Chief Executive Officer
    

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>
<CAPTION>

<S>                                <C>                                                <C>
SIGNATURES                         TITLE                                                 DATE SIGNED

   
/s/    BILLY V. RAY, JR.           President, Chief Executive Officer and                 March 1, 1999
       -----------------------     Director (Principal Executive Officer and
       BILLY V. RAY, JR.           Acting Principal Financial Officer)

                                   
/s/    MICHAEL ARP                 Financial Vice President                               March 1, 1999
       ----------------------      (Principal Accounting Officer)
       MICHAEL ARP                    

/s/    C. FRANK SWARTZ             Chairman and Director                                  March 1, 1999
       -----------------------
       C. FRANK SWARTZ

/s/    FRAZIER L. GAINES           Director                                               March 1, 1999
       ----------------------
       FRAZIER L. GAINES

/s/    THOMAS M. DAVIDSON          Director                                               March 1, 1999
       ----------------------
       THOMAS M. DAVIDSON

                                   Director                                                            
       ----------------------
       GIDEON D. TAYLOR
    
 
                                   Director                                                             
       -----------------------
       JONATHAN A. BRATT

   
/s/    ROBERT H. YOUNG             Director                                               March 1, 1999
       -----------------------
       ROBERT H. YOUNG
    

                                   Director                                                            
       -----------------------
       GERALD PYE

</TABLE>

                                       28

<PAGE>


                               ABLE TELCOM HOLDING CORP.

                           INDEX TO FINANCIAL STATEMENTS AND

                             FINANCIAL STATEMENT SCHEDULES

Reports of Independent Certified Public Accountants

Consolidated Financial Statements:

Consolidated Balance Sheets - October 31, 1998 and 1997

Consolidated Statements of Operations -
    Years Ended October 31, 1998, 1997 and 1996

Consolidated Statements of Shareholders' Equity - 
    Years ended October 31, 1998, 1997 and 1996

Consolidated Statements of Cash Flows - Years Ended
    October 31, 1998, 1997 and 1996

Notes to Consolidated Financial Statements - October 31, 1998

Financial Statement Schedule:

II.     Valuation and Qualifying Accounts - Years ended
           October 31, 1998, 1997, and 1996

                                      F-1

<PAGE>


                       REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of Directors of
Able Telcom Holding Corp.:

We have audited the accompanying consolidated balance sheet of Able Telcom
Holding Corp. (a Florida Corporation) and subsidiaries as of October 31, 1998,
and the related consolidated statements of operations, shareholders' equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Able Telcom
Holding Corp. and subsidiaries as of October 31, 1998, and the 
results of their operations and their cash flows for the year then ended in
conformity with generally accepted accounting principles. 

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The financial statement schedule listed in the
Index at Item 14(a) is presented for purposes of complying with the Securities
and Exchange Commissions rules and is not part of the basic financial
statements. The schedule has been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, fairly
states in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.

                              ARTHUR ANDERSEN LLP

Omaha, Nebraska
February 17, 1999

                                       F-2
<PAGE>


                  REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Shareholders and Board of Directors
Able Telcom Holding Corp.:

We have audited the accompanying consolidated balance sheet of Able Telcom
Holding Corp. and subsidiaries (the "Company") as of October 31, 1997, and the
related consolidated statements of operations, shareholders' equity, and cash
flows for each of the two years in the period ended October 31, 1997. Our audits
also included the financial statement schedule listed in the Index at Item
14(a). 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, 1997, and the consolidated
results of their operations and their cash flows for each of the two years in
the period ended October 31, 1997, in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial statement
schedule, 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 19, 1998

                                      F-3
<PAGE>



                       ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

                 CONSOLIDATED BALANCE SHEETS--OCTOBER 31, 1998 AND 1997

                   (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                         ASSETS                                                 1998          1997
                                         ------                                                 ----          ----
<S>                                                                                             <C>           <C>    
                                                                           
CURRENT ASSETS:
    Cash and cash equivalents                                                                $  13,544     $  6,230
    Accounts receivable, net of allowances for bad debts of $866       
        and $686 at October 31, 1998 and 1997, respectively                                     64,159       13,399
    Costs and profits in excess of billings on uncompleted contracts                           105,478        5,615
    Prepaid expenses and other                                                                   2,641        1,766
                                                                                               -------       ------- 
        Total current assets                                                                   185,822       27,010
                                                                                               -------       -------
PROPERTY AND EQUIPMENT:   
    Land and buildings                                                                           4,473        1,415
    Equipment, furniture and fixtures                                                           42,522       19,982
                                                                                               -------       -------
                                                                                                46,995       21,397 
    Less- Accumulated depreciation                                                             (14,921)      (8,283)
                                                                                               -------       ------
        Property and equipment, net                                                             32,074       13,114
                                                                                               -------       ------
   

OTHER ASSETS:
    Goodwill, net of accumulated amortization of $2,162 and $1,200                              
        at October 31, 1998 and 1997, respectively                                              31,374        8,341
    Assets held for sale                                                                        38,750            -
    Other                                                                                        2,740        1,881
                                                                                               -------       ------
        Total other assets                                                                      72,864       10,222
                                                                                               -------       -------
        Total assets                                                                         $ 290,760     $ 50,346
                                                                                               =======       =======

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Current portion of long-term debt                                                        $  15,047     $  3,154
    Accounts payable and accrued liabilities                                                    61,376        8,649
    Billings in excess of costs and profits on uncompleted contracts                            57,439          291
    Reserves for losses on uncompleted contracts                                                25,390            -
    Notes payable shareholders/directors                                                         1,182          875
                                                                                               -------       ------
        Total current liabilities                                                              160,434       12,969
    Long-term debt, excluding current portion                                                   76,047       14,140
    Other                                                                                        2,737        1,277
                                                                                               -------       ------
        Total liabilities                                                                      239,218       28,386
                                                                                               -------       ------
    

COMMITMENTS AND CONTINGENCIES (Note 8)

CONVERTIBLE PREFERRED STOCK
    Series A redeemable preferred stock, $.10 par value, 995 shares issued and
        outstanding in 1997                                                                          -        6,713
    Series B preferred stock, $.10 par value, (aggregate liquidation
        value of $17,820,000), 4,000 shares authorized; 3,564 shares issued
        and outstanding in 1998                                                                 11,325            -
                                                                                               -------       ------
        Total convertible preferred stock                                                       11,325        6,713
                                                                                               -------       ------
SHAREHOLDERS' EQUITY:
    Preferred stock, 1,000,000 shares authorized, 5,200 shares issued                                -            -
    Common stock, $.001 par value, authorized 25,000,000 shares;
        11,065,670 and 8,580,422 shares issued and outstanding at
        October 31, 1998 and 1997, respectively                                                     11            9
    Additional paid-in-capital                                                                  40,564       15,096
    Senior Subordinated Note warrants                                                            1,244            -
    WorldCom stock options                                                                       3,490            -
    WorldCom phantom stock                                                                         606            -
    Retained earnings (deficit)                                                                 (5,698)         142
                                                                                               -------       ------
        Total shareholders' equity                                                              40,217       15,247
                                                                                               -------       ------
        Total liabilities and shareholders' equity                                           $ 290,760     $ 50,346
                                                                                              ========      =======
</TABLE>

 The accompanying notes are an integral part to these consolidated financial
 statements

                                      F-4
<PAGE>


                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

           FOR THE FISCAL YEARS ENDED OCTOBER 31, 1998, 1997 AND 1996

   
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
    


<TABLE>
<CAPTION>


                                                                          1998        1997       1996
                                                                          ----        ----       -----    
<S>                                                                     <C>         <C>         <C>    

REVENUES                                                                $ 217,481   $ 86,334    $ 48,906
COSTS AND EXPENSES:
     Cost of revenues                                                     179,505     68,164      40,486
     General and administrative                                            18,692      8,780       8,404
     Depreciation                                                           6,638      4,124       2,411
     Amortization                                                             962        408         339
     Charges and transaction/translation losses related to 
        Latin American operations                                             275         17       3,553
                                                                          -------     ------      ------
        Total costs and expenses                                          206,072     81,493      55,193
                                                                          -------     ------      ------
INCOME (LOSS) FROM OPERATIONS                                              11,409      4,841      (6,287)

   
OTHER (INCOME) EXPENSE, NET:
     Interest expense, including amortization of discount of $157    
        in 1998                                                             5,534      1,565       1,350
     Interest and dividend income                                            (342)      (449)       (270)
     Other                                                                   (320)      (152)         32
                                                                            -----      -----       ------
     Total other expense, net                                               4,872        964       1,112
                                                                            -----      -----       -----
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES
     AND MINORITY INTEREST                                                  6,537      3,877      (7,399)
PROVISION (BENEFIT) FOR INCOME TAXES                                        3,405        727        (891)
                                                                            -----      -----       ------
INCOME (LOSS) BEFORE MINORITY INTEREST                                      3,132      3,150      (6,508)
MINORITY INTEREST                                                             618        293        (598)
                                                                            -----      -----       ------
NET INCOME (LOSS)                                                           2,514      2,857      (5,910)
PREFERRED DIVIDENDS                                                          (341)      (260)          -
BENEFICIAL CONVERSION PRIVILEGE OF PREFERRED STOCK                         (8,013)    (1,266)          -
                                                                          -------     ------      ------
INCOME (LOSS) APPLICABLE TO COMMON STOCK                                 $ (5,840)   $ 1,331     $(5,910)
                                                                           ======      =====       =====
INCOME (LOSS) PER COMMON SHARE:
     Basic                                                                $ (0.59)    $ 0.16     $ (0.71)
                                                                       ===========  =========  ==========
     Diluted                                                              $ (0.59)    $ 0.16     $ (0.71)
                                                                       ===========  =========  ==========
WEIGHTED AVERAGE SHARES OUTSTANDING - basic                             9,907,060  8,504,972   8,361,458
                                                                       ===========  =========  ==========
</TABLE>
    

The accompanying notes are an integral part to these consolidated financial
statements

                                      F-5

<PAGE>

<TABLE>
<CAPTION>
                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

           FOR THE FISCAL YEARS ENDED OCTOBER 31, 1998, 1997 AND 1996

             (in thousands, except common stock shares and amounts)

                                                                                                                                 
                                                                                    Common Stock        Additional   Subordinated
                                                                            ------------------------      Paid-In        Notes   
                                                                                 Shares       Amount      Capital      Warrants  
                                                                            ------------    --------    ----------   ------------
<S>                                                                         <C>             <C>          <C>         <C>         
BALANCE, November 1, 1995                                                      8,193,212    $  8,193     $ 12,790    $     -     
    Issuance of common stock to
       directors in connection with acquisition                                   10,000          10           43          -     
    Change in unrealized loss on investments                                           -           -            -          -     
    Net loss                                                                           -           -            -          -     
                                                                            ------------    --------     --------    -------     
BALANCE, October 31, 1996                                                      8,203,212       8,203       12,833          -     
    Issuance of common stock in connection with acquisition                      108,489         108          620          -     
    Issuance of common stock for services                                          2,000           2           12          -     
    Issuance of common stock for exercise of options                             262,240         262          732          -     
    Compensation recognized on stock options                                           -           -          338          -     
    Issuance of common stock for conversion of
       convertible preferred shares                                                4,481           4           34          -     
    Changes in unrealized loss on investments                                          -           -            -          -     
    Convertible preferred dividends paid                                               -           -            -          -     
    Embedded dividend recognized on convertible
       preferred shares                                                                -           -            -          -     
    Tax benefit from exercise of options                                               -           -          527          -     
    Net income                                                                         -           -            -          -     
                                                                            ------------    --------     --------    -------     
   

BALANCE, October 31, 1997                                                      8,580,422       8,579       15,096          -     
    Issuance of common stock for GEC earnout                                     204,440         204        1,278          -     
    Compensation expense for below market options                                      -           -           93          -     
    Issuance of common stock for exercise of options                             351,935         352        2,071          -     
    Dividends on Series A preferred stock                                              -           -            -          -     
    Embedded dividend recognized on Series A
       convertible preferred shares                                                    -           -            -          -     
    Issuance of common stock for conversion of
       Series A convertible preferred shares                                     920,946         921        6,817          -     
    Valuation of subordinated note warrants                                            -           -            -      1,244     
    Valuation of Series B Preferred Stock warrants                                     -           -        5,400          -     
    Beneficial conversion privilege applicable to Series B Preferred Stock             -           -        7,909          -     
    Valuation of WorldCom options                                                      -           -            -          -     
    Valuation of WorldCom phantom stock awards                                         -           -            -          -     
    Issuance of common stock for conversion of
       Series B Preferred Stock                                                1,007,927       1,008        1,384          -     
    Dividends on Series B preferred stock                                              -           -            -          -     
    Tax benefit from exercise of options                                              -           -          516          -
    Net income                                                                         -           -            -          -     
                                                                            ------------    --------     --------    -------     

BALANCE, October 31, 1998                                                     11,065,670    $ 11,064     $ 40,564    $ 1,244     
                                                                            ============    ========     ========    =======     

<CAPTION>
                                                                                                           Unrealized
                                                                                                             Loss on    Retained
                                                                               WorldCom       WorldCom     Investments  Earnings
                                                                            Stock Options  Phantom Stock  Net of Taxes  (Deficit)
                                                                            -------------  -------------  ------------  -------- 
<S>                                                                           <C>             <C>            <C>        <C>      
BALANCE, November 1, 1995                                                     $     -         $   -          $ (53)     $  4,721 
    Issuance of common stock to
       directors in connection with acquisition                                     -             -              -             - 
    Change in unrealized loss on investments                                        -             -             (1)            - 
    Net loss                                                                        -             -              -        (5,910)
                                                                              -------         -----          -----      -------- 
BALANCE, October 31, 1996                                                           -             -            (54)       (1,189)
    Issuance of common stock in connection with acquisition                         -             -              -             - 
    Issuance of common stock for services                                           -             -              -             - 
    Issuance of common stock for exercise of options                                -             -              -             - 
    Compensation recognized on stock options                                        -             -              -             - 
    Issuance of common stock for conversion of
       convertible preferred shares                                                 -             -              -             - 
    Changes in unrealized loss on investments                                       -             -             54             - 
    Convertible preferred dividends paid                                            -             -              -          (260)
    Embedded dividend recognized on convertible
       preferred shares                                                             -             -              -        (1,266)
    Tax benefit from exercise of options                                            -             -              -             - 
    Net income                                                                      -             -              -         2,857 
                                                                              -------         -----          -----      -------- 
BALANCE, October 31, 1997                                                           -             -              -           142 
    Issuance of common stock for GEC earnout                                        -             -              -             - 
    Compensation expense for below market options                                   -             -              -             - 
    Issuance of common stock for exercise of options, net of tax benefit            -             -              -             - 
    Dividends on Series A preferred stock                                           -             -              -           (79)
    Embedded dividend recognized on Series A
       convertible preferred shares                                                 -             -              -          (104)
    Issuance of common stock for conversion of
       Series A convertible preferred shares                                        -             -              -             - 
    Valuation of subordinated note warrants                                         -             -              -             - 
    Valuation of Series B Preferred Stock warrants                                  -             -              -             - 
    Beneficial conversion privilege applicable to Series B Preferred Stock          -             -              -        (7,909)
    Valuation of WorldCom options                                               3,490             -              -               
    Valuation of WorldCom phantom stock awards                                      -           606              -               
    Issuance of common stock for conversion of
       Series B Preferred Stock                                                     -             -              -             - 
    Dividends on Series B preferred stock                                           -             -              -          (262)
    Net income                                                                      -             -                        2,514 
                                                                              -------         -----          -----      -------- 
BALANCE, October 31, 1998                                                     $ 3,490         $ 606          $   -      $ (5,698)
                                                                              =======         =====          =====      ======== 
<CAPTION>
                                                                              Total
                                                                            --------
<S>                                                                         <C>
BALANCE, November 1, 1995                                                   $ 17,466
    Issuance of common stock to
       directors in connection with acquisition                                   43
    Change in unrealized loss on investments                                      (1)
    Net loss                                                                  (5,910)
                                                                            --------
BALANCE, October 31, 1996                                                     11,598
    Issuance of common stock in connection with acquisition                      621
    Issuance of common stock for services                                         12
    Issuance of common stock for exercise of options                             732
    Compensation recognized on stock options                                     338
    Issuance of common stock for conversion of
       convertible preferred shares                                               34
    Changes in unrealized loss on investments                                     54
    Convertible preferred dividends paid                                        (260)
    Embedded dividend recognized on convertible
       preferred shares                                                       (1,266)
    Tax benefit from exercise of options                                         527
    Net income                                                                 2,857
                                                                            --------
BALANCE, October 31, 1997                                                     15,247
    Issuance of common stock for GEC earnout                                   1,278
    Compensation expense for below market options                                 93
    Issuance of common stock for exercise of options                           2,071
    Dividends on Series A preferred stock                                        (79)
    Embedded dividend recognized on Series A
       convertible preferred shares                                             (104)
    Issuance of common stock for conversion of
       Series A convertible preferred shares                                   6,818
    Valuation of subordinated note warrants                                    1,244
    Valuation of Series B Preferred Stock warrants                             5,400
    Beneficial conversion privilege applicable to Series B Preferred Stock         -
    Valuation of WorldCom options                                              3,490
    Valuation of WorldCom phantom stock awards                                   606
    Issuance of common stock for conversion of
       Series B Preferred Stock                                                1,385
    Dividends on Series B preferred stock                                       (262)
    Tax benefit from exercise of options                                         516
    Net income                                                                 2,514
                                                                            --------
BALANCE, October 31, 1998                                                   $ 40,217
                                                                            ========
    

</TABLE>

The accompanying notes are an integral part to these consolidated financial
statements

                                      F-6

<PAGE>
   
<TABLE>
<CAPTION>
                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                      FOR THE YEARS ENDED (IN THOUSANDS):

                                                                   1998                 1997               1996
                                                                  -------              ------             ------ 
<S>                                                               <C>                  <C>               <C>   
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                              $ 2,514              $2,857            $(5,910)
   Adjustments to reconcile net income (loss)
     to net cash provided by (used in) operating activities,
     net of effects of acquisitions:
       Depreciation                                                 6,638               4,532              2,750
       Amortization                                                   962
       Bad debt expense                                              --                   160              1,094
       Translation/transaction Losses                                 275                  17              1,180
       Deferred income taxes                                          717                 727               (891)
       Minority interest                                              618                 293               (598)
       Write down of Latin American assets                           --                  --                1,593
       Compensation recognized for conversion
         of stock options                                              93                 338               --
       Reduction in revenue for litigation                           --                  (433)              --
       Other - net                                                    156                  10                313
                                                                  -------              ------             ------ 
                                                                   11,973               8,501               (469)
   Changes in assets and liabilities,
     net of effects from acquisitions:
       Decrease in accounts receivable                              2,694                 842              1,855
       Increase in costs and profits in
         excess of billings on
         uncompleted contracts                                    (16,987)             (4,661)              (829)
       Decrease in inventory                                        2,602                 118              1,871
       Decrease (increase) in other current assets                   (268)                313                340
       Decrease (increase) in other assets                          1,247                (280)              (287)
       Increase (decrease) in accounts payable
         and accrued expenses                                       2,273                (199)               160
       Increase (decrease) in billings
         in excess of costs and estimated
         profits on uncompleted contracts                             569                (927)               681
       Increase in other liabilities                                2,789                 230               --
                                                                  -------              ------             ------ 
       Cash Provided by Operating Activities                        6,892               3,937              3,322
                                                                  -------              ------             ------ 
CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures, net                                       (9,966)             (4,487)            (2,557)
   Net proceeds from sale of assets                                    90                  96                129
   Sales of investments                                                 0                 567               --
   Cash acquired in acquisitions                                    4,661                 404              1,761
   Cash paid for acquisitions                                      (8,681)             (3,000)            (3,500)
                                                                  -------              ------             ------ 
       Net cash used in investing activities                      (13,896)             (6,420)            (4,167)
                                                                  -------              ------             ------ 
CASH FLOWS FROM FINANCING ACTIVITIES:
   Borrowings under lines of credit                                50,518              (4,626)             1,254
   Payment of shareholder/directors loans                          (2,925)               (250)              (500)
   Borrowings from shareholder/directors                            2,050                --                  500
   Proceeds from long-term debt                                    10,000              11,014              4,547
   Proceeds from debt to finance acquisition                       10,000               3,000              3,000
   Repayments on long-term debt                                   (74,388)             (9,272)            (6,251)
   Distributions to minority interests                               (502)               (293)              (210)
   Foreign currency translation adjustment                           (275)                (17)              (779)
   Proceeds from the issuance of preferred
     stock, net                                                    18,110               5,418               --
   Proceeds from the exercise of stock options                      2,071                 732               --
   Dividends paid                                                    (341)               (260)              --
                                                                  -------              ------             ------ 
Net cash provided by financing activities                          14,318               5,446              1,561
                                                                  -------              ------             ------ 
Effect of exchange rate changes on cash
  and cash equivalents                                                --                  --                (401)
Increase in cash and cash equivalents                               7,314               2,963                315
Cash and cash equivalents at beginning of year                      6,230               3,267              2,952
                                                                  -------              ------             ------ 
Cash and cash equivalents at end of year                          $13,544              $6,230             $3,267
                                                                  =======              ======             ====== 
Supplemental disclosures of cash flow information:
   Valuation of warrants                                          $ 6,644              $  --              $  --
   Discount on preferred stock                                      7,909                 --                 --
   Conversion of Series B Preferred Stock                           1,385                 --                 --
   Conversion of Series A Preferred Stock                           6,818                 --                 --
   Issuance of common stock for acquisition                         1,278                 621               43
   Issuance of common stock for services                              --                   11               --
   GEC earnout                                                     (4,595)             (1,278)              --
   Compensation recognized on below market options                     93                 338               --
   Valuation of below market options on acquisition                 4,096                --                 --
   Cash paid for:
      Interest                                                      4,226               1,684              1,120
      Income taxes                                                     29                --                 --

</TABLE>
    
                                      F-7
<PAGE>


                            ABLE TELCOM HOLDING CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                OCTOBER 31, 1998

1.  THE COMPANY:

Able Telcom Holding Corp. ("Able Telcom" or the "Company") develops, builds and
maintains communications systems for companies and governmental authorities. The
Company is headquartered in West Palm Beach, Florida, and operates its
subsidiaries throughout the United States, as well as in areas of South America.
The Company has three main organizational groups:

       ORGANIZATIONAL GROUP                         SERVICES PROVIDED

 Network Services Group              Design, development, engineering,
                                     installation, construction, operation and
                                     maintenance services for telecommunications
                                     systems

 Transportation Services Group       Design, development, integration,
                                     installation, construction, project
                                     management, maintenance and operation of
                                     automated toll collection systems,
                                     electronic traffic management and control
                                     systems, and computerized manufacturing
                                     systems

 Communications Development Group    Design, installation and maintenance 
 (Latin America)                     services to foreign telephone companies

Each group is comprised of subsidiaries of the Company with each having local
executive management functioning under a decentralized operating environment.

The Company's customers include local and long distance telephone companies,
utilities, cable television operators, financial institutions, universities,
medical facilities, correctional facilities and local, state and federal
governments.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF CONSOLIDATION 

The accompanying consolidated financial statements are prepared on an accrual
basis and include the accounts of the Company and its subsidiaries. A
substantial portion of consolidated total assets, liabilities and revenues are
generated by one subsidiary of the Company, MFS Network Technologies, Inc.
(MFSNT) which was acquired during the fiscal year ended October 31, 1998.
Operations for subsidiaries acquired in purchase business combinations are
included in the consolidated results of operations since the date of
acquisition. All material intercompany accounts and

                                      F-8

<PAGE>

transactions have been eliminated. Certain items in the 1997 and 1996 
consolidated financial statements have been reclassified to conform to the 1998 
presentation.

USE OF ESTIMATES 

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

CASH AND CASH EQUIVALENTS 

The Company considers all unrestricted highly liquid investments with original
maturities of three months or less to be cash equivalents.

ASSETS HELD FOR SALE 

Assets held for sale represent certain assets acquired in connection with the
acquisition of MFSNT which are held for sale and are reported at the estimated
fair value less costs to sell.

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 which
generally range from five to ten years.

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 20 years.

The Company, at each balance sheet date, evaluates the recoverability of the
carrying amount of goodwill if circumstances suggest that 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.

                                      F-9

<PAGE>

STOCK BASED COMPENSATION 

   
The Company accounts for its stock based compensation plan under Accounting
Principle Board Opinion No. 25, ("APB No. 25")"Accounting for Stock Issued to
Employees," and relating interpretations, and follows the disclosure provisions
of Statement of Financial Accounting Standards ("SFAS") No. 123, "Acounting for
Stock-Based Compensation." See Note 12.
    

REVENUE RECOGNITION 

Revenues from "per unit basis" contracts are recognized at the time services are
rendered and accepted by the customer. Revenues from construction contracts and
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. Generally, the determination of substantial contract completion is made
by the project owner.

Changes in job performance, condition and the estimated profitability may result
in changes in the estimates for project costs and profits. Revised estimates are
recognized in the period in which the changes are determined.

When the current estimates of total contract revenue and contract cost indicates
a loss ("loss jobs"), a provision for the entire loss on the contract is made.
During the fiscal year ended October 31, 1998, costs on loss jobs of
approximately $15.1 million were charged to reserves for losses on uncompleted
contracts which relate primarily to loss contracts acquired in connection with
the acquisition of MFSNT.

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. Nonmonetary assets and liabilities, and related
income statement amounts are remeasured at historical exchange rates.

INCOME TAXES 

The Company files consolidated federal income tax returns. The Company
recognizes deferred tax assets and liabilities based on the difference between
the financial statement and tax bases of assets and liabilities using estimated
tax rates in effect for the year in which the differences are expected to
reverse.

                                      F-10

<PAGE>

INCOME (LOSS) PER COMMON SHARE

In February 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 128, "Earnings Per Share" ("SFAS No. 128"), which specifies the computation,
presentation and disclosure requirements for earnings per share (EPS). SFAS No.
128 is effective for periods ending after December 15, 1997, and requires
retroactive restatement of EPS for all prior periods presented. The statement
replaces the previous "primary earnings per share" computation with a "basic
earnings per share" and redefines the "diluted earnings per share" computation.

   
The difference between the Company's weighted average shares outstanding and
diluted shares outstanding is due to the dilutive effect of stock options and
convertible securities. There are no significant differences in the numerator of
the Company's computations of basic and diluted earnings per share for any
period presented. The effect of securities that could dilute basic earnings per
share would be antidilutive for all periods presented. The Company has
potentially dilutive securities that could have a dilutive effect in the future.
Those securities include warrants related to the Series A Preferred Stock,
Series B Preferred Stock, stock options, warrants and phantom stock awards.

FAIR VALUE FINANCIAL INSTRUMENTS

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
values of lines-of-credit and long-term debt approximate their carrying amount
since the currently effective rates reflect market rates.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

SFAS No. 130 - In June 1997, the FASB issued SFAS No. 130, "Reporting
Comprehensive Income." This statement establishes standards for reporting and
display of comprehensive income and its components in a full set of financial
statements. This statement is effective for fiscal years beginning after
December 15, 1997. Companies are also required to report comparative totals for
comprehensive income in interim reports. The Company will report comprehensive
income commencing in fiscal year 1999.

SFAS No. 131 - In June 1997, the FASB issued SFAS No. 131, "Disclosures About
Segments of an Enterprise and Related Information". This
statement requires disclosures for each segment that are similar to those
required under current standards with the addition of quarterly disclosure
requirements and more specific and detailed geographic disclosures especially by
countries as opposed to broad geographic regions. The provisions of SFAS No. 131
are effective for fiscal years beginning after December 15, 1997. The Company
will adopt this statement in the fiscal year 1999.

SFAS No. 133 - In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and for Hedging Activities." This statement revises the
accounting for the recognition and measurement of derivatives and hedging
transactions and is effective for fiscal years beginning after June 15, 1999.
The Company does not anticipate the early adoption of this statement and has not
determined the impact it will have on the consolidated financial statements.

3.  ACQUISITIONS

On July 2, 1998, the Company acquired the network construction and
transportation systems business of MFSNT from WorldCom, Inc. ("WorldCom")
pursuant to a merger agreement dated April 26, 1998 ("Plan of Merger"). On
September 9, 1998, the Company and WorldCom finalized the terms of the Plan of
Merger through the execution of an amended agreement. The acquisition of MFSNT
was accounted for using the purchase method of accounting at a total price of
approximately $67.5 million, as described below.

In conjunction with the acquisition of MFSNT, the Company granted an option to
WorldCom (the "WorldCom Option") to purchase up to 2,000,000 shares of the
Company's common stock, at an exercise price of $7.00 per share, but subject to
a 1,817,941 share maximum limitation, and the right to receive upon satisfaction
of certain conditions phantom stock awards (the "Phantom Stock Awards")
equivalent to 600,000 shares of common stock, payable in cash, stock, or a
combination of both at the Company's option. The WorldCom Phantom Stock Awards
are exercisable only on the following three days: July 2, 1999, July 2, 2000, or
July 2, 2001. WorldCom will be entitled to receive any appreciation of the
Common Stock over a base price of $5 3/32 per share, but in no event shall the
maximum payment exceed $25.00 per share. The fair values of the WorldCom Option
and Phantom Stock Awards were estimated at the date of grant at $3.5 million and
$0.6 million, respectively, and are included as a component of the total
consideration paid for the acquisition of MFSNT.
    

   
Subsequent to October 31, 1998, the Company and WorldCom agreed to convert the
WorldCom Option to stock appreciation rights with similar terms and provisions,
except that the stock appreciation rights provide for the payment of cash to
WorldCom based upon the appreciation of the Company's common stock over a base
price of $7.00 per share. The stock appreciation rights may revert back to the
Option if certain shareholder approvals are received.
    

The purchase price for MFSNT was determined as follows (in millions):

        Contract price                                                   $58.8
        Transaction related costs                                          4.6
        WorldCom Option                                                    3.5
        WorldCom Phantom Stock Awards                                       .6
                                                                         -----
               Total Purchase Price                                      $67.5
                                                                         =====

                                      F-11
<PAGE>

The Company allocated the purchase price to the assets acquired and the 
liabilities assumed based on the fair value of those assets and liabilities as
follows (in millions):

       Cash and accounts receivable                                     $47.0
       Costs and profits in excess billing on
         uncompleted contracts                                           93.7
       Assets held for sale                                              38.8
       Prepaid expenses                                                   1.0
       Property                                                           5.7
       Goodwill(1)                                                       16.5
       Accounts payable                                                 (13.7)
       Billings in excess of costs and profits
         on uncompleted contracts                                       (56.6)
       Reserve for losses on uncompleted contracts                      (40.5)
       Accrued restructuring costs(2)                                    (2.0)
       Property taxes payable                                           (15.0)
       Other accrued liabilities(3)                                      (7.4)
                                                                        -----
                Total allocated purchase price                          $67.5
                                                                        =====

-------------
(1) Goodwill is being amortized on a straight-line basis over 20 years.
(2) Accrued restructuring costs related primarily to severance and benefit costs
    associated with the involuntary termination of employees pursuant to an
    approved restructuring plan. During the fiscal year ended October 31, 1998,
    approximately $1.7 million was charged against this reserve.
(3) Includes allowances for costs related to litigation and claims of $5.0
    million which, according to the Plan of Merger, is payable to WorldCom in
    the event specified litigation costs and claims are not paid by the Company.

In conjunction with the acquisition of MFSNT, the Company entered into a
five-year agreement with WorldCom to provide telecommunications infrastructure
services to WorldCom (the "WorldCom Master Services Agreement") for a minimum of
$40.0 million per year, provided that the aggregate sum payable to MFSNT shall
be not less than $325.0 million, including a fee of 12 percent of reimbursable
costs under the agreement ("Aggregate Sum"). If MFSNT declines any of the first
$130.0 million of contract work in any year of the agreement, the value of the
declined work reduces the Aggregate Sum. MFSNT has agreed that WorldCom Network
will have met all of its obligations to MFSNT to the extent that payments to
MFSNT reach an aggregate of $500.0 million at any time during the five-year
term. During the fiscal year ended October 31, 1998, the Company recognized
revenues of approximately $30.3 million from the WorldCom Master Services
Agreement.

                                      F-12

<PAGE>


The Company is entitled to use the name "MFSNT" during the 18-month transition
period commencing July 2, 1998.

PATTON MANAGEMENT CORPORATION

On April 1, 1998, the Company purchased all of the outstanding common stock of
Patton Management Corporation ("Patton") for a total purchase price of
approximately $4.0 million. The acquisition was accounted for using the purchase
method of accounting. Goodwill of approximately $2.8 million was recorded and is
being amortized on a straight-line basis over 20 years.

DIAL COMMUNICATIONS, INC.

On December 2, 1996, Able acquired all the outstanding common stock of Dial
Communications, Inc. (Dial). As consideration, the Company paid $3.0 million in
cash, issued 108,489 shares of common stock (fair value of $0.6 million) and
issued a $0.9 million promissory note with a three year term bearing interest
at Prime plus 1/2 percent. 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. Goodwill of $1.5 million
was recorded in this transaction which is being amortized over 20 years using
the straight-line method.

                                      F-13

<PAGE>

GEORGIA ELECTRIC COMPANY

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 $3.0 million in cash. Under the terms of
the earn-out provision of the acquisition agreement, the Company will issue
shares of common stock over a five year period 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 Company recorded goodwill of $1.3 million at October 31, 1997 and additional
goodwill of $4.6 million at October 31, 1998 as a result of additional purchase
price due to the former owner of GEC under the terms of the earn-out provisions
of the acquisition agreement. The goodwill is being amortized over 20 years
using the straight-line method. Corresponding amounts are reflected as accounts
payable and accrued liabilities in the consolidated balance sheets pending the
issuance of the Company's common stock.

                                      F-14


<PAGE>


H. C. CONNELL, INC.

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 $0.5 million in cash and issued a $1.9 million 
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.

                                      F-15

<PAGE>

Pro Forma Financial Information (Unaudited)

Unaudited pro forma financial information for the Company is presented below as
if the Company's acquisitions had taken place as of November 1, for each of the
respective years (in thousands, except per share amounts):

   
                                       Years Ended October 31,
                                      ------------------------
                                      1998       1997      1996
                                      ----       ----      ----

        Revenues                    $401,400   $457,820   $85,095
        Net loss                     (29,993)   (14,127)   (1,346)
        Loss applicable to common
             stock                   (38,347)   (15,653)   (1,346)
        Loss applicable to common
             stock per share           (3.87)     (1.84)     (.17)
    

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. ACQUISITION OF COMSAT CONTRACTS:

On February 25, 1998, GEC acquired 12 contracts (the "COMSAT Contracts") with
the Texas Department of Transportation from CRSI Acquisition, Inc., a subsidiary
of COMSAT Corporation ("COMSAT"). The COMSAT Contracts are for the installation
of intelligent traffic management systems and the design and construction of
wireless communication networks. In exchange for assuming the obligations to
perform under the COMSAT Contracts, GEC received consideration from COMSAT of
approximately $15.0 million.

During the fiscal year ended October 31, 1998, the Company recognized revenues
and cost of revenues related to the COMSAT contracts of $19.8 million and $10.7
million, respectively. At October 31, 1998, seven of the COMSAT Contracts were
substantially complete.

                                      F-16

<PAGE>

5.  UNCOMPLETED CONTRACTS:

   
Uncompleted contracts consist of the following at October 31, (in thousands):

                                                     1998              1997    
                                                     -----             ----
    Costs incurred on uncompleted contracts        $116,073           $43,237
    Earnings recognized on uncompleted contracts     29,086             7,361
                                                     ------            ------
                Total                               145,159            50,598
    Less billings to date                           (97,120)          (45,274)
                                                    -------            ------
                 Net                               $ 48,039          $  5,324
                                                   ========          ========

Included in the accompanying balance sheets under the following headings at
October 31, (in thousands):
    

                                                      1998             1997
                                                      ----             ----
    Costs and profits in excess of billings on
       uncompleted contracts                       $105,478           $5,615
    Billings in excess of costs and profits on
       uncompleted contracts                         57,439              291
                                                   --------           ------
               Net                                 $ 48,039           $5,324
                                                   ========           ======

6.  ASSETS HELD FOR SALE:

   
Assets held for sale consist of certain fiber optic conduit and an interest in
Kanas Telcom, Inc. ("Kanas") whose primary asset is a telecommunications network
along the Alaskan pipeline (the "Alyeska Project"). These assets were acquired
in connection with the acquisition of MFSNT and are reflected in the
accompanying October 31, 1998 consolidated balance sheet at their estimated fair
value less costs to sell. Subsequent to October 31, 1998, the Company negotiated
the sale of the fiber optic conduit for approximately $26.0 million which
approximated the October 31, 1998 carrying value.
    

                                      F-17

<PAGE>

7.  DEBT:
   

The Company's debt consist of the following at October 31, (in thousands):

<TABLE>
<CAPTION>

                                                                                     1998                             1997     
                                                                                     ----                             ---
<S>                                                                                  <C>                              <C>


    Note payable to bank under Revolving Credit Facility, maturing on
       June 20, 2001, interest payment dates and rates vary (7.69 percent
       at October 31, 1998), secured by the Company's existing and future
       restricted subsidiaries, excluding MFSNT                                      $     35,000                    $     -

    Note payable to WorldCom maturing on December 15, 2000, interest is
       payable quarterly at an annual rate of 11.5 percent                                 30,000                          -

    Senior Subordinated Notes, annual payments of $5.0 million on January 6,
       2004 and 2005, 12 percent interest per annum, in arrears, paid
       semi-annually                                                                       10,000                          -

    Notes payable to a bank, payable in monthly installments aggregating
       approximately $47,161, interest payable monthly ranging from
       2.0 to 8.75 percent secured by substantially all the assets of
       the Company                                                                            491                      3,560

    Notes payable to former owner of Dial payable in monthly installments
       of principal and interest of 8.75 percent at October 31, 1998                          369                        669

    Bank lines of credit, $6.0 million maturing on March 1, 1998, interest
       payable monthly at prime (8.75 percent at October 31, 1997) secured
       by substantially all the assets of the Company                                           -                      6,000
    
    Notes payable to banks, payable in monthly installments of principal and
       interest of 8.5 percent at October 31, 1997, secured by real and
       personal property of GEC                                                                 -                      2,500

    Mortgage note payable to a bank, payable in monthly installments
       of $1,604 plus interest at prime (8.75 percent at October 31, 1997)                      -                        269

    Notes payable to bank, payable in monthly installments
       of principal and interest at prime (8.75 percent at October 31,
       1997), secured by real and personal property of Dial                                     -                      2,876

    Notes payable to banks, payable in monthly installments of
       principal and interest at prime (8.75 percent at
       October 31, 1997), secured by related equipment                                          -                        385

    Notes payable to bank, payable in monthly installments of
       principal and interest at prime (8.75 percent at October 31,
       1997), secured by related equipment                                                      -                        511
                                                                                           ------                    -------
                                                                                           75,860                     16,770

    Property taxes payable under certain contractual agreements at the
       present value of estimated amounts payable over 20 years discounted
       at 15 percent, payments to commence in fiscal year 1999                             15,000                          -
    Capital leases                                                                          1,321                        524
                                                                                           ------                    -------
                                                                                           92,181                     17,294
    Less- Discount on Senior Subordinated Notes                                            (1,087)                         -
                                                                                           ------                    -------
                                                                                           91,094                     17,294
    Less- Current portion                                                                 (15,047)                    (3,154)
                                                                                           ------                    -------
    Long-term debt, excluding current portion                                            $ 76,047                    $14,140
                                                                                           ======                    =======
</TABLE>
    
                                      F-18

<PAGE>

CREDIT FACILITIES

On April 6, 1998, the Company obtained a $25.0 million three-year senior secured
revolving credit facility (the "Credit Facility") with a $2.0 million sub-limit
for the issuance of standby letter(s) of credit. The Credit Facility allowed the
Company to select an interest rate based upon the prime rate or on a short-term
LIBOR, in each case, plus an applicable margin, with respect to each draw the
Company made thereunder. Interest was payable monthly in arrears on base rate
advances and at the expiration of each interest period for LIBOR advances. The
Credit Facility contained certain covenants which required, among other
conditions, that the Company maintain certain net worth, minimum fixed charge
coverage and limitations on total debt, and was secured by a perfected first
priority security interest on all tangible assets of the Company. The proceeds
of the Credit Facility were used to finance working capital requirements and for
other general corporate purposes, including acquisitions and capital
expenditures, not to exceed $15.0 million, associated with the Company's overall
strategic plan. On June 11, 1998, this amount was repaid with proceeds from the
Company's New Credit Facility defined below.

On June 11, 1998, the Company replaced the Credit Facility with a new $35.0
million three-year senior secured revolving credit facility ("New Credit
Facility") with a $5.0 million sub-limit for the issuance of standby letter(s)
of credit. The New Credit Facility allows the Company to select an interest rate
based upon the prime rate or on a short-term LIBOR, in each case plus an
applicable margin, with respect to each draw the Company makes thereunder.
Interest is payable monthly in arrears on base rate advances and at the
expiration of each interest period for LIBOR advances. The New Credit Facility
contains certain financial covenants which require, among other conditions, that
the Company maintain certain minimum ratios, including current and debt
leverage, minimum fixed charge coverage, interest coverage, as well as
limitations on total debt. The New Credit Facility is secured by a perfected
first priority security interest on all tangible assets of the Company and a
pledge of the shares of stock of each of the Company's subsidiaries operating in
the United States. On June 30, 1998, the New Credit Facility was amended to
include (i) the Company's acquisition of MFSNT and the related financing of such
transaction, (ii) changes in financial covenants related thereto, and (iii)
other amendments relating to investments, pledging and intercompany matters. At
October 31, 1998 and thereafter, the Company was in violation of certain of the
covenants in the New Credit Facility which were subsequently waived through
November 1, 1999.

WORLDCOM NOTE:

In conjunction with the acquisition of MFSNT, the Company executed a $30.0
million promissory note to WorldCom bearing interest of 11.5 percent per year
(the "WorldCom Note").

The principal amount of the WorldCom Note is to be repaid in part by applying a
portion of certain fees (i) due under the WorldCom Master Services Agreement and
(ii) received by the Company in connection with the sale and installation of
certain fiber optic conduit projects. Pursuant to an agreement, the Company has
pledged all of the shares of capital stock in MFSNT to WorldCom to secure the
Company's obligations under the WorldCom Note.

The Company has classified $13.2 million of the WorldCom Note as a current
liability based upon the estimates of the fiscal year 1999 repayments resulting
from proceeds under the WorldCom Master Services Agreement and the sale of the
fiber optic conduit.

The WorldCom Note provides for covenants of which the Company was in compliance
at October 31, 1998. Upon noncompliance or an event of default, the entire
balance of the WorldCom Note shall automatically become due and payable, subject
to certain subordination provisions. In addition, remedies available to WorldCom
include the following:

/bullet/  Acquire all of the stock in MFSNT.
/bullet/  Keep all principal and interest already paid under the WorldCom Note.
/bullet/  Require an 18 percent annual default rate of interest.
/bullet/  Cause WorldCom to apply 12 percent of the payment it owes to the
          Company at the time of default under the WorldCom Master Services
          Agreement to the outstanding principal and interest due under the
          WorldCom Note.

In addition, if the WorldCom Note is not repaid in full by December 15, 2000,
it is anticipated that WorldCom will be able to:

/bullet/  Reduce the minimum yearly and aggregate revenues under the WorldCom
          Master Services Agreement.
/bullet/  Refuse to give additional work under the WorldCom Master Service
          Agreement while in default.

SENIOR SUBORDINATED NOTES

   
Effective January 6, 1998, the Company issued $10.0 million of unsecured 12
percent Senior Subordinated Notes due January 6, 2005 (the "Senior Subordinated
Notes") with detachable warrants to purchase 409,505 shares of common stock at a
price of $8.25 per share, which were valued at approximately $1.2 million
resulting in a corresponding discount applicable to the Senior Subordinated
Notes which is being amortized to interest expense over the life of such notes.
The agreement, pursuant to which the Senior Subordinated Notes were issued,
contains covenants which require, among other conditions, that the Company
maintain certain tangible net worth, minimum fixed charge coverage and
limitations on total debt and which limit the Company's ability to pay dividends
and make certain other payments, make investments and sell assets or
subsidiaries. At October 31, 1998, the Company was in violation of certain of
the covenants in the Senior Subordinated Note agreement. These notes were
purchased from the holder of these notes subsequent to October 31, 1998, which
will be accounted for as a redemption by the Company. See Note 17.
    

OTHER BORROWINGS

On June 1, 1997, the Company entered into a $6.0 million Line of Credit Facility
(the "Line of Credit"). The Line of Credit was due March 1, 1998 and was repaid
in 1998.

AGGREGATE MATURITIES

The aggregate maturities of long-term debt and capital leases for years
subsequent to October 31, 1998, are as follows:

             1999                                              $  15,047
             2000                                                 18,225
             2001                                                 36,021
             2002                                                    935
             2003                                                    872
             Thereafter                                           21,081
                                                                --------
                                                                 $92,181
                                                                ========

                                      F-19

<PAGE>


8. COMMITMENTS AND CONTINGENCIES:


                                      F-20

<PAGE>

LITIGATION

   
On May 21, 1998, SIRIT Technologies, Inc. ("SIRIT") filed a lawsuit in the
United States District Court for the Southern District of Florida, against the
Company and Thomas M. Davidson, who has since become a member of the Company's
Board of Directors. SIRIT asserts claims against the Company for tortuous
interference, fraudulent inducement, negligent misrepresentation and breach of
contract in connection with the Company's agreement to purchase the shares of
MFSNT and seeks injunction relief and compensatory damages in excess of $100.0
million.

On September 10, 1998, Shipping Financial Services Corp. ("SFSC") filed a
lawsuit in the United States District Court for the Southern District of Florida
against the Company, and certain of its officers. SFSC asserts claims under the
federal securities laws against the Company and four of its officers that the
defendants allegedly caused the Company to falsely represent and mislead the
public with respect to two acquisitions, COMSAT and MFSNT, and the ongoing
financial condition of the Company as a result of the acquisitions and the
related financing of those acquisitions. SFSC seeks certification as a class
action on behalf of itself and all others similarly situated and seeks
unspecified damages and attorneys' fees.
    

The Company is subject to a number of shareholder and other lawsuits and claims
for various amounts which arise out of the normal course of its business. The
Company intends to vigorously defend itself in these matters. The disposition of
all pending lawsuits and claims is not determinable and may have a material
adverse effect on the Company's financial position.

KANAS GUARANTY AGREEMENT

In conjunction with the acquisition of MFSNT, the Company has agreed to
guarantee the payment obligations of Kanas under its credit agreement. The
aggregate commitment of the lenders under this agreement is $85.4 million, and
the purpose of the Kanas Credit Agreement is to provide the funds necessary to
complete the Alyeska Project.

CONTRACTS

The Company has and will continue to execute various construction and other
contracts which may require the Company to, among other items, maintain specific
financial parameters, meet specific milestones and post adequate collateral
generally in the form of performance bonds. Failure by the Company to meet its
obligation under these contracts may result in the loss of the contract and
subject the Company to litigation and various claims, including liquidated
damages.


                                      F-21

<PAGE>

LEASED PROPERTIES

As of October 31, 1998, the Company leased office space and equipment under
various noncancelable long-term operating lease arrangements.

Rental expense for operating leases amounted to $2.4 million, $0.8 million and
$0.6 million for the fiscal years ended October 31, 1998, 1997 and 1996,
respectively.

During fiscal year 1998, the Company leased certain equipment under capitalized
lease agreements which have been included in Property and Equipment. Cost
and accumulated amortization of such assets as of October 31, 1998, totaled $3.2
million and $1.8 million, respectively.

Future minimum lease payments required under operating and capital leases with
initial terms in excess of one year are as follows (in thousands):

                                                     CAPITAL        OPERATING
        YEARS ENDING OCTOBER 31,                      LEASES          LEASES 
                                                     --------       ----------

        1999                                         $  788           $3,177
        2000                                            454            1,738
        2001                                            149            1,238
        2002                                             64            1,125
        2003                                              -              625
        Thereafter                                        -              416
                                                     ------           ------
        Total minimum lease payments                 $1,455           $8,319
                                                     ======           ======
        Present value of net minimum lease 
           payments                                  $1,321
        Less current installments of
           obligations under capital leases             706
                                                     ------
        Obligations under capital leases,
           excluding current installments            $  615
                                                     ======

                                      F-22

<PAGE>


9. PREFERRED STOCK:

SERIES A PREFERRED

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 "Series A 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 $6.0 million. Each share of Series A Preferred Stock was convertible
into shares of the Company's common stock after April 30, 1997, at the lesser of
$9.82 per share or at a discount (increased to a maximum of 20 percent for
conversions after December 20, 1997) of the average closing bid price of a share
of common stock for three days proceeding the date of conversion. The Company
recognized the discount attributable to the beneficial conversion privilege of
approximately $1.3 million by accreting the amount from the date of issuance,
December 20, 1996, through the last date the discount rate increase can occur,
December 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, resulted in a
charge to retained earnings and accompanying credit to the Preferred Stock. The
Preferred Stock accrues dividends at an annual rate of five percent and is
payable quarterly in arrears in cash or through a dividend of additional shares
of Preferred Stock.

During fiscal 1998, all remaining Series A Preferred Stock was converted into
common stock pursuant to the terms thereof and the related number of warrants
was reduced to 62,000, due to either conversion or forfeiture.

SERIES B PREFERRED

   
Effective June 30, 1998 (the "Closing"), the Company completed a private
offering (the "Offering") of 4,000 shares of $0.10 par value, nonvoting Series B
Convertible Preferred Stock (the "Series B Preferred Stock") which bear annual
dividends of 4 percent, and warrants to purchase 1,000,000 shares of the
Company's common stock at $19.80 per share for a period of five years from the
date of grant (the "Warrants"). Net proceeds from the Offering totaled $18.1
million. In general, the conversion amount of each share of Series B Preferred
Stock is convertible into shares of the Company's common stock commencing on
June 30, 1998, at 97 percent of the lesser of the (i) average of the low trading
prices for any three days during the twenty-two (22) trading days immediately
preceding the conversion date, or (ii) the low trading price on the day
immediately preceding the conversion date, subject to a minimum equal to 95
percent of such conversion price. The conversion amount of each share of Series
B Preferred Stock is equal to $5,000 plus any unpaid dividends thereon. Unless
waived by a holder on not less than 61 days prior written notice, no holder may
convert an amount which would result in such holders and its affiliates'
beneficial ownership exceeding 4.99 percent of the then outstanding common stock
of the Company.
    

                                      F-23

<PAGE>

Of the $18.1 million of proceeds $5.4 million was assigned to the value of the
warrants and $12.7 million was assigned as the Series B Preferred Stock. The
warrants are exercisable for a five-year period commencing June 30, 1998. In
addition, approximately $7.9 million was assigned to the beneficial conversion
privilege and has been reflected as a reduction in income available to common
stock for the fiscal year ended October 31, 1998.

As of October 31, 1998, 436 shares of the Series B Preferred Stock were
converted into 1,007,927 shares of common stock at a price of $2.17 per share.

   
Subsequent to October 31, 1998, 2,785 shares were acquired from the holders of 
this stock by an affiliate of the Company. See Note 17.
 
The Series B Preferred Stock agreements contain certain covenants including
registration rights and limitations on common stock dividends. Subsequent to
October 31, 1998, the Company was in violation of certain of the covenants
related primarily to registration rights and intends to complete the required
registration statement in the fiscal year 1999. The Series B Preferred Stock
agreements provide for mandatory redemption at amounts up to 130% of the
liquidation value under certain circumstances.
    

10. IMPAIRMENT OF LATIN AMERICAN OPERATIONS

During the second quarter of fiscal 1996, the Company identified circumstances
that 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 Statement of Operations for fiscal year 1997.

11. INCOME TAXES:

An analysis of the components of income (loss) before income taxes and minority
interest and the related provision (benefit) for income taxes is presented below
(in thousands):

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

         Domestic                         $6,084      $3,304     $(3,770)
         Foreign                             453         573      (3,629)
                                          ------      ------     ------- 

                                          $6,537      $3,877     $(7,399)
                                          ======      ======     ========
         Provision (benefit) for
           income taxes:
           Federal
             Current                      $1,937      $    -     $     - 
             Deferred                        792         657        (969)
           State
             Current                         751           -           - 
             Deferred                        (75)         70        (167)
           Foreign
             Current                           -           -           - 
             Deferred                          -           -         245 
                                          ------      ------     ------- 
         Provision (benefit) for income
             taxes                        $3,405      $  727     $  (891)
                                          ======      ======     ========

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

   
                                              1998      1997          1996    
                                              ----      ----          ----    
         Provision (benefit) tax at
             federal statutory rate            34%       34%          (34)%  

         State income tax, net                  7         .2             4    
         Non-deductible goodwill                4          4             2    
         Reduction in valuation
             Allowance                          -          -            (1)   

         Foreign operations, net                4        (20)           22    

         Other items, net                       3        3.8            (5)   
                                               --        ---           ---    
         Effective income tax rate             52%        22%          (12)%  
                                               ==        ===           ===    
    

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities are presented below:

   
                                                        1998           1997
                                                       ------         ------
         Deferred tax assets-
             Reserve for bad debts                     $  312         $  135
             Net operating loss carryforward                -          1,143
             Foreign tax credit carryforwards               -            424
             Other                                        747             69
                                                       ------         ------
                                                        1,059          1,771
                                                       ------         ------
         Deferred tax liabilities-
             Plant, property and equipment               (755)          (660)
             Investment in foreign subsidiaries             -           (129)
             Other                                        (39)             -
                                                       ------         ------
                                                         (794)          (789)
                                                       ------         ------
         Net deferred tax asset                        $  265         $  982
                                                       ======         ======
    

On October 31, 1997, the Company had Federal net operating loss carryforwards
of approximately $3.3 million which were fully utilized in 1998.

                                      F-24
 
<PAGE>

12. STOCK OPTIONS:

In fiscal 1996, the Company's shareholders adopted a stock option plan for the
issuance of up to 550,000 shares which included provisions for both incentive
and nonqualified stock options (the Plan) and which expires on September 19,
2005. Salaried employees are eligible to receive both incentive and nonqualified
stock options, except that employees of the Company may not receive incentive
stock options if at the date of grant they own more than ten percent (10%) of
the Company's outstanding stock, unless (i) the incentive stock options are
granted at an option price at least equal to 110 percent of the fair market
value of the Company's common stock at the date of grant, and (ii) the options
are not exercisable after five years from the date of the grant. Grants of
incentive stock options are also limited under the Plan to the extent that the
aggregate fair market value at the date of grant is exercisable for the first
time by an employee of the Company during any calendar year in an amount which
exceeds $100,000. Nonemployee directors who do not own more than five percent
(5%) of any class of the Company's outstanding stock, consultants and advisors
are eligible to receive nonqualified stock options under the Plan.

The Plan specifies that all options must be granted at a price which is equal to
or in excess of the fair market value of the Company's common stock, determined
in accordance with the Plan (the average closing price of the Company's common
stock for the ten (10) business days immediately preceding the date of grant)
and are not transferable other than at the death of the optionee. Incentive
stock options generally become exercisable over a three-year period in equal
installments beginning in the year

                                      F-25

<PAGE>

after the date of grant, while nonqualified stock options are exercisable, as
determined by the plan administrator described below. The Plan is currently
administered by the Company's Board of Directors, although the Plan provides
that a committee of disinterested persons appointed by the Board of Directors
may also administer the Plan.

On April 24, 1998, the shareholders increased the number of shares issuable
under the Plan to 1,300,000 and made certain other amendments to the Plan which
relate primarily to the issuance of restricted stock awards.

A summary of the Company's stock option activity under the Plan, and related
information for the period from October 31, 1996, through October 31, 1998,
follows:

                                               NUMBER OF          OPTION PRICE
                                                SHARES              PER SHARE 
                                               ---------            ----------  

        Options Outstanding at
          October 31, 1996                     160,000        $5.75  -  $6.875
             Grants                            323,500         6.00  -   7.813
             Exercises                         (71,740)        6.00  -   6.875
             Cancellations                     (39,320)       5.875  -   7.813

        Option Outstanding at
          October 31, 1997                     372,440         6.00  -   7.813
             Grants                            592,000         5.34  -   14.00
             Exercises                        (211,935)        5.34  -   7.813
             Cancellations                     (88,030)       6.375  -   7.813
                                              --------------------------------
        Options Outstanding at
          October 31, 1998                     664,475         6.20  -   14.00
                                              ================================

       

   
In addition, stock options have been granted to certain officers prior to the
adoption of the Plan and to certain employees of the Company outside of the
Plan. During fiscal 1992, an option to purchase 260,000 shares of the Company's
common stock at $0.05 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 $0.50 per share and a financial consultant for the
Company was granted a total of 200,000 shares at an average price of $3.38 per
option, all of which were exercised prior to October 31, 1996. During fiscal
1995, options to purchase 100,000 shares at the fair market value of $4.83 per
share were granted to an officer, pursuant to an employment agreement. During
fiscal 1996, options to purchase 40,000 were granted to an employee at an option
price of $6.44 per share, which was above the fair market value at the date of
grant ($6.00). During fiscal 1998, options to purchase 160,000 shares of the
Company's common stock were granted to members of the Company's Board of
Directors at option prices of $6.20 or $11 15/16 per share, and 150,000 options
were granted to certain employees of the Company at an option price of $14.00
per share.
    

                                      F-26

<PAGE>

A summary of the Company's stock option activity outside the Plan, and related
information for the period from October 31, 1996, through October 31, 1998,
follows:

                                               NUMBER OF          OPTION PRICE
                                                SHARES              PER SHARE   
                                               --------            ----------- 
        Options Outstanding at
          October 31, 1996                     300,500        $0.05  -   $6.44
             Grants                               -                  -
             Exercises                        (190,500)        0.05  -    4.83
             Cancellations                        -                  -

        Option Outstanding at
          October 31, 1997                     110,000         0.05  -    6.44
             Grants                            310,000         6.20  -   14.00
             Exercises                        (110,000)        0.05  -    6.44
             Cancellations                      -                    -
                                              --------------------------------
        Options Outstanding at
          October 31, 1998                     310,000         6.20  -   14.00
                                              ================================

The estimated average remaining life of the stock options in the Plan and
outside the Plan is approximately 3.5 years and 6 years, respectively.

Subsequent to October 31, 1998, in an effort to correct certain of the actions
taken by the Company's Board of Directors in order to maintain compliance with
the Plan, as amended, the Board of Director's rescinded certain of the above
stock option grants, or 530,000 options under the Plan and 310,000 options
outside the Plan, and reissued these options at the calculated fair market value
on December 31, 1998, as well as shortened certain of the expiration dates of
the options. In addition, subsequent to October 31, 1998, the Board of Directors
of the Company granted an additional 162,500 stock options under the Plan and
1,050,000 options outside the Plan to employees of the Company.

Compensation expense associated with options issued at an option price less than
fair market value for the fiscal year ended October 31, 1998 totaled $0.1
million. For the fiscal years ended October 31, 1997 and 1996, the Company did
not have any compensation expense associated with stock options.

   
FASB issued SFAS No. 123 in 1995, which requires expanded disclosures of stock
based compensation arrangements with employees and encourages compensation cost
to be measured based on the fair value of the equity instrument. Under SFAS No.
123, companies are permitted to apply APB No. 25 which recognizes compensation
cost based on the intrinsic value of the equity instrument awarded. The Company
has elected to continue to apply APB No. 25. Under APB No. 25, to the extent the
exercise price of the Company's employee stock options equals the market price
of the underlying stock on the date of grant, no compensation expense is
recognized. The following is the pro forma effect on net income (loss) and
earnings (loss) per share as if the Company had adopted the expense recognition
requirement of SFAS No. 123:

                                          YEAR ENDED OCTOBER 31,
                                      1998         1997         1996 

Proforma income (loss) applicable
   to common stock                 $ (7,303)     $ 1,121     $ (5,760)
Proforma income (loss) applicable
   to common stock per share:
       Basic                          (0.74)         .13        (0.69)
    

13. MAJOR CUSTOMERS/CONCENTRATION OF CREDIT RISK

   
In fiscal years 1997 and 1996, a significant portion of the Company's business
is derived from four major customers including a governmental agency, two
telephone companies and an industrial manufacturer. At October 31, 1997, the
Company had accounts receivable from these customers of $3.1 million or 48% of
total accounts receivable. Revenues from these customers totaled approximately
$30.9 million and $22.8 million or 36% and 50% of consolidated revenues in
fiscal years 1997 and 1996, respectively.
    

Approximately 50% of the Company's Latin American revenues are derived from one
customer in Venezuela. Revenues from this customer were approximately 2% of
consolidated revenues in 1997 and 4% in 1996. Accounts receivable outstanding
for this customer were $0.8 million at October 31, 1997.

During fiscal year 1998, only one customer, WorldCom, accounted for ten percent
or more of the Company's consolidated revenues. Revenues from WorldCom during
the fiscal year ended October 31, 1998 totaled approximately $30.3 million, and
receivables from WorldCom at October 31, 1998 totaled $11.8 million.

14. RELATED-PARTY TRANSACTIONS:

   
In conjunction with certain finders fees associated with the acquisition of
MFSNT, the Company entered into three-year, 10 percent note for $1.3 million
with a third party who subsequently became a member of the Company's Board of
Directors. At October 31, 1998, the outstanding balance of this note was $1.2
million and is reflected in current liabilities in the accompanying consolidated
balance sheet.
    

At various times in the past, certain of the Company's directors have loaned the
Company money for a variety of purposes. Generally these loans are unsecured at
market rates of interest. Other than the note described above, there were no
notes to directors at October 31, 1998 and $0.9 million outstanding under such
notes at October 31, 1997.

                                      F-27

<PAGE>

In November 1997, a subsidiary of the Company assumed the obligations of Ten-Ray
Utility Construction, Inc. ("Ten-Ray"), a North Carolina corporation, as
contractor under two network construction contracts and paid the costs Ten-Ray
had accrued under the contracts of approximately $0.1 million. On January 30,
1998, the Company purchased from Ten-Ray certain construction equipment used in
connection with the contracts. The purchase price for the equipment was the
satisfaction of Ten-Ray's bank loans secured by the equipment in the amount of
$0.3 million, including principal and interest, which in the opinion of the
executives of the subsidiary was not more than the fair market value of the
equipment and at the time of this transaction. The Company's Chief Financial
Officer, beneficially owned approximately 7.7 percent of the voting stock of
Ten-Ray and had personally guaranteed the equipment loans to the bank.


                                      F-28

<PAGE>

15. INDUSTRY AND GEOGRAPHIC AREA SEGMENT INFORMATION:

The Company currently operates primarily in two industry segments: network
services and transportation services. Transportation services are conducted
primarily in the United States with small projects in South America, Canada and
Asia, while telecommunication network services are conducted both in the United
States and Latin America. Revenues, income (loss) 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 (in thousands):

<TABLE>
<CAPTION>
   

        INDUSTRY SEGMENTS                             1998           1997            1996
        -----------------                             ----           ----            ----
<S>                                                <C>             <C>             <C>   

        Sales to unaffiliated customers:
            Transportation services                $ 84,022        $46,795         $22,661
            Network services                        133,459         39,539          26,245
                                                   --------        -------         -------
        Total                                      $217,481        $86,334         $48,906
                                                   ========        =======         =======

        Income (loss) from operations:
            Transportation services                $  8,220         $3,772         $(3,454)
            Network services                          3,189          1,069          (2,833)
                                                   --------        -------         -------
        Total                                      $ 11,409         $4,841         $(6,287)
                                                   ========        =======         =======
        Identifiable assets:
           Transportation services                 $ 88,340        $28,884         $25,099
           Network services                         202,420         21,462          13,820
                                                   --------        -------         -------
        Total                                      $290,760        $50,346         $38,919
                                                   ========        =======         =======
        Capital expenditures:
            Transportation services                $  3,238         $1,635          $1,275
            Network services                          6,728          2,852           2,216
                                                   --------        -------          ------
        Total                                      $  9,966         $4,487          $3,491
                                                   ========         ======          ======
        Depreciation and amortization:
            Transportation services                $  2,824         $1,710          $1,229
            Network services                          4,776          2,822           1,521
                                                   --------        -------          ------
        Total                                      $  7,600         $4,532          $2,750
                                                   ========         ======          ======
        GEOGRAPHIC AREAS 

        Revenues:
          United States                            $212,152        $82,171         $45,160
          Latin America                               5,329          4,163           3,746
                                                   --------        -------         -------
        Total                                      $217,481        $86,334         $48,906
                                                   ========        =======         =======
        Income (loss) from operations:
          United States                            $ 11,310        $ 4,824         $(2,073)
          Latin America                                  99             17          (4,214)
                                                   --------        -------        --------
        Total                                      $ 11,409        $ 4,841         $(6,287)
                                                   ========        =======        ========

        Identifiable assets:
          United States                            $287,569        $47,781         $36,410
          Latin America                               3,191          2,565           2,509
                                                   --------        -------         -------
        Total                                      $290,760        $50,346         $38,919
                                                   ========        =======         =======
    

</TABLE>

                                      F-29

<PAGE>

16. QUARTERLY FINANCIAL DATA (UNAUDITED):

(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>


                                               FIRST    SECOND     THIRD     FOURTH
                                              QUARTER   QUARTER   QUARTER    QUARTER
                                              ------    -------   -------    -------
<S>                                           <C>        <C>       <C>       <C>   
         1998(1)

         Revenues                              $22,268  $34,552    $58,305   $102,356
         Operating income (loss)                (1,261)   2,083      4,032      5,156
         Net income (loss)                        (927)     867        790      1,785
         Income (loss) applicable to
            common stock                        (1,081)     838     (7,186)     1,589

         1997(2)

         Revenues                              $18,326  $20,871    $21,984    $25,153
         Operating income (loss)                 1,142    1,785      1,024        888
         Net income (loss)                         505      851        932        567
         Income (loss) applicable to
            common stock                           470      337        491         33

</TABLE>
-----------
(1) Quarterly amounts have been adjusted from amounts previously reported by the
    Company in their quarterly filings with the SEC for adjustments related to
    a) the beneficial conversion feature associated with the Series B Preferred
    Stock; b) the recognition of certain contract revenues; and c) several
    adjustments for depreciation and miscellaneous accruals.

(2) Certain adjustments were made in the fourth quarter of 1997 which included a
    reduction in reserves associated with litigation between the Company and
    former owners of TSCI of $0.2 million. 

The previously reported financial data are as follows (amounts in thousands):

                                       FIRST      SECOND      THIRD
                                      QUARTER    QUARTER     QUARTER
                                      -------    -------     -------
          1998
          ----
          Revenues                    $22,268     $34,552    $57,705
          Operating income (loss)        (776)      3,725      4,763
          Net income (loss)              (670)      1,835      1,464
          Income (loss) applicable
            to common stock              (824)      1,792        824

17. SUBSEQUENT EVENT:

   
Subsequent to October 31, 1998, WorldCom advanced the Company $32.0 million for
purposes of arranging the purchase of 2,785 shares, or approximately 78 percent,
of the Series B Preferred Stock and the purchase of the outstanding $10.0
million of Senior Subordinated Notes. The advance accrues interest at 11.5
percent and is repayable on the earlier of (i) October 31, 2000 or (ii) the
dates of redemption and/or conversion of the Series B Preferred Stock or the
Senior Subordinated Notes.

In connection with these transactions, the Company expects to recognize an
extraordinary loss in the second quarter of fiscal year 1999 on the purchase of
the Senior Subordinated Notes of approximately $3.3 million and a reduction in
income applicable to common stock of approximately $10.0 million on the purchase
of the Series B Preferred Stock.

In addition, the Company agreed to modify the terms of the existing Series B
Preferred Stock conversion and warrant agreements which will result in a
reduction in income applicable to common stock of approximately $6.0 million
during the second quarter of fiscal year 1999.

WorldCom also agreed to make available additional advances to the Company of up
to $15.0 million against amounts otherwise payable pursuant to the WorldCom
Master Services Agreement. These additional advances accrue interest at 11.5
percent and are repayable to WorldCom on October 31, 2000.

Had these transactions occurred in fiscal year 1998, convertible preferred
stock and selected components of shareholders' equity at October 31, 1998
would have been as follows (in thousands):

                                                           UNAUDITED
                                       AS REPORTED         PRO FORMA
                                       -----------         ---------

Convertible Preferred Stock              $11,325            $  2,475
Additional paid-in capital                40,564              50,564
Retained deficit                          (5,698)            (24,998)
Total shareholders' equity                40,217              30,917
    

Additionally, had the transaction occurred in fiscal year 1998, basic earnings
per share would have been reduced by $1.95 per common share.

                                      F-30

<PAGE>

                            ABLE TELCOM HOLDING CORP.
                                AND SUBSIDIARIES

                                   SCHEDULE II

                        Valuation and Qualifying Accounts

                   Years ended October 31, 1998, 1997 and 1996
   
<TABLE>
<CAPTION>
                                                 BALANCE AT                      CHARGED TO                      BALANCE AT
                                                 BEGINNING                       COSTS AND                         END OF
                                                 OF PERIOD      ACQUISITIONS      EXPENSES      DEDUCTIONS         PERIOD
                                              ---------------  --------------  -------------  --------------   --------------
<S>                                               <C>             <C>             <C>             <C>              <C>
Allowance for doubtful accounts:
October 31, 1998                                  $   686         $    75         $   782         $   677          $   866
October 31, 1997                                      828               -             160             302              686
October 31, 1996                                      536               2             746             456              828

Restructuring charges:
October 31, 1998                                        -           2,227               -           1,720              507
October 31, 1997                                        -               -               -               -                -
October 31, 1996                                        -               -               -               -                -

Reserves for litigation and claims
October 31, 1998                                        -           5,000               -             986            4,014

Reserves for losses on uncompleted contracts
October 31, 1998                                        -          40,500               -          15,110           25,390
</TABLE>
    

<PAGE>

                                 EXHIBIT INDEX

EXHIBIT           DESCRIPTION
--------          -----------

 2.5.1.3          Agreement between WorldCom Network Services, Inc. and Able
                  Telcom Holding Corp. dated January 26, 1999

 2.5.2.1          11.5% Promissory Note between Able Telcom Holding Corp. and
                  WorldCom Network Services, Inc. dated as of September 1, 1998

 2.5.7            Modification to Stock Option Agreement between the Company and
                  WorldCom, Inc. dated January 8, 1999

 2.5.8            Agreement to Enter Into Stock Appreciation Rights Agreement
                  between the Company and WorldCom, Inc. dated January 8, 1999

 2.5.9            Financing Agreement between WorldCom Network Services, Inc.
                  and Able Telcom Holding Corp. dated February 16, 1999

 4.13             Preferred Stock Purchase Agreement by and among Able Telcom
                  Holding Corp. RGC International Investors, LDC, and Cotton
                  Communications, Inc. dated February 17, 1999

 4.14             Warrant Amendment between Able Telcom Holding Corp. and
                  Purchasers (as defined) dated February 17, 1999

   
 4.15             Securities Purchase Agreement by and between the Sellers, as
                  defined, and Cotton Communications, Inc. dated February 17,
                  1999
    

10.33             Employment Agreement with Billy V Ray, Jr., dated October 1,
                  1998

10.36             Employment Agreement with G. Vance Cartee, dated January 4,
                  1999

10.37             Employment Agreement with Edward Pollock, dated January 1,
                  1999

10.38             Employment Agreement with Frazier L. Gaines, dated November
                  12, 1998

10.39             Employment Agreement with Gideon D. Taylor, dated December 7,
                  1998

10.40             Employment Agreement with Rick Boyle, dated April 1, 1998

10.41             Financing Agreement between Able Telcom Holding Corp. and
                  Cotton Communications, Inc. dated February 17, 1999 (without
                  exhibits)

10.42             11.5% Non-Recourse Promissory Note between Cotton
                  Communications, Inc. and Able Telcom Holding Corp. dated
                  February 17, 1999

10.43             Stock Pledge Agreement between Able Telcom Holding Corp. and
                  Cotton Communications, Inc. dated February 17, 1999

23.1              Consent of Ernst & Young

27                Financial Data Schedule