SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
      EXCHANGE ACT OF 1934

      FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
       EXCHANGE ACT OF 1934

      FOR THE TRANSITION PERIOD FROM  _____________       TO  _________________


                           Commission file no. 0-23477


                                 ICON CMT CORP.
             --------------------------------------------------------
              (Exact name of Registrant as Specified in Its Charter)


     Delaware                                                 13-3603128
----------------------------------           -----------------------------------
(State or Other Jurisdiction of
 Incorporation or Organization)               (IRS Employer Identification No.)


               1200 Harbor Boulevard, Weehawken, New Jersey 07087
--------------------------------------------------------------------------------
             (Address of Principal Executive Offices with Zip Code)

        Registrant's Telephone Number Including Area Code: (201) 601-2000

--------------------------------------------------------------------------------
 Former Name, Former Address and Former Fiscal Year, if Changed Since Last 
 Report.

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
                                       ---      ---

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required by Section 12, 13 or 15(d) of the  Securities  Exchange Act of
1934 subsequent to the  distribution  of securities  under a plan confirmed by a
court. Yes      No
          ---      ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

The  number of shares of common  stock  outstanding  as of August  10,  1998 was
15,884,378

--------------------------------------------------------------------------------

<PAGE>
                                 ICON CMT CORP.

                                    FORM 10-Q

                       FOR THE QUARTER ENDED JUNE 30, 1998



PART I.           FINANCIAL INFORMATION                                     Page
                                                                            ----

Item 1.           Financial Statements

                  Condensed Consolidated Balance Sheet as of June 30, 1998 
                  (unaudited) and December 31, 1997............................3

                  Condensed Consolidated Statement of Operations for the Three 
                  and Six Months ended June 30, 1998 and June 30, 1997 
                  (unaudited)..................................................4

                  Condensed Consolidated Statement of Cash Flows for the Six
                   Months ended June 30, 1998 and June 30, 1997 (unaudited)....5

                  Notes to Financial Statements................................6


Item 2.           Management's Discussion and Analysis of Financial Condition
                  and Results of Operations....................................8

PART II.          OTHER INFORMATION

Item 2.           Changes in Securities and Use of Proceeds...................17

Item 6.           Exhibits and Reports on Form 8-K............................17

SIGNATURES....................................................................18

                                      -2-

<PAGE>
                                     PART 1
                              FINANCIAL INFORMATION
                              Financial Statements
                                 ICON CMT CORP.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                      (In thousands, except share amounts)
<TABLE>
<CAPTION>

                                                                        June 30,            December 31,
                                                                          1998                  1997
                                                                    -----------------       --------------
                                                                      (Unaudited)
                           Assets

<S>
                                                                    <C>                    <C>
Current Assets:
  Cash and cash equivalents                                                 $ 18,387               $ 1,409
  Accounts receivable, net of allowance of
     $526 and $455, respectively                                               9,862                10,237
  Unbilled costs and accrued revenue                                           1,987                 1,119
  Inventories                                                                    365                   104
  Prepaid expenses and other current assets                                    2,220                 2,381
                                                                   -----------------        --------------
      Total current assets                                                    32,821                15,250
  Fixed assets, net                                                           11,983                 6,675
  Other noncurrent assets                                                        108                   232
                                                                    -----------------       --------------
               Total assets                                                 $ 44,912              $ 22,157
                                                                    =================       ==============

    Liabilities, Mandatorily Redeemable Convertible
         Preferred Stock and Stockholders' Equity

Current liabilities:
  Accounts payable                                                           $ 9,612               $ 9,124
  Accrued expenses                                                             3,406                 4,540
  Deferred revenue                                                             1,229                   658
  Note payable                                                                     -                 1,000
                                                                    -----------------        --------------
    Total current liabilities                                                 14,247                15,322
                                                                                 133                     2
                                                                    -----------------       --------------
               Total liabilities                                              14,380                15,324
                                                                    -----------------       --------------
                                                                                  
Mandatorily Redeemable 10% PIK Series B Convertible
   Participating Preferred Stock ($.01 par value; 415,000 shares
   authorized, none issued and outstanding at June 30, 1998,
   180,240 shares issued and outstanding at December 31, 1997)                      -               16,628
Mandatorily Redeemable Series A Convertible Participating
   Preferred Stock ($.01 par value; 450,000 shares authorized,
   none issued and outstanding at June 30,1998, 422,607 shares
   issued and outstanding at December 31, 1997)                                     -               10,601                    
Stockholder's equity:
   Preferred stock ($.01 par value; 1,000,000 shares authorized)                    -                    -
   Common stock ($.001 par value; 50,000,000 shares authorized,
     15,856,655 and 7,273,780 shares issued and outstanding, respectively)         16                    8
   Additional paid-in-capital                                                  62,493                  533
   Accretion of mandatorily redeemable preferred stock                              -                 (388)
   Accumulated deficit                                                        (31,977)             (20,549)
                                                                    -----------------       --------------
    Total stockholders' equity (deficit)                                       30,532              (20,396)
                                                                    -----------------       --------------
               Total liabilities, mandatorily redeemable preferred
                stock and stockholders' equity                       $         44,912             $ 22,157
                                                                    =================       ==============

</TABLE>

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

                                      - 3 -

<PAGE>
                                 ICON CMT CORP.
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                    (In thousands, except per share amounts)
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                          For the Three Months     For the Six Months
                                                            Ended June 30,        Ended June 30,
                                                  -----------------------------------------------------
                                                     1998        1997           1998           1997
 
                                                  ----------  ----------   -------------   ------------
<S>                                              
Revenues, net                                   <C>         <C>           <C>             <C>         
    Services:
      Professional                                  $ 8,231     $ 5,502        $ 15,747        $ 9,840
      Communications                                  3,250       1,233           6,063          2,171
      Media                                               -           -              14             77
                                                  ----------  ----------   -------------   ------------
         Total services revenues                     11,481       6,735          21,824         12,088
                                                  ----------  ----------   -------------   ------------
    Products                                          7,470       4,885          16,526          9,680
                                                  ----------  ----------   -------------   ------------
           Total revenues, net                       18,951      11,620          38,350         21,768
                                                  ----------  ----------   -------------   ------------

Cost of revenues:
    Services                                          7,925       4,331          15,151          8,091
    Products                                          6,349       4,092          14,335          7,905
                                                  ----------  ----------   -------------   ------------
           Total costs of revenues                   14,274       8,423          29,486         15,996
                                                  ----------  ----------   -------------   ------------

Gross profit                                          4,677       3,197           8,864          5,772
                                                  ----------  ----------   -------------   ------------

Operating expenses:
    Sales and marketing                               4,586       2,182           8,598          4,537
    General and administrative                        4,814       3,091           8,757          5,413
    Research and development                            591         282           1,167            559
    Depreciation and amortization                       457         224             797            413
    Special merger related charges                    1,094           -           1,094              -
                                                  ----------  ----------   -------------   ------------
           Total operating expenses                  11,542       5,779          20,413         10,922
                                                  ----------  ----------   -------------   ------------

Loss from operations                                 (6,865)     (2,582)        (11,549)        (5,150)
                                                  ----------  ----------   -------------   ------------

Other income (expense):
    Interest income                                     305          22             487             39
    Interest expense                                     (6)       (191)            (58)          (319)
    Other, net                                         (125)          -            (125)             -
                                                  ----------  ----------   -------------   ------------
      Total other income (expense)                      174        (169)            304           (280)
                                                  ----------  ----------   -------------   ------------

Loss before income taxes                             (6,691)     (2,751)        (11,245)        (5,430)

Provision for income taxes                                -           -               -            256
                                                  ----------  ----------   -------------   ------------

Net loss                                           $ (6,691)   $ (2,751)      $ (11,245)      $ (5,686)
                                                  ==========  ==========   =============   ============

Basic and diluted loss per share                   $ (0.42)    $ (0.41)        $ (0.83)       $ (0.84)
                                                  ==========  ==========   =============   ============

Weighted average shares outstanding used for
  basic and diluted loss per share                   15,804       7,273          13,764          7,273
                                                  ==========  ==========   =============   ============
</TABLE>

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

                                       -4-
<PAGE>

                                 ICON CMT CORP.
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                         For the Six Months
                                                                           Ended June 30,
                                                                    --------------------------------
                                                                           1998              1997
                                                                    ---------------     ------------
<S>                                                                <C>                  <C>
Cash flows from operating activities:
     Net loss                                                            $ (11,245)        $ (5,686)
     Adjustments to reconcile net loss to net cash
       used in operating activities
        Depreciation and amortization                                        1,971              947
        Deferred taxes, net                                                      -              284
        Non-cash interest expense                                                -               20
     Changes in assets and liabilities, net                                   (678)          (2,854)
                                                                    ---------------     ------------                      
               Net cash used in operating activities                        (9,952)          (7,289)
                                                                    ---------------     ------------

Cash flows from investing activities:
     Capital expenditures                                                   (7,120)          (1,209)
     Other, net                                                                125                -
                                                                    ---------------     ------------
               Net cash used in investing activities                        (6,995)          (1,209)
                                                                    ---------------     ------------


Cash flows from financing activities:
     Net proceeds from issuance of common stock                             34,337                -
     Net proceeds from exercise of stock options                               790                -
     Borrowings of short-term notes                                          1,772            3,565
     Repayments of short-term notes                                         (2,772)          (5,186)
     Net proceeds from issuance of preferred stock                               -           10,671
     Other                                                                    (202)            (113)
                                                                    ---------------     ------------
               Net cash provided by financing activities                    33,925            8,937
                                                                    ---------------     ------------

Net increase in cash                                                        16,978              439

Cash and cash equivalents at beginning of period                             1,409              722
                                                                    ---------------     ------------

Cash and cash equivalents at end of period                                $ 18,387          $ 1,161
                                                                    ===============     ============


</TABLE>

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

                                      - 5 -


<PAGE>

                                 ICON CMT CORP.
                          NOTES TO FINANCIAL STATEMENTS
                (In thousands, except share and per share amounts)


1.       Basis of Presentation

      The  accompanying  unaudited  financial  statements  for the three and six
month periods ended June 30, 1998 and 1997 have been prepared in accordance with
generally accepted accounting  principles for interim financial  information and
with  the   instructions  to  Form  10-Q  and  Article  10  of  Regulation  S-X.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all  adjustments,  consisting of normal recurring
accruals,  considered  necessary  for a fair  presentation  have been  included.
Operating  results for the three and six month  periods  ended June 30, 1998 are
not  necessarily  indicative  of the results  that may be expected  for the year
ending  December  31,  1998.  For further  information,  refer to the  financial
statements and footnotes  thereto  included in the Annual Report on Form 10-K of
Icon CMT Corp. ("Icon" or the "Company") for the year ended December 31, 1997.

2.      Initial Public Offering

      On February 18, 1998, the Company  completed its initial  public  offering
(the "IPO"),  selling  3,850,000 shares of common stock at a price of $10.00 per
share,  providing  gross  proceeds to the  Company of $38,500 and net  proceeds,
after  deducting  underwriting  discounts,  commissions  and estimated  offering
expenses payable by the Company, of approximately $34,337.

      Upon the closing of the IPO, all outstanding shares of the Company's
Series A and Series B Preferred  Stock  converted into an aggregate of 4,629,831
shares of common stock.

3.       Acquisition of Frontier Media Group, Inc.

        On May 27, 1998, the Company acquired all of the issued  and outstanding
shares of common stock of Frontier Media Group, Inc.  ("Frontier"),  in exchange
for 728,325 shares of the Company's common stock. For accounting  purposes,  the
acquisition  has been  accounted  for using the pooling of interests  method and
prior  periods  have been  restated  to include  the  results of  Frontier  on a
comparable  basis. In connection  with the acquisition of Frontier,  the Company
incurred  $1,094 of  transaction  and other costs  associated  with the business
combination.

4.       Loss Per Common Share

      Effective  December 31, 1997,  the Company  adopted  Financial  Accounting
Standard No. 128,  "Earnings per Share" ("FAS 128") which requires  presentation
of basic  earnings  per share  ("Basic  EPS")  and  diluted  earnings  per share
("Diluted  EPS") by all  entities  that have  publicly  traded  common  stock or
potential  common stock (i.e.,  options,  warrants,  convertible  securities  or
contingent  stock  arrangements).  Basic  EPS is  computed  by  dividing  income
available to common stockholders by the weighted average number of common

                                      -6-

<PAGE>

shares outstanding  during the period.  Diluted EPS gives effect to all dilutive
potential  common  shares  outstanding  during the period.  The  computation  of
Diluted  EPS does not assume  conversion,  exercise  or  contingent  exercise of
securities that would have an antidilutive effect on earnings.

      The  computation of basic and diluted loss per share for the three and six
months ended June 30, 1998 and 1997 are as follows: 
<TABLE>
<CAPTION>



                                                        For the Three Months     For the Six Months
                                                            Ended June 30,        Ended June 30,
                                                  -----------------------------------------------------
                                                     1998        1997           1998           1997
 
                                                 -----------  -----------   -------------   ------------
<S>                                              <C>         <C>           <C>           <C>
Net Loss                                         $ (6,691)   $ (2,751)      $ (11,245)      $ (5,686)
Accrued didvidends on Series A
 Preferred and Series B Preferred Stock                 -        (240)           (202)          (388)
                                                 -----------  -----------   -------------   ------------

Loss Available to common stockholders            $ (6,691)   $ (2,991)      $ (11,447)      $ (6,074)
                                                 ===========  ===========  =============    ============



Weighted average shares outstanding used        
 for basic and diluted loss per share              15,804       7,273          13,764          7,273


Basic and diluted loss per share                 $  (0.42)   $  (0.41)      $   (0.83)      $  (0.84) 
                                                 ==========  ==========   =============    ============
                                                 

</TABLE>

      At June 30,  1998,  outstanding  options to purchase  1,502,323  shares of
common  stock,  with  exercise  prices  ranging  from $6.02 to $18.50  have been
excluded  from  the   computations  of  diluted  loss  per  share  as  they  are
antidilutive.  Outstanding  warrants to purchase 948,891 shares of common stock,
with exercise  prices ranging from $0.01 to $6.02,  were also  antidilutive  and
excluded from the computations of diluted loss per share at June 30, 1998.

5.       Discontinued Product Line

      In March  1998,  the  Company  discontinued  its  media  services  product
offerings.  The  Company  generated  revenues  of $14 and $77  from  selling  of
advertising space on its media properties for the six months ended June 30, 1998
and 1997, respectively.  The cost of revenues associated with media services for
the three  months ended June 30, 1997 and the six months ended June 30, 1998 and
1997 was $591, $548 and $1,054, respectively.



                                      -7-

<PAGE>



Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

      The following  discussion should be read in conjunction with the Financial
Statements   included  elsewhere  in  this  Report.   This  discussion  contains
forward-looking  statements based on current expectations that involve risks and
uncertainties.  Actual  results  and the  timing of  certain  events  may differ
significantly from those projected in such  forward-looking  statements due to a
number of factors, including those set forth at the end of this Item.

Overview

      Integration  Consortium,  Inc.  ("ICI"),  the Company's  predecessor,  was
incorporated  in New York in  February  1991.  Icon  CMT  Corp.  ("Icon"  or the
"Company")  was  incorporated  in Delaware in February  1995, and ICI was merged
with and into Icon in December  1995.  ICI was primarily  engaged in the design,
marketing,   installation  and  on-going   support  of  high-end   network-based
information management systems. ICI also focused on developing,  customizing and
integrating both third-party and proprietary software applications.

      In 1995,  recognizing the emergence of internet  protocol ("IP") as a data
transmission standard, the Company's management redefined the Company's strategy
to provide  end-to-end  solutions that enable  corporate  customers to implement
their Internet,  intranet and extranet  strategies.  The Company's  revenues are
primarily  derived  from the  following  services and  products:  (i) a range of
professional services,  including custom application and website development and
design,   systems  integration  and  maintenance  and  support  services;   (ii)
communications  services  including  high-quality  Internet  access and  related
services, such as web/server hosting and management;  and (iii) product resales,
including  hardware and software sold as an integral part of systems  design and
integration and as a means to sell integrated  communications  and  professional
services and establish customer relationships.

      On May 27, 1998,  the Company  acquired all of the issued and  outstanding
shares of common stock of Frontier Media Group, Inc.  ("Frontier"),  in exchange
for 728,325 shares of the Company's common stock. For accounting  purposes,  the
acquisition  has been  accounted  for using the pooling of interests  method and
prior  periods  have been  restated  to include  the  results of  Frontier  on a
comparable  basis. In connection  with the acquisition of Frontier,  the Company
incurred  $1,094 of  transaction  and other costs  associated  with the business
combination.

         Statement of Operations

      The Company provides  professional services to its customers to facilitate
the delivery of their  information and applications  over Icon's  communications
infrastructure,  including  development,  design and  integration  services  and
maintenance and support services. Revenues from development,  design and systems
integration  contracts  are  recognized  on  a  percentage-of-completion  basis.
Maintenance  and support  services are  typically  provided in  accordance  with
annual  agreements  that are  renewable  at the  discretion  of the customer and
subject to change  annually.  Maintenance  and support  revenues are  recognized
ratably over the term of the respective agreement.

      Revenues from communications  services are generated by providing Internet
access and other related communications services, such as web/server hosting and
management. Communications services

                                      -8-

<PAGE>

are  generally  provided  based on service  agreements  ranging from one to five
years,  which are renewable at the  discretion  of the customer.  Communications
services revenues are recognized ratably over the term of the respective service
agreement.

      As a result of the Company's  implementation  of its end-to-end  solutions
strategy, services revenues have increased on an annual basis as a percentage of
total  revenue.  For the three  and six  months  ended  June 30,  1998  services
revenues consisted of 61% and 57% of total net revenues, respectively,  compared
with 58% and 56% for the  same  periods  in the  prior  year.  The  increase  in
services  revenues as a percentage of total net revenues is expected to continue
to increase in the future.  Historically,  the Company  generated  limited media
revenues from selling  advertisement  space on its three  new-media  properties,
Word(R),   Charged(TM)  and  SportsFan  Online.  The  Company  had  experienced
operating  losses  in  connection  with  the  ongoing  operation  of  its  media
properties and, in March 1998, the Company  discontinued the ongoing  operations
of Word and Charged. In April 1998, Zapata Corporation  ("Zapata") purchased all
of the assets of Word and  Charged  from the Company in  exchange  for  Zapata's
commitment  to  purchase  no  less  than  $2  million  in   communications   and
professional  services over the next four years. Also, during the first quarter,
Icon  terminated its agreement with SportsFan  Radio Network,  and instead began
providing  consulting  services and  communications  services to SportsFan Radio
Network in connection with the ongoing operation of SportsFan Online.

      Historically the Company has experienced  relatively  stable gross margins
on  product  sales.  Over the same  periods,  gross  margins  on  services  have
fluctuated as cost of revenues,  particularly on communications  services,  have
increased  in  advance  of  revenue  growth  for  such  services.   The  Company
anticipates that in the future services will provide greater  opportunities  for
increased gross margins.

      The Company generates  products revenues through the reselling of computer
and  networking  hardware and  software,  including  network  servers,  routers,
firewall  software,  and database  management  software.  Products  revenues are
recognized upon shipment.

      Professional  services cost of revenues consists of the labor and overhead
costs for the  personnel  performing  the service  including the cost of project
management,  quality control and project review. Cost of communications services
revenues  consists  primarily of the cost to maintain and operate the  Company's
communications  infrastructure and customers' hosted web servers, access charges
from Local Exchange Carriers and network and related  communications  facilities
costs,  depreciation  of network  equipment  and rental  expenses for  equipment
pursuant to operating  leases.  The Company expects its costs of its services to
continue  to increase in dollar  amount,  while  declining  as a  percentage  of
services  revenue  as the  Company  expands  its  customer  base and more  fully
utilizes  its  communications  infrastructure.  Cost of  revenues  for  products
consists primarily of the Company's  acquisition cost of computer and networking
hardware and software that is purchased from the manufacturers' distributors.

      Selling and marketing  expenses consist  primarily of personnel  expenses,
including  salary,  benefits,  commissions,  overhead  costs  and  the  cost  of
marketing programs, such as advertising,  trade shows and public relations.  The
Company expects selling and marketing expenses to continue to increase in dollar
amount in future years as the Company's  business  grows and as it increases its
presence at trade  shows,  increases  the size of its sales  force and  develops
additional materials to reach a larger audience,  but to decrease over time as a
percentage of total net revenues.

                                      -9-
<PAGE>


      General and administrative expenses consist primarily of personnel expense
and  professional  fees,  as well as rent and  operating  costs of the Company's
facilities.  The Company expects general and administrative expenses to increase
in dollar  amount,  reflecting  the continued  growth of its  operations and the
costs  associated  with being a publicly held entity,  but to decrease in future
years as a percentage of total net revenues.

      Research and  development  expenses  consist  primarily  of personnel  and
related costs associated with the development of the Company's technologies. The
Company's  expectations of significant revenue growth are not dependent upon the
success of ongoing future research and development activities. In July 1998, the
Company   reorganized  its  research  and  development   group  by  reallocating
development  personnel  from the research and  development  group to support the
Company's professional services and communications  services groups. In light of
this, the Company  expects to continue to reduce its  expenditures in connection
with the ongoing development of proprietary technologies, although it expects to
continue to use its products and/or  expertise  developed to date to augment its
other service offerings and to continue its related research activities.

         Other

      In order to provide nationwide  communications services including Internet
access,  the Company  entered into a three-year  agreement in June 1995 with MFS
Datanet,  Inc. ("MFS") to access MFS' nationwide  communications  facilities and
related  communications  products and services. MFS was subsequently acquired by
Worldcom, Inc. ("Worldcom").  The terms of the agreement provide for the Company
to pay  MFS/Worldcom  primarily based on the average  bandwidth of the Company's
traffic transmitted over MFS/Worldcom's  communications facilities. The Company
has extended the term of the agreement  through  September of 1999.  The Company
believes  that the  usage-based  pricing plan  established  in the agreement has
allowed, and will continue to allow, the Company to grow communications services
revenues  without  incurring  the full fixed  costs  typically  associated  with
building a nationwide  network and Internet access.  The Company has experienced
delays in the provisioning of its Internet access installation service orders by
MFS/Worldcom.  As a result,  the  Company  has begun  purchasing  communications
infrastructure facilities from additional suppliers and is reviewing Request For
Proposal  responses  in order to identify  alternative  suppliers to address its
expanding bandwidth and facilities requirements.

      The Company,  which had been  profitable  prior to 1995,  has incurred net
losses and negative cash flow from operations since  transitioning  its strategy
to provide end-to-end Internet solutions and expects to continue to operate at a
loss and  experience  negative cash flow from  operations at least through 1999.
The Company's attainment of profitability and positive cash flow from operations
is dependent upon its ability to substantially grow its revenue base and achieve
related operating efficiencies.

      The Company will  continue to focus on growing its  professional  services
and communications services businesses,  which could require it to significantly
increase its expenses for personnel and marketing.

      The  Company  has  historically  served  major  customers  in  information
intensive industries, such as financial services, telecommunications,  media and
travel and,  with the  acquisition  of  Frontier,  serves many  companies in the
pharmaceutical  industry.  Revenues  attributable  to Bear  Stearns  & Co.  Inc.
comprised 37% and 44%, respectively, of the Company's total net revenues for the
three and six months ended June 30, 1998 compared to 43% for the same periods in
the prior year, and in each year represented a significant component of services
and products revenues.  No other customers represented over 10% of the Company's
total  net  revenues  in the  same  time  periods.  Management  expects  revenue
concentration to decline as the Company grows its services revenues.

      Historically, the Company has marketed and sold its services and products
through its direct sales force and through indirect  channels.  In May 1996, the
Company  entered  into an  arrangement  with Bell  Atlantic  Internet  Solutions
whereby  Bell  Atlantic  Internet  Solutions,   Inc.  ("Bell  Atlantic  Internet
Solutions") 


                                      -10-

<PAGE>
agreed to provide  billing  services  in  connection  with the  offering  of the
Company's communications services to requesting Bell Atlantic Internet Solutions
customers  for  both  dedicated  and  switched  access,   including  residential
customers.  Revenues from  customers  acquired  through Bell  Atlantic  Internet
Solutions  represented 39% and 37%,  respectively,  of  communications  services
revenues for the three and six months ended June 30, 1998. The Company  believes
that  revenues from this  arrangement  will continue to grow at least until such
time that Bell Atlantic Internet Solutions or its affiliates receives regulatory
relief from the FCC from  various  regulations  that affect the  development  of
advanced  telecommunications  services  by the RBOCs and that this  relationship
will represent a significant element of the Company's  distribution  strategy in
Bell  Atlantic's  southern  region.  In October 1997,  the Company  extended its
arrangement by entering into an updated Global Service  Provider  agreement with
Bell Atlantic Internet  Solutions to continue to make its services  available in
the  traditional  Bell  Atlantic  southern  region for  switched  and  dedicated
services and to expand the  Company's  reach with respect to dedicated  services
into the Bell Atlantic northern region  (previously NYNEX) through October 1999.
The Company's  agreement with Bell Atlantic  Internet  Solutions  contemplates a
service offering to requesting Bell Atlantic Internet Solutions customers in the
Bell Atlantic  northern  region,  subject to Bell Atlantic  Internet  Soultions'
receipt  of  certain  regulatory  approvals.  To date,  Bell  Atlantic  Internet
Solutions,  has not received such  approvals.  In July 1998,  Bell Atlantic,  an
affiliate of Bell Atlantic Internet  Solutions,  announced that it would acquire
GTE Corp. The transaction is subject to regulatory approval.  The Company cannot
predict what effect, if any, the proposed  transaction will have with respect to
the  Company's  existing  business with Bell Atlantic  Internet  Solutions.  The
Company also has agreements with Fiberlink  Communications Corp., TotalTel, Inc.
and other resellers to resell the Company's communications services.

      The Company has incurred losses in 1995,  1996, 1997 and the first half of
1998 that have  generated net  operating  loss carry  forwards of  approximately
$29.7 million at June 30, 1998 for federal and state income tax purposes.  These
carry  forwards are available to offset future taxable income and expire in 2011
through 2018 for federal income tax purposes.

Results of Operations

      Three Months  Ended June 30, 1998  Compared to Three Months Ended June 30,
1997

      Revenues. Total net revenues were $19.0 million for the three months ended
June 30, 1998, a $7.4 million, or 63%, increase over total net revenues of $11.6
million for the three months ended June 30, 1997.

      Professional  services revenues were $8.2 million and $5.5 million for the
three  months  ended  June 30,  1998 and  1997,  respectively,  representing  an
increase in 1998 of 50%. This increase was  attributable  to the growing  demand
for professional  services in its existing  customer base and the acquisition of
several new customers, a high renewal rate of existing maintenance contracts, an
increased number of systems engineers  available to perform these services and a
higher average billing rate per systems engineer.

      Communications  services  revenues  were $3.3 million and $1.2 million for
the three months  ended June 30, 1998 and 1997,  respectively,  representing  an
increase in 1998 of over 164%.  This increase is primarily  attributable  to the
acquisition  of new customers and the  arrangement  with Bell Atlantic  Internet
Solutions under which the Company began  providing  service in the third quarter
of 1996. Revenues derived from the Bell Atlantic Internet Solutions  arrangement
comprised  39% of  communications  revenues  for the three months ended June 30,
1998.  The  Company's  backlog  for  communications  services  pending  has been
increasing  significantly.  The  Company  has  begun  purchasing  communications
infrastructure facilities from 

                                      -11-
<PAGE>
additional suppliers and is reviewing Request For Proposal responses in order to
identify alternative suppliers to address its expanding bandwidth and facilities
requirements.

      Products  revenues were $7.5 million and $4.9 million for the three months
ended June 30,  1998 and 1997,  respectively,  representing  an increase of 53%.
This  increase  was not as  great  as the  increase  in  services  revenues  due
primarily to the transition of the Company's focus from its historical role as a
value-added reseller to providing IP network related services.

      Cost of  revenues.  Total cost of  revenues  were $14.3  million  and $8.4
million  for the  three  months  ended  June 30,  1998 and  1997,  respectively,
representing 75% and 72% of total net revenues, respectively.

      Services cost of revenues were approximately $7.9 million and $4.3 million
for the three months ended June 30, 1998 and 1997, respectively.  This growth is
primarily  attributable  to  the  hiring  of  additional  professional  services
personnel  and  contractors  and  the  continued   expansion  of  the  Company's
communications  infrastructure.  Such costs  increased to 69% as a percentage of
services  revenues in the three months ended June 30, 1998 from 64% in the three
months ended June 30, 1997.

      Products cost of revenues were $6.4 million and $4.1 million for the three
months ended June 30, 1998 and 1997,  respectively,  representing 85% and 84% of
products   revenues  for  the  three  months  ended  June  30,  1998  and  1997,
respectively.

      Selling and  marketing.  Selling and marketing  expenses were $4.6 million
and  $2.2   million  for  the  three  months  ended  June  30,  1998  and  1997,
respectively. The 110% increase in the three months ended June 30, 1998 reflects
hiring of  additional  sales and marketing  personnel and increased  spending on
advertising and trade shows.  Selling and marketing  expenses as a percentage of
total net revenues increased to 24% in the three months ended June 30, 1998 from
19% in the three months ended June 30, 1997.

      General and administrative.  General and administrative expenses were $4.8
million  and $3.1  million  for the three  months  ended June 30, 1998 and 1997,
respectively.  This higher  level of expenses  reflects an increase in personnel
and   professional   fees   necessary  to  manage  the   financial,   legal  and
administrative  aspects of the business,  as well as rent and operating costs of
the Company's facilities. General and administrative expenses as a percentage of
total net revenues  decreased to 25% during the three months ended June 30, 1998
from 27% in the three months ended June 30, 1997.

      Research and  development.  Research and  development  expenses  were $0.6
million  and $0.3  million  for the three  months  ended June 30, 1998 and 1997,
respectively.  This higher level of expense  reflects an overall increase in the
number of  personnel  required  to develop  new  technologies  that  enhance the
performance and reliability of the Company's network.  In July 1998, the Company
reorganized  its  research and  development  group by  reallocating  development
personnel  from the  research  and  development  group to support the  Company's
professional services and communications  services groups. In light of this, the
Company,  expects to reduce its  expenditures  in  connection  with the  ongoing
development of proprietary technologies,  although it expects to continue to use
its products  and/or  expertise  developed to date to augment its other  service
offerings and to continue its related research activities.

                                      -12-
<PAGE>


    Six Months Ended June 30, 1998 Compared to Six Months Ended June 30, 1997

      Revenues.  Total net revenues  were $38.4 million for the six months ended
June 30,  1998, a $16.6  million,  or 76%,  increase  over total net revenues of
$21.8 million for the six months ended June 30, 1997.

      Professional services revenues were $15.7 million and $9.8 million for the
six months ended June 30, 1998 and 1997, respectively,  representing an increase
in 1998 of 60%.  This  increase  was  attributable  to the  growing  demand  for
professional  services in its  existing  customer  base and the  acquisition  of
several new customers, a high renewal rate of existing maintenance contracts, an
increased number of systems engineers  available to perform these services and a
higher average billing rate per
systems engineer.

      Communications  services  revenues  were $6.1 million and $2.1 million for
the six  months  ended June 30,  1998 and 1997,  respectively,  representing  an
increase in 1998 of over 179%.  This increase was primarily  attributable to the
acquisition  of new customers and the  arrangement  with Bell Atlantic  Internet
Solutions under which the Company began  providing  service in the third quarter
of 1996. Revenues derived from the Bell Atlantic Internet Solutions  arrangement
comprised 37% of communications revenues for the six months ended June 30, 1998.
The Company's  backlog for  communications  services pending has been increasing
significantly.  The Company has begun purchasing  communications  infrastructure
facilities  from  additional  suppliers  and is  reviewing  Request For Proposal
responses in order to identify  alternative  suppliers to address its  expanding
bandwidth and facilities requirements.

      Products  revenues  were $16.5 million and $9.7 million for the six months
ended June 30, 1998 and 1997, respectively, representing an increase of 71%.

      Cost of  revenues.  Total cost of  revenues  were $29.5  million and $16.0
million  for  the six  months  ended  June  30,  1998  and  1997,  respectively,
representing 77% and 73% of total net revenues, respectively.

      Services  cost of  revenues  were  approximately  $15.2  million  and $8.1
million  for the six months  ended June 30,  1998 and 1997,  respectively.  Such
costs  increased to 69% as a percentage  of services  revenues in the six months
ended June 30, 1998 from 67% in the six months ended June 30,  1997,  due to the
continued expansion of the Company's communications infrastructure.

      Products  cost of revenues  were $14.3  million  and $7.9  million for the
three months ended June 30, 1998 and 1997,  respectively,  representing  87% and
82% of  products  revenues  for the six  months  ended  June 30,  1998 and 1997,
respectively.  The  decrease  in margin  was due  primarily  to  selected  sales
designed to promote increased services revenue in the future.

      Selling and marketing. Selling and marketing expenses were $8.6 million
and $4.5 million for the six months ended June 30, 1998 and 1997,  respectively.
The 90%  increase  in the six months  ended  June 30,  1998  reflects  hiring of
additional sales and marketing  personnel and increased  spending on advertising
and trade shows.  Selling and  marketing  expenses as a percentage  of total net
revenues  increased to 22% in the six months ended June 30, 1998 from 21% in the
six ended June 30, 1997.

      General and administrative.  General and administrative expenses were $8.8
million  and $5.4  million  for the six  months  ended  June 30,  1998 and 1997,
respectively.  This higher  level of expenses  reflects an increase in personnel
and   professional   fees   necessary  to  manage  the   financial,   legal  and
administrative  aspects of the business,  as well as rent and operating costs of
the Company's facilities. General and


                                      -13-

<PAGE>
administrative  expenses as a percentage of total net revenues  decreased to 23%
during the six months  ended June 30, 1998 from 25% in the six months ended June
30, 1997.

      Research and  development.  Research and  development  expenses  were $1.2
million  and $0.6  million  for the six  months  ended  June 30,  1998 and 1997,
respectively.  This higher level of expense  reflects an overall increase in the
number of  personnel  required  to develop  new  technologies  that  enhance the
performance and reliability of the Company's network.  In July 1998, the Company
reorganized  its  research and  development  group by  reallocating  development
personnel  from the  research  and  development  group to support the  Company's
professional services and communications  services groups. In light of this, the
Company  expects to reduce  its  expenditures  in  connection  with the  ongoing
development of proprietary technologies,  although it expects to continue to use
its products  and/or  expertise  developed to date to augment its other  service
offerings and to continue its related research activities.

Liquidity and Capital Resources

      The Company had an  accumulated  deficit of $32.0 million at June 30, 1998
and has used cash of $23.6  million in the aggregate to fund  operations  during
1996,  1997 and the six month period ended June 30, 1998.  Prior to consummation
of the Company's  initial public  offering (the "IPO") on February 18, 1998, the
Company  had  satisfied  its cash  requirements  primarily  through  the sale of
preferred stock and borrowings under credit agreements.  The Company's principal
uses of cash are to fund  operations,  working capital  requirements and capital
expenditures.  At June 30, 1998 the  Company had $18.4  million in cash and cash
equivalents  and working  capital of $18.6  million.  Net cash used in operating
activities  for the six months  ended June 30,  1998 and 1997 was  approximately
$10.0  million  and  $7.3  million,  respectively.  Net cash  used in  investing
activities  for the six months  ended June 30,  1998 and 1997 was  approximately
$7.0 million and $1.2 million,  respectively.  For the six months ended June 30,
1998  and  1997,  cash  of   approximately   $33.9  million  and  $8.9  million,
respectively,  was provided by financing activities.  Cash provided by financing
activities for the six months ended June 30, 1998 includes  approximately  $34.3
million in net proceeds  from the  issuance of common  stock from the  Company's
IPO.

      The Company maintains a secured line of credit with The CIT Group/Business
Credit, Inc. ("CIT") for $10.0 million,  which  automatically  renewed on August
13, 1998 and expires on August 13, 1999.  Borrowings under this line are secured
by substantially  all of the assets of the Company and are limited to a specific
percentage of qualifying accounts receivable less outstanding obligations of the
Company owed to CIT, including outstanding letters of credit. Under this secured
line of credit,  the Company may not,  among other things,  pay cash  dividends,
pledge any of its assets to third  parties,  borrow money from third  parties or
merge or  consolidate  with third parties  without CIT's prior written  consent.
Borrowings  under this line amounted to $1.0 million at December 31, 1997. There
were no borrowings  under the line of credit at June 30, 1998.  The Company does
not  currently  expect that it will be  necessary  to use this  secured  line of
credit to meet its working capital and capital expenditure  requirements through
the end of 1998.  Interest expense amounted to $0.1 and $0.3 million for the six
months ended June 30, 1998 and 1997,  respectively.  Interest is payable monthly
at an annual rate equal to the prime rate plus one  percent.  Following a change
in the prime  rate,  the rate  adjusts on the first of the month  following  any
change.  As of June 30, 1998,  there was  approximately  $3.4 million  available
under the line.

      As of June 30, 1998,  trade  payables and accrued  expenses to a vendor in
the amount of $4.3 million were  secured by a lien on  substantially  all of the
Company's assets.

      The Company has made capital investments in its network, network operating
centers and other capital  assets  totaling $7.1 million in the six months ended
June 30, 1998. The Company  expects to make  additional  capital  investments to
expand and enhance its operations  approximating  $5 million in the remainder of
1998.  The  foregoing  expectation  with  respect  to  capital  investment  is a
forward-looking statement that involves

                                      -14-

<PAGE>

risks and uncertainties  and the actual amount of capital  investment could vary
materially as a result of a number of factors.

      In the IPO,  3.85  million  shares of Common Stock were sold at a price of
$10.00 per share,  providing  gross proceeds to the Company of $38.5 million and
net proceeds, after deducting underwriting discounts,  commissions and estimated
offering expenses payable by the Company, of approximately $34.3 million.  Since
the Company expects to incur additional operating losses, the Company intends to
use the net proceeds from the IPO to meet its short-term  capital  requirements.
The Company  believes  that proceeds from the IPO will be sufficient to meet its
anticipated  cash needs for working  capital and for the  acquisition of capital
equipment through the end of 1998.  However,  there can be no assurance that the
Company  will not  require  additional  financing  within  this  timeframe.  The
Company's  forecast of the period of time through which its financial  resources
will be adequate to support its operations is a  forward-looking  statement that
involves risks and uncertainties, and actual results could vary. The Company may
be required  to raise  additional  funds  through  public or private  financing,
strategic  relationships or other  arrangements.  There can be no assurance that
such additional  financing,  if needed, will be available on terms attractive to
the Company,  or at all.  Furthermore,  any additional  equity  financing may be
dilutive  to  stockholders,  and  debt  financing,  if  available,  may  involve
restrictive covenants.  Strategic arrangements, if necessary to raise additional
funds,  may  require  the  Company  to  relinquish  its rights to certain of its
technologies.

Recently Issued Accounting Standards

      In June 1997, the FASB issued Financial Accounting Standards No. 131,
"Disclosure  About  Segments of an  Enterprise  and Related  Information"  ("FAS
131"), which establishes  standards for the way that public business enterprises
report information about operating segments.  It also establishes  standards for
related  disclosures  about  products and services,  geographic  areas and major
customers.  FAS 131 is effective for fiscal years  beginning  after December 31,
1997.  The  adoption  of the  provisions  of FAS 131 is not  expected  to have a
material impact on the Company's existing disclosures.

Year 2000

      As reasonably necessary and appropriate,  the Company is in the process of
modifying or replacing  software  components  that it uses so that such software
will properly recognize dates beyond December 31, 1999 ("Year 2000 Compliance").
The cost for such modifications and replacements is not expected to be material.
The Company has initiated formal communications with its significant vendors and
customers  to  determine  the extent  that Year 2000  Compliance  issues of such
parties may affect the Company,  and is interviewing  outside  consultants  with
respect to possible  assistance in connection with the Company's internal review
of its Year 2000 compliance  status.  There can be no guarantee that the systems
of such other companies will be timely converted,  or that their conversion will
be compatible  with  information  included in the Company's  systems,  without a
material  adverse  effect on the  Company's  business,  financial  condition  or
results of operations.


                                      -15-
<PAGE>

Disclosure Regarding Forward-Looking Information

      This  report  contains  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange  Act of 1934,  as amended.  Forward-looking  statements  are  typically
identified by the words "believe,"  "expect,"  "intend,"  "estimate" and similar
expressions.  Those  statements  appear in a number of places in this report and
include statements  regarding the intent,  belief or current  expectation of the
Company or its directors or officers with respect to, among other things, trends
affecting the Company's  financial  conditions and results of operations and the
Company's business and growth strategies.  Such  forward-looking  statements are
not guarantees of future performance and involve risks and uncertainties. Actual
results may differ materially from those projected,  expressed or implied in the
forward-looking  statements  as a result of various  factors,  including but not
limited to the following  ("Cautionary  Statements"):  (i) the Company's limited
operating history and history of negative cash flow and operating  losses,  (ii)
potential  fluctuations in the Company's quarterly operating results,  (iii) the
Company's  concentration of revenues,  (iv) challenges  facing the Company as it
experiences  rapid  growth  and  (v)  its  dependence  on a  limited  number  of
suppliers.  The accompanying information contained in this report, including the
information set forth under  "Management's  Discussion and Analysis of Financial
Condition and Results of Operations,"  identifies  important  factors that could
cause such  differences.  Such  forward-looking  statements speak only as of the
date of this report, and the Company cautions  potential  investors not to place
undue  reliance on such  statements.  The Company  undertakes  no  obligation to
update or revise any forward-looking  statements. All subsequent written or oral
forward-looking  statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by the Cautionary Statements.


                                      -16-
<PAGE>



                                     PART II
                                OTHER INFORMATION

Item 2.           Changes in Securities and Use of Proceeds

      On February 12, 1998 (the "Effective  Date"),  the Securities and Exchange
Commission declared effective the Company's  Registration  Statement on Form S-1
(File No. 333-38339). From the Effective Date through June 30, 1998, the Company
incurred expenses of approximately  $2.7 million for underwriting  discounts and
commissions  and $1.5 million for other  expenses.  Such payments were direct or
indirect  payments to persons other than  directors,  officers or persons owning
10% or more of the  Company's  common  stock.  The net offering  proceeds to the
Company were $34.3  million.  From the Effective Date through June 30, 1998, net
offering  proceeds  of: (i) $6.3  million  was paid for  construction  of plant,
buildings  and  facilities;   (ii)  $1.8  million  was  used  for  repayment  of
indebtedness;  and (iii) $11.6 million was used for working  capital and general
corporate  purposes.  Such payments,  except for compensation  pursuant to their
employment  by the Company,  were direct or indirect  payments to persons  other
than directors,  officers or persons owning 10% or more of the Company's  Common
Stock.


Item 6.           Exhibits and reports on Form 8-K

      (a)         Exhibits


    Exhibit               Description
    -------               -----------

          27.1            Financial Data Schedule.


           (b)            Reports on Form 8-K

      A Current  Report on Form 8-K dated May 27, 1998 (date of  earliest  event
reported) was filed by the Company on June 11, 1998.

                                      -17-

<PAGE>


                                   SIGNATURES
                                   ----------


      Pursuant to the  requirements 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.

Dated:  August 14, 1998

                                  ICON CMT CORP.



                                  By: /s/ Scott A. Baxter
                                     -------------------------------------------
                                     Scott A. Baxter, President, Chief 
                                     Executive Officer and Chairman of the Board



                                  By: /s/ Kenneth J. Hall
                                      ------------------------------------------
                                      Kenneth J. Hall, Senior Vice President, 
                                      Chief Financial Officer and Treasurer


                                      -18-


<PAGE>


                                  EXHIBIT INDEX
                                  -------------




 


    Exhibit               Description                          
    --------              -------------                          

          27.1            Financial Data Schedule               


                                      -19-