<PAGE>   1


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K

                                   (Mark One)
            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
                    For the fiscal year ended March 28, 1999

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)

       For the transition period from _______________ to ________________

                         Commission file number 0-24334

                              AMERILINK CORPORATION
                              ---------------------
             (Exact name of registrant as specified in its charter)

                      Ohio                                31-1409345
                      ----                                ----------
        (State or other jurisdiction of     (I.R.S. Employer Identification No.)
         incorporation or organization)

1900 E. Dublin - Granville Road,  Columbus,  Ohio            43229
-------------------------------------------------            -----
    (Address of principal executive offices)              (zip code)

       Registrant's telephone number, including area code: (614) 895-1313
                                                           --------------

        Securities registered pursuant to Section 12(b) of the Act: None
                                                                    ----

           Securities registered pursuant to Section 12(g) of the Act:
     Common Shares with no par value                   NASDAQ National Market

         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. ( ).

         Based upon the closing sale price reported on the NASDAQ National
Market on May 25, 1999, the aggregate market value of the Common Shares of the
Registrant held by non-affiliates (assuming, for this purpose, that only
executive officers are affiliates) on that date was $36,753,920

         4,427,874 shares of common stock were outstanding on May 25, 1999




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                              AMERILINK CORPORATION

                                    FORM 10-K

                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
Item                                                                                                    Page
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<C> <S>                                                                                                 <C>
                                     PART I

1   Business-----------------------------------------------------------------------------------------     3

2   Properties---------------------------------------------------------------------------------------    12

3   Legal Proceedings--------------------------------------------------------------------------------    12

4   Submission of Matters to a Vote of Security Holders----------------------------------------------    12


                                    PART II

5   Market for Registrant's Common Equity and Related Stockholder Matters----------------------------    12

6   Selected Financial Data--------------------------------------------------------------------------    13

7   Management's Discussion and Analysis of Financial Condition and Results of Operations------------    14

7A  Quantitative and Qualitative Disclosures About Market Risk---------------------------------------    22

8   Financial Statements and Supplementary Data------------------------------------------------------    22

9   Changes in and Disagreements With Accountants on Accounting and Financial Disclosure-------------    38


                                    PART III

10  Directors and Executive Officers of the Registrant-----------------------------------------------    38

11  Executive Compensation---------------------------------------------------------------------------    40

12  Security Ownership of Certain Beneficial Owners and Management-----------------------------------    43

13  Certain Relationships and Related Transactions---------------------------------------------------    44


                                    PART IV

14  Exhibits, Financial Statement Schedules and Reports on Form 8-K----------------------------------    45


    Signatures---------------------------------------------------------------------------------------    47
</TABLE>





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                                     PART I

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.

         This Annual Report on Form 10-K contains various forward-looking
statements (as such term is defined in the Private Securities Litigation Reform
Act of 1995). Such forward-looking statements may be identified by, among other
things, the use of forward-looking terminology such as "believes," "expects,"
"may," "will," "should," or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy that
involves risks and uncertainties. These forward-looking statements, such as
statements regarding anticipated future revenues, capital expenditures and other
statements regarding matters that are not historical facts, involve predictions.
These forward-looking statements are based on the Company's current expectations
and are subject to a number of risks and uncertainties that could cause actual
results in the future to differ significantly from results expressed or implied
in any forward-looking statements included herein. The Company's actual results,
performance or achievements could differ materially from the results expressed
in, or implied by, these forward-looking statements depending upon a variety of
important factors, including a continuation of the degree and timing of customer
utilization and rate of renewals of contracts with the Company at historic
levels, the Company's relationship with key customers, implementation of the
Company's growth strategy, seasonality, changing market conditions and customer
purchase authorizations, competitive and regulatory risks associated with the
telecommunications industry, new products and technological changes, disruptions
to the operations of the Company resulting from Year 2000 issues, and other
risks detailed in the Company's periodic report filings with the Securities and
Exchange Commission, including, but not limited to, the factors described under
the caption "Variability in Quarterly Results and Seasonality" on page 11.


ITEM 1. BUSINESS.

GENERAL

         AmeriLink Corporation (referred to herein, together with its
subsidiaries, where the context requires, as the "Company") is a nationwide
provider to the telecommunications industry of cabling systems for the
transmission of video, voice, and data. The Company offers these services on a
national basis to providers of telecommunications services, including: major
cable television multiple system operators ("MSOs); traditional telephone
service providers, including local exchange carriers and long distance carriers
(collectively, "Telcos"); competitive local exchange carriers ("CLECs"); Direct
Broadcast Satellite ("DBS") providers; system integrators and users of local
area network ("LAN") and wide-area network ("WAN") systems; and other businesses
providing specific or bundled telecommunications services. The Company, which
conducts business under the trade name "NaCom" in addition to AmeriLink, is
headquartered in Columbus, Ohio, and provides its services predominately through
the use of independent contractors via its national network of field offices.

         The Company designs, constructs, installs and maintains fiber optic,
coaxial and twisted-pair copper cabling systems for the transmission of video,
voice, and data. The Company believes there continue to be growing opportunities
in both residential and commercial markets to provide its services as
telecommunications service providers increase capital expenditures for their
infrastructures and implement plans to improve service in response to
competition. In order to eliminate the ongoing expense and effort required to
manage labor intensive, multi-office service organizations, the cable television
industry historically has sought to outsource a large portion of these services
on a unit cost basis with independent contractors, such as the Company. Telcos
and other telecommunications service providers are also beginning to seek new
outsourcing solutions in response to competitive price pressures. Independent
contractors, such as the Company, typically have lower cost structures than the
telecommunications providers do, primarily as a result of the contractor's lower
direct and overhead cost structures. Commercial LAN cabling services are also
typically performed by third party vendors who construct, install and maintain
LAN systems for businesses on a contract basis. The Company believes that
telecommunications providers are seeking comprehensive solutions to their
infrastructure needs by utilizing fewer qualified contractors to provide a full
range of telecommunications services, and that it will continue to gain
significant cabling opportunities in both residential and commercial markets as
new technologies, increased services and competition fuel the growing demand for
the delivery of video, voice and data into homes and businesses. In addition,
the Company believes that it will gain significant cabling opportunities to
provide services to DBS providers and distributors given the potential market
for video, audio, and data programming services via satellite.



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PROPOSED MERGER WITH TANDY CORPORATION

         On May 21, 1999, AmeriLink Corporation and Tandy Corporation ("Tandy")
each announced their signing of a definitive merger agreement (the "Merger").
Under terms of the Merger, Tandy will acquire 100% of AmeriLink's common stock
at an exchange ratio designed to reflect $15.60 per share of AmeriLink's stock
in a tax-free exchange for Tandy stock. If the average closing price of Tandy's
common shares falls below a specified amount for a twenty-day trading period
ending just before the merger is completed, AmeriLink shareholders will receive
$14.50 cash for every AmeriLink common share they own instead of Tandy stock.
Following the merger, AmeriLink will continue its operations as a wholly owned
subsidiary of Tandy. The Merger has been approved by the Board of Directors of
each Company and is subject to usual and customary closing conditions, including
regulatory and shareholder approval. It is currently anticipated that the
transaction will close in late August 1999. More detailed information relating
to the terms and conditions of the Merger will be contained in a Registration
Statement on Form S-4 to be filed by Tandy on or around June 8, 1999, which will
include a prospectus and a proxy statement for a special shareholders meeting of
AmeriLink. If the merger is not consummated for any reason, the Company intends
to continue operating independently.


RECENT ACQUISITION

         On February 2, 1999, the Company, through a wholly-owned subsidiary,
MCC Acquisition Corp. ("MAC"), acquired Midwest Computer Cable, Inc. ("MCCI"), a
commercial cabling installation firm headquartered in Des Moines, Iowa. Pursuant
to the Merger Agreement, MCCI was merged with and into MAC and the separate
corporate existence of MCCI ceased. Following the Merger, MAC changed its name
to "Midwest Computer Cable, Inc." and will continue to conduct business as a
wholly-owned subsidiary of the Company. The consideration delivered to the
shareholders of MCCI in connection with the acquisition consisted of $4.4
million in cash and 500,000 common shares (without par value) of the Company
valued at the time of the merger at $3,565,000. MCCI provides installation and
maintenance services for premise cabling systems through six offices located in
Iowa, Kansas, Ohio, and Texas. The Company believes that the additional offices,
management, and technicians which were gained from the MCCI acquisition will
accelerate the growth of its commercial cabling and installation business.


PRINCIPAL SERVICES

         The Company's services include the drops and cable feeds to, and wiring
of, residences, multiple dwelling units ("MDUs") and commercial buildings
(collectively, "premises wiring services") and the construction and installation
of aerial and underground distribution plant ("outside plant construction
services").

         Premises Wiring Services. Residential premises wiring services include
the installation and maintenance of both hardwire and wireless cable systems.
Installation services for hardwire cable systems include the installing of cable
drops which connect residences to the feeder cable carrying the operator's
signal, cabling the exterior and interior of MDUs and single family residences,
and installing converter units within the residence. Maintenance services for
hardwire cable systems include: (1) the replacement of damaged or obsolete
cable, (2) the reconnection and disconnection of subscriber services, (3)
day-to-day additions and changes to installed drops, (4) upgrade sales and
service changes, and (5) miscellaneous service calls.

         Wireless cabling services include both installation and maintenance
services for Direct Broadcast Satellite ("DBS") systems or wireless
multi-channel, multi-point distribution systems ("MMDS"), popularly known as
"wireless cable". DBS installation services consist of attaching a satellite
dish to the subscriber's property, hooking up the digital set-top converter box,
and installing the related cabling, grounding, and connective materials. DBS
maintenance services include the replacement of damaged cable, grounding and
connective materials, and satellite receiving equipment. MMDS cable system
installations consist of attaching a microwave receiving antenna to the
subscriber's property and installing the set-top converter and related cabling,
grounding, and connective materials. Maintenance services for MMDS are
essentially the same as maintenance services for DBS. The Company provides
digital satellite services for both residential subscribers (single family and
multi-family units) and commercial and other subscribers, such as hotels,
motels, bars, businesses, schools, and non-residential buildings which are not
easily accessible by hardwire cable systems.

         Premises wiring services for the commercial market also include the
design and data cabling of LAN and WAN systems for commercial businesses,
governments, and educational communities. The Company's network cabling design
services begin with an on-location site survey to determine the most efficient
cable routing path and the location of end-user outlets. The Company may then
utilize a computer-assisted design system to finalize a



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<PAGE>   5

cabling plan that meets network requirements and performance specifications.
Once approved by the customer, a blueprint or other working print is generated
which is used as a guide for the network installation. Upon completion of a
network installation, the Company generally delivers to the customer test
documentation and an as-built design layout.

         In fiscal 1998 the Company also started providing commercial voice and
data installation and maintenance services to competitive local exchange
carriers (such as Teligent and Winstar) for connections to local-loop networks.
These services include both on-location site surveys to determine the most
efficient digital microwave antenna location, and the subsequent installation of
the antenna on the roof of the commercial building.

         Outside Plant Construction Services. Outside plant construction
projects include the installation of fiber optic cable, coaxial cable and
twisted-pair copper wire for aerial and underground portions of cable systems.
These services include installation of all necessary electronic components,
including signal amplification and conversion devices and the performance of
diagnostic engineering tests at all levels of the infrastructure to determine
whether new and existing systems are within appropriate manufacturer or Federal
Communication Commission ("FCC") specifications. The Company uses heavy
machinery, specialized trucks and other construction equipment to perform its
outside plant construction services. The Company has implemented a strategy to
shift its outside plant construction services from providing services for both
retrofit construction projects (systems with active subscribers) and new
construction projects (systems without active subscribers) to exclusively
providing outside plant construction services for new construction projects.
Retrofit construction projects involve more uncertainties than new construction
projects because each phase of the retrofit construction project must be planned
and executed in a manner which disrupts service to the active subscribers as
little as possible. The Company believes that the competitive environment
associated with retrofit construction projects, along with uncertainty regarding
customer work commitments on these projects, make them less desirable for the
Company's current resources than new construction and premises wiring projects.
For the fiscal year ended March 28, 1999, outside plant construction services
accounted for approximately 8 % of the Company's total revenues.


MARKET OVERVIEW

         The market for telecommunications services is undergoing rapid change
due to deregulation and the introduction of new technologies, both of which have
resulted in increased competition in the industry. In addition, growing customer
demand for enhanced video, voice and data telecommunications services has
increased bandwidth requirements and highlighted bandwidth limitations of
existing cabling in many markets. There is a convergence of different types of
technologies and of the services that have traditionally been provided using
these different technologies. This convergence allows for new services to be
provided over existing infrastructure, and new infrastructure to be developed
that provides combined services, including both content-based and common carrier
services. The practical effect of technological and market convergence is that
traditionally defined industry segments are less and less distinguishable. The
telephone industry and the television industry are entering each others markets
both at the technical and the service level: telephone operators can provide
broadcast type services and cable TV operators are introducing telephone
services. Both types of communication take place over wired and wireless media,
in both a one-to-one and one-to-many format. In the end, definitions of services
according to the nature of information transmitted (video, voice, and data) are
becoming irrelevant.

         Cable television service traditionally has been provided primarily by
cable television system operators that have been awarded franchises from the
municipalities they serve. The cable television industry has been subject to
varying degrees of both national and local government regulation, most recently
The Telecommunications Act of 1996 and the 1992 Cable Reregulation Act, which
imposed extensive rate regulation on the cable television industry. The
Telecommunications Act of 1996 provides for a termination of existing FCC
regulation of cable rates on March 31, 1999. Currently, MSOs are facing
competition for video services from DBS providers and, in certain markets, from
Telcos and other telecommunications providers. In response to this competition,
MSOs have been increasing and expanding their service offerings. To date, a vast
majority of video networks have adopted a hybrid fiber coax ("HFC") network
architecture for video service delivery. Many telecommunications providers
envision the expansion of the role of HFC networks from a video-centric focus to
a key platform for the delivery of a variety of broadband services, including
high-speed Internet access via cable modems, video on demand, and HDTV.
Providers also envision the delivery of cable television signal programming data
and phone services on one drop cable. These services generally require increased
amounts of cabling and system bandwidth, which in turn require MSOs to upgrade
their existing cable plant. The construction, expansion, and upgrade of cable
systems require significant capital investment by cable operators. MSO's have
been significant borrowers from the credit and capital



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markets, and, accordingly, capital spending within the domestic cable television
industry has been cyclical, depending to a significant degree on the
availability of credit and capital. Due to the significant capital investment
required to construct, expand, and upgrade these networks and to finance the
market opportunities associated with new video, voice, and data services, there
has been much consolidation among providers within the telecommunications
industry. Companies appear to be following a belief that size and scale is the
best strategy for long-term, facilities based telecommunications competition. On
March 9, 1999 AT&T Corporation completed its acquisition of Tele-Communications,
Inc. ("TCI") the country's second largest MSO, and in May, 1999 announced that
they reached a definitive merger agreement to acquire MediaOne Group. AT&T
Corporation, the country's largest phone company, will also be the biggest cable
company. There have been other numerous consolidations among existing cable
MSOs, including Paul Allen's purchase of Charter Communications, Marcus Cable,
and his recently announced intent to acquire Falcon Cable TV and Fanch
Communications. Other planned mergers within the telecommunications industry
include SBC Communications Inc. and Ameritech Corp., Bell Atlantic Corp. and GTE
Corp., and US West Inc. and Global Crossing Ltd.

         With regard to the commercial video, voice, and data cabling market,
the rapidly growing need to interconnect new and existing computer resources
over local and geographically dispersed areas continues to create an increased
demand for networking cabling. In the past decade, the commercial use of PCs has
become pervasive. The development of more powerful processors and easier to use
software has expanded applications from word processing, accounting and database
management to electronic mail and research. As the number of PCs in businesses
has grown, the need to share information among users has also grown, giving rise
to a large and rapidly expanding networking industry consisting of LANs, which
connect PCs to other PCs, file servers and other devices such as printers, and
WANs which connect LANs at one site to other sites and connect users working at
home or traveling to their LAN, third party information sources or the Internet.
Rapid technological advances in computers and software, including the use of
more powerful computers and distributed area processing, have created the need
for increasingly sophisticated LAN and WAN technologies. Such technologies
demand advanced high bandwidth data transmission cable that enables increased
volumes of data to be transmitted at faster speeds without diminishing data
integrity. This rapid rate of technological change has created demand both for
new LANs and for maintenance and upgrades of existing LAN systems which no
longer provide the necessary speed or quality of data transmission.

         There is growing competition in the estimated $51 billion local
exchange market, which is currently one of the most profitable segments in the
communications industry. Local exchange services have historically been provided
by regional monopolies known as incumbent local exchange carriers or "ILECs".
ILECS have typically used older, existing copper wire-based networks. These
networks, faced with increasing demand from businesses for new services, such as
Internet access, have created a "last mile bottleneck" between the customer
location and the ILEC network. The potential revenue opportunity in the local
exchange market, coupled with changes in the regulatory environment designed to
enhance competition, have created opportunities for competitive local exchange
carriers, or CLECs. Facilities-based CLECs such as Teligent and Winstar offer
customers a variety of individual and bundled services, including local and long
distance voice services and high-speed data and Internet service in a growing
number of major markets throughout the United States.


PRINCIPAL CUSTOMER GROUPS

         The Company provides cabling services on a national basis to providers
of telecommunications services, including: major cable television multiple
system operators ("MSOs); traditional telephone service providers, including
local exchange carriers and long distance carriers (collectively, "Telcos");
competitive local exchange carriers ("CLECs"); Direct Broadcast Satellite
("DBS") providers; system integrators and users of local area network ("LAN")
and wide-area network ("WAN") systems; and other businesses providing specific
or bundled telecommunications services. The effect of technological and market
convergence is that traditionally defined industry segments are less and less
distinguishable. Definitions of services and customers according to the nature
of information transmitted (video, voice, and data or "cable company" and
"telephone company") are becoming irrelevant.

         Telcos. Prior to the Telecommunications Act of 1996, Local Exchange
Carriers ("LECs") were prohibited from offering video programming directly to
subscribers in their telephone service areas (except in limited circumstances in
rural areas). The Telecommunications Act provides LECs with options for
providing video programming directly to their local exchange area customers.
During the fiscal year that ended March 29, 1998 the Company provided premises
wiring services for competitive video systems to the following Telcos: GTE,
Ameritech, Pacific Bell, U.S. West, and BellSouth. In fiscal 1998, revenues from
Telcos for video communication



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systems increased 151% to approximately $25.9 million from approximately $10.3
million in the previous 1997 fiscal year. SBC Communications ("SBC") acquired
Pacific Bell in April 1997 and announced that it was scaling back its
investments in video services in its service areas. SBC discontinued its
broadband network video trials including a Pacific Bell project in San Jose,
California. This project produced approximately $1.1 million of revenues for the
Company in its fiscal 1998 first quarter. In late 1997 there was a reassessment
by Telcos with regard to their video strategies, primarily of pursuing less
costly DBS and MMDS wireless cable systems in lieu of the more costly hybrid
fiber-coaxial hardwire systems. In 1998 Bell Atlantic recorded pre-tax charges
of $23 million related to wireline and other nonsatellite video initiatives. In
conjunction with this charge, Bell Atlantic announced a strategic decision to
focus video efforts on satellite service being offered via DirecTV, and they are
currently providing video service exclusively in conjunction with arrangements
with DirecTV. The biggest impact to the Company regarding Telco competitive
video projects has been the decision by GTE (through GTE Media Ventures) to
scale back deployment of the hybrid fiber coax (HFC) video networks that it had
built in certain test markets, and not to proceed with HFC deployment in
previously announced additional markets. In 1996, GTE announced aggressive plans
to expand video services to 66 markets with a reach of some seven million homes
by 2004. AmeriLink was one of GTE's lead contractors in its initial two test
markets in Tampa Bay, Florida and Ventura County, California. In fiscal 1998
revenues from these two projects totaled approximately $14.7 million, and GTE
was the Company's largest customer, comprising approximately 17% of total
revenues. After completing a review of its operations in these two test markets,
GTE decided to scale back its video initiatives. In their 1998 fiscal year, GTE
recorded a pretax charge of approximately $161 million related to their video
networks, which had generated operating losses of approximately $86 million as
of December 31, 1998. Company revenues from GTE from these two projects in
fiscal 1999 declined $11.7 million to $3.0 million. The Company no longer
performs installation services for GTE in the Tampa Bay area, and revenues from
the Ventura County project for the most recent fourth quarter ended March 28,
1999 were only approximately $240,000. Revenues from Telcos for video services,
excluding DirecTV re-sale programs, have declined sequentially in the six
consecutive quarters that ended December of 1998, from approximately $8.3
million in the quarter ended June 1998 to approximately $2.5 million in the
third and fourth quarters of fiscal 1999.

         The Company currently performs video installation services, excluding
DirecTV re-sale programs, for GTE, Ameritech, and BellSouth. During the 1999
fiscal year the Pacific Bell MMDS properties were sold to PrimeOne Tele-TV, for
which the Company continues to perform installation services. Revenues from
Telcos for the most recent fourth quarter ended March 28, 1999 were
approximately $2.5 million, of which $1.2 million related to video projects with
Ameritech. The amount of future capital allocated by Telcos to their video
programs is largely contingent upon the financial success of these programs,
possible new technical developments, and overall strategic decisions by the
companies regarding video services, including the current pending mergers. It is
unclear what impact that the current pending mergers between SBC Communications
Inc. and Ameritech Corp. and Bell Atlantic Corp. and GTE will have on the
respective company's video strategies.

         CLECs. The Company provides premises wiring and outside plant
construction services to CLECs that are competing for residential and commercial
local-loop business. In fiscal 1999, the Company performed outside plant
construction services for MFS Network Technologies and Mcleod, Inc. and
residential voice and data installation services for MCI. In late fiscal 1998,
the Company also started performing commercial voice and data installation
services for Teligent, Inc., and Winstar, nationwide CLECs. Revenues derived
from cabling services from Teligent and Winstar for the fiscal year ended March
28, 1999 were approximately $0.9 million and $0.3 million, respectively.

         MSOs. The Company provides both premises wiring and outside plant
construction services to MSOs. Historically, broadband video networks in the
United States were almost exclusively provided by cable television operators.
Accordingly, the Company had historically derived a large percentage of its
revenues from this customer base. Revenues derived for or on behalf of MSOs
(excluding PRIMESTAR, the DBS provider owned by certain MSOs) for fiscal 1999
were approximately $27.2 million, or 42% of total Company revenues, versus
approximately $26.1 million or 30% the previous fiscal year. Representative
customers of the Company include Time Warner Cable (approximately 12% of total
Company revenues in fiscal 1999), Tele-Communications, Inc. (approximately 11%
of total Company revenues in fiscal 1999), MediaOne Group, and Cox
Communications, Inc. AT&T Corporation acquired TCI in March, 1999 and also
recently announced that they reached an agreement to acquire MediaOne Group.

         MSOs have historically contracted for cabling services through their
local and regional offices. As a result, the Company markets its services to
MSOs in a decentralized manner. The Company seeks to develop contacts and learn
of potential opportunities through attendance at trade shows and by membership
of its key managers and



                                      -7-
<PAGE>   8

corporate personnel in the Society of Cable Television Engineers and local cable
associations. The Company's regional directors, regional managers and area
managers are responsible for developing and maintaining relationships with local
and regional cable operators. The Company believes that the development and
maintenance of customer relationships as well as the consistent performance of
quality services allows it to gain repeat business. The Company believes that
more and more MSOs are seeking comprehensive solutions to their infrastructure
needs by turning to fewer qualified contractors who have the size and financial
capability to meet their cabling needs. This trend should accelerate as industry
consolidations increase, and these entities begin to provide bundled services to
end-users. The Company believes that this trend will result in additional
cabling opportunities due to its national presence and cabling capabilities.

         System Integrators and End Users of LAN and WAN Systems. The Company
provides network cabling services to both systems integrators of network systems
and directly to the end users of the network. Systems integrators such as
Unisys, IBM, and Lucent Technologies, Inc. submit competitive bids for network
systems to third party customers. The Company submits a competitive bid to the
systems integrator for the cabling portion of the overall proposal. If the
systems integrator is awarded the project, the Company will perform the required
cabling services if its bid is accepted and bill the systems integrator
directly. In other projects, the end users request bids directly from third
party suppliers for network related services. In this case, the Company submits
a proposal directly to the end user.

         The Company provides network cabling services through its larger field
offices, which provides customers with a single source for large regional or
nationwide network installation projects. The Company employs a combined
corporate and regional approach to marketing its network cabling services. In
1992 the Company created a dedicated corporate sales and installation support
group to identify and establish relationships with systems integrators that can
provide an ongoing source of network cabling business in markets in which the
Company has regional offices. The Company augments this national sales effort
with network sales engineers who market multi-state sales territories from key
regional offices.

         DBS Providers. DBS companies provide television services via
transmission from medium power and higher power communications DBS satellites.
Unlike cable television, DBS services do not require ground construction to
install, maintain, or upgrade cable distribution plant. These systems require
the subscriber to purchase or lease a satellite dish to receive signals and a
receiver system to process and descramble signals for television viewing.

         Digital satellite television has been one of the fastest selling
consumer electronics products in U.S. history. As of December 31, 1998 the
installed base for digital satellite services ("DSS") consisted of approximately
8.7 million active subscribers nationwide, as compared to approximately 6.2
million, 4.4 million and 2.2 million subscribers at December 31, 1997, 1996 and
1995, respectively. PRIMESTAR, Inc. ("PRIMESTAR"), DirecTV, Inc. ("DirecTV"),
and EchoStar Communications Corporation ("EchoStar") are the primary providers
of DBS services in the United States. Historically, DirecTV distributed their
equipment primarily via nationwide retail outlets and utilized numerous
contractors to perform their installation services. Because of this, the Company
has been unable to obtain the necessary volume of work-orders from DirecTV
needed to operate in an acceptable profitable manner. PRIMESTAR also utilized
numerous contractors ("full-service providers" or "FSPs") to install their
satellite equipment. PRIMESTAR required that FSPs sign exclusivity agreements
with them to perform satellite installation services, which the Company elected
not to do. Thus, revenues received from PRIMESTAR related installations,
primarily through contracts with the FSPs, decreased to approximately $1.1
million in fiscal 1999 from approximately $4.5 million the previous year.
Revenues derived from all DSS providers including PRIMESTAR, EchoStar, and
DirecTV for the fiscal year ended March 28, 1999 were approximately $3.4
million, versus approximately $5.2 million in fiscal 1998.

         On April 28, 1999 DirecTV, a subsidiary of Hughes Corporation and
General Motors Corporation, completed its acquisition of PRIMESTAR. At that
time, DirecTV indicated that it will operate the PRIMESTAR medium-power business
for approximately 24 months, during which time it will transition PRIMESTAR
subscribers to DirecTV high-power service. The Company believes that the
acquisition of PRIMESTAR by DirecTV, along with other developments within the
DSS industry, will provide significant cabling opportunities and increased
demand for its services. DBS providers have historically been at a disadvantage
in competing with MSOs due to the fact that they cannot generally offer local
programming. However, on April 27, 1999 the U.S. House of Representatives passed
the "Satellite Copyright Competition and Consumer Protection Act of 1999" which:
(1) allows satellite TV companies to continue the delivery of out-of-market
broadcast network signals to eligible subscribers, as well as deliver local
channels into local markets, (2) reduces the copyright fees satellite TV
carriers



                                      -8-
<PAGE>   9

pay for broadcast signals, and (3) eliminates the 90-day waiting period for
former cable subscribers to subscribe to distant network signals via satellite.
The U.S. Senate recently approved similar legislation, and any differences
between the two bills will have to be reconciled before the legislation can
become law. Upon passage of the legislation by the House of Representatives,
DirecTV announced plans for delivering local broadcast network channels by
satellite to approximately 50 million homes in major metropolitan markets across
the United States. DirecTV, with its acquisition of PRIMESTAR, currently
provides service to more than 7 million subscribers.

         The Company believes that DirecTV, along with other providers of DSS
services, are seeking larger, national contractors to provide their installation
and maintenance needs. The conversion of PRIMESTAR subscribers to DirecTV
satellite dishes will require numerous new installations. PRIMESTAR currently
has approximately 2.3 million satellite subscribers. Bell Atlantic Corp., SBC
Communications Inc., and GTE Corporation have also entered into a multi-year
marketing and distribution agreement with DirecTV to sell satellite-television
services to their telephone customers, and the Company currently performs
satellite installations for Bell Atlantic in California. In order to increase
the Company's DSS installation capability, it is in the process of implementing
a national installation network and customer call center. This installation
network will feature centralized work order processing that will process work
orders and disseminate them throughout the United States. The customer call
center and support function will handle both customer and end subscriber calls
along with work order status and monitoring procedures. The Company is in the
process of partnering with other smaller contractors to provide installation
coverage in those areas that are currently not practical or cost efficient to
service. The installation network will ultimately provide complete service
coverage for the continental United States.

         Other Telecommunications Providers. As a result of the opportunities
presented by the passage of The Telecommunications Act of 1996 (the "Act"), the
overall growing customer demand for enhanced video, voice and data
telecommunications services which have increased bandwidth requirements, and the
continued industry trend toward the outsourcing of cabling services, the Company
believes it can capture new customers in industries in which it currently
competes, and can expand into new industries and customers requiring cabling
services. For example, the Act allows public utility companies to provide local
and long distance telecommunications facilities to third parties. Many utilities
have already announced plans to enter businesses or form joint ventures offering
services such as local and long distance telephone services, cable television
services and Internet access to their markets. The Company also markets its
cabling services to other providers offering individual or bundled video, voice,
and data services such as RCN Corp., a competitive carrier offering bundled
phone, video, and Internet services in several Northeast cities. For the fiscal
year ended March 28, 1999 the Company performed approximately $400,000 of
cabling services to RCN Corp., primarily in the Boston area.


CONTRACTS

         Many telecommunication providers require cabling service contractors,
such as the Company, to first enter into a master contract which establishes
certain requirements to be met before actual work orders are issued. However,
master contracts do not bind these companies to use any one cabling service
contractor in any given locality or for any given project. Rather, they
negotiate with individual cabling service contractors on a project by project
basis. Therefore, the Company has no extended commitment from any single
provider and bids on individual projects along with its competitors. The Company
is typically compensated on these projects on a per unit basis for actual
services performed. The Company's commercial network cabling and outside plant
construction services are generally nonrecurring in nature and are contracted on
a project-by-project basis. Since the Company's services are generally provided
on a project-by-project basis, the amount of work being performed at any given
time for any particular customer and the general mix of customers for which work
is being performed can vary significantly.


OPERATIONS

         Amerilink's projects are managed under the direct supervision of over
40 project managers who generally report to area or regional managers or, in
certain cases, directly to one of the Company's four regional directors. The
regional directors are all under the supervision of the Company's Senior Vice
President - Operations. The Company's marketing and operations functions are
decentralized, giving regional directors, regional managers and area managers
greater flexibility in their regions to maintain and develop relationships with
existing customers and to pursue new opportunities. The Company provides its
services predominately through the use of independent contractors via its
national network of regional and satellite field offices. Each regional office
is headed by a



                                      -9-
<PAGE>   10

regional manager or area manager whose primary duties consist of new business
development and contract oversight. Regional managers and area managers employ
the project managers who are responsible for locating and qualifying independent
contractor production personnel, maintaining and deploying vehicles and
equipment, and supporting the regional managers and area managers in maintaining
customer relationships. The smaller satellite offices report to and are
supervised by the larger regional offices. Regional offices are "full service"
premises wiring providers offering both residential and commercial premises
wiring services and in certain markets outside plant construction services. MCCI
projects are managed in a similar manner, with the six field offices headed by a
branch manager who reports directly to the MCCI Vice President of Operations.
MCCI provides its commercial cabling services through the use of hourly paid
employee technicians. The Company's operating profitability and capacity to
increase revenues is largely dependent upon its ability to locate and attract
qualified regional directors, regional managers, area managers, project
managers, and production personnel.

         The Company's corporate headquarters in Columbus, Ohio, provides
national marketing support, strategic planning, administrative services and
operations support for the Company's field offices. The corporate office
develops and maintains customer relationships with national companies and
provides support for field offices performing work for these customers in local
markets. In addition, the corporate office assists regional directors and area
managers in responding to all bid requests by providing engineering support,
performing cost analyses to determine pricing, and preparing proposal response
documentation. All purchasing and accounting functions are managed at the
corporate level.


MATERIALS

         The Company provides both consignment and material turnkey services. In
the majority of non-network cabling contracts, the Company's customers supply
most or all of the materials required for the project. The majority of the
Company's network and construction contracts are turnkey contracts in which the
Company provides both the labor and materials necessary for the network
installation. The Company purchases cabling materials directly from independent
third party suppliers, and does not manufacture any materials for resale to
customers. The Company is not dependent upon any one supplier for network
cabling materials and has not experienced, nor does it anticipate experiencing,
difficulties in obtaining network cabling materials.


PERSONNEL

         As of March 28, 1999, the Company had 501 employees. Fifty-two (52) are
employees at the Corporate Office in Columbus, Ohio and 449 are employed in
field offices, including 88 employees of Midwest Computer Cable, Inc. The
Company believes that its relationship with its employees is good.

         AmeriLink provides most of its cabling services through the use of
independent contractors who are either sole proprietorships or small business
entities. Independent contractors are engaged and compensated on a
project-by-project basis to perform local work. They generally provide their own
vehicles, tools and insurance coverage. Independent contractors are paid in
accordance with a schedule of unit rates for the performance of specific
services. MCCI utilizes hourly paid employee technicians to perform its
commercial cabling services. The Company's success is dependent upon its ability
to attract and retain the services of qualified employees and independent
contractors. From time to time, state and federal authorities have asserted that
these contractors should be deemed to be employees of the Company for purposes
of taxation and coverage under wage and hour, workers' compensation and
unemployment compensation laws and regulations. None of these asserted claims
has had a material adverse effect on the Company's results of operations or
financial condition. However, if, in the future, additional assertions by state
or Federal authorities are upheld, the Company could incur significant
litigation costs and liabilities and, if the Company were required to treat
individual installers as employees rather than independent contractors, the
Company's operating expenses could increase significantly with potential adverse
effects on its results of operations and financial condition.


COMPETITION

         The Company competes both with the in-house service organizations of
telecommunication providers and with independent third parties in most of the
markets in which it operates. Historically, the cabling service industry has
been highly fragmented, and most service providers are small, privately-held
companies. The Company believes




                                      -10-
<PAGE>   11

that while it may be considered a major competitor in many of the markets in
which it provides cabling services, there are few barriers to entry into the
cabling service business and, as a result, any business that has access to
persons who possess technical expertise may become a competitor of the Company.
Smaller regional and local competitors may be able to offer lower prices because
of lower overhead expenses. Because of the highly competitive bidding
environment in recent years for cable service contracts, the price of the cable
service contractor's bid has often been the deciding factor in determining
whether such contractor was awarded a contract for a cabling project. In
response to the current deregulated operating environment, there has been an
increase in business combinations among the smaller private firms, which the
Company believes will continue. As the demand for cabling services has
increased, the Company believes that contracts are increasingly being awarded
based on the combination of a contractor's price, its track record for
completing projects, its ability to dedicate management and production personnel
to the project, and its financial and operational resources to complete the
contract. The markets in which the Company provides network cabling services are
highly competitive and many of the competitors in those markets include national
competitors with greater financial resources than the Company.


VARIABILITY IN QUARTERLY RESULTS AND SEASONALITY

         The Company's quarterly revenues and associated operating results have
in the past, and may in the future, vary depending upon a number of factors. The
Company has no long-term contractual commitments to provide its services. The
contractual commitments which do exist generally can be terminated on 30 days'
notice. These contractual commitments do not involve a firm backlog of committed
work because the nature of the Company's contracts with MSOs, Telcos, CLECs, DBS
providers, and other telecommunication providers produce daily work orders only
on a project-by-project basis which must be funded by an approved purchase
order. In addition, network cabling services are generally nonrecurring in
nature and are contracted on a project-by-project basis. Therefore, the amount
of work performed at any given time and the general mix of customers for which
work is being performed can vary significantly. Consolidation within the
telecommunications industry may also delay or depress capital spending, as
companies assess their new business plans and strategies and focus on
administrative and operational issues associated with their acquisitions or
alliances. The Company's operations historically have also been influenced by
the budget cycles of the Company's customers. Many of the Company's MSO
customers utilize a calendar year budget cycle, funded with quarterly purchase
authorizations, which in certain fiscal years has resulted in a lack of
availability of funds in the Company's third fiscal quarter and has delayed work
authorizations in the early part of the calendar year (the Company's fourth and
first fiscal quarters.) Telecommunications providers are also subject to actual
and potential local, state, and federal regulations that influence the
availability of work for which the Company may compete. Weather may affect
operating results due to the fact that construction cabling services are
performed outdoors. Weather can also impact the Company's premises wiring
cabling services due to the limited and lost production associated with poor
driving conditions, and soft ground which may prevent underground premises
installations, the burying of cable drops, and increased restoration costs.
Operating results may also be affected by the capital spending patterns of the
Company's customers and by the success of various technologies and business
strategies employed by them. In fiscal 1998, the Company recorded approximately
$25.9 million (or 30.2% of total revenues for the year) in revenues from Telcos
that are building or expanding video systems. Of the total $25.9 million of
revenues from Telcos, approximately $14.7 million (or 17% of total Company
revenues) was generated from work orders issued under contracts with GTE Media
Ventures, a part of GTE Corporation. In late 1997 there was a reassessment by
Telcos with regard to their video strategies, primarily of pursuing less costly
DBS and MMDS wireless cable systems in lieu of the more costly hybrid
fiber-coaxial hardwire systems. Revenues from Telcos for video services,
excluding DirecTV re-sale programs, have declined sequentially in the six
consecutive quarters that ended December of 1998, from approximately $8.3
million in the quarter ended June 1998 to approximately $2.5 million in the
third and fourth quarters of fiscal 1999. Company revenues from GTE in fiscal
1999 declined $11.7 million to $3.0 million. The amount of future capital
allocated by these companies to their video programs is largely contingent upon
the financial success of these programs, possible new technical developments,
and overall strategic decisions by the companies regarding video services. The
Company's operating profitability and capacity to increase revenues is also
largely dependent upon its ability to locate and attract qualified field
managers, project managers, and technical production personnel. Other factors
that may affect the Company's operating results include the size and timing of
significant projects, and the gain or loss of a significant contract or
customer.




                                      -11-
<PAGE>   12

ITEM 2. PROPERTIES.

         The Company does not own any real property. The Company's corporate
headquarters are located in Columbus, Ohio. The Company's regional field offices
service the following metropolitan areas: Atlanta, Baltimore, Charleston, West
Va., Cedar Rapids, Chicago, Cincinnati, Cleveland, Columbus, Dallas, Davenport,
Des Moines, Detroit, Houston, Indianapolis, Kansas City, Los Angeles,
Louisville, New Orleans, Omaha, Phoenix, Richmond, San Antonio, San Francisco,
Seattle/Tacoma, St. Louis, and Tampa Bay. A typical regional office consists of
an office with an attached warehouse for the storage of materials, tools and
equipment and an adjacent secure outside storage area. The Company leases its
corporate headquarters and all of its regional and satellite offices from
unaffiliated lessors. The lease terms, including options exercisable by the
Company, range from one month to five years. Subsequent to fiscal 1999, the
Company executed a new ten-year non-cancelable lease agreement for a new
corporate office facility that is in addition to leases that were in effect as
of March 28, 1999. The agreement will require future minimal rental commitments
of $230,000 per year effective upon the targeted occupation and commencement
date, which is currently estimated to be April 1, 2000.


ITEM 3. LEGAL PROCEEDINGS.

         The Company is involved in various legal proceedings, most of which
arise in the ordinary course of business and many of which are covered by
insurance. In the opinion of the Company's management, none of the claims
relating to such proceedings will have a material adverse effect on the
financial condition or results of operations of the Company.


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

         Not applicable.


                                     PART II

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

         The Company's common stock is traded on the NASDAQ National Market,
under the symbol "ALNK". The following table sets forth for the periods
indicated the high and low last sales price for the common shares, as reported
by the NASDAQ National Market.

<TABLE>
<CAPTION>
                                                                              Sales Prices
                                                                              ------------
                                                                     High                       Low
                                                                     ----                       ---
<S>                                                             <C>                       <C>
FISCAL YEAR 1998

     Quarter Ended June 29, 1997                                $     9.500               $     6.000
     Quarter Ended September 28, 1997                           $    33.875               $     9.406
     Quarter Ended December 28, 1997                            $    36.250               $    21.500
     Quarter Ended March 29, 1998                               $    33.563               $    21.500

FISCAL YEAR 1999

     Quarter Ended June 28, 1998                                $    25.000               $    11.875
     Quarter Ended September 27, 1998                           $    16.250               $     5.875
     Quarter Ended December 27, 1998                            $     9.250               $     7.000
     Quarter Ended March 28, 1999                               $     9.250               $     6.750
</TABLE>

The Company has never paid cash dividends, other than S Corporation
distributions, on its common stock. The Company currently intends to retain all
of its net earnings to finance future growth and therefore does not anticipate
paying any cash dividends in the foreseeable future.

As of May 25, 1999, there were approximately 3,457 holders of the Company's
stock.



                                      -12-
<PAGE>   13

ITEM 6. SELECTED FINANCIAL DATA.

         The selected financial data included in the following table should be
read in conjunction with the Company's Financial Statements and related notes
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing on pages 14 through 22 of this Annual Report on Form 10-K.
On February 2, 1999, the Company acquired Midwest Computer Cable, Inc. The
acquisition has been accounted for as a purchase, and the results of operations
of MCCI have been included in the consolidated results of the Company from the
date of acquisition.

<TABLE>
<CAPTION>
                                                                 FISCAL YEAR ENDED
                                       -----------------------------------------------------------------------
                                       APRIL 2,        MARCH 31,      MARCH 30,      MARCH 29,       MARCH 28,
                                         1995            1996           1997           1998            1999
                                         ----            ----           ----           ----            ----
(in thousands, except per share data)

STATEMENT OF INCOME DATA:
<S>                                   <C>            <C>             <C>            <C>            <C>
   Revenues                           $   47,541     $   56,055      $  63,036      $   85,646     $   65,211
   Income from operations                  2,780          1,170          3,301           7,846          1,636
   Income before income taxes (a)          2,487            686          2,691           7,659          2,100
   Net income (a)                          1,492            457          1,568           4,586          1,223
   Earnings per share (a):
     Basic                            $     0.47     $     0.13      $    0.45      $     1.20     $     0.29
     Diluted                          $     0.45     $     0.13      $    0.44      $     1.15     $     0.28

   Weighted average shares:
     Basic                                 3,156          3,479          3,479           3,806          4,245
     Diluted                               3,351          3,626          3,589           4,002          4,334

BALANCE SHEET DATA:

   Total assets                       $   17,133     $   20,554      $  26,211      $   38,528     $   40,350
   Total debt                              4,009          6,563          9,069            ----           ----
   Shareholders' equity                    8,754          9,211         10,802          31,321         33,751
</TABLE>

----------
(a) On a pro forma basis for the fiscal year ended April 2, 1995.

NOTE: The Company made S Corporation distributions to its shareholders Larry R.
Linhart, E. Len Gibson and Robert L. Powelson of $3.2 million in fiscal 1995,
$2.7 million of which was made in conjunction with the Company's initial public
offering in August 1994 and $500,000 was paid in April 1994. No dividends have
been paid since the Company's initial public offering on August 12, 1994.




                                      -13-
<PAGE>   14

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

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.

         This Annual Report on Form 10-K, including Management's Discussion and
Analysis of Financial Condition and Results of Operations, contains various
forward-looking statements (as such term is defined in the Private Securities
Litigation Reform Act of 1995). Such forward-looking statements may be
identified by, among other things, the use of forward-looking terminology such
as "believes," "expects," "may," "will," "should," or "anticipates" or the
negative thereof or other variations thereon or comparable terminology, or by
discussions of strategy that involves risks and uncertainties. These
forward-looking statements, such as statements regarding anticipated future
revenues, capital expenditures and other statements regarding matters that are
not historical facts, involve predictions. These forward-looking statements are
based on the Company's current expectations and are subject to a number of risks
and uncertainties that could cause actual results in the future to differ
significantly from results expressed or implied in any forward-looking
statements included herein. The Company's actual results, performance or
achievements could differ materially from the results expressed in, or implied
by, these forward-looking statements depending upon a variety of important
factors, including a continuation of the degree and timing of customer
utilization and rate of renewals of contracts with the Company at historic
levels, the Company's relationship with key customers, implementation of the
Company's growth strategy, seasonality, changing market conditions and customer
purchase authorizations, competitive and regulatory risks associated with the
telecommunications industry, new products and technological changes, disruptions
to the operations of the Company resulting from Year 2000 issues, and other
risks detailed in the Company's periodic report filings with the Securities and
Exchange Commission, including, but not limited to, the factors described under
the caption "Variability in Quarterly Results and Seasonality" below.


PROPOSED MERGER WITH TANDY CORPORATION

         On May 21, 1999, AmeriLink Corporation and Tandy Corporation ("Tandy")
each announced their signing of a definitive merger agreement (the "Merger").
Under terms of the Merger, Tandy will acquire 100% of AmeriLink's common stock
at an exchange ratio designed to reflect $15.60 per share of AmeriLink's stock
in a tax-free exchange for Tandy stock. If the average closing price of Tandy's
common shares falls below a specified amount for a twenty-day trading period
ending just before the merger is completed, AmeriLink shareholders will receive
$14.50 cash for every AmeriLink common share they own instead of Tandy stock.
Following the merger, AmeriLink will continue its operations as a wholly owned
subsidiary of Tandy. The Merger has been approved by the Board of Directors of
each Company and is subject to usual and customary closing conditions, including
regulatory and shareholder approval. It is currently anticipated that the
transaction will close in late August 1999. More detailed information relating
to the terms and conditions of the Merger will be contained in a Registration
Statement on Form S-4 to be filed by Tandy on or around June 8, 1999, which will
include a prospectus and a proxy statement for a special shareholders meeting of
AmeriLink. If the merger is not consummated for any reason, the Company intends
to continue operating independently.

RECENT ACQUISITION

         On February 2, 1999, the Company, through a wholly-owned subsidiary,
MCC Acquisition Corp. ("MAC"), acquired Midwest Computer Cable, Inc. ("MCCI"), a
commercial cabling installation firm headquartered in Des Moines, Iowa. Pursuant
to the Merger Agreement, MCCI was merged with and into MAC and the separate
corporate existence of MCCI ceased. Following the Merger, MAC changed its name
to "Midwest Computer Cable, Inc." and will continue to conduct business as a
wholly-owned subsidiary of the Company. The consideration delivered to the
shareholders of MCCI in connection with the acquisition consisted of $4.4
million in cash and 500,000 common shares (without par value) of the Company
valued at the time of the merger at $3,565,000. MCCI provides installation and
maintenance services for premise cabling systems through six offices located in
Iowa, Kansas, Ohio, and Texas. The Company believes that the additional offices,
management, and technicians which were gained from the MCCI acquisition will
accelerate the growth of its commercial cabling and installation business.




                                      -14-
<PAGE>   15

OVERVIEW

         The Company reported record revenues and earnings for its 1998 fiscal
year which ended March 29, 1998. In comparison to the previous fiscal 1997 year,
revenues increased 36% to approximately $85.6 million, operating income more
than doubled to $7.8 million, and diluted earnings per share increased 161% to
$1.15. Revenues and operating results for the most recent fiscal 1999 year,
however, decreased substantially from fiscal 1998. Revenues decreased 24% to
approximately $65.2 million, and operating income decreased to approximately
$1.6 million. Diluted earnings per share for the most recent fiscal year
decreased 76% to $0.28. The Company's decreased operating profitability is
primarily the result of its reduced revenue levels, which were negatively
impacted primarily by a reduction in revenues from telephone companies building
or expanding competitive video systems.

         The following table sets forth for fiscal years 1997, 1998 and 1999,
and the dollar change from fiscal 1997 to 1998 and from fiscal 1998 to 1999: (1)
approximate Company revenues from premises wiring services (segregated by
residential premises wiring services and commercial premises wiring services)
and (2) approximate premises wiring residential revenues by principal customer
group or service. Fiscal 1999 revenues include approximately $1.9 million of
commercial network cabling revenues from MCCI .

<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS)
---------------------                 FISCAL YEAR                       CHANGE IN DOLLARS
                             1997        1998        1999          1997 / 1998     1998 / 1999
                             ----        ----        ----          -----------     -----------
PREMISES WIRING
    RESIDENTIAL:
<S>                       <C>         <C>         <C>               <C>           <C>
     MSOs                 $   22.5    $   26.1    $   27.2          $    3.6      $     1.1
     Telco video              10.3        25.9        11.2              15.6          (14.7)
     DBS providers             6.8         5.2         3.4              (1.6)          (1.8)
     Other                      --         3.7         1.2               3.7           (2.5)
                          --------     -------     -------          --------      ---------
    TOTAL RESIDENTIAL         39.6        60.9        43.0              21.3          (17.9)

    COMMERCIAL:               13.8        16.1        16.7               2.3            0.6
                          --------     -------     -------          --------      ---------
        TOTAL             $   53.4    $   77.0    $   59.7          $   23.6      $   (17.3)
                          ========    ========    ========          ========      =========
</TABLE>


         After deliberation for several years, the Telecommunications Act of
1996 ("the Act") was signed into law in February 1996. Key provisions of the Act
were designed to enhance competition within the telecommunications industry.
These provisions include: (1) allowing Telcos to sell video services, and in
certain cases, to buy local cable television companies, (2) deregulating cable
companies (such as allowing them to charge what they wish for many channels)
once there is effective competition or after three years, (3) permitting RBOCs
and other LECs to enter the long distance market once certain conditions are met
in the local phone market, and (4) allowing long distance providers to enter the
local phone business. During the fiscal year that ended March 29, 1998 the
Company provided premises wiring services for competitive video systems to the
following Telcos: GTE, Ameritech, Pacific Bell, U.S. West, and BellSouth. In
fiscal 1998, revenues from Telcos for video communication systems increased 151%
to approximately $25.9 million from approximately $10.3 million in the previous
1997 fiscal year. SBC Communications ("SBC") acquired Pacific Bell in April 1997
and announced that it was scaling back its investments in video services in its
service areas. SBC discontinued its broadband network video trials including a
Pacific Bell project in San Jose, California. This project produced
approximately $1.1 million of revenues for the Company in its fiscal 1998 first
quarter. In late 1997 there was a reassessment by Telcos with regard to their
video strategies, primarily of pursuing less costly DBS and MMDS wireless cable
systems in lieu of the more costly hybrid fiber-coaxial hardwire systems. In
1998 Bell Atlantic recorded pre-tax charges of $23 million related to wireline
and other nonsatellite video initiatives. In conjunction with this charge, Bell
Atlantic announced a strategic decision to focus video efforts on satellite
service being offered via DirecTV, and they are currently providing video
service exclusively in conjunction with arrangements with DirecTV. The biggest
impact to the Company regarding Telco competitive video projects has been the
decision by GTE (through GTE Media Ventures) to scale back deployment of the
hybrid fiber coax (HFC) video networks that it had built in certain test
markets, and not to proceed with HFC deployment in previously announced
additional markets. In 1996, GTE announced aggressive plans to expand video
services to 66 markets with a reach of some seven million homes by 2004.
AmeriLink was one of GTE's lead contractors in its initial two test markets in
Tampa Bay, Florida and Ventura County, California. In fiscal 1998 revenues from
these two projects totaled approximately $14.7 million, and GTE was the
Company's



                                      -15-
<PAGE>   16

largest customer, comprising approximately 17% of total revenues. After
completing a review of its operations in these two test markets, GTE decided to
scale back its video initiatives. In their 1998 fiscal year, GTE recorded a
pretax charge of approximately $161 million related to their video networks,
which had generated operating losses of approximately $86 million as of December
31, 1998. Company revenues from GTE from these two projects in fiscal 1999
declined $11.7 million to $3.0 million. The Company no longer performs
installation services for GTE in the Tampa Bay area, and revenues from the
Ventura County project for the most recent fourth quarter ended March 28, 1999
were only approximately $240,000. Revenues from Telcos for video services,
excluding DirecTV re-sale programs, have declined sequentially in the six
consecutive quarters that ended December of 1998, from approximately $8.3
million in the quarter ended June 1998 to approximately $2.5 million in the
third and fourth quarters of fiscal 1999.

         In response to this decrease in revenues from Telephone companies, the
Company has initiated or is initiating strategies designed to rebuild its
revenue streams and to improve its operating results, including: (1) focusing
marketing activities on positive developments within its core cable television
customer base, primarily with Tele-Communications, Inc. ("TCI"), (2)
aggressively seeking acquisitions or alliances to augment its existing premises
wiring capabilities (3) pursuing cabling opportunities with DirecTV and other
DSS providers given the potential market for video, audio, and data programming
services via satellite, along with recent favorable regulatory and market
developments within the DSS industry, and (4) continuing to diversify its
customer base and market its cabling services to new and additional
telecommunication providers.

         The Company has historically provided cabling services to TCI, who
comprised approximately 15% of total Company revenues for its 1994 fiscal year.
However, the Company focused on broadening its customer base in order to reduce
its dependency on cable television companies, due to the highly volatile nature
of capital spending within the cable television industry. As a result of project
opportunities from Telcos that were building or expanding competitive video
systems, the Company deployed its resources on Telco projects due to their
perceived short term and long term economic potential. Revenues derived from TCI
projects for the 1998 fiscal year comprised only 4% of total Company sales. In
June 1998 AT&T Corporation announced its intent to acquire TCI and announced a
$4 billion four-year upgrade and maintenance program of TCI's cable networks.
The Company aggressively pursued TCI projects and opened new regional offices in
Dallas, Baltimore, and the Seattle / Tacoma area, primarily to service new TCI
contracts. Revenues from TCI for the 1999 fiscal year increased $3.8 million to
approximately $6.9 million, and comprised approximately 11% of total Company
revenues.

          The Company believes that its strong financial resources allow it to
supplement internal growth and sales development efforts with acquisitions and
strategic alliances. On February 2, 1999, the Company, through a wholly-owned
subsidiary, acquired Midwest Computer Cable, Inc., a commercial cabling
installation firm that provides installation and maintenance services for
premise cabling systems through six offices located in Iowa, Kansas, Ohio, and
Texas. The Company believes that the additional offices, management, and
technicians which were gained from the acquisition will accelerate the growth of
its commercial cabling and installation business.

         On April 28, 1999 DirecTV, a subsidiary of Hughes Corporation and
General Motors Corporation, completed its acquisition of PRIMESTAR. At that
time, DirecTV indicated that it will operate the PRIMESTAR medium-power business
for approximately 24 months, during which time it will transition PRIMESTAR
subscribers to DirecTV high-power service. The Company believes that the
acquisition of PRIMESTAR by DirecTV, along with other developments within the
DSS industry, will provide significant cabling opportunities and increased
demand for its services. DBS providers have historically been at a disadvantage
in competing with MSOs due to the fact that they cannot generally offer local
programming. However, on April 27, 1999 the U.S. House of Representatives passed
the "Satellite Copyright Competition and Consumer Protection Act of 1999" which:
(1) allows satellite TV companies to continue the delivery of out-of-market
broadcast network signals to eligible subscribers, as well as deliver local
channels into local markets, (2) reduces the copyright fees satellite TV
carriers pay for broadcast signals, and (3) eliminates the 90-day waiting period
for former cable subscribers to subscribe to distant network signals via
satellite. The U.S. Senate recently approved similar legislation, and any
differences between the two bills will have to be reconciled before the
legislation can become law. Upon passage of the legislation by the House of
Representatives, DirecTV announced plans for delivering local broadcast network
channels by satellite to approximately 50 million homes in major metropolitan
markets across the United States. DirecTV, with its acquisition of PRIMESTAR,
currently provides service to more than 7 million subscribers.

         The Company believes that DirecTV, along with other providers of DSS
services, are seeking larger, national contractors to provide their installation
and maintenance needs. The conversion of PRIMESTAR subscribers to DirecTV
satellite dishes will require numerous new installations. PRIMESTAR currently
has



                                      -16-
<PAGE>   17

approximately 2.3 million satellite subscribers. Bell Atlantic Corp., SBC
Communications Inc. and GTE Corporation have also entered into a multi-year
marketing and distribution agreement with DirecTV to sell satellite-television
services to their telephone customers, and the Company currently performs
satellite installations for Bell Atlantic in California. In order to increase
the Company's DSS installation capability, it is in the process of implementing
a national installation network and customer call center. This installation
network will feature centralized work order processing that will process work
orders and disseminate them throughout the United States. The customer call
center and support function will handle both customer and end subscriber calls
along with work order status and monitoring procedures. The Company is in the
process of partnering with other smaller contractors to provide installation
coverage in those areas that are currently not practical or cost efficient to
service. The installation network will ultimately provide complete service
coverage for the continental United States.

         Finally, the Company has continued to market its cabling services to
new customers and markets beyond the traditional cable television industry. In
late fiscal 1998, the Company started performing commercial voice and data
installation services for Teligent, Inc., and Winstar, facilities-based
nationwide CLECs that offer customers a variety of individual and bundled
services, including local and long distance voice services and high-speed data
and Internet service in a growing number of major markets throughout the United
States. Revenues derived from cabling services from Teligent and Winstar for the
fiscal year ended March 28, 1999 were approximately $0.9 million and $0.3
million, respectively.


RESULTS OF OPERATIONS

         Revenue is generated from cabling projects performed via work orders
issued under master contracts. Contract costs may vary depending upon the
contract volume, the level of productivity, competitive factors in the local
market, and other items. Cost of sales includes subcontractor production costs,
materials not supplied by the customer, vehicle and machinery expenses, and
business insurance related costs. Selling, general and administrative expenses
consist primarily of field employee wages and payroll costs.


FISCAL 1999 COMPARED TO FISCAL 1998

         REVENUES

         Total revenues for fiscal 1999 were $65,211,040 compared to $85,645,991
for fiscal 1998, a decrease of 24%.

         Revenues derived from residential and commercial premises wiring
activities decreased by 22% to $59.7 million in fiscal 1999, versus
approximately $77.0 million in the prior year period. Premises wiring revenues
from telephone companies for video communication services decreased to
approximately $11.2 million (17% of total Company revenues) in fiscal 1999 from
$25.9 million (30% of total Company revenues) in fiscal 1998. Revenues from
these services have declined sequentially in the six consecutive quarters that
ended December of 1998, from approximately $8.3 million in the quarter ended
June 1998 to approximately $2.5 million in the third and fourth quarters of
fiscal 1999. Revenues from GTE Media Ventures derived from classic hardwire
cable system projects for fiscal 1999 declined to $3.0 million, versus
approximately $14.7 million in fiscal 1998. GTE was the Company's largest
customer in fiscal 1998 and comprised approximately 17% of total Company
revenues. The amount of future capital allocated by Telcos to their video
programs is largely contingent upon the financial success of these programs,
possible new technical developments, and overall strategic decisions by the
companies regarding video services. It is unclear what impact that the current
pending mergers between SBC Communications Inc. and Ameritech Corp. and Bell
Atlantic Corp. and GTE will have on the respective company's video strategies.

         Premises wiring revenues for fiscal 1998 also included approximately
$2.6 million in revenues from a contract to provide voice and data cabling for
U.S. West in Phoenix, AZ. Work under this contract was substantially completed
in June 1998 and contributed approximately $0.5 million of revenues in fiscal
1999. Commercial network cabling revenues in fiscal 1999 were negatively
impacted by funding delays on a number of large contracts for cabling
educational facilities. These projects , which were anticipated to commence in
May 1999, were expected to generate approximately $5.0 million of revenues in
fiscal 1999. Cabling on some of these projects began in late fiscal 1999 and
contributed approximately $0.2 million in revenues. Revenues for fiscal 1999
include approximately $1.9 million of commercial network cabling revenues from
Midwest Computer Cable, Inc., a commercial cabling installation firm acquired by
the Company on February 2, 1999. Revenues and operations were adversely impacted



                                      -17-
<PAGE>   18

by weather in the fourth fiscal quarter ended March 28, 1999. In addition,
revenues during the fourth quarter of fiscal 1998 were negatively impacted by
weather and by delays in customer purchase and work authorizations in several
market areas.

         GROSS PROFIT

         Gross profit for fiscal 1999 was $25.7 million, or 39.4% of revenues,
as compared to $33.0 million, or 38.6% of revenues in 1998.

         The increase in gross margin is due primarily to a decrease in
subcontractor production costs, which decreased as a percent of labor cabling
revenues in fiscal 1999 compared to the corresponding period last year. Contract
and project subcontractor costs are dependent upon a number of factors,
including pricing for the Company's services, the level of productivity,
competitive factors in the local market and other items.

         SELLING, GENERAL AND ADMINISTRATIVE

         Selling, general and administrative expenses for fiscal 1999 were $24.1
million, or 37.0% of revenues, as compared to $25.2 million, or 29.4%, of
revenues for fiscal 1998.

         The Company's selling, general and administrative cost structure is
maintained at levels necessary to adequately support both anticipated near term
revenues and projected longer term revenues. These anticipated revenue levels
and associated cost structures may vary among the Company's regional field
offices and geographic market areas. The Company is reluctant to significantly
reduce its cost structure during periods of reduced revenues and spending by its
customers and believes a certain expense level is necessary to adequately
support longer term revenue growth and quality customer service. The decrease in
selling, general and administrative expenses for fiscal 1999 is primarily a
result of a decrease in employee wage expense and employee benefits. The
increase in selling, general and administrative expenses as a percentage of
revenues is a result of a decline in revenues in fiscal 1999, which decreased
approximately 24% from fiscal 1998.

         INTEREST INCOME AND EXPENSE

         Interest income was $464,174, or 0.7% of revenues, for fiscal 1999 as
compared to net interest expense of $187,633, or 0.2% of revenues, for fiscal
1998. In October 1997 the Company used part of the proceeds received from a
public stock offering to pay in full its outstanding bank debt of approximately
$6.8 million. The balance of the proceeds are being invested in short-term
investment grade securities (see "Liquidity and Capital Resources").

         PROVISION FOR INCOME TAXES

         The Company's effective tax rate was 41.8% for fiscal 1999 versus 40.1%
for fiscal 1998. This increase is the result of Goodwill amortization and other
permanent differences which, combined, represented 4.4% of income before income
taxes versus 0.9% in fiscal 1998.


FISCAL 1998 COMPARED TO FISCAL 1997

         REVENUES

         Total revenues for fiscal 1998 were $85,645,991 compared to $63,035,814
for fiscal 1997, an increase of 35.9%.

         Revenues derived from residential and commercial premises wiring
activities increased by 44.2% to a record $77.0 million in fiscal 1998, versus
approximately $53.4 million in the prior year period. Such revenues accounted
for 90.0% of the Company's total revenues for fiscal 1998 versus 84.7% a year
earlier, consistent with the Company's announced strategy to focus efforts on
premises wiring activities.

         Premises wiring revenues derived from Telcos building or expanding
video systems increased to approximately $25.9 million (30.2% of total Company
revenues) in fiscal 1998 compared to approximately $10.3 million (16.4% of total
Company revenues) in fiscal 1997. Of the total $25.9 million of revenues from
Telcos, approximately $14.7 million, or 17% of total Company revenues, was
generated from work orders issued under


                                      -18-
<PAGE>   19

contracts with GTE Media Ventures, a division of GTE. Revenues from Telcos for
video systems declined sequentially in each quarter of fiscal 1998, from
approximately $8.3 million in the first quarter to approximately $4.2 million in
the fourth quarter, which ended March 29, 1998.

         Premises wiring sales from cable television multiple system operators
in fiscal 1998 increased approximately $3.6 million to $26.1 million, and
commercial network revenues increased $2.3 million, or 17%, to approximately
$16.1 million. Revenues during the fourth quarter of fiscal 1998 were negatively
impacted by weather-related problems and delays in customer purchase and work
authorizations in several market areas.

          In May 1998, the Company elected to terminate a contract in Phoenix,
Arizona, with a Telco due to profitability concerns. Individual project work
orders related to this contract generated approximately $2.6 million in revenues
in fiscal 1998, including approximately $1.3 million in the fourth fiscal
quarter ended March 29, 1998. Work under this contract was substantially
completed in June 1998.

         GROSS PROFIT

         Gross profit for fiscal 1998 was $33.0 million, or 38.6% of revenues,
as compared to $21.7 million, or 34.5% of revenues in 1997. The increase in
gross margin is due primarily to a decrease in cabling materials expense
(included in cost of sales) as a percent of total Company revenues. The majority
of the Company's commercial network cabling contracts are turnkey contracts, in
which the Company provides both the labor and materials necessary for the
network installation. These cabling materials, which are billed at near cost,
comprised approximately 9% of total Company revenues in fiscal 1998 versus
approximately 14% in fiscal 1997. The percentage decline in cabling materials is
primarily due to strong fiscal 1998 labor only revenues derived from Telcos. The
increase in gross margin is also a result of subcontractor production costs,
which decreased as a percent of labor cabling revenues in fiscal 1998. Contract
and project subcontractor costs are dependent upon a number of factors,
including pricing for the Company's services, the level of productivity,
competitive factors in the local market, and other items.

         SELLING, GENERAL AND ADMINISTRATIVE

         Selling, general and administrative expenses for fiscal 1998 were $25.2
million, or 29.4% of revenues, as compared to $18.4 million, or 29.2%, of
revenues for fiscal 1997.

         The Company's selling, general and administrative cost structure is
maintained at levels necessary to adequately support both anticipated near term
revenues and projected longer-term revenues. These anticipated revenue levels
and associated cost structures may vary among the Company's regional field
offices and geographic market areas. The dollar increase in selling, general,
and administrative expenses for fiscal 1998 is primarily due to increased
employee wages and associated costs incurred to support both current period
revenues and anticipated future revenues.

         INTEREST EXPENSE

         Interest expense was $343,726, or 0.4% of revenues, for fiscal 1998 as
compared to $617,004, or 1.0% of revenues, for fiscal 1997. In October 1997 the
Company used part of the proceeds received from a public stock offering to pay
in full its outstanding bank debt of approximately $6.8 million. The balance of
the proceeds are being invested in short-term investment grade securities.
Interest income generated from these investments totaled $156,093 for the period
ended March 29, 1998 (see "Liquidity and Capital Resources").


LIQUIDITY AND CAPITAL RESOURCES

         General. Historically, the Company's principal sources of liquidity
have come from operating cash flow and credit arrangements. The Company's
primary requirements for working capital are to finance accounts receivable,
work-in-process and capital expenditures. Pursuant to a typical construction,
MDU, or LAN cabling contract, work performed by the Company is generally not
billed to a customer until various stages in a project are complete or until the
entire project is complete. Because the Company pays its suppliers and
subcontractors on a current basis, to the extent that trade payables exceed
customer accounts paid at any given time, the Company would draw on its
revolving credit note to finance its work-in-process until project work is
billed to and paid by the customer.


                                      -19-
<PAGE>   20

         In October 1997, the Company completed a public offering in which it
issued 600,000 new shares of common stock. Net proceeds from the offering were
$14,175,000 before deducting related expenses of $279,443. The Company paid in
full the outstanding balance of its revolving credit note of approximately $6.8
million and is using the balance of the proceeds for general corporate purposes,
including working capital, expansion of sales and marketing activities, openings
of new field offices and possible acquisitions of businesses, services or
technology complimentary to the Company's business. Pending such uses, the
proceeds are being invested in short-term investment grade securities. As of
March 28, 1999 the Company had approximately $6.0 million in cash and cash
equivalents.

         On September 4, 1998 the Company's Board of Directors authorized the
repurchase of up to 400,000 common shares of the Company's stock in the open
market or in privately negotiated transactions depending upon market conditions
and other factors. The Company used current cash reserves to finance the share
repurchase program. A total of 333,570 shares were repurchased as of March 28,
1999 at an aggregate purchase price of approximately $2.5 million. Subsequent to
March 28, 1999 through April 13, 1999, the Company repurchased an additional
21,900 shares for an additional $159,000. Due to the proposed merger with Tandy
Corporation, the Company does not anticipate repurchasing any additional shares.

         On February 2, 1999, the Company acquired Midwest Computer Cable, Inc.
The consideration delivered to the shareholders of MCCI in connection with the
Merger consisted of $4.4 million in cash and 500,000 shares of the Company's no
par common stock, of which 249,000 were shares previously held in treasury.

         Combined accounts receivable and work-in-process at March 28, 1999
totaled $17.4 million compared to $19.6 million at March 29, 1998, a decrease of
$2.2 million or 11%. This decrease was primarily due to lower revenue levels
recorded in fiscal 1999. Revenues for fiscal 1999 were $65.2 million, a decrease
of $20.4 million, or 24%, from the $85.6 million recorded in fiscal 1998.
Revenues for the fourth quarter of fiscal 1999 decreased 12% to $17.1 million
compared with $19.5 million for the fourth quarter of fiscal 1998. Combined
accounts receivable and work-in-process for MCCI was approximately $1.1 million
at March 28, 1999. The Company anticipates that it will continue to receive
collections of its accounts receivable in the ordinary course of business.
However, there is no assurance that the Company will be able to collect all or
substantially all of its accounts receivable outstanding at any time, although
the Company believes it has adequately provided for potential losses through its
allowance for doubtful accounts. The Company's failure to collect substantially
all of its accounts receivable and work-in-process would have an adverse impact
on its working capital and could adversely affect its results of operations.

         Capital requirements are dependent upon a number of factors, including
the Company's revenues, level of operations, and the type of contracts and work
that the Company performs. Due to the fact that the Company generally has no
extended commitments from its customers, it is difficult to forecast longer-term
revenues and associated capital expenditure and operating cash requirements.
Management believes that current cash reserves, cash flow from operations, and
possible credit from its commercial bank should provide sufficient capital to
meet the reasonably foreseeable business needs of the Company.

         Current Credit Arrangements. On March 9, 1999, the Company received a
commitment from a commercial bank for a two-year $10.0 million unsecured
revolving credit note. The formal loan agreement was executed on April 5, 1999
and provides for borrowing under the note at a rate of prime minus 1.25%. The
revolving credit note matures on April 6, 2001 and includes a commitment fee,
after the first request for an advance, of 1/8% on any unused portion of the
note. The new loan agreement contains certain restrictive covenants, which,
among others, require the Company to maintain certain financial ratios. There
were no borrowings under the agreement as of March 28, 1999.

         Cash Flow From Operating Activities. For fiscal 1999, net cash provided
by operating activities was $5.8 million. This was due primarily to the
Company's depreciation and amortization, which totaled $3.1 million, and a
reduction in combined accounts receivable and work-in-process, which totaled
$3.3 million. The reduction in combined accounts receivable and work-in-process
is due primarily to lower revenue levels in fiscal 1999.

         Cash Used In Investing Activities. Net cash used in investing
activities for fiscal 1999 totaled $6.2 million, primarily as a result of the
$4.6 million of cash utilized in the acquisition of MCCI (net of acquired cash),
and the purchase of property and equipment which totaled $2.6 million.




                                      -20-
<PAGE>   21

VARIABILITY IN QUARTERLY RESULTS AND SEASONALITY

         The Company's quarterly revenues and associated operating results have
in the past, and may in the future, vary depending upon a number of factors. The
Company has no long-term contractual commitments to provide its services. The
contractual commitments which do exist generally can be terminated on 30 days'
notice. These contractual commitments do not involve a firm backlog of committed
work because the nature of the Company's contracts with MSOs, Telcos, CLECs, DBS
providers, and other telecommunication providers produce daily work orders only
on a project-by-project basis which must be funded by an approved purchase
order. In addition, network cabling services are generally nonrecurring in
nature and are contracted on a project-by-project basis. Therefore, the amount
of work performed at any given time and the general mix of customers for which
work is being performed can vary significantly. Consolidation within the
telecommunications industry may also delay or depress capital spending, as
companies assess their new business plans and strategies and focus on
administrative and operational issues associated with their acquisitions or
alliances. The Company's operations historically have also been influenced by
the budget cycles of the Company's customers. Many of the Company's MSO
customers utilize a calendar year budget cycle, funded with quarterly purchase
authorizations, which in certain fiscal years has resulted in a lack of
availability of funds in the Company's third fiscal quarter and has delayed work
authorizations in the early part of the calendar year (the Company's fourth and
first fiscal quarters.) Telecommunications providers are also subject to actual
and potential local, state, and federal regulations that influence the
availability of work for which the Company may compete. Weather may affect
operating results due to the fact that construction cabling services are
performed outdoors. Weather can also impact the Company's premises wiring
cabling services due to the limited and lost production associated with poor
driving conditions, and soft ground which may prevent underground premises
installations, the burying of cable drops, and increased restoration costs.
Operating results may also be affected by the capital spending patterns of the
Company's customers and by the success of various technologies and business
strategies employed by them. In fiscal 1998, the Company recorded approximately
$25.9 million (or 30.2% of total revenues for the year) in revenues from Telcos
that are building or expanding video systems. Of the total $25.9 million of
revenues from Telcos, approximately $14.7 million (or 17% of total Company
revenues) was generated from work orders issued under contracts with GTE Media
Ventures, a part of GTE Corporation. In late 1997 there was a reassessment by
Telcos with regard to their video strategies, primarily of pursuing less costly
DBS and MMDS wireless cable systems in lieu of the more costly hybrid
fiber-coaxial hardwire systems. Revenues from Telcos for video services,
excluding DirecTV re-sale programs, have declined sequentially in the six
consecutive quarters that ended December of 1998, from approximately $8.3
million in the quarter ended June 1998 to approximately $2.5 million in the
third and fourth quarters of fiscal 1999. Company revenues from GTE in fiscal
1999 declined $11.6 million to $3.0 million. The amount of future capital
allocated by these companies to their video programs is largely contingent upon
the financial success of these programs, possible new technical developments,
and overall strategic decisions by the companies regarding video services. The
Company's operating profitability and capacity to increase revenues is also
largely dependent upon its ability to locate and attract qualified field
managers, project managers, and technical production personnel. Other factors
that may affect the Company's operating results include the size and timing of
significant projects, and the gain or loss of a significant contract or
customer.


INFLATION

         Historically, inflation has not been a significant factor to the
Company as labor is the primary cost of operations and its contracts are
typically short-term in nature. On an ongoing basis, the Company attempts to
minimize any effects of inflation on its operating results by controlling
operating costs and, whenever possible, seeking to insure that selling prices
reflect increases in costs due to inflation.





                                      -21-
<PAGE>   22

ENVIRONMENTAL MATTERS

         The Company anticipates that its compliance with various laws and
regulations relating to the protection of the environment will not have a
material effect on its capital expenditures, future earnings or competitive
position.


YEAR 2000

         The Year 2000 problem arises from the fact that due to early
limitations on memory and disk storage many computer programs indicate the year
by only two digits, rather than four. This limitation can cause programs that
perform arithmetic operations, comparisons, or sorting of data fields to yield
incorrect results when working outside the year range of 1900-1999. This could
cause computer hardware or software to fail or to create erroneous results
unless corrective measures are taken. Incomplete or untimely resolution of the
Year 2000 issue could have a material adverse impact on the Company's business,
operations or financial condition in the future. The Company has undertaken a
Year 2000 project which includes an assessment of computer equipment, software,
network infrastructure, and telephone equipment. The project addresses inventory
and assessment, impact analysis, implementation, and testing. The Company is
utilizing primarily internal resources to complete and test the Year 2000
project. External costs associated with the project through May 1999 were
approximately $40,000, and the Company estimates that it will incur additional
external costs of approximately $70,000, including the replacement of identified
non-compliant computer hardware, to complete the project. The Company is
currently in the late stages of implementation and testing and believes that all
critical parts of the project will be complete by September 1999, prior to any
anticipated impact on the Company's operating systems. The Company is also in
the process of surveying its bank, critical suppliers, and significant third
parties to determine the extent to which related interfaces with the Company's
systems are vulnerable if these third parties fail to remediate their Year 2000
issues. The Company will be formulating a contingency plan to address the
possible effects , if any, of any significant third parties experiencing Year
2000 problems. Assuming that project plans can be implemented as planned, the
Company believes future costs relating to the Year 2000 issue will not have a
material adverse impact on the Company's business, operations, or financial
condition. However, there is no assurance that the Company's year 2000
compliance efforts will prevent all consequences, and there may be undetermined
future costs due to business disruption that may be caused by customers,
suppliers, or unforeseen circumstances.


ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company's exposure to market risk through derivative financial
instruments and other financial instruments, such as investments in short-term
marketable securities and long-term debt, is not material. The existing credit
facility of the Company has a variable interest rate and could be adversely
affected by an increase in interest rates. There were no borrowings under this
facility as of March 28, 1999.


ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The Registrant's consolidated financial statements and related notes
and independent auditors' reports follow on the subsequent pages of this report.



                                      -22-
<PAGE>   23


REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
AmeriLink Corporation

We have audited the accompanying consolidated balance sheets of AmeriLink
Corporation as of March 29, 1998 and March 28, 1999, and the related
consolidated statements of income, changes in shareholders' equity, and cash
flows for each of the three years in the period ended March 28, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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
AmeriLink Corporation at March 29, 1998 and March 28, 1999, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended March 28, 1999, in conformity with generally accepted
accounting principles.


                                                           /s/ Ernst & Young LLP

Columbus, Ohio
May 11, 1999, except for
Note 12, as to which the date
is May 21, 1999





                                      -23-
<PAGE>   24

                              AMERILINK CORPORATION
                           CONSOLIDATED BALANCE SHEETS

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


<TABLE>
<CAPTION>
                                                                            March 29,              March 28,
                                                                              1998                   1999
                                                                              ----                   ----
<S>                                                                       <C>                   <C>
ASSETS
Current assets:
     Cash and cash equivalents                                            $  8,723,230          $  5,958,882
     Accounts receivable-trade, net of allowance for doubtful
          accounts of $234,000 in 1998 and $237,000 in 1999                 13,884,731            12,084,381
     Work-in-process                                                         5,690,546             5,322,616
     Materials and supply inventories                                        1,655,809             2,100,419
     Other receivables                                                         229,702               225,372
     Deferred income taxes                                                     458,584               361,400
     Other                                                                     114,895               519,978
                                                                          ------------          ------------
          Total current assets                                              30,757,497            26,573,048

Property and equipment - net                                                 7,585,118             6,366,853
Goodwill - net                                                                      --             7,168,168
Deferred income taxes                                                               --               128,184
Deposits and other assets                                                      185,291               114,474
                                                                          ------------          ------------

          Total assets                                                    $ 38,527,906          $ 40,350,727
                                                                          ============          ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Trade accounts payable                                               $  2,658,091          $  2,565,298
     Liability to subcontractors                                             1,886,173             1,610,121
     Accrued compensation and related expenses                               1,845,507             1,643,872
     Accrued insurance                                                         509,965               397,713
     Other                                                                     307,579               383,223
                                                                          ------------          ------------
          Total current liabilities                                          7,207,315             6,600,227

Shareholders' equity:
     Preferred stock, without par; 1,000,000 shares authorized;
          none issued or outstanding                                                --                    --
     Common stock, without par; 10,000,000 shares authorized;
          4,255,930 and 4,534,344 shares issued and outstanding
          in 1998 and 1999                                                  24,017,256            25,872,715
     Common stock held in treasury, at cost; 84,570 shares at
          March 28, 1999                                                            --              (648,877)
     Retained earnings                                                       7,303,335             8,526,662
                                                                          ------------          ------------
          Total shareholders' equity                                        31,320,591            33,750,500
                                                                          ------------          ------------

          Total liabilities and shareholders' equity                      $ 38,527,906          $ 40,350,727
                                                                          ============          ============
</TABLE>


--------------------------------------------------------------------------------
                 See notes to consolidated financial statements

                                      -24-
<PAGE>   25

                              AMERILINK CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
                          For the Fifty-Two Weeks Ended

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

<TABLE>
<CAPTION>
                                                        March 30,              March 29,              March 28,
                                                          1997                   1998                   1999
                                                          ----                   ----                   ----
<S>                                                   <C>                    <C>                    <C>
Revenues                                              $ 63,035,814           $ 85,645,991           $ 65,211,040
Cost of sales                                           41,297,467             52,615,969             39,511,832
                                                      ------------           ------------           ------------
Gross profit                                            21,738,347             33,030,022             25,699,208
Selling, general and administrative expenses            18,436,896             25,183,821             24,063,055
                                                      ------------           ------------           ------------
Income from operations                                   3,301,451              7,846,201              1,636,153
Interest income (expense)                                 (617,004)              (187,633)               464,174
Other income                                                 7,047                     --                     --
                                                      ------------           ------------           ------------
Income before income taxes                               2,691,494              7,658,568              2,100,327
Provision for income taxes                               1,123,000              3,073,000                877,000
                                                      ------------           ------------           ------------
Net income                                            $  1,568,494           $  4,585,568           $  1,223,327
                                                      ============           ============           ============

Earnings per share:
     Basic                                            $       0.45           $       1.20           $       0.29
                                                      ============           ============           ============
     Diluted                                          $       0.44           $       1.15           $       0.28
                                                      ============           ============           ============

Weighted average shares:
     Basic                                               3,479,025              3,805,866              4,244,790
     Diluted                                             3,589,131              4,002,089              4,334,465
</TABLE>


--------------------------------------------------------------------------------
                 See notes to consolidated financial statements

                                      -25-
<PAGE>   26

                              AMERILINK CORPORATION
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

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

<TABLE>
<CAPTION>
                                                                                                           Common Stock
                                                                   Common Stock                           Held in Treasury

                                                           Shares               Amount               Shares               Amount
                                                           ------               ------               ------               ------
<S>                                                      <C>                <C>                     <C>               <C>
Balance at March 31, 1996                                3,478,580          $  8,061,395

     Net Income                                                 --                    --

     Issuance of restricted stock                            3,000                23,250
                                                         ---------          ------------            --------           ------------

Balance at March 30, 1997                                3,481,580             8,084,645                  --                     --

     Net income                                                 --                    --

     Proceeds from exercise of
        stock options                                      174,350               813,275

     Tax benefit from exercise of
        stock options                                           --             1,223,779

     Net proceeds from sale of
        common stock, less issuance
        expenses of $279,443                               600,000            13,895,557
                                                         ---------          ------------            --------           ------------

Balance at March 29, 1998                                4,255,930            24,017,256                  --                     --

     Net income                                                 --                    --

     Proceeds from exercise of stock options                25,000               158,750                  --                     --

     Repurchases of common stock                                --                    --            (333,570)          $ (2,528,400)

     MCCI Acquisition                                      251,000             1,685,477             249,000              1,879,523

     Issuance of restricted stock,
        net of deferred compensation expense                 2,414                    --                  --                     --

     Amortization of deferred
        compensation expense                                    --                11,232                  --                     --
                                                         ---------          ------------            --------           ------------

Balance at March 28, 1999                                4,534,344          $ 25,872,715             (84,570)          $   (648,877)
                                                         =========          ============            ========           ============
</TABLE>


<TABLE>
<CAPTION>
                                                        Retained
                                                        Earnings                Total
                                                        --------                -----
<S>                                                  <C>                   <C>
Balance at March 31, 1996                             $  1,149,273          $  9,210,668

     Net Income                                          1,568,494             1,568,494

     Issuance of restricted stock                               --                23,250
                                                      ------------          ------------

Balance at March 30, 1997                                2,717,767            10,802,412

     Net income                                          4,585,568             4,585,568

     Proceeds from exercise of
        stock options                                           --               813,275

     Tax benefit from exercise of
        stock options                                           --             1,223,779

     Net proceeds from sale of
        common stock, less issuance
        expenses of $279,443                                    --            13,895,557
                                                      ------------          ------------

Balance at March 29, 1998                                7,303,335            31,320,591

     Net income                                          1,223,327             1,223,327

     Proceeds from exercise of stock options                    --               158,750

     Repurchases of common stock                                --            (2,528,400)

     MCCI Acquisition                                           --             3,565,000

     Issuance of restricted stock,
        net of deferred compensation expense                    --                    --

     Amortization of deferred
        compensation expense                                    --                11,232
                                                      ------------          ------------

Balance at March 28, 1999                             $  8,526,662          $ 33,750,500
                                                      ============          ============
</TABLE>


--------------------------------------------------------------------------------
                 See notes to consolidated financial statements

                                      -26-
<PAGE>   27

                              AMERILINK CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          For the Fifty-Two Weeks Ended


<TABLE>
<CAPTION>
                                                                             March 30,              March 29,            March 28,
                                                                               1997                   1998                 1999
                                                                               ----                   ----                 ----
<S>                                                                        <C>                    <C>                  <C>
OPERATING ACTIVITIES
Net income                                                                 $  1,568,494           $  4,585,568         $  1,223,327
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
   Depreciation and amortization                                              2,242,312              2,967,518            3,105,767
   Net loss (gain) on disposal of fixed assets                                  (14,950)                (4,400)               8,515
   Gain on investments                                                           (6,199)                    --                   --
   Deferred income taxes                                                       (145,000)              (304,281)             (31,000)
Changes in operating assets and liabilities net of effect
of acquisition:
     Accounts receivable and work-in-process                                 (6,051,531)            (1,721,686)           3,334,630
     Materials and supply inventories                                           200,244               (145,969)             (20,354)
     Other receivables                                                          (86,558)                78,515                4,330
     Other assets                                                               357,138                 38,230             (309,831)
     Trade accounts payable                                                     516,554                339,416             (555,320)
     Liability to subcontractors                                                877,568                (74,581)            (276,052)
     Accrued compensation and related expenses                                  356,737                409,835             (517,077)
     Accrued insurance                                                         (168,615)               141,708             (112,252)
     Other liabilities                                                           95,199                 51,428              (70,930)
                                                                           ------------           ------------         ------------
Net cash provided by (used in) operating activities                            (258,607)             6,361,301            5,783,753
INVESTING ACTIVITIES
     Purchase of property and equipment                                      (2,752,254)            (4,917,240)          (2,593,451)
     Proceeds from sale of property and equipment                               629,525                297,066              936,630
     Cash paid for acquisition net of acquired cash                                  --                     --           (4,592,446)
     Deposits and other assets                                                  (82,912)                (1,713)              70,816
                                                                           ------------           ------------         ------------
Net cash used in investing activities                                        (2,205,641)            (4,621,887)          (6,178,451)

FINANCING ACTIVITIES
     Principal payments on long-term debt                                   (20,400,000)           (25,794,190)                  --
     Proceeds from borrowings on long-term debt                              22,905,963             16,725,000                   --
     Common stock repurchased                                                        --                     --           (2,528,400)
     Proceeds from issuance of common stock                                          --             13,895,557                   --
     Proceeds from exercise of stock options                                         --                813,275              158,750
     Tax benefit from exercise of options                                            --              1,223,779                   --
                                                                           ------------           ------------         ------------
Net cash provided by (used in) financing activities                           2,505,963              6,863,421           (2,369,650)
                                                                           ------------           ------------         ------------

     Increase (decrease) in cash and cash equivalents                            41,715              8,602,835           (2,764,348)
Cash and cash equivalents at beginning of year                                   78,680                120,395            8,723,230
                                                                           ------------           ------------         ------------

Cash and cash equivalents at end of year                                   $    120,395           $  8,723,230         $  5,958,882
                                                                           ============           ============         ============

Supplemental cash flow disclosures:
     Interest paid                                                         $    619,192           $    347,484         $         --
     Income taxes paid                                                     $    762,048           $  2,304,584         $  1,056,089
</TABLE>



--------------------------------------------------------------------------------
                 See notes to consolidated financial statements

                                      -27-
<PAGE>   28

                              AMERILINK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fifty-two weeks ended March 30, 1997, March 29, 1998 and March 28, 1999

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

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS: AmeriLink Corporation (the "Company") designs, constructs,
installs and maintains fiber optic, coaxial and twisted-pair copper cabling
systems for the transmission of video, voice and data. The Company's cabling
services include the drops and cable feeds to, and wiring of, residences,
multiple dwelling units and commercial buildings and the construction of aerial
and underground distribution plant. The Company offers these services on a
national basis to providers of telecommunications services, including: major
cable television multiple system operators; traditional telephone service
providers, including local exchange carriers and long distance carriers;
competitive local exchange carriers; Direct Broadcast Satellite ("DBS")
providers; system integrators and users of local area network ("LAN") and
wide-area network ("WAN") systems; and other businesses providing specific or
bundled telecommunications services. The Company's services are provided
predominately through the use of independent contractors via its national
network of regional and satellite field offices.

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of the Company and all of its wholly owned subsidiaries. All
significant inter-company accounts and transactions have been eliminated in
consolidation.

FISCAL YEAR: Fiscal years are designated in the financial statements and notes
thereto by the year in which the fiscal year ends. Accordingly, results for the
fiscal years 1997, 1998 and 1999 represent the 52 weeks ended March 30, 1997,
March 29, 1998, and March 28, 1999, respectively.

REVENUES AND COST RECOGNITION: The Company recognizes revenues from its fixed
and unit price contracts in process on the percentage of completion method of
accounting. Anticipated losses on these contracts are recorded when identified.
Contract costs include all direct labor, material, subcontract and other direct
project costs related to contract performance.

Work-in-process typically represents amounts earned under the Company's
contracts but not billed due to timing or not billable to clients according to
contract terms, which usually consider passage of time, achievement of certain
milestones or completion of the project.

MAJOR CUSTOMERS: Customers comprising 10% or greater of the Company's fiscal
year net sales are summarized as follows:

                                                  1997         1998         1999
                                                  ----         ----         ----
          Time Warner Cable                        19%          16%          12%
          Tele-Communications, Inc. (TCI)           9%           4%          11%
          GTE Media Ventures                        8%          17%           5%

CONCENTRATIONS OF CREDIT RISK: Financial instruments, which potentially subject
the Company to concentration of credit risk, consist principally of
uncollateralized trade receivables and unbilled work-in-process. The Company
performs ongoing credit evaluations of its customers' financial conditions but
does not require collateral to support customer receivables. The Company
establishes an allowance for doubtful accounts based upon factors surrounding
the credit risk of specific customers, historical trends and other information.

The following is a summary of activity in the allowance for doubtful accounts
for the fiscal years ended 1997, 1998 and 1999.

<TABLE>
<CAPTION>
                                              1997                1998                1999
                                              ----                ----                ----
<S>                                        <C>                 <C>                 <C>
Beginning balance                          $  95,000           $ 171,000           $ 234,000
Provision for bad debts                      349,000             229,600              76,000
Allowance acquired in acquisition                 --                  --              40,000
Account write-offs, net                     (273,000)           (166,600)           (113,000)
                                           ---------           ---------           ---------
Ending Balance                             $ 171,000           $ 234,000           $ 237,000
                                           =========           =========           =========
</TABLE>

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



                                      -28-
<PAGE>   29

                              AMERILINK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fifty-two weeks ended March 30, 1997, March 29, 1998 and March 28, 1999

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

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   (CONTINUED)

MATERIALS AND SUPPLY INVENTORIES: Materials and supply inventories are comprised
primarily of cabling materials and are stated at cost. Cost is determined using
the first-in, first-out (FIFO) method.

PROPERTY AND EQUIPMENT: Property and equipment is recorded at cost. Depreciation
and amortization for financial reporting purposes is computed using the
straight-line method over the estimated useful lives of the assets. Generally,
the useful lives for all major classes of assets are two to seven years.
Recovery of capital costs for income tax reporting purposes is primarily
provided by the use of accelerated methods over the statutory recovery periods.
The costs of assets sold or retired and the related accumulated depreciation are
removed from the accounts in the year of disposal, and any gain or loss is
included in net income. Maintenance and repairs are charged to expense as
incurred.

GOODWILL: Goodwill represents the excess of the purchase price over the fair
value of net assets acquired. Goodwill is being amortized ratably over a 25 year
period. The carrying value of goodwill will be reviewed periodically by the
Company, and impairments, if any, will be recognized when expected future
operating cash flows derived from goodwill are less than its carrying value.
Goodwill related amortization expense charged to operations for fiscal 1999 was
$69,856.

CASH AND CASH EQUIVALENTS: For purposes of the statements of cash flows, the
Company considers all highly liquid investments with a maturity of three months
or less at the time of purchase to be cash equivalents. Cash equivalents consist
of money market fund investments and short-term commercial paper, substantially
all of which were held with two financial institutions.

INCOME TAXES: Income taxes are calculated in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes".
Deferred tax assets and liabilities are recognized based on the difference
between the financial statement and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which the differences are expected
to be realized.

FAIR VALUE OF FINANCIAL INSTRUMENTS: The fair values of all financial
instruments approximate carrying values because of the short maturities of those
instruments.


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

                                      -29-
<PAGE>   30

                              AMERILINK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fifty-two weeks ended March 30, 1997, March 29, 1998 and March 28, 1999

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

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   (CONTINUED)

COMMON STOCK AND EARNINGS PER SHARE: The Company follows SFAS No. 128, "Earnings
per Share," which requires the presentation of basic and diluted earnings per
share ("EPS"). Basic EPS excludes dilution and is computed by dividing income
available to common shareholders by the weighted average number of common shares
outstanding for the period. Diluted EPS includes the dilution of common stock
equivalents consisting of shares subject to stock options.

<TABLE>
<CAPTION>
                                                              1997               1998                1999
                                                              ----               ----                ----
       <S>                                                 <C>                 <C>                 <C>
       Basic:
       ------
       Net income                                          $1,568,494          $4,585,568          $1,223,327
       Weighted average common
         shares outstanding                                 3,479,025           3,805,866           4,244,790
                                                           ----------          ----------          ----------

           Basic EPS                                       $     0.45          $     1.20          $     0.29
                                                           ==========          ==========          ==========

       Diluted:
       --------
       Net income                                          $1,568,494          $4,585,568          $1,223,327
       Weighted average common
         shares outstanding                                 3,479,025           3,805,866           4,244,790
       Dilutive stock options                                 110,106             196,223              89,675
                                                           ----------          ----------          ----------
       Total shares and dilutive potential shares           3,589,131           4,002,089           4,334,465
                                                           ----------          ----------          ----------

           Diluted EPS                                     $     0.44          $     1.15          $     0.28
                                                           ==========          ==========          ==========
</TABLE>

Some options were outstanding during fiscal years 1997, 1998 and 1999 but were
not included in the computation of diluted earnings per share because the
average market price of the Company's common stock during the period was greater
than the exercise price of the options and, therefore, were anti-dilutive. Note
7 provides additional information on the Company's stock options.

USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Management believes those estimates and assumptions utilized
in preparing the financial statements are reasonable. Actual results could
differ from those estimates.

Estimates used in the Company's consolidated financial statements include, but
are not limited to, revenue recognition of work-in-process, the allowance for
doubtful accounts, self-insured claims liabilities, the valuation of deferred
tax assets, depreciation and amortization and the estimated lives of assets.

BUSINESS SEGMENTS: In June 1997, the Financial Accounting Standards Board issued
SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information" ("SFAS No. 131"). SFAS No. 131 changes the way public companies
report segment information in annual financial statements and also requires
those companies to report selected segment information in interim financial
reports to stockholders. It also establishes standards for related disclosures
about products and services, geographic areas, and major customers. Management
believes the Company's operations comprise only one segment and as such,
adoption of SFAS No. 131 does not impact the disclosures made in the Company's
financial statements.



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

                                      -30-
<PAGE>   31

                              AMERILINK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fifty-two weeks ended March 30, 1997, March 29, 1998 and March 28, 1999

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

2.  PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of March 29, 1998 and March
28, 1999:

<TABLE>
<CAPTION>
                                                                   1998                 1999
                                                                   ----                 ----
         <S>                                                  <C>                   <C>
         Leasehold improvements                               $     224,331         $     238,633
         Transportation equipment                                 7,105,535             6,968,000
         Machinery and equipment                                  5,380,994             5,594,254
         Computer equipment and related software                  1,621,867             2,055,927
         Furniture and fixtures                                     974,463               854,813
                                                              -------------         -------------
              Total                                              15,307,190            15,711,627

         Less accumulated depreciation                           (7,722,072)           (9,344,774)
                                                              -------------         --------------

         Net property and equipment                           $   7,585,118         $   6,366,853
                                                              =============         =============
</TABLE>


3.  EMPLOYEE BENEFIT PLANS

The Company has a Profit Sharing and 401(k) Plan covering substantially all of
its employees. Profit sharing contributions are at the discretion of the Board
of Directors, although limited to the maximum amount permitted under the
Internal Revenue Code. The Company did not make a profit sharing contribution
for fiscal years 1997, 1998, and 1999. The Company's 401(k) Plan allows eligible
employees to contribute a portion of their compensation to the Plan. The
employer may make an additional contribution subject to the terms of the Plan.
The contribution expense for the Company to the 401(k) Plan for fiscal years
1997, 1998 and 1999 was $66,109, $160,557, and $65,274, respectively.


4.  EXISTING CREDIT FACILITY

On March 9, 1999 the Company received a commitment from a commercial bank for a
$10.0 million unsecured revolving credit note. The formal loan agreement was
executed on April 5, 1999 and provides for borrowings under the note at a rate
of prime minus 1.25%. The revolving credit note matures on April 6, 2001 and
includes a commitment fee, after the first request for an advance, of 1/8% on
any unused portion of the note. The new loan agreement contains certain
restrictive covenants which, among others, require the Company to maintain
certain financial ratios. There were no borrowings under the agreement as of
March 28, 1999.



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

                                      -31-
<PAGE>   32

                              AMERILINK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fifty-two weeks ended March 30, 1997, March 29, 1998 and March 28, 1999

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

5.  INCOME TAXES

The provision for income taxes consists of the following for the fiscal years
ended 1997, 1998 and 1999:

<TABLE>
<CAPTION>
                                                            1997                  1998                 1999
                                                            ----                  ----                 ----
         <S>                                            <C>                   <C>                   <C>
         Current:
           Federal                                      $ 1,013,000           $ 2,728,000           $   771,000
           State and local                                  255,000               649,000               137,000
                                                        -----------           -----------           -----------
                                                          1,268,000             3,377,000               908,000
         Deferred:
           Federal                                         (123,000)             (259,000)              (27,000)
           State and local                                  (22,000)              (45,000)               (4,000)
                                                        -----------           -----------           -----------
                                                           (145,000)             (304,000)              (31,000)
                                                        -----------           -----------           -----------

              Total provision for income taxes          $ 1,123,000           $ 3,073,000           $   877,000
                                                        ===========           ===========           ===========
</TABLE>

Deferred tax assets recorded in the consolidated balance sheets at fiscal years
ended 1998 and 1999, consist of the following:

<TABLE>
<CAPTION>
                                                          1998              1999
                                                          ----              ----
         <S>                                            <C>               <C>
         Deferred tax assets:
               Depreciation                             $     --          $128,184
               Accrued compensation                      169,073            80,749
               Accrued insurance                          88,128           126,646
               Allowance for doubtful accounts            93,600            78,800
                 Other                                   107,783            75,205
                                                        --------          --------
                 Total deferred tax assets              $458,584          $489,584
                                                        ========          ========
</TABLE>


A reconciliation of the federal corporate income tax rate and the effective tax
rate on income taxes is summarized below for the fiscal years ended 1997, 1998
and 1999:

<TABLE>
<CAPTION>
                                                                  1997           1998           1999
                                                                  ----           ----           ----
         <S>                                                      <C>            <C>            <C>
         Statutory income tax rate                                34.0%          34.0%          34.0%
         State and local taxes, net of Federal benefit             5.2%           5.2%           3.4%
         Goodwill amortization                                      --             --            1.4%
         Other permanent differences                               2.5%           0.9%           3.0%
                                                                  ----           ----           ----

                  Effective income tax rate                       41.7%          40.1%          41.8%
                                                                  ====           ====           ====
</TABLE>



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

                                      -32-
<PAGE>   33

                              AMERILINK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fifty-two weeks ended March 30, 1997, March 29, 1998 and March 28, 1999

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

6.  OPERATING LEASES

The Company is committed under non-cancelable operating leases for offices and
warehouse space which will require future minimum rental commitments of
$1,058,968, $270,707, $87,960, $20,760, and $19,030 in fiscal years 2000 through
2004, respectively. The Company also operates under lease agreements which do
not exceed one year in term. Rental expense under all operating leases amounted
to $923,752, $1,222,171 and $1,255,549 for the fiscal years 1997,1998 and 1999,
respectively.

Subsequent to fiscal 1999, the Company executed a new ten-year non-cancelable
lease agreement that is in addition to leases that were in effect as of March
28, 1999. The agreement will require future minimal rental commitments of
$230,000 per year effective upon the targeted occupation and commencement date,
which is currently estimated to be April 1, 2000.


7.  STOCK OPTIONS AND STOCK INCENTIVE PLAN

Prior to the Company's initial public offering in August 1994, key officers were
granted options to purchase outstanding shares of common stock from the majority
shareholders of the Company, and in connection with the offering agreed to
restated option agreements. The Chief Executive Officer was granted options to
purchase 135,000 shares at $4.00 per share, all of which were exercised during
fiscal 1998, and 225,000 shares at $6.35 per share. Of the 225,000 shares,
25,000 were exercised during fiscal 1998 and 25,000 were exercised during fiscal
1999. The remaining 175,000 options are currently exercisable and shall remain
in effect until the later of termination of employment or, in the event
employment is terminated by death, one year after death. The Company's Senior
Vice President of Operations was granted options to purchase 81,000 shares at
$4.69 per share. These options shall remain effective until the earlier of May
1, 2004, or the termination of employment (if employment is terminated by death,
then one year after death). Options to purchase 40,500 of the shares became
exercisable on April 1, 1997, and the remaining options will become exercisable,
on a cumulative basis, at the rate of 10% per year commencing on April 1, 1998.
None of the options have been exercised as of March 28, 1999.

Effective August 1994, and amended in August 1998, the Company adopted a stock
incentive plan (the "Plan") for key employees and directors of the Company. The
Plan is administered by the Compensation Committee of the Board of Directors,
and provides for grants of stock options, stock appreciation rights, restricted
stock awards and phantom stock. The maximum aggregate number of common shares
which may be granted under the Plan is 950,000 shares, and the maximum number of
shares that may be awarded during any calendar year may not exceed 10% of the
total number of issued and outstanding common shares of the Company. Any awards
that lapse or are canceled are available for re-grant under the terms of the
Plan. At March 28, 1999, there were 350,933 shares available for grant.

Stock option grants may be in the form of incentive stock options or
non-qualified options. Key employee options awarded under the plan vest either
20% or 25% annually from the date of the grant. Non-employee Director option
awards granted after August 4, 1998 vest on the first anniversary of the date of
the grant, and those granted before August 4, 1998 vest 25% annually from the
date of grant. Stock options awarded under the plan are at exercise prices that
equal or exceed the fair market value at the date of the grant, and any shares
not exercised lapse on the earliest of ten years from the grant date or 90 days
after termination with the Company. In February 1997, a grant of 3,000 shares of
restricted stock was issued to non-employee Directors of the Company. In May
1998, the Company awarded 2,414 shares of restricted stock to the Senior Vice
President of Operations. One-third of the restricted shares becomes exercisable
on each anniversary of the date of the award.



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

                                      -33-
<PAGE>   34

                              AMERILINK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fifty-two weeks ended March 30, 1997, March 29, 1998 and March 28, 1999

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

7.  STOCK OPTIONS AND STOCK INCENTIVE PLAN (CONTINUED)

The following table summarizes all stock option transactions under the Stock
Incentive Plan for the fiscal years ended March 30, 1997, March 29, 1998, and
March 28, 1999.


<TABLE>
<CAPTION>
                                              1997                         1998                         1999
                                      ----------------------      ----------------------      -----------------------
                                                    Weighted                    Weighted                    Weighted
                                                     Average                     Average                     Average
                                                    Exercise                    Exercise                    Exercise
                                      Options         Price       Options         Price       Options         Price
                                      -------         -----       -------         -----       -------         -----
<S>                                   <C>        <C>              <C>         <C>             <C>         <C>
Outstanding - beginning
   of year                            142,450    $     8.70        177,490    $     8.50       220,736    $    10.80
     Granted                           48,425    $     7.75         57,596    $    17.19       368,251    $    10.02
     Forfeited                        (13,385)   $     7.95             --                      (9,684)   $    15.04
     Exercised                             --                      (14,350)   $     7.98            --
                                      -------                      -------                     -------

Outstanding - end of year             177,490    $     8.50        220,736    $    10.80       579,303    $    10.23
                                      =======                      =======                     =======

Exercisable at end of year             49,125    $     8.81         71,410    $     8.84       120,190    $     9.43
                                      =======                      =======                     =======
</TABLE>


The following table summarizes information about stock options outstanding at
March 28, 1999:

<TABLE>
<CAPTION>
                                                 Options Outstanding                     Options Exercisable
                                     -----------------------------------------          ---------------------
                                                                      Weighted                       Weighted
                                                Weighted Average       Average                        Average
                                                   Remaining          Exercise                       Exercise
Range of Exercise Prices             Options    Contractual Life        Price           Options        Price
------------------------             -------    ----------------        -----           -------        -----
<S>                                  <C>        <C>                  <C>                <C>         <C>
        $7.75 - $8.25                194,216           7.7           $    8.05           71,636     $    7.95
       $10.00 - $14.06               343,101           8.3           $   10.38           40,000     $   10.00
           $19.13                     41,986           8.4           $   19.13            8,554     $   19.13
                                     -------                                            -------
                                     579,303           8.1           $   10.23          120,190     $    9.43
                                     =======                                            =======
</TABLE>

The Company follows the disclosure requirements of SFAS No. 123, "Accounting for
Stock-Based Compensation", but has elected to continue to measure compensation
expense in accordance with Accounting Principles Board Opinion No. 25, ("APB
25") "Accounting for Stock Issued to Employees". Under APB 25, no compensation
expense for stock options has been recognized because the exercise prices equal
or exceed the market price of the underlying stock on the date of grant.



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

                                      -34-
<PAGE>   35

                              AMERILINK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fifty-two weeks ended March 30, 1997, March 29, 1998 and March 28, 1999

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

7.  STOCK OPTIONS AND STOCK INCENTIVE PLAN
    (CONTINUED)

The fair value of the options granted in fiscal years 1997, 1998 and 1999 has
been estimated at the date of grant using the Black-Scholes option-pricing model
with the following assumptions:

<TABLE>
<CAPTION>
                                                      1997                  1998                  1999
                                                      ----                  ----                  ----
         <S>                                         <C>                   <C>                <C>
         Expected stock volatility                    40.0%                 70.0%                 60.0%
         Risk-free interest rate                       6.5%                  6.2%                  5.3%
         Expected lives                              5 years               5 years            4 to 5 years
         Dividend yield                                0.0%                  0.0%                  0.0%
</TABLE>

The weighted average estimated fair value of stock options granted during fiscal
1997, 1998 and 1999 was $3.53, $10.85 and $5.51 per share, respectively. Had
compensation cost for the Company's stock option and stock incentive plans been
determined based on the fair value at the grant dates of awards under those
plans, consistent with the method of SFAS No. 123, the Company's net income and
earnings per share would have been reduced to the proforma amounts indicated
below:

<TABLE>
<CAPTION>
                                                       1997          1998            1999
                                                       ----          ----            ----
<S>                          <C>                   <C>            <C>             <C>
Net income:                  As reported           $ 1,568,494    $ 4,585,568     $ 1,223,327
                             Proforma                1,544,000      4,502,000         958,572

Basic EPS                    As reported           $      0.45    $      1.20     $      0.29
                             Proforma                     0.44           1.18            0.23

Diluted EPS                  As reported           $      0.44    $      1.15     $      0.28
                             Proforma                     0.44           1.13            0.23
</TABLE>

The Black-Scholes option valuation model was developed for estimating the fair
value of traded options that have no vesting restrictions and are fully
transferable. Because option valuation models require the use of subjective
assumptions and changes in these assumptions can materially impact the fair
value of the options and the Company's options do not have the characteristics
of traded options, the option valuation models do not necessarily provide a
reliable measure of the fair value of its options.


8.  STOCK OFFERING

On October 23, 1997, the Company issued 600,000 new shares of its common stock.
The proceeds from the offering were $14,175,000 before deducting related
expenses totaling $279,443. The Company used part of the proceeds to pay in full
the outstanding balance of its unsecured revolving credit note with its
commercial bank.




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

                                      -35-
<PAGE>   36

                              AMERILINK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fifty-two weeks ended March 30, 1997, March 29, 1998 and March 28, 1999

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

9.  ACQUISITION

On February 2, 1999, the Company, through a wholly-owned subsidiary, MCC
Acquisition Corp. ("MAC"), acquired Midwest Computer Cable, Inc. ("MCCI"), a
commercial cabling installation firm headquartered in Des Moines, Iowa. Pursuant
to the Merger Agreement, MCCI was merged with and into MAC and the separate
corporate existence of MCCI ceased. Following the Merger, MAC changed its name
to "Midwest Computer Cable, Inc." and will continue to conduct business as a
wholly-owned subsidiary of the Company. The consideration delivered to the
shareholders of MCCI in connection with the acquisition consisted of $4.4
million in cash and 500,000 common shares (without par value) of the Company
valued at $3,565,000. The acquisition has been accounted for as a purchase, and
the results of operations of MCCI have been included in the consolidated results
of the Company from the date of acquisition. The excess of the total cost over
the fair value of the net assets acquired is being amortized under the
straight-line method over twenty-five years. The purchase price allocation is
subject to final adjustments which management believes will not be material.

The following unaudited pro forma data summarize the results of operations for
the fifty-two weeks ended March 29, 1998 and March 28, 1999 as if the
acquisition took place as of the beginning of the periods presented. The
unaudited pro forma data gives effect to actual operating results prior to the
acquisition and reflects pro forma adjustments for amortization of goodwill on a
straight-line basis over 25 years, and interest charges on the $4,734,452 of
cash utilized in the acquisition. In December 1998 the shareholders of MCCI
declared special one-time bonuses to three key employees in the aggregate amount
of $1,369,575 payable by issuing a total of 17,823.53 shares of MCCI common
stock. This bonus is not representative of the bonuses expected to be paid to
those key employees subsequent to the acquisition, and therefore, the unaudited
pro forma consolidated statement of income for the fifty-two weeks ended March
28, 1999 has been adjusted as if these special bonuses had not been made.
Effective July 1, 1998 MCCI elected under Subchapter S of the Internal Revenue
Code to have the shareholders recognize their proportionate share of MCCI's
taxable income on their personal income tax returns in lieu of paying corporate
income tax. Pro forma net income includes a provision for income taxes
reflecting adjustments to provide for income taxes as if MCCI were included in
AmeriLink's federal and state income tax returns, including the associated
amortization of goodwill resulting from the acquisition which is not deductible
for income tax purposes.



         PRO FORMA DATA
           (UNAUDITED)                        1998                1999
           -----------                        ----                ----

         Revenues                          $92,622,068          $72,652,772
         Net income                        $ 4,526,841          $ 1,587,358
                                           ===========          ===========

         Earnings per share:
              Basic                        $      1.05          $      0.34
                                           ===========          ===========
              Diluted                      $      1.01          $      0.33
                                           ===========          ===========

         Weighted average shares:
              Basic                          4,305,866            4,669,447
              Diluted                        4,502,089            4,759,122


These unaudited pro forma results do not purport to be indicative of the results
that would have actually been obtained if MCCI had been acquired as of the
beginning of the earliest period presented.




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

                                      -36-
<PAGE>   37

                              AMERILINK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fifty-two weeks ended March 30, 1997, March 29, 1998 and March 28, 1999

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

10. STOCK REPURCHASE PROGRAM

On September 4, 1998 the Company's Board of Directors authorized the repurchase
of up to 400,000 common shares of the Company's stock in the open market or in
privately negotiated transactions depending upon market conditions and other
factors. The Company intends to use current cash reserves to finance the share
repurchase program. Repurchased common shares will be held in the Company's
treasury and used for employee benefit plans, potential acquisitions and other
general corporate purposes. A total of 333,750 shares have been repurchased,
249,000 of which were re-issued in connection with the MCCI acquisition (see
note 9). As of March 28,1999 there were 84,570 shares held in Treasury.

11. QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of the unaudited quarterly results from operations
for the 52 weeks ended March 29, 1998, and March 28, 1999 (in thousands, except
per share amounts).

<TABLE>
<CAPTION>
                                                    First           Second            Third           Fourth
                                                   Quarter          Quarter          Quarter          Quarter
                                                  ---------        ---------        ---------        ----------
              <S>                                <C>              <C>               <C>              <C>
              Revenues:
                  Fiscal 1998                      $21,651          $21,717          $22,736          $19,542
                  Fiscal 1999                       16,649           15,759           15,669           17,134
              Gross profit:
                  Fiscal 1998                        8,302            8,338            8,791            7,599
                  Fiscal 1999                        6,482            6,041            6,252            6,924
              Income before income taxes:
                  Fiscal 1998                        2,001            2,001            2,322            1,335
                  Fiscal 1999                          717              570              536              277
              Net income:
                  Fiscal 1998                        1,181            1,212            1,389              804
                  Fiscal 1999                          444              339              321              119
              Basic EPS:
                  Fiscal 1998                      $  0.34          $  0.35          $  0.35          $  0.19
                  Fiscal 1999                      $  0.10          $  0.08          $  0.08          $  0.03
              Diluted EPS:
                  Fiscal 1998                      $  0.33          $  0.31          $  0.32          $  0.18
                  Fiscal 1999                      $  0.10          $  0.08          $  0.08          $  0.03
</TABLE>


12. SUBSEQUENT EVENT - PLANNED TRANSACTION

On May 21, 1999, AmeriLink Corporation and Tandy Corporation ("Tandy") each
announced their signing of a definitive merger agreement (the "Merger"). Under
terms of the Merger, Tandy will acquire 100% of AmeriLink's common stock at an
exchange ratio designed to reflect $15.60 per share of AmeriLink's stock in a
tax-free exchange for Tandy stock. If the average closing price of Tandy's
common shares falls below a specified amount for a twenty-day trading period
ending just before the merger is completed, AmeriLink shareholders will receive
$14.50 cash for every AmeriLink common share they own instead of Tandy stock.
Following the merger, AmeriLink will continue its operations as a wholly owned
subsidiary of Tandy. The Merger has been approved by the Board of Directors of
each Company and is subject to usual and customary closing conditions, including
regulatory and shareholder approval. It is currently anticipated that the
transaction will close in late August 1999.





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

                                      -37-
<PAGE>   38

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

         Not Applicable.


                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         The following table sets forth the names and ages of the directors and
executive officers of the Company as well as offices held by such persons. A
summary of the background and experience of each of these individuals is set
forth after the table. The Board of Directors is divided into two classes of
three members each. The members of the two classes are elected to serve for
staggered terms of two years. There are no family relationships among the
directors or executive officers of the Company.


<TABLE>
<CAPTION>
                                                Director or Executive
         Name                      Age              Officer Since                      Position
         ----                      ---              -------------                      --------
       <S>                         <C>          <C>                          <C>
       Larry R. Linhart             53                   1984                Chairman of the Board of Directors,
                                                                             President and Chief Executive Officer

       Joseph L. Govern             41                   1986                Senior Vice President - Operations

       Robert B. Horn               50                   1997                Vice President - Human Resources

       James W. Brittan             40                   1994                Treasurer and Vice President - Finance

       Robert L. Powelson           57                   1981                Director

       Robert D. Setzer             51                   1998                Director

       William H. Largent           43                   1994                Director

       Richard W. Rubenstein        55                   1997                Director

       George R. Manser             68                   1994                Director
</TABLE>

         Larry R. Linhart is the Chairman of the Board of Directors, President
and Chief Executive Officer of the Company. Mr. Linhart has been the President,
Treasurer and Chief Executive Officer of AmeriLink Corp. ("The Operating
Company") since 1986 and a Director of the Operating Company since 1984. From
1984 to 1986, Mr. Linhart served as Executive Vice President and General Counsel
of the Operating Company. Mr. Linhart was previously a partner in the Columbus
law firm of Murphey, Young and Smith (currently, Squire, Sanders & Dempsey),
which he joined in 1971.

         Joseph L. Govern is the Senior Vice President - Operations of the
Corporation. Mr. Govern has been Senior Vice President - Operations of the
Operating Company since 1992. From 1991 to 1992, Mr. Govern served as the
Operating Company's Vice President of Finance and Director of Operations. From
1986 to 1991, Mr. Govern was the Vice President of Finance and Administration
for the Operating Company. He is a Certified Public Accountant and from 1980
through 1985 was employed by Coopers & Lybrand.

         Robert B. Horn is the Vice President - Human Resources of the
Corporation. Mr. Horn was hired as Vice President Human Resources in February,
1997. From 1993 to 1997, Mr. Horn was the Vice President of Human Resources of
Damon's International, Inc., a 110 unit casual dining restaurant chain. From
1985 to 1993, Mr. Horn owned and operated five restaurants, co-owned and
operated an international meeting planning firm and served as a



                                      -38-
<PAGE>   39

management development consultant to various small companies and trade
associations. From 1974 to 1985, Mr. Horn was employed by RAX Restaurants, Inc.
and served as Executive Vice President - Operations.

         James W. Brittan is the Treasurer and Vice President - Finance of the
Corporation. Mr. Brittan has been Treasurer and Vice President - Finance of the
Operating Company since May, 1994. Mr. Brittan served as the Operating Company's
Controller from 1986 to May, 1994. From 1984 to 1986, Mr. Brittan was employed
by The Limited, Inc., a national fashion retailer, as Senior Accountant. Mr.
Brittan is a Certified Public Accountant and from 1981 through 1984 was employed
by Coopers & Lybrand.

         Robert L. Powelson was a co-founder of the Operating Company with E.
Len Gibson. From 1987 to 1994, Mr. Powelson served as a consultant for the
Operating Company.

         Robert D. Setzer is currently the Chairman of the Board of Directors,
President and Chief Executive Officer of Capital-Plus, Inc. From 1989 to 1991
Mr. Setzer was President and a Director of Liebert Corporation.

         William H. Largent is the Senior Vice President - Operations and Chief
Financial Officer of Applied Innovation, Inc. Previously Mr. Largent was the
Chief Financial Officer and a Director of Metatec, Corporation from 1993 to
1997, and was President of Liebert Capital Management Corporation from 1990 to
1993.

         Richard W. Rubenstein is a Partner of Squire, Sanders & Dempsey, L.L.P.
From 1992 until 1994 Mr. Rubenstein was a Partner of Schwartz, Kelm, Warren &
Rubenstein.

         George R. Manser is currently Chairman of the Board of Directors of
UniGlobe Travel (Capital Cities) Inc., a travel agency franchiser; Director of
Corporate Finance of UniGlobe Travel USA since 1997; Advisory Director to J.C.
Bradford & Co. since 1994; Director of Cardinal Health, Inc., a wholesale
pharmaceutical distributor; Director of State Auto Financial Corporation, an
insurance holding company; Director of Hallmark Financial Services, Inc., a
nonstandard, Texas-only, auto insurer; Director of Checkfree Corporation, a
business facilitating electronic commerce and prior to 1994, Chairman of North
American National Corporation.







                                      -39-
<PAGE>   40

ITEM 11. EXECUTIVE COMPENSATION.

         The following table sets forth all cash compensation paid or accrued by
the Company for services rendered to the Company and its subsidiaries in all
capacities during the fiscal years ended March 30, 1997, March 29, 1998 and
March 28, 1999 for the chief executive officer of the Company and other
executive officers (together, the "Named Executives"), whose total salary and
bonus for the fiscal year ended March 29, 1998 exceeded $100,000.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                                          Long Term Compensation
                                                                   Annual Compensation                             Awards
                                                     ---------------------------------------------     ----------------------------
                                                                                            Other       Restricted         Stock
              Name and                Fiscal                                               Annual       Stock Award       Options
         Principal Position            Year          Salary ($)          Bonus ($)        Comp.(1)          ($)         Granted (#)
         ------------------            ----          ---------           --------         -------       -----------     ----------
         <S>                           <C>           <C>                 <C>             <C>            <C>             <C>
         Larry R. Linhart,             1999          $ 377,145           $  14,154       $   2,400       $   -0-         200,000
         President and Chief           1998            372,673             115,229           4,750           -0-             -0-
         Executive Officer             1997            361,818             105,089           1,365           -0-             -0-

         Joseph L. Govern,             1999          $ 138,000           $   5,000       $   1,400       $   -0-           5,208
         Senior Vice President -       1998            115,000              86,250           2,980        40,435(2)          -0-
         Operations                    1997            105,000              37,991           1,718           -0-             -0-

         James W. Brittan,             1999          $  80,000           $   5,000       $   1,400       $   -0-           4,167
         Vice President -              1998             80,000              60,692           2,886           -0-           5,000
         Finance, Treasurer            1997             73,500              15,193           1,428           -0-           5,000

         Robert B. Horn,               1999          $  75,000           $   5,000       $     530       $   -0-          10,000
         Vice President -              1998             75,000              37,500             -0-           -0-           2,500
         Human Resources               1997              (3)
</TABLE>
----------
(1)  Represents the Named Executive's share of the Operating Company's
     contribution under the Operating Company's 401(k).

(2)  Represents 2,414 restricted shares granted to Mr. Govern on May 15, 1998,
     as part of his fiscal 1998 bonus. The shares are subject to annual vesting
     of 805 shares on May 15, 1999, 805 shares on May 15, 2000, and 804 shares
     on May 15, 2001, contingent upon Mr. Govern's continued employment through
     the years then ended.

(3)  Mr. Horn joined the Company in February 1997 and earned cash compensation
     of $11,500 during fiscal year 1997.







                                      -40-
<PAGE>   41

STOCK OPTION GRANTS IN FISCAL 1999

         The following table sets forth information regarding stock option
grants to the Named Executives during the 1999 fiscal year. All options were
awarded at exercise prices that equal or exceed the market price of the
Corporation's stock on the date of grant.


<TABLE>
<CAPTION>
                                                                                          Potential Realizable Value
                          Number           % of Total                                       at Assumed Annual Rates
                       of Securities     Options Granted                                  of Stock Price Appreciation
                        Underlying        to Employees      Exercise                            for Option Term
                          Options           in Fiscal         Price          Expiration         ---------------
       Name             Granted (#)           Year          ($/Share)           Date          5% ($)       10% ($)
       ----             -----------           ----          ---------           ----          ------       -------
<S>                     <C>              <C>               <C>               <C>          <C>            <C>
Larry R. Linhart         50,000              13.6%         $   11.000        August 3,        151,955      335,781
                                                                                2003

                        150,000              40.7%         $   10.000        August 3,        943,342    2,390,614
                                                                                2008

Joseph L. Govern          5,208 (1)           1.4%         $   14.063        August 20,        16,508       35,701
                                                                                2002

James W. Brittan          4,167 (1)           1.1%         $   14.063        August 20,        13,208       28,565
                                                                                2002

Robert B. Horn           10,000               2.7%         $   10.000         August 3,        62,889      159,374
                                                                                2008
</TABLE>
----------
(1) Shares became fully exercisable on May 26, 1999.


AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE

         The following table sets forth certain information concerning stock
options exercised during fiscal year 1999 and the value of unexercised stock
options held as of March 28,1999, by the Named Executives.

<TABLE>
<CAPTION>
                                                                                          Value of Unexercised
                         Shares                           Unexercised Options             In-The-Money Options
                        Acquired                        at Fiscal Year End (#)          at Fiscal Year End ($)(1)
      Name and             on            Value          ----------------------          -------------------------
 Principal Position   Exercise (#)   Realized ($)     Exercisable    Unexercisable     Exercisable   Unexercisable
 ------------------   ------------   ------------     -----------    -------------     -----------   -------------
<S>                      <C>             <C>             <C>              <C>             <C>            <C> <C>
Larry R. Linhart         25,000          $ -0-           215,000          210,000         $135,625       $  -0-

Joseph L. Govern           -0-             -0-            48,600           37,608          118,341        78,894

James W. Brittan           -0-             -0-            10,500           15,667             -0-           -0-

Robert B. Horn             -0-             -0-             3,500           16,500             -0-           -0-
</TABLE>
----------
(1)  Amount shown represents the difference between the fair market value of the
     Common Shares underlying the options based on the closing price of the
     Common Shares of $7.125 on March 26, 1999, the last trading day prior to
     the end of fiscal 1999, and the exercise price of the options.


                                      -41-
<PAGE>   42

EMPLOYMENT AGREEMENTS

         Larry R. Linhart. Larry R. Linhart has entered into an employment
agreement with the Corporation pursuant to which he has agreed to serve as
Chairman of the Board of Directors, President and Chief Executive Officer of the
Corporation. In August 1998 the Company amended the existing employment
agreement and extended Mr. Linhart's employment through March 31, 2008. Mr.
Linhart receives a base annual salary, subject to annual cost of living
adjustments, which for fiscal 1999 was $377,145. Mr. Linhart also receives
incentive compensation based upon the operating results of the Company which may
be payable in a combination of cash, deferred compensation, and restricted
stock. Mr. Linhart received cash incentive compensation for fiscal 1999 in the
amount of $14,154.

         In the event Mr. Linhart's employment is terminated for cause, the
Corporation will pay Mr. Linhart the compensation (including a pro rata share of
any incentive compensation) and benefits due under his employment agreement
through the date of such termination. In the event Mr. Linhart's employment is
terminated by the Corporation other than for cause, disability or death, or if
Mr. Linhart voluntarily terminates his employment with the Corporation for good
reason, all restricted stock held will be deemed fully vested, and all incentive
bonus compensation remaining unpaid shall be payable in cash.

         Pursuant to the August 1998 amendment to Mr. Linhart's employment
agreement, the Corporation granted to Mr. Linhart the right to purchase 200,000
Common Shares subject to the terms and conditions of the Corporation's 1994
Stock Incentive Plan. Mr. Linhart was granted 50,000 Incentive Stock Options at
a price equal to 110% of the fair market value on the day of the grant ($11.00
per share) and 150,000 non-qualified Options equal to the fair market value at
the time of grant. The Incentive Stock Options expire five years from the date
of grant and the non-qualified Options expire ten years from the date of grant.
All options vest and become exercisable ratably over the four successive years
following the grant date.

         Joseph L. Govern. The Operating Company and Joseph L. Govern are
parties to an employment agreement pursuant to which Mr. Govern is serving as
Senior Vice President - Operations of the Operating Company. The employment
agreement renews every two years and may be terminated by the Operating Company
for cause or in the event of Mr. Govern's disability. In the event the
Corporation terminates Mr. Govern's employment other than for cause (as defined
in the agreement), the Corporation will be obligated to pay Mr. Govern his base
salary over the remaining term of his employment. Mr. Govern's employment
agreement contains certain non-competition and non-solicitation provisions,
which prohibit him from competing with the Operating Company during his
employment and for a period of three years after termination of his employment.
Mr. Govern's salary for fiscal 1999 was $138,000. With respect to fiscal 1999,
Mr. Govern was eligible to receive a bonus, payable in cash and restricted
stock, based upon the operating profitability of the Company. Mr. Govern
received cash incentive compensation for fiscal 1999 in the amount of $5,000.

COMPENSATION OF DIRECTORS

         In connection with the consummation of the Corporation's initial public
offering of its Common Shares in fiscal 1995, the Corporation, pursuant to its
1994 Stock Incentive Plan, granted to each non-employee Director an option to
purchase 1,875 Common Shares at $8.00 per share. Under the original provisions
of The Corporation's 1994 Stock Incentive Plan, the Corporation granted to each
non-employee Director on the date of each year's annual meeting of shareholders
an option to purchase that number of Common Shares equal to the lesser of (i)
2,500, and (ii) the quotient derived from dividing $15,000 by the fair market
value of one Common Share on the date the option is granted. Each option vests
or will vest over a four-year period and has or will have an exercise price
equal to the market price at the time of grant. In accordance with the
amendments to the 1994 Stock Incentive Plan, the Corporation granted to each
non-employee Director on August 3, 1998 options to purchase 2,000 Common Shares.
In addition, on February 4, 1997, the Corporation granted 1,500 Common Shares
each to William H. Largent and George R. Manser (or a total of 3,000 Common
Shares), as awards of restricted stock, subject to the condition that such
restricted stock awards shall each become exercisable as to 500 Common Shares on
each of the next three anniversaries of the grant date, except that if the
grantee shall cease to be a Director at any time, any unvested portion of such
restricted stock awards shall be subject to forfeiture, and subject to certain
other terms and conditions contained in certain Restricted Stock Award
Agreements between the Corporation and each such grantee. Non-employee Directors
also receive reimbursement for travel expenses incurred in connection with
attending meetings. Directors who are employees do not receive any separate
compensation for their services as Directors. The



                                      -42-
<PAGE>   43

Corporation has agreed to provide health insurance benefits to Messrs. Powelson
and Gibson on the same terms as provided to all other participants in the
Corporation's health care plan.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         Mr. Linhart is Chairman of the Board of Directors, President and Chief
Executive Officer of the Corporation and Mr. Powelson is Secretary of the
Corporation. Mr. Manser is not an officer or employee of the Corporation. Mr.
Linhart has and intends to continue to abstain from participating in any actions
of the Compensation Committee affecting his compensation. Mr. Powelson is not
compensated for his services as Secretary of the Corporation.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The following table sets forth information regarding the beneficial
ownership of Common Shares as of May 25, 1999, by each person known by the
Corporation to own beneficially more than five percent of the Corporation's
outstanding Common Shares, by each Nominee and Continuing Director, by each
executive officer named in the Summary Compensation table contained in
"Executive Compensation," and by all Directors and executive officers as a
group. As of May 25, 1999, there were 4,427,874 Common Shares issued and
outstanding (net of 106,470 Common shares held in treasury) and an aggregate of
382,377 Common Shares subject to options exercisable within 60 days thereafter.
Except as otherwise noted, each person named in the table has sole voting and
investment power with respect to all shares shown as beneficially owned by him.

<TABLE>
<CAPTION>
                                                                                Percent of Shares
               Name of                      Shares Beneficially                   Beneficially
          Beneficial Owner                 Owned at May 18, 1999                      Owned
          ----------------                 ---------------------                      -----
  <S>                                      <C>                                  <C>
          Larry R. Linhart                         638,808  (1)                       13.8%

         Robert L. Powelson                        760,631  (2)                       17.2%

            E. Len Gibson                          616,871  (3)                       13.9%

          Joseph L. Govern                          64,322  (4)                        1.4%

          James W. Brittan                          14,667  (5)                         *

           Robert B. Horn                           12,500  (6)                         *

         William H. Largent                          7,945  (2)                         *

     Richard W. Rubenstein, Esq.                       396  (7)                         *

          Robert D. Setzer                            -0-                               *

          George R. Manser                          14,065  (2)                         *

     All Directors and Executive                 2,130,205  (1)(2)(3)                 46.3%
  Officers as a group (10 Persons)                          (4)(5)(6)(7)
</TABLE>
----------
*    Represents less than 1%.

(1)  Share amount shown includes the following exercisable options to purchase
     215,000 Common Shares: (i) exercisable options to purchase 175,000 Common
     Shares pursuant to the 1991 Options and (ii) exercisable options to
     purchase 40,000 Common Shares, representing 80% of the 50,000 Common Shares
     subject to the options



                                      -43-
<PAGE>   44

     granted in fiscal 1995 to Mr. Linhart pursuant to his employment agreement.
     See "Executive Compensation -- Aggregated Option Exercises and Fiscal
     Year-End Option Value Table" and "Executive Compensation -- Employment
     Agreements."

(2)  Share amount shown includes exercisable options to purchase 4,445 Common
     Shares, representing the exercisable portion of the 8,469 Common Shares
     subject to options granted to each non-employee Director of the
     Corporation. See "Compensation of Directors."

(3)  Share amount shown includes exercisable options to purchase 5,685 Common
     Shares. In conjunction with Mr. Gibson's decision not to stand for
     re-election, the Board elected to vest 100% of Mr. Gibson's options granted
     through 1996 in consideration of his past services to the Company, and to
     forfeit the 784 shares granted in August 1997.

(4)  Share amount shown amount shown includes (1) 2,414 shares of restricted
     stock, granted as part of Mr. Govern's fiscal year 1998 bonus (2)
     exercisable options to purchase 56,700 Common Shares, representing 70% of
     the 81,000 Common Shares subject to the options granted in fiscal 1995, and
     (3) exercisable options to purchase 5,208 Common Shares granted in fiscal
     1999. See "Executive Compensation - Aggregated Option Exercises and Fiscal
     Year-End Option Value Table" and "Executive Compensation - Employment
     Agreements".

(5)  Share amount shown includes exercisable options to purchase 10,500 Common
     Shares, representing the exercisable portion of the 26,167 Common Shares
     subject to options granted to Mr. Brittan. See "Executive Compensation --
     Aggregated Option Exercises and Fiscal Year-End Option Value Table".

(6)  Share amount shown includes (1) 2,000 shares owned by family members and
     (2) exercisable options to purchase 3,500 Common Shares, representing the
     exercisable portion of the 20,000 Common Shares subject to options granted
     to Mr. Horn. See "Executive Compensation -- Aggregated Option Exercises and
     Fiscal Year-End Option Value Table".

(7)  Share amount shown includes exercisable options to purchase 196 Common
     Shares, representing the exercisable portion of 2,784 Common Shares subject
     to options. See "Compensation of Directors."


ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Not Applicable








                                      -44-
<PAGE>   45

                                     PART IV


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


     (a) (1) FINANCIAL STATEMENTS.

         The following consolidated financial statements and notes of the
         Company, together with the report thereon of Ernst & Young LLP, appear
         in this Form 10-K:

         Report of Independent Auditors
         Consolidated Balance Sheets as of March 29, 1998, and March 28, 1999
         Consolidated Statements of Income for the 52 weeks ended March 30,
            1997, March 29, 1998, and March 28, 1999
         Consolidated Statements of Changes in Shareholders' Equity for the 52
            weeks ended March 30, 1997, March 29, 1998, and March 28, 1999
         Consolidated Statements of Cash Flows for the 52 weeks ended March 30,
            1997, March 29, 1998, and March 28, 1999
         Notes to Consolidated Financial Statements

     (a) (2) FINANCIAL STATEMENT SCHEDULES.

         All schedules have been omitted because they are either not applicable,
         not required, or the required information is provided in the financial
         statements or notes thereto.

     (a) (3) SEE INDEX TO EXHIBITS ON PAGE 46

     (b) REPORTS ON FORM 8-K.

         On April 13, 1999 the Company filed a current report on Form 8-K
         reporting under Item 2, Acquisition or Disposition of Assets, that on
         February 2, 1999, the Company, through a wholly-owned subsidiary,
         acquired Midwest Computer Cable, Inc. ,a commercial cabling
         installation firm headquartered in Des Moines, Iowa.









                                      -45-
<PAGE>   46

                                INDEX TO EXHIBITS


     EXHIBIT NO.                         DESCRIPTION
     -----------                         -----------
       2.1                 Agreement and Plan of Merger, dated February 2, 1999,
                           among Larry Kendall, Dayton Kendall, Linda Kendall,
                           Midwest Computer Cable, Inc., AmeriLink Corporation
                           and MCC Acquisition Corp., a wholly-owned subsidiary
                           of AmeriLink Corporation, incorporated by reference
                           herein to Exhibit 2 to the Company's December 27,
                           1998 quarterly report Form 10-Q dated February 2,
                           1999 which was filed on February 9, 1999.

       3.1                 Amended Articles of Incorporation.*

       3.2                 Code of Regulations.*

       4.1                 Specimen Certificate for Common Shares.*

       4.2                 Bank Loan Agreement and Promissory Note dated April
                           5, 1999 between AmeriLink Corporation and KeyBank
                           National Association **

       10.1                Form of 1994 Stock Incentive Plan (incorporated by
                           reference herein to the registrant's registration
                           statement on form S-1 file no. 33-79832 and to
                           Exhibit A to the registrant's 1998 Proxy Statement
                           dated July 6, 1998 which was filed on July 7, 1998).

       10.2                Executive Employment Agreement between Larry R.
                           Linhart and Registrant including amendments **

       10.3                Employment Agreement between Joseph L. Govern and
                           Operating Company, dated October 1, 1991.*

       10.4                Form of Joseph L. Govern Stock Option Agreement.*

       10.5                Form of Shareholders' Agreement among the Principal
                           Shareholders and Registrant.*

       10.9                Stock Purchase and Close Corporation Agreement as
                           amended among the Principal Shareholders and the
                           Operating Company (without exhibits).*

       10.10               Restricted Stock Award Agreement between AmeriLink
                           Corporation and William H. Largent and George Manser
                           (Incorporated by reference to Exhibit 10.10 to the
                           Company's Annual Report on Form 10-K for the fiscal
                           year ended March 30, 1997).

       10.12               Employment Agreement of Larry Kendall, dated February
                           2, 1999 incorporated by reference herein to Exhibit
                           10 to the Company's December 27, 1998 quarterly
                           report Form 10-Q dated February 2, 1999 which was
                           filed on February 9, 1999

       11.1                Incorporated by reference to Page 30 of the 1999
                           Financial Statements beginning on page 22 herein.

       21.1                Subsidiaries of the registrant.**

       23.1                Consent of Ernst & Young LLP.**

       27.1                Financial Data Schedule. **

*    Incorporated by reference from the registrant's registration statement on
     form S-1, file no. 33-79832.

**   Filed herewith.



                                      -46-
<PAGE>   47


                                   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.

         Date:  June 1, 1999                              AMERILINK CORPORATION

         /s/  Larry R. Linhart
         ---------------------
         By Larry R. Linhart, 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>
          Signature                                Title                                      Date
          ---------                                -----                                      ----
<S>                                 <C>                                                 <C>
/s/ Larry R. Linhart                Chairman of the Board, President and                June 1, 1999
---------------------------         and Chief Executive Officer (Principal
Larry R. Linhart                    Executive Officer)


/s/ James W. Brittan                Treasurer and Vice President Finance                June 1, 1999
---------------------------         (Principal Financial and Accounting
James W. Brittan                    Officer)


/s/ Robert Powelson                 Secretary and Director                              June 1, 1999
---------------------------
Robert Powelson


/s/ William H. Largent              Director                                            June 1, 1999
---------------------------
William H. Largent


/s/ Richard W. Rubenstein           Director                                            June 1, 1999
---------------------------
Richard W. Rubenstein
</TABLE>








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