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                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
 
                                  FORM 10-KSB
 
(MARK ONE)
 
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934 FOR THE FISCAL YEAR ENDED JUNE 30, 1998
                                       OR
 
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934
 
                            COMMISSION FILE NO. 1-13272
 
                                 OMNIAMERICA, INC.
                    (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
                  (Name of Small Business Issuer in Its Charter)
 
<TABLE>
<S>                                            <C>
                   DELAWARE                                      85-0421409
       (State or Other Jurisdiction of              (I.R.S. Employer Identification No.)
        Incorporation or Organization)
           12001 STATE HWY 14 NORTH                                87008
           CEDAR CREST, NEW MEXICO                               (Zip Code)
   (Address of Principal Executive Offices)
</TABLE>
 
                   Issuer's Telephone Number: (505) 281-2197
 
         Securities Registered Under Section 12(b) of the Exchange Act:
 
<TABLE>
<CAPTION>
                                                           NAME OF EACH EXCHANGE
             TITLE OF EACH CLASS                            ON WHICH REGISTERED
             -------------------                           ---------------------
<S>                                            <C>
                     None                                           None
</TABLE>
 
      Securities Registered Pursuant to Section 12(g) of the Exchange Act:
 
                                 TITLE OF CLASS
 
                          Common Stock, $.01 Par Value
 
     Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 [ ]
 
     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this Form 10-KSB, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.  [ ]
 
     The issuer's revenues for its most recent fiscal year were $62,799,071.
 
     The approximate aggregate market value of voting stock held by
non-affiliates, computed by reference to the average bid and asked prices of
such stock as of September 16, 1998, was $138.6 million. The number of shares of
common stock outstanding as of September 16, 1998, was 15,096,360.
 
     Transitional Small Business Disclosure Format.  Yes [ ]  No [X]
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
     None.
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                                     PART I
 
ITEM 1. DESCRIPTION OF BUSINESS
 
FORWARD-LOOKING STATEMENTS
 
     Statements contained in this Annual Report on Form 10-KSB that are not
historical facts are forward-looking statements ("forward-looking statements")
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which are intended to be covered by the safe
harbors created by those sections. In addition, such forward-looking statements
may be contained in filings made by the Company with the Securities and Exchange
Commission, or press releases or oral statements made from time to time by or
with the approval of an authorized executive officer of the Company. Such
forward-looking statements are necessarily estimates reflecting the best
judgment of the Company's management based upon current information and involve
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company, or industry results,
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such risks,
uncertainties and other factors include, but are not limited to, the following
possibilities: increasing competition for tower sites and leasing customers,
increasing difficulty in obtaining zoning and construction permits, difficulties
in integrating acquisitions, changes in regulatory requirements, changes in
telecommunications transmission technology, changes in outsourcing plans of
telecommunications transmission companies and factors inherent in tower
ownership and construction, such as the availability of experienced construction
crews and damage and delays caused by inclement weather. In addition, other
factors which may affect forward-looking statements include those set forth
herein under the caption "ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- Cautionary Statements" and
appearing elsewhere in this Annual Report and appearing from time to time in
filings made by the Company with the Securities and Exchange Commission. These
risks, uncertainties and other factors should not be construed as exhaustive and
the Company does not undertake, and specifically disclaims any obligation, to
update any forward-looking statements to reflect occurrences or unanticipated
events or circumstances after the date of such statements.
 
GENERAL
 
     OmniAmerica, Inc. (formerly Specialty Teleconstructors, Inc.), a Delaware
corporation (together with its subsidiaries, the "Company"), is a leading
provider of wireless communications services and broadcast tower services to the
United States communications industry. The Company's tower services include
owning, leasing, managing and developing multi-use telecommunications sites for
radio and television broadcasting (including high definition television
("HDTV")), paging, cellular, personal communications services ("PCS") and other
wireless technologies; providing wireless infrastructure building and
implementation services primarily for providers of wireless communication
services in the United States; and manufacturing and selling wireless
infrastructure components used in the construction and maintenance of wireless
communication transmitting and receiving facilities. See "-- The Company's Tower
Services."
 
     Strategically, management intends to position the Company to take advantage
of increasing demand from wireless providers and broadcasters for tower space by
expanding its network of tower sites, either owned, leased or managed, and
leasing space to multiple tenants. Adding customers to an existing tower does
not result in materially increased operating expenses for the Company. In
addition, due to the specific configurations required for transmission networks,
significant capital expenditures to install or relocate transmission equipment
and complex regulatory requirements, wireless providers and broadcasters are
generally reluctant to change tower locations. These factors allow the Company
to take advantage of low fixed costs while providing a churn-resistant,
recurring revenue stream by co-locating multiple tenants on its towers. As a
result of the April 23, 1998 merger (the "April Merger") of a wholly-owned
subsidiary of the Company with OmniAmerica Holdings Corporation, a Delaware
corporation ("OmniAmerica Holdings"), and subsequent acquisitions, the Company
now owns or has under definitive acquisition contract over 200 wireless and
broadcast towers providing leased space to third parties. In addition, the
Company has entered into written or
 
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oral commitments and/or currently is conducting site acquisition or construction
related activities with respect to over 600 new wireless and broadcast towers to
be constructed by the Company pursuant to build-to-suit arrangements or for the
Company's own account.
 
     Concurrent with the implementation of this strategy, the Company will
continue to capitalize on its reputation for quality, on-time construction and
implementation services by building towers for third-party owners, and, in
addition, will continue to manufacture and sell its line of wireless
infrastructure components. During the fiscal year ended June 30, 1998, the
Company's revenues, which include the revenues of OmniAmerica Holdings and its
subsidiaries' tower ownership and leasing services from April 23, 1998, were
approximately $62.8 million, with wireless infrastructure building and
implementation services accounting for approximately 84.5%, sales of wireless
infrastructure components accounting for approximately 13.5% and tower ownership
and leasing services accounting for approximately 2.0%.
 
     The wireless communications industry has changed dramatically in the last
decade, as the rapid development of technological advances, including the advent
of digital technology, and increased licensing of band space by the Federal
Communications Commission ("FCC") have resulted in a proliferation of cellular
telephones, paging devices and similar equipment for business and personal use.
This burgeoning use of wireless communications has resulted in an increased
demand for transmission antennas, which generally results in additional demand
for transmission towers. Meanwhile, local authorities are increasingly seeking
by zoning restrictions and other means to limit the number of towers erected,
particularly in densely populated areas, augmenting a trend toward co-location
of multiple tenants on transmission towers.
 
     Many wireless carriers, which traditionally have owned and operated their
own transmission tower assets, are responding to industry changes by evaluating
the benefits of entering into "build-to-suit" arrangements, in which an
independent tower company builds a group of tower sites which are then leased to
the wireless carrier. The independent tower company owns, leases and operates
the wireless tower infrastructure, often with multiple carriers as tenants on a
given tower. The build-to-suit program offers an end-to-end solution to wireless
carriers and is designed to reduce carriers' capital expenditures and overhead
associated with the traditional methods of acquiring, owning and managing
wireless tower networks. In addition, by entering into a build-to-suit program
involving co-location, a wireless carrier can be perceived as responding to
community concerns regarding tower proliferation, thus improving its community
image. Currently, several wireless carriers have either entered into, or are
negotiating toward entering into, build-to-suit agreements with the Company.
However, there can be no assurance that the Company will successfully enter into
additional significant build-to-suit agreements with any wireless carrier or
that it will be able to reach definitive agreements with the owners of
attractive sites or develop the sites in a cost-effective manner.
 
     Wireless carriers also are considering the benefits of outsourcing their
wireless tower infrastructure in order to raise capital and reduce operating
leverage. A recent example of outsourcing by a wireless carrier is the Company's
acquisition of 52 towers and the exclusive right to manage an additional 3 sites
from Arch Communications Group, Inc. ("Arch") with an arrangement allowing the
Company to acquire up to an additional 80 towers from Arch. See "-- History."
The Company intends to continue the pursuit of other carrier outsourcing
opportunities and acquire additional towers, however, there can be no assurance
that the Company will successfully enter into additional transactions to acquire
outsourced towers.
 
     Many broadcasters face an FCC mandate requiring the introduction of HDTV,
which requires digital technology, beginning in 1999. In order to comply,
station owners subject to the mandate must outlay significant capital to install
new equipment capable of transmitting digital signals, while maintaining
existing analog-related structures and services. The digital equipment will
generally require more tower space than the existing analog transmission
equipment and, in some instances, stronger and taller towers will be required.
As a result, broadcasters owning their own towers may require that their tower
tenants relocate. Alternatively, broadcasters may seek to place digital
transmission equipment on leased tower space. It is anticipated that the
erection, modification and replacement of broadcast towers will accelerate in
response to demand from broadcasters that are required to install digital
television transmission equipment. As a result of the April Merger, the Company
owns a 33 1/3% equity interest in Kline Iron & Steel Co., Inc. ("Kline"), a
diversified steel fabricator that also fabricates broadcasting towers. The
Company is working with broadcasters to
 
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outsource their tower projects, thereby offering broadcasters an end-to-end
solution designed to reduce capital expenditures while allowing them to conform
to government mandates to deploy digital television signals on a timely basis.
However, it is possible that technological advances in antenna design may
mitigate the need for new transmission towers in the future.
 
     As the Company focuses on its strategy of leasing tower space to wireless
providers and broadcasters by building, buying and managing towers to expand its
own tower network, revenues and earnings from its third-party installation
services and its wireless infrastructure components operations are likely to
decline. Management believes that the decline in revenues and earnings from its
installation services and its components operations will be mitigated over time
by the recurring revenue stream expected from its tower leasing operations.
 
COMPANY STRUCTURE
 
     The Company is a holding company which conducts its business and operations
primarily through its subsidiaries. The Company's principal operating
subsidiaries include OmniAmerica Towers, Inc., a Delaware corporation (formerly
known as OmniAmerica, Inc.), OmniAmerica Development Corp., a Nevada
corporation, OmniAmerica Holdings Corporation, a Delaware corporation, South
Atlantic Tower Corporation, a Delaware corporation, Specialty Constructors,
Inc., a New Mexico corporation, Specialty Constructors Coatings, Inc., a Nevada
corporation, Specialty Management, Inc., a Nevada corporation, OmniTower, Ltd.,
a Florida limited partnership, Microwave Tower Service, Inc., an Oregon
corporation, Novak & Lackey Construction Co., Inc., an Oklahoma corporation, and
Specialty Combined Resources, Inc., a Texas corporation. The Company's
headquarters for its wireless infrastructure building and implementation
services are located in Cedar Crest, New Mexico, approximately seven miles from
Albuquerque, New Mexico. The Company's headquarters for its tower ownership and
leasing services are located in Independence, Ohio (a suburb of Cleveland,
Ohio). The Company also maintains 26 strategically-placed regional offices
located throughout the United States. See "ITEM 2. DESCRIPTION OF PROPERTIES"
 
HISTORY
 
     The Company was incorporated in April 1994 under the name "Specialty
Teleconstructors, Inc." for the purpose of acquiring all of the issued and
outstanding shares of capital stock of Michael R. Budagher Specialty
Constructors, Inc. (now named Specialty Constructors, Inc.), whose primary
business involved wireless infrastructure building and implementation services
related to the build-out and expansion of cellular telephone and paging networks
in the U.S. On September 14, 1998, the Company, pursuant to a merger (the
"Reincorporation Merger") with and into a wholly-owned subsidiary of the
Company, changed its name from "Specialty Teleconstructors, Inc." to
"OmniAmerica, Inc." and changed its state of incorporation from Nevada to
Delaware.
 
     In the last three years, the Company has consummated the following material
acquisitions of assets or companies, the largest and most strategically
important of which was the April Merger.
 
     On July 9, 1998, the Company, through a wholly-owned subsidiary, acquired
substantially all the assets of Teleforce, LLC ("Teleforce"), a California
limited liability company providing site acquisition services for the wireless
communications industry, in exchange for $640,000 and 81,270 shares of the
Company's common stock, par value $.01 per share (the "Company Common Stock").
 
     On April 10, 1998, OmniAmerica Towers, Inc. entered into an Asset Purchase
and Sale Agreement with certain wholly-owned subsidiaries of Arch pursuant to
which the Company will acquire substantially all of the telecommunications sites
owned by Arch. The Company is purchasing a portion of such sites at each of
three separate closings. Pursuant to the first closing on June 26, 1998 (the
"Arch First Closing"), the Company acquired a total of 52 towers on 46 sites,
and the exclusive right to manage an additional 3 sites. The Company paid Arch
approximately $13,139,000 for the sites acquired pursuant to the Arch First
Closing. Pursuant to the second closing, which is scheduled to take place on
September 29, 1998 (the "Arch Second Closing"), the Company will acquire
approximately 62 towers on 59 sites, and the exclusive right to manage an
additional 7 sites. The purchase price for the sites acquired pursuant to the
Arch Second Closing is estimated to be
 
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approximately $20,000,000. A third and final closing is expected to take place
during the last calendar quarter of 1998. The Company, if it so elects, could
acquire approximately 18 additional towers pursuant to the third closing.
 
     On April 23, 1998, the Company consummated the April Merger pursuant to an
Amended and Restated Agreement and Plan of Merger among the Company, OAI
Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of the
Company ("Acquisition"), OmniAmerica Holdings, OmniAmerica, Inc. (subsequently
renamed OmniAmerica Towers, Inc.), a Delaware corporation and wholly-owned
subsidiary of OmniAmerica Holdings, Omni/HSW Acquisition, Inc., a Delaware
corporation ("Omni/HSW"), and HMTF/Omni Partners, L.P., a Delaware limited
partnership ("OmniPartners"). At the time of the April Merger, Omni/HSW was
merged into OmniAmerica Holdings, with OmniAmerica Holdings surviving, and
immediately thereafter, Acquisition was merged into OmniAmerica Holdings, with
OmniAmerica Holdings surviving as a wholly-owned subsidiary of the Company.
OmniAmerica Holdings and its subsidiaries' operations primarily involve tower
ownership and leasing services. In addition, as a result of the April Merger,
the Company acquired a 33 1/3% equity ownership position in Kline. At the
consummation of the April Merger, the Company issued 6,750,000 shares of Company
Common Stock to OmniPartners, the former stockholder of OmniAmerica Holdings.
OmniPartners is an affiliate of the Dallas-based investment firm of Hicks, Muse,
Tate & Furst Incorporated.
 
     On October 7, 1997, a wholly-owned subsidiary of the Company purchased
substantially all of the assets of Ellis Tower Co., Inc. ("Ellis Tower") in
exchange for $449,405 in cash and 120,848 shares of Company Common Stock. Ellis
Tower, located in Ft. Lauderdale, Florida, provides wireless infrastructure
building services.
 
     On June 30, 1997, the Company acquired Microwave Tower Service, Inc., an
Oregon corporation ("MTS"), pursuant to the merger of a wholly-owned subsidiary
of the Company with and into MTS (the "MTS Merger"). MTS is based in Salem,
Oregon, and designs, engineers, constructs and installs wireless communications
facilities primarily for providers of wireless communications services in the
western half of the U.S. In addition, MTS manufactures and distributes a line of
tower installation products used in the implementation, installation and
maintenance of wireless communications facilities. In connection with the MTS
Merger, the Company issued 2,380,000 shares of Company Common Stock for all of
the outstanding shares of MTS common stock.
 
     On June 1, 1997, a subsidiary of the Company acquired substantially all the
assets of Specialty Constructors Coatings, Inc. ("SCC"), a Cedar Crest, New
Mexico-based provider of lead abatement and other remediation and refinishing
services for elevated metal structures such as water towers, in exchange for
55,814 shares of Company Common Stock.
 
     On May 28, 1997, a wholly-owned subsidiary of the Company acquired
substantially all the assets of Paramount Communication Systems, Inc., a builder
of wireless transmitting and receiving facilities located in Somerdale, New
Jersey, in exchange for 186,047 shares of Company Common Stock.
 
     On May 14, 1997, the Company acquired Novak & Lackey Construction Co.,
Inc., an Oklahoma corporation ("N&L"), pursuant to the merger of a wholly-owned
subsidiary of the Company with and into N&L (the "N&L Merger"). N&L is based in
Oklahoma City, Oklahoma and builds wireless communications facilities and
switching facilities primarily for providers of wireless communications services
in the western half of the U.S. In connection with the N&L Merger, the Company
issued 400,000 shares of Company Common Stock for all of the outstanding shares
of N&L common stock.
 
     On October 31, 1996, a wholly-owned subsidiary of the Company acquired
substantially all the assets of Data Cell Systems, Inc. ("Data Cell"), a builder
of wireless transmitting and receiving facilities located near Phoenix, Arizona,
in exchange for $160,000 in cash and 93,400 shares of Company Common Stock. The
purchase price of the assets acquired from Data Cell is subject to increase by
an amount not to exceed $200,000 in the aggregate if certain pre-tax earnings
targets are achieved during the three fiscal years immediately following the
date of the acquisition and if certain other conditions are met. Such targets
were not attained in the fiscal years ended June 30, 1997 and 1998.
 
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     On July 1, 1995, the Company exchanged 92,308 shares of Company Common
Stock for all of the issued and outstanding capital stock of ST Combined
Resources, Inc., a provider of wireless infrastructure electrical design and
engineering services located in Laguna Hills, California. Following this
acquisition, ST Combined Resources, Inc. changed its corporate name to Specialty
Combined Resources, Inc.
 
     Management will continue to aggressively pursue acquisition opportunities
for existing wireless and broadcast communications sites and towers that meet
its geographical and economic requirements. Certain of such acquisitions, if
consummated, could be significant in size and may be funded with cash, stock of
the Company, increased indebtedness or a combination thereof. The Company is in
various stages of negotiation with owners of sites and towers that meet its
criteria. However, the tower industry is consolidating rapidly, and it is likely
that other tower operators will compete for existing assets in prime areas.
Therefore, there can be no assurances that the Company will be successful in its
acquisition strategy.
 
INDUSTRY BACKGROUND
 
  The Wireless Communications Industry
 
     Wireless communications towers are primary transmitting and receiving
facilities for wireless communications services such as cellular, paging, PCS,
specialized mobile radio ("SMR") services, enhanced specialized mobile radio
("ESMR") services, and wireless local loop ("WLL") services. Wireless
communications companies require specialized wireless transmission networks in
order to provide service to their customers. Each of these networks is
configured specifically to meet the coverage requirements of the particular
carrier and includes transmission equipment such as antennae, transmitters and
receivers placed at various locations throughout the covered area. These
locations, or communications sites, are critical to the operation of wireless
communications networks and consist of towers, rooftops and other structures
upon which such equipment may be placed. Wireless communications providers
design their networks and select their communications sites in order to optimize
available frequencies relative to their projected usage patterns, topography and
service requirements. Once tower locations and networks are established,
wireless communications providers rarely change tower locations due to the
specifically designed configuration of their networks, high switching costs,
business disruption and regulatory requirements.
 
     The wireless communications industry is growing rapidly as: (i) consumers
become increasingly aware of the uses and benefits of wireless communications
services; (ii) the costs of wireless communications services decrease; and (iii)
new wireless communications technologies continue to be developed. Changes in
U.S. federal regulatory policy have led to a significant increase in the number
of competitors in the wireless communications industry, most recently through
the auction of radio spectrum for PCS. This competition, combined with an
increasing reliance on wireless communications services by consumers and
businesses, has increased demand for higher quality networks characterized by
uninterrupted service and improved coverage. As new carriers build out their
networks and existing carriers upgrade and expand their networks to maintain
their competitiveness, the demand for communications sites is expected to
continue to increase dramatically.
 
     Cellular and Paging. Although SMR and other radio-based communications
technologies have been utilized commercially by taxi cabs, ambulance fleets and
other fleet dispatch services and by government entities such as police and fire
departments for many years, the widespread use of wireless communications
technologies for the general public began with the advent of the cellular
telephone industry. The cellular telephone industry began in 1983 when the FCC
began granting licenses to two licensees in each metropolitan statistical area
("MSA") and many rural areas ("rural service areas") throughout the United
States. Cellular licenses were eventually awarded in 306 MSAs and 428 rural
service areas. In 1986, the FCC granted additional portions of the radio
spectrum to each holder of a cellular license. Cellular networks operate within
a 50 MHz band located in the 800-900 MHz frequency range. Paging services also
began to expand rapidly in the 1980's. Paging services utilize a different
portion of the radio spectrum and, while not offering two-way voice transmission
capability, historically have offered a lower-cost alternative for mobile
communications than cellular telephony.
 
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     PCS. During the late 1980s and early 1990s, advances in technology of
wireless communications gave rise to a new technology known as PCS. In 1993,
Congress enacted legislation directing the FCC to allocate a portion of the
radio spectrum for PCS via competitive bidding. In response, the FCC established
PCS service areas in the United States and began to hold auctions for portions
or "Blocks" of the radio spectrum designated for PCS services. Compared with
cellular, PCS will operate at higher frequencies within a 140 MHz band in the
1850-1990 MHz frequency range and in slightly different geographic coverage
areas. The geographic areas for PCS licenses are divided into 51 major trading
areas ("MTAs") for A- and B-Block licenses, and 493 basic trading areas ("BTAs")
for other PCS licenses, including the C-, D-, E- and F-Block licenses. MTAs and
BTAs are different than the metropolitan statistical areas and rural service
areas.
 
     In March 1995, the FCC completed the A- and B-Block PCS auction, resulting
in the award of two 30 MHz licenses in each MTA. In May 1996, the FCC completed
the C-Block auction, resulting in the award of one 30 MHz license in each BTA.
After completion of the C-Block auction, the FCC reauctioned 18 C-Block licenses
for which the high bidders failed to make initial post-auction down payments. In
January, 1997, the FCC completed the auction for the D-, E- and F-Block
licenses, each block resulting in the award of one 10 MHz license in each BTA.
 
     SMR and ESMR. As a result of advances in digital technology, some providers
of wireless communications services have begun to design and deploy or modify
networks that utilize SMR and ESMR technologies. ESMR technology increases the
capacity of SMR networks enabling more efficient use of the allocated frequency.
This increase coupled with additional advances in switching technologies are
intended to enable ESMR networks to compete effectively with cellular and PCS
networks. ESMR technology may offer certain cost advantages over cellular and
PCS technologies due in large part to the fact that, historically, licenses to
use part of the radio spectrum allocated for ESMR services have been available
at substantially lower costs than licenses to operate cellular or PCS systems in
the same geographic areas. Currently, ESMR technology is being used by companies
such as Nextel Communications and Southern Communications to provide wireless
telephone services in many large metropolitan areas in the U.S. In addition, the
Company believes that several other smaller wireless communications service
providers plan to use ESMR technology to offer wireless telephone service in the
U.S.
 
     WLL. WLL systems provide non-mobile telecommunications services to users by
transmitting voice messages over radio waves from the public switched network to
the location of the fixed telephone. WLL systems are seen as an alternative to
traditional copper and fiber optic based fixed services with the potential to be
implemented more quickly and at lower cost than wireline services. The
installation of WLL systems minimizes the need to obtain rights-of-way and
excavate existing roads and infrastructure to lay copper or fiber cables in
order to install or upgrade a local telephone system serving non-mobile
telephones. At the present time, it is not possible to forecast the number of
WLL systems that might be implemented in the U.S. or to forecast the effect, if
any, such implementation will have on the demand for the Company's wireless
infrastructure building and implementation services and wireless infrastructure
components.
 
     Other Wireless Communications Technologies. The FCC has proposed or adopted
final rules authorizing additional wireless communications services. For
example, the FCC has proposed to authorize the use of the 37 and 39 GHz bands
for the provision of fixed and mobile communications services. In May 1996, the
FCC adopted final rules to permit Interactive Video and Data Service licensees
to provide mobile two-way data services. Also in May 1996, the FCC authorized
local multipoint distribution service licensees to provide certain fixed and
mobile communications services. The FCC has proposed to reallocate former
federal government spectrum located at 4 GHz for a broad range of wireless fixed
and mobile services, and is expected to reallocate additional former federal
government spectrum for wireless mobile services in the future.
 
     Several national and global mobile satellite or "MSS" based systems are
currently being implemented or have been proposed that are intended to compete
directly with land-based wireless communications networks. In theory, this
technology could create an alternative to land-based wireless networks that
might reduce or slow the growth in demand for new and enhanced land-based
wireless communications transmitting and receiving facilities, which in turn
could have a material adverse effect on the Company's business, results of
operations and financial condition. However, the Company believes that the cost
of wireless communications
 
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services planned to be offered by providers using MSS technologies will be
significantly higher than the cost of most services offered by land-based
wireless networks. At the present time, while it is not possible to forecast the
effect, if any, that MSS or any other alternative technology will have on the
demand for the Company's wireless infrastructure building and implementation
services and wireless infrastructure components, the Company does not believe
that MSS technologies will adversely affect demand for the Company's services
and products in the foreseeable future.
 
  The Radio and Television Broadcasting Industry
 
     Broadcast towers are primary transmitting and receiving facilities for
radio and television broadcast signals. Broadcasters transmit AM/FM radio
signals and VHF and UHF television signals in order to obtain the broadest,
clearest coverage available. A broadcast station's coverage is one of the
primary factors that influences the station's ability to attract advertising
revenue. Once a tower location is chosen, broadcasters rarely change sites due
to complex regulatory requirements, high switching costs and business
disruption. The U.S. broadcasting industry is generally mature with respect to
demand for transmission tower capacity. However, a significant increase in
demand for tower capacity may occur when digital spectrum is used to deliver
HDTV or digital multi-casting, i.e., multiple "normal" definition television
channels. Digital equipment generally is larger and heavier, requiring more
tower space and, in some instances, stronger and taller towers. As a result,
broadcasters owning their own towers may require their tower tenants to
relocate. Alternatively, broadcasters may seek to build new towers, upgrade
existing towers or locate their equipment on leased tower space. In addition,
wireless cable television is being developed and positioned as a potentially
more accessible alternative to traditional cable television. Wireless cable
operates by receiving programming from a satellite which is retransmitted from
an antenna on a tower to a receiving antenna on a subscriber's residence.
 
THE COMPANY'S TOWER SERVICES
 
     Management's strategic focus is to take advantage of increasing demand for
tower space and industry trends toward outsourcing and co-location by expanding
its network of tower sites, either owned, leased or managed, and leasing space
to wireless communications providers and broadcasters. The Company intends to
implement this strategy by (i) aggressively marketing available rental space on
the Company's towers, (ii) acquiring additional towers and (iii) utilizing its
tower construction capabilities to pursue build-to-suit opportunities and to
build new towers and upgrade existing towers for its own account to accommodate
additional tenants. The Company's leasing operations primarily depend on the
location of towers and the amount of equipment installations that each tower can
support. Through "vertical separation" -- locating equipment at different levels
on one tower -- the Company is able to support multiple tenants on one tower.
The Company's portfolio of existing towers and towers under construction or
subject to acquisition contracts, together with the Company's construction
resources, are expected to provide the Company with tower locations and
equipment bearing capabilities suitable for attracting additional leasing
clients. Given their dependence on location and their reluctance to re-locate,
the Company's tenants generally are willing to enter into long-term leases
providing a churn-resistant recurring revenue stream for the Company. The
Company's standard lease for wireless communications tenants generally provides
for a five-year term, with options to renew the lease for additional five-year
terms. The Company's standard lease for broadcast tenants generally provides for
a 10-20 year term.
 
     The Company designs, builds, installs, modifies and maintains
(collectively, "wireless infrastructure building and implementation services")
land-based wireless communications transmitting and receiving facilities located
in the U.S. ("wireless communications facilities") primarily for providers of
wireless communications services. As part of the Company's wireless
infrastructure building and implementation services business, the Company also
provides certain electrical engineering services, wireless equipment testing
services and site acquisition and evaluation services in connection with the
location and installation of wireless communications facilities.
 
     The Company also manufactures and sells a line of fasteners and other
mounting components, waveguide bridge products, square support rail, tower
lighting systems, tower safety products and other hardware products
 
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(collectively, "wireless infrastructure components") primarily used in
connection with the installation and maintenance of wireless communications
facilities. The Company markets certain of its wireless infrastructure
components directly to end users in conjunction with the Company's wireless
infrastructure building and implementation services. In addition, the Company
markets certain of its wireless infrastructure components through independent
third party distributors located principally in the U.S. who then resell these
products to end users. Finally, the Company manufactures certain wireless
components on a private label basis for sale to several large wireless
communications equipment vendors who market these products under their own brand
names to end users. The Company believes that, to date, the vast majority of the
Company's wireless infrastructure components have been sold to end users located
in the U.S.
 
CUSTOMERS
 
     The Company provides leased tower space and renders wireless infrastructure
building and implementation services to radio and television broadcasters and to
providers of a broad range of wireless communications services including paging
services, analog and digital cellular telephone services, PCS services, SMR
services, ESMR services and microwave communications services. Examples of the
Company's customers include Western Wireless Corporation, AT&T Wireless Services
Inc., Sprint, PCS PrimeCo L.P., BellSouth Mobility, Inc., Nextel Communications,
and Arch, among others. In fiscal 1998, Sprint accounted for approximately 15%
of the Company's revenues and was the only customer accounting for 10% or more
of the Company's revenues.
 
     The Company's wireless infrastructure components customers include the end
users of the Company's building and infrastructure services, third party
distributors and large wireless communications vendors who market the Company's
products under their own brand names.
 
SALES AND MARKETING
 
     The Company markets rental space on its towers by offering strategically
located towers and groups of towers to wireless communications providers and
radio and television broadcasters as well as by stressing the Company's ability
to provide "build to suit" locations to enhance or complete its clients'
networks. Additionally, the shift of the capital expenditures and overhead
relating to tower ownership to the Company as a result of build-to-suit
arrangements, outsourcing and co-location is a key marketing factor utilized by
the Company. The Company also provides highly-trained employees to assist
customers with site location and installation logistics. Finally, the Company
also provides well-maintained and secure facilities to protect the sophisticated
equipment located on its towers and in its tower buildings.
 
     Although its customers include companies with international operations,
historically, the Company has marketed its wireless infrastructure building and
implementation services and wireless infrastructure components primarily to
providers of wireless communications services in the U.S. The Company's wireless
infrastructure building and implementation services are sold on a contract basis
and are marketed through either direct customer contact or via response to
competitive bids by a national marketing team led by four of the Company's top
regional managers. This national marketing team was formed in July 1997 to
exploit the increased capabilities and geographic presence which has resulted
from the Company's internal growth and acquisitions. The Company generates
prospective new customers through referrals from existing customers, wireless
communications equipment manufacturers and vendors, through participation in
conferences and trade shows and from other sources. The Company is currently
seeking to expand its relationships with wireless communications equipment
manufacturers and vendors as a method for increasing its exposure to prospective
new customers. The Company does not use independent distributors or agents in
connection with the marketing of its wireless infrastructure building and
implementation services.
 
     The Company markets its wireless infrastructure components (i) directly to
end users in conjunction with the Company's wireless infrastructure building and
implementation services and (ii) through independent third party distributors
located principally in the U.S. who then resell these products to end users. The
Company also manufactures certain wireless components on a private label basis
for sale to several large wireless communications equipment vendors who market
these products under their own brand names to end
 
                                        8
<PAGE>   10
 
users. The Company believes that, to date, the vast majority of the Company's
wireless infrastructure components have been sold to end users located in the
U.S.
 
     The Company continues to evaluate opportunities to perform wireless
infrastructure building and implementation services and sell wireless
infrastructure components outside the U.S. Although the Company has been
approached regarding the possibility of becoming involved in certain wireless
infrastructure development activities outside the U.S., the Company has reached
no agreements with respect to any such involvement and the Company has very
little experience in doing business outside the U.S. There can be no assurance
that the Company will identify or enter into business opportunities outside the
U.S. or that, if entered into, such opportunities will be successful. See "ITEM
6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS -- Cautionary Statements -- Risks Associated with Potential
Operations Outside the U.S."
 
MANUFACTURING AND COMPONENT ASSEMBLY
 
     The Company manufactures wireless infrastructure components by obtaining
sheet metal and other raw materials, standard parts and components from a
variety of vendors and specially fabricating and configuring these materials to
produce the Company's wireless infrastructure components. The Company also
engages third-party contract manufacturers and assemblers to produce certain of
these wireless infrastructure components based on the Company's specifications.
With the exception of wireless infrastructure components manufactured by
third-party contract manufacturers and assemblers, substantially all the
Company's wireless infrastructure components are manufactured or assembled at
the Company's manufacturing facilities in Salem, Oregon. Although the Company
has historically obtained the raw materials, standard parts and components used
in the manufacture and assembly of the Company's wireless infrastructure
components from a limited number of suppliers, to date, the Company generally
has been able to obtain the needed quantities of the items in a timely manner
from these suppliers. In addition, substantially all of these items are
available from numerous other suppliers.
 
RESEARCH AND DEVELOPMENT
 
     Although the Company has designed many of its wireless infrastructure
components and has the capability to custom design wireless infrastructure
components to meet specific customer requirements, historically, the Company has
not incurred significant research and development expenses and the Company does
not currently anticipate making significant expenditures for research and
development activities in the foreseeable future.
 
TRADEMARKS
 
     The Company markets certain of its wireless infrastructure components under
the ICECo(TM) brand name. The Company has filed for trademark protection for the
ICECo(TM) trademark. There can be no assurance that the Company will be
successful in obtaining this trademark or that this trademark will afford the
Company with any competitive advantages.
 
COMPETITION
 
     The market for tower space leasing is highly competitive. The Company
competes with wireless communications providers and broadcasters who own and
operate their own tower networks, site management companies which acquire space
on existing towers, rooftops and other sites, other independent tower companies
and traditional local independent tower operators. Wireless communications
providers who own and operate their own tower networks generally are, and some
broadcasters and independent tower companies are, larger and have greater
financial resources than the Company. The Company believes that tower location
and capacity, price, quality of service and density within a geographic market
historically have been and will continue to be the most significant competitive
factors affecting tower rental companies. The Company believes that competition
for tower acquisitions will increase and that additional competitors will enter
the tower leasing market, some of which may have greater financial resources
than the Company.
 
                                        9
<PAGE>   11
 
     Historically, the market for wireless infrastructure building and
implementation services has been highly competitive but also highly fragmented.
As such, most participants in this market have been relatively small firms of
between three and fifty employees. While the Company believes that the industry
continues to be comprised predominately of these smaller firms, in recent years,
as the market for wireless infrastructure building and implementation services
has grown, several of the Company's historical competitors have grown
substantially. In addition, the Company has faced increasing competition from
(i) wireless communications equipment manufacturers which provide wireless
infrastructure building and implementation services in conjunction with the sale
of wireless communications equipment, (ii) wireless and non-wireless engineering
companies, construction companies and construction management companies, and
(iii) non-wireless subcontractors. The Company believes that, historically,
competition in the market for wireless infrastructure building and
implementation services has been based primarily on price and the competitor's
reputation for quality and timely completion of work. In recent years, certain
competitors, predominately wireless communications equipment manufacturers, have
increasingly offered turnkey package solutions for the implementation of new
wireless communications networks such as PCS networks. These turnkey package
solutions typically include wireless communications equipment, radio frequency
or "RF" engineering services, wireless infrastructure building and
implementation services and, in many cases, financing for all or a significant
portion of the build-out of the network. Initially, many providers of wireless
communications services found these turnkey package solutions attractive because
of perceived administrative efficiencies of contracting with one party versus
contracting separately for the different products and services necessary to
implement their networks. Increasingly, however, current and prospective
providers of wireless communications services have become dependent on these
turnkey package solutions to implement their networks due largely to the
availability of the financing component.
 
     The Company believes that many of the wireless communications equipment
manufacturers that offer these turnkey package solutions do not themselves have
the personnel necessary to perform the wireless infrastructure building and
implementation services included as a part of these turnkey package solutions.
Consequently, many wireless communications equipment manufacturers contract with
other companies to provide some or all of these wireless infrastructure building
and implementation services. From time to time, the Company has performed
wireless infrastructure building and implementation services in connection with
turnkey package solutions offered by certain of these wireless communications
equipment manufacturers. However, the Company believes that, in recent years,
several wireless communications equipment manufacturers have begun to acquire or
enhance their ability to perform wireless infrastructure building and
implementation services with their own personnel, thus competing directly with
the Company. In addition, the Company believes that many of the Company's other
competitors have either developed or are currently seeking to develop a customer
finance capability as a method for obtaining future business. As a consequence
of this trend, the Company believes that the ability to offer some element of
financing in conjunction with the sale of wireless infrastructure building and
implementation services is becoming an important competitive factor.
Historically, the Company has not provided significant financing to its third
party tower construction customers. While the Company may consider the
implementation of a customer financing program in the future, there can be no
assurances that the Company will in fact implement such a program. However, the
Company believes that its build-to-suit programs, pursuant to which the Company
bears the capital expenditures and overhead resulting from the construction and
ownership of a carrier's network, provide a competitive alternative to the
customer finance programs of other manufacturers.
 
EMPLOYEES
 
     As of September 16, 1998, the Company employed 548 full-time employees.
None of the Company's employees are represented by a labor union and the Company
considers its employee relations to be good. The Company's future success is
also dependent on its ability to attract and retain experienced, highly
qualified sales personnel, technical employees, project managers and other key
employees who perform and manage the tower space leasing and the wireless
infrastructure building and implementation services provided by the Company. See
"ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- Cautionary Statements -- Dependence on Labor Force."
 
                                       10
<PAGE>   12
 
GOVERNMENT REGULATION
 
     The wireless communications industry is subject to regulation by state
regulatory agencies, the FCC, the FAA, Congress, the courts and other
governmental bodies. There can be no assurance that any of these governmental
bodies will not adopt or change regulations or take other actions that would
adversely affect the wireless communications industry and the Company's
business, results of operations and financial condition.
 
     In addition, the Telecommunications Act of 1996 is expected to cause
significant changes in existing regulation of the telecommunications industry
that are intended to promote the competitive development of new services, to
expand public availability of telecommunications services and to streamline
regulation of the industry. These changes include requirements that local
exchange carriers must: (i) permit other competitive carriers, which may include
many wireless communications service providers, to interconnect to their
networks, (ii) establish reciprocal compensation agreements with competitive
carriers to terminate traffic on each other's networks, and (iii) offer resale
of their local loop facilities. The implementation of these requirements by the
FCC and state authorities potentially involves numerous changes in established
rules and policies that could adversely affect the wireless communications
industry and the Company's business, results of operations and financial
condition.
 
     In addition, the construction and installation of wireless transmitting and
receiving facilities are often subject to state or local zoning, land use and
other regulation. Such regulation may include zoning, environmental and building
permit approvals or other state or local certification. The Telecommunications
Act of 1996 provides that state and local authority over the placement,
construction and modification of personal wireless services (including cellular
and other cellular mobile radio services and unlicensed wireless services) shall
not prohibit or have the effect of prohibiting personal wireless services or
unreasonably discriminate among providers of functionally equivalent services.
Although state and local zoning authorities retain their rights over land use,
their actions cannot have the effect of banning wireless services or picking and
choosing among similar wireless providers.
 
ITEM 2. DESCRIPTION OF PROPERTY
 
     The Company presently leases approximately 6,400 square feet of office
space in Cedar Crest, New Mexico from Michael R. Budagher, its Chief Operating
Officer and a Director of the Company, for $16,800 annually. See "ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS." The New Mexico office serves as
the headquarters for the Company's wireless infrastructure building and
implementation services. The Company's headquarters for its tower ownership and
leasing services are located in Independence, Ohio. The Company is seeking
additional and/or new space to meet its current needs.
 
     The Company maintains four regional offices in California, three regional
offices in Florida, two regional offices in Illinois, two regional offices in
Ohio, two regional offices in Texas, and one regional office in each of Alabama,
Colorado, Louisiana, Oklahoma, Arizona, North Carolina, Oregon, Utah, and New
Jersey, from which the Company conducts primarily wireless infrastructure
building and implementation operations. The Company manufactures infrastructure
components in an approximately 55,000 square foot manufacturing facility located
adjacent to its regional office in Salem, Oregon. The Company's electrical
design and engineering operations are conducted primarily from an office in
Laguna Hills, California; build-to-suit operations are conducted primarily from
offices in Dallas, Texas, Oklahoma City, Oklahoma, and Albuquerque, New Mexico;
and tower ownership and leasing services are conducted from the office in
Independence, Ohio. With exception of the regional offices in Salem and Oklahoma
City, all of the Company's regional offices are leased pursuant to operating
leases that do not exceed five years in duration.
 
     The Company both owns and leases the real property upon which its owned
towers are located. As of September 16, 1998, the Company owned 90 towers on
parcels of real estate that are leased to the Company and 11 towers on parcels
of real estate that are owned by the Company. In rural areas, a tower site
typically consists of a one to five acre tract that supports the tower, an
equipment shelter and guy wires that stabilize the tower. Less than 2,500 square
feet are needed for a self-supporting tower that is typically used in
metropolitan areas. Ground leases generally have 5 to 25 year terms, with many
having options for the Company to renew. Pursuant to the Company's Credit
Agreement (as hereinafter defined), the senior lenders have (or have the
 
                                       11
<PAGE>   13
 
right to obtain) liens on, among other things, tenant leases, equipment,
inventory and interests in all real property of the Company on which towers are
located or which constitute a tower. Approximately 17 of the sites acquired by
the Company from Arch pursuant to the Arch First Closing are owned in fee. Of
the remaining 32 sites acquired in the Arch First Closing, 29 are located on
real estate that is leased, and 3 are managed sites. The sites which are
scheduled to be acquired by the Company pursuant to the Arch Second Closing,
consist of sites owned in fee, sites that are leased and managed sites.
 
ITEM 3. LEGAL PROCEEDINGS
 
     The Company is, and from time to time may be, a party to routine legal
proceedings incidental to its business. The outcome of these legal proceedings
is not expected to have a material adverse effect on the Company's business,
results of operations or financial condition, based on the Company's current
understanding of the relevant facts and law. The Company maintains general
liability insurance against risks arising out of the normal course of business.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     No matters were submitted to a vote of the Company's stockholders during
the fourth quarter of fiscal 1998.
 
     On July 24, 1998, the holders of a majority (approximately 59.3%) of the
Common Stock of the Company executed a written consent (i) authorizing the
Reincorporation Merger and (ii) approving the Company's 1998 Stock Option Plan.
An Information Statement was distributed to all of the Company's stockholders
informing them of such matters. The Reincorporation Merger and 1998 Stock Option
Plan became effective on September 14, 1998.
 
                                       12
<PAGE>   14
 
                                    PART II
 
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
     The Company's common stock is quoted on the Nasdaq National Market under
the symbol "XMIT" (prior to the Reincorporation Merger the Company's symbol was
"SCTR"). On September 16, 1998, there were approximately 93 holders of record of
the Company Common Stock. The following table sets forth the quarterly high and
low bid prices for the Company Common Stock for the periods indicated. These
prices reflect inter-dealer prices and do not include adjustments for retail
mark-ups, mark-downs or commissions and may not represent actual transactions.
 
<TABLE>
<CAPTION>
                     FISCAL YEAR ENDED
                       JUNE 30, 1997:                          HIGH        LOW
                     -----------------                        -------    -------
<S>                                                           <C>        <C>
Fiscal Quarter Ended 09/30..................................  $ 9.625    $ 3.938
Fiscal Quarter Ended 12/31..................................  $10.063    $ 6.75
Fiscal Quarter Ended 03/31..................................  $16.25     $ 8.125
Fiscal Quarter Ended 06/30..................................  $15.563    $ 8.75
</TABLE>
 
<TABLE>
<CAPTION>
                     FISCAL YEAR ENDED
                       JUNE 30, 1998:                          HIGH        LOW
                     -----------------                        -------    -------
<S>                                                           <C>        <C>
Fiscal Quarter Ended 09/30..................................  $19.875    $13.375
Fiscal Quarter Ended 12/31..................................  $17.375    $11.25
Fiscal Quarter Ended 03/31..................................  $36.50     $12.75
Fiscal Quarter Ended 06/30..................................  $48.50     $33.375
</TABLE>
 
<TABLE>
<CAPTION>
                                                               HIGH        LOW
                                                              -------    -------
<S>                                                           <C>        <C>
For the Period July 1, 1998 to September 25, 1998...........  $43.00     $20.625
</TABLE>
 
     To date, the Company has not declared or paid any cash dividends on the
Company Common Stock and the present policy of the Board of Directors is to
retain any earnings to provide for the Company's growth. The Credit Agreement
dated as of June 30, 1998 among the Company, the lenders party thereto, The
Chase Manhattan Bank, as administrative agent, issuing lender and swingline
lender, Bankers Trust Company, as documentation agent, and BankBoston, N.A., as
syndication agent (the "Credit Agreement"), contains covenants that restrict the
Company's ability to pay dividends. Further, future determination to pay
dividends will be at the discretion of the Board of Directors and in light of
the Company's financial condition, results of operations, capital requirements
and such other factors as the Board of Directors deems relevant.
 
     In connection with the acquisition of substantially all of the assets of
Teleforce, on July 9, 1998, the Company issued 81,270 shares of Company Common
Stock to Teleforce. See "ITEM 1. DESCRIPTION OF BUSINESS -- History."
 
     In connection with the April Merger, on April 23, 1998 the Company issued
6,750,000 shares of Company Common Stock to OmniPartners. See "ITEM 1.
DESCRIPTION OF BUSINESS -- History."
 
     In connection with the acquisition of substantially all of the assets of
Ellis Tower, on October 7, 1997, the Company issued 120,848 shares of Company
Common Stock to Ellis Tower. See "ITEM 1. DESCRIPTION OF BUSINESS -- History."
 
     With respect to the above-described transactions, the Company relied upon
the exemption from registration provided by Section 4(2) of the Securities Act
relating to transactions by an issuer not involving a public offering.
 
ITEM 6.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
       OF OPERATIONS
 
     Statements appearing in the following discussion that are not historical
facts are forward-looking statements ("forward-looking statements") within the
meaning of Section 27A of the Securities Act and
 
                                       13
<PAGE>   15
 
Section 21E of the Exchange Act, which are intended to be covered by the safe
harbors created by those sections. In addition, such forward-looking statements
may be contained in filings made by the Company with the Securities Exchange
Commission, or press releases or oral statements made from time to time by or
with the approval of an authorized executive officer of the Company. Such
forward-looking statements are necessarily estimates reflecting the best
judgement of the Company's management based upon current information and involve
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company, or industry results,
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such risks,
uncertainties and other factors include, but are not limited to, the following
possibilities: increasing competition for tower sites and leasing customers,
increasing difficulty in obtaining zoning and construction permits, difficulties
in integrating acquisitions, changes in regulatory requirements, changes in
telecommunications transmission technology, changes in outsourcing plans of
telecommunications transmission companies and factors inherent in tower
ownership and construction, such as the availability of experienced construction
crews and damage and delays caused by inclement weather. In addition, other
factors which may affect forward-looking statements include those set forth
below under the caption "Cautionary Statements" and appearing elsewhere in this
Annual Report and appearing from time to time in filings made by the Company
with the Securities and Exchange Commission. These risks, uncertainties and
other factors should not be construed as exhaustive and the Company does not
undertake, and specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences or unanticipated events or
circumstances after the date of such statements. SEE "ITEM 1. DESCRIPTION OF
BUSINESS -- Forward-Looking Statements."
 
     In addition, the following discussion and analysis should be read in
conjunction with the Company's Consolidated Financial Statements and the notes
thereto and the other financial data appearing elsewhere in this Annual Report.
 
ACQUISITIONS
 
     During the fiscal year ended June 30, 1998, the Company completed the
following acquisitions.
 
     On October 7, 1997, a wholly-owned subsidiary of the Company purchased
substantially all the assets of Ellis Tower Co., Inc., a builder of wireless
transmitting and receiving facilities located in Ft. Lauderdale, Florida, in
exchange for $449,405 in cash and the delivery of 120,848 shares of Company
Common Stock. The transaction was accounted for by the Company as a purchase.
See "ITEM 1. DESCRIPTION OF BUSINESS -- History."
 
     On April 23, 1998, the Company consummated the April Merger. The April
Merger was accounted for by the Company as a purchase. See "ITEM 1. DESCRIPTION
OF BUSINESS -- History."
 
     On June 26, 1998, the consummated the Arch First Closing. This transaction
was accounted for by the Company as a purchase. See "ITEM 1. DESCRIPTION OF
BUSINESS -- History."
 
PLAN OF OPERATIONS
 
     Historically, the Company principally has been engaged in building sites
for wireless carriers, who have traditionally owned and operated their own
transmission tower assets. While the Company continues to provide infrastructure
building and implementation services to wireless carriers, since the April
Merger the Company's focus has been directed increasingly toward developing
sources of recurring revenue, specifically, building towers for its own account,
acquiring towers from carriers and other owners, maximizing lease revenues from
existing towers, and entering into long-term maintenance contracts with other
tower owners. The Company's focus on sources of recurring revenues is intended,
in part, to capitalize on recent trends by several carriers who have begun to
evaluate opportunities to outsource the ownership and operation of their
wireless infrastructure either by selling their existing tower sites to
independent third party tower owners and operators, who would then lease tower
space back to the carriers and/or entering into build-to-suit arrangements,
whereby an independent third party builds, owns and leases tower sites to the
wireless carriers, often with multiple tenants on any given site. The Company
believes that its historical competency of tower
                                       14
<PAGE>   16
 
construction coupled with the ownership and leasing operations of OmniAmerica
Holdings and its subsidiaries makes the Company one of the leading candidates
for carrier outsourcing.
 
     The Company believes owning towers and leasing tower space to the wireless
carriers will provide more stable long-term recurring revenues. In addition to
the Company's plans to pursue opportunities to acquire existing sites and towers
from carriers seeking to outsource their wireless infrastructure, the Company
believes that, at the present time, utilizing its infrastructure building and
implementation resources to construct towers for its own account is a more cost
effective method of expanding its portfolio of owned towers. As part of its
effort to develop sources of recurring revenue, late in the second fiscal
quarter of 1998, the Company began focusing on opportunities to provide
build-to-suit services to wireless carriers. The Company's build-to-suit program
offers an end-to-end solution to wireless carriers and is designed to reduce
carriers' capital expenditures and overhead associated with the traditional
methods of acquiring and owning their wireless networks. As of June 30, 1998,
approximately 183 sites were under written or oral commitments from 5 wireless
carriers. As of September 18, 1998, an additional 265 sites were under written
or oral commitments. In addition to the sites subject to build-to-suit
commitments, as of September 18, 1998, the Company was conducting site
acquisition or construction related activities with respect to approximately 175
towers and/or rooftop transmission facilities for its own account. There can be
no assurance that the Company will successfully enter into additional
significant build-to-suit agreements with any wireless carrier or group of
carriers or that it will be able to reach definitive agreements with the owners
of sites not currently under written contract or develop the sites in a
cost-effective manner, that implementation of its existing build-to-suit
agreements will result in the Company's ownership of all of the towers
originally contemplated by those agreements or that the Company will complete
the development of any of the towers or rooftop transmission facilities
currently being developed for its own account. As the Company focuses its
resources increasingly on tower ownership, revenues from its infrastructure
building and implementation services operations are likely to decline.
Management believes that the decline in revenues from its infrastructure
building and implementation services operations will be offset over time by the
recurring revenue stream expected from tower ownership, including revenues from
the towers owned by OmniAmerica Holdings and its subsidiaries prior to the April
Merger, revenues from future tower acquisitions by the Company, revenues from
towers the Company is currently developing and building for its own account and
revenues from towers the Company will develop and build for its own account in
the future.
 
RESULTS OF OPERATIONS
 
  Comparison of the Fiscal Years Ended June 30, 1998 and 1997
 
     Revenues. Revenues for the fiscal year ended June 30, 1998 decreased
$2,827,729, or approximately 4%, from $65,626,800 in the fiscal year ended June
30, 1997 to $62,799,071 for fiscal 1998. Management believes the decrease in
revenues was attributable to (i) the utilization of staff during the last
quarter of the fiscal year for build-to-suit sites to be owned by the Company
instead of building for third parties (resulting in the Company incurring
approximately $2.1 million in capitalized costs through June 30, 1998 with
respect to which no revenues were generated in fiscal 1998) and (ii) the slower
rollout of wireless infrastructure building and implementation activity in the
U.S. compared to fiscal year 1997 as carriers evaluated outsourcing and
build-to-suit options. The decrease in revenues was offset in part by $1,258,936
in revenues from the Company's leasing operations for the 67 day period
subsequent to the April Merger.
 
     Gross Profit. Gross profit for fiscal year ended June 30, 1998 decreased
$1,349,943, or approximately 11%, from $12,215,250 in fiscal 1997 to $10,865,307
in fiscal 1998. In addition to the decrease in revenues, this decrease was
attributable to management's decision in the third fiscal quarter of 1998 to
retain its existing workforce, despite the slowdown in building and
implementation activity, to implement the rollout of the Company's build-to-suit
programs in the fourth quarter of fiscal year 1998. Build-to-suit costs incurred
in the fourth quarter (approximately $2.1 million through June 30, 1998) have
not yet resulted in the generation of revenue, resulting in a negative impact on
gross profit. In preparation for the build-to-suit program, field personnel were
mobilized throughout the nation to meet regional workloads, despite the
additional costs to be incurred. In addition, management directed certain senior
management personnel to focus on the development
 
                                       15
<PAGE>   17
 
of sites for the Company's own account, incurring substantial costs and change
in focus, thus impacting current operations. These actions resulted in less
efficient labor utilization and costs.
 
     Selling, General and Administrative ("SG&A") Expenses. SG&A for fiscal year
ended June 30, 1998 increased $2,317,682, or approximately 39%, from $5,915,808
in fiscal year 1997 to $8,233,490 in fiscal 1998. The increase was primarily the
result of the following: approximately $582,000 in goodwill charges in
connection with fiscal 1998 acquisitions; approximately $230,000 in legal
expenses related to acquisitions and other issues not encountered in fiscal year
1997; a $225,000 increase in the Company's allowance for doubtful accounts;
transitional costs incurred in connection with the integration of the operations
and administration of OmniAmerica Holdings' tower ownership business; and a
general increase in personnel as a result of fiscal 1998 acquisitions and to
meet the needs of the Company's build-to-suit programs. The Company does not
expect to incur significant additional expenses in the future as a result of the
continuing integration of the operations of OmniAmerica Holdings and its
subsidiaries with the Company.
 
     Income Taxes. Income taxes were provided at a 46% effective rate in fiscal
1998 as compared to a 39% effective rate in fiscal 1997. The increased rate was
primarily the result of non-deductible goodwill and other non-deductible
expenses.
 
     Net Earnings. Net earnings decreased $4,710,630 ($2,570,130 on a pro forma
basis after adjustment for tax differences resulting from MTS's prior status as
an S-Corporation), or approximately 83% (73% on a pro forma basis), to $977,112
in the fiscal year ended June 30, 1998 from $5,687,742 ($3,547,242 on a pro
forma basis) in the fiscal year ended June 30, 1997. The decrease was primarily
the result of lower revenues and associated gross profit that were a consequence
of the slowdown in wireless infrastructure building and implementation activity
compared to fiscal year 1997 and the implementation of the Company's
build-to-suit program described above. Net earnings were also directly affected
by build-to-suit costs incurred in the fourth quarter (approximately $2.1
million through June 30, 1998) which have not yet resulted in the generation of
revenues. The remainder was due to the increased SG&A costs noted above and to a
one-time, non-cash compensation expense of approximately $719,000 for the
cashless exercise of stock options granted primarily to a former director of the
Company.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     At June 30, 1998, the Company had cash and temporary investments totaling
$4,349,324, an increase of $3,359,604 from June 30, 1997. In addition, at June
30, 1998, the Company had no "available for sale securities", a decrease of
$769,850 from June 30, 1997. During the fiscal year ended June 30, 1998, cash
provided from operating activities was $4,531,664. Net cash flow from operating
activities was impacted primarily due to increases in trade accounts payable
associated with build-to-suit costs principally incurred during the fourth
quarter of fiscal 1998. During fiscal 1998, the Company expended $23,628,680
primarily for the purchases of existing wireless tower facilities and
build-to-suit projects throughout the country.
 
     Net cash generated by financing activities during fiscal year 1998 was
$22,456,620, primarily consisting of long-term borrowings under an existing
long-term credit facility for the acquisition of existing tower facilities and
build-to-suit sites.
 
     On June 30, 1998, the Company entered into a $75,000,000 senior secured
credit facility with a group of lenders, consisting of Bankers Trust Company
(documentation agent), BankBoston, N.A. (syndication agent) and Chase Manhattan
Bank (administrative agent) ("Chase"). The credit facility consists of a $30
million term loan and a $45 million revolving loan, collateralized by
substantially all the assets of the Company's subsidiaries and the stock of the
Company's subsidiary companies. Interest accrues at a rate of interest that
approximates the Chase prime rate plus 1% or the Interbank Eurodollar Rate plus
2%. At June 30, 1998, the entire term loan of $30 million was borrowed at a
blended rate of 7.675%. The term loan matures on June 30, 2001. At June 30,
1998, there were no borrowings under the Company's revolving credit facility.
 
     The Company's future cash requirements for fiscal 1999 and beyond will
depend primarily upon the level of wireless infrastructure building and
implementation services, leasing revenue from existing, acquired and constructed
tower facilities, the level of working capital needed to generate the revenues
associated with such
 
                                       16
<PAGE>   18
 
business (including capital expenditures to construct towers and transmission
equipment pursuant to build-to-suit arrangements and for the Company's own
account), and acquisition opportunities. The Company believes that cash flow
from operations, amounts available from the credit facility noted above and
other capital resources available to the Company will be adequate to satisfy its
working capital requirements for at least the next twelve months.
 
     To date, the Company has derived substantially all its revenues from sales
in the U.S. and inflation has not had a significant effect on the Company's
business. The Company does not currently expect inflation to adversely affect
the Company in the future unless it increases significantly in the U.S. or
unless the Company begins doing business outside the U.S. in countries in which
inflation is significantly higher than in the U.S. See ITEM 6. MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS -- Cautionary Statements -- Risks Associated with Potential
Operations Outside the U.S."
 
YEAR 2000
 
     As a result of certain computer programs being written using two digits
rather than four digits to define the applicable year, any of the Company's
computer programs that have date sensitive software may recognize a date using
"00" as the Year 1900 rather than the Year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including among
other things, a temporary inability to process transactions, send invoices or
engage in normal business activities. The Company has implemented a Year 2000
program to review the functionality of the Company's information technology and
non-information technology systems and applications beyond 1999 as well as year
2000 issues related to the Company's third-party vendors. The Company currently
has four major internal information technology systems. The Company believes
these systems will be fully Year 2000 compliant by January 1999.
 
     The Company is currently reviewing Year 2000 issues with its major
third-party vendors, including the Company's lockbox system, mailing service,
electronic funds transfer system and its long distance carrier and believes that
applications used by the Company are either Year 2000 compliant or are in the
process of being upgraded or replaced by the third-party vendors. Should these
third-party vendors fail to become Year 2000 compliant, the Company intends to
contract with alternative Year 2000 compliant vendors. Although the failure to
complete the Year 2000 conversion process by the Company or its vendors could
cause disruption to the Company's operations, the Company believes that this
process will be completed in accordance with the current schedule, the costs of
implementation will not be material, and the Year 2000 issue will not have a
material adverse effect on the Company.
 
CAUTIONARY STATEMENTS
 
  Outstanding Options; Risk of Further Dilution
 
     As of June 30, 1998, the Company had outstanding options to purchase a
total of 667,776 shares of Company Common Stock at a weighted average price of
$12.13 including 156,576 options granted under the Company's Amended and
Restated 1994 Stock Option Plan (the "1994 Plan"); 22,000 options granted under
the Company's Outside Directors' Stock Option Plan (the "Director Plan"); and
489,200 shares granted under the Company's 1997 Stock Incentive Plan (the "1997
Plan"). Of these options, 363,258 are currently exercisable. Although the 1994
Plan, the Director Plan and the 1997 Plan have been amended to provide that no
further options may be granted thereunder, the Company has adopted its 1998
Stock Option Plan (the "1998 Plan"), effective September 14, 1998, which makes
available options to purchase 675,000 shares of Company Common Stock. There
currently are no options outstanding under the 1998 Plan.
 
     In the future, the price which the Company would receive for Company Common
Stock upon exercise of options to purchase Company Common Stock could be
significantly less than the value of, or market price for, the Company Common
Stock at the time such options are exercised. While such options are
outstanding, the holders thereof are given, at little or no cost, the
opportunity to profit from a rise, if any, in the value of or market price (if
any) for the Company Common Stock without assuming the risk of ownership. To the
extent that any such options are exercised, the interests of the Company's
stockholders will be diluted proportionately.
                                       17
<PAGE>   19
 
  Dependence on the Wireless Communications Industry
 
     The Company is dependent on the continued growth, viability and financial
stability of its customers, which are in turn substantially dependent on the
continued growth, viability and financial stability of the wireless
communications industry. The wireless communications industry is highly
competitive and has been characterized by rapid technological and regulatory
change. Examples of recent technological changes include the advent or continued
rapid development of new or enhanced wireless communications technologies such
as PCS, ESMR and MSS-based wireless communications technologies. Technological
changes could reduce, delay or make unnecessary the expansion or construction of
new wireless communications networks, which in turn could render the Company's
products and services obsolete or noncompetitive or otherwise reduce the demand
for such products and services. A recent example of regulatory changes affecting
the industry is the enactment of the Telecommunications Act of 1996. See
"-- Government Regulation." In addition, many of the Company's customers are
affected by general economic conditions. Any downturn or other disruption of the
wireless communications industry caused by adverse competitive developments,
technological changes, government regulation, lack of available financing or
other factors would have a material adverse effect on the Company's business,
results of operations and financial condition.
 
  Uncertainty and Fluctuations of Operating Results.
 
     The Company has experienced and may continue to experience fluctuations in
quarterly and annual operating results due to variations in the amount and
timing of revenues generated by its wireless infrastructure building and
implementation services business and wireless infrastructure components
business. While the Company anticipates that its tower leasing services will
provide a recurring revenue stream, there can be no assurance that the Company
will sustain profitability on a quarterly or annual basis in the future.
Although the Company's strategy will focus on expanding its network of owned
towers and leasing space to wireless providers and broadcasters, the Company's
future results will continue to depend in part on the continued deployment of
new wireless communications networks in the U.S. and the continued success of
the Company's wireless infrastructure building and implementation services
business and the Company's ability to successfully manufacture and sell
commercial scale quantities of its wireless infrastructure components on a
timely and profitable basis.
 
  Implementation of Business Strategy
 
     The Company's strategy of expanding its network of sites and towers to
provide leased space to multiple wireless providers and broadcasters is subject,
among other things, to the Company's ability to enter into additional
build-to-suit arrangements, to secure additional opportunities to acquire
outsourced towers and to attract other tenants to co-locate on the Company's
towers. Competition for the construction of build-to-suit networks is great and
there can be no assurance that the Company will be able to enter into
significant build-to-suit arrangements, obtain attractive sites or develop sites
in a cost-effective manner. The rapid consolidation of the tower industry has
led to increased competition for existing assets in prime locations and there
can be no assurance that the Company will be able to acquire additional
outsourced towers that may become available or that the Company will be able to
complete acquisitions on terms satisfactory to the Company. Finally, the Company
will face competition from other tower owners for additional tenants and such
competitors may have more attractive sites or more favorable lease terms.
Because wireless providers and broadcasters are generally reluctant to relocate,
the number of potential tenants for the Company's leasing operations may be
limited.
 
  Dependence on Key Personnel
 
     The Company relies on the business and technical expertise of its senior
management personnel and certain other key employees. The Company's future
performance depends in substantial part upon the continued contributions of
these individuals. The loss of the services of any one of these individuals
could have a material adverse effect on the Company's business, results of
operations and financial condition. In particular, the Company's future
performance is highly dependent on the continued contributions of Mr. Carl E.
Hirsch, the Company's President and Chief Executive Officer, and Mr. Michael R.
Budagher, the Company's Chief Operating Officer. The loss of the services of
Messrs. Hirsch or Budagher may have a
                                       18
<PAGE>   20
 
material adverse effect on the Company's business, results of operations and
financial condition. Each of Messrs. Hirsch and Budagher, as well as certain
other executives of the Company, have entered into employment agreements with
the Company. See "Item 10. EXECUTIVE COMPENSATION -- Employment Agreements."
 
  Dependence on Labor Force
 
     The Company's future success is also dependent on its ability to attract
and retain experienced, highly qualified marketing and technical employees,
project managers and other key employees who perform and manage the wireless
infrastructure building and implementation services provided by the Company. The
Company believes there is, and there will continue to be, intense competition
for the services of these individuals from competitors in the wireless
infrastructure development and implementation industry and from providers of
wireless communications services. The loss of significant numbers of the
Company's current marketing, technical and project management personnel or the
inability to attract and retain sufficient numbers of additional marketing,
technical and project management personnel to support the expansion of the
Company's business would have a material adverse effect on the Company's
business, results of operations and financial condition. There can be no
assurance that the Company will be able to retain its key employees or that it
will be able to attract or retain other experienced, highly qualified marketing,
technical and project management personnel in the future.
 
  Risks Related to Acquisitions
 
     The acquisition of towers and tower companies is a key component of the
Company's business strategy. Execution of this component of its business
strategy requires the Company's management to, among other things, (i) identify
geographic markets (local, regional or national) in which the Company can
successfully compete, (ii) identify acquisition candidates who are willing to be
acquired at prices and on terms acceptable to the Company and (iii) consummate
identified acquisitions. In addition, it is possible that future acquisitions
will require the Company to obtain additional financing either to consummate the
acquisition or to provide additional working capital to facilitate the increased
level of business activity caused by the acquisition. Certain risks are inherent
in an acquisition strategy, such as dilution of outstanding equity securities,
increased leverage and debt service requirements, the difficulty in combining
different company cultures and facilities and the possibility of significant
turnover among key employees of the acquired company following the acquisition,
any of which could materially adversely affect the Company's operating results
or the market price of the Company Common Stock prevailing from time to time.
The success of any completed acquisition will depend in part on the Company's
ability to effectively integrate the acquired business, which integration may
involve unforeseen difficulties and may require a disproportionate amount of
management's attention and the Company's financial and other resources.
 
  Possible Need for Additional Financing
 
     During the past three fiscal years, the Company has made significant
expenditures for the acquisition of new equipment used primarily in the
Company's wireless infrastructure building and implementation services business
and to make certain of the Company's recent acquisitions of towers and tower
companies. In addition, the Company's strategy of building towers for its own
account to be leased to wireless carriers and broadcasters requires the Company
to incur significant capital expenditures for the acquisition of tower sites and
the construction of towers prior to the Company receiving revenues from leasing
services with respect to such sites and towers. To the extent that the Company's
cash resources are insufficient to fund the Company's activities, the Company
will be required to raise additional funds. The Company may, from time to time,
seek additional funding through the amendment of the Credit Agreement, or public
or private financing, including debt or equity financing. There can be no
assurance that adequate funding will be available as needed on terms acceptable
to the Company, or at all. If additional funds are raised by issuing equity or
convertible debt securities, existing stockholders may experience dilution.
Insufficient funds may inhibit future growth or require the Company to scale
back or eliminate some or a significant part of its business.
 
                                       19
<PAGE>   21
 
  Competition
 
     Competition in the wireless infrastructure building and implementation
services, the wireless infrastructure components businesses and the tower
leasing business is intense and many of the Company's competitors have
financial, technical, marketing, sales, manufacturing, distribution and other
resources substantially greater than those of the Company. There can be no
assurance that the Company will be able to compete effectively or that future
increases or changes in competition will not have a material adverse effect on
the Company's business, results of operations and financial condition. See "ITEM
1. DESCRIPTION OF BUSINESS -- Competition."
 
  Product Liability
 
     The manufacturing, marketing and use of the Company's wireless
infrastructure components entail the risk of product liability. While the
Company currently has product liability insurance that it believes is adequate
to protect against product liability claims, no assurance can be given that the
Company will be able to continue to maintain such insurance at a reasonable cost
or in sufficient amounts to protect the Company against losses due to product
liability. An inability to maintain insurance at an acceptable cost or to
otherwise protect against potential product liability could prevent or inhibit
the Company's ability to market its wireless infrastructure components. In
addition, a product liability claim or recall could have a material adverse
effect on the business, results of operations and financial condition of the
Company.
 
  Risks Associated with Potential Operations Outside the U.S.
 
     To date, the Company has derived substantially all its revenues from sales
in the U.S. Consequently, the Company has very little experience doing business
outside the U.S. While the Company continues to evaluate potential opportunities
to perform wireless infrastructure building and implementation services and sell
wireless infrastructure components outside the U.S., the Company has reached no
agreements with respect to any such involvement. There can be no assurance that
the Company will in fact begin to do business outside the U.S. or, if such
operations are commenced, that they will be successful. If the Company does
begin to do business outside the U.S., the Company will be subject to the risks
of doing business internationally, including unexpected changes in regulatory
requirements; fluctuations in foreign currency exchange rates; imposition of
tariffs and other barriers and restrictions; the burdens of complying with a
variety of foreign laws; and general economic and geopolitical conditions,
including inflation and trade relationships. There can be no assurance that
currency fluctuations, changes in the rate of inflation or any of the
aforementioned factors will not have a material adverse effect on the Company's
business, results of operations and financial condition.
 
  Government Regulation
 
     The wireless communications industry is subject to regulation by state
regulatory agencies, the FCC, Congress, the courts and other governmental
bodies. There can be no assurance that any of these governmental bodies will not
adopt or change regulations or take other actions that would adversely affect
the wireless communications industry and the Company's business, results of
operations and financial condition.
 
     The Telecommunications Act of 1996 is expected to cause significant changes
in existing regulation of the telecommunications industry that are intended to
promote the competitive development of new services, to expand public
availability of telecommunications services and to streamline regulation of the
industry. These changes include requirements that local exchange carriers must:
(i) permit other competitive carriers, which may include many wireless
communications service providers, to interconnect to their networks, (ii)
establish reciprocal compensation agreements with competitive carriers to
terminate traffic on each other's networks, and (iii) offer resale of their
local loop facilities. The implementation of these requirements by the FCC and
state authorities potentially involves numerous changes in established rules and
policies that could adversely affect the wireless communications industry and
the Company's business, results of operations and financial condition.
 
     In addition, the construction and installation of wireless transmitting and
receiving facilities are often subject to state or local zoning, land use and
other regulation. Such regulation may include zoning,
                                       20
<PAGE>   22
 
environmental and building permit approvals or other state or local
certification. The Telecommunications Act of 1996 provides that state and local
authority over the placement, construction and modification of personal wireless
services (including CMRS and unlicensed wireless services) shall not prohibit or
have the effect of prohibiting personal wireless services or unreasonably
discriminate among providers of functionally equivalent services. Although state
and local zoning authorities retain their rights over land use, their actions
cannot have the effect of banning wireless services or picking and choosing
among similar wireless providers.
 
  Alleged Health Risks Related to RF Emissions
 
     Allegations have been raised that the use of cellular telephones and other
wireless communications devices may pose health risks to humans due to RF
emissions from the handsets. Concerns over RF emissions may have the effect of
discouraging the use of wireless communications. Studies performed by wireless
telephone equipment manufacturers dispute these allegations, and a major
industry trade association and certain governmental agencies have stated
publicly that the use of such phones poses no undue health risk. Regardless of
the truth of these allegations, they could have an adverse effect on the
wireless communications industry which in turn could have an adverse effect on
the Company. In addition, digital wireless telephones have been shown to cause
interference with some electronic devices, such as hearing aids and pacemakers.
The FCC has recently adopted new standards for safe RF output and radiation from
communications sites. All legacy sites must comply with such standards by
September 1, 2000 and all new sites must be in compliance immediately.
Compliance with such standards, or the adoption of more stringent standards, may
have an adverse effect on the wireless communications industry which in turn
could adversely effect the Company.
 
  Seasonality of Installation Activities
 
     Historically, the rate at which contracts for the installation and retrofit
of wireless communications facilities are awarded has been lower during the
period from January 1 to March 31 of each year due to contracting practices of
many providers of wireless communications. In addition, cold weather and the
limited daylight hours in the winter months in certain markets have lowered the
revenues received from wireless infrastructure building and implementation
services during these months. Therefore, the Company may experience lower than
average revenues during the winter season.
 
  Volatility of Stock Price
 
     Historically, the Company's stock price has been volatile. The sales prices
for the Company's Common Stock have ranged from $11.25 to $48.50 during the
fiscal year ended June 30, 1998. See "ITEM 5. MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDERS MATTERS." Future announcements concerning the Company or
its competitors or the wireless communications industry, changes in
recommendations of securities analysts, government regulations or other events
may have a significant impact on the market price of the Company's Common Stock.
The Company's future earnings and stock price may be subject to significant
volatility, particularly on a quarterly basis. Any shortfalls in revenues or
earnings from the levels expected by securities analysts could have an immediate
and significant adverse effect on the trading price of the Company's Common
Stock in any given period.
 
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
     The information called for by this item is included in the Company's
Consolidated Financial Statements and the notes thereto beginning on page F-1 of
this Annual Report.
 
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE
 
     By unanimous written consent dated as of July 21, 1998, the Board of
Directors of the Company engaged the accounting firm of Ernst & Young LLP as the
independent auditors for the Company for its fiscal year ended June 30, 1998.
The engagement of KPMG Peat Marwick LLP, which had theretofore served as the
Company's independent auditors, was terminated effective July 21, 1998. The
additional disclosures with respect to this matter called for by this item were
previously reported (as that term is defined in Rule 12b-2 under the Exchange
Act) in the Company's Form 8-K dated July 21, 1998 filed with the Securities and
Exchange Commission on July 24, 1998.
 
                                       21
<PAGE>   23
 
                                    PART III
 
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT
 
     The following table sets forth information regarding the directors,
nominees for director and executive officers of the Company.
 
     The Board of Directors of the Company is classified into three classes.
Each Class I Director will hold office until the 1998 annual meeting of
stockholders of the Company, each Class II Director will hold office until the
1999 annual meeting of stockholders of the Company and each Class III director
will hold office until the 2000 annual meeting of stockholders of the Company
and, in each case, until his successor is duly elected or appointed and
qualified in the manner provided in the Certificate of Incorporation of the
Company or the Bylaws of the Company, or as otherwise provided by applicable
law.
 
<TABLE>
<CAPTION>
               NAME                 AGE                        POSITION
               ----                 ----                       --------
<S>                                 <C>    <C>
Michael R. Budagher...............    40   Chief Operating Officer and Vice Chairman,
                                           Director
Ernie L. Carpenter................    58   Director
John D. Emery.....................    51   Director
Jack D. Furst.....................    39   Chairman of the Board, Director
Carl E. Hirsch....................    52   President and Chief Executive Officer, Director
Jeffrey A. Howard.................    38   Vice President -- Corporate Development, Director
F. Howard Mandel..................    37   Vice President and General Counsel
Anthony S. Ocepek.................    60   Executive Vice President and Chief Financial
                                           Officer
Steven M. Smith...................    33   Vice President -- Finance
Lawrence D. Stuart, Jr. ..........    54   Director
J. Otis Winters...................    65   Director
</TABLE>
 
     Mr. Budagher has served as Chief Operating Officer and Vice Chairman of the
Company since the effective date of the April Merger and Treasurer of the
Company since June 1996. Prior to the effective date of the April Merger, and
from the inception of the Company, Mr. Budagher served as Chairman of the Board,
President and Chief Executive Officer of the Company. Mr. Budagher has served as
a Director of the Company since its inception and is currently serving as a
Class III Director. Mr. Budagher is also a founder, stockholder and President of
Specialty Antenna Site Resources, Inc. ("SASR") and a founder and President of
Specialty Constructors Coatings, Inc.
 
     Mr. Carpenter was elected to the Board of Directors in September 1997 and
currently serves as a Class II Director. Since March 1997, Mr. Carpenter has
been President and Chief Executive Officer of Microwave Tower Service, Inc., a
wholly-owned subsidiary of the Company. For more than five years prior to March
1997, Mr. Carpenter was Controller of Microwave Tower Service, Inc.
 
     Mr. Emery has been a Director of the Company since 1994 and currently
serves as a Class I Director. For more than five years prior to the date hereof,
Mr. Emery has been President of Corporate Development Center, Inc., a consulting
firm specializing in assisting fast-growth companies, arranging mergers and
acquisitions, rendering expert valuations and providing crisis management
services to businesses. In August 1997, Mr. Emery founded Growth Dynamics, LLC,
which provides consulting and other services primarily to new or recently formed
high technology companies. Mr. Emery has taught Entrepreneurship, Business
Ethics and Organizational Environment, and Business Policy and Strategy at the
University of New Mexico.
 
     Mr. Furst has been Chairman of the Board and a Director of the Company
since April 1998 and currently serves as a Class III Director. Mr. Furst is a
Managing Director and Principal of Hicks, Muse, Tate & Furst Incorporated and
has held such position since 1989. Mr. Furst currently serves as a Director of
Cooperative Computing, Inc., Hedstrom Corp., International Wire Holding Company
and Viasystems, Inc.
 
                                       22
<PAGE>   24
 
     Mr. Hirsch has served as President, Chief Executive Officer and Director of
the Company since April 1998. Mr. Hirsch currently serves as a Class I Director.
From October 1997 until April 1998, Mr. Hirsch served as President and Chief
Executive Officer of OmniAmerica Towers, Inc. Prior to that time and for more
than five years prior to the date hereof, Mr. Hirsch served as the Chairman of
the Board, President and Chief Executive Officer of OmniAmerica Communications,
Inc., the managing general partner of OmniAmerica Group.
 
     Mr. Howard has served as Vice President -- Corporate Development and
Director of the Company since April 1998. Mr. Howard currently serves as a Class
I Director. From December 1997 until April 1998, Mr. Howard served as Vice
President -- Business Development of the Company. From March 1994 to December
1997, Mr. Howard was a named partner of the law firm, Jordaan, Howard &
Pennington, PLLC. Prior to that time and for more than five years prior to the
date hereof, Mr. Howard served as Vice President and General Counsel of Carlyle
Capital Markets, Inc.
 
     Mr. Mandel has served as Vice President and General Counsel of the Company
since April 1998. Since November 1997, Mr. Mandel has served as Vice President
of OmniAmerica Towers, Inc. For more than five years prior to the date hereof,
Mr. Mandel served as an associate and a partner of the law firm of Thompson,
Hine & Flory LLP. Mr. Mandel continues to be a non-equity partner of the same
firm.
 
     Mr. Ocepek has served as Executive Vice President and Chief Financial
Officer of the Company since April 1998. From October 1997 until April 1998, Mr.
Ocepek served as Senior Vice President, Chief Financial Officer and Director of
OmniAmerica Towers, Inc. For more than five years prior to the date hereof, Mr.
Ocepek served as the Senior Vice President of OmniAmerica Communications, Inc.,
the managing general partner of OmniAmerica Group.
 
     Mr. Smith has served as Vice President -- Finance since April 1998. From
November 1997 until April 1998, Mr. Smith served as Vice President of
OmniAmerica Towers, Inc. For more than five years prior to the date hereof, Mr.
Smith served as Vice President -- Finance of OmniAmerica Communications, Inc.,
the managing general partner of OmniAmerica Group.
 
     Mr. Stuart has served as a Director of the Company since April 1998 and
currently serves as a Class II Director. Mr. Stuart is a Managing Director and
Principal of Hicks, Muse, Tate & Furst Incorporated and has held such position
since October 1995. Prior to joining Hicks, Muse, Tate & Furst Incorporated,
from 1990 to 1995, Mr. Stuart served as the managing partner of the Dallas
office of the law firm Weil, Gotshal & Manges LLP. Mr. Stuart currently serves
as a Director of Capstar Broadcasting Corp., Chancellor Media Corp. and Arena
Brands Holding Corporation.
 
     Mr. Winters has served as a Director of the Company since April 1998 and
currently serves as a Class II Director. Mr. Winters has served in several
positions, including Chief Executive Officer and Chairman of the Board, with PWS
Group Inc. during the last five years. Mr. Winters currently serves as a
Director of Dynegy, Inc., AMX Corporation, Walden Residential Properties, Inc.
and Chancellor Media Corporation.
 
  Compliance with Section 16(a) of the Exchange Act
 
     Section 16(a) of the Exchange Act requires the Company's officers and
directors and persons who own more than ten percent of the Company's Common
Stock to file reports of ownership and changes in ownership with the Securities
and Exchange Commission. Officers, directors and greater than ten-percent owners
are required by the Securities and Exchange Commission regulations to furnish
the Company with copies of all Section 16(a) forms they file.
 
     Based solely on the Company's review of the copies of such forms received
by it, the Company believes that, during the fiscal year ended June 30, 1997,
all filing requirements applicable to its officers, directors and greater than
ten-percent owners were complied with, except the Forms 4 for Mr. Stuart and Mr.
Furst, relating to the transfer of Company Common Stock to each of them by
OmniPartners, were late. Forms 5 were filed for Mr. Stuart and Mr. Furst with
respect to such transfers.
 
                                       23
<PAGE>   25
 
ITEM 10. EXECUTIVE COMPENSATION
 
     The following table sets forth the compensation paid during each of the
three years in the period ended June 30, 1998 to the following individuals (the
"Named Executive Officers"): (i) the Chief Executive Officer and each other
individual who was serving as an executive officer of the Company at June 30,
1998 whose total annual salary and bonus for the fiscal year ended June 30, 1998
was in excess of $100,000 and (ii) Michael R. Budagher, who served as Chief
Executive Officer of the Company prior to the April Merger and who was serving
as the Vice Chairman and Chief Operating Officer of the Company at June 30,
1998.
 
                           SUMMARY COMPENSATION TABLE
 
<TABLE>
<CAPTION>
                                                                          LONG TERM
                                                                         COMPENSATION
                                                                         ------------
                                              ANNUAL COMPENSATION         SECURITIES        ALL
                                         -----------------------------    UNDERLYING       OTHER
NAME AND PRINCIPAL POSITION              YEAR     SALARY($)   BONUS($)     OPTIONS      COMPENSATION
---------------------------              ----     ---------   --------   ------------   ------------
<S>                                      <C>      <C>         <C>        <C>            <C>
Carl E. Hirsch.........................  1998(1)   273,500         --           --           --
  President and Chief Executive          1997           --         --           --           --
  Officer (since April 23, 1998)         1996           --         --           --           --
Anthony S. Ocepek......................  1998(1)   232,944         --           --           --
  Executive Vice President and           1997           --         --           --           --
  Chief Financial Officer                1996           --         --           --           --
  (since April 23, 1998)
Ernie L. Carpenter.....................  1998      150,000         --       60,000           --
  President and Chief Executive Officer  1997      116,667    110,000           --           --
  of Microwave Tower Service, Inc.       1996       50,000     35,000           --           --
F. Howard Mandel.......................  1998(1)   116,667         --           --           --
  Vice President and General Counsel     1997           --         --           --           --
  (since April 23, 1998)                 1996           --         --           --           --
Michael R. Budagher....................  1998       70,833         --           --           --
  Vice Chairman and Chief Operating      1997       85,000         --           --          850(2)
  Officer (since April 23, 1998) and     1996       85,000         --           --           --
  Chief Executive Officer (until April
  23, 1998)
</TABLE>
 
---------------
 
(1) Amounts for the fiscal year ended June 30, 1998 for Messrs. Hirsch, Ocepek
    and Mandel include compensation paid to such individuals as executive
    officers of OmniAmerica Holdings Corporation and its subsidiaries prior to
    the April Merger.
 
(2) Reflects employer contributions under the Specialty Constructors, Inc.
    Profit Sharing Plan.
 
                                       24
<PAGE>   26
 
     The following table summarizes option grants made during the fiscal year
ended June 30, 1998 to the Named Executive Officers. Other than as set forth
below, no stock options, SARs or awards under any long-term incentive plan were
granted to any Named Executive Officer in the fiscal year ended June 30, 1998.
 
                       OPTIONS GRANTS IN LAST FISCAL YEAR
 
<TABLE>
<CAPTION>
                                                                     INDIVIDUAL GRANTS
                                                   -----------------------------------------------------
                                                   NUMBER OF
                                                   SECURITIES    PERCENT OF
                                                   UNDERLYING   TOTAL OPTIONS
                                                    OPTIONS      GRANTED TO     EXERCISE OR
                                                    GRANTED     EMPLOYEES IN    BASE PRICE    EXPIRATION
                                                     (#)(1)      FISCAL YEAR      ($/SH)         DATE
                                                   ----------   -------------   -----------   ----------
<S>                                                <C>          <C>             <C>           <C>
Ernie L. Carpenter...............................    60,000         18.7%         $12.50       12/3/07
</TABLE>
 
---------------
 
(1) The options to purchase Company Common Stock were granted under the
    Company's 1997 Stock Incentive Plan and become exercisable in three equal
    annual installments commencing on January 1, 1999.
 
     The following table summarizes the value of options to acquire Company
Common Stock held by the Named Executive Officers as of June 30, 1998. Other
than as set forth below, at June 30, 1998, no Named Executive Officer held any
unexercised stock options or SARs.
 
              AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
                        FISCAL YEAR END OPTION VALUES(1)
 
<TABLE>
<CAPTION>
                                                      NUMBER OF SECURITIES
                                                     UNDERLYING UNEXERCISED       VALUE OF UNEXERCISED
                                                     OPTIONS AT FISCAL YEAR      IN-THE-MONEY OPTIONS AT
                                                             END(#)               FISCAL YEAR END($)(2)
                                                    -------------------------   -------------------------
                                                    EXERCISABLE/UNEXERCISABLE   EXERCISABLE/UNEXERCISABLE
                                                    -------------------------   -------------------------
<S>                                                 <C>                         <C>
Ernie L. Carpenter................................          0/60,000                   0/1,470,000
</TABLE>
 
---------------
 
(1) No options were exercised by a Named Executive Officer in fiscal 1998.
 
(2) Reflects a market value of the underlying securities of $37.00 per share,
    the closing price on The Nasdaq Stock Market on June 30, 1998, less the
    exercise price.
 
EMPLOYMENT AGREEMENTS
 
     Executive Employment Agreements with Messrs. Hirsch, Budagher and
Ocepek. Each of Messrs. Hirsch, Budagher and Ocepek entered into Executive
Employment Agreements with the Company effective April 23, 1998 with terms
ending on April 23, 2000; provided that the term of each such employment
agreement shall be extended for successive one year terms unless either party
shall give notice that the term shall not be so extended at least 120 days prior
to the end of the initial term or annual extension, as the case may be. The
employment agreements provide that Messrs. Hirsch, Budagher and Ocepek shall
serve as the President and Chief Executive Officer, Vice Chairman and Chief
Operating Officer, and Executive Vice President and Chief Financial Officer,
respectively, of the Company. The employment agreements further provide that
Messrs. Hirsch, Budagher and Ocepek shall receive an annual base salary of
$295,000, $245,000 and $245,000, respectively, subject to increase as determined
in the sole discretion of the Board of Directors of the Company, and that each
such executive officer shall be eligible for annual bonuses based on budgeted
earnings before income tax, depreciation and amortization and other criteria
established by the Board of Directors at the beginning of each fiscal year. The
employment agreements also provide that Messrs. Hirsch, Budagher and Ocepek will
be entitled to other customary benefits generally made available to other
executives of the Company. The employment agreements provide for a severance
payment equal to twelve months base salary in the event of termination of
employment by the executive for Good Reason (as defined) or by the Company other
than for Cause (as defined), Financial Cause (as defined) or the executive's
death, permanent disability or retirement and for severance payments equal to
six months base salary in the event of
 
                                       25
<PAGE>   27
 
termination by the Company for Financial Cause. Pursuant to the employment
agreements, Messrs. Hirsch, Budagher and Ocepek have agreed that, subject to
certain exceptions, during the term of their respective agreements and for one
year thereafter, they will not (i) solicit, entice, persuade or induce any
employee of the Company or its subsidiaries to terminate his employment with the
Company or its subsidiaries or become employed by any other person and (ii)
compete with the Company through any person or other business enterprise having
or operating transmission towers within any of the same markets as the Company
or any of its subsidiaries.
 
     Executive Employment Agreement with Mr. Carpenter. Mr. Carpenter entered
into an Employment Agreement with Microwave Tower Service, Inc., a wholly owned
subsidiary of the Company ("MTS"), on June 30, 1997 for a term of three years
pursuant to which Mr. Carpenter serves as President and Chief Executive Officer
of MTS. The employment agreement provides that Mr. Carpenter shall receive an
annual salary of $150,000 and shall be eligible for a bonus for each fiscal year
during which Mr. Carpenter is continuously employed by MTS. The employment
agreement also provides that Mr. Carpenter will be entitled to such benefits as
are customarily provided to other employees of MTS. Pursuant to his employment
agreement, Mr. Carpenter has agreed that he will not, during the term of his
employment and for two years thereafter, (i) directly or indirectly, engage or
participate in any business or other activities in competition with MTS in the
United States, (ii) directly or indirectly, call upon any customer of MTS, the
Company or their respective subsidiaries for the purpose of selling to or
supplying such customer with products or services similar to the products and
services provided by MTS, the Company or their respective subsidiaries and (iii)
directly or indirectly, solicit or employ any person employed by MTS, the
Company or their respective subsidiaries.
 
COMPENSATION OF DIRECTORS
 
     Prior to the April Merger, Directors received $500 for each Board of
Directors meeting attended and reimbursement for expenses incurred in attending
such meetings. In addition, Directors who served on committees received $100 per
hour for time spent attending meetings of such committees. The Company has not
adopted a formal policy regarding the compensation of Directors following the
April Merger. The Company anticipates that Directors will be compensated in
accordance with the policy in effect prior to the April Merger until such time
as a new policy has been adopted.
 
                                       26
<PAGE>   28
 
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     As of September 16, 1998, there were 15,096,360 shares of Company Common
Stock issued and outstanding. The following table sets forth certain
information, as of September 16, 1998, with respect to the beneficial ownership
of shares of Company Common Stock by (i) all persons known by the Company to be
the beneficial owners of more than 5% of the outstanding shares of Company
Common Stock (as derived solely from the Company's review of Schedules 13D and
13G on file with the Commission and from correspondence received from or
telephone conversations with certain stockholders of the Company), (ii) each
director of the Company, (iii) each Named Executive Officer, and (iv) all
executive officers and directors of the Company as a group.
 
<TABLE>
<CAPTION>
                                                          AMOUNT AND NATURE OF
                                                         BENEFICIAL OWNERSHIP OF
NAME AND ADDRESS OF BENEFICIAL OWNER                     COMPANY COMMON STOCK(1)   PERCENT OF CLASS
------------------------------------                     -----------------------   ----------------
<S>                                                      <C>                       <C>
Thomas O. Hicks........................................         6,676,099(2)             44.2%
  200 Crescent Court, Suite 1600
  Dallas, Texas 75201-6950
HMTF/Omni Partners, L.P................................         6,648,811                44.0%
  200 Crescent Court, Suite 1600
  Dallas, Texas 75201-6950
Tommie R. Carpenter....................................         2,280,000(3)             15.1%
  888 Coburn St. South
  Salem, Oregon 97302
Michael R. Budagher....................................         2,155,000(4)             14.3%
  12001 Hwy 14 North
  Cedar Crest, New Mexico 87001
John D. Emery..........................................            12,000(5)                *
Jack D. Furst..........................................            17,604                   *
Carl E. Hirsch.........................................            17,000(6)                *
Jeffrey A. Howard......................................           137,500(7)                *
Lawrence D. Stuart, Jr.................................             5,065                   *
Ernie L. Carpenter.....................................                --                  --
J. Otis Winters........................................                --                  --
Anthony S. Ocepek......................................                --(6)               --
F. Howard Mandel.......................................                --(6)               --
All executive officers and directors as a group (11             2,344,169                15.5%
  persons).............................................
</TABLE>
 
---------------
 
 *  Less than 1%.
 
(1) Based upon information supplied or confirmed by officers, directors and the
    principal stockholders. The percentage of class assumes the exercise of all
    options and warrants held by the named individual that are exercisable on
    September 16, 1998, or within sixty days thereafter, but not the exercise of
    any other options or warrants that are outstanding.
 
(2) Includes (i) 24,412 shares owned of record by Mr. Hicks, (ii) 2,876 shares
    owned of record by six trusts of which Mr. Hicks serves as trustee and (iii)
    6,648,811 shares owned of record by HMTF/Omni Partners, L.P., a limited
    partnership of which the sole general partner is HM3/OmniAmerica Partners,
    LLC, a limited liability company of which the sole member is HM3
    Coinvestors, L.P., a limited partnership of which the sole general partner
    is Hicks, Muse GP Partners III, L.P., a limited partnership of which the
    sole general partner is Hicks, Muse Fund III Incorporated, a corporation of
    which Mr. Hicks is the sole director, Chairman of the Board, Chief Executive
    Officer, Secretary and sole
 
                                       27
<PAGE>   29
 
stockholder. Mr. Hicks expressly disclaims (i) the existence of any group and
(ii) beneficial ownership with respect to any shares of Company Common Stock not
owned of record by him.
 
(3) Includes (i) 174,300 shares owned of record by Mr. Carpenter, (ii) 174,300
    shares owned of record by Virginia Carpenter, Mr. Carpenter's wife, and
    (iii) 1,931,400 shares owned by Carpenter Family Investments LLC, of which
    Mr. Carpenter and his wife are the sole members.
 
(4) Consists entirely of shares owned by the Budagher Family LLC, of which Mr.
    Budagher is the general manager.
 
(5) Consists entirely of shares that are deemed beneficially owned by Mr. Emery
    by virtue of options held by him that are exercisable within 60 days of
    September 16, 1998.
 
(6) In addition to shares of Company Common Stock, if any, owned of record by
    Messrs. Hirsch, Ocepek and Mandel, each of Messrs. Hirsch, Ocepek and Mandel
    is also a limited partner of HMTF/Omni Partners, L.P. The percentage
    ownership represented by Messrs. Hirsch's, Ocepek's and Mandel's limited
    partnership interests are equivalent to 487,847, 487,847 and 71,118 shares,
    respectively, of the shares of Company Common Stock owned by HMTF/Omni
    Partners, L.P. Each of Messrs. Hirsch, Ocepek and Mandel expressly disclaims
    (i) the existence of any group and (ii) beneficial ownership with respect to
    any shares of Company Common Stock not owned of record by him.
 
(7) Includes (i) 50,000 shares owned of record by Mr. Howard and (ii) 87,500
    shares that are deemed beneficially owned by Mr. Howard by virtue of options
    held by him that are exercisable within 60 days of September 16, 1998.
 
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     Set forth below is a description concerning transactions that may not
otherwise be described herein by and between the Company and/or its affiliates
and other persons or entities affiliated with the Company or its affiliates. The
Company is of the view that each of such transactions was on terms no less
favorable to the Company than would otherwise have been available to the Company
in arms-length transactions with unaffiliated third parties.
 
     Until March 1, 1997, Michael R. Budagher owned 50% of Specialty
Constructors Coatings, Inc. ("SCC"). SCC provides lead abatement services and
finishes or refinishes metal structures, principally elevated water towers.
During the year ended June 30, 1997, the Company paid $606,304 for services
provided by SCC to the Company. On March 1, 1997, Mr. Budagher sold his interest
in SCC to two employees of SCC pursuant to a warrant to purchase said interests
that was sold to these employees in 1996. On June, 1, 1997, the Company acquired
substantially all the assets of SCC in exchange for 55,814 shares of Company
Common Stock.
 
     Bruce P. Budagher, Vice President of Specialty Constructors and the brother
of Michael R. Budagher, and Sheril E. Budagher, the spouse of Michael R.
Budagher, own all of the outstanding stock of Specialty Manufacturing, Inc.
("SMI"). Until August 1997, SMI manufactured devices ("SMI ground kits") that
ground electric transmission lines used in connection with wireless transmitting
and receiving facilities. Historically, the Company has bought SMI ground kits
for use in connection with certain of the Company's wireless infrastructure
building operations. During fiscal 1997 and 1998, the Company purchased $29,852
and $3,768, respectively, of SMI ground kits. In August, 1997, Microwave Tower
Service, Inc., a wholly-owned subsidiary of the Company, acquired substantially
all the inventory and manufacturing equipment of SMI and the right to
manufacture and sell SMI ground kits in exchange for approximately $134,832 in
cash and the right to receive a royalty of $2.00 per SMI ground kit sold by
Microwave Tower Service, Inc. during the period beginning August 1, 1997 and
ending July 31, 2000. During fiscal year 1998, the Company paid $42,348 to SMI
pursuant to the royalty arrangement.
 
     The Company has utilized contract labor from Budagher Tower Co., a company
wholly owned by William J. Budagher, a brother of Michael R. Budagher and Bruce
P. Budagher. The Company paid $452,338 and $252,933 for contract labor services
provided by Budagher Tower Co. for the fiscal years ended June 30, 1997 and
1998, respectively.
 
                                       28
<PAGE>   30
 
     The Company presently leases approximately 5,400 square feet of office
space from Michael R. Budagher for $16,800 annually. The office space is located
in a 6,400 square foot building in Cedar Crest, New Mexico. This office serves
as the Company's headquarters and as a regional office for the Company's
wireless infrastructure building and implementation and wireless infrastructure
electrical design and engineering operations. Management of the Company believes
that the rent for the space is at least as favorable as could have been
negotiated in an arms-length transaction.
 
     In connection with the MTS Merger, on June 30, 1997, the Company borrowed
$2,000,000 (the "Carpenter Loan") from Tommie R. Carpenter. The Carpenter Loan
has an interest rate of 8.25% and is secured by finished goods inventory of the
Company. The principal balance of the Carpenter Loan at June 30, 1998 was
$80,000.
 
     On December 29, 1997, the Company loaned $600,000 to Jeffrey A. Howard (the
"Howard Loan"), due and payable on December 29, 2002, for the purchase of 50,000
shares of Company Common Stock. The Howard Loan has an annual interest rate of
the lesser of (i) seven percent and (ii) the maximum rate of nonusurious
interest allowed from time to time by law.
 
     On April 23, 1998, the Company and its subsidiaries entered into a ten-year
agreement (the "Monitoring and Oversight Agreement") with Hicks, Muse & Co.
Partners, L.P. ("Hicks Muse Partners"), an affiliate of OmniPartners, pursuant
to which they pay Hicks Muse Partners an annual fee of $180,000 for oversight
and monitoring services to the Company and its subsidiaries. The annual fee is
adjustable at the end of each fiscal year to an amount equal to 0.2% of the
budgeted consolidated annual net sales of the Company and its subsidiaries for
the then current fiscal year, but in no event less than $180,000. Messrs. Thomas
O. Hicks, Jack D. Furst and Lawrence D. Stuart, Jr. are each principals of Hicks
Muse Partners. In addition, the Company and its subsidiaries have agreed to
indemnify Hicks Muse Partners, its affiliates and their respective directors,
officers and controlling persons, if any, and, agents and employees of Hicks
Muse Partners or any of its affiliates from and against all claims, liabilities,
losses, damages, and expenses, including legal fees, arising out of or in
connection with the services rendered by Hicks Muse Partners in connection with
the Monitoring and Oversight Agreement.
 
     On April 23, 1998, the Company and its subsidiaries entered into a ten-year
agreement (the "Financial Advisory Agreement") with Hicks Muse Partners. Hicks
Muse Partners also will be entitled to receive a fee equal to 1.5% of the
transaction value (as defined) for each add-on transaction (as defined) in which
the Company and its subsidiaries is involved. The term "transaction value" means
the total value of any add-on transaction (excluding any fees payable pursuant
to the Financial Advisory Agreement in connection with such add-on transaction)
including the amount of any indebtedness, preferred stock or similar items
assumed (or remaining outstanding). The term "add-on transaction" means any
future proposal for a tender offer, acquisition, sale, merger, exchange offer,
recapitalization, restructuring, or other similar transaction directly or
indirectly involving the Company and its subsidiaries, and any other person or
entity. Messrs. Thomas O. Hicks, Jack D. Furst and Lawrence D. Stuart, Jr. are
each principals of Hicks Muse Partners. In addition, the Company and its
subsidiaries have agreed to indemnify Hicks Muse Partners, its affiliates and
their respective directors, officers and controlling persons, if any, and agents
and employees of Hicks Muse Partners from and against all claims, liabilities,
losses, damages, and expenses, including legal fees, arising out of or in
connection with the services rendered by Hicks Muse Partners in connection with
the Financial Advisory Agreement.
 
     The Monitoring and Oversight Agreement and the Financial Advisory Agreement
make available the resources of Hicks Muse Partners concerning a variety of
financial and operational matters. The services that have been and will continue
to be provided by Hicks Muse Partners could not otherwise be obtained by the
Company and its subsidiaries without the addition of personnel or the engagement
of outside professional advisors. In management's opinion, the fees provided for
under these agreements reasonably reflect the benefits received and to be
received by the Company and its subsidiaries.
 
     OmniPartners, Mr. Budagher, the Budagher Family LLC, of which Mr. Budagher
is the general manager, Mr. Tommie Carpenter (together with Mr. Budagher and the
Budagher Family, LLC, the "Stockholder Group") and certain other stockholders of
the Company have entered into a stockholders agreement (the "Stockholders
Agreement") dated as of April 23, 1998. Pursuant to the Stockholders
                                       29
<PAGE>   31
 
Agreement, each of Hicks, Muse, Tate & Furst Incorporated, an affiliate of
OmniPartners ("HMTF"), and the Stockholder Group is entitled to designate up to
four directors of the Board of Directors of the Company, dependent upon the
percentage of the Company Common Stock owned by OmniPartners and its affiliates
(the "Omni Group") or the Stockholder Group, as applicable. Without the
affirmative vote of a majority of the directors elected by HMTF and a majority
of the directors elected by the Stockholder Group, the Company cannot enter into
certain transactions, including, without limitation, acquisitions involving an
aggregate purchase price in excess of $5,000,000, the disposition of
substantially all of the assets of the Company and its subsidiaries, debt
financing involving more than $10,000,000 or any merger, consolidation or
business combination between the Company or a subsidiary of the Company and any
other entity. Also, pursuant to the terms of the Stockholders Agreement, the
Company has the right of first offer upon the proposed transfer of certain
shares of Company Common Stock that are subject to the Stockholders Agreement.
If the Company chooses not to or fails to purchase such shares, the member of
the Omni Group or Stockholder Group desiring to effect the transfer may offer to
include in the transfer a certain percentage of shares held by other non-
selling shareholders. In addition, OmniPartners and certain of its affiliates
have agreed that prior to the termination of the Stockholders Agreement, none of
them will purchase or otherwise acquire, directly or indirectly, more than 49.9%
of the outstanding shares of Company Common Stock. Furthermore, none of such
parties will take certain actions, including, without limitation, soliciting
proxies, encouraging the formation of voting trusts or commencing other actions
in order to seek control of the Board of Directors of the Company. At any time,
(i) members of the Omni Group owning at least 35% or more of the aggregate
number of Registrable Shares (as defined in the Stockholders Agreement) then
owned by the Omni Group or (ii) members of the Stockholder Group owning 35% or
more of the aggregate number of Registrable Shares then owned by the Stockholder
Group, may request the registration of all or part of its or their Registrable
Shares. Furthermore, all holders of Registrable Shares may include its or their
Registrable Shares in each registration of equity securities by the Company.
 
     On August 13, 1998, the Company announced that it had entered into a
build-to-suit agreement with Alamosa PCS, L.L.C. ("Alamosa"), an affiliate of
Sprint PCS, for the construction of approximately 250 towers for which Alamosa
will be the anchor tenant. It is anticipated that construction of the towers
will be completed by the year 2000. Michael R. Budagher currently owns
approximately 12% of the outstanding equity of Alamosa.
 
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
     (a) Exhibits
 
<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                               DESCRIPTION OF EXHIBIT
        -------                               ----------------------
<C>                        <S>
          2.1              -- Amended and Restated Agreement and Plan of Merger, dated
                              April 22, 1998, among Specialty Teleconstructors, Inc.,
                              OAI Acquisition Corp., OmniAmerica Holdings Corporation,
                              OmniAmerica, Inc., Omni/HSW Acquisition, Inc. and
                              HMTF/OmniPartners, L.P.(1)
          2.2              -- Agreement and Plan of Merger, dated July 24, 1998, by and
                              between Specialty Teleconstructors, Inc. and OmniAmerica,
                              Inc.(2)
          3.1              -- Certificate of Incorporation of the Registrant(2)
          3.2              -- By-laws of the Registrant(2)
          4.1              -- Post-Merger Stockholders Agreement, dated April 23, 1998,
                              among Specialty Teleconstructors, Inc. and the
                              stockholders of Speciality Teleconstructors, Inc. party
                              thereto(1)
         10.1              -- 1998 Stock Option Plan of Specialty Teleconstructors,
                              Inc.(2)
         10.2              -- Executive Employment Agreement, dated December 6, 1997,
                              by and between Specialty Teleconstructors, Inc. and
                              Jeffrey A. Howard(3)
</TABLE>
 
                                       30
<PAGE>   32
 
<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                               DESCRIPTION OF EXHIBIT
        -------                               ----------------------
<C>                        <S>
         10.3              -- Employment Agreement, dated February 16, 1998, effective
                              as of the effective time of the April Merger, between
                              Specialty Teleconstructors, Inc. and Michael R.
                              Budagher(1)
         10.4              -- Executive Employment Agreement, dated February 16, 1998,
                              effective as of the effective time of the April Merger,
                              between Specialty Teleconstructors, Inc. and Carl E.
                              Hirsch(1)
         10.5              -- First Amendment to Employment Agreement, dated April 22,
                              1998, effective as of the effective time of the April
                              Merger, between Specialty Teleconstructors, Inc. and
                              Jeffrey A. Howard(1)
         10.6              -- Executive Employment Agreement, dated February 16, 1998,
                              effective as of the effective time of the April Merger,
                              between Specialty Teleconstructors, Inc. and Anthony S.
                              Ocepek(1)
         10.7              -- Credit Agreement, dated as of June 30, 1998, among
                              Specialty Teleconstructors, Inc., the lenders party
                              thereto, Bankers Trust Company, Bank Boston, N.A. and The
                              Chase Manhattan Bank*
         10.8              -- Guarantee and Collateral Agreement, dated as of June 30,
                              1998, made by Specialty Teleconstructors, Inc. and
                              certain of its subsidiaries, in favor of The Chase
                              Manhattan Bank*
         10.9              -- Monitoring and Oversight Agreement, dated April 23, 1998,
                              among Specialty Teleconstructors, Inc., a Nevada
                              corporation, OmniAmerica Holdings Corporation, a Delaware
                              corporation, OmniAmerica, Inc., a Delaware corporation,
                              Novak & Lackey Construction Co., Inc., an Oklahoma
                              corporation, Specialty Management, Inc., a Nevada
                              corporation, Microwave Tower Services, Inc., an Oregon
                              corporation, Specialty Constructors, Inc., a New Mexico
                              corporation, Specialty Constructors Coatings, Inc., a
                              Nevada corporation, Specialty Capital Services, Inc., a
                              Nevada corporation, Specialty Combined Resources, Inc., a
                              Texas corporation, Specialty Fortress, Inc., a Nevada
                              corporation, Specialty Training Centers, Inc., a Nevada
                              corporation, South Atlantic Tower Corporation, a Delaware
                              corporation, OmniTower, Ltd., a Florida limited
                              partnership, and Hicks, Muse & Co. Partners, L.P., a
                              Texas limited partnership*
         10.10             -- Financial Advisory Agreement, dated April 23, 1998, among
                              Specialty Teleconstructors, Inc., a Nevada corporation,
                              OmniAmerica Holdings Corporation, a Delaware corporation,
                              OmniAmerica, Inc., a Delaware corporation, Novak & Lackey
                              Construction Co., Inc., an Oklahoma corporation,
                              Specialty Management, Inc., a Nevada corporation,
                              Microwave Tower Services, Inc., an Oregon corporation,
                              Specialty Constructors, Inc., a New Mexico corporation,
                              Specialty Constructors Coatings, Inc., a Nevada
                              corporation, Specialty Capital Services, Inc., a Nevada
                              corporation, Specialty Combined Resources, Inc., a Texas
                              corporation, Specialty Fortress, Inc., a Nevada
                              corporation, Specialty Training Centers, Inc., a Nevada
                              corporation, South Atlantic Tower Corporation, a Delaware
                              corporation, OmniTower, Ltd., a Florida limited
                              partnership, and Hicks, Muse & Co. Partners, L.P., a
                              Texas limited partnership*
         10.11             -- Asset Purchase Agreement, dated June 1, 1998, among
                              Specialty Capital Services, Inc. (n/k/a OmniAmerica
                              Development Corp.), Specialty Teleconstructors, Inc.,
                              Teleforce, LLC, and Richard H. Statler and Terry A.
                              Klein*
         10.12             -- Asset Purchase and Sale Agreement, dated April 10, 1998,
                              between certain subsidiaries of Arch Communications
                              Group, Inc. and OmniAmerica, Inc.*
         10.13             -- Amendment to Asset Purchase and Sale Agreement, dated
                              June 26, 1998, between certain subsidiaries of Arch
                              Communications Group, Inc. and OmniAmerica, Inc.*
</TABLE>
 
                                       31
<PAGE>   33
 
<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                               DESCRIPTION OF EXHIBIT
        -------                               ----------------------
<C>                        <S>
         10.14             -- Second Amendment to Asset Purchase and Sale Agreement,
                              dated August 12, 1998, between certain subsidiaries of
                              Arch Communications Group, Inc. and OmniAmerica, Inc.*
         10.15             -- Third Amendment to Asset Purchase and Sale Agreement,
                              dated as of September 29, 1998, between certain
                              subsidiaries of Arch Communications Group, Inc. and
                              OmniAmerica, Inc.*
         10.16             -- Employment Agreement dated as of June 30, 1997, by and
                              between Microwave Tower Services, Inc. and Ernie L.
                              Carpenter(4)
         21.1              -- Subsidiaries of the Registrant*
         23.1              -- Consent of Ernst & Young LLP*
         23.2              -- Consent of KPMG Peat Marwick LLP*
         27.1              -- Financial Data Schedule*
</TABLE>
 
---------------
 
 *  Filed herewith.
 
(1) Incorporated by reference to the Registrant's Current Report on Form 8-K
    filed on May 7, 1998.
 
(2) Incorporated by reference to the Registrant's Schedule 14C filed on August
    24, 1998.
 
(3) Incorporated by reference to the Registrant's Form 10-QSB filed on February
    20, 1998.
 
(4) Incorporated by reference to the Registrant's Form 10-KSB for the fiscal
    year ended June 30, 1997.
 
     (b) Reports on Form 8-K
 
     On May 7, 1998, the Company filed a Form 8-K and reported the consummation
of the merger of OAI Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of the Company, with and into OmniAmerica Holdings
Corporation, a Delaware corporation ("Holdings"), with Holdings being the
surviving corporation of the merger and, as a result of the merger, a
wholly-owned subsidiary of the Company.
 
                                       32
<PAGE>   34
 
                                   SIGNATURES
 
     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
 
                                            OMNIAMERICA, INC.
 
                                            By:     /s/ CARL E. HIRSCH
                                              ----------------------------------
                                                       Carl E. Hirsch,
                                                        President and
                                                   Chief Executive Officer
 
                                            By:    /s/ ANTHONY S. OCEPEK
                                              ----------------------------------
                                                      Anthony S. Ocepek,
                                                   Chief Financial Officer
 
                                            By:   /s/ DENNIS K. HARTNETT
                                              ----------------------------------
                                                     Dennis K. Hartnett,
                                                   Chief Accounting Officer
 
Date: September 28, 1998
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Company and in
the capacities and on the dates indicated:
 
<TABLE>
<CAPTION>
                      SIGNATURE                                   TITLE                     DATE
                      ---------                                   -----                     ----
<C>                                                    <S>                           <C>
 
               /s/ MICHAEL R. BUDAGHER                 Director                      September 28, 1998
-----------------------------------------------------
                 Michael R. Budagher
 
               /s/ ERNIE L. CARPENTER                  Director                      September 28, 1998
-----------------------------------------------------
                 Ernie L. Carpenter
 
                  /s/ JOHN D. EMERY                    Director                      September 28, 1998
-----------------------------------------------------
                    John D. Emery
 
                  /s/ JACK D. FURST                    Director                      September 28, 1998
-----------------------------------------------------
                    Jack D. Furst
 
                 /s/ CARL E. HIRSCH                    Director                      September 28, 1998
-----------------------------------------------------
                   Carl E. Hirsch
 
                /s/ JEFFREY A. HOWARD                  Director                      September 28, 1998
-----------------------------------------------------
                  Jeffrey A. Howard
 
             /s/ LAWRENCE D. STUART, JR.               Director                      September 28, 1998
-----------------------------------------------------
               Lawrence D. Stuart, Jr.
 
                 /s/ J. OTIS WINTERS                   Director                      September 28, 1998
-----------------------------------------------------
                   J. Otis Winters
</TABLE>
 
                                       33
<PAGE>   35
 
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
                       CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 1998 AND 1997
                     (WITH REPORTS OF INDEPENDENT AUDITORS)
 
                                       F-1
<PAGE>   36
 
               REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
 
Stockholders and Board of Directors
OmniAmerica, Inc. (formerly Specialty Teleconstructors, Inc.)
 
     We have audited the accompanying consolidated balance sheet of OmniAmerica,
Inc. and subsidiaries (formerly Specialty Teleconstructors, Inc.) as of June 30,
1998, and the related consolidated statements of earnings, stockholders' equity,
and cash flows for the year then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audit.
 
     We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
 
     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
OmniAmerica, Inc. and subsidiaries (formerly Specialty Teleconstructors, Inc.)
at June 30, 1998, and the consolidated results of their operations and their
cash flows for the year then ended, in conformity with generally accepted
accounting principles.
 
                                                 /s/ ERNST & YOUNG, LLP
 
Dallas, Texas
September 16, 1998
 
                                       F-2
<PAGE>   37
 
                          INDEPENDENT AUDITORS' REPORT
 
The Board of Directors
OmniAmerica, Inc. (formerly Specialty Teleconstructors, Inc.):
 
     We have audited the accompanying consolidated balance sheet of OmniAmerica,
Inc. and subsidiaries (formerly Specialty Teleconstructors, Inc.) as of June 30,
1997, and the related consolidated statements of earnings, stockholders' equity,
and cash flows for the year then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audit.
 
     We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also incudes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
 
     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of OmniAmerica
Inc. and subsidiaries (formerly Specialty Teleconstructors, Inc.) as of June 30,
1997, and the results of their operations and their cash flows for the year then
ended, in conformity with generally accepted accounting principles.
 
                                              /s/ KPMG PEAT MARWICK LLP
 
Albuquerque, New Mexico
August 29, 1997
 
                                       F-3
<PAGE>   38
 
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
                          CONSOLIDATED BALANCE SHEETS
                             JUNE 30, 1998 AND 1997
 
                         ASSETS (Substantially Pledged)
 
<TABLE>
<CAPTION>
                                                                  1998          1997
                                                              ------------   -----------
<S>                                                           <C>            <C>
Current assets:
  Cash and cash equivalents.................................  $  4,349,324   $   989,720
  Available for sale securities.............................            --       769,850
  Contracts receivable, less allowance for doubtful accounts
     of $390,230 in 1998 and $355,000 in 1997...............    17,349,853    14,740,479
  Costs and estimated earnings in excess of billings on
     uncompleted contracts (note 3).........................     3,747,671     2,233,289
  Components inventory......................................     3,430,868     2,664,239
  Prepaid income taxes......................................       287,849       407,477
  Other current assets......................................       891,148       283,760
                                                              ------------   -----------
          Total current assets..............................    30,056,713    22,088,814
Property and equipment, net (note 4)........................    50,847,107     8,429,906
Goodwill, net of amortization of $808,250 in 1998 and
  $43,383 in 1997...........................................    87,993,151     1,512,555
Investment in unconsolidated subsidiary (note 5)............     7,889,650            --
Other assets, net...........................................     2,536,804       331,989
                                                              ------------   -----------
                                                              $179,323,425   $32,363,264
                                                              ============   ===========
 
                          LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
  Trade accounts payable....................................  $  8,802,734   $ 4,021,694
  Lines of credit (note 8)..................................            --     3,387,910
  Notes payable to stockholder (note 14)....................        80,000     2,000,000
  Billings in excess of costs and estimated earnings on
     uncompleted contracts (note 3).........................       758,932       597,939
  Accrued expenses..........................................     2,171,429       790,975
  Current installments of notes and capital leases payable
     (note 8)...............................................       474,696       573,798
  Deferred income taxes (note 11)...........................            --       384,600
                                                              ------------   -----------
          Total current liabilities.........................    12,287,791    11,756,916
Deferred income taxes (note 11).............................       213,378        90,000
Notes and capital leases payable, excluding current
  installments (note 8).....................................    31,631,459     2,012,081
                                                              ------------   -----------
          Total liabilities.................................    44,132,628    13,858,997
                                                              ------------   -----------
Stockholders' equity:
  Common stock, $.01 par value. Authorized 20,000,000
     shares; issued 15,070,294 and 7,876,554 shares in 1998
     and 1997, respectively (notes 9, 10 and 15)............       150,703        78,765
  Additional paid-in capital................................   129,131,297    12,015,667
  Treasury stock, at cost, 100,000 shares...................    (1,387,500)           --
  Note receivable from officer and director (note 14).......      (600,000)           --
  Retained earnings.........................................     7,896,297     6,409,835
                                                              ------------   -----------
          Total stockholders' equity........................   135,190,797    18,504,267
Commitments and contingencies (notes 6, 13, 15 and 17)
                                                              ------------   -----------
                                                              $179,323,425   $32,363,264
                                                              ============   ===========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       F-4
<PAGE>   39
 
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
                      CONSOLIDATED STATEMENTS OF EARNINGS
                       YEARS ENDED JUNE 30, 1998 AND 1997
 
<TABLE>
<CAPTION>
                                                                 1998           1997
                                                              -----------    -----------
<S>                                                           <C>            <C>
Revenues earned:
  Installation services.....................................  $53,038,988    $57,250,485
  Component sales...........................................    8,501,147      8,376,315
  Tower leasing.............................................    1,258,936             --
                                                              -----------    -----------
          Total revenues earned.............................   62,799,071     65,626,800
                                                              -----------    -----------
Cost of revenues earned:
  Cost of installation services.............................   45,684,581     48,298,454
  Cost of component sales...................................    5,589,902      5,113,096
  Cost of tower leasing.....................................      659,281             --
                                                              -----------    -----------
          Total cost of revenues earned.....................   51,933,764     53,411,550
                                                              -----------    -----------
          Gross profit on revenues earned...................   10,865,307     12,215,250
Compensation expense for cashless option exercises (note
  10).......................................................      719,000             --
Selling, general and administrative expenses................    8,233,490      5,915,808
                                                              -----------    -----------
          Earnings from operations..........................    1,912,817      6,299,442
                                                              -----------    -----------
Other income (expenses):
  Interest income...........................................      157,015        181,516
  Interest expense..........................................     (623,723)      (429,615)
  Equity in earnings of unconsolidated subsidiary...........      219,569             --
  Other, net................................................      143,434        (20,101)
                                                              -----------    -----------
                                                                 (103,705)      (268,200)
                                                              -----------    -----------
          Earnings before income taxes......................    1,809,112      6,031,242
Income taxes................................................      832,000        343,500
                                                              -----------    -----------
          Net earnings......................................  $   977,112    $ 5,687,742
                                                              ===========    ===========
Shares of common stock used in computing earnings per share:
  Basic.....................................................    9,274,676      7,110,282
  Diluted...................................................    9,562,121      7,467,990
Net earnings per common share:
  Basic.....................................................  $       .11    $       .80
                                                              ===========    ===========
  Diluted...................................................  $       .10    $       .76
                                                              ===========    ===========
Pro forma information (note 12):
  Net earnings..............................................                   5,687,742
  Pro forma adjustment for 1997 income taxes of acquired
     entity previously filing as an S Corporation...........                   2,140,500
                                                                             -----------
Pro forma net earnings after adjustment for income taxes of
  acquired entity...........................................                   3,547,242
                                                                             ===========
Pro forma net earnings per common share:
  Basic.....................................................                 $       .50
                                                                             ===========
  Diluted...................................................                 $       .47
                                                                             ===========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       F-5
<PAGE>   40
 
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                       YEARS ENDED JUNE 30, 1998 AND 1997
 
<TABLE>
<CAPTION>
                                                                                            NOTE
                                                                                         RECEIVABLE
                                                                                            FROM
                                        COMMON STOCK         ADDITIONAL                   OFFICER
                                    ---------------------     PAID-IN       TREASURY        AND        RETAINED
                                      SHARES      AMOUNT      CAPITAL         STOCK       DIRECTOR     EARNINGS        TOTAL
                                    ----------   --------   ------------   -----------   ----------   -----------   ------------
<S>                                 <C>          <C>        <C>            <C>           <C>          <C>           <C>
Balance at June 30, 1996..........   6,872,308   $ 68,723   $  5,344,298   $        --   $      --    $ 5,032,817   $ 10,445,838
Issuance of common stock and
  warrants to acquire common
  stock, net......................     668,985      6,690      3,686,003            --          --             --      3,692,693
Acquisitions (note 15):
  Data Cell Systems, Inc. ........      93,400        934        664,576            --          --             --        665,510
  Paramount Communication Systems,
    Inc...........................     186,047      1,860      1,728,324            --          --             --      1,730,184
  Specialty Constructors Coatings,
    Inc...........................      55,814        558        592,466            --          --             --        593,024
Distributions of prior S
  Corporation earnings............          --         --             --            --          --     (4,310,724)    (4,310,724)
Net earnings......................          --         --             --            --          --      5,687,742      5,687,742
                                    ----------   --------   ------------   -----------   ---------    -----------   ------------
Balance at June 30, 1997..........   7,876,554     78,765     12,015,667            --          --      6,409,835     18,504,267
Issuance of common stock, net.....     322,892      3,229      2,886,720            --          --             --      2,889,949
Acquisitions (note 15):
  Ellis Tower.....................     120,848      1,209      1,796,410            --          --             --      1,797,619
  OmniAmerica.....................   6,750,000     67,500    112,432,500            --          --             --    112,500,000
Purchase of treasury stock........          --         --             --    (1,387,500)         --             --     (1,387,500)
Return of prior S Corporation
  earnings distribution...........          --         --             --            --          --        509,350        509,350
Note receivable from officer and
  director (note 14)..............          --         --             --            --    (600,000)            --       (600,000)
Net earnings......................          --         --             --            --          --        977,112        977,112
                                    ----------   --------   ------------   -----------   ---------    -----------   ------------
Balance at June 30, 1998..........  15,070,294   $150,703   $129,131,297   $(1,387,500)  $(600,000)   $ 7,896,297   $135,190,797
                                    ==========   ========   ============   ===========   =========    ===========   ============
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       F-6
<PAGE>   41
 
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                       YEARS ENDED JUNE 30, 1998 AND 1997
 
<TABLE>
<CAPTION>
                                                                  1998          1997
                                                              ------------   ----------
<S>                                                           <C>            <C>
Cash flows from operating activities:
  Net earnings..............................................  $    977,112   $5,687,742
  Adjustments to reconcile net earnings to net cash provided
     by (used in) operating activities:
       Provision for uncollectible receivables..............       225,000      355,000
       Depreciation of property and equipment...............     2,282,084    1,496,830
       Amortization.........................................       799,867      134,185
       Compensation expense for cashless option exercises...       719,000           --
       Equity in earnings of unconsolidated subsidiary......      (219,569)          --
       Gain on sale of equipment............................            --      (10,489)
       Changes in certain assets and liabilities, net of
        acquisitions:
           Contracts receivable.............................    (1,869,714)  (4,636,796)
           Prepaid income taxes.............................       119,628     (344,726)
           Costs and estimated earnings in excess of
              billings on uncompleted contracts.............    (1,514,382)    (945,959)
           Components inventory.............................      (680,417)  (1,769,594)
           Other current assets.............................      (292,647)    (172,919)
           Trade accounts payable...........................     4,109,132      808,416
           Billings in excess of costs and estimated
              earnings on uncompleted contracts.............      (335,738)     355,359
           Accrued expenses.................................       473,530     (444,544)
           Current income taxes.............................            --     (578,200)
           Deferred income taxes............................      (261,222)    (210,300)
                                                              ------------   ----------
            Net cash provided by (used in) operating
                activities..................................     4,531,664     (275,995)
                                                              ------------   ----------
Cash flows from investing activities:
  Purchases of property and equipment, net..................   (22,182,316)  (3,609,094)
  Acquisitions costs recorded as goodwill...................    (3,499,319)          --
  Acquisitions, net of cash acquired........................     1,665,555      (80,263)
  Purchases of other assets.................................      (382,450)          --
  Proceeds from sale of available for sale securities.......       769,850           --
  Purchases of available for sale securities, net...........            --     (473,815)
                                                              ------------   ----------
            Net cash used in investing activities...........   (23,628,680)  (4,163,172)
                                                              ------------   ----------
Cash flows from financing activities:
  Lines of credit, net......................................    (3,387,910)   1,255,910
  Borrowings from notes payable.............................    29,162,211      661,500
  Payment of deferred financing fees........................    (1,340,000)          --
  Principal payments on notes payable.......................      (750,480)    (783,110)
  Borrowings from notes payable to stockholder..............            --    2,000,000
  Principal payments on notes payable to stockholder........    (1,410,650)    (500,000)
  Proceeds from sale of common stock and warrants to acquire
     common stock, net......................................     1,570,949    3,692,693
  Acquisition of treasury stock.............................    (1,387,500)          --
  Distributions of prior S Corporation earnings.............            --   (4,310,724)
                                                              ------------   ----------
            Net cash provided by financing activities.......    22,456,620    2,016,269
                                                              ------------   ----------
            Net increase (decrease) in cash and cash
                equivalents.................................     3,359,604   (2,422,898)
Cash and cash equivalents at beginning of year..............       989,720    3,412,618
                                                              ------------   ----------
Cash and cash equivalents at end of year....................  $  4,349,324   $  989,720
                                                              ============   ==========
</TABLE>
 
                                       F-7
<PAGE>   42
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
              CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)
                       YEARS ENDED JUNE 30, 1998 AND 1997
 
<TABLE>
<CAPTION>
                                                                  1998          1997
                                                              ------------   ----------
<S>                                                           <C>            <C>
Supplemental disclosure of cash flow information:
  Interest paid.............................................  $    623,723   $  478,177
                                                              ============   ==========
  Income taxes paid.........................................  $  1,220,587   $1,318,977
                                                              ============   ==========
  Noncash investing and financing activities:
     Acquisition of vehicles in exchange for notes
      payable...............................................  $  1,108,545   $1,208,056
                                                              ============   ==========
     Notes receivable from stockholder in exchange for
      common stock..........................................  $    600,000   $       --
                                                              ============   ==========
     Return of prior S Corporation earnings distribution....  $    509,350   $       --
                                                              ============   ==========
</TABLE>
 
     Acquisitions of net assets of Ellis Tower and OmniAmerica Holdings in
exchange for cash and common stock of the Company in the year ended June 30,
1998 and Paramount, Data Cell, and Coatings in exchange for cash and common
stock of the Company in the year ended June 30, 1997. Fair value of assets
acquired and liabilities assumed at the date of the acquisition were as follows:
 
<TABLE>
<CAPTION>
                                                                  1998           1997
                                                              -------------   -----------
<S>                                                           <C>             <C>
Contracts receivable........................................  $   1,175,989   $ 1,348,404
Costs and estimated earnings in excess of billings on
  uncompleted contracts.....................................             --      (169,674)
Components inventory........................................         86,212       204,888
Other current assets........................................        314,741            --
Property and equipment......................................     21,408,424       934,550
Goodwill....................................................     87,069,134     1,593,397
Investment in unconsolidated subsidiary.....................      7,670,081            --
Other assets................................................        482,365       100,066
Trade accounts payable......................................       (671,908)     (475,809)
Billings in excess of costs and estimated earnings on
  uncompleted contracts.....................................       (496,731)           --
Accrued expenses............................................       (906,924)       (6,883)
Notes and capital leases payable............................             --      (459,957)
Common stock issued.........................................   (114,297,619)   (2,988,719)
                                                              =============   ===========
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                       F-8
<PAGE>   43
 
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 1998 AND 1997
 
(1) ORGANIZATION AND DESCRIPTION OF BUSINESS
 
     On September 14, 1998, Specialty Teleconstructors, Inc.("STI"), through a
merger with a wholly-owned subsidiary of STI, changed its name from STI to
OmniAmerica, Inc. ("OmniAmerica" or the "Company") and changed its state of
incorporation from Nevada to Delaware.
 
     The Company is headquartered in Cedar Crest, New Mexico and was formed as a
holding company to combine the operations of its principal operating
subsidiaries, OmniAmerica Towers, Inc., OmniAmerica Development Corporation,
OmniAmerica Holdings Corporation, South Atlantic Tower Corporation, Specialty
Constructors, Inc., Specialty Constructors Coatings, Inc., Specialty Management,
Inc., OmniTower, Ltd., Microwave Tower Service, Inc., Novak & Lackey
Construction Company, Inc., and Specialty Combined Resources, Inc. The Company
is a leading provider of wireless communications and broadcast tower services to
the United States communications industry. The Company's tower services include
owning, leasing, managing and developing multi-use telecommunications sites for
radio and television broadcasting, paging, cellular, personal communications
services and other wireless technologies; providing wireless infrastructure
building and implementation services primarily for providers of wireless
communication services in the United States; and manufacturing and selling
wireless infrastructure components used in the construction and maintenance of
wireless communication transmitting and receiving facilities. The Company's
customers are located throughout the country.
 
     Effective March 31, 1997, a subsidiary of the Company merged with Novak &
Lackey Construction Co., Inc. ("N&L") and on June 30, 1997, a subsidiary of the
Company merged with Microwave Tower Service, Inc. ("MTS"). Both transactions
were accounted for as pooling of interests business combinations. Accordingly,
the Company's consolidated financial statements prior to these transactions have
been restated to reflect the combined operations (see note 15) for all periods
presented.
 
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  (a) Principles of Consolidation
 
     The consolidated financial statements include the financial statements of
the Company and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.
 
     Investment in a 33 1/3% owned affiliated company is accounted for on the
equity basis of accounting and accordingly, the statement of earnings includes
the Company's proportionate share of the affiliate's income since its date of
acquisition during 1998.
 
  (b) Revenue Recognition
 
     Revenues from installation services are recognized on the
percentage-of-completion method. Contract costs include all direct material and
labor costs and those indirect costs related to contract performance. Selling,
general and administrative costs are charged to expense as incurred. Provisions
for estimated losses on uncompleted contracts are made in the period in which
such losses are determined.
 
     Costs and estimated earnings in excess of billings on uncompleted contracts
represents revenues recognized in excess of amounts billed. Billings in excess
of costs and estimated earnings on uncompleted contracts represents billings in
excess of revenues recognized.
 
     Revenues from the sale of components are recognized upon shipment to the
customer.
 
     Revenues from tower leasing are recognized ratably as earned over the
respective tower lease terms.
 
                                       F-9
<PAGE>   44
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
  (c) Statements of Cash Flows
 
     For purposes of statements of cash flows, the Company considers all highly
liquid debt instruments with original maturities of three months or less to be
cash equivalents.
 
  (d) Available for Sale Securities
 
     Investment securities consist of stocks, municipal bonds and mutual funds.
In accordance with Statement of Financial Accounting Standard (SFAS) No. 115,
the Company's investments are classified as available for sale. Available for
sale securities are recorded at fair value based on the market value as provided
by brokers/dealers. Unrealized holding gains and losses, net of the related tax
effect, are reported as a separate component of stockholders' equity. Realized
gains and losses from the sale of available for sale securities are determined
on a specific identification basis.
 
     A decline in the market value of any available for sale security below cost
that is deemed to be other than temporary results in a reduction in carrying
amount to fair value. The impairment is charged to earnings and a new cost basis
for the security is established. Premiums and discounts are amortized or
accreted over the life of the related security as an adjustment to yield using
the effective interest method. Dividend and interest income are recognized when
earned.
 
     As of June 30, 1997, the cost of the Company's available for sale
securities approximates market value. Such securities were liquidated during
1998.
 
  (e) Components Inventory
 
     Components inventory is stated at the lower of cost or market. Cost is
determined using the first-in, first-out method.
 
  (f) Property and Equipment
 
     Property and equipment are stated at cost. Depreciation on property and
equipment is provided on a straight-line basis over the estimated useful lives
of the assets. Leasehold improvements are amortized on a straight-line basis
over the shorter of the lease term or estimated useful life of the asset.
 
  (g) Business and Credit Concentrations
 
     Customers comprising 10 percent or greater of the Company's revenues earned
are summarized as follows:
 
<TABLE>
<CAPTION>
                                                              1998   1997
                                                              ----   ----
<S>                                                           <C>    <C>
Sprint......................................................   15%    --
Western Wireless............................................   --     20%
AT&T........................................................   --     12%
</TABLE>
 
     The Company generally does not require collateral from its customers and
has provided adequate provisions for possible credit losses for 1998 and 1997.
 
  (h) Distributions
 
     Distributions to the previous subchapter S Corporation stockholder in 1997
were made at the discretion of the Board of Directors for payment of income
taxes. In 1998, the excess amount of this distribution over actual income taxes
was returned to the Company.
 
                                      F-10
<PAGE>   45
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
  (i) Goodwill
 
     The excess of purchase price over the fair value of net assets acquired is
amortized on a straight-line basis over the estimated benefit period of
approximately 30 years.
 
  (j) Deferred Financing Costs
 
     Deferred financing costs incurred in connection with the Company's senior
secured revolving credit facility and variable term note will be amortized over
the term of the related debt on a straight-line basis.
 
  (k) Impairment of Long-lived Assets and Long-lived Assets to be Disposed Of
 
     The Company adopted the provisions of SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, on
July 1, 1996. This statement requires that long-lived assets and certain
identifiable intangible assets be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceed the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount or fair value less costs to
sell.
 
  (l) Income Taxes
 
     The Company uses the asset and liability method to account for income
taxes. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
 
  (m) Advertising Costs
 
     Advertising costs, all of which are non-direct response advertising, are
expensed as incurred. Advertising expense was approximately $153,000 and
$133,000 during the years ended June 30, 1998 and 1997, respectively.
 
  (n) Stock Option Plan
 
     Prior to July 1, 1996, the Company accounted for its stock option plan in
accordance with the provisions of Accounting Principles Board (APB) Opinion No.
25, Accounting for Stock Issued to Employees, and related interpretations. As
such, compensation expense would be recorded on the date of grant only if the
current market price of the underlying stock exceeded the exercise price. On
July 1, 1996, the Company adopted SFAS No. 123, Accounting for Stock-Based
Compensation, which permits entities to recognize as expense over the vesting
period the fair value of all stock-based awards on the date of grant.
Alternatively, SFAS No. 123 also allows entities to continue to apply the
provisions of APB Opinion No. 25 and provide pro forma net income and pro forma
earnings per share disclosures for employee stock option grants made in fiscal
1996 and future years as if the fair-value-based method defined in SFAS No. 123
had been applied. The Company has elected to continue to apply the provisions of
APB No. 25 and provide the pro forma disclosure provisions of SFAS No. 123.
 
                                      F-11
<PAGE>   46
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
  (o) Uses 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. Actual results could differ from those estimates.
 
  (p) Earnings Per Share
 
     In 1998, the Company adopted SFAS No. 128, Earnings per Share. In
accordance with this SFAS, basic earnings per common share is computed by
dividing net income applicable to common stock by the weighted average number of
common shares outstanding. Dilutive earnings per share is computed by dividing
net income applicable to common stock by the total of the weighted average
number of common shares outstanding and the additional dilutive effect of stock
options and warrants during the period. The dilutive effect of outstanding stock
options and warrants is computed using the average market price of the Company's
common stock for the period. The earnings per share for 1997 has been restated
to conform to this change.
 
     The following is the reconciliation of the numerators and denominators of
the basic and diluted earnings per share computations for net income and other
related disclosures required by SFAS No. 128 at June 30:
 
<TABLE>
<CAPTION>
                                                   INCOME          SHARES        PER SHARE
                                                 (NUMERATOR)    (DENOMINATOR)     AMOUNT
                                                 -----------    -------------    ---------
<S>                                              <C>            <C>              <C>
Year ended June 30, 1998:
  Basic earnings per share:
     Income available to common stockholders...  $  977,112       9,274,676        $.11
  Effect of dilutive shares:
     Options...................................          --         287,445
                                                 ----------      ----------
  Dilutive earnings per share:
     Income available to common stockholders
       plus assumed conversions................  $  977,112       9,562,121        $.10
                                                 ==========      ==========        ====
Year ended June 30, 1997:
  Basic earnings per share:
     Income available to common stockholders...  $5,687,742       7,110,282        $.80
  Effect of dilutive shares:
     Options and warrants......................          --         357,708
                                                 ----------      ----------
  Dilutive earnings per share:
     Income available to common stockholders
       plus assumed conversions................  $5,687,742       7,467,990        $.76
                                                 ==========      ==========        ====
  Proforma earnings per share after adjustment
     for income taxes of acquired entity
     previously filing as an S Corporation:
     Basic.....................................  $3,547,242       7,110,282        $.50
                                                 ==========      ==========        ====
     Diluted...................................  $3,547,242       7,467,990        $.47
                                                 ==========      ==========        ====
</TABLE>
 
  (q) Financial Instruments
 
     SFAS No. 107, Disclosures About Fair Values of Financial Instruments,
requires the fair value of financial instruments be disclosed. In addition to
available for sale securities carried at fair value, the
                                      F-12
<PAGE>   47
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
Company's financial instruments are contracts receivable, accounts payable, line
of credit and notes payable. The carrying amounts of these items, because of
their nature, approximate fair value.
 
  (r) New Accounting Standards
 
     In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
Reporting Comprehensive Income. SFAS No. 130 establishes standards for reporting
and display of comprehensive income and its components (revenues, expenses,
gains and losses) in a full set of general purpose financial statements.
Specifically, SFAS No. 130 requires that all items that meet the definition of
components of comprehensive income be reported in a financial statement for the
period in which they are recognized. However, SFAS No. 130 does not specify when
to recognize or how to measure the items that make up comprehensive income. SFAS
No. 130 is effective for financial statements issued for periods beginning after
December 15, 1997.
 
     In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
Financial Reporting for Segments of Business Enterprise. SFAS No. 131 supercedes
the "industry segment" concept of SFAS No. 14 with a "management approach'
concept as the basis for identifying reportable segments. SFAS No. 131 is
effective for financial statements issued for periods beginning after December
15, 1997.
 
  (s) Reclassifications
 
     Certain prior year amounts have been reclassified to conform to current
year presentation.
 
(3) COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS
 
<TABLE>
<CAPTION>
                                                               1998           1997
                                                            -----------   ------------
<S>                                                         <C>           <C>
Costs incurred on uncompleted contracts...................  $23,877,446   $ 16,682,266
Estimated earnings........................................   10,033,415      6,321,822
Less billings to date.....................................  (30,922,122)   (21,368,738)
                                                            -----------   ------------
                                                            $ 2,988,739   $  1,635,350
                                                            ===========   ============
Included in the accompanying balance sheets:
  Costs and estimated earnings in excess of billings on
     uncompleted contracts................................  $ 3,747,671   $  2,233,289
  Billings in excess of costs and estimated earnings on
     uncompleted contracts................................     (758,932)      (597,939)
                                                            -----------   ------------
                                                            $ 2,988,739   $  1,635,350
                                                            ===========   ============
</TABLE>
 
                                      F-13
<PAGE>   48
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(4) PROPERTY AND EQUIPMENT
 
     Property and equipment consists of the following at June 30:
 
<TABLE>
<CAPTION>
                                                   ESTIMATED
                                                    USEFUL
                                                 LIVES (YEARS)      1998          1997
                                                 -------------   -----------   -----------
<S>                                              <C>             <C>           <C>
Tower assets...................................         30       $34,918,139   $        --
Land...........................................                    3,528,681       398,204
Buildings......................................      15-40         4,932,786     1,812,275
Vehicles.......................................        3-7         6,406,562     5,103,442
Furniture and fixtures.........................       3-10         1,794,439     1,468,646
Equipment......................................       3-10         4,556,502     2,774,246
Leasehold improvements.........................          5           156,053        58,827
                                                                 -----------   -----------
                                                                  56,293,162    11,615,640
Less accumulated depreciation                                     (5,446,055)   (3,185,734)
                                                                 -----------   -----------
                                                                 $50,847,107   $ 8,429,906
                                                                 ===========   ===========
</TABLE>
 
(5) INVESTMENT IN UNCONSOLIDATED SUBSIDIARY (UNAUDITED)
 
     As a result of the Company's merger with OmniAmerica Holdings described in
note 15 below, the Company holds a 33 1/3% interest in Kline Iron and Steel Co.,
Inc. ("Kline"), a company which fabricates structural and tower steel products,
domestically and internationally, and is accounted for under the equity method.
Summarized historical financial information of Kline as of and for the year
ended June 30, 1998 and 1997 is as follows:
 
<TABLE>
<CAPTION>
                                                                1998          1997
                                                             -----------   -----------
<S>                                                          <C>           <C>
Current Assets.............................................  $29,595,156   $12,310,714
Total Assets...............................................   33,448,072    15,991,459
Stockholders' Equity.......................................    5,625,935     3,236,912
Revenues...................................................   65,345,299    47,371,599
Net Earnings...............................................    2,389,023       931,261
</TABLE>
 
(6) LEASES
 
     The Company leases its main office building from an executive officer and
leases office space for several regional offices and various equipment and
vehicles from unrelated parties. These leases are operating leases that expire
over the next four years. The main office building lease contains a renewal
option for five years and requires the Company to pay all executory costs such
as maintenance and insurance. Rental expense for operating leases was
approximately $490,000 and $365,000 for the years ending June 30, 1998 and 1997,
respectively.
 
                                      F-14
<PAGE>   49
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     Future minimum lease payments under non-cancelable operating leases at June
30, 1998 are:
 
<TABLE>
<CAPTION>
                    YEAR ENDING JUNE 30
                    -------------------
<S>                                                           <C>
1999........................................................  $  464,857
2000........................................................     247,931
2001........................................................     151,263
2002........................................................     103,482
2003........................................................     112,816
Thereafter..................................................   2,554,075
                                                              ----------
          Total minimum lease payments......................  $3,634,424
                                                              ==========
</TABLE>
 
(7) TOWER LEASING REVENUE
 
     The Company receives rental revenue from its tenants for use of its towers.
Certain leases with tenants include renewal options and/or escalation clauses.
Future minimum tower leasing revenues under tower leases in effect at June 30,
1998 are as follows:
 
<TABLE>
<CAPTION>
                    YEAR ENDING JUNE 30
                    -------------------
<S>                                                           <C>
1999........................................................  $ 4,341,131
2000........................................................    3,731,309
2001........................................................    2,953,908
2002........................................................    2,356,235
2003........................................................    1,802,980
Thereafter..................................................    4,409,387
                                                              -----------
                                                              $19,594,950
                                                              ===========
</TABLE>
 
                                      F-15
<PAGE>   50
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(8) NOTES AND CAPITAL LEASES PAYABLE
 
     Notes and capital leases payable consist of the following at June 30:
 
<TABLE>
<CAPTION>
                                                                 1998          1997
                                                              -----------   ----------
<S>                                                           <C>           <C>
Variable rate term note payable to Chase Manhattan Bank,
  interest at LIBOR plus 2% (7.675% at June 30, 1998)
  payable monthly, matures June 30, 2001; secured by
  substantially all assets of the Company...................  $30,000,000   $       --
Note payable in monthly installments of $2,267, including
  interest at U.S. Treasury Index plus 3.5% (9.125% at June
  30, 1998) with the balance due March 2005; secured by a
  building and guaranteed by a principal stockholder of the
  Company...................................................      776,410      784,436
7.3% capital lease payable in monthly installments of
  $26,341 with the balance due July 2001, secured by
  vehicles..................................................      697,937           --
8.5% note payable in monthly installments of $12,068,
  including interest, with the balance due July 1999;
  secured by vehicles.......................................      350,177      492,893
11% note payable in monthly installments of approximately
  $29,795, including interest, with the balance due at
  various dates in 2000; secured by vehicles................           --      835,968
Other.......................................................      281,631      472,582
                                                              -----------   ----------
          Total notes and capital leases payable............   32,106,155    2,585,879
Less current installments...................................      474,696      573,798
                                                              -----------   ----------
          Notes and capital leases payable, excluding
            current installments............................  $31,631,459   $2,012,081
                                                              ===========   ==========
</TABLE>
 
     The aggregate maturities of notes and capital leases payable are as
follows:
 
<TABLE>
<CAPTION>
YEAR ENDING JUNE 30
-------------------
<S>                                                            <C>
1999........................................................   $   474,696
2000........................................................       467,374
2001........................................................    30,343,948
2002........................................................        77,377
2003........................................................         9,100
Thereafter..................................................       733,660
                                                               -----------
                                                               $32,106,155
                                                               ===========
</TABLE>
 
     The Company entered into a bank senior secured revolving credit facility of
$45,000,000 with Chase Manhattan Bank on June 30, 1998. There were no draws from
this credit facility as of June 30, 1998. The credit facility is to be secured
by substantially all the Company's assets, and borrowings are limited to certain
EBITDA ratios along with specific capitalization and interest ratios. Interest
is based on Company directed Eurodollar or ABR variable rate of interest. The
line of credit balance as of June 30, 1997 was repaid in 1998.
 
(9) WARRANTS
 
     In connection with its initial public offering in November 1994, the
Company issued 1,000,000 shares of common stock and warrants to acquire 500,000
shares of common stock. Warrants issued with the Company's common stock were
exercisable for $6.00 per share. Additionally, in connection with the public
offering, the Company issued warrants to the underwriters to purchase 50,000
units, each consisting of two shares of
 
                                      F-16
<PAGE>   51
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
common stock and one warrant to acquire a share of common stock. The exercise
price was 120 percent of the initial public offering price of $10.125 per unit,
or $12.15 per unit. Pursuant to the warrant agreements, the Company was entitled
to redeem all outstanding warrants, or repurchase those not redeemed at $.05 per
share, upon the Company's common stock market closing price reaching specified
levels. These levels were attained and, on February 20, 1997, the Company filed
a registration statement which included a notice to the warrant holders of
record that the Company intended to redeem all unexercised warrants on March 26,
1997 (the "Redemption Date"). All but 330 of the outstanding warrants, including
all of the underwriter units, were exercised prior to the Redemption Date,
resulting in the issuance of 649,670 shares of the Company's common stock.
Proceeds to the Company, net of issuance costs of approximately $289,000, were
$3,607,000. Following the Redemption Date, the Company redeemed the 330 then
outstanding warrants at $.05 each.
 
(10) STOCK OPTION PLANS
 
     In November 1997, the Company's Board of Directors resolved and the
shareholders approved an Incentive Stock Option Plan (the 1997 Plan) pursuant to
which the Company may grant stock options to officers and key employees. The
1997 Plan may be terminated at any time by the Board of Directors, subject to
shareholder approval. Stock options are granted with an exercise price equal to
the stock's fair market value at the date of grant. All stock options have
10-year terms and generally vest and become fully exercisable after 3 years from
the date of grant.
 
     In May 1995, the Company's Board of Directors resolved and the shareholders
approved an Incentive Stock Option Plan (the 1995 Plan) pursuant to which the
Company may grant stock options to officers and key employees. The 1995 Plan may
be terminated at any time by the Board of Directors, subject to shareholder
approval. Stock options are granted with an exercise price equal to the stock's
fair market value at the date of grant. All stock options have 10-year terms and
generally vest and become fully exercisable after 3 years from the date of
grant.
 
     In May 1995, the Company's Board of Directors resolved and the shareholders
approved an Outside Directors' Stock Option Plan (Directors Plan) pursuant to
which the Company may grant stock options to non-employee directors of the
Company. The Directors Plan will terminate in May 2004. The Directors Plan
authorizes grants of options to purchase up to 50,000 shares of authorized but
unissued common stock. Stock options are granted with an exercise price equal to
the stock's fair market value at the date of grant. All stock options have
10-year terms and vest and become fully exercisable after 3 years from the date
of grant.
 
     On July 24, 1998, the Company's Board of Directors resolved and the
shareholders approved an Incentive Stock Option Plan (the 1998 Plan) pursuant to
which the Company may grant stock options to key employees. The effective date
of the 1998 Plan was September 14, 1998 and shall terminate ten years later. A
maximum of 675,000 shares were designated.
 
     At June 30, 1998, there were 15,000 additional shares available for grant
under the 1997 Plan, 163 additional shares available for grant under the 1995
Plan and 2,000 additional shares available under the Directors Plan. The per
share weighted-average fair value of stock options granted during 1998 and 1997
was $12.58 and $6.98 on the date of grant using the Black Scholes option-pricing
model with the following weighted-average assumptions: 1998 -- expected
volatility of 63 percent, expected dividend yield 0 percent, risk-free interest
rate of 5.22 percent, and an expected life of 3 years; 1997 -- expected
volatility of 82 percent, expected dividend yield 0 percent, risk-free interest
rate of 6.82 percent, and an expected life of 3 years.
 
     The Company applies APB Opinion No. 25 in accounting for its stock option
plans and, accordingly, no compensation cost has been recognized for its stock
options in the financial statements. Had the Company
 
                                      F-17
<PAGE>   52
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
determined compensation cost based on the fair value at the grant date for its
stock options under SFAS No. 123, the Company's net income would have been
reduced to the pro forma amounts indicated below:
 
<TABLE>
<CAPTION>
                                                                  1998         1997
                                                                --------    ----------
<S>                                              <C>            <C>         <C>
Net income.....................................  As reported    $977,112    $5,687,742
                                                  Pro forma     $ 95,427    $4,212,742
Earnings per common share:
  Basic........................................  As reported    $    .11    $      .80
                                                  Pro forma     $    .01    $      .59
  Diluted......................................  As reported    $    .10    $      .76
                                                  Pro forma     $    .01    $      .56
</TABLE>
 
     Pro forma net income reflects only options granted in 1998, 1997 and 1996.
Therefore, the full impact of calculating compensation cost for stock options
under SFAS No. 123 is not reflected in the pro forma net income amounts
presented above because compensation cost is reflected over the options' vesting
period and compensation cost for options granted prior to July 1, 1995 is not
considered.
 
     Stock option activity for all plans during the periods indicated is as
follows:
 
<TABLE>
<CAPTION>
                                                             NUMBER OF   WEIGHTED-AVERAGE
                                                              SHARES      EXERCISE PRICE
                                                             ---------   ----------------
<S>                                                          <C>         <C>
Balance at June 30, 1996...................................   323,645         $ 4.14
     Granted...............................................   337,500          12.96
     Exercised.............................................   (23,125)          3.71
     Forfeited.............................................    (4,175)          4.52
     Expired...............................................        --             --
                                                             --------
Balance at June 30, 1997...................................   633,845           8.85
     Granted...............................................   321,700          12.58
     Exercised.............................................  (239,836)          5.10
     Forfeited.............................................   (47,933)          6.98
     Expired...............................................        --             --
                                                             --------
Balance at June 30, 1998...................................   667,776         $12.13
                                                             ========
</TABLE>
 
     The following tables summarize information about fixed stock options
outstanding at June 30, 1998:
 
<TABLE>
<CAPTION>
                                                                   OPTIONS OUTSTANDING
                                                           -----------------------------------
                                                           WEIGHTED-AVERAGE
                                               NUMBER         REMAINING       WEIGHTED-AVERAGE
         RANGE OF EXERCISE PRICES            OUTSTANDING   CONTRACTUAL LIFE    EXERCISE PRICE
         ------------------------            -----------   ----------------   ----------------
<S>                                          <C>           <C>                <C>
$3.0625 to $4.5625.........................     54,925           1.00              $ 4.13
$6 to $9...................................     48,000           1.38                7.13
$10 to $12.50..............................    295,851           2.50               12.07
$13.00 to $15.50...........................    269,000           1.77               14.72
                                               -------
                                               667,776                             $12.13
                                               =======
</TABLE>
 
                                      F-18
<PAGE>   53
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                  OPTIONS EXERCISABLE
                                                            -------------------------------
                                                              NUMBER       WEIGHTED-AVERAGE
                RANGE OF EXERCISE PRICES                    OUTSTANDING     EXERCISE PRICE
                ------------------------                    -----------    ----------------
<S>                                                         <C>            <C>
$3.0625 to $4.5625......................................       54,925           $ 4.13
$6 to $9................................................       39,000             6.69
$10 to $12.50...........................................      101,001            11.88
$13.00 to $15.50........................................      168,332            14.74
                                                              -------
                                                              363,258           $11.47
                                                              =======
</TABLE>
 
     In 1998, approximately 23,500 options were exercised by employees and an
outside director on the cashless method, which resulted in the Company
recognizing a one-time non-cash compensation expense of $719,000.
 
(11) INCOME TAXES
 
     Income tax expense (benefit) consists of:
 
<TABLE>
<CAPTION>
                                                    CURRENT      DEFERRED      TOTAL
                                                   ----------    ---------    --------
<S>                                                <C>           <C>          <C>
Year ended June 30, 1998:
  U.S. federal...................................  $  973,000    $(249,000)   $724,000
  State and local................................     143,000      (35,000)    108,000
                                                   ----------    ---------    --------
          Total..................................  $1,116,000    $(284,000)   $832,000
                                                   ==========    =========    ========
Year ended June 30, 1997:
  U.S. federal...................................  $  411,500    $(201,800)   $209,700
  State and local................................      98,700       35,100     133,800
                                                   ----------    ---------    --------
          Total..................................  $  510,200    $(166,700)   $343,500
                                                   ==========    =========    ========
</TABLE>
 
     Income tax expense differs from the amounts computed by applying the U.S.
federal income tax rate of 34 percent to earnings before income taxes as a
result of the following factors:
 
<TABLE>
<CAPTION>
                                                                1998        1997
                                                              --------   -----------
<S>                                                           <C>        <C>
Computed "expected" tax.....................................  $615,000   $ 2,050,600
Reduction for income taxable to Subchapter S shareholder
  (MTS).....................................................        --    (1,895,900)
Deferred taxes established in connection with acquisition of
  prior Subchapter S Corporation (MTS)......................        --        90,000
Non-deductible goodwill expense.............................    58,100            --
Non-deductible compensation expense for cashless option
  exercises.................................................    38,900            --
Non-deductible meals and entertainment......................    32,300            --
State income taxes, net of federal tax benefit..............    90,400        63,100
Other.......................................................    (2,700)       35,700
                                                              --------   -----------
          Total.............................................  $832,000   $   343,500
                                                              ========   ===========
</TABLE>
 
                                      F-19
<PAGE>   54
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at June 30,
1998 and 1997 are presented below:
 
<TABLE>
<CAPTION>
                                                                1998        1997
                                                              ---------   ---------
<S>                                                           <C>         <C>
Deferred Tax Liabilities:
  Adjustment for conversion from cash basis to accrual basis
     tax reporting..........................................  $(213,200)  $(385,700)
  Investment in unconsolidated subsidiary...................   (167,600)         --
  Amortization of goodwill and depreciation for financial
     reporting purposes in excess of tax amounts............   (270,300)     21,400
  Deferred taxes established in connection with acquisition
     of prior Subchapter S Corporation (MTS)................    (90,000)    (90,000)
  Other.....................................................         --     (20,300)
                                                              ---------   ---------
          Total deferred tax liability......................   (741,100)   (474,600)
                                                              ---------   ---------
Deferred Tax Assets:
  Allowance for doubtful accounts...........................    152,200          --
  Start up costs............................................    244,000          --
  Accrued expenses..........................................     65,300          --
  Net operating loss........................................    336,800          --
  Other.....................................................     29,522          --
  Less valuation allowance..................................   (300,100)         --
                                                              ---------   ---------
          Total deferred tax asset..........................    527,722          --
                                                              ---------   ---------
  Net deferred tax liability................................  $(213,378)  $(474,600)
                                                              =========   =========
</TABLE>
 
     A subsidiary of the Company has a net operating loss of $893,000 as of its
acquisition date. This net operating loss is subject to limitation by Internal
Revenue Code Section 382 and the separate return limitation year rules. The net
operating loss will begin to expire in the year 2012. A valuation allowance has
been established against the net deferred tax asset resulting from the net
operating loss due to the limitations imposed on the utilization of the loss.
All of the valuation allowance for deferred tax assets will reduce goodwill when
the tax benefit is recognized in the future.
 
(12) PRO FORMA INCOME TAXES
 
     For financial reporting purposes, a pro forma provision for income taxes
has been reflected in the consolidated statements of earnings to present taxes
on the results of operations of MTS for the year ended June 30, 1997 on the
basis that is required upon their change in tax status from an S Corporation to
a C Corporation. This amount, $2,140,500, is equal to the required Federal and
state income tax provisions that would have been recorded if MTS had not elected
S Corporation status and was subject to and liable for Federal and state income
taxes as a C Corporation prior to its termination of S Corporation status. MTS
terminated its S Corporation status upon merging with a wholly-owned subsidiary
of the Company on June 30, 1997.
 
(13) PROFIT-SHARING PLANS
 
     In November 1996, the Company established a profit sharing plan pursuant to
Section 401(k) of the Internal Revenue Code, whereby participants may contribute
a percentage of compensation, but not in excess of the maximum allowed under the
code. The plan provides for a matching contribution by the Company, which
amounted to approximately $50,800 and $9,000 for the years ended June 30, 1998
and 1997, respectively.
 
                                      F-20
<PAGE>   55
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     In 1989, MTS, a wholly owned subsidiary, established a discretionary profit
sharing and money purchase pension plan. The plans cover all non-union employees
who have met certain service requirements. Contributions to the profit sharing
plan are discretionary and determined based on operating results of MTS. For the
money purchase pension plan, MTS was required to contribute 8% of eligible
compensation annually. Effective, October 31, 1997, the plans were terminated in
accordance with the provisions of Employee Retirement Income Security Act of
1974, and all participants became immediately vested in their accounts.
Contributions were approximately $-0- and $173,000 in 1998 and 1997,
respectively.
 
(14) RELATED PARTY TRANSACTIONS
 
  (a) Leases
 
     The Company leases its main office building from Michael R. Budagher (a
principal stockholder, an officer and director of the Company).
 
  (b) Budagher's Tower Co. ("BTC")
 
     The Company uses contract labor provided by BTC, a corporation which is
wholly-owned by Michael R. Budagher's brother. The Company incurred $252,933 and
$452,338 for contract labor services provided by BTC during the years ended June
30, 1998 and 1997, respectively.
 
  (c) Specialty Constructors Coatings, Inc.("SCC")
 
     The Company uses contract labor services provided by SCC. SCC is a
corporation which was 50 percent owned by Michael R. Budagher until March 31,
1997, when Mr. Budagher sold his interest in SCC. On June 1, 1997, the Company
acquired SCC (note 15). The Company incurred $606,304 for contract labor
services provided by SCC during the year ended June 30, 1997.
 
  (d) Specialty Manufacturing, Inc.("SMI")
 
     Prior to August 1997, the Company purchased ground kits from SMI used in
certain construction projects. SMI is owned 50 percent by Michael R. Budagher's
spouse (a stockholder) and 50 percent by Michael R. Budagher's brother (a
stockholder and employee of the Company). The Company purchases from SMI totaled
$3,768 and $29,852 during the years ended June 30, 1998 and 1997, respectively.
In August 1997, MTS acquired substantially all of the inventory and
manufacturing equipment of SMI for $134,882 in cash and the right to receive a
royalty of $2 for each ground kit sold by MTS through July 31, 2000. The Company
paid royalties to SMI in the amount of $42,348 in 1998.
 
  (e) Change Corporation ("Change")
 
     The Company occasionally purchases computer equipment and software from
Change, which is used for office purposes. Change is owned by Michael R.
Budagher's sister. The Company incurred $36,575 in 1998 and $ -0- in 1997 for
such purchases.
 
  (f) Note Receivable from Officer and Director
 
     A 7% recourse note receivable of $600,000 due December 29, 2002 is due from
an officer and director of the Company. Such note was originated for the
purchase of 50,000 shares of the Company's common stock, the source being from
unissued shares of the Company. Such balance is classified in the stockholders'
equity section of the balance sheet.
 
                                      F-21
<PAGE>   56
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
  (g) Notes Payable to Stockholder
 
     The Company had notes payable to stockholder for $80,000 and $2,000,000 as
of June 30, 1998 and 1997, respectively. Such notes payable originated as a
distribution to the previous subchapter S Corporation stockholder in 1997 for
estimated payment of income taxes. $1,410,650 was paid to this stockholder
during 1998, $509,350 of this balance was returned to the Company for the
difference between the actual income tax liability and the original $2,000,000
distribution, and $80,000 remains for anticipated remaining liability for such
income taxes. The remaining payable is secured by components inventory.
 
  (h) Principal Stockholder Advisory and Financial Services Commitment
 
     The Company has retained Hicks, Muse & Co. Partners ("HMCo") (owner of
approximately 45% of the Company's outstanding common stock) in 1998 to perform
certain advisory, oversight, monitoring, and financial services as requested by
the Board of Directors for a period to be the lesser of April 23, 2008 or upon
HMCo owning less than 33 1/3% of the outstanding common stock of the Company.
Such annual fees shall be the greater of $180,000 or .2% of annual consolidated
net sales of the Company for oversight and monitoring services and a 1 1/2% fee
for all future acquisitions, sales, mergers, recapitalization, restructurings or
other similar transactions for which HMCo provides services. During 1998,
approximately $269,000 was paid to HMCo. Such services did not exist in 1997.
 
  (i) Kline Tower and Steel ("Kline")
 
     The Company purchases certain structural and tower steel products from
Kline. The Company owns 33 1/3% of the outstanding equity of Kline (note 5).
During the year ended June 30, 1998, approximately $2,569,000 of such products
were purchased from Kline and approximately $100,000 in consulting fees were
paid to Kline. The Company is obligated to pay Kline this $100,000 consulting
fee each year for the next four fiscal years. Approximately $294,000 included in
trade accounts payable was owed to Kline as of June 30, 1998. The Company did
not hold an ownership interest in Kline during 1997.
 
(15) ACQUISITIONS
 
     On April 23, 1998, the Company issued 6,750,000 shares of restricted common
stock of the Company at a price of $16.67 per share, determined by the average
closing price on or about February 16, 1998, in connection with the merger of
OmniAmerica Holdings ("OmniAmerica Holdings"). OmniAmerica Holdings owns assets
consisting of real estate, equipment and other physical property used in the
operation of the wireless communications and broadcast transmission tower
leasing business. The source of the shares for the transaction were unissued
shares of the Company. The transaction was accounted for as a purchase.
Accordingly, the results of OmniAmerica Holdings have been included in those of
the Company since the date of the merger. Goodwill of approximately $85,000,000
recorded in connection with the acquisition is being amortized over a period of
thirty years. The Company is currently completing the allocation of its purchase
price, including the valuation of identifiable intangible assets. The refinement
of the purchase price allocation within the next year is not expected to have a
material impact on the Company's financial position or results of operations.
 
     On October 7, 1997, a wholly-owned subsidiary of the Company purchased
substantially all the assets of Ellis Tower Co., Inc. ("Ellis Tower"), in
exchange for $449,405 in cash and 120,848 shares of the Company's common stock
at a price of $14.87 determined by the closing price on or about October 7,
1997. Ellis Tower, located in Ft. Lauderdale, FL, provides wireless
infrastructure building services. The source of the shares for the transaction
were unissued shares of the Company. The transaction was accounted for as a
purchase. Accordingly the results of Ellis Tower have been combined with those
of the Company since the date of the
 
                                      F-22
<PAGE>   57
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
purchase. Goodwill of approximately $1,700,000 recorded in connection with the
purchase is being amortized over a period of 15 years.
 
     On June 30, 1997, the Company issued 2,380,000 shares of restricted common
stock of the Company at a price of $11.625 per share, determined by the closing
price on or about June 8, 1997, pursuant to the merger of MTS with a
wholly-owned subsidiary of the Company. The source of the shares for the
transaction were unissued shares of the company. MTS, located in Salem, Oregon;
Salt Lake City, Utah; Phoenix, Arizona; Denver, Colorado; and Sacramento,
California, provides wireless infrastructure building services and
manufacturing, distribution and sales of components for wireless infrastructure.
The transaction was accounted for as a pooling of interests. Accordingly, the
Company's consolidated financial statements have been restated to include the
operations of MTS prior to the acquisition for all periods presented.
 
     On June 1, 1997, the Company issued 55,814 shares of restricted common
stock of the Company at a price of $10.625 per share, determined by the closing
price on or about June 1, 1997, in exchange for substantially all the assets and
liabilities of Specialty Constructors Coatings, Inc. ("Coatings"). Coatings was
originally 50 percent owned by Michael R. Budagher, but Mr. Budagher's interest
was sold to the other shareholders on March 1, 1997. The source of the shares
for the transaction were unissued shares of the Company. Coatings, located in
Cedar Crest, New Mexico, provides wireless infrastructure building services,
primarily on water tank facilities. The transaction was accounted for as a
purchase. Accordingly, the results of Coatings operations have been combined
with those of the Company since the date of acquisition. No goodwill was
recorded in connection with the purchase.
 
     On May 28, 1997, the Company issued 186,047 shares of restricted common
stock of the Company at a price of $9.30 per share, determined by the closing
price on or about March 31, 1997, in exchange for substantially all the assets
and liabilities of Paramount Communication Systems, Inc. ("Paramount"). The
source of the shares for the transaction were unissued shares of the Company.
Paramount, located in Somerdale, New Jersey, provides wireless infrastructure
building services. The transaction was accounted for as a purchase. Accordingly,
the results of Paramount's operations have been combined with those of the
Company since the date of acquisition. Goodwill of approximately $1,300,000
recorded in connection with the purchase is being amortized over a period of
fifteen years. In connection with the purchase, the Company entered into a note
receivable with the principal stockholder of Paramount. The note, in the amount
of $250,000, is due in three semi-annual installments beginning May 2000 and one
final installment in November 2001. Interest, at 9 percent, is payable
quarterly. Under the terms of the acquisition agreement, the Company is
obligated to loan an additional $250,000 to the stockholder of Paramount. Such
additional loan was not requested by the stockholder in 1998. The note is
secured by 93,024 shares of the Company's common stock.
 
     On May 14, 1997, the Company issued 400,000 shares of restricted common
stock of the Company at a price of $9.25 per share, determined by the closing
price on or about March 31, 1997, pursuant to the merger of N&L with a
wholly-owned subsidiary of the Company. The source of the shares for the
transaction were unissued shares of the Company. N&L, located in Oklahoma City,
OK and southern California, provides general contract services for wireless
telecommunications companies, health care and other commercial customers. The
transaction was accounted for as a pooling of interests. Accordingly, the
Company's consolidated financial statements have been restated to include the
operations of N&L prior to the acquisition for all periods presented.
 
     On October 31, 1996, the Company paid $160,000 and issued 93,400 shares of
restricted common stock of the Company at a price of $7.125 per share,
determined by the closing price on or about October 31, 1996, in exchange for
substantially all the assets and liabilities of Data Cell Systems, Inc. ("Data
Cell"). Data Cell provides wireless infrastructure building services. The source
of the shares for the transaction were unissued shares of the Company. The
transaction was accounted for as a purchase. Accordingly, the results of Data
                                      F-23
<PAGE>   58
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
Cell's operations have been combined with those of the Company since the date of
acquisition. Goodwill of approximately $380,000 recorded in connection with the
purchase is being amortized over a period of five years. Additionally, pursuant
to the purchase agreement, the Company may be required to pay additional
consideration, not to exceed $200,000, based upon the Data Cell subsidiary
achieving specified levels of pre-tax earnings during the three years
immediately following the date of acquisition. Such levels were not attained in
the years ended June 30, 1998 and 1997.
 
     Fiscal years 1998 and 1997 also include other acquisitions which are
immaterial to the consolidated financial statements of the Company.
 
     Separate results of the combining entities, giving effect to the N&L and
MTS poolings of interests for periods prior to such transactions are as follows
for the years ending June 30:
 
<TABLE>
<CAPTION>
                                                                 1997(1)
                                                               AS RESTATED
                                                               -----------
                                                               (UNAUDITED)
<S>                                                            <C>
Revenues earned:
  OmniAmerica...............................................   $32,303,360
  Novak & Lackey............................................    10,303,550
  Microwave Tower Service...................................    23,019,890
                                                               -----------
                                                               $65,626,800
                                                               ===========
Net earnings (loss):
  OmniAmerica...............................................   $  (279,257)
  Novak & Lackey............................................       390,885
  Microwave Tower Service...................................     5,576,114
                                                               -----------
                                                               $ 5,687,742
                                                               ===========
Pro forma net earnings (loss) (see note 12)
  OmniAmerica...............................................   $  (279,257)
  Novak & Lackey............................................       390,885
  Microwave Tower Service...................................     3,435,614
                                                               -----------
                                                               $ 3,547,242
                                                               ===========
</TABLE>
 
---------------
 
(1) The Company's results for the twelve months ended June 30, 1997 include the
    results of N&L for the period following the consummation of the merger.
 
     The following unaudited pro forma financial information presents the
combined results of operations of the Company and OmniAmerica Holdings as if the
acquisitions had occurred as of the beginning of 1998 and 1997, after giving
effect to certain adjustments, including amortization of goodwill, additional
depreciation expense and related income tax effects. The pro forma financial
information does not necessarily reflect the
 
                                      F-24
<PAGE>   59
                       OMNIAMERICA, INC. AND SUBSIDIARIES
                  (FORMERLY SPECIALTY TELECONSTRUCTORS, INC.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
operations that would have occurred had the Company and the acquired entities
constituted a single entity during such periods nor is it an indication of
future performance:
 
<TABLE>
<CAPTION>
                                                                 YEAR ENDED JUNE 30
                                                              -------------------------
                                                                 1998          1997
                                                              -----------   -----------
<S>                                                           <C>           <C>
Revenues earned.............................................  $67,437,136   $71,332,114
                                                              ===========   ===========
Net earnings................................................  $ 1,163,107   $ 6,424,651
                                                              ===========   ===========
Earnings per common share:
  Basic.....................................................  $       .08   $       .46
                                                              ===========   ===========
  Diluted...................................................  $       .08   $       .45
                                                              ===========   ===========
Pro forma net earnings(2)...................................                $ 4,284,151
                                                                            ===========
Pro forma earnings per common and common equivalent share(2)
  Basic.....................................................                $       .31
                                                                            ===========
  Diluted...................................................                $       .30
                                                                            ===========
</TABLE>
 
---------------
 
(2) Pro forma net earnings and earnings per common and common equivalent share
    are based on pooled results of the Company, giving effect to pro forma
    income taxes for pooling with Subchapter S Corporation for the years ended
    June 30, 1998 and 1997.
 
     The effects of the Company's acquisition of Ellis Tower is not material to
the combined results of operations of the Company for the year ended June 30,
1998 and 1997, respectively.
 
(16) SUBSEQUENT EVENTS
 
     On July 9, 1998, the Company paid $640,000 and issued 81,270 shares of
restricted common stock of the Company at a price of $30.60 per share,
determined by the closing price on or about July 9, 1998, in exchange for
substantially all the assets and liabilities of Teleforce Communications. LLC
("Teleforce"). Teleforce provides site acquisition services for the wireless
communications industry. The transaction is to be accounted for as a purchase.
 
     On April 10, 1998, the Company entered into an Asset Purchase and Sale
Agreement with certain wholly-owned subsidiaries of Arch Communications Group,
Inc. ("Arch") with respect to the acquisition by the Company of substantially
all of the telecommunications sites owned by Arch. The Company is purchasing a
portion of such sites at each of three separate closings. Pursuant to the first
closing on June 26, 1998 (the "Arch First Closing"), the Company acquired a
total of 52 towers on 46 sites, and the exclusive right to manage an additional
3 sites. The Company paid Arch approximately $13,139,000 for the sites acquired
pursuant to the Arch First Closing. Pursuant to the second closing, which is
scheduled to take place on September 29, 1998 (the "Arch Second Closing"), the
Company will acquire approximately 62 towers on 59 sites, and the exclusive
right to manage an additional 7 sites. The purchase price for the sites acquired
pursuant to the Arch Second Closing is estimated to be approximately
$20,000,000. A third and final closing is expected to take place during the last
calendar quarter of 1998.
 
(17) CONTINGENCIES
 
     The Company is, and from time to time may be, a party to routine legal
proceedings incidental to its business. The outcome of these legal proceedings
is not expected to have a material adverse effect on the Company's business,
results of operations or financial condition, based on the Company's current
understanding of the relevant facts and law. The Company maintains general
liability insurance against risks arising out of the normal course of business.
 
                                      F-25
<PAGE>   60
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                               DESCRIPTION OF EXHIBIT
        -------                               ----------------------
<C>                        <S>
          2.1              -- Amended and Restated Agreement and Plan of Merger, dated
                              April 22, 1998, among Specialty Teleconstructors, Inc.,
                              OAI Acquisition Corp., OmniAmerica Holdings Corporation,
                              OmniAmerica, Inc., Omni/HSW Acquisition, Inc. and
                              HMTF/OmniPartners, L.P.(1)
          2.2              -- Agreement and Plan of Merger, dated July 24, 1998, by and
                              between Specialty Teleconstructors, Inc. and OmniAmerica,
                              Inc.(2)
          3.1              -- Certificate of Incorporation of the Registrant(2)
          3.2              -- By-laws of the Registrant(2)
          4.1              -- Post-Merger Stockholders Agreement, dated April 23, 1998,
                              among Specialty Teleconstructors, Inc. and the
                              stockholders of Speciality Teleconstructors, Inc. party
                              thereto(1)
         10.1              -- 1998 Stock Option Plan of Specialty Teleconstructors,
                              Inc.(2)
         10.2              -- Executive Employment Agreement, dated December 6, 1997,
                              by and between Specialty Teleconstructors, Inc. and
                              Jeffrey A. Howard(3)
         10.3              -- Employment Agreement, dated February 16, 1998, effective
                              as of the effective time of the April Merger, between
                              Specialty Teleconstructors, Inc. and Michael R.
                              Budagher(1)
         10.4              -- Executive Employment Agreement, dated February 16, 1998,
                              effective as of the effective time of the April Merger,
                              between Specialty Teleconstructors, Inc. and Carl E.
                              Hirsch(1)
         10.5              -- First Amendment to Employment Agreement, dated April 22,
                              1998, effective as of the effective time of the April
                              Merger, between Specialty Teleconstructors, Inc. and
                              Jeffrey A. Howard(1)
         10.6              -- Executive Employment Agreement, dated February 16, 1998,
                              effective as of the effective time of the April Merger,
                              between Specialty Teleconstructors, Inc. and Anthony S.
                              Ocepek(1)
         10.7              -- Credit Agreement, dated as of June 30, 1998, among
                              Specialty Teleconstructors, Inc., the lenders party
                              thereto, Bankers Trust Company, Bank Boston, N.A. and The
                              Chase Manhattan Bank*
         10.8              -- Guarantee and Collateral Agreement, dated as of June 30,
                              1998, made by Specialty Teleconstructors, Inc. and
                              certain of its subsidiaries, in favor of The Chase
                              Manhattan Bank*
         10.9              -- Monitoring and Oversight Agreement, dated April 23, 1998,
                              among Specialty Teleconstructors, Inc., a Nevada
                              corporation, OmniAmerica Holdings Corporation, a Delaware
                              corporation, OmniAmerica, Inc., a Delaware corporation,
                              Novak & Lackey Construction Co., Inc., an Oklahoma
                              corporation, Specialty Management, Inc., a Nevada
                              corporation, Microwave Tower Services, Inc., an Oregon
                              corporation, Specialty Constructors, Inc., a New Mexico
                              corporation, Specialty Constructors Coatings, Inc., a
                              Nevada corporation, Specialty Capital Services, Inc., a
                              Nevada corporation, Specialty Combined Resources, Inc., a
                              Texas corporation, Specialty Fortress, Inc., a Nevada
                              corporation, Specialty Training Centers, Inc., a Nevada
                              corporation, South Atlantic Tower Corporation, a Delaware
                              corporation, OmniTower, Ltd., a Florida limited
                              partnership, and Hicks, Muse & Co. Partners, L.P., a
                              Texas limited partnership*
</TABLE>
<PAGE>   61
 
<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                               DESCRIPTION OF EXHIBIT
        -------                               ----------------------
<C>                        <S>
         10.10             -- Financial Advisory Agreement, dated April 23, 1998, among
                              Specialty Teleconstructors, Inc., a Nevada corporation,
                              OmniAmerica Holdings Corporation, a Delaware corporation,
                              OmniAmerica, Inc., a Delaware corporation, Novak & Lackey
                              Construction Co., Inc., an Oklahoma corporation,
                              Specialty Management, Inc., a Nevada corporation,
                              Microwave Tower Services, Inc., an Oregon corporation,
                              Specialty Constructors, Inc., a New Mexico corporation,
                              Specialty Constructors Coatings, Inc., a Nevada
                              corporation, Specialty Capital Services, Inc., a Nevada
                              corporation, Specialty Combined Resources, Inc., a Texas
                              corporation, Specialty Fortress, Inc., a Nevada
                              corporation, Specialty Training Centers, Inc., a Nevada
                              corporation, South Atlantic Tower Corporation, a Delaware
                              corporation, OmniTower, Ltd., a Florida limited
                              partnership, and Hicks, Muse & Co. Partners, L.P., a
                              Texas limited partnership*
         10.11             -- Asset Purchase Agreement, dated June 1, 1998, among
                              Specialty Capital Services, Inc. (n/k/a OmniAmerica
                              Development Corp.), Specialty Teleconstructors, Inc.,
                              Teleforce, LLC, and Richard H. Statler and Terry A.
                              Klein*
         10.12             -- Asset Purchase and Sale Agreement, dated April 10, 1998,
                              between certain subsidiaries of Arch Communications
                              Group, Inc. and OmniAmerica, Inc.*
         10.13             -- Amendment to Asset Purchase and Sale Agreement, dated
                              June 26, 1998, between certain subsidiaries of Arch
                              Communications Group, Inc. and OmniAmerica, Inc.*
         10.14             -- Second Amendment to Asset Purchase and Sale Agreement,
                              dated August 12, 1998, between certain subsidiaries of
                              Arch Communications Group, Inc. and OmniAmerica, Inc.*
         10.15             -- Third Amendment to Asset Purchase and Sale Agreement,
                              dated as of September 29, 1998, between certain
                              subsidiaries of Arch Communications Group, Inc. and
                              OmniAmerica, Inc.*
         10.16             -- Employment Agreement dated as of June 30, 1997, by and
                              between Microwave Tower Services, Inc. and Ernie L.
                              Carpenter(4)
         21.1              -- Subsidiaries of the Registrant*
         23.1              -- Consent of Ernst & Young LLP*
         23.2              -- Consent of KPMG Peat Marwick LLP*
         27.1              -- Financial Data Schedule*
</TABLE>
 
---------------
 
 *  Filed herewith.
 
(1) Incorporated by reference to the Registrant's Current Report on Form 8-K
    filed on May 7, 1998.
 
(2) Incorporated by reference to the Registrant's Schedule 14C filed on August
    24, 1998.
 
(3) Incorporated by reference to the Registrant's Form 10-QSB filed on February
    20, 1998.
 
(4) Incorporated by reference to the Registrant's Form 10-KSB for the fiscal
    year ended June 30, 1997.