WESTOWER CORPORATION AND SUBSIDIARIES
                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                      Three Months ended December 31, 1998

                  As at December 31,1998 and September 30, 1998
                                      - 3 -

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


     [x] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES  EXCHANGE
ACT OF 1934

         For the quarterly period ended December 31, 1998

[  ]     TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

  For the transition period from________________________to_____________________



                         COMMISSION FILE NUMBER 1-132963


                              WESTOWER CORPORATION
                (Name of registrant as specified in its charter)

                WASHINGTON                   1623                  91-1825860
        (State or jurisdiction of  (Primary Standard Industrial     (I.R.S.
                 Employer
Incorporation or Organization)     Classification Code Number)   Identification
                                                                       Number)


                              Westower Corporation
                               7001 NE 40th Avenue
                           Vancouver, Washington 98661
                                 (360) 750-9355
 
(Address and telephone number of principal executive offices and principal place
of business)

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 / /


                                       APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares  outstanding  of each of the issuer's  classes common
equity, as of the latest practicable date:

                                         8,267,000 as of January 31, 1999









<PAGE>


                      WESTOWER CORPORATION AND SUBSIDIARIES
                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                  As at December 31,1998 and September 30, 1998
              See accompanying notes to these financial statements
                                                        

                                               
                                                       INDEX
<TABLE>
<CAPTION>


PART I - FINANCIAL INFORMATION
<S>                                                                                            <C>      

          ITEM 1 - UNAUDITED CONDENSED CONSOLIDATED
          FINANCIAL STATMENTS
         Unaudited Condensed Consolidated Balance Sheets
         at December  31, 1998 and September 30, 1998 (audited)                                  3

         Unaudited Condensed Consolidated Statements of Income
         for the three-month period ended December  31, 1998 and 1997                            4

         Unaudited Condensed Consolidated Statement of  Stockholders' Equity
         for the three-month period ended December 31, 1998                                      5

         Unaudited Condensed Consolidated Statements of Cash Flows
          for the three-month period ended December  31, 1998 and 1997                           6

         Notes to the Unaudited Condensed Consolidated Financial Statements
         as of December  31, 1998 and 1997                                                       7



         ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                       8

PART II - OTHER INFORMATION                                                                      11

         ITEM 1 - LEGAL PROCEEDINGS

         ITEM 2 - CHANGES IN SECURITIES

         ITEM 3 - DEFAULTS UPON SENIOR SECURITES

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

         ITEM 5 - OTHER INFORMATION

         ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

         SIGNATURES

</TABLE>

















<PAGE>

<TABLE>
<CAPTION>

                                                                      (audited)
                                                                   December 31,      September 30,
                                                                       1998             1998
                                                                -----------------  ---------
<S>                                                                  <C>               <C>

CURRENT ASSETS
    Cash and cash equivalents                                   $       4,862,000  $     9,331,000
    Accounts receivable, net                                           20,729,000       13,289,000
    Costs and estimated earnings in excess of
       billings on uncompleted contracts                                3,697,000        5,078,000
    Inventory                                                           2,489,000        2,151,000
    Related party advances and receivables                                971,000          956,000
    Income tax receivable                                                 220,000         220,000
    Other current assets                                                2,908,000        1,203,000
                                                                -----------------  ---------------
          Total current assets                                         35,876,000       32,228,000
PROPERTY AND EQUIPMENT, net                                             9,230,000        7,574,000
INTANGIBLE ASSETS, net                                                                  19,721,000
OTHER ASSETS                                                           21,451,000        2,771,000
                                                                -----------------  ---------------
TOTAL ASSETS                                                    $               0  $    62,294,000
                                                                =================  ===============

                                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Trade accounts payable                                      $       7,439,000  $     7,053,000
    Other current liabilities                                           1,389,000        2,810,000
    Billings in excess of costs and estimated
       earnings on uncompleted contracts                                  391,000        1,435,000
    Income taxes payable                                                2,350,000        2,116,000
    Deferred income taxes                                                 612,000          428,000
    Stockholder advances and notes payable to related parties           1,060,000          228,000
    Note payable                                                          582,000        1,089,000
    Current portion of long-term debt
       and capital lease obligations                                    1,819,000        2,419,000
                                                                -----------------  ---------------
          Total current liabilities                                    15,642,000       17,578,000
LONG-TERM DEBT AND CAPITAL LEASE
    OBLIGATIONS, excluding current portion                             38,117,000       14,991,000
DEFERRED INCOME TAXES                                                   2,944,000        2,962,000
                                                                -----------------  ---------------
          Total liabilities                                            56,703,000       35,531,000
 

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
    Common stock ($.01 par value,  10,000,000 shares  
    authorized,  8,254,000 and
    7,047,000  shares  issued 
    and  outstanding  at  December 
    31,  1998  and September 30, 1998
    respectively)      
                                                                           83,000           70,000
    Additional paid-in-capital                                         37,769,000       22,610,000
    Accumulated other comprehensive income (loss)                        (641,000)        (581,000)
    Retained earnings                                                   5,455,000        4,664,000
                                                                -----------------  ---------------
          Total stockholders' equity                                   42,666,000       26,763,000
                                                                -----------------  ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $      99,369,000  $    62,294,000
                                                                =================  ===============
</TABLE>


<PAGE>


                      WESTOWER CORPORATION AND SUBSIDIARIES
              UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                  Three Months ended December 31, 1998 and 1997
              See accompanying notes to these financial statements
                                                                



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

CONTRACT AND OTHER
REVENUES EARNED                                $     24,988,000    $      11,957,000

COSTS OF REVENUES EARNED                             18,144,000            8,756,000
 (exclusive of depreciation shown below)
    Gross profit                                      6,844,000            3,201,000

SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES                               4,258,000            1,720,000

DEPRECIATION AND AMORTIZATION                           589,000               71,000

MERGER RELATED EXPENSES                                  77,000             -
                                                        ----------------    ------- 

OPERATING INCOME                                      1,920,000            1,410,000

OTHER INCOME (EXPENSE)
    Other income (expense)                                    -               (8,000)
    Interest income                                      53,000               50,000
    Interest and financing expense                     (572,000)             (26,000)
                                               -----------------   ------------------
       Total other income (expense)                    (519,000)              16,000
                                               -----------------   -----------------

INCOME BEFORE PROVISION
FOR INCOME TAXES                                      1,401,000            1,426,000

PROVISION FOR INCOME TAXES                              610,000              500,000
                                               ----------------    -----------------

NET INCOME                                     $        791,000    $         926,000
                                               ================     ================

EARNINGS PER SHARE:

BASIC EARNINGS                                    $     0.10             $      0.16
                                                 ==========                    ====== 

DILUTED EARNINGS                                    $                    $         
                                                    =========            ===========
</TABLE>



<PAGE>


                      WESTOWER CORPORATION AND SUBSIDIARIES
       UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                      Three Months ended December 31, 1998
<TABLE>
<CAPTION>

                                                                                         Accumulated
                                                            Additional                     Other Com-        Com-
                                      Common Stock            Paid-in        Retained      prehensive     prehensive
                                   Shares       Amount        Capital        Earnings     Income (loss)         Income       Total
                                -----------  -----------   ------------- --------------- ---------------       --------     -------
<S>                              <C>                <C>            <C>       <C>            <C>                <C>

BALANCE, September 30, 1998     7,047,000    $  70,000    $   22,610,000  $ 4,664,000     $ (581,000)                   $ 26,763,000
Net income                                                                    791,000                      $   791,000
Foreign currency translation
   adjustment                                                                                (60,000)          (60,000)
                                                                                                               --------
      Total comprehensive income                                                                              $ 731,000      731,000
                                                                                                               =========

Proceeds from warrants              819,000        9,000       7,282,000                                                   7,291,000
   exercised, net
Stock issuances for
   business acquisitions            388,000        4,000       7,857,000                                                   7,861,000
Stock compensation expense                                        20,000                                                      20,000

BALANCE, December 31,
   1998                           8,254,000  $    83,000   $  37,769,000 $     5,455,000 $   (641,000)                   $42,666,000
                                ===========  ===========   ============= =============== ==============                 ===========

</TABLE>

<PAGE>


                      WESTOWER CORPORATION AND SUBSIDIARIES
            UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                For Three Months ended December 31, 1998 and 1997

<TABLE>
<S>                                                 <C>                  <C>    
 



                                                          1998                1997
                                                   ----------------    -----------
CASH FROM OPERATING ACTIVITIES
    Net income                                     $        791,000    $         926,000
Adjustments to reconcile net income to
net cash from operating activities
    Depreciation and amortization                           589,000               71,000
    Gain on sale of assets                                        -             (125,000)
    Non-cash interest and financing expense                 117,000                    -
    Earnings from equity investment                         (33,000)                   -
    Stock compensation expense                               20,000
Changes in operating assets and liabilities,
net of effect of acquisitions
    Accounts receivable                                  (4,010,000)          (1,284,000)
    Costs and estimated earnings in excess of billings
       on uncompleted contracts                           1,381,000             (477,000)
    Inventory and other current assets                   (1,935,000)            (232,000)
    Trade accounts payable                                 (258,000)          (1,444,000)
    Billings in excess of costs and estimated earnings
       on uncompleted contracts                          (1,044,000)             780,000
    Other current liabilities                            (1,808,000)             663,000
    Current  and deferred income taxes                      400,000               96,000
                                                   ----------------    -----------------
    Net cash flows used in operating activities          (5,790,000)          (1,026,000)
                                                   -----------------   ------------------
CASH FLOWS FROM INVESTING ACTIVITIES
    Cash paid for acquisitions, net of cash acquired     (6,252,000)            (311,000)
    Increase in other assets                            (18,736,000)                   -
    Purchases of property, plant and equipment             (689,000)            (525,000)
    Proceeds from sale of assets                                  -              302,000
                                                   ----------------    -----------------
    Net cash flows used in investing activities         (25,677,000)            (534,000)
                                                   -----------------   ------------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from stock issuances, net                     7,291,000           7,514,000
    Proceeds from long-term debt                                  -              104,000
    Repayments to related parties                          (915,000)              (9,000)
    Advances to related parties                                   -             (196,000)
    Borrowings (repayments) on line of credit, net       (1,357,000)             115,000
    Proceeds from credit facility                        24,000,000                    -
    Repayments of long-term debt                         (1,983,000)            (326,000)
                                                   -----------------   ------------------
    Net cash flow from financing activities              27,036,000            7,202,000
                                                   ----------------    -----------------

EFFECT OF EXCHANGE RATES  ON CASH                           (38,000)            (169,000)
                                                   -----------------   ------------------

NET INCREASE (DECREASE) CASH EQUIVALENTS               (4,469,000)             5,473,000


CASH AND CASH EQUIVALENTS,
    beginning of period                                   9,331,000             1,748,000
                                                   ----------------    ------------------

CASH AND CASH EQUIVALENTS,
    end of period                                  $      4,862,000    $       7,221,000
                                                    ===============     ================
</TABLE>

<PAGE>


                      
                      WESTOWER CORPORATION AND SUBSIDIARIES
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                                 



Note 1 - Basis of Presentation

Westower  Corporation ( the  "Company")  designs  builds and maintains  wireless
communications  transmitting and receiving  facilities for providers of wireless
communications services. The Company also owns and leases communications towers.
The Company operates throughout the U.S. and Canada.

The unaudited condensed  consolidated  financial statements and notes thereto at
December 31, 1998 and  September  30, 1998  (audited),  and for the  three-month
period  ended  December  31, 1998 and 1997,  reflect the October 28, 1997 merger
with Western Telecom Construction Ltd., an Alberta corporation, the May 29, 1998
merger with MJA Communications Corp., a Florida corporation,  and the August 31,
1998 merger with Standby  Services,  Inc., a Texas  corporation.  All  companies
design,  fabricate and construct wireless  transmitting and receiving facilities
and shelters for communications  providers. The Company issued 835,000 shares of
its common stock for all the common shares of Western Telecom Construction Ltd.,
397,000  shares  of  its  common  stock  for  all of the  common  shares  of MJA
Communications  Corp.,  and  544,000  shares of its common  stock for all of the
common shares of Standby Services,  Inc. All of these mergers were accounted for
as or similar to a  pooling-of-interests.  Accordingly,  the unaudited condensed
consolidated  financial  statements  and notes  thereto at December 31, 1998 and
September 30, 1998 (audited),  and for the three-month period ended December 31,
1998 and 1997, have been restated to include the results of these mergers.

On October 27, 1998, the Company changed its fiscal year-end from February 28 to
September 30. The  three-month  period ended  December 31, 1998 is the Company's
first quarter in its fiscal year ended September 30, 1999. All prior information
has been restated to conform with a September 30 year end.

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  reporting and in accordance with the  instructions  for Form 10-Q and
Article  10 of  Regulation  S-X.  Accordingly,  they do not  include  all of the
information and disclosures  normally required by generally accepted  accounting
principles for complete financial  statements or those normally reflected in the
Company's  Annual  Report on Form 10-KSB.  The  financial  information  included
herein reflects all  adjustments  (consisting of normal  recurring  adjustments)
which are, in the opinion of management,  necessary for a fair  presentation  of
results  for interim  periods.  Results of interim  periods are not  necessarily
indicative  of the  results  to be  expected  for a full year.  These  unaudited
condensed  consolidated  financial statements should be read in conjunction with
the  consolidated  financial  statements for the seven month  Transition  Period
ended  September 30, 1998 and the notes thereto  included in the Company's  Form
10-KSB.

Consolidation -- The consolidated  financial  statements include the accounts of
the Company and its wholly owned domestic and Canadian subsidiaries. Investments
in subsidiaries in which the Company exercises  significant  influence but which
it does not control are accounted for using the equity  method.  Investment in a
60% owned affiliated company is accounted for on the equity basis of accounting.
All material  intercompany  accounts and  transactions  have been  eliminated in
consolidation.

Foreign  Currency  Translation  -- All asset and liability  accounts of Canadian
operations are translated into U.S. dollars at current exchange rates.  Revenues
and expenses are translated  using the average  exchange rate during the period.
Foreign  currency  translation  adjustments  are  reported  as  a  component  of
comprehensive income and stockholders' equity in the consolidated balance sheet.

Use of  Estimates--The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and  assumptions  that affect the amounts  reported in the  unaudited  condensed
consolidated  financial  statements.  Examples of estimates  subject to possible
revision  based upon the outcome of future  events  include  costs and estimated
earnings on  uncompleted  contracts,  depreciation  of property  and  equipment,
accrued income tax liabilities, and purchase price allocations for acquisitions.
Actual results could differ from those estimates.

Reclassification -- Certain prior year amounts have been reclassified to conform
to the  current  year  presentation  and  did  not  impact  previously  reported
stockholders' equity or cash flow.

Note 2 - Inventory
Inventory  is stated at the lower of cost and  estimated  net  realizable  value
using the first-in,  first-out method. Inventory consists of materials purchased
for future construction not associated with specific jobs.



Note  3 -  Property  And  Equipment  Property  and  equipment  consists  of  the
following:
<TABLE>
<CAPTION>

                                                            December 31,        September 30,
                                                                1998                1998
<S>                                                            <C>                <C>

Buildings                                                      $  1,770,000       $  1,795,000
Vehicles                                                          3,316,000          2,540,000
Equipment                                                         2,134,000          1,580,000
Communications towers                                             1,908,000           1,401,000
Furniture and fixtures                                            1,053,000             943,000
Leasehold improvements                                              109,000              81,000
                                                          -----------------  ------------------
                                                                 10,290,000           8,340,000
Less accumulated depreciation                                    (1,849,000)         (1,562,000)
                                                          ------------------ -------------------
                                                                  8,441,000           6,778,000
Land                                                                789,000             796,000
                                                          -----------------  ------------------
                                                          $      9,230,000   $       7,574,000
                                                          ================   =================
</TABLE>

Note  4 - Acquisitions

During the three months ended  December 31, 1998,  the Company  consummated  the
following  transactions  which  were  accounted  for by the  purchase  method of
accounting, and accordingly, the operating results of the acquired entities have
been  included  in  the  consolidated   operating  results  since  the  date  of
acquisition.

On October  30,  1998 the  Company  completed  the  acquisition  of  Teletronics
Management  Services,  Inc.  ("Teletronics").  The  acquisition  was effected by
exchanging  188,000 shares of common stock valued at approximately $3.8 million,
based  on  the  publicly   traded  price,   $1.8  million  in  cash,   including
distributions payable to former shareholders in the amount of $800,000,  and the
assumption of certain  liabilities,  for all outstanding  shares of Teletronics.
The  acquisition  was  accounted  for using the  purchase  method  for  business
combinations resulting in goodwill of approximately $5.0 million.

On  November  10,  1998  the  Company   completed  the   acquisition  of  Summit
Communications,  LLC ("Summit"),  a Mississippi  limited liability company which
engages in operations  similar to those of the Company.  The merger was effected
by  exchanging  200,000  shares of common  stock  valued at  approximately  $4.1
million,  based on the publicly  traded  price,  $4.4  million in cash,  and the
assumption of certain  liabilities,  for all membership interests in Summit. The
former members of Summit may also receive an additional 100,000 shares of common
stock,  based on certain  performance  criteria during the three years following
the date of  acquisition.  The  acquisition was accounted for using the purchase
method for business  combinations  resulting in goodwill of  approximately  $8.0
million.  Additional  shares of  common  stock  issued  will be  recorded  as an
adjustment of the purchase price and will increase recorded goodwill.

The following is a summary of all consideration  exchanged for acquisitions that
were accounted for as purchases:

                                                                Three Months
                                                                   Ended
                                                                December 31,
                                                                 1998
Shares issued                                                      388,000

Value of shares                                          $        7,861,000
Cash                                                              6,252,000
                                                          ------------------
       Total purchase price                              $       14,113,000
                                                           ================ 


The assets and  liabilities  of the  acquired  entities  were  recorded at their
estimated  fair  market  values  at  the  dates  of  acquisition.   The  initial
allocations of fair market values are preliminary and are subject to adjustments
during the first year following the acquisition. The initial allocations were as
follows:






                                                                December 31,
                                                                 1998
Non-compete agreements                                       $           136,000
Tangible assets                                                        4,739,000
Communications tower purchase contracts                                      -
Goodwill                                                              13,046,000
Liabilities assumed and deferred tax liabilities                     (3,808,000)
                                                                ----------------
       Total purchase price                                   $       14,113,000
                                                               =================

Included in the operating  results for the three month period ended December 31,
1998 are revenues of $4,895,000 and operating  income of $934,000 from the dates
of acquisition.

Note 5 - Intangible Assets Intangible assets consist of the following:

                                                 December 31,     September 30,
                                                  1998                1998
Goodwill                                    $  27,085,000        $ 14,039,000
Communications tower purchase contracts         5,857,000           5,661,000
Non-compete agreements                            355,000             219,000
                                                --------  ------------------
                                               33,297,000          19,919,000
Less accumulated amortization                    (485,000)           (198,000)
                                                -------- -------------------

                                         $     32,812,000       $  19,721,000
                                               =======  ==================

Note 6 - Other Assets

Other assets consist of the following:

                                               December 31,        September 30,
                                                   1998                1998
Deposits on tower purchase contracts         $  17,236,000       $        -
Equity investment in joint venture                 755,000             217,000
Deposit on business purchase                       650,000            -
Other noncurrent assets, net                     2,810,000           2,554,000
                                                -----------  ------------------
                                            $   21,451,000        $  2,771,000
                                               ----------  ------------------

During the three months ended  December 31, 1998, the Company paid $16.5 million
as a deposit to acquire  certain  communications  towers,  subject to regulatory
approval.  Subsequent  to December 31,  1998,  the approval was received and the
Company completed the acquisition of the communications towers. During the three
months  ended  December  31,  1998,  the Company  paid  $736,000 as a deposit to
acquire  additional  towers.  Equity investment in joint venture  represents the
Company's  cash   investment  and  the  Company's   equity  earnings  from  this
investment. Deposit on business purchase represents a deposit on a purchase of a
business  that the Company is currently  negotiating.  There can be no assurance
that the Company will be  successful in completing  this  negotiation,  in which
case the deposit is refundable.

Note 7 - Long -Term Debt

During the three  months  ended  December  31,  1998,  the Company  borrowed $24
million  under its credit  facility  with Bank Boston N.A.  Interest was set for
three months at approximately 5.5%.






Note 8 - Common Stock

On October 15, 1997,  the Company  issued  1,200,000  shares of common stock and
1,380,000  warrants to purchase common stock in a public  offering.  The Company
received proceeds, net of costs, of $7,493,000 from its public offering.  During
the three months ended December 31, 1998,  the Company  received net proceeds of
$7,291,000  on the  exercise of 819,000  warrants,  at $9.00 per share of common
stock.

Note 9 - Earnings Per Share

The numerators and  denominators  of basic and fully diluted  earnings per share
are as follows:


                                               Three Months       Three Months
                                                    Ended             Ended
                                                December 31,      December 31,
                                                    1998              1997
Numerator - Net income as reported             $  791,000        $    926,000
                                               ===============  ================
Denominator - Weighted average number of shares
outstanding:
       Basic weighted average
          number of shares                      7,839,000         5,700,000
       Effect of dilutive stock
          options and warrants                    782,000           179,000
                                               ---------------  ----------------
          Diluted weighted average
              number of shares                  8,621,000         5,879,000
                                               ===============  ================

For the three months ended December 31, 1998, shares associated with convertible
debt were excluded from the  computation  of diluted  earnings per share because
inclusion would have had an anti-dilutive effect on earnings per share All other
potential  common  shares have been  included in the diluted  earnings per share
calculation.  All potential  common shares were included in the  calculation  of
diluted earnings per share for the three months ended December 31, 1997.

Note 10 - Segment Information

The  Company's  operations  are  comprised  of a number of  communication  tower
construction entities that were recently acquired. While management assesses the
operating  results of each of these entities  separately,  as these entities and
its existing  operations exhibit similar financial  performance and have similar
economic characteristics, they have been aggregated as one segment.



The following table summarizes contract and other revenues and long-lived assets
related to the respective countries in which the Company operates.

                       As at and for the Three Months Ended December 31, 1998

                                        Total        United States       Canada
Contract and Other Revenues    $     24,988,000  $    19,079,000  $    5,909,000
Long-lived Assets              $      9,230,000  $     5,064,000  $    4,166,000









                         As at and for the Three Months Ended December 31, 1997
                                       Total        United States       Canada
Contract and Other Revenues    $     11,957,000  $     6,122,000  $   5,835,000
Long-lived Assets              $      2,707,000  $     1,001,000  $   1,706,000

Long-lived  assets are  comprised of property,  plant and equipment and excludes
intangible assets.



<PAGE>



                                                                


ITEM 2- MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS



FORWARD-LOOKING STATEMENTS

Statements  contained herein 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,  and  Section  21E of the  Securities
Exchange Act of 1934,  as amended,  which are intended to be covered by the safe
harbors  created  by  those  sections.   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, those set forth in the Company's Annual Report
on Form 10-KSB for the transition  period ended September 30, 1998 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 AND COMPANY STRATEGY

Historically,   Westower   Corporation  and  its  subsidiaries  (the  "Company")
principally has been engaged in building towers 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,  the Company's focus has been directed increasingly toward
developing sources of recurring revenues,  specifically  building towers for its
own account  (build-to-suit),  acquiring  towers from carriers and other owners,
maximizing   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 towers to the wireless carriers, often with multiple tenants on any given
tower. The Company  believes that its historical  competency of tower design and
construction  makes  the  Company  one of the  leading  candidates  for  carrier
outsourcing.

The Company believes owning towers and leasing tower space to wireless  carriers
and other  users will  provide  more stable  long-term  recurring  revenues.  In
addition to the Company's plan 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. In the
first fiscal  quarter of the fiscal year ending  September 30, 1999, the Company
began focusing on  opportunities to provide sources of recurring  revenues.  The
Company's  build-to-suit  program offers a turnkey 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 February 12, 1999,  210 towers were under  written or oral  commitments  from
three  wireless  carriers.  In addition to the towers  subject to  build-to-suit
commitments,  as of February 12,  1999,  the Company  owned or had  contracts to
acquire 145 towers. 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 towers not currently  under  written  contract or
develop  the  towers 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 currently being developed for
its own  account.  As the Company  increasingly  focuses its  resources on tower
ownership,  revenues from third parties generated by 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,  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 the towers the
Company will develop and build for its own account in the future.

RESULTS OF OPERATIONS

The  Company's  revenues  for the  three-month  period  ended  December 31, 1998
increased  approximately  109% to  $24,988,000  from  $11,957,000  for the  same
three-month  period in the previous  year.  Management  believes the increase in
revenues was  primarily due to an increased  rollout of wireless  infrastructure
building and implementation activities during the 1998 period and the results of
business  acquisitions  completed  after  December 31, 1997 and accounted for as
purchases.

Gross profit, excluding depreciation,  for the three-month period ended December
31, 1998 increased approximately 114% to $6,844,000 from $3,201,000 for the same
three-month  period in the prior year.  Gross profit as a percentage  of revenue
increased  to 27.4% for the first three months of fiscal 1999 from 26.8% for the
same three months of fiscal 1998.  The increase in gross profit is primarily due
to the increase in revenues coupled with a slightly improved margin.

Selling general and  administrative  expenses for the  three-month  period ended
December 31, 1998 increased approximately 148% to $4,258,000 from $1,720,000 for
the same  three-month  period in the prior year.  As a  percentage  of revenues,
selling  general and  administrative  expenses  increased  to 17.0% in the first
three months of fiscal 1999 compared to 14.4% in the same three months of fiscal
1998.  The  increase  in  selling   general  and   administrative   expenses  is
attributable to the increase in revenues that required additional management and
administrative  resources  and an  increase  in  staffing of the Company for the
build-to-suit  and tower  leasing  programs,  both of which did not exist in the
comparable period in the prior year.

Interest and financing  expenses for the  three-month  period ended December 31,
1998  increased  approximately  2100%  to  $572,000  from  $26,000  for the same
three-month  period in the prior year.  The increase is due to borrowings  made,
the  proceeds  of which have been used to acquire  companies  and towers  (See "
Liquidity and Capital Resources").

Income  taxes for the  three-month  period  ended  December  31, 1998  increased
approximately  22% to $610,000 from $500,000 for the same three-month  period in
the prior year. The Company's effective tax rate for the first quarter of fiscal
1999 was  approximately  43% compared to 35% in the same quarter of fiscal 1998.
The increase is primarily the result of non-deductible  amortization  expense of
goodwill recognized in business combinations accounted for as purchases.

LIQUIDITY AND CAPITAL RESOURCES

At  December  31,  1998,  the  Company had cash of  $4,862,000  a decrease  from
September 30, 1998, of $4,469,000. Working capital was $20,234,000.

The Company used  $5,790,000 of cash in its  operations  during the three months
ended  December  31,  1998.  Net income plus  non-cash  operating  expenses  was
$1,484,000  and  $7,274,000  is reflected  in the changes in non-cash  operating
assets and  liabilities.  During the three months ended  December 31, 1998,  the
Company used cash of $6,252,000,  net of acquired  cash, to acquire  businesses,
and $689,000 to purchase property and equipment.

In October 1997, the Company sold 1,200,000 Units in its initial public offering
of securities and received net proceeds of approximately  $7,493,000.  Each unit
consisted  of one share of common  stock and one  warrant to purchase a share of
common stock for $9.00 During the seven month transition  period ended September
30,  1998,  559,000  warrants  were  exercised  resulting  in  net  proceeds  of
$4,788,000.  During the three months ended December 31, 1998,  nearly all of the
remaining warrants were exercised resulting in net proceeds of $7,291,000.

In May 1998, the Company issued $15,000,000  principal amount of 7% subordinated
convertible notes  ("Subordinated  Debt").  Net proceeds were  $14,850,000.  The
notes are  convertible  into 599,000  shares of Common Stock at $25.03 per share
until April 30, 2007.  In connection  with the  Subordinated  Debt,  the Company
granted  warrants to  purchase  40,000  shares of Common  Stock at $23 per share
until April 30,  2007.  The Company has used the  proceeds to purchase and build
communications towers for lease to others, and to acquire other enterprises.

On October 30,  1998,  the Company  completed  the  acquisition  of  Teletronics
Management  Services,  Inc.  ("Teletronics").  The  acquisition  was effected by
exchanging  188,076 shares of common stock valued at approximately $3.8 million,
$1.8  million in cash,  including  $800,000 in  distributions  payable to former
shareholders,  and the assumption of certain  liabilities,  for all  outstanding
shares of  Teletronics.  The  acquisition  was  accounted for using the purchase
method for business  combinations,  resulting in goodwill of approximately  $5.0
million.

On  October  22,  1998,  the  Company  exercised  its right to  acquire  certain
communications towers for $9.2 million,  subject to regulatory approval.  During
the three months ended December 31, 1998, the Company paid $736,000  towards the
purchase price.

On  November  10,  1998  the  Company   completed  the   acquisition  of  Summit
Communications,  LLC ("Summit"),  a Mississippi  limited liability company which
engages in operations  similar to those of the Company.  The merger was effected
by  exchanging  200,000  shares of common  stock  valued at  approximately  $4.1
million,  $4.4 million in cash, and the assumption of certain  liabilities,  for
all membership interest in Summit. The former members of Summit may also receive
an  additional  100,000  shares of common  stock,  based on certain  performance
criteria  during  the  three  years  following  the  date  of  acquisition.  The
acquisition   was  accounted   for  using  the  purchase   method  for  business
combinations, resulting in goodwill of approximately $8.0 million.

In December 1998, the Company paid $16.5 million as a deposit to acquire certain
communications  towers.  Closing was subject to regulatory approval.  In January
1999,  approval was  received  and the Company  completed  the  transaction.  At
December 31, 1998,  the $16.5 million  payment was included in "Other Assets" on
the Company's balance sheet.

On June 9, 1998, the Company signed a credit  agreement  with  BankBoston,  N.A.
whereby BankBoston,  N.A. committed to providing $75,000,000 principal amount of
senior secured  revolving  credit (the "Credit  Facility").  The Credit Facility
allows the  Company to purchase or  construct  communications  towers for use by
third  parties.  The  Company's  ability  to  utilize  the  Credit  Facility  is
determined by, among other  criteria,  its cash flows  generated from operations
and from tower  leasing.  During the three months ended  December 31, 1998,  the
Company borrowed $24 million under the 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
undertaken by the Company,  the level of working  capital needed to generate the
revenues associated with such business plan, and acquisition opportunities.  The
Company  believes that revenues from operations and amounts  available under the
Credit Facility noted above and other capital resources available to the Company
will be adequate to satisfy its working  capital  requirements  at least through
the next twelve months.

To date, the Company has derived substantially all of its revenues from sales in
the United States and Canada,  and inflation has not had a significant effect on
the  Company's  business.  The Company does not  currently  expect  inflation to
adversely  affect it in the future unless inflation  increases  significantly in
the United States or Canada.  To date,  the Company's  activities in Brazil have
been denominated in Canadian currency.

The  Company  is  currently  in  negotiation  with  certain  tower  construction
companies concerning acquisition by Westower. The Company is also in negotiation
with certain third parties concerning the acquisition of wireless  communication
towers,  and with a financial  institution to arrange financing for the wireless
communication tower purchases,  should the negotiations  conclude  successfully.
None of the  negotiations  are  finalized  and  there is no  assurance  that the
Company will be successful in concluding these negotiations or if the Company is
successful, that the acquisitions will not be dilutive to existing shareholders.

YEAR 2000 COMPLIANCE

The Company is aware of the issues  associated  with the Year 2000 as it relates
to information systems. In September 1998,  independent  consultants completed a
review of the Company's software and hardware.  Pursuant to recommendations made
by the consultants, the Company replaced a few personal computers. The Company's
total expenditure to date for the Year 2000 compliance is less that $50,000. The
Year 2000 is not  expected to have a material  impact on the  Company's  current
information  systems  because its current  software is either  already Year 2000
compliant or required  changes are not expected to be  significant.  The Company
has not conducted a survey of its  customers or vendors to ascertain  their Year
2000 readiness. Based on the nature of the Company's business, and the existence
of alternate vendors,  however, the Company anticipates that it is not likely to
experience material business interruption due to the potential adverse impact of
the Year 2000 on its vendors.  As a result, the Company does not anticipate that
incremental expenditures to address Year 2000 compliance will be material to the
Company's  liquidity,  financial position or results of operations over the next
few years.

ACCOUNTING STANDARDS

In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 133,
"Accounting  for Derivative  Instruments  and Hedging  Activities".  Among other
provision,  SFAS No. 133 requires that entities  recognize  all  derivatives  as
either assets or liabilities in the statement of financial  position and measure
those instruments at fair value.  Gains and losses resulting from changes in the
fair values of those  derivatives would be accounted for depending on the use of
the  derivative  and whether it  qualifies  for hedge  accounting.  SFAS No. 133
becomes effective for the Company beginning October 1, 1999.  Management has not
yet  evaluated  the effects  that the  adoption of SFAS No. 133 will have on its
reported financial position or results of operations.


<PAGE>



                                                PART II - OTHER INFORMATION

ITEM 1 -          LEGAL PROCEEDINGS
                  None

ITEM 2 - CHANGES IN SECURITES

                  During the three months ended  December 31, 1998,  the Company
                  issued 200,000 shares of common stock as partial consideration
                  for all of the  membership  interests  in Summit,  and 188,076
                  shares of common stock as partial consideration for all of the
                  shares  of  Teletronics.  In  respect  of both  issuance,  the
                  Company relied on the exemption from  registration as provided
                  in Section 4(2) of the Securities Act of 1933, as amended.


ITEM 3 -          DEFAULTS UPON SENIOR SECURITES
                  None

ITEM 4 -          SUMBISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
                  None

ITEM 5 -          OTHER INFORMATION
                  None

ITEM 6 -          EXHIBITS AND REPORTS ON FORM 8-K

                  (a)      Exhibits.  The following exhibit is contained in 
                                      this report.

                           27.      Financial Data Schedule

                  (b)      Reports on Form 8-K.  The  following  reports on Form
                           8-K were filed during the quarter ended  December 31,
                           1998:

                           1.       Form 8-K dated  September  25, 1998 relating
                                    to  Item  5  (Other   Events)   and  Item  7
                                    (Exhibits)  relating to the  acquisition  of
                                    CNG Communications, Inc.

                           2.       Form 8-K dated  October 27, 1998 relating to
                                    Item  4   (Changes   in   the   Registrant's
                                    Certifying  Accountant),  Item 7  (Exhibits)
                                    and Item 8 (Change in Fiscal Year).

                           3.       Form 8-K dated  October 30, 1998 relating to
                                    Item 5 (Other  Events) and Item 7 (Exhibits)
                                    relating to the  acquisition  of Teletronics
                                    Management Services, Inc.

                           4.       Form 8-K/A  (Amendment  No. 1) dated  August
                                    31,  1998  relating  to  Item  7  (Financial
                                    Statements,  Pro Forma Financial Information
                                    and Exhibits)  containing  audited financial
                                    statements of Standby Services, Inc. and pro
                                    forma financial information,  and Form 8-K/A
                                    (Amendment  No.  2) dated  August  31,  1998
                                    relating to Item 5 (Other Events) and Item 7
                                    (Exhibits).

                           5.       Form 8-K/A  (Amendment  No. 1) dated  August
                                    31, 1998  relating to Item 5 (Other  Events)
                                    and Item 7 (Financial Statements,  Pro Forma
                                    Financial    Information    and    Exhibits)
                                    containing  audited financial  statements of
                                    CORD  Communications,  Inc.  and  pro  forma
                                    financial   information,   and  Form   8-K/A
                                    (Amendment   No.  2)   relating  to  Item  7
                                    (Financial  Statements,  Pro Forma Financial
                                    Information and Exhibits) containing audited
                                    financial statements of CORD Communications,
                                    Inc. and pro forma financial information.

                           6.       Form 8-K dated November 10, 1998 relating to
                                    Item  2   (Acquisition   or  Disposition  of
                                    Assets)  and Item 7  (Financial  Statements,
                                    Pro   Forma   Financial    Information   and
                                    Exhibits),  relating to the  acquisition  of
                                    Summit Communications,  LLC , and Form 8-K/A
                                    (Amendment  No. 1) relating to Item 5 (Other
                                    Events)  and Item 7  (Financial  Statements,
                                    Pro   Forma   Financial    Information   and
                                    Exhibits)   containing   audited   financial
                                    statements of Summit Communications, LLC and
                                    pro forma financial information.



Signature:        ____________________________________________________________

Signature:        ____________________________________________________________

Signature:        ____________________________________________________________

Westower Corporation
Registrant

Date:             ____________________________________________________________