================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   ----------

   
                                    FORM 10-Q/A
    

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

                  FOR THE QUARTERLY PERIOD ENDED JULY 31, 1998

                                       OR

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

              FOR THE TRANSITION PERIOD FROM _________ TO ________.

                         COMMISSION FILE NUMBER 0-21986

                            ABLE TELCOM HOLDING CORP.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

             FLORIDA                                         65-0013218
 (STATE OR OTHER JURISDICTION OF                            (IRS EMPLOYER
 INCORPORATION OR ORGANIZATION)                          IDENTIFICATION NO.)

            1601 FORUM PLACE
               SUITE 1110
        WEST PALM BEACH, FLORIDA                                    33401
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                         (ZIP CODE)

                                 (561) 688-0400
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

                                 NOT APPLICABLE
              (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
                         IF CHANGED SINCE LAST REPORT)

           Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                YES X   NO ___

   
        As of October 9, 1998, there were 11,065,670 shares, par value $.001
per share, of the Registrant's Common Stock outstanding.
    

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

                                TABLE OF CONTENTS

                                                                                                       PAGE
                                                                                                     NUMBER
<S>                                                                                                  <C>
PART I.       FINANCIAL INFORMATION

              Item 1.   Financial Statements

                        Condensed Consolidated Balance Sheets as of July 31, 1998 (Unaudited)
                           and October 31, 1997......................................................   3

                        Condensed Consolidated Statements of Operations (Unaudited)
                          for the three months and nine months ended July 31, 1998 and 1997..........   4

                        Condensed Consolidated Statements of Cash Flows (Unaudited)
                          for the nine months ended July 31, 1998 and 1997...........................   5

                        Notes to Condensed Consolidated Financial Statements (Unaudited).............   6

              Item 2.   Management's Discussion and Analysis of Financial Condition and
                           Results of Operations.....................................................  13

PART II.      OTHER INFORMATION

              Item 2.   Changes in Securities........................................................  16

              Item 3.   Default Upon Senior Securities...............................................  16

SIGNATURES...........................................................................................  17
</TABLE>
    

                                        2

<PAGE>

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

PART I.       FINANCIAL INFORMATION

ITEM 1.       FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                          JULY 31,           OCTOBER 31,
                                                                            1998                1997(1)
                                                                          ---------          ----------
<S>                                                                    <C>                  <C>
ASSETS
Currents Assets:
  Cash and cash equivalents........................................    $  5,078,750         $ 6,229,602
  Accounts receivable, net.........................................      59,696,806          13,399,327
  Inventories......................................................      22,016,046           1,257,218
  Costs and profits in excess of billings on uncompleted contracts      100,216,707           5,614,813
  Prepaid expenses and other current assets........................       2,281,426             508,591
                                                                       ------------         -----------
      Total current assets.........................................     189,289,735          27,009,551
Property and equipment, net........................................      27,885,038          13,113,638
Other assets:
  Goodwill, net....................................................      14,156,511           8,341,064
  Other non-current assets.........................................       3,265,463           1,881,741
                                                                       ------------         -----------
      Total other assets...........................................      17,421,974          10,222,805
                                                                       ------------         -----------
      Total assets.................................................    $234,596,747         $50,345,994
                                                                       ============         ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Current portion of long-term-debt................................    $  6,340,229         $ 3,154,428
  Accounts payable.................................................      29,197,037           5,392,871
  Billings in excess of costs and profits on uncompleted contracts.      42,084,937             291,165
  Accrued and other current liabilities............................      22,693,872           4,130,173
                                                                       ------------         -----------
      Total current liabilities....................................     100,316,075          12,968,637
  Long-term debt, non-current portion..............................      55,932,136          14,139,567
  Other non-current liabilities....................................      28,582,100           1,277,866
                                                                       ------------         -----------
      Total liabilities............................................     184,830,311          28,386,070
Contingencies......................................................           _____               _____
Convertible redeemable Series A preferred stock, $.10 par value,
   authorized, 1,000,000 shares; 995 shares issued and outstanding
   at October 31, 1997.............................................           _____           6,713,314
Convertible redeemable Series B preferred stock, $.10 par value,
   authorized 1,000,000 shares, 4,000 shares issued and outstanding
   at July 31, 1998................................................      14,690,000               _____

Shareholders' Equity:
  Common stock, $.001 par value, authorized 25,000,000 shares;
   10,057,743 and 8,580,422 shares issued and outstanding at
   July 31, 1998 and October 31, 1997, respectively................          10,058               8,579
   Additional paid-in capital......................................      33,686,277          15,095,863
   Dividends on preferred stock....................................        (203,846)              _____
   Retained earnings...............................................       1,583,947             142,168
                                                                       ------------         -----------
      Total shareholders' equity...................................      35,076,436          15,246,610
                                                                       ------------         -----------
      Total liabilities and shareholders' equity...................    $234,596,747         $50,345,994
                                                                       ============         ===========
<FN>
-----------------
(1)      The balance sheet at October 31, 1997 has been derived from the audited
         financial statements at that date, but does not include all of the
         information and footnotes required by generally accepted accounting
         principles for complete financial statements.
</FN>
</TABLE>

            See notes to condensed consolidated financial statements.

                                        3

<PAGE>

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

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                    FOR THE THREE MONTHS             FOR THE NINE MONTHS
                                                       ENDED JULY 31,                   ENDED JULY 31,
                                                ---------------------------      ---------------------------
                                                   1998             1997            1998             1997
                                                -----------     -----------      -----------     -----------
<S>                                             <C>             <C>             <C>              <C>
Revenues..................................      $57,704,843     $21,984,127     $114,524,482     $61,181,275
Costs and expenses:
  Costs of revenues.......................       46,421,401      17,618,429       89,640,694      47,652,773
  General and administrative..............        4,637,348       2,143,050       12,703,229       6,366,327
  Depreciation and amortization...........        1,883,374       1,197,826        4,468,311       3,237,199
                                                -----------     -----------     ------------     -----------
    Total costs and expenses..............       52,942,123      20,959,305      106,812,234      57,256,299
                                                -----------     -----------     ------------     -----------
Income from operations....................        4,762,720       1,024,822        7,712,248       3,924,976
Other expense, net........................        2,222,315          83,355        2,656,780         654,602
                                                -----------     -----------     ------------     -----------
Income before income taxes and
  minority interest.......................        2,540,405         941,467        5,055,468       3,270,374
Provision (benefit) for income taxes......          712,963         (33,778)       1,669,721         850,432
                                                -----------     -----------     ------------     -----------
Income before minority interest...........        1,827,442         975,245        3,385,747       2,419,942
Minority Interest.........................          363,214          42,668          756,495         130,148
                                                -----------     -----------     ------------     -----------
Net income................................        1,464,228         932,577        2,629,252       2,289,794
Preferred stock dividends.................           21,267          75,000          203,846         185,000
Discount attributable to beneficial
   conversion privilege of preferred
   stock..................................          618,557         366,231          723,330         938,831
                                                -----------     -----------     ------------     -----------
Income applicable to common stock.........      $   824,404     $   491,346     $  1,702,076     $ 1,165,963
                                                ===========     ===========     ============     ===========
Income per common share (See Note 6):
  Basic...................................      $      0.08     $      0.06     $       0.18     $      0.14
                                                ===========     ===========     ============     ===========
  Diluted.................................      $      0.07     $      0.06     $       0.18     $      0.14
                                                ===========     ===========     ============     ===========
</TABLE>

            See notes to condensed consolidated financial statements

                                        4

<PAGE>

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

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                                                      FOR THE NINE MONTHS
                                                                         ENDED JULY 31, 
                                                                   --------------------------
                                                                      1998            1997
                                                                   ------------   -----------
<S>                                                                <C>            <C>
Cash provided by operating activities............................. $  5,882,784   $ 3,761,221

Investing Activities:

  Capital expenditures, net.......................................   (8,743,600)   (2,375,226)
  Acquisitions of businesses (net of cash acquired of $4,704,829
    in 1998 and $403,617 in 1997).................................   (1,209,462)   (2,596,383)
Sale of investments, net..........................................            0       625,000
                                                                   ------------   -----------
  Net cash used in investing activities...........................   (9,953,062)   (4,346,609)
                                                                   ------------   -----------
Financing Activities:
  Repayments of long-term debt and other borrowings...............  (91,074,992)   (7,526,293)
  Proceeds from the issuance of long-term debt
    and other borrowings..........................................   71,413,238     6,131,459
  Net proceeds from preferred stock offering......................   20,000,000     5,664,148
  Proceeds from the exercise of stock options.....................    2,784,367        21,312
  Dividends paid on preferred stock...............................     (203,846)     (150,000)
  Other...........................................................          659      (440,731)
                                                                   ------------   -----------
    Net cash provided by financing activities.....................    2,919,426     3,699,895
                                                                   ------------   -----------
(Decrease) increase in cash and cash equivalents..................   (1,150,852)  $ 3,114,507
Cash and cash equivalents, beginning of period....................    6,229,602   $ 3,267,161
                                                                   ------------   -----------
Cash and cash equivalents, end of period.......................... $  5,078,750   $ 6,381,668
                                                                   ============   ===========
Supplemental Disclosure:
  Valuation of detachable warrants................................ $  6,644,284   $        --
                                                                   ============   ===========
</TABLE>

            See notes to condensed consolidated financial statements.

                                        5

<PAGE>

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.    OPERATION AND BASIS OF PRESENTATION

      Able Telcom Holding Corp. and subsidiaries ("Able" or the "Company")
      specializes in the design, installation, maintenance and system
      integration of advanced communication networks for voice, data and video
      systems. These services are provided for an array of complimentary
      applications, including telecommunications infrastructure, traffic
      management systems, automated manufacturing systems and utility networks.

      In the opinion of management, the unaudited condensed consolidated
      financial statements furnished herein include all adjustments, consisting
      of only recurring adjustments necessary for a fair presentation of the
      results of operations for the interim periods presented. These interim
      results of operations are not necessarily indicative of results for the
      entire year. The condensed consolidated financial statements contained
      herein should be read in conjunction with the consolidated financial
      statements and related notes contained in the Company's 1997 Annual Report
      on Form 10-K ("Form 10-K").

      The accompanying unaudited condensed consolidated financial statements
      have been prepared in accordance with generally accepted accounting
      principles for interim financial information and with the instructions on
      Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
      include all of the information and footnotes required for complete
      financial statements.

      Certain items in the condensed consolidated financial statements as of
      July 31, 1997 and October 31, 1997 have been reclassified to conform with
      the current presentation.

2.    ACQUISITIONS

      On December 2, 1996, the Company, through a wholly owned subsidiary,
      acquired all of the outstanding common stock of Dial Communications, Inc.
      ("Dial"). As consideration, the Company paid $3.0 million in cash, issued
      108,489 shares of common stock and issued an $0.9 million promissory note.
      The acquisition was accounted for using the purchase method of accounting
      in accordance with Accounting Principles Board Opinion No. 16, BUSINESS
      COMBINATIONS ("APB No. 16"), and approximately $1.5 million of goodwill
      was recorded which is being amortized on a straight line basis over 20
      years. The results of operations of Dial have been included since the date
      of acquisition. The cash component of the purchase was funded in part from
      the Company's line of credit and the remainder through a $1.9 million term
      loan from a bank. On July 15, 1997, this initial debt was repaid with an
      approximately $3.0 million term note.

      On February 25, 1998, the Company, through its wholly owned subsidiary,
      Georgia Electric Company ("GEC") acquired substantially all of the assets
      and assumed certain liabilities of COMSAT RSI Acquisition, Inc. (d/b/a/
      COMSAT RSI JEFA Wireless Systems) ("COMSAT"), a subsidiary of COMSAT
      Corporation. As part of the transaction, GEC assumed certain construction
      contracts with the Texas Department of Transportation and various other
      telecommunications customers. GEC acquired the accounts receivable and
      fixed assets of the seller, assumed its trade payables, and received a
      cash payment from the seller at closing of approximately $4.7 million. In
      addition, the Company recorded significant accruals related to the
      contracts assumed of approximately $12.5 million, of which approximately
      $4.9 million remains outstanding at July 31, 1998 and is reflected as
      accrued and other current liabilities in the consolidated balance sheet.
      The acquisition was accounted for using the purchase method of accounting
      in accordance with APB No. 16.

      On April 1, 1998, the Company purchased all of the outstanding common
      stock of Patton Management Corporation ("Patton") for a total purchase
      price of approximately $4.0 million, of which approximately $1.7 million
      was

                                        6

<PAGE>
                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

      funded by the Company's revolving credit facility (See Note 3). The
      acquisition was accounted for using the purchase method of accounting in
      accordance with APB No. 16. Approximately $2.8 million in goodwill was
      recorded, which is being amortized on a straight line basis over 20 years.
      The results of operations of Patton have been included since the date of
      acquisition. In connection with the acquisition, approximately $3.6
      million in long-term debt outstanding at Patton, excluding that related to
      capital lease obligations, was repaid in April 1998 from the Company's
      revolving credit facility.

   
      On July 2, 1998, Able acquired all of the outstanding common stock of MFS
      Network Technologies, Inc. ("MFSNT") from MFS Communications Company, Inc.
      ("MFSCC"), a subsidiary of Worldcom, Inc. ("WorldCom") pursuant to a
      merger agreement dated April 26, 1998 ("Plan of Merger"). The purchase
      price was originally equal to the shareholders' equity of MFSNT as of
      March 31, 1998, subject to certain adjustments, including adding back the
      cumulative advance by MFSCC or its affiliates to MFSNT, plus $10.0
      million. The purchase price at that time was projected to be $101.4
      million, as well as additional consideration in the form of options as
      described below. On September 9, 1998, the Company and WorldCom Network
      Services, Inc. ("WorldCom Network"), a wholly owned subsidiary of
      WorldCom, as assignee from MFSCC, entered into an agreement amending
      various terms of the transaction (the "September Agreement").

      The September Agreement, among other things, finalizes the cash portion of
      the purchase price of MFSNT at approximately $58.8 million (which was
      determined by negotiation without reference to the original purchase
      formula). The cash portion of the purchase price is subject to additional
      amounts payable as contingent consideration on December 29, 2000 which
      relate to the resolution of certain pre-acquisition contingencies for
      pending litigation, claims, assessments and losses on certain projects.
      Additionally, the general terms and conditions of the grant of stock
      options (as previously granted pursuant to the Plan of Merger) and a
      phantom stock award or other equity participation award to be granted were
      also addressed.

      As of July 31, 1998 the Company paid $33.6 million of the consideration in
      cash, and temporarily financed the then estimated remaining amount with a
      seller note originally issued for $86.4 million, with a 12% note ("MFSNT
      Note") delivered to MFSCC. As security for the MFSNT Note and an indemnity
      agreement, the Company has pledged to Worldcom and MFSCC all of the shares
      of MFSNT. Pursuant to the September Agreement, the MFSNT Note will be
      replaced by a new promissory note between the Company and WorldCom Network
      in the principal amount of $30.0 million at an interest rate of 11.5% (the
      "New Note"). The New Note represents $20.0 million associated with the
      remaining cash portion of the purchase price of MFSNT and $10.0 million
      relates to an estimated advance for receivables of MFSNT, subject to
      certain adjustments. The New Note matures December 15, 2000 and may be
      prepaid without penalty. The principal amount of the New Note is to be
      prepaid by applying a portion of certain fees (i) due to the Company by
      WorldCom and (ii) received by the Company in connection with the lease and
      installation of certain conduit projects.

      The cash portion of the purchase price was obtained in part from the
      Company's operations and its line of credit. Additionally, a portion was
      paid with certain of the proceeds from a private offering, which closed on
      June 30, 1998 of (i) 4,000 shares of the Company's Series B Convertible
      Preferred Stock, par value $.10, which bear annual dividends of 4%, and
      (ii) warrants to purchase up to an aggregate of 1,000,000 shares of the
      Company's common stock at $19.80 per share for a period of five years from
      the date of grant. See Note 4.

      The Company's senior lender and the holder of the Company's $10.0 million
      12% Senior Subordinated Notes (the "12% Notes") consented to the original
      MFSNT Note and the stock pledge agreement. In connection with the consent
      of the 12% Notes holders, the Company agreed to prepay the 12% Notes,
      together with a prepayment penalty, on August 31, 1998, which was extended
      until October 16, 1998. See Note 3.
    

      Pursuant to the merger agreement, the Company agreed with WorldCom, MFSCC
      and its affiliates to assume (a) their obligations under a certain
      Guaranty Agreement in favor of Credit Lyonnais' New York branch, as
      Administrative Agent for lenders, under a Credit Agreement dated November
      1, 1996 between the lenders and Kanas Telcom, Inc., a partially-owned
      affiliate of MFSNT, and (b) their obligations under surety indemnity
      agreements relating to various surety bonds issued in favor of MFSNT.

      In addition, MFSNT entered into a five-year Master Services Agreement with
      WorldCom Network to provide telecommunications infrastructure services to
      WorldCom affiliates for a minimum of $40.0 million per year, provided that
      the aggregate sum payable to MFSNT shall be not less than $325.0 million,
      including a fee of 12% of reimbursable costs under the agreement
      ("Aggregate Sum"). To achieve these established minimums, WorldCom Network
      has agreed to award MFSNT at least 75% of all of WorldCom Network's
      outside plant work related to its local network projects. If MFSNT
      declines any of the first $130.0 million of contract work in any year of
      the agreement, the value of the declined work reduces the Aggregate Sum.
      MFSNT has agreed that WorldCom Network will have met all of its
      obligations to MFSNT to the extent that payments to MFSNT reach an
      aggregate of $500.0 million at any time during the five-year term.

                                        7

<PAGE>

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

   
      As was the case for the MFSNT Note, it is anticipated that if the New Note
      is in default, WorldCom Network's obligations under the Master Services
      Agreement would be reduced in certain respects, and it would not be
      obligated to order further work under the Master Services Agreement during
      the period the New Note remained in full. In addition, upon a default
      under the New Note, WorldCom and MFSCC would have the right to retain the
      shares of MFSNT as well as all payments made by the Company under the New
      Note, and in certain circumstances WorldCom could have a claim against the
      Company for any balance due under the New Note in excess of the deemed
      value of MFSNT as calculated under the stock pledge agreement.
    

      Under the merger agreement, the Company is entitled to use the name
      "MFSNT" during the 18-month transition period commencing July 2, 1998, and
      will not be entitled to use it after such 18-month period.

   
      Pursuant to the Plan of Merger, as amended, the Company also granted to
      MFSCC an option to purchase up to 2,000,000 shares of the Company's common
      stock, during the period commencing July 2, 1998 ending six months after
      payment of the MFSNT Note, as amended by the September Agreement to extend
      the exercise period. The exercise price is $7.00 per share, except that
      MFSCC may elect to exercise the option, in whole or in part, on a
      "cashless" basis under which it will receive shares of common stock with a
      market value equal to the difference between the common stock's then
      market price and $7.00, subject to a 1,817,941 share limitation. Should
      the options be exercised, MFSCC will be entitled to designate a
      representative to serve on the Company's Board of Directors as long as
      MFSCC retains these shares aggregating at least 5.0% of the then
      outstanding shares. In addition, pursuant to the September Agreement, the
      Company agreed to issue a phantom stock award or other equity
      participation award which covers an amount equivalent to 600,000 shares of
      the Company's common stock, payable in cash, stock or a combination
      thereof at the Company's option, and which is exercisable with respect to
      the following three days: July 2, 1999, July 2, 2000, or July 2, 2001.
      When issued, WorldCom will be entitled to receive any appreciation of the
      common stock over a base price of $5-3/32 per share, but not more than
      $30-3/32 per share.

      The September Agreement also modified certain other provisions including,
      among other things, (i) extending the term of the stock pledge agreement
      (whereby the stock of MFSNT was pledged as security for certain of the
      Registrant's obligations to WorldCom), (ii) indemnifying WorldCom Network
      and its affiliates arising out of MFSNT's operations, exclusive of certain
      matters, and (iii) executing mutual releases between the parties. The
      final terms and conditions of the September Agreement, including the
      provisions thereof relating to a grant of a phantom stock award or other
      equity participation award, are expected to be more fully set forth in
      certain additional agreements in the future and may be modified to conform
      with other agreements of the Company and various third parties or may
      require certain consents or waivers from such third parties (including the
      New Credit Facility lenders as described below). There can be no
      assurance, however, that the Company will be able to so modify or conform
      the terms of the September Agreement or obtain appropriate waivers or
      consents. The failure to do so could have a material adverse effect on the
      financial condition of the Company.
    

      The acquisition of MFSNT was accounted for using the purchase method of
      accounting, in accordance with APB No. 16, whereby all assets acquired and
      liabilities assumed were fair-valued, which resulted in negative goodwill
      totaling approximately $50.7 million which was first allocated to fixed
      assets, reducing them to zero, with the remainder reducing the value of
      certain ongoing projects. The results of operations of MFSNT have been
      included since the date of acquisition.

      The following summarizes the fair value of the assets acquired and the
      liabilities assumed in connection with the acquisition of MFSNT on July 2,
      1998 (in millions):

<TABLE>
<CAPTION>
                                                                                           ALLOCATION OF
                                                                                              NEGATIVE     FAIR VALUE
                                                                               FAIR VALUE     GOODWILL      RECORDED
                                                                               ----------     --------      --------
<S>                                                                               <C>          <C>           <C>
      Cash and cash equivalents.............................................      $ 0.5                      $  0.5
      Accounts receivable...................................................       46.3                        46.3
      Costs and profits in excess of billings on uncompleted contracts......       82.6                        82.6
      Resalable conduit inventory...........................................       65.7        ($45.0)         20.7
      Prepaid expenses and other current assets.............................        0.5                         0.5
      Property, plant and equipment.........................................        5.7          (5.7)           --
      Accounts payable......................................................      (13.7)                      (13.7)
      Billings in excess of costs and profits on uncompleted contracts......      (42.3)                      (42.3)
      Accrued liabilities...................................................      (35.8)                      (35.8)
      Note payable..........................................................      (58.8)                      (58.8)

           Negative Goodwill................................................      (50.7)         50.7            --
</TABLE>

      The pro forma unaudited results of operations for the three and nine
      months ended July 31, 1998 and 1997, assuming consummation of the
      purchases for Dial, COMSAT, Patton, and MFSNT at the beginning of the
      respective periods are as follows:

<TABLE>
<CAPTION>
                                                     FOR THE THREE MONTHS           FOR THE NINE MONTHS
                                                        ENDED JULY 31,                 ENDED JULY 31,
                                                  ---------------------------   ---------------------------
                                                     1998            1997           1998           1997
                                                  ----------     ------------   ------------   ------------
<S>                                               <C>            <C>            <C>            <C>
      Revenues..................................  $91,401,281    $108,773,491   $297,350,870   $325,662,942
      Basic loss per share:
         Loss applicable to common stock........  $(3,478,554)   $ (3,248,049)  $(15,752,820)  $ (9,026,577)
         Loss per common share..................  $     (0.35)   $      (0.39)  $      (1.63)  $      (1.09)
      Diluted loss per share:
         Loss applicable to common stock........  $(3,457,287)   $ (3,173,049)  $(15,548,974)  $ (8,841,577)
         Loss per common share..................  $     (0.30)   $      (0.34)  $      (1.50)  $      (1.00)
</TABLE>

      The unaudited pro forma information does not purport to be indicative of
      the results of operations which would have resulted had the acquisitions
      been consummated at the date assumed.

3.    BORROWINGS

      On June 1, 1997, the Company entered into a $6.0 million Line of Credit
      Facility (the "Line of Credit"). The Line of Credit was due March 1, 1998
      with interest payable monthly and contained covenants which required among
      other conditions, that the Company maintain certain tangible net worth,
      working capital and debt service coverage. The Line of Credit was
      collateralized by all real and personal property of the Company. The
      proceeds of the Line of Credit were used to repay existing debt, purchase
      assets and for working capital requirements. This amount was repaid with
      proceeds from the Company's new revolving credit agreement described
      below.

                                        8

<PAGE>

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

   
      Effective January 6, 1998, the Company issued $10.0 million of unsecured
      12% Senior Subordinated Notes due January 6, 2005 (the "12% Notes") with
      detachable warrants to purchase 409,505 shares of common stock at a price
      of $8.25 per share. The warrants were fair valued at approximately $1.2
      million and are reflected as debt discount on the consolidated balance
      sheet at July 31, 1998. Amortization of debt discount for the nine months
      ended July 31, 1998 totaled $0.1 million. Interest under the 12% Notes is
      payable semi-annually in arrears. Equal principal payments are due in
      January 2004 and 2005 giving the 12% Notes an average life of six and
      one-half years. The agreement, pursuant to when the 12% Notes were issued,
      contains covenants which require, among other conditions, that the Company
      maintain certain tangible net worth, minimum fixed charge coverage and
      limitations on total debt and which limit the Company's ability to pay
      dividends and make certain other payments, make investments and sell
      assets or subsidiaries. The proceeds from the issuance of the 12% Notes
      were used for current working capital needs, to pay off existing debts and
      to provide liquidity to finance growth and certain expenditures, including
      acquisitions, associated with the Company's overall strategic plan.
      Between May 29, 1998 and September 17, 1998, the Company received either
      waivers and/or consents, or letters of forbearance relating to the
      acquisition of MFSNT and the related financing of the acquisition. These
      letters also accelerated the expiration date of the 12% Notes to August
      31, 1998, which has been extended through October 16, 1998 by the last
      letter dated September 17, 1998. At July 31, 1998, this amount has been
      reflected as long-term debt as it is expected to be refinanced with long
      term debt. The Company believes that it will be able to refinance or
      further extend the time for payment of the 12% Notes due October 16, 1998.
      However, there can be no assurance that the Company will be able to so
      satisfy the 12% Notes by such date, or if satisfied, that the terms and
      conditions of such refinancing or extension will not be adverse to the
      Company. Failure to timely satisfy the 12% Notes would constitute a
      default under the New Credit Facility (described below) and could have a
      material adverse effect on the Company.
    

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

   
      On June 11, 1998, the Company replaced the Credit Facility with a new
      $35.0 million three year senior secured revolving credit facility ("New
      Credit Facility") with a $5.0 million sub-limit for the issuance of
      standby letter(s) of credit. The New Credit Facility allows the Company to
      select an interest rate based upon the prime rate or on a short-term
      LIBOR, in each case plus an applicable margin, with respect to each draw
      the Company makes thereunder. Interest is payable monthly in arrears on
      base rate advances and at the expiration of each interest period for LIBOR
      advances. The New Credit Facility contains certain financial covenants
      which require, among other conditions, that the Company maintain certain
      minimum ratios, including current and debt leverage, minimum fixed charge
      coverage, interest coverage, as well as limitations on total debt. The New
      Credit Facility is secured by a perfected first priority security interest
      on all tangible assets of the Company and a pledge of the shares of stock
      of each of the Company's subsidiaries operating in the United States. On
      June 30, 1998, the New Credit Facility was amended to include (i) the
      Company's acquisition of MFSNT and the related financing of such
      transaction, (ii) changes in financial covenants related thereto, and
      (iii) other amendments relating to investments, pledging and intercompany
      matters. The Company is currently engaged in discussions with its senior
      lenders under the New Credit Facility with respect to the waiver or
      consent of various provisions of such Facility (of which it may be in
      violation) arising out of the MFSNT transaction, including the September
      Agreement. In connection with the Company's quarterly reporting
      obligations to such senior lenders, and again in connection with a recent
      draw request by the Company for the balance of funds available under the
      New Credit Facility, the senior lenders granted the Company a limited
      waiver with regard to compliance with one of the minimum financial ratios
      required under the New Credit Facility. The Company anticipates that it
      will need additional waivers with respect to such minimum financial ratio
      in the future, including in connection with its future quarterly reporting
      obligations to the senior lenders. The Company also anticipates that, and
      is analyzing the extent to which, additional waivers or consents with
      respect to other provisions of the New Credit Facility may be necessary
      arising out of the MFSNT transaction, including the September Agreement.
      The Company also intends to seek additional financing. There can be no
      assurance, however, that the Company will be able to obtain additional
      appropriate waivers or consents, or additional financing on commercially
      reasonable terms. The failure to obtain appropriate waivers or consents
      could have a material adverse effect on the Company. The New Credit
      Facility matures in June 2001.

      On July 2, 1998 the Company entered into the MFSNT Note with MFSCC for
      $86.4 million, at an interest rate of 12%, due on August 31, 1998. As
      security for the MFSNT Note and an indemnity agreement, the Company has
      pledged to WorldCom and MFSCC all of the shares of MFSNT. As a result of
      the September Agreement, the MFSNT Note will be replaced with a New Note
      in the principal amount of $30.0 million bearing interest at 11.5%. The
      New Note represents $20.0 million associated with the purchase price of
      MFSNT and $10.0 million related to an estimated advance for receivables at
      MFSNT, subject to certain adjustments. The New Note matures on December
      15, 2000, may be prepaid without penalty, and will be reduced by the
      proceeds from the sale of certain assets which were acquired in the
      transaction.
    

4.    PREFERRED STOCK

      SERIES A PREFERRED STOCK
      Effective December 20, 1996, the Company completed a private placement
      transaction of 1,000 shares of $.10 par value, Series A Convertible
      Preferred Stock (the "Series A Preferred Stock") and warrants to purchase
      200,000 shares of the Company's common stock at $9.82 per share. Proceeds
      from the offering totaled $6.0 million. Each share of Series A Preferred
      Stock was convertible into shares of the Company's common stock after
      April 30, 1997 at the lesser of $9.82 per share or at a discount
      (increased to a maximum of 20% for conversions after

                                       9

<PAGE>

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

      December 20, 1997) of the average closing bid price of a share of common
      stock for three days preceding the date of conversion. This accretion
      adjustment, which also represents the amount needed to accrete to the
      redemption value of the Series A Preferred Stock for the nine months ended
      July 31, 1998, was recorded as a charge to equity and accompanying credit
      to the Series A Preferred Stock. The Series A Preferred Stock accrued
      dividends at an annual rate of 5% and was payable quarterly in arrears in
      cash or through a dividend of additional shares of Series A Preferred
      Stock. The warrants are exercisable during the four year period commencing
      on the first anniversary of the private placement, provided that for each
      share of Series A Preferred Stock which is converted prior to the one year
      anniversary of the placement, warrants to purchase 200 shares of common
      stock were forfeited.

      During the nine months ended July 31, 1998, 995 shares of Series A
      Preferred Stock were converted into an aggregate of 920,946 shares of
      common stock. As of July 31, 1998, all of the shares of Series A Preferred
      Stock have been converted to common stock.

      During the nine months ended July 31, 1998, 106,800 warrants were
      forfeited and 62,200 warrants remain outstanding.

   
      SERIES B PREFERRED STOCK

      Effective June 30, 1998 (the "Closing"), the Company completed a private
      offering (the "Offering") of 4,000 shares of $0.10 par value, non-voting
      Series B Convertible Preferred Stock (the "Series B Preferred Stock"),
      which bear annual dividends of 4%, and warrants to purchase 1,000,000
      shares of the Company's common stock at $19.80 per share for a period of
      five years from the date of grant (the "Warrants"). Proceeds from the
      Offering totaled $20.0 million which were used to pay part of the cash
      payment towards the cash portion of the MFSNT purchase price, as well as
      other costs associated with the acquisition. In general, the conversion
      amount of each share of Series B Preferred Stock is convertible into
      shares of the Company's common stock commencing on June 30, 1998 at 97% of
      the lesser of the (i) average of the low trading prices for any three days
      during the twenty-two (22) trading days immediately preceding the
      conversion date, or (ii) the low trading price on the day immediately
      preceding the conversion date, subject to a minimum equal to 95% of such
      conversion price. The conversion amount of each share of Series B
      Preferred Stock is equal to $5,000 plus any unpaid dividends thereon.
      Unless waived by a holder on not less than 61 days prior written notice,
      no holder may convert an amount which would result in such holders and its
      affiliates' beneficial ownership exceeding 4.99% of the then outstanding
      common stock of the Company.

      The holders of the Series B Preferred Stock and the Warrants (the "Series
      B Securities") are entitled to certain registration rights to register the
      common stock underlying the Series B Securities pursuant to the Securities
      Act of 1933, as amended. In the event that such underlying common stock is
      not registered with the Securities and Exchange Commission by late October
      1998, is not listed with the securities exchange and/or markets on which
      the common stock is then listed, within a definitive period of time, or
      various other covenants are not complied with, then certain penalties may
      be incurred to certain or all of the holders of the Series B Securities,
      including, among other things, a reduction in the conversion and/or
      exercise price of the applicable securities and/or additional monetary
      payments. Unless waived, the Company expects to have difficulty in timely
      complying with certain of its obligations relating to the Series B
      Securities, including accomplishing registration of the Series B
      Securities by late October.

      Additionally, under certain circumstances, including without limitation,
      if the registration statement that includes the shares of common stock
      underlying the Series B Securities is not declared effective within 180
      days of the Closing, the Company is delisted under certain circumstances
      from any securities exchange, or any representation or warranty by the
      Company to the holders is not true and correct, then the holders of the
      Series B Securities, in whole or in part, also have the option to require
      the Company to redeem their securities at premium prices. Furthermore, so
      long as any Series B Security is outstanding, the Company is prohibited
      from declaring or paying any dividends (other than to holders of Series B
      Preferred Stock) or purchasing any equity security of the Company.

      The accretion adjustment attributable to the beneficial conversion feature
      of $0.6 million has been recorded as a charge to equity and an
      accompanying credit to the Series B Preferred Stock. The Series B
      Preferred Stock accrues dividends at an annual rate of 4% and is payable
      quarterly in arrears, in cash, or through a dividend of shares of the
      Company's common stock. The warrants are exercisable over a five year
      period commencing June 30, 1998 and are fair valued at $5.4 million in
      accordance with Statement of Financial Accounting Standards No. 123 ("SFAS
      No. 123"), "ACCOUNTING FOR STOCK BASED COMPENSATION," and will be
      amortized as a dividend over five years.
    

      During the three months ended July 31, 1998, dividends of $0.2 million
      were recorded consisting of $0.1 million as the cumulative dividend and
      $0.1 million for the amortization of the valuation of the warrants. None
      of the Series B Preferred Stock had been converted nor had any warrants
      been exercised as of July 31, 1998. Costs incurred in connection with the
      offering of approximately $1.0 million will be expensed over the five year
      conversion period commencing June 30, 1998.

   
      As of October 2, 1998, 436 shares of the Series B Preferred Stock were
      converted into 1,007,927 shares of common stock at a price of $2.18 per
      share.
    

5.    STOCK OPTION PLAN

      In October 1995, the Financial Accounting Standards Board ("FASB") issued
      SFAS No. 123, which requires expanded disclosures of stock based
      compensation arrangements with employees and encourages compensation cost
      to be measured based on the fair value of the equity instrument. Under
      SFAS No. 123, companies are permitted to continue to apply Accounting
      Principles Board ("APB") Opinion No. 25 "Accounting for Stock Issued to
      Employees," which recognizes compensation cost based on the intrinsic
      value of the equity instrument awarded. The Company has elected to
      continue to apply APB Opinion No. 25, and related Interpretations in
      accounting for its employee stock options because the alternative fair
      value accounting provided for under SFAS No. 123 requires use of option
      valuation models that were not developed for use in valuing employee stock
      options. Under APB 25, to the extent the exercise price of the Company's
      employee stock options equals the market price of the underlying stock on
      the date of grant, no compensation expense is recognized. The following is
      the pro forma effect on net income an earnings per share as if the Company
      had adopted the expense recognition requirement of SFAS No. 123:

                                       10

<PAGE>

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                          FOR THE THREE MONTHS             FOR THE NINE MONTHS
                                                             ENDED JULY 31,                  ENDED JULY 31,
                                                       ----------------------------      ------------------------
                                                          1998             1997             1998          1997
                                                       ----------        ----------      ----------      --------
<S>                                                   <C>                 <C>             <C>            <C>
      Pro forma income (loss) available to common
       stockholders:
         Basic.....................................   $  (336,786)        $438,848        $238,876       $788,836
         Diluted...................................   $  (315,519)        $513,848        $442,722       $973,836
      Pro forma income (loss):

       Per share:
         Basic.....................................        $(0.03)           $0.05           $0.02          $0.09
         Diluted...................................        $(0.03)           $0.05           $0.04          $0.11
</TABLE>

      Under the Company's 1995 Stock Option Plan, as amended, up to 1.3 million
      shares of the Company's common stock are available for issuance pursuant
      to the grant of stock options.

6.    EARNINGS PER SHARE

      In February 1997, the FASB issued SFAS No. 128, "EARNINGS PER SHARE",
      which changes the method of calculating earnings per share and was
      effective for the Company beginning with the quarter ended January 31,
      1998. All periods presented have been restated in accordance with the
      provisions of SFAS No. 128.

      The following is a reconciliation of the numerators and denominators of
      the basic and diluted per share computation as required by SFAS No. 128:

<TABLE>
<CAPTION>
                                                         FOR THE THREE MONTHS            FOR THE NINE MONTHS
                                                            ENDED JULY 31,                  ENDED JULY 31,
                                                       ------------------------      -------------------------
                                                           1998          1997            1998          1997
                                                       -----------   ----------      -----------    ----------
<S>                                                    <C>           <C>             <C>            <C>
      Basic:
      Net income available to common stockholders
         (numerator).................................. $   824,404   $  491,346      $ 1,702,076    $1,165,963
      Weighted-average number of common shares
        (denominator).................................   9,918,292    8,321,534        9,660,921     8,304,036
      Earnings per common share-basic................. $      0.08   $     0.06      $      0.18    $     0.14

      Diluted:
      Net income available to common stockholders
         (numerator).................................. $   845,671   $  566,346      $ 1,905,922    $1,241,457
      Weighted-average number of common shares
        (denominator).................................   9,916,404    8,321,534        9,642,253     8,304,036
      Common stock equivalents arising from stock
        options, warrants and convertible preferred
        stock.........................................   1,683,266    1,108,514          706,234       517,412
      Total shares (denominator)......................  11,601,558    9,430,048       10,367,155     8,821,448
      Earnings per common share-diluted............... $      0.07   $     0.06      $      0.18    $     0.14
</TABLE>

                                       11


<PAGE>

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

7.    LITIGATION

      On May 21, 1998, SIRIT Technologies, Inc. ("SIRIT") filed a lawsuit in the
      United States District Court for the Southern District of Florida, against
      the company and Thomas M. Davidson, who has since become a member of the
      Company's Board of Directors. SIRIT asserts claims against the Company for
      tortious interference, fraudulent inducement, negligent misrepresentation
      and breach of contract in connection with the Company's agreement to
      purchase the shares of MFSNT (See Note 7) and seeks injunctive relief and
      compensatory damages in excess of $100.0 million. In the opinion of
      management, the lawsuit will not have a material adverse effect upon the
      consolidated financial position or results of operations of the Company.
      The Company intends to vigorously defend this matter.

   
      On September 10, 1998, Shipping Financial Services Corp. ("SFSC") filed a
      lawsuit in the United States District Court for the Southern District of
      Florida against the Company, Chairman of the Board Gideon Taylor, Chief
      Executive Officer Frazier L. Gaines, Chief Accounting Officer Jesus
      Dominguez, and Chief Financial Officer Mark A. Shain. SFSC asserts claims
      under the federal securities laws against the Company and four of its
      officers that the defendants allegedly caused the Company to falsely
      represent and mislead the public with respect to two acquisitions, COMSAT
      and MFSNT, and the ongoing financial condition of the Company as a result
      of the acquisitions and the related financing of those acquisitions. SFSC
      seeks certification as a class action on behalf of itself and all others
      similarly situated and seeks unspecified damages and attorneys' fees.
      Management is currently assessing the allegations set forth in the
      lawsuit and the Company intends to vigorously defend this matter.
    

      Although the Company has not yet been served, it is aware of the filing of
      additional shareholder lawsuits. The allegations of these lawsuits appear
      to be based on allegations similar to those set forth in the SFSC lawsuit.
      The Company intends to vigorously defend these similar lawsuits as well.

      The Company is party, from time to time, to other various legal
      proceedings. In the opinion of management, none of these other proceedings
      are expected to have a material adverse effect on the Company's
      consolidated financial position or results of operations.

                                       12

<PAGE>

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

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

      The following discussion and analysis relates to the financial condition
      and results of operations of the Company for the three and nine months
      ended July 31, 1998 and 1997. This information should be read in
      conjunction with the Company's condensed consolidated financial statements
      appearing elsewhere in this document. Except for historical information
      contained herein, the matters discussed below contain forward looking
      statements that involve risk and uncertainties, including but not limited
      to economic, governmental and technological factors affecting the
      Company's operations, markets and profitability.

      As a result of three acquisitions during the nine month period ended July
      31, 1998, primarily the acquisition of MFS Network Technologies Inc.
      ("MFSNT"), material changes exist in substantially all balance sheet and
      statements of operations categories.

      RESULTS OF OPERATIONS

      The following table sets forth, for the periods indicated, selected
      elements of the Company's condensed statements of operations as a
      percentage of its revenues.

<TABLE>
<CAPTION>
                                                 FOR THE THREE MONTHS             FOR THE NINE MONTHS
                                                     ENDED JULY 31,                  ENDED JULY 31,
                                                 1998           1997              1998            1997
<S>                                             <C>            <C>               <C>             <C>
      Revenues                                  100.00%        100.00%           100.00%         100.00%
      Cost of Revenues                           80.45          80.14             78.27           77.89
      General and Administrative                  8.04           9.75             11.09           10.41
      Depreciation and amortization               3.26           5.45              3.90            5.29
      Income from Operations                      8.25           4.66              6.73            6.42
      Other expense, net                          3.85           0.38              2.32            1.07
      Net income                                  2.54           4.24              2.30            3.74
</TABLE>

      The following table sets forth the selected elements of the Company's
      condensed statement of operations for MFSNT as a percentage of
      revenues for the period July 3 through July 31, 1998.

<TABLE>
<S>                                             <C>
      Revenues                                  100.00%
      Cost of Revenues                           80.62
      General and Administrative                  9.47
      Depreciation and amortization               0.00
      Income from Operations                      9.94
      Net income                                  4.36
</TABLE>

      For the quarter ended July 31, 1998 revenues increased $35.7 million over
      the same period in the prior year from $22.0 million to $57.7 million. For
      the nine months ended July 31, 1998 revenues increased $53.3 million from
      $61.2 million through July 31, 1997 to $114.5 for the nine months ended
      July 31, 1998. These increases in revenue are due primarily to growth of
      the Company's Operations through the acquisition of MFSNT in the third
      quarter and the acquisition of COMSAT RSI JEFA Wireless Systems ("COMSAT")
      and Patton Management Corporation ("Patton") in the second quarter of
      fiscal 1998, as well as increased demands for services in the traffic
      management and telecommunications industry. For the quarter ended July 31,
      1998 revenues increased by approximately $18.6 million, $5.1 million and
      $7.5 million related to the acquisitions of MFSNT, COMSAT, and Patton,
      respectively. For the nine months ended July 31, 1998 the revenue growth
      associated with the acquisitions was $18.6 million, $15.5 million and
      $10.3 million, respectively.

      As a percentage of revenues, cost of revenues increased from 80.14% to
      80.45% for the three months ended compared to the same period in the prior
      year. For the nine month period ended July 31, 1998 and 1997 cost of
      revenues as a percentage of revenues increased slightly from 77.89% to
      78.27%. The increases are due to increased cost related to the
      telecommunications service group resulting from tighter margins and
      competition in the telecommunications industry, as well as inclement
      weather which restricted some work during the winter months and extended
      completion dates into later periods, offset by decreased cost related to
      the traffic management group acquisition of COMSAT's operations.

      General and administrative expenses increased $2.5 million from $2.1
      million to $4.6 million for the three months ended July 31, 1998 compared
      to the same period in the previous year. For the nine month ended July 31,
      1998 general and administrative expenses were $12.7 million, an increase
      of $6.4 over the same period in the prior year. These increases are due to
      the overall increase in the management structure, at the corporate level
      as well as the division offices, necessary to support the Company's
      increased revenue in accordance with the Company's strategic objective of
      growth through acquisition and an increase in cost resulting from the
      acquisition of MFSNT. For the three and nine month period ended July 31,
      1998 general and administrative expense relating to the operations of
      MFSNT were approximately $1.7 million.

      As a percentage of revenues, depreciation and amortization expense
      decreased from 5.45% to 3.26% for the three months ended July 31, 1998 as
      compared to the same period in the prior year. For the nine month period
      ended July 31, 1998 the depreciation and amortization expense as a
      percentage of revenue decreased from 5.29% to 3.90% as compared to the
      same period in 1997. This decrease, as a percentage of revenue, is due to
      the significant increase in revenues which did not require the same
      percentage increase in capital assets to support the operations of the
      Company. The MFSNT acquisition resulted in negative goodwill which
      resulted in the reduction in the depreciable base of the fixed assets to
      zero. Therefore no depreciation is recorded for the MFSNT operations.

      For the quarter ended July 31, 1998 income from operations for the
      Company was $4.7 million compared to income of $1.0 million in the
      quarter ended July 31, 1998. For the nine months ended July 31, 1998 
      income from operations was $7.7 million compared to $3.9 million for the
      same period in the prior year as discussed above.

      Other expense, net increased by $2.1 million to $2.2 for the three month
      period ended July 31, 1998 as compared to $0.1 million for the comparable
      period in 1997. This increase is due to increased interest cost relating
      to the acquisition of MFSNT, the write-off of loan cost on the Bank Of
      America credit facility of approximately $0.2 million, and a noncash
      expense of approximately $0.1 million relating to the earnout agreement
      associated with the acquisition of GEC. Other expense, net was also
      impacted by noncash charges associated with stock option granted at below
      market prices, the amortization of the cost basis of the warrants issued
      in conjunction with the Series B preferred stock and amortization of loan
      cost associated with the Nations Bank revolver. Other expense, net
      increased by $1.9 million to $2.6 million for the nine month period ended
      July 31, 1998 from the same period in 1997 for the same reasons discussed
      above.

      The Company has provided income taxes at a rate which approximates the
      rate used when applying federal and state statutory rates to pre-tax
      income, after adjusting for the amortization of nondeductible goodwill.

      Net income before the discount attributable to beneficial conversion
      privilege of preferred stock and preferred dividends for the three months
      ended July 31, 1998 increased $.6 million from $.9 million in 1997 to $1.5
      million in 1998 for the reasons described above. For the nine months ended
      July 31, 1998 net income before the discount attributable to beneficial
      conversion privilege of preferred stock and preferred dividends was $2.6
      million compared to $2.3 million for the comparable period in 1997 for the
      reasons described above.

      Income applicable to common stock was $.8 million and $1.7 million for the
      three and nine months ending July 31, 1998 as compared to $.5 million and
      $1.2 million for the three and nine months ended July 31, 1997,
      respectively. On a diluted basis, income per share was $.07 per share
      for the three months ended July 31, 1998 as compared to $.06 per share for
      the same period in 1997. For the nine month period ended July 31, 1998
      income per share on a diluted basis was $.18 compared to $.14 for the
      nine months ended July 31, 1997.

      LIQUIDITY AND CAPITAL RESOURCES

      Cash and cash resources were $5.1 million at July 31, 1998 compared to
      $6.2 million at October 31, 1997.

      Cash provided from operating activities of $5.9 million is a result of net
      income generated by the Company of $2.6 million for the nine month period,
      increased by depreciation and amortization charges of $4.5 million, $0.8
      million for contingent consideration for a non-cash charge related to the
      acquisition of GEC, and $0.8 million for a non-cash charge for the
      accretive dividend on the Series B Preferred Stock, and offset by
      increases in accounts receivable balances due to increased revenues as a
      result of the Company's significant growth in operations.

      Cash used in investing activities of $10.0 million is due to net capital
      expenditures required to support increased operations and replacement of
      existing equipment and net expenditures for acquisitions of businesses.

      Cash provided from financing activities of approximately $2.9 million is
      due primarily to net increases in long term debt and other borrowings in
      order to fund the acquisitions of MESNT and Patton, general corporate
      needs, and working capital requirements.

                                       13

<PAGE>

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

   
      Effective January 6, 1998, the Company issued $10.0 million of 12%
      unsecured Senior Subordinated Notes due January 6, 2005 (the "12% Notes")
      with detachable warrants to purchase 409,505 shares of common stock at a
      price of $8.25 per share. The warrants were valued at approximately $1.2
      million and are reflected as debt discount on the consolidated balance
      sheet at July 31, 1998. Amortization of debt discount for the nine months
      ended July 31, 1998 totaled $0.1 million. Interest under the Notes is
      payable semi-annually in arrears. Equal principal payments are due in
      January 2004 and 2005 giving the Notes an average life of 6.5 years. The
      agreement pursuant to which the Notes were issued contains covenants which
      require, among other conditions, that the Company maintain certain
      tangible net worth, minimum fixed charge coverage and limitations on total
      debt and which limit the Company's ability to pay dividends and make
      certain other payments, make investments and sell assets or subsidiaries.
      The proceeds from issuance of the Notes were used for current working
      capital needs, to pay off existing debt and to provide liquidity to
      finance growth and certain expenditures, including acquisitions,
      associated with the Company's overall strategic plan. Between May 29, 1998
      and September 17, 1998, the Company received either waivers and/or
      consents, or letters of forbearance relating to the acquisition of MFSNT
      and the related financing of the acquisition. These letters also
      accelerated the expiration date of the 12% Notes to August 31, 1998, which
      has been extended through October 16, 1998 by the last letter dated
      September 17, 1998. At July 31, 1998, this amount has been reflected as
      long-term debt as it is expected to be refinanced with long-term debt. The
      Company believes that it will be able to refinance or further extend the
      time for payment of the 12% Notes due October 16, 1998. However, there can
      be no assurance that the Company will be able to so satisfy the 12% Notes
      by such date, or if satisfied, that the terms and conditions of such
      refinancing or extension will not be adverse to the Company. Failure to
      timely satisfy the 12% Notes would constitute a default under the New
      Credit Facility (described below) and could have a material adverse effect
      on the Company.
    

      In addition to the 12% Notes, on April 6, 1998, the Company obtained a
      $25.0 million three year senior secured revolving credit facility (the
      "Credit Facility") with a $2.0 million sub-limit for the issuance of
      standby letter(s) of credit. The Credit Facility allows the Company to
      select an interest rate based upon the prime rate or on a short-term
      LIBOR, in each case, plus an applicable margin, with respect to each draw
      the Company makes thereunder. Interest was payable monthly in arrears on
      base rate advances and at the expiration of each period for LIBOR
      advances. The Credit Facility contained certain covenants which require,
      among other conditions, that the Company maintain certain net worth,
      minimum fixed charge coverage and limitations on total debt, and was
      secured by a perfected first priority security interest on all tangible
      assets of the Company. The proceeds of the Credit Facility were used to
      finance working capital requirements and for other general corporate
      purposes, including acquisitions and equipment capital expenditures, not
      to exceed $15.0 million, associated with the Company's overall strategic
      plan. On June 11, 1998 this amount was repaid with proceeds from the
      Company's New Credit Facility defined below.

   
      On June 11, 1998, the Company replaced the Credit Facility with a new
      $35.0 million three year senior secured revolving credit facility ("New
      Credit Facility") with a $5.0 million sub-limit for the issuance of
      standby letter(s) of credit. The Credit Facility allows the Company to
      select an interest rate based upon the prime rate or on a short-term
      LIBOR, in each case plus an applicable margin, with respect to each draw
      it makes thereunder. Interest will be payable monthly in arrears on base
      rate advances and at the expiration of each interest period for LIBOR
      advances. The New Credit Facility contains certain financial covenants
      which require, among other conditions, that the Company maintain certain
      minimum ratios, including current and debt leverage, minimum fixed charge
      coverage, interest coverage, as well as limitations on total debt. The New
      Credit Facility will be secured by a perfected first priority security
      interest on all tangible assets of the Company and a pledge of the shares
      of stock of each of the Company's subsidiaries operating in the United
      States. On June 30, 1998, the New Credit Facility was amended to include
      (i) the Company's acquisition of MFSNT and the related financing of such
      transaction, (ii) changes in financial covenants related thereto, and
      (iii) other amendments relating to investments pledging and intercompany
      matters. The Company is currently engaged in discussions with its senior
      lenders under the New Credit Facility with respect to the waiver or
      consent of various provisions of such Facility (of which it may be in
      violation) arising out of the MFSNT transaction, including the September
      Agreement. In connection with the Company's quarterly reporting
      obligations to such senior lenders, and again in connection with a recent
      draw request by the Company for the balance of funds available under the
      New Credit Facility, the senior lenders granted the Company a limited
      waiver with regard to compliance with one of the minimum financial ratios
      required under the New Credit Facility. The Company anticipates that it
      will need additional waivers with respect to such minimum financial ratio
      in the future, including in connection with its future quarterly reporting
      obligations to the senior lenders. The Company also anticipates that, and
      is analyzing the extent to which, additional waivers or consents with
      respect to other provisions of the New Credit Facility may be necessary
      arising out of the MFSNT transaction, including the September Agreement.
      The Company also intends to seek additional financing. There can be no
      assurance, however, that the Company will be able to obtain additional
      appropriate waivers or consents, or additional financing on commercially
      reasonable terms. The failure to obtain appropriate waivers or consents
      could have a material adverse effect on the Company. The New Credit
      Facility matures in June 2001.

      On July 2, 1998 the Company entered into the MFSNT Note with MFSCC for
      $86.4 million, at an interest rate of 12%, due on August 31, 1998. As
      security for the MFSNT Note and an indemnity agreement, the Company has
      pledged to WorldCom and MFSCC all of the shares of MFSNT. Pursuant to the
      September Agreement, the MFSNT Note will be replaced with a New Note in
      the principal amount of $30.0 million bearing interest at 11.5%. The New
      Note represents $20.0 million associated with the purchase price of MFSNT
      and $10.0 million related to an estimated advance for receivables at
      MFSNT, subject to certain adjustments. The New Note matures on December
      15, 2000, may be prepaid without penalty, and will be reduced by the
      proceeds from the sale of certain assets which were acquired in the
      transaction.
    

      The amount available under the New Credit Facility was used to repay
      existing secured indebtedness, and will be used to finance working capital
      requirements of existing and acquired businesses, to fund acquisitions and
      capital expenditures and for other general corporate purposes.

   
      Subject to the foregoing discussion regarding the necessity of various
      consents and waivers from the Company's senior lenders under the New
      Credit Facility and the discussion below, the Company expects that its
      cash on hand, cash flow from operations and available borrowing capacity
      under the New Credit Facility will be sufficient to fund its capital
      requirements for the next twelve months. Nonetheless, pursuant to the
      terms of the documents relating to the Series B Securities, under certain
      circumstances, including without limitation, if the registration statement
      that includes the shares of common stock underlying the Series B
      Securities is not declared effective within 180 days of the Closing
      (December 27, 1998), the Company is delisted under certain circumstances
      from any securities exchange, or any representation or warranty by the
      Company to the holders is not true and correct, then the holders of the
      Series B Securities, in whole or in part, have the option to require the
      Company to redeem their securities at premium prices. Although the Company
      intends to use its best efforts to comply with the provisions in the
      documents relating to the Series B Securities, the failure of which would
      provide the holder the right to exercise such redemption option, there can
      be no assurance that the Company will be able to do so, in part, because
      certain of such matters are dependent upon the efforts or approval of
      others (such as the Securities and Exchange Commission with respect to the
      effectiveness of the aforementioned registration statement). Additionally,
      there are certain ambiguities or inconsistencies in the documents relating
      to the Series B Securities, which if interpreted contrary to the
      interpretation given by the Company, could result in a default or
      acceleration of the foregoing redemption option. To the extent the holders
      of the Series B Securities become entitled to exercise a redemption right
      and seek to require the redemption of their shares, such exercise would
      materially increase the cash requirements of the Company, could result in
      a default under the terms of its New Credit Facility (which in turn, would
      constitute a default under the Subordinated Notes) and would likely have a
      material adverse impact on the Company. In addition, there can be no
      assurance, however, that the Company will not experience adverse operating
      results or other factors, including the inability to refinance the 12%
      Notes or a default in connection with its obligations to the holders of
      Series B Securities, which could materially increase its cash requirements
      or adversely affect its liquidity position.
    

      CAUTIONARY STATEMENTS

      Certain of the information contained herein may contain "forward-looking
      statements" within the meaning of the Private Securities Litigation Reform
      Act of 1995, as the same may be amended from time to time ("the Act") and
      in releases made by the Securities and Exchange Commission ("SEC") from
      time to time. Such forward-looking statements involve known and unknown
      risks, uncertainties and other factors which may cause the actual results,
      performance, or achievements expressed or implied by such forward-looking
      statements. The words "estimate," "believes,"

                                       14

<PAGE>

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

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

      YEAR 2000

      In 1996, the Company initiated a conversion from existing accounting
      software to programs that are Year 2000 compliant. Management has
      determined that the Year 2000 issue will not pose significant operational
      problems for its computer systems. As a result, all costs associated with
      this conversion, excluding those related to the purchase of new software
      which will be capitalized, are being expensed as incurred. The Company
      plans to utilize both internal and external resources to reprogram or
      replace, and test the software for Year 2000 modifications and anticipates
      completing its conversions prior to October 31, 1999 at a total projected
      cost of $0.3 million.

      The Company has also initiated formal communications with all of its
      significant suppliers and large customers to determine the extent to which
      the Company's interface systems are vulnerable to those third parties'
      failures to remediate their own Year 2000 issue.

                                       15

<PAGE>

                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

PART II.       OTHER INFORMATION
       
ITEM 2.        CHANGES IN SECURITIES AND USE OF PROCEEDS

      On April 24, 1998, the Company granted to each of its Directors, options
      to purchase 10,000 shares of the Company's common stock, (an aggregate of
      60,000 shares) par value $.001 per share. The options were granted under
      the Company's 1995 Stock Option Plan, as amended, as compensation for
      prior service and are non-qualified, vest immediately and are exercisable
      at $6.20 per share, which represents 80% of the stock price on the date of
      grant, through April 24, 2005.

      On April 24, 1998, the Company also granted to each of its Directors,
      additional options to purchase 20,000 shares of the Company's common stock
      (aggregate of 120,000 shares), par value $.001 per share, at an exercise
      price equal to the fair market value on the day immediately following the
      announcement of the acquisition of MFSNT. The options were granted under
      the Company's 1995 Stock Option Plan, as amended, as compensation for each
      Director's efforts in connection with the acquisition of MFSNT (see Note 2
      to Consolidated Financial Statements), are non-qualified, vested on July
      3, 1998, and are exercisable at $11.9375 per share through July 3, 2004.

      On April 24, 1998, the Company accelerated the vesting of 35,000 options
      which were granted in 1997 for an employee and a consultant for the
      Company.

      On June 23, 1998, the Company issued 30,000 shares of common stock to
      Silverton International Fund, Ltd. upon exercising warrants previously
      granted in connection with the Company's Series A Preferred Stock. Such
      shares were issued pursuant to Section 3(a)(9) of the Securities Act of
      1933, as amended, as an exchange with existing security holders
      exclusively.
   
      Effective June 30, 1998 (the "Closing"), the Company completed a private
      offering (the "Offering") of its securities to seven accredited investors
      pursuant to Rule 506 of Regulation D and Section 4(2) of the Securities
      Act of 1933, as amended (the "Act"). Each investor was provided with, or
      otherwise has access to, information, including financial information,
      concerning the Company. Proceeds from the Offering totaled $20.0 million
      and were used to pay part of the cash payment towards the MFSNT purchase
      price, as well as other costs associated with the Plan of Merger.

      The Offering consisted of (i) four thousand (4,000) shares of non-voting,
      Series B Convertible Preferred Stock, par value $.10 ("Series B Preferred
      Stock"), which pay a 4% dividend per annum, payable quarterly in cash, or,
      at the Company's option, in common stock, provided there is a registration
      statement effective with the Securities and Exchange Commission as to the
      underlying common stock, and (ii) warrants ("Warrants") to purchase an
      aggregate of one million shares of common stock of the Company, as
      described below.

      At any time following the Closing, a holder may convert any or all of the
      Series B Preferred Stock into shares of common stock, par value $.001, of
      the Company. At maturity, June 25, 2003 ("Maturity"), an remaining
      outstanding shares of Series B Preferred Stock will automatically convert
      into common stock. The conversion amount of each share of Series B
      Preferred Stock is convertible into shares of common stock at 97% of the
      lesser of (a) the average of the low stock price of the common stock
      during any three trading days in the last 22 trading days immediately
      preceding the date of conversion, or (b) the low stock price on the
      trading day immediately preceding the date of conversion, provided that
      any conversions pursuant to (b) are subject to a minimum equal to 95% of
      such conversion price. The conversion amount of each share of Series B
      Preferred Stock is equal to $5,000 plus any unpaid dividends thereon.
      Unless waived by a holder on not less than 61 days prior written notice,
      no holder may convert an amount which would result in such holders and its
      affiliates' beneficial ownership interest exceeding 4.99% of the then
      outstanding common stock of the Company. The conversion price may be
      further reduced upon the occurrence of certain dilutive issuances of the
      Company's securities.

      The Warrants are exercisable for a period of five years commencing as of
      the Closing through Maturity, at $19.80 per share, which represents 110%
      of the market price of the common stock as of Closing. The Warrants may be
      exercised on a cashless basis by surrendering the appropriate number of
      Warrants. The Warrants also contain certain anti-dilutive provisions. The
      Warrants may be called by the Company at $35.00 per share.

      The holders of the Series B Preferred Stock and the Warrants (the "Series
      B Securities") are entitled to certain registration rights to register the
      common stock underlying the Series B Securities pursuant to the Securities
      Act of 1933, as amended. In the event that such underlying common stock is
      not registered with the Securities and Exchange Commission by late October
      1998, is not listed with the securities exchange and/or markets on which
      the common stock is then listed, within a definitive period of time, or
      various other covenants are not complied with, then certain penalties may
      be incurred to certain or all of the holders of the Series B Securities,
      including, among other things, a reduction in the conversion and/or
      exercise price of the applicable securities and/or additional monetary
      payments. Unless waived, the Company expects to have difficulty in timely
      complying with certain of its obligations relating to the Series B
      Securities, including accomplishing registration of the Series B
      Securities by late October.

      Additionally, under certain circumstances, including without limitation,
      if the registration statement that includes the shares of common stock
      underlying the Series B Securities is not declared effective within 180
      days of the Closing, the Company is delisted under certain circumstances
      from any securities exchange, or any representation or warranty by the
      Company to the holders was not true and correct, then the holders of the
      Series B Securities, in whole or in part, also have the option to require
      the Company to redeem their securities at premium prices. Furthermore, so
      long as any Series B Security is outstanding, the Company is prohibited
      from declaring or paying any dividends (other than to holders of Series B
      Preferred Stock) or purchasing any equity security of the Company.

      On July 8, 1998, the Company granted options to purchase 230,000 shares of
      the Company's common stock, par value $.001 to various officers,
      directors, and a significant employee, all of which were granted as
      compensation for certain additional contributions to the MFSNT acquisition
      (see Note 2 to Consolidated Financial Statements). These options were
      granted pursuant to the 1995 Stock Option Plan, as amended, and are
      non-qualified. The subject options vest immediately or over a period of
      two years and are exercisable at $14.00 through July 8, 2000.
    
      On July 8, 1998, the Company granted 150,000 shares to two employees of
      the Company at the fair market value of $14.00 per share, pursuant to
      employment agreements. These options are exercisable after one year of
      employment and vest ratably over three years.
   
      As of October 2, 1998, 436 shares of Series B Preferred Stock were
      converted into 1,007,927 shares of common stock of the Company at an
      exercise price of $2.18 per share.
    
ITEM 3.        DEFAULTS UPON SENIOR SECURITIES
   
      On June 11, 1998, the Company replaced its existing $25.0 million three
      year senior secured revolving credit facility with a new $35.0 million
      three year senior secured revolving credit facility ("New Credit
      Facility") with a $5.0 million sub-limit for the issuance of standby
      letter(s) of credit. The Credit Facility allows the Company to select an
      interest rate based upon the prime rate or on a short-term LIBOR, in each
      case plus an applicable margin, with respect to each draw it makes
      thereunder. Interest will be payable monthly in arrears on base rate
      advances and at the expiration of each interest period for LIBOR advances.
      The New Credit Facility contains certain financial covenants which
      require, among other conditions, that the Company maintain certain minimum
      ratios, including current and debt leverage, minimum fixed charge
      coverage, interest coverage, as well as limitations on total debt. The New
      Credit Facility will be secured by a perfected first priority security
      interest on all tangible assets of the Company and a pledge of the shares
      of stock of each of the Company's subsidiaries operating in the United
      States. On June 30, 1998, the New Credit Facility was amended to include
      (i) the Company's acquisition of MFSNT and the related financing of such
      transaction, (ii) changes in financial covenants related thereto, and
      (iii) other amendments relating to investments, pledging and intercompany
      matters. The Company is currently engaged in discussions with its senior
      lenders under the New Credit Facility with respect to the waiver or
      consent of various provisions of such Facility (of which it may be in
      violation) arising out of the MFSNT transaction, including the September
      Agreement. In connection with the Company's quarterly reporting
      obligations to such senior lenders, and again in connection with a recent
      draw request by the Company for the balance of funds available under the
      New Credit Facility, the senior lenders granted the Company a limited
      waiver with regard to compliance with one of the minimum financial ratios
      required under the New Credit Facility. The Company anticipates that it
      will need additional waivers with respect to such minimum financial ratio
      in the future, including in connection with its future quarterly reporting
      obligations to the senior lenders. The Company also anticipates that, and
      is analyzing the extent to which, additional waivers or consents with
      respect to other provisions of the New Credit Facility may be necessary
      arising out of the MFSNT transaction, including the September Agreement.
      There can be no assurance, however, that the Company will be able to
      obtain additional appropriate waivers or consents. The failure to obtain
      appropriate waivers or consents could have a material adverse effect on
      the Company. The New Credit Facility matures in June 2001.
    
                                       16
<PAGE>

       


                   ABLE TELCOM HOLDING CORP. AND SUBSIDIARIES

                                   SIGNATURES


      Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                                      ABLE TELCOM HOLDING CORP.

                                                    (REGISTRANT)

   
October 12, 1998                                  By:   /S/   FRAZIER L. GAINES
                                                        -----------------------
                                                              Frazier L. Gaines
                                          President and Chief Executive Officer

October 12, 1998                                          /S/    MARK A. SHAIN
                                                          ---------------------
                                                                 Mark A. Shain
                                                         Chief Financial Officer
    

                                     17