<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 10, 1998
-------------------------
WESTOWER CORPORATION
----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
WASHINGTON 333-32963 91-1825860
------------------- ----------- ------------------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
7001 N.E. 40TH AVENUE, VANCOUVER, WASHINGTON 98661
------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (360) 750-9355
----------------
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 5. OTHER EVENTS.
The following section is included for incorporation by reference into
Westower Corporation's Registration Statement on Form S-8 (Registration No. 333-
65337):
Experts
The financial statements of Summit Communications, LLC ("Summit") for the
fiscal year ended December 31, 1997, included in Westower Corporation's Form 8-
K/A Amendment No. 1 to its Current Report on Form 8-K dated November 20, 1998,
are incorporated by reference herein in reliance on the consent of Shearer,
Taylor & Co., P.A., independent auditors, given on the authority of said firm as
experts in auditing and accounting.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
On November 10, 1998, Westower Corporation (the "Company") completed the
acquisition of Summit, a Mississippi limited liability company, pursuant to an
Agreement and Plan of Merger among Summit, the members of Summit, Westower and
Westower Summit Acquisition LLC, a Mississippi limited liability company and a
wholly-owned subsidiary of the Company. Included below are certain financial
statements and pro forma information of Summit.
(a) Financial statements of Summit.
Audited financial statements and schedules for the fiscal year ended
December 31, 1997:
<PAGE>
SUMMIT COMMUNICATIONS, LLC
CONTENTS
--------
Page
----
Report of Independent Certified Public Accountants 3
Balance Sheet 4
Statement of Income 5
Statement of Members' Equity 6
Statement of Cash Flows 7-8
Notes to the Financial Statements 9
Schedule 1 - Earnings from Contracts 16-17
Schedule 2 - Contracts in Progress 18
<PAGE>
Report of Independent Certified Public Accountants
To the Members
Summit Communications, LLC
Ridgeland, Mississippi
We have audited the accompanying balance sheet of Summit Communications, LLC, as
of December 31, 1997, and the related statements of income, members' equity and
cash flows for the period from May 24, 1997 (inception) to December 31, 1997.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Summit Communications, LLC as
of December 31, 1997, the results of its operations and its cash flows for the
period from inception to December 31, 1997, in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole of Summit Communications, LLC. The
supplementary information included in Schedules 1 and 2 is presented for
purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
March 5, 1998
<PAGE>
SUMMIT COMMUNICATIONS, LLC
Balance Sheet
December 31, 1997
<TABLE>
<CAPTION>
Assets
------
<S> <C>
Current assets:
Contract receivables $1,142,771
Costs and estimated earnings in excess
of billings on uncompleted contracts 117,648
Other receivables 9,448
Inventories 20,000
Prepaid expenses 31,501
----------
Total current assets 1,321,368
----------
Property and equipment:
Machinery, equipment and tools 479,459
Furniture and fixtures 17,292
Vehicles 398,916
----------
895,667
Less accumulated depreciation (196,346)
----------
Net property and equipment 699,321
----------
Intangible asset, net of accumulated amortization of $715 19,671
----------
$ 2,040,360
==========
Liabilities and Members' Equity
-------------------------------
Liabilities:
Current liabilities:
Book overdraft in bank account $ 118,249
Short-term notes payable 116,537
Short-term note payable to member 388,938
Current maturities of long-term debt 52,041
Current portion of capital leases 14,917
Accounts payable 183,876
Billings in excess of costs and estimated
earnings on uncompleted contracts 265,520
Accrued expenses 46,942
Other liabilities 37,324
----------
Total current liabilities 1,224,344
----------
Long-term debt, less current maturities 231,053
Capital lease obligations, less current portion 18,881
----------
Total liabilities 1,474,278
----------
Members' Equity 566,082
----------
$ 2,040,360
==========
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE>
SUMMIT COMMUNICATIONS, LLC
Statement of Income
Period From May 24, 1997 (Inception) to December 31, 1997
<TABLE>
<S> <C>
Contract revenues earned $5,477,770
----------
Cost of contract revenues:
Materials, supplies and contract services 2,519,761
Direct labor 867,387
Other direct costs 726,241
----------
Total cost of contract revenues 4,113,389
----------
Gross profit 1,364,381
----------
General and administrative expenses:
Salaries and labor 270,802
Other expenses 572,212
----------
Total general and administrative expenses 843,014
----------
Income from operations 521,367
----------
Other expenses - interest expense (45,285)
----------
Net income before income taxes 476,082
----------
Income taxes:
Assumed expense 177,500
Effect of special election by members (177,500)
----------
Net income taxes -
----------
Net income $ 476,082
==========
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE>
SUMMIT COMMUNICATIONS, LLC
Statement of Members' Equity
Period From May 24, 1997 (Inception) to December 31, 1997
<TABLE>
<S> <C>
Capital contributions $100,000
Net income 476,082
Distributions (10,000)
--------
December 31, 1997 $566,082
========
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE>
SUMMIT COMMUNICATIONS, LLC
Statement of Cash Flows
Period From May 24, 1997 (Inception) to December 31, 1997
<TABLE>
<S> <C>
Cash flows from operating activities:
Net earnings $ 476,082
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation 196,346
Amortization 715
(Increase) decrease in:
Contract receivables (1,142,771)
Cost and estimated earnings in excess of
billings on uncompleted contracts (117,648)
Other receivables (9,448)
Prepaid expenses (27,741)
Increase (decrease) in:
Accounts payable 183,876
Billings in excess of costs and estimated
earnings on uncompleted contracts 265,520
Accrued expenses (31,071)
Other, net 37,324
-----------
Net cash used in operating activities (168,816)
-----------
Cash flows from investing activities:
Assets acquired in acquisition (900,042)
Purchases of property and equipment (13,865)
-----------
Net cash used in investing activities (913,907)
-----------
</TABLE>
(Continued)
-----------
<PAGE>
SUMMIT COMMUNICATIONS, LLC
Statement of Cash Flows
Period From May 24, 1997 (Inception) to December 31, 1997
<TABLE>
<S> <C>
Cash flow from financing activities:
Liabilities assumed in acquisition $ 387,835
Proceeds from short-term notes payable 937,322
Repayments of short-term notes payable (820,785)
Proceeds of short-term note payable to member 400,000
Repayments of short-term note payable to member (11,062)
Repayments of capital lease obligations (301,930)
Proceeds from long-term notes payable 300,174
Repayments of long-term notes payable (17,080)
Capital contributions 100,000
Distributions (10,000)
---------
Net cash provided by financing activities 964,474
---------
Net decrease in cash (118,249)
Cash at inception -
---------
Book overdraft in bank account at end of year $ (118,249)
=========
Supplemental disclosures:
Collections on contracts $ 4,244,157
Payments for materials, sub contractors,
labor and supplies 4,510,108
Interest paid 42,644
==========
Noncash investing and financing activities:
Capital lease obligations incurred in
connection with property and equipment $ 25,905
==========
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE>
SUMMIT COMMUNICATIONS, LLC
Notes to the Financial Statements
Note 1: Summary of Significant Accounting and Reporting Policies
- -----------------------------------------------------------------
A summary of the significant accounting and reporting policies of Summit
Communications, LLC (the Company), which materially affect the determination
of financial position and results of operations is presented below.
Organization
------------
The Company is incorporated under the laws of the state of Mississippi. The
Company constructs communication towers for use by the radio, television,
telephone and other industries in the continental United States. The main
business operations are located in Ridgeland, Mississippi.
Accounting Estimates
--------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Revenue and Cost Recognition
----------------------------
Revenues from fixed-priced and modified fixed-price construction contracts are
recognized on the percentage-of-completion method, measured by the
percentage of costs incurred to date to total estimated costs to complete
each contract.
Contract costs include all direct material and labor costs and those direct
costs related to contract performance, such as supplies, tools and repairs.
Indirect costs, such as labor, supplies, general repairs and depreciation
are not allocated to contract costs. Selling, general, and administrative
costs, including indirect costs on contracts, are charged to expense as
incurred. Provisions for estimated losses on uncompleted contracts are made
in the period in which such losses are determined. Changes in job
performance, job conditions, and estimated profitability may result in
revisions to costs and income which are recognized in the period in which
the revisions are determined. Changes in estimated job profitability
resulting from job performance, job conditions, contract penalty provisions,
claims, change orders and settlements are accounted for as changes in
estimates in the current period.
The asset, "Costs and estimated earnings in excess of billings on uncompleted
contracts," represents revenues recognized in excess of amounts billed. The
liability, "Billings in excess of costs and estimated earnings on
uncompleted contracts," represents billings in excess of revenues
recognized.
(Continued)
-----------
<PAGE>
SUMMIT COMMUNICATIONS, LLC
Notes to the Financial Statements
Note 1: (Continued)
- --------------------
Property and Equipment
----------------------
The cost of property and equipment is depreciated over the estimated useful
lives of the related assets. Depreciation is computed using the straight-
line and accelerated methods adopted by the Internal Revenue Service for
financial purposes. The difference between tax depreciation methods and
generally accepted accounting depreciation methods is not considered
material.
Intangible Assets
-----------------
The Company recorded an intangible asset related to its acquisition of Summit
Communications, Inc. This intangible asset is being amortized over a fifteen
year period using the straight-line method.
Income Taxes
------------
The Company is not a tax paying entity for Federal income tax purposes, and
thus no Federal income tax expense has been recorded in these statements.
The Company was formed as a limited liability company (LLC) and has made an
election for Federal tax purposes, and tax purposes in certain states in
which it operates, to be taxed as a subchapter S corporation. Income of the
Company is taxed to the members in their respective returns for Federal
purposes and state purposes in states where the subchapter S corporation
election is available. State income taxes will be recorded in the financial
statements for states in which the Company operates that do not allow
subchapter S elections.
Note 2: Contract Receivables
- -----------------------------
The following is a summary of contract receivables at December 31, 1997:
Billed:
Completed contracts $ 257,060
Contracts in progress 885,711
---------
$ 1,142,771
=========
<PAGE>
SUMMIT COMMUNICATIONS, LLC
Notes to the Financial Statements
Note 3: Uncompleted Contracts
- ------------------------------
Costs, estimated earnings and billings on uncompleted contracts at December
31, 1997, are summarized as follows:
<TABLE>
<S> <C>
Costs incurred on uncompleted contracts $1,143,511
Estimated earnings 495,683
----------
1,639,194
Less billings 1,787,066
----------
$ (147,872)
==========
Included in accompanying balance sheets
under the following captions:
Cost and estimated earnings in excess
of billings on uncompleted contracts $ 117,648
Billings in excess of costs and estimated
earnings on uncompleted contracts (265,520)
----------
$ (147,872)
==========
Note 4: Backlog
- ----------------
The following schedule summarizes changes in the backlog of contracts from the
period of inception to December 31, 1997. Backlog represents the amount of
revenue the Company expects to realize from work to be performed on
uncompleted contracts in progress at year end and from contractual
agreements on which work has not yet begun.
Backlog balance at inception $ -
New contracts during the year 6,993,007
----------
6,993,007
Less contract revenues earned during
the year 5,477,770
----------
Backlog balance at end of year $ 1,515,237
==========
</TABLE>
<PAGE>
SUMMIT COMMUNICATIONS, LLC
Notes to the Financial Statements
Note 5: Short-term Notes Payable
- ---------------------------------
Short-term notes payable consisted of the following at December 31, 1997:
Line of credit for $600,000 payable to commercial
bank; interest at lender's prime rate plus .5%,
9% at December 31, 1997; principal and interest
payable January 1, 1998; secured by inventory,
real estate, fixed assets and accounts receivable $ 57,593
Line of credit for $750,000 payable to commercial
bank; interest at lender's prime rate plus .5%;
9% at December 31, 1997; principal and interest
due July 1, 1998; secured by inventory, real
estate, fixed assets and accounts receivable 58,944
-------
$ 116,537
=======
Note 6: Short-term Note Payable to Member
- ------------------------------------------
Short-term notes payable to member consisted of the following at December 31,
1997:
Note payable to member at an interest rate of
Trustmark National Bank prime rate, 8.5% at
December 31, 1997; principal payable on
July 18, 1998 and interest payable quarterly $ 388,938
=======
Note 7: Long-term Debt
- -----------------------
A summary of long-term debt at December 31, 1997, follows:
Unsecured note payable to commercial bank at an
interest rate of 8.5%; payable in monthly
installments of $6,176, including interest,
through September 25, 2002; secured by fixed
assets and accounts receivable $ 283,094
Less current maturities (52,041)
-------
Long-term debt, less current maturities $ 231,053
=======
(Continued)
-----------
<PAGE>
SUMMIT COMMUNICATIONS, LLC
Notes to the Financial Statements
Note 7: (Continued)
- --------------------
A summary of the future maturities of long-term debt at December 31, 1997, is
as follows:
<TABLE>
<CAPTION>
<S> <C>
1998 $ 52,041
1999 56,641
2000 61,647
2001 67,096
2002 45,669
-------
$ 283,094
=======
Note 8: Capital Lease Obligations
- ----------------------------------
A summary of capital lease obligations follows:
Lease payable in monthly installments of $506
through August 4, 1998, reflecting an
effective interest rate of 8.634%;
secured by vehicle $ 3,919
Lease payable in monthly installments of $1,048
through July 28, 1998, reflecting an effective
interest rate of 6.86%; secured by equipment 5,483
Lease payable in monthly installments of $633
through August 28, 2000, final installment of
$7,772 at September 28, 2000, reflecting an
effective interest rate of 9.325%; secured by
vehicle 24,396
-------
33,798
Less current obligations (14,917)
-------
$ 18,881
=======
</TABLE>
(Continued)
-----------
<PAGE>
SUMMIT COMMUNICATIONS, LLC
Notes to the Financial Statements
Note 8: Continued)
- -------------------
A schedule of future minimum lease payments under capital leases agreements at
December 31, 1997, follows:
<TABLE>
<S> <C>
1998 $ 17,362
1999 7,601
2000 13,473
--------
Total minimum lease payments 38,436
Less amount representing interest (4,638)
--------
33,798
Less current portion (14,917)
--------
Capital lease obligations, less
current portion $ 18,881
========
A summary of assets and accumulated depreciation of assets under capital
leases at December 31, 1997, follows:
Assets under capital leases $ 54,397
Less accumulated depreciation (6,802)
--------
$ 47,595
========
</TABLE>
Depreciation expense includes amortization of assets under capital leases of
$6,802 for the period from inception to December 31, 1997.
Note 9: Employee Benefit Plan
- ------------------------------
The Company has an employee benefit plan which is a 401(k) Profit Sharing Plan
and Trust. Employees become eligible for participation in the plan after one
year of service. Employees may contribute a percentage of their gross
compensation not to exceed limits set by law. Contributions by the Company
are made at the discretion of the Board of Directors. There were no
contributions made by the Company related to this plan for the period from
inception to December 31, 1997.
Note 10: Related Party Transactions
- ------------------------------------
Summit leases a vehicle from one of its officers for use in the normal course
of business. As of December 31, 1997, the capital lease obligation owed to
this officer was $3,919.
<PAGE>
SUMMIT COMMUNICATIONS, LLC
Notes to the Financial Statements
Note 11: (Continued)
- ---------------------
On May 24, 1997, the Company acquired certain assets and assumed certain
liabilities of Summit Communications, Inc. (SCI) in a purchase transaction.
The following is a summary of assets acquired and liabilities assumed in the
SCI transaction:
<TABLE>
<S> <C>
Assets acquired:
Inventory $ 20,000
Prepaid expenses 3,760
Fixed assets 855,896
Intangible asset 20,386
--------
900,042
--------
Liabilities assumed:
Long-term debt 293,634
Capital leases 16,188
Accrued expenses 78,013
--------
387,835
--------
Purchase price $512,207
========
</TABLE>
<PAGE>
Schedule 1
----------
SUMMIT COMMUNICATIONS, LLC
Earnings from Contracts
Period From May 24, 1997 (Inception) to December 31, 1997
<TABLE>
<CAPTION>
Cost of
Revenues Revenues Gross
Earned Earned Profit
----------- ----------- -----------
<S> <C> <C> <C>
Contracts in progress at inception
and completed during the year $ - $ - $ -
----------- ----------- -----------
Contracts started and completed
during the year:
Bellsouth Mobility (5 projects) 197,729 118,309 79,420
Black and Veatch (13 projects) 407,185 311,703 95,482
Cellular One (5 projects) 165,104 90,594 74,510
Irby (6 projects) 152,400 123,595 28,805
Pinnacle (5 projects) 256,414 215,888 40,526
Sprint (18 projects) 1,594,032 1,272,364 321,668
All other 1,065,712 837,425 228,287
----------- ----------- -----------
3,838,576 2,969,878 868,698
----------- ----------- -----------
Contracts in progress
at end of year (Schedule 2) 1,639,194 1,143,511 495,683
----------- ----------- -----------
$ 5,477,770 $ 4,113,389 $ 1,364,381
=========== =========== ===========
</TABLE>
<PAGE>
SUMMIT COMMUNICATIONS, LLC
Schedule of Contracts in Progress
Period From May 24, 1997 (Inception) to December 31, 1997
<TABLE>
<CAPTION>
Total Contract
--------------------------------
Estimated
Estimated Gross
Description Revenues Costs Profit
- ------------------------------- ----------- --------- --------
<S> <C> <C> <C>
Eatel - Gonsales, LA $ 109,826 $ 97,280 $ 12,546
Bellsouth - Knight Arnold 73,102 62,095 11,007
Cell South MobilComm 11,080 1,988 9,092
Pinnacle - Bogalousa, LA 102,690 68,094 34,596
Pinnacle - Long Beach 103,700 78,013 25,687
Powertel - WAPT 16 145,308 90,724 54,584
BMI - Roseland, LA 83,936 61,579 22,357
B&V - Holiday Inn 93,949 51,831 42,118
BMI - Crystal Springs 108,204 76,700 31,504
Sprintcom - Bellevue, TN 74,737 60,878 13,859
So Com - Perdido Bay, FL 44,717 30,997 13,720
BMI - Broussard, LA 75,153 60,259 14,894
BMI - Cynthia - Jackson, MS 58,360 45,479 12,881
BOH Bros - 16 Mile Causeway 56,486 44,690 11,796
So Comm - Stonewall, MS 86,465 59,000 27,465
Pinnacle - Sorrento, LA 113,037 71,686 41,351
Castlewoods 150 Monopole 85,283 57,200 28,083
Cell One H'Burg - Laurel, MS 58,531 30,000 28,531
Pinnacle - Donaldsonville, LA 38,565 28,523 10,042
Eatel - Port ALlen, LA 50,174 37,157 13,017
BMI - Edwards, MS 87,948 48,000 39,948
MCI - Deweyville, LA 103,137 72,181 30,956
MCI - Irwinville, LA 86,982 50,000 36,982
CCI - Cottage Hill, AL 95,732 60,000 35,732
CCI - Theodore, AL 39,815 31,736 8,079
CCI - Vidalia/Juneau, AL 89,911 61,089 28,822
CCI - Moss Point, MS 35,592 24,952 10,640
Sprint PCS - Site Upgrade 124,270 94,700 29,570
Pinnacle - Baton Rouge, LA 167,537 115,000 52,537
Pinnacle - Art Street 220,890 177,000 43,890
Irby - Marriot #514 78,147 53,000 25,147
---------- --------- --------
$2,703,264 $1,901,831 $ 801,433
========== ========= ========
</TABLE>
<PAGE>
Schedule 2
----------
<TABLE>
<CAPTION>
From May 24, 1997 (Inception) to December 31, 1997 December 31, 1997
- ----------------------------------------------------- --------------------------
Costs and Billings in
Estimated Profits Excess of
Revenues Cost of Gross Billed Costs to in Excess Costs and
Earned Revenues Profit to Date Complete of Billings Profits
- ----------- ------------ --------- ----------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
$ 109,826 $ 97,280 $ 12,546 $ 107,526 $ - $ 2,300 $ -
73,102 62,095 11,007 65,997 - 7,105 -
11,080 1,988 9,092 7,183 - 3,897 -
102,690 68,094 34,596 96,513 - 6,177 -
103,700 78,013 25,687 103,700 - - -
106,430 66,450 39,980 36,263 24,274 70,167 -
83,525 61,278 22,247 83,937 301 - 412
89,965 49,633 40,332 93,949 2,198 - 3,984
100,678 71,365 29,313 107,400 5,335 - 6,722
74,737 60,878 13,859 74,737 - - -
87 60 27 - 30,937 87 -
75,153 60,259 14,894 75,153 - - -
4,085 3,183 902 52,524 42,296 - 48,439
17,891 14,155 3,736 12,150 30,535 5,741 -
28,151 19,209 8,942 36,020 39,791 - 7,869
103,926 65,908 38,018 105,037 5,778 - 1,111
71,559 47,995 23,564 81,300 9,205 - 9,741
53,942 27,648 26,294 57,480 2,352 - 3,538
36,221 26,789 9,432 38,565 1,734 - 2,344
7,627 5,648 1,979 - 31,509 7,627 -
40,293 21,991 18,302 73,822 26,009 - 33,529
2,116 1,481 635 - 70,700 2,116 -
34,429 19,791 14,638 47,447 30,209 - 13,018
74,438 46,654 27,784 84,392 13,346 - 9,954
32,728 26,087 6,641 33,604 5,649 - 876
60,753 41,278 19,475 83,855 19,811 - 23,102
29,662 20,795 8,867 32,505 4,157 - 2,843
22,955 17,493 5,462 100,659 77,207 - 77,704
75,014 51,491 23,523 95,348 63,509 - 20,334
738 591 147 - 176,409 738 -
11,693 7,931 3,762 - 45,069 11,693 -
- ----------- ----------- --------- ----------- --------- ---------- -----------
$ 1,639,194 $ 1,143,511 $ 495,683 $ 1,787,066 $ 758,320 $ 117,648 $ 265,520
=========== =========== ========= =========== ========= ========== ===========
</TABLE>
<PAGE>
Unaudited financial statements for the interim periods ended August 31,
1998 and 1997:
Summit Communications, LLC.
Balance Sheet (Unaudited)
August 31, 1998 and 1997
ASSETS
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 500 $ 190,771
Accounts receivable, net 2,357,737 1,388,669
Costs and estimated earnings in excess of billings on
uncompleted contracts - 10,773
Notes receivable 192,998 -
Inventory 22,000 20,000
Prepaid expenses 82,867 26,205
Other current assets 60,232 18,070
---------- ----------
Total current assets 2,716,334 1,654,488
PROPERTY AND EQUIPMENT, net 732,679 813,662
OTHER ASSETS 18,560 25,000
---------- ----------
TOTAL ASSETS $3,467,573 $2,493,150
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 823,565 $ 662,299
Other current liabilities 32,340 208,795
Billings in excess of costs and estimated
earnings on uncompleted contracts 596,578 -
Employee loan payable 110,261
Notes payable 38,375 369,593
Note payable shareholder - 400,000
Current portion of long-term debt 66,958 66,958
---------- ----------
Total current liabilities 1,557,816 1,817,906
LONG-TERM DEBT, excluding current portion 708,622 242,444
STOCKHOLDERS' EQUITY
Members' capital 90,000 100,000
Retained earnings 1,111,135 332,800
---------- ----------
Total stockholders' equity 1,201,135 432,800
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,467,573 $2,493,150
========== ==========
</TABLE>
<PAGE>
SUMMIT COMMUNICATIONS, LLC
Statement Of Income (Unaudited)
Eight Months Ended August 31, 1998 and
the Period From May 24, 1997 (Inception) to August 31, 1997
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
CONTRACT REVENUES EARNED $6,479,307 $2,327,228
COSTS OF REVENUES EARNED 4,875,298 1,618,889
---------- ----------
Gross profit 1,604,009 708,339
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 991,610 375,538
---------- ----------
OPERATING INCOME 612,399 332,801
---------- ----------
OTHER INCOME (EXPENSE)
Interest expense 19,647 -
Other income (expense) 5,070 -
---------- ----------
Total other income (expense) 24,717 -
---------- ----------
NET INCOME $ 637,116 $ 332,801
========== ==========
</TABLE>
(b) Pro forma financial information.
The unaudited pro forma condensed combined balance sheet at August 31,
1998 combines historical financial information as if the acquisition of Summit
had occurred on August 31, 1998. The unaudited pro forma condensed combined
statement of income for the year ended February 28, 1998 and the six months
ended August 31, 1998 combine historical statements of operations for the
Company and Summit as if the acquisition had occurred on March 1, 1997.
The unaudited proforma condensed combined balance sheet at August 31, 1998
combines historical financial information of the Company and Summit at August
31,1998. The unaudited pro forma condensed combined statement of income for the
six months ended August 31, 1998 combines historical financial information of
the Company for the six months ended August 31, 1998 and Summit for the six
months ended June 30, 1998. The unaudited pro forma condensed combined statement
of income for the year ended February 28, 1998 combines historical financial
information of the Company for the year ended February 28, 1998 and Summit for
the year ended December 31, 1997. As the most recent fiscal year end of Summit
differs from the Company's fiscal year end by less than 93 days, no adjustments
were made to Summit's statement of income for the purpose of the pro forma
presentation.
The business of these entities is subject to seasonal fluctuations and,
therefore, the results of operations for periods less than twelve months may not
be indicative of annual results. The pro forma financial statements are not
necessarily indicative of the financial position or results of operations which
would actually have been reported had the transaction been consummated on March
1, 1997 or which may be reported in the future.
<PAGE>
The pro forma data should be read in conjunction with the notes to
unaudited pro forma condensed combined financial information and the historical
financial statements and notes thereto of Summit contained elsewhere herein.
1. Unaudited Pro Forma Condensed Combined Balance Sheet at August 31,
1998:
<TABLE>
<CAPTION>
WESTOWER CORPORATION
PRO FORMA COMBINED CONDENSED BALANCE SHEET
August 31, 1998
HISTORICAL
WESTOWER SUMMIT PRO FORMA
CORPORATION COMMUNICATIONS ADJUSTMENTS PRO FORMA COMBINED
--------------------------------------------- --------------------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash 18,260,000 0 (4,400,000) 1 13,860,000
Contracts receivable, net 11,328,000 2,358,000 13,686,000
Costs and estimated earnings in excess of
billings on uncompleted contracts 3,640,000 0 3,640,000
Notes Receivable 193,000 193,000
Inventory 1,723,000 22,000 1,745,000
Other current assets 0 143,000 143,000
--------------------------------------------- ----------------
Total current assets 34,951,000 2,716,000 (4,400,000) 33,267,000
PROPERTY AND EQUIPMENT, net 5,723,000 733,000 6,456,000
GOODWILL 12,179,000 5,924,000 1 18,103,000
OTHER ASSETS 4,624,000 19,000 4,643,000
--------------------------------------------- ----------------
TOTAL ASSETS 57,477,000 3,468,000 1,524,000 62,469,000
============================================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable 5,904,000 824,000 6,728,000
Other current liabilities 62,000 32,000 94,000
Billings in excess of costs and estimated
earnings on uncompleted contracts 1,522,000 597,000 2,119,000
Current portion of long term debt 138,000 67,000 205,000
Income taxes payable 1,356,000 1,356,000
Note payable 1,027,000 38,000 1,065,000
Acquisition payable 5,000,000 5,000,000
Deferred income taxes 534,000 534,000
--------------------------------------------- ----------------
Total current liabilities 15,543,000 1,558,000 0 17,101,000
LONG TERM DEBT, net of current portion 2,383,000 709,000 3,092,000
DEFERRED INCOME TAXES 0
SUBORDINATED CONVERTIBLE NOTES 15,000,000 0 15,000,000
Total liabilities 32,926,000 2,267,000 0 35,193,000
--------------------------------------------- ----------------
STOCKHOLDERS' EQUITY
Common stock 18,310,000 90,000 (90,000) 2 21,035,000
2,000 1
2,723,000 1
Foreign currency translation adjustment' (67,000) (67,000)
Retained Earnings 6,308,000 1,111,000 (1,111,000) 2 6,308,000
--------------------------------------------- ----------------
Total stockholders equity 24,551,000 1,201,000 1,524,000 27,276,000
TOTAL LIABILIITES AND STOCKHOLDERS' EQUITY 57,477,000 3,468,000 1,524,000 62,469,000
============================================= ================
</TABLE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
August 31, 1998
1 To reflect the application of purchase accounting to the
Company's acquisition of Summit. The total purchase price of
$7,125,000 was paid through the issuance of 200,000 shares of the
Company's common stock valued at $13.62 per share and $4,400,000
in cash.
2 To eliminate the historical balances of Summit.
<PAGE>
2. Unaudited Pro Forma Condensed Combined Statement of Income for the
Company's fiscal year ended February 28, 1998:
WESTOWER CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED FEBRUARY 28, 1998
<TABLE>
<CAPTION>
HISTORICAL
WESTOWER SUMMIT PRO FORMA
CORPORATION COMMUNICATIONS ADJUSTMENTS PRO FORMA COMBINED
--------------------------------------------- --------------------
<S> <C> <C> <C> <C>
CONTRACT REVENUES EARNED 37,112,000 5,478,000 42,590,000
COSTS OF REVENUES EARNED 27,474,000 4,113,000 31,587,000
--------------------------------------------- --------------------
Gross profit 9,638,000 1,365,000 0 11,003,000
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 5,174,000 843,000 276,000 1 6,410,000
117,000 2
--------------------------------------------- --------------------
OPERATING INCOME 4,464,000 522,000 (393,000) 4,593,000
OTHER INCOME(EXPENSE)
Gain on sale of assets 125,000 125,000
Other
Interest income 114,000 114,000
Interest expense (93,000) (45,000) (138,000)
--------------------------------------------- --------------------
146,000 (45,000) 0 101,000
--------------------------------------------- --------------------
INCOME BEFORE INCOME TAXES 4,610,000 477,000 (393,000) 4,694,000
INCOME TAXES 1,812,000 33,000 3 1,845,000
--------------------------------------------- --------------------
NET INCOME 2,798,000 477,000 (426,000) 2,849,000
============================================= ====================
Basic earnings per share 0.59 n/a 0.58
============================================= ====================
Diluted earnings per share 0.55 n/a 0.54
============================================= ====================
Shares of common stock used in
computing earnings per share:
Basic 4,720,000 200,000 4 4,920,000
============================================= ====================
Diluted 5,051,000 200,000 4 5,251,000
============================================= ====================
</TABLE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED FEBRUARY 28, 1998
1 To reflect amortization of intangible assets resulting from the
application of purchase accounting, producing goodwill of
approximately $5,524,000. For amortization purposes, the Company has
used a useful life of 20 years.
2 Contractual increases in historical compensation of former owners of
Summit.
3 Estimated adjustment to reflect income taxes at effective rate.
4 Represents shares of Westower common stock issued in connection with
the acquisition of Summit as if the shares had been outstanding for
the entire period.
<PAGE>
3. Unaudited Pro Forma Condensed Combined Statement of Income for the
period ended August 31, 1998:
WESTOWER CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
SIX MONTHS ENDED AUGUST 31, 1998
<TABLE>
<CAPTION>
HISTORICAL
WESTOWER SUMMIT PRO FORMA
CORPORATION COMMUNICATIONS ADJUSTMENTS PRO FORMA COMBINED
--------------------------------------------- --------------------
<S> <C> <C> <C> <C>
CONTRACT REVENUES EARNED 38,671,000 4,027,000 42,698,000
COSTS OF REVENUES EARNED 29,536,000 3,030,000 32,566,000
--------------------------------------------- --------------------
GROSS PROFIT 9,135,000 997,000 0 10,132,000
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 5,511,000 651,000 138,000 1 6,380,000
80,000 2
--------------------------------------------- --------------------
OPERATING INCOME 3,624,000 346,000 (218,000) 3,752,000
OTHER INCOME(EXPENSE)
Other 16,000
Interest income 244,000 0 244,000
Interest expense (263,000) (68,000) (331,000)
--------------------------------------------- --------------------
(19,000) (52,000) 0 (87,000)
--------------------------------------------- --------------------
INCOME BEFORE INCOME TAXES 3,605,000 294,000 (218,000) 3,665,000
INCOME TAXES 1,262,000 21,000 3 1,283,000
NET INCOME 2,343,000 294,000 (239,000) 2,382,000
--------------------------------------------- --------------------
BASIC EARNINGS PER SHARE 0.38 n/a 0.38
============================================= ====================
DILUTED EARNINGS PER SHARE 0.33 n/a 0.33
============================================= ====================
Shares of common stock used in
computing earnings per share:
Basic 6,123,000 200,000 4 6,323,000
============================================= ====================
Diluted 7,117,000 200,000 4 7,317,000
============================================= ====================
</TABLE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
SIX MONTHS ENDED AUGUST 31, 1998
1 To reflect amortization of intangible assets resulting from the
application of purchase accounting, producing goodwill of
approximately $5,524,000. For amortization purposes, the Company has
used a useful life of 20 years.
2 Contractual increases in historical compensation of former owners of
Summit.
3 Estimated adjustment to reflect income taxes at effective rate.
4 Represents shares of Westower common stock issued in connection with
the acquisition of Summit as if the shares had been outstanding for
the entire period.
<PAGE>
(c) Exhibits.
2.1 Agreement and Plan of Merger, dated as of November 10, 1998, among
Westower Corporation, Westower Summit Acquisition, LLC, Summit
Communications, LLC and the Members of Summit Communications, LLC.*
2.2 Registration Rights Agreement, dated as of November 10, 1998, among
Westower Corporation and the Members of Summit Communications, LLC.*
2.3 Employment Agreement, dated as of November 10, 1998, between Westower
Summit Acquisition, LLC and Mark J. Shapley.*
2.4 Employment Agreement, dated as of November 10, 1998, between Westower
Summit Acquisition, LLC and Mike A. Jarvis.*
23 Consent of Independent Auditor.
__________
* Previously filed.
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WESTOWER CORPORATION
Date: January 25, 1999 By:/s/ Peter Lucas
-------------------------------------
Peter Lucas, Senior Vice President,
Chief Financial Officer, Treasurer
and Secretary
<PAGE>
Exhibit Index
-------------
Exhibits
- --------
2.1 Agreement and Plan of Merger, dated as of November 10, 1998, among
Westower Corporation, Westower Summit Acquisition, LLC, Summit
Communications, LLC and the Members of Summit Communications, LLC.*
2.2 Registration Rights Agreement, dated as of November 10, 1998, among
Westower Corporation and the Members of Summit Communications, LLC.*
2.3 Employment Agreement, dated as of November 10, 1998, between Westower
Summit Acquisition, LLC and Mark J. Shapley.*
2.4 Employment Agreement, dated as of November 10, 1998, between Westower
Summit Acquisition, LLC and Mike A. Jarvis.*
23 Consent of Independent Auditor.
__________
* Previously filed.
<PAGE>
Exhibit 23
SHEARER
TAYLOR
& CO.
A Professional Association
Consent of Independent Certified Public Accountants
We consent to the incorporation by reference in the Registration Statement of
Westower Corporation on Form S-8 (Registration No. 333-65337) of our report
dated March 5, 1998, relating to the financial statements of Summit
Communications, LLC appearing in this Amendment No. 1 on Form 8-K/A to the
Current Report on Form 8-K dated November 20, 1998 of Westower Corporation.
/s/ Shearer, Taylor & Co., P.A.
Jackson, Mississippi
January 13, 1999
