<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended MARCH 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
For the transition period from ___________ to ____________
COMMISSION FILE NUMBER 1-132963
WESTOWER CORPORATION
(Name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
WASHINGTON 1623 91-1825860
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
WESTOWER CORPORATION
7001 NE 40th Avenue
Vancouver, Washington 98661
(360) 750-9355
(Address and telephone number of principal executive offices and principal
place of business)
Check whether the issuer:
(1) filed all reports required to be filed by Section 13 or 15 (d) of the
Exchange Act during the preceding 12 months ( or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days
YES /X/ No / /
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes common
equity, as of the latest practicable date:
8,529,514 AS OF MAY 13, 1999
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1 - UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATMENTS
Condensed Consolidated Balance Sheets
at March 31, 1999 (unaudited) and September 30, 1998 3
Unaudited Condensed Consolidated Statements of Income
for the three and six month periods ended March 31, 1999 and 1998 4
Unaudited Condensed Consolidated Statement of Stockholders' Equity
for the six month periods ended March 31, 1999 5
Unaudited Condensed Consolidated Statements of Cash Flows
for the six month periods ended March 31, 1999 and 1998 6
Notes to Unaudited Condensed Consolidated Financial Statements 7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 12
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK 16
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
ITEM 2 - CHANGES IN SECURITIES
ITEM 3 - DEFAULTS UPON SENIOR SECURITES
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5 - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
-2-
<PAGE>
WESTOWER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
At March 31, 1999 and September 30, 1998
ASSETS
<TABLE>
<CAPTION>
March 31, September 30,
1999 1998
------------- -------------
<S> <C> <C>
CURRENT ASSETS (unaudited)
Cash and cash equivalents $ 9,246,000 $ 9,331,000
Accounts receivable, net 16,711,000 13,289,000
Costs and estimated earnings in excess of
billings on uncompleted contracts 4,263,000 5,078,000
Inventory 2,920,000 2,151,000
Related party advances and receivables 1,579,000 956,000
Income tax receivable 220,000 220,000
Other current assets 1,908,000 1,203,000
------------- -------------
Total current assets 36,847,000 32,228,000
PROPERTY AND EQUIPMENT, net 30,529,000 7,574,000
INTANGIBLE ASSETS, net 33,739,000 19,721,000
OTHER ASSETS 5,547,000 2,771,000
------------- -------------
TOTAL ASSETS $106,662,000 $62,294,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 4,909,000 $ 7,053,000
Other current liabilities 1,366,000 2,810,000
Billings in excess of costs and
estimated
earnings on uncompleted contracts 1,112,000 1,435,000
Income taxes payable 2,690,000 2,116,000
Deferred income taxes 370,000 428,000
Stockholder advances and notes payable to related parties 254,000 228,000
Note payable 68,000 1,089,000
Current portion of long-term debt
and capital lease obligations 1,630,000 2,419,000
------------- -------------
Total current liabilities 12,399,000 17,578,000
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, excluding current portion 46,437,000 14,991,000
DEFERRED INCOME TAXES 2,926,000 2,962,000
------------- -------------
Total liabilities 61,762,000 35,531,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock ($.01 par value,
25,000,000 and 10,000,000 shares
authorized, 8,435,000 and 7,047,000
shares issued and outstanding, at
March 31, 1999 and September 30, 1998,
respectively) 84,000 70,000
Additional paid-in-capital 39,488,000 22,610,000
Accumulated other comprehensive income (loss) (482,000) (581,000)
Retained earnings 5,810,000 4,664,000
------------- -------------
Total stockholders' equity 44,900,000 26,763,000
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $106,662,000 $62,294,000
============ =============
</TABLE>
See accompanying notes to these financial statements
-3-
<PAGE>
WESTOWER CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three and Six Months ended March 31, 1999 and 1998
<TABLE>
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
March 31, 1999 March 31, 1998 March 31, 1999 March 31, 1998
-------------- -------------- ------------------ -----------------
<S> <C> <C> <C> <C>
CONTRACT AND OTHER
REVENUES EARNED $ 18,319,000 $ 11,401,000 $43,271,000 $23,358,000
COSTS OF REVENUES EARNED 12,586,000 8,294,000 30,730,000 17,050,000
(exclusive of depreciation shown below) -------------- -------------- ------------------ -----------------
Gross profit 5,733,000 3,107,000 12,541,000 6,308,000
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 3,999,000 1,467,000 8,257,000 3,187,000
DEPRECIATION AND AMORTIZATION 870,000 190,000 1,459,000 261,000
MERGER RELATED EXPENSES 77,000
-------------- -------------- ------------------ -----------------
OPERATING INCOME 864,000 1,450,000 2,748,000 2,860,000
OTHER INCOME (EXPENSE)
Other income (expense) 237,000 122,000 273,000 116,000
Interest income 78,000 64,000 131,000 112,000
Interest and financing expense (551,000) (46,000) (1,123,000) (72,000)
-------------- -------------- ------------------ -----------------
Total other income (expense) (236,000) 140,000 (719,000) 156,000
-------------- -------------- ------------------ -----------------
INCOME BEFORE PROVISION
FOR INCOME TAXES 628,000 1,590,000 2,029,000 3,016,000
PROVISION FOR INCOME TAXES 273,000 557,000 883,000 1,057,000
-------------- -------------- ------------------ -----------------
NET INCOME $ 355,000 $ 1,033,000 $ 1,146,000 $ 1,959,000
============== ============== =================== =================
EARNINGS PER SHARE:
BASIC EARNINGS $0.04 $0.17 $0.14 $0.33
===== ===== ===== =====
DILUTED EARNINGS $0.04 $0.15 $0.13 $0.29
===== ===== ===== =====
</TABLE>
See accompanying notes to these financial statements
-4-
<PAGE>
WESTOWER CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Six Months ended March 31, 1999
<TABLE>
<CAPTION>
Accumulated
Common Stock Additional Other Com- Com-
------------------- Paid-in Retained prehensive prehensive
Shares Amount Capital Earnings Income (loss) Income Total
--------- -------- ----------- ---------- -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, September 30, 1998 7,047,000 $ 70,000 $22,610,000 $4,664,000 $ (581,000) $26,763,000
Net income 1,146,000 $1,146,000
Foreign currency translation
adjustment 99,000 99,000
----------
Total comprehensive income $1,245,000 1,245,000
==========
Proceeds from warrants and
options exercised, net 985,000 10,000 8,558,000 8,568,000
Stock issuances for
business acquisitions 403,000 4,000 8,280,000 8,284,000
Stock compensation expense 40,000 40,000
--------- -------- ----------- ---------- -------------- -----------
BALANCE, March 31, 1999 8,435,000 $ 84,000 $39,488,000 $5,810,000 $ (482,000) $44,900,000
========= ======== =========== ========== ============= ===========
</TABLE>
See accompanying notes to these financial statements
-5-
<PAGE>
WESTOWER CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTOF CASH FLOWS
For Six Months ended March 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
------------ --------------
<S> <C> <C>
CASH FROM OPERATING ACTIVITIES
Net income $ 1,146,000 $ 1,959,000
Adjustments to reconcile net income
to net cash from operating activities
Depreciation and amortization 1,459,000 261,000
Gain on sale of assets (125,000)
Non-cash interest and financing expense 239,000
Earnings from equity investment (225,000)
Stock compensation expense 40,000 35,000
Changes in operating assets and
liabilities, net of effect of acquisitions
Accounts receivable 186,000 859,000
Costs and estimated earnings in
excess of billings
on uncompleted contracts 815,000 (962,000)
Inventory and other current assets (1,316,000) (460,000)
Other assets 335,000
Trade accounts payable (2,818,000) (348,000)
Billings in excess of costs and
estimated earnings
on uncompleted contracts (323,000) 587,000
Other current liabilities (1,782,000) 146,000
Current and deferred income taxes 480,000 1,619,000
------------ --------------
Net cash flows (used in) provided
by operating activities (2,099,000) 3,906,000
------------ --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for acquisitions, net of cash acquired (6,583,000) (1,474,000)
Increase in other assets (3,225,000)
Purchases of property and equipment (22,658,000) (1,192,000)
Proceeds from sale of assets 302,000
------------ --------------
Net cash flows used in investing activities (32,466,000) (2,364,000)
------------ --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stock issuances, net 7,574,000 7,493,000
Proceeds from long-term debt 807,000 837,000
Repayments to related parties (1,980,000) (1,101,000)
Repayments from (advances to) related parties 526,000 (637,000)
Borrowings (repayments) on line of credit, net (1,871,000) (404,000)
Proceeds from credit facility 31,500,000
Distributions to stockholders of
acquired subsidiaries prior to acquisition (2,738,000)
Repayments of long-term debt (2,086,000) (325,000)
------------ --------------
Net cash flow from financing activities 34,470,000 3,125,000
------------ --------------
EFFECT OF EXCHANGE RATES 10,000 (6,000)
------------ --------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (85,000) 4,661,000
CASH AND CASH EQUIVALENTS,
beginning of period 9,331,000 1,748,000
------------ --------------
CASH AND CASH EQUIVALENTS,
end of period $ 9,246,000 $ 6,409,000
============ ==============
</TABLE>
See accompanying notes to these financial statements
-6-
<PAGE>
WESTOWER CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - BASIS OF PRESENTATION
Westower Corporation ( the "Company") designs, builds and maintains wireless
communications transmitting and receiving facilities for providers of wireless
communications services. The Company also owns and leases communications
towers. The Company operates throughout the U.S. and Canada.
The unaudited condensed consolidated financial statements and notes thereto at
March 31, 1999 and September 30, 1998 (audited), and for the three and six
months ended March 31, 1999 and 1998, reflect the October 28, 1997 merger with
Western Telecom Construction Ltd., an Alberta corporation, the May 29, 1998
merger with MJA Communications Corp., a Florida corporation, and the August 31,
1998 merger with Standby Services, Inc., a Texas corporation. All companies
design, fabricate and construct wireless transmitting and receiving facilities
and shelters for communications providers. The Company issued 835,000 shares of
its common stock for all the common shares of Western Telecom Construction Ltd.,
397,000 shares of its common stock for all of the common shares of MJA
Communications Corp., and 544,000 shares of its common stock for all of the
common shares of Standby Services, Inc. All of these mergers were accounted for
as or similar to a pooling-of-interests.
On October 27, 1998, the Company changed its fiscal year-end from February 28 to
September 30. All prior information has been restated to conform with a
September 30 year end.
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial reporting and in accordance with the instructions for Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and disclosures normally required by generally accepted accounting
principles for complete financial statements or those normally reflected in the
Company's Annual Report on Form 10-KSB. The financial information included
herein reflects all adjustments (consisting of normal recurring adjustments)
which are, in the opinion of management, necessary for a fair presentation of
results for interim periods. Results of interim periods are not necessarily
indicative of the results to be expected for a full year. These unaudited
condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements for the seven-month Transition Period
ended September 30, 1998 and the notes thereto included in the Company's Form
10-KSB.
CONSOLIDATION -- The consolidated financial statements include the accounts of
the Company and its wholly owned domestic and Canadian subsidiaries.
Investments in subsidiaries in which the Company exercises significant influence
but which it does not control are accounted for using the equity method.
Investment in a 60% owned affiliated company is accounted for on the equity
method of accounting. The Company's equity earnings from this investment during
the three and six months ended March 31, 1999 were $189,000 and $225,000,
respectively, which has been included in other income. All material
intercompany accounts and transactions have been eliminated in consolidation.
FOREIGN CURRENCY TRANSLATION -- All asset and liability accounts of Canadian
operations are translated into U.S. dollars at current exchange rates. Revenues
and expenses are translated using the average exchange rate during the period.
Foreign currency translation adjustments are reported as a component of
comprehensive income and stockholders' equity in the consolidated balance sheet.
Exchange gains and losses from foreign currency transactions are included in
income currently.
USE OF ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the unaudited condensed
consolidated financial statements. Examples of estimates subject to possible
revision based upon the outcome of future events include costs and estimated
earnings on uncompleted contracts, depreciation of property and equipment,
accrued income tax liabilities, and purchase price allocations for acquisitions.
Actual results could differ from those estimates.
RECLASSIFICATION -- Certain prior year amounts have been reclassified to conform
to the current year presentation and did not impact previously reported
stockholders' equity or cash flow.
NOTE 2 - INVENTORY
Inventory is stated at the lower of cost and estimated net realizable value
using the first-in, first-out method. Inventory consists of materials purchased
for future construction not associated with specific jobs.
-7-
<PAGE>
WESTOWER CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
March 31, September 30,
1999 1998
------------ --------------
Buildings $ 1,806,000 $ 1,795,000
Vehicles 3,796,000 2,540,000
Equipment 2,361,000 1,580,000
Communications towers 20,174,000 1,401,000
Furniture and fixtures 1,668,000 943,000
Leasehold improvements 150,000 81,000
Construction in progress 1,616,000
----------- -----------
31,571,000 8,340,000
Less accumulated depreciation and amortization (2,358,000) (1,562,000)
----------- -----------
29,213,000 6,778,000
Land 1,316,000 796,000
----------- -----------
$30,529,000 $ 7,574,000
=========== ===========
In February 1999, the Company completed the acquisition of certain
communications towers under contract in December 1998, at an aggregate cost of
approximately $17 million.
NOTE 4 - ACQUISITIONS
During the six months ended March 31, 1999, the Company consummated the
following transactions which were accounted for under the purchase method of
accounting, and accordingly, the operating results of the acquired entities have
been included in the consolidated operating results since the date of
acquisition.
On October 30, 1998 the Company completed the acquisition of Teletronics
Management Services, Inc. ("Teletronics"). The acquisition was effected by
exchanging aproximately 188,000 shares of common stock valued at approximately
$3.8 million, based on the publicly traded price, $1.8 million in cash,
including distributions payable to former shareholders in the amount of
$800,000, and the assumption of certain liabilities, for all outstanding shares
of Teletronics. The acquisition was accounted for using the purchase method for
business combinations resulting in goodwill of approximately $5.0 million.
On November 10, 1998 the Company completed the acquisition of Summit
Communications, LLC ("Summit"), a Mississippi limited liability company which
engages in operations similar to those of the Company. The acquisition was
effected by exchanging approximately 200,000 shares of common stock valued at
approximately $4.1 million, based on the publicly traded price, $4.4 million in
cash, and the assumption of certain liabilities, for all membership interests in
Summit. The former members of Summit may also receive an additional 100,000
shares of common stock, based on certain performance criteria during the three
years following the date of acquisition. The acquisition was accounted for using
the purchase method for business combinations resulting in goodwill of
approximately $8.0 million.
On February 4, 1999 the Company completed the acquisition of Cypress Real Estate
Services, Inc. ("Cypress"), a Florida corporation. The acquisition was effected
by exchanging approximately 15,000 shares of common stock valued at
approximately $424,000, based on the publicly traded price, for all outstanding
shares of Cypress. The former shareholder of Cypress may also receive
additional shares of common stock, based on the number of towers, not to exceed
1,000 towers, acquired or constructed by the Company, subject to certain
limitations and restrictions. The acquisition was accounted for using the
purchase method for business combinations with substantially all of the purchase
price allocated to goodwill.
On February 26, 1999 the Company completed the acquisition of Telecommunications
R. David ("R. David"), a Quebec, Canada company which engages in operations
similar to those of the Company. The acquisition was effected by exchanging
approximately $330,000 in cash, and the assumption of certain liabilities, for
all outstanding shares of R. David. The acquisition was accounted for using the
purchase method for business combinations resulting in goodwill of approximately
$350,000.
-8-
<PAGE>
WESTOWER CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of all consideration exchanged for acquisitions that
were accounted for as purchases:
Six Months
Ended
March 31,
1999
-----------
Shares issued 403,000
Value of shares $ 8,284,000
Cash 6,583,000
-----------
Total purchase price $14,867,000
===========
The assets and liabilities of the acquired entities were recorded at their
estimated fair market values at the dates of acquisition. The initial
allocations of fair market values are preliminary and are subject to adjustments
during the first year following the acquisition. The initial allocations were as
follows:
March 31,
1999
-----------
Non-compete agreements $ 136,000
Tangible assets 5,084,000
Goodwill 13,825,000
Liabilities assumed and deferred tax liabilities (4,178,000)
-----------
Total purchase price $14,867,000
===========
Included in the operating results for the three and six months ended March 31,
1999 are revenues of $4,384,000 and $9,279,000, respectively, and operating
income of $426,000 and $1,360,000, respectively, from the dates of acquisition.
Goodwill is generally amortized over a 20 year period.
NOTE 5 - INTANGIBLE ASSETS
Intangible assets consist of the following:
March 31, September 30,
1999 1998
----------- -----------
Goodwill $27,864,000 $14,039,000
Communications tower purchase contract 6,381,000 5,661,000
Non-compete agreements 355,000 219,000
----------- -----------
34,600,000 19,919,000
Less accumulated amortization (861,000) (198,000)
----------- -----------
$33,739,000 $19,721,000
=========== ===========
During May 1999, the company completed the acquisition of certain wireless
communications towers under contract at an aggregate cost of $9.2 million, which
is in addition to the amount ascribed in the contract above.
NOTE 6 - OTHER ASSETS
Other assets consist of the following:
March 31, September 30,
1999 1998
---------- -------------
Deposits on tower purchase contracts $ 781,000 $ -
Equity investment in joint venture 1,210,000 217,000
Deposit on business purchase 662,000 -
Other noncurrent assets, net 2,894,000 2,554,000
---------- -------------
$5,547,000 $2,771,000
---------- -------------
-9-
<PAGE>
WESTOWER CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
During the six months ended March 31, 1999, the Company paid $781,000 as a
deposit to acquire additional towers. Equity investment in joint venture
represents the Company's cash investment and the Company's equity earnings from
this investment. Deposits on business purchases represent deposits on purchases
of businesses that the Company is currently negotiating. There can be no
assurance that the Company will be successful in completing these negotiations,
in which case the deposits are refundable.
NOTE 7 - LONG -TERM DEBT
During the six months ended March 31, 1999, the Company borrowed an aggregate
$31.5 million under its credit facility with Bank Boston N.A. As of March 31,
1999, the effective interest rate on borrowings under the facility was
approximately 7.5%.
NOTE 8 - COMMON STOCK
On October 15, 1997, the Company issued 1,200,000 shares of common stock and
1,380,000 warrants to purchase common stock in a public offering. The Company
received proceeds, net of costs, of $7,493,000 from its public offering. During
the six months ended March 31, 1999, the Company received net proceeds of
$7,291,000 on the exercise of 819,000 warrants, at $9.00 per share of common
stock. In addition to the warrants noted above, during the six months ended
March 31, 1999, the Company's underwriters exercised warrants, issued in
connection with the Company's initial public offering, resulting in the Company
receiving $996,000 on the exercise of warrants to purchase 111,000 shares of
common stock at $9 per share. At March 31, 1999, the Company has a receivable
from the underwriters of $996,000 included in related party advances and
receivables for which the Company received cash proceeds in April and May 1999.
At March 31, 1999, there were unexercised warrants to purchase approximately
130,000 shares of common stock held by underwriters.
NOTE 9 - EARNINGS PER SHARE
The numerators and denominators of basic and fully diluted earnings per share
are as follows:
<TABLE>
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
1999 1998 1999 1998
------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
Numerator - Net income as reported $ 355,000 $1,033,000 $1,146,000 $1,959,000
========== ========== ========== ==========
Denominator - Weighted average number of
shares outstanding:
Basic weighted average
number of shares 8,343,000 6,110,000 8,088,000 5,980,000
Effect of dilutive stock
options and warrants 491,000 958,000 599,000 873,000
---------- ---------- ---------- ----------
Diluted weighted average
number of shares 8,834,000 7,068,000 8,687,000 6,853,000
========== ========== ========== ==========
</TABLE>
For the three and six months ended March 31, 1999 and 1998, shares associated
with convertible debt were excluded from the computation of diluted earnings per
share because inclusion would have had an anti-dilutive effect on earnings per
share. All other potential common shares have been included in the diluted
earnings per share calculation. All potential common shares were included in
the calculation of diluted earnings per share for the three and six months ended
March 31, 1998.
-10-
<PAGE>
WESTOWER CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - SEGMENT INFORMATION
The Company's operations are comprised of a number of communication tower
construction entities that were recently acquired. While management assesses the
operating results of each of these entities separately, as these entities and
its existing operations exhibit similar financial performance and have similar
economic characteristics, they have been aggregated as one segment.
The following table summarizes contract and other revenues and long-lived assets
related to the respective countries in which the Company operates.
<TABLE>
<CAPTION>
As at and for the Six Months Ended March 31, 1999
-------------------------------------------------
Total United States Canada
--------------- ---------------- --------------
<S> <C> <C> <C>
Contract and Other Revenues $43,271,000 $32,823,000 $10,448,000
Long-lived Assets $30,529,000 $24,485,000 $ 6,044,000
As at and for the Six Months Ended March 31, 1998
---------------------------------------------------
Total United States Canada
--------------- ---------------- --------------
Contract and Other Revenues $23,358,000 $12,495,000 $10,863,000
Long-lived Assets $ 4,366,000 $ 1,235,000 $ 3,131,000
</TABLE>
Long-lived assets are comprised of property and equipment and excludes
intangible assets.
NOTE 11 - MERGER OF THE COMPANY
On May 15, 1999, the Company entered into a definitive agreement with
Spectrasite Holdings, Inc. (Spectrasite), under which Westower will merge with a
subsidiary of Spectrasite. Under the terms of the agreement, Westower
shareholders will receive 1.81 shares of Spectrasite common stock for each
Westower share, and Westower will become a wholly-owned subsidiary of
SpectraSite. The merger is subject to the approval of Westower's shareholders
and the appropriate regulatory agencies as well as other customary closing
conditions. There can be no assurance that the merger will be consummated.
-11-
<PAGE>
ITEM 2- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Statements contained herein that are not historical facts are forward-looking
statements ("forward-looking statements") within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, which are intended to be covered by the safe
harbors created by those sections. Such forward-looking statements are
necessarily estimates reflecting the best judgment of the Company's management
based upon current information and involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such risks, uncertainties and other factors
include, but are not limited to, those set forth in the Company's Annual Report
on Form 10-KSB for the transition period ended September 30, 1998 and appearing
from time to time in filings made by the Company with the Securities and
Exchange Commission. These risks, uncertainties and other factors should not be
construed as exhaustive and the Company does not undertake, and specifically
disclaims any obligation, to update any forward-looking statements to reflect
occurrences or unanticipated events or circumstances after the date of such
statements.
GENERAL AND COMPANY STRATEGY
Historically, Westower Corporation and its subsidiaries (the "Company")
principally has been engaged in building towers for wireless carriers, who have
traditionally owned and operated their own transmission tower assets. While the
Company continues to provide infrastructure building and implementation services
to wireless carriers, the Company's focus has been directed increasingly toward
developing sources of recurring revenues, specifically building towers for its
own account (build-to-suit), acquiring towers from carriers and other owners,
maximizing revenues from existing towers, and entering into long-term
maintenance contracts with other tower owners. The Company's focus on sources
of recurring revenues is intended, in part, to capitalize on recent trends by
several carriers who have begun to evaluate opportunities to outsource the
ownership and operation of their wireless infrastructure either by selling their
existing tower sites to independent third party tower owners and operators, who
would then lease tower space back to the carriers, and/or entering into build-
to-suit arrangements, whereby an independent third party builds, owns and leases
towers to the wireless carriers, often with multiple tenants on any given
tower. The Company believes that its historical competency of tower design and
construction makes the Company one of the leading candidates for carrier
outsourcing.
The Company believes owning towers and leasing tower space to wireless carriers
and other users will provide more stable long-term recurring revenues. In
addition to the Company's plan to pursue opportunities to acquire existing sites
and towers from carriers seeking to outsource their wireless infrastructure, the
Company believes that, at the present time, utilizing its infrastructure
building and implementation resources to construct towers for its own account is
a more cost-effective method of expanding its portfolio of owned towers. In the
first fiscal quarter of the fiscal year ending September 30, 1999, the Company
began focusing on opportunities to provide sources of recurring revenues. The
Company's build-to-suit program offers a turnkey solution to wireless carriers
and is designed to reduce carriers' capital expenditures and overhead associated
with the traditional methods of acquiring and owning their wireless networks. As
of May 13, 1999, 300 towers were under non-binding written or oral commitments
from four wireless carriers or network developers. In addition to the towers
subject to build-to-suit commitments, as of May 13, 1999, the Company owned or
had contracts to acquire 197 towers. There can be no assurance that the
build-to-suit commitments will result in the construction of towers, that the
Company will successfully enter into additional significant build-to-suit
agreements with any wireless carrier or group of carriers, that it will be able
to reach definitive agreements with the owners of towers not currently under
written contract
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<PAGE>
or develop the towers in a cost-effective manner. As the Company increasingly
focuses its resources on tower ownership, revenues from third parties generated
by its infrastructure building and implementation services operations are likely
to decline. Management believes that the decline in revenues from its
infrastructure building and implementation services operations will be offset
over time by the recurring revenue stream expected from tower ownership,
revenues from future tower acquisitions by the Company, revenues from towers the
Company is currently developing and building for its own account and revenues
from the towers the Company will develop and build for its own account in the
future.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO MARCH 31, 1998
The Company's revenues for the three-month period ended March 31, 1999 increased
approximately 61% to $18,319,000 from $11,401,000 for the same three-month
period in the prior year. The increase in revenues was primarily due to an
increased rollout of wireless infrastructure building and implementation
activities during the 1999 period and the results from business acquisitions
completed after March 31, 1998, accounted for as purchases.
Gross profit, excluding depreciation, for the three-month period ended March 31,
1999 increased approximately 85% to $5,733,000 from $3,107,000 for the same
three-month period in the prior year. Gross profit as a percentage of revenue
increased to 31.3% for the first three months ended March 31, 1999 from 27.3%
for the same three months of fiscal 1998. The increase in the gross profit
percentage is attributable to an increase in the labor content of revenues. The
increase in gross profit is primarily due to the increase in revenues coupled
with an improved margin.
Selling, general and administrative expenses for the three-month period ended
March 31, 1999 increased approximately 173% to $3,999,000 from $1,467,000 for
the same three-month period in the prior year. As a percentage of revenues,
selling general and administrative expenses increased to 21.8% in the three
months of ended March 31, 1999 compared to 12.9% in the same three months of
fiscal 1998. The increase in selling, general and administrative expenses is
attributable to the increase in revenues that required additional management and
administrative resources and an increase in staffing of the Company for the
build-to-suit and tower leasing programs, both of which did not exist in the
comparable period in the prior year.
Interest and financing expenses for the three-month period ended March 31, 1999
increased approximately 1098% to $551,000 from $46,000 for the same three-month
period in the prior year. The increase is due to borrowings made, the proceeds
of which have been used to acquire companies and towers (See " Liquidity and
Capital Resources").
Income taxes for the three-month period ended March 31, 1999 decreased
approximately 51% to $273,000 from $557,000 for the same three-month period in
the prior year. The Company's effective tax rate for the second quarter of
fiscal 1999 was approximately 43% compared to 35% in the same quarter of fiscal
1998. The increase in the effective tax rate is primarily the result of non-
deductible amortization expense of goodwill recognized in business combinations
accounted for as purchases.
SIX MONTHS ENDED MARCH 31, 1999 COMPARED TO MARCH 31, 1998
The Company's revenues for the six-month period ended March 31, 1999 increased
approximately 85% to $43,271,000 from $23,358,000 for the same six-month period
in the previous year. The increase in revenues was primarily due to an increased
rollout of wireless infrastructure building and implementation
-13-
<PAGE>
activities during the 1999 period and the results of business acquisitions
completed after March 31, 1998 and accounted for as purchases.
Gross profit, excluding depreciation, for the six-month period ended March 31,
1999 increased approximately 99% to $12,541,000 from $6,308,000 for the same
six-month period in the prior year. Gross profit as a percentage of revenue
increased to 29.0% for the first six months of the fiscal 1999 from 27.0% for
the same six months of fiscal 1998. The increase in the gross profit percentage
is attributable to an increase in the labor content of revenues. The increase
in gross profit is primarily due to the increase in revenues coupled with
improved margins.
Selling general and administrative expenses for the six-month period ended March
31, 1999 increased approximately 159% to $8,257,000 from $3,187,000 for the same
six-month period in the prior year. As a percentage of revenues, selling
general and administrative expenses increased to 19.1% in the first six months
of fiscal 1999 compared to 13.6% in the same three months of fiscal 1999. The
increase in selling general and administrative expenses is attributable to the
increase in revenues that required additional management and administrative
resources and an increase in staffing of the Company for the build-to-suit and
tower leasing programs, both of which did not exist in the comparable period in
the prior year
Interest and financing expenses for the six-month period ended March 31, 1999
increased approximately 1460% to $1,123,000 from $72,000 for the same six-month
period in the prior year. The increase is due to borrowings made, the proceeds
of which have been used to acquire companies and towers (See "Liquidity and
Capital Resources").
Income taxes for the six-month period ended March 31, 1999 decreased
approximately 16% to $883,000 from $1,057,000 for the same six-month period in
the prior year. The Company's effective tax rate for the first six months of
fiscal 1999 was approximately 43% compared to 35% in the same quarter of fiscal
1998. The increase is primarily the result of non-deductible amortization
expense of goodwill recognized in business combinations accounted for as
purchases.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1999, the Company had cash of $9,246,000 a decrease from September
30, 1998, of $85,000. Working capital was $24,448,000.
The Company used $2,099,000 of cash in its operations during the six months
ended March 31, 1999. Net income plus non-cash operating expenses were
$2,659,000 and $4,758,000 is reflected in the changes in operating assets and
liabilities. During the six months ended March 31, 1999, the Company used cash
of $6,583,000, net of acquired cash, to acquire businesses, and $22,658,000 to
purchase property and equipment, principally communications towers.
In October 1997, the Company sold 1,200,000 Units in its initial public offering
of securities and received net proceeds of approximately $7,493,000. Each unit
consisted of one share of common stock and one warrant to purchase a share of
common stock for $9.00. During the seven month transition period ended
September 30, 1998, 559,000 warrants were exercised resulting in net proceeds of
$4,788,000. During the six months ended March 31, 1999, nearly all of the
remaining warrants were exercised resulting in net proceeds of $7,291,000.
In May 1998, the Company issued $15,000,000 principal amount of 7% subordinated
convertible notes ("Subordinated Debt"). Net proceeds were $14,850,000. The
notes are convertible into 599,000 shares of common stock at $25.03 per share
until April 30, 2007. In connection with the Subordinated Debt, the Company
granted warrants to purchase 40,000 shares of common stock at $23 per share
until April 30, 2007. The Company has used the proceeds to purchase and build
communications towers for lease to others, and to acquire other enterprises.
On June 9, 1998, the Company signed a credit agreement with BankBoston, N.A.
whereby BankBoston, N.A. committed to providing $75,000,000 principal amount of
senior secured revolving credit (the "Credit Facility").
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<PAGE>
The Credit Facility allows the Company to purchase or construct communications
towers for use by third parties and acquire businesses. The Company's ability to
utilize the Credit Facility is determined by, among other criteria, its cash
flows generated from operations and from tower leasing. During the six months
ended March 31, 1999, the Company borrowed $31.5 million under the Credit
Facility. At March 31, 1999 the Company has $34.5 million available under the
Credit Facility, subject to projected cash flow to be derived from potential
transactions.
On October 30, 1998, the Company completed the acquisition of Teletronics
Management Services, Inc. ("Teletronics"). The acquisition was effected by
exchanging approximately 188,000 shares of common stock valued at approximately
$3.8 million, based upon the publicly traded price, $1.8 million in cash,
including $800,000 in distributions payable to former shareholders, and the
assumption of certain liabilities, for all outstanding shares of Teletronics.
The acquisition was accounted for using the purchase method for business
combinations, resulting in goodwill of approximately $5.0 million.
On October 22, 1998, the Company exercised its right to acquire certain
communications towers for $9.2 million, subject to regulatory approval. During
the six months ended March 31, 1999, the Company paid $736,000 towards the
purchase price. The Company received approval and consummated the transaction
in May 1999.
On November 10, 1998 the Company completed the acquisition of Summit
Communications, LLC ("Summit"), a Mississippi limited liability company which
engages in operations similar to those of the Company. The merger was effected
by exchanging 200,000 shares of common stock valued at approximately $4.1
million, based on the publicly traded price, $4.4 million in cash, and the
assumption of certain liabilities, for all membership interest in Summit. The
former members of Summit may also receive an additional 100,000 shares of common
stock, based on certain performance criteria during the three years following
the date of acquisition. The acquisition was accounted for using the purchase
method for business combinations, resulting in goodwill of approximately $8.0
million.
In December 1998, the Company paid $16.5 million as a deposit to acquire certain
communications towers. Closing was subject to regulatory approval. In
February 1999, approval was received and the Company completed the transaction
at an aggregate cost of approximately $17 million.
On February 4, 1999 the Company completed the acquisition of Cypress Real Estate
Services, Inc. ("Cypress"), a Florida corporation. The acquisition was effected
by exchanging approximately 15,000 shares of common stock valued at
approximately $424,000, based upon the publicly traded price, for all
outstanding shares of Cypress. The former shareholder of Cypress may also
receive additional shares of common stock, based on the number of towers, not to
exceed 1,000 towers, acquired or constructed by the Company, subject to certain
limitations and restrictions. The acquisition was accounted for using the
purchase method for business combinations with substantially all of the
purchase price allocated to goodwill.
On February 26, 1999 the Company completed the acquisition of Telecommunications
R. David ("R. David"), a Quebec, Canada company which engages in operations
similar to those of the Company. The acquisition was effected by exchanging
approximately $330,000 in cash, and the assumption of certain liabilities, for
all outstanding shares of R. David. The acquisition was accounted for using the
purchase method for business combinations resulting in goodwill of approximately
$350,000.
The Company's future cash requirements for fiscal 1999 and beyond will depend
primarily upon the level of wireless infrastructure building and implementation
undertaken by the Company, the level of working capital needed to generate the
revenues associated with such business plan, and acquisition opportunities. The
Company believes that revenues from operations and amounts available under the
Credit Facility noted will be adequate to satisfy its working capital
requirements at least through September 1999.
To date, the Company has derived substantially all of its revenues from sales in
the United States and Canada, and inflation has not had a significant effect on
the Company's business. The Company does not currently expect inflation to
adversely affect it in the future unless inflation increases significantly in
the United States or Canada. To date, the Company's activities in Brazil have
been denominated in Canadian currency.
-15-
<PAGE>
On May 17, 1999, the Company entered into a definitive agreement with
Spectrasite Holdings, Inc. (Spectrasite), under which Westower will merge with a
subsidiary of Spectrasite. Under the terms of the agreement, Westower
shareholders will receive 1.81 shares of Spectrasite common stock for each
Westower share, and Westower will become a wholly-owned subsidiary of
Spectrasite. The merger is subject to the approval of Westower's shareholders
and the appropriate regulatory agencies as well as other customary closing
conditions. There can be no assurance that the merger will be consummated.
The Company is currently in negotiations with certain tower construction
companies concerning acquisition by Westower. The Company is also in
negotiation with certain third parties concerning the acquisition of wireless
communication towers, and with a financial institution to arrange financing for
the wireless communication tower purchases, should the negotiations conclude
successfully. None of the negotiations are finalized and there is no assurance
that the Company will be successful in concluding these negotiations or if the
Company is successful, that the acquisitions will not be dilutive to existing
shareholders.
YEAR 2000 COMPLIANCE
The Company is aware of the issues associated with the Year 2000 as it relates
to information systems. In September 1998, independent consultants completed a
review of the Company's software and hardware. Pursuant to recommendations made
by the consultants, the Company replaced a few personal computers. The
Company's total expenditure to date for the Year 2000 compliance is less that
$50,000. The Year 2000 is not expected to have a material impact on the
Company's current information systems because its current software is either
already Year 2000 compliant or required changes are not expected to be
significant. The Company has not conducted a survey of its customers or vendors
to ascertain their Year 2000 readiness. Based on the nature of the Company's
business, and the existence of alternate vendors, however, the Company
anticipates that it is not likely to experience material business interruption
due to the potential adverse impact of the Year 2000 on its vendors. As a
result, the Company does not anticipate that incremental expenditures to address
Year 2000 compliance will be material to the Company's liquidity, financial
position or results of operations.
ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". Among other
provision, SFAS No. 133 requires that entities recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. Gains and losses resulting from changes in the
fair values of those derivatives would be accounted for depending on the use of
the derivative and whether it qualifies for hedge accounting. SFAS No. 133
becomes effective for the Company beginning October 1, 1999. Management has not
yet evaluated the effects that the adoption of SFAS No. 133 will have on its
reported financial position or results of operations.
ITEM 3- QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in our risk exposure from the period
reported in our Form 10-KSB for the Transition Period ended September 30, 1998.
-16-
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
The Company's subsidiary CNG Communications, Inc. ("CNG") is a
defendant in an action entitled Commercial Labor Management, Inc.,
Mark J. Richardson and Edward Torres v. CNG Communications, Inc. and
Paul Bishop, No. 99-3192, United States District Court for the
Central District of California. The Company acquired CNG in
September 1998. Plaintiffs allege that they had a pre-existing
agreement to acquire CNG that was breached when the Company acquired
CNG by merger. The Plaintiffs are seeking the recovery of damages in
an unspecified amount. CNG is contesting the matter vigorously and
believes that the allegations are without merit.
ITEM 2. Changes in Securities and Use of Proceeds.
During the three months ended March 31, 1999, the Company issued
15,151 shares of common stock as consideration for all of the issued
and outstanding shares of common stock of Cypress Real Estate
Services, Inc., a Florida corporation. In respect of this issuance,
the Company relied on the exemption from registration provided in
Section 4(2) of the Securities Act of 1933, as amended.
ITEM 3. Defaults Upon Senior Securities.
None
ITEM 4. Submission of Matters to a Vote of Security Holders.
On March 10, 1999, the Company conducted its Annual Meeting of
Shareholders pursuant to due notice. A quorum being present, either
in person or by proxy, the shareholders voted on the following
matters:
1. To elect ten directors to serve until the next Annual Meeting
of Shareholders and until their successors have been duly
elected and qualified;
2. To consider a proposal to amend the Articles of Incorporation,
increasing the number of shares of common stock that the
Company is authorized to issue from 10,000,000 shares to
25,000,000 shares;
<PAGE>
3. To consider a proposal to adopt the Company's 1998 Stock
Incentive Compensation Plan; and
4. To consider a proposal to ratify the appointment of
PricewaterhouseCoopers LLP as the Company's independent
accountants for the fiscal year ending September 30, 1999.
No other matters were voted upon. The votes cast are set forth
below.
1. The following individuals were elected to the Company's Board
of Directors:
Michael J. Anderson, Seth A. Buechley, Ronald P. Erickson,
Donald A. Harris, S. Roy Jeffrey, Peter Lucas,
Calvin J. Payne, Robert A. Shuey, III, Leonard M. Tannenbaum,
and Bruce E. Toll.
2. Approval of the amendment to the Articles of Incorporation.
For Against Abstain
--- ------- -------
6,751,710 69,705 425
3. Adoption of the 1998 Stock Incentive Compensation Plan:
For Against Abstain
--- ------- -------
4,872,842 62,935 595
4. Ratification of PricewaterhouseCoopers as independent
accountants:
For Against Abstain
--- ------- -------
6,817,815 2,700 1,325
ITEM 5. Other Information.
None.
<PAGE>
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Number Description
------ -----------
3.1 Amended and Restated Articles of Incorporation.
10.1 Amendment No. 1, dated August 21, 1998, to Credit
Agreement, dated June 9, 1998, with BankBoston N.A.
and BankBoston Securities Inc.
10.2 Amendment No. 2, dated December 17, 1998, to Credit
Agreement, dated June 9, 1998, with BankBoston N.A. and
BankBoston Securities Inc.
10.3 Amendment No. 3, dated March 18, 1999, to Credit
Agreement, dated June 9, 1998, with BankBoston N.A. and
BankBoston Securities Inc.
27 Financial Data Schedule.
(b) Reports on Form 8-K.
1. Form 8-K/A (Amendment No. 1), dated January 25, 1999, relating
to Item 7 (Financial Statements, Pro Forma Financial
Information and Exhibits) containing audited financial
statements of Summit Communications, LLC and pro forma
financial information.
2. Form 8-K, dated March 8, 1999, relating to Item 2 (Acquisition
or Disposition of Assets) relating to the acquisition of
certain telecommunications towers from five affiliates of Koch
Industries, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Date: May 24, 1999 By: /s/ Peter Lucas
---------------------
Peter Lucas
Chief Financial Officer
<PAGE>
Exhibit 3.1
AMENDED
ARTICLES OF INCORPORATION
WESTOWER CORPORATION
ARTICLE I
NAME
The name of this corporation is Westower Corporation. The corporation is
incorporated under Title 23B RCW, and has perpetual existence.
ARTICLE II
SHARES
2.1 Authorized Shares. The number of shares the corporation is authorized
to issue is 25,000,000 shares of Common Stock, having a par value of $.01 per
share.
2.2 Consideration For Shares. Shares may be issued for consideration
consisting of any tangible or intangible property or benefit to the corporation,
including cash, promissory notes, services performed, contracts for services to
be performed, or other securities of the corporation, as may be authorized by
the board of directors. The board of directors may determine that the
consideration received or to be received for the shares to be issued is
adequate; when the corporation has received the consideration so determined, the
shares issued therefor will be fully paid and nonassessable.
2.3 No Cumulative Voting The shareholders are not entitled to cumulate
votes at any election of directors.
2.4 No Preemptive Right. The shareholders do not have any preemptive right
to acquire unissued shares or securities convertible into or carrying a right to
subscribe for or acquire shares.
<PAGE>
ARTICLE III
REGISTERED OFFICE AND AGENT
The street address of the corporation's initial registered office is 1420
Fifth Avenue, Suite 4100, Seattle, Washington 98101-2338, and the name of its
initial registered agent at that office is LPSL Corporate Services, Inc.
ARTICLE IV
INCORPORATOR
The incorporator is LPSL Corporate Services, Inc., 1420 Fifth Avenue,
Suite 4100, Seattle, Washington 98101-2338.
ARTICLE V
DIRECTORS
The number of directors will be fixed, and may be increased or decreased,
from time to time by the process specified in the bylaws. The names and
addresses of the individuals who are to serve as initial directors are: Calvin
Jay Payne, Stanley Roy Jeffrey and Walter Friesen.
ARTICLE VI
LIMITATION OF DIRECTORS' LIABILITY
Any personal liability of a director to the corporation or its
shareholders for monetary damages for conduct as a director is eliminated,
except for any liability for any acts or omissions that involve intentional
misconduct by a director or a knowing violation of law by a director, for
conduct violating RCW 23B.08.310, for any transaction from which the director
will personally receive a benefit in money, property, or services to which the
director is not legally entitled, or for any act or omission occurring prior to
the date when this Article becomes effective. If after this Article becomes
effective the Washington Business Corporation Act is amended to authorize
further elimination or limitation of liability of a director, then, upon the
effective date of the amendment, the liability of a director shall be further
eliminated and limited without further act to the fullest extent so authorized.
No amendment or repeal of these Articles of Incorporation shall reduce the
extent of any elimination or limitation of liability of a director existing
immediately prior to the amendment or repeal.
<PAGE>
ARTICLE VII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
7.1 Right to Indemnification. EACH INDIVIDUAL (including an individual's
personal representative) who was or is made a party or is threatened to be made
a party to, or is otherwise involved (including, without limitation, as a
witness) in, any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative, investigative or by or in the right of
the corporation, or otherwise (a "Proceeding") because the individual or another
individual of whom the individual is a personal representative:
(a) is or was a director or officer of the corporation or any
predecessor entity, or
(b) being or having been such a director or officer, is or was
serving at the request of the corporation or any predecessor entity as a
director, officer, partner, trustee, employee, agent, or in any other
relationship or capacity whatsoever, of any other foreign or domestic
corporation, partnership, joint venture, employee benefit plan or trust or
other trust, enterprise or other private or governmental entity, agency,
board, commission, body or other unit whatsoever ((a) and (b)
collectively, an "Indemnitee")
SHALL BE INDEMNIFIED AND HELD HARMLESS by the corporation to the fullest extent
not prohibited by the Washington Business Corporation Act as the same exists or
may hereafter be amended (but, in the case of any amendment, only to the extent
that the amendment does not prohibit the corporation from providing broader
indemnification rights than prior to the amendment) IF the Indemnitee acted in
good faith and reasonably believed the Indemnitee's conduct was in the
corporation's best interests (in the case of conduct in the Indemnitee's
official capacity with the corporation) and (in all other cases) was at least
not opposed to the corporation's best interests and is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances
("Corporation's Standards for Indemnification"), WITHOUT REGARD TO the
limitations in RCW 23B.08.510 through 23B.08.550, AND WHETHER OR NOT the
Indemnitee met the standard of conduct set forth in RCW 23B.08.510 or any other
standard of conduct set forth in RCW 23B.08.500 through RCW 23B.08.580,
<PAGE>
AGAINST ALL DIRECT AND INDIRECT EXPENSES, LIABILITIES AND LOSSES (including but
not limited to attorneys fees, judgments, settlements, penalties, fines, ERISA
and employee benefit plan and other excise taxes and other taxes and penalties,
environmental and remediation expenses, settlements, penalties and fines, and
other adverse effects) that are actually incurred or suffered by the Indemnitee
in connection with the Proceeding (whether or not the basis of the Proceeding is
alleged conduct, action or inaction in an official capacity as a director,
officer, partner, trustee, employee, agent, or in any other relationship or
capacity whatsoever).
The indemnification granted in this Article is a contract right and
includes the right to payment by, and the right to receive reimbursement from,
the corporation of all the Indemnitee's expenses as they are incurred, including
advances in advance of final disposition of the Proceeding. The term "expenses"
as used in this Article includes without limitation all counsel and attorneys'
fees and costs.
Notwithstanding the foregoing, an advance for expenses incurred by an
Indemnitee who is a party to a Proceeding because the Indemnitee is or was a
director of the corporation or any predecessor entity shall be made in advance
of final disposition of the Proceeding only upon receipt by the corporation of
(i) a written undertaking (hereinafter an "undertaking") executed personally or
on the Indemnitee's behalf to repay the advance if and to the extent it is
ultimately determined by order of a court having jurisdiction (which
determination shall become final upon expiration of all rights to appeal,
hereinafter a "final adjudication") that the Indemnitee is not entitled to be
indemnified for such expenses under this Article, and (ii) a written affirmation
by the Indemnitee of the Indemnitee's good faith belief that the Indemnitee has
met the Corporation's Standards for Indemnification as defined in this Article
for the amount claimed.
The undertaking must be an unlimited general obligation of the Indemnitee,
unsecured and without reference to financial ability to make repayment.
7.2 Court-Ordered Indemnification or Advance: Presumption. If any claim
for indemnification or advance of expenses under Section 7.1 of this Article is
not paid in full by the corporation within 30 days after a written claim has
been received by the corporation, the Indemnitee may at any time thereafter
apply for indemnification or advance of expenses to the court conducting the
Proceeding or to another court of competent jurisdiction. If the Indemnitee is
successful in whole or in part in any such application, the corporation shall
also pay to Indemnitee all the Indemnitee's expenses in connection with the
application.
<PAGE>
The Indemnitee shall be presumed to be entitled to indemnification and advances
of expenses under this Article upon the corporation's receipt of Indemnitee's
written claim (and in any application to a court for indemnification or advance
of expenses), and thereafter the corporation shall have the burden of proof to
overcome that presumption.
Neither the fact that the corporation (including its board of directors, special
legal counsel or its shareholders under RCW 23B.08.550, or otherwise) did, nor
the fact that the corporation (including its board of directors, special legal
counsel or its shareholders under RCW 23B.08.550, or otherwise) did not, make a
determination that the Indemnitee is or is not entitled to indemnification or
advance of expenses, shall be a defense to the application or create a
presumption that the Indemnitee is not so entitled.
If the Indemnitee applies to a court having jurisdiction for determination of
the right to indemnity or advance of expenses, or amount thereof, the court's
determination shall become final upon expiration of all rights to appeal, and
such a final adjudication shall supersede any other determination made in
accordance with RCW 23B.08.550, or otherwise.
7.3 Nonexclusivity of Rights, Severability. The right to indemnification
(including but not limited to payment, reimbursement and advances of expenses)
granted in this Article is not exclusive of any other rights that any individual
may have or hereafter acquire under any statute, common law, provision of the
Articles of Incorporation or Bylaws of the corporation, agreement, vote or
resolution of shareholders or disinterested directors, or otherwise.
Notwithstanding any amendment to or repeal of this Article, any Indemnitee shall
be entitled to indemnification and advance of expenses in accordance with the
provisions of this Article with respect to any conduct, acts or omissions of the
Indemnitee occurring prior to the amendment or repeal. If any provision or term
of this Article is determined to be void or unenforceable for any reason, the
remaining provisions and terms shall remain in full force and effect.
7.4 Insurance, Contracts and Funding:. The corporation may purchase and
maintain insurance, at its expense, to protect itself and any individual
(including an individual's personal representative) who is or was a director,
officer, employee or agent of the corporation or any predecessor entity or who
being or having been such a director or officer, is or was serving at the
request of the corporation or any predecessor entity as a director, officer,
partner, trustee, employee, agent, or in any other relationship or capacity
whatsoever, of any other foreign or domestic corporation, partnership, joint
venture, employee benefit plan or trust or other trust, enterprise or other
private or governmental entity, agency, board, commission, body or other unit
whatsoever, against any expense, liability or loss, whether or not the
corporation would have
<PAGE>
power to indemnify the individual against the same expense, liability or loss
under the Washington Business Corporation Act, or RCW 23B.08.510 or 23B.08.520,
or otherwise. The corporation may grant indemnity, and may enter into contracts
granting indemnity, to any such individual, whether or not in furtherance of the
provisions of this Article, and may create trust funds, grant security interests
and use other means (including, without limitation, letters of credit) to secure
and ensure the payment of indemnification amounts.
7.5 Partial Indemnification. If an Indemnitee is entitled to
indemnification by the corporation for some or a portion of expenses,
liabilities or losses, but not for the total amount thereof, the corporation
shall nevertheless indemnify the Indemnitee for the portion of the expenses,
liabilities and losses to which the Indemnitee is entitled.
7.6 Successors and Assigns. All obligations of the corporation to
indemnify any Indemnitee: (i) are binding upon all successors and assigns of the
corporation (including any transferee of all or substantially all of its assets
and any successor by merger or otherwise by operation of law), (ii) are binding
on and inure to the benefit of the spouse, heirs, personal representatives and
estate of the Indemnitee, and (iii) shall continue as to an Indemnitee who has
ceased to be a director, officer, partner, trustee, employee, or agent (or other
relationship or capacity) included in the definition of Indemnitee in Section
7.1 of this Article. The corporation shall not effect any sale or other transfer
of substantially all of its assets, merger, consolidation or other
reorganization unless the purchaser, transferee, successor or surviving entity
(as the case may be) agrees in writing to assume all such obligations of the
corporation.
ARTICLE VIII
BYLAWS
The board of directors may adopt, amend or repeal the bylaws, or adopt new
bylaws, subject to the reserved power of the shareholders to amend or repeal the
bylaws, or adopt new bylaws, and in amending or repealing a particular bylaw to
provide expressly that the board of directors may not amend or repeal that
bylaw.
<PAGE>
ARTICLE IX
AMENDMENT OF ARTICLES OF INCORPORATION
The corporation reserves the right from time to time to amend, alter,
change or repeal any and all provisions of its Articles of Incorporation by
majority vote of all votes entitled to be cast by the holders of the then
outstanding shares of Common Stock, in any manner now or hereafter prescribed or
permitted by statute. All rights of the shareholders, directors, and officers of
the corporation are granted subject to this reservation.
IN WITNESS WHEREOF, the undersigned has executed these Articles on June 6,
1997.
LPSL CORPORATE SERVICES; INC
By: /s/ Hartley Paul
-------------------------------
Hartley Paul, Vice President
<PAGE>
Exhibit 10.1
WESTOWER HOLDINGS LTD.
WESTOWER COMMUNICATIONS LTD.
CREDIT AGREEMENT
Amendment No. 1
This Agreement, dated as of August 21, 1998 (this "Agreement"), is among
Westower Corporation, a Washington corporation, its subsidiaries set forth on
the signature pages hereof, including Westower Holdings Ltd., a Wyoming
corporation (the "U.S. Borrower"), and Westower Communications Ltd., a British
Columbia, Canada corporation (the "Canadian Borrower") (together with the U.S.
Borrower, the "Borrowers") and BankBoston, N.A., as Agent for itself and the
other Lenders under the Credit Agreement (as defined below). The parties agree
as follows:
1. Credit Agreement; Definitions. This Agreement amends the Credit
Agreement dated as of June 9, 1998 among the parties hereto and the Lenders (as
in effect prior to giving effect to this Agreement, the "Credit Agreement").
Terms defined in the Credit Agreement as amended hereby (the "Amended Credit
Agreement") and not otherwise defined herein are used with the meaning so
defined.
2. Amendment of Credit Agreement. Effective upon the date hereof, the
Credit Agreement is amended as follows:
2.1. Amendment of Section 1.158. The definition of "Tower Company"
in Section 1.158 of the Credit Agreement is amended to read in its
entirety as follows:
"1.158. 'Tower Company' means a corporation or any other
entity engaged primarily in the same types of business as the
Company and its Subsidiaries described in Section 6.2.1 of the
Credit Agreement."
2.2. Amendment of Section 6.4.4. Section 6.4.4 of the Credit
Agreement is amended by replacing the words "15 Banking Days'" with the
words "10 Banking Days'".
3. Consent. Pursuant to Section 6.9.5(d) of the Credit Agreement, the
Lenders consent to the acquisition by the Company of (a) Standby Services, Inc.
pursuant to the Share Exchange Agreement, dated on or about August 31, 1998, (b)
CNG Communications, Inc. ("CNG"), pursuant to the Stock Purchase Agreement,
dated on or about August 31, 1998 and (c) American Television Relay, a business
unit of MCI Communications Corporation ("MCI"), pursuant to the
<PAGE>
Asset Purchase Agreement, dated on or about August 31, 1998, between CNG and MCI
(the "Proposed Acquisitions").
4. Waiver. The Lenders hereby waive the requirement that the Company
deliver (a) the Tower Acquisition Report, as provided in Section 6.4.4 of the
Credit Agreement, 15 Business Days prior to the Proposed Acquisitions and (b)
certain computations, as provided in Section 6.9.5(a) of the Credit Agreement,
10 Banking Days prior to the Proposed Acquisitions; provided, that the Company
shall have delivered such report and computations to the Lenders prior to the
effectiveness of this Agreement.
5. Representation and Warranty. In order to induce the Agent to enter into
this Agreement, each of the Borrowers and the Guarantors jointly and severally
represents and warrants that, after giving effect to this Agreement, no Default
exists.
6. General. The Amended Credit Agreement and all of the Credit Documents
are each confirmed as being in full force and effect. This Agreement, the
Amended Credit Agreement and the other Credit Documents referred to herein or
therein constitute the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior and current
understandings and agreements, whether written or oral. Each of this Agreement
and the Amended Credit Agreement is a Credit Document and may be executed in any
number of counterparts, which together shall constitute one instrument, and
shall bind and inure to the benefit of the parties and their respective
successors and assigns, including as such successors and assigns all holders of
any Credit Obligation. This Agreement shall be governed by and construed in
accordance with the laws (other than the conflict of law rules) of The
Commonwealth of Massachusetts.
[The rest of this page is left intentionally blank]
<PAGE>
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first written above.
WESTOWER CORPORATION
By /s/ Peter Lucas
-----------------------------------
Title: Chief Financial officer
WESTOWER HOLDINGS LTD.
WESTOWER COMMUNICATIONS LTD.
MJA COMMUNICATIONS CORP.
NATIONAL TOWER SERVICE LTD.
RALPH'S RADIO INC.
WESTERN TELECOM CONSTRUCTION LTD
WESTOWER COMMUNICATIONS INC.
WESTOWER LEASING CANADA INC.
WTC HOLDINGS INC.
WTC LEASING LTD. PARTNERSHIP
By 582570 ALBERTA LTD., its general
partner 3479021 CANADA INC.
By /s/ Peter Lucas
-----------------------------------
As an authorized officer of each of the
foregoing corporations
BANKBOSTON, N.A.,
as Agent under the Credit Agreement
By /s/ Lenny Mason
-----------------------------------
Title: Vice President
<PAGE>
The foregoing amendment is approved by the
Lenders signing below:
PARIBAS
By /s/ Salo Aizendero
-----------------------------------
Title: Vice President
By /s/ William B Schink
-----------------------------------
Title: Director
PARIBAS BANK OF CANADA
By /s/ James Goodall
-----------------------------------
Title: Managing Director
By /s/ William R. Jeffrey
-----------------------------------
Title: Director
FLEET NATIONAL BANK
By Tanya M. Crossley
-----------------------------------
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By Thomas G. Gunder
-----------------------------------
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By Michael K. McShane
-----------------------------------
Title: Senior Vice President
<PAGE>
Exhibit 10.2
WESTOWER HOLDINGS LTD.
WESTOWER COMMUNICATIONS LTD.
CREDIT AGREEMENT
Amendment No. 2
This Agreement, dated as of December 17, 1998 (this "Agreement"), is among
Westower Corporation, a Washington corporation, its subsidiaries set forth on
the signature pages hereof, including Westower Holdings Ltd., a Wyoming
corporation (the "U.S. Borrower"), and Westower Communications Ltd., a British
Columbia, Canada corporation (the "Canadian Borrower") (together with the U.S.
Borrower, the "Borrowers") and BankBoston, N.A., as Agent for itself and the
other Lenders under the Credit Agreement (as defined below). The parties agree
as follows:
7. Credit Agreement; Definitions. This Agreement amends the Credit
Agreement dated as of June 9, 1998 among the parties hereto and the Lenders (as
in effect prior to giving effect to this Agreement, the "Credit Agreement").
Terms defined in the Credit Agreement as amended hereby (the "Amended Credit
Agreement") and not otherwise defined herein are used with the meaning so
defined.
8. Amendment of Credit Agreement. Effective upon the date hereof, Section
6.4 of the Credit Agreement is amended so that the paragraph immediately prior
to Section 6.4.1 reads in its entirety as follows:
"6.4. Financial Statements and Reports. Each of the Company and its
Subsidiaries shall maintain a system of accounting in which correct
entries shall be made of all transactions in relation to their business
and affairs in accordance with generally accepted accounting practice. The
fiscal year of the Company and its Subsidiaries shall end on September 30
in each year and the fiscal quarters of the Company and its Subsidiaries
shall end on March 31, June 30, September 30 and December 31 in each
year."
9. Consent. Pursuant to Section 6.9.5(d) of the Credit Agreement, the
Lenders consent to the acquisition by the Company of Koch Industries, Inc.
pursuant to the Asset Purchase Agreement, to be dated on or about December 24,
1998 (the "Proposed Acquisition").
10. Waiver. The Lenders waive the requirement that the Company deliver
certain computations, as provided in Section 6.9.5(a) of the Credit Agreement,
10 Banking Days prior to the Proposed Acquisition; provided that the Company
shall have delivered such report and computations to the Lenders prior to the
effectiveness of this Agreement.
<PAGE>
11. Representation and Warranty. In order to induce the Agent to enter
into this Agreement, each of the Borrowers and the Guarantors jointly and
severally represents and warrants that, after giving effect to this Agreement,
no Default exists.
12. General. The Amended Credit Agreement and all of the Credit Documents
are each confirmed as being in full force and effect. This Agreement, the
Amended Credit Agreement and the other Credit Documents referred to herein or
therein constitute the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior and current
understandings and agreements, whether written or oral. Each of this Agreement
and the Amended Credit Agreement is a Credit Document and may be executed in any
number of counterparts, which together shall constitute one instrument, and
shall bind and inure to the benefit of the parties and their respective
successors and assigns, including as such successors and assigns all holders of
any Credit Obligation. This Agreement shall be governed by and construed in
accordance with the laws (other than the conflict of law rules) of The
Commonwealth of Massachusetts.
[The rest of this page is intentionally blank]
<PAGE>
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first written above.
WESTOWER CORPORATION
By /s/ Peter Lucas
-----------------------------------
Title: Chief Financial officer
WESTOWER HOLDINGS LTD.
WESTOWER COMMUNICATIONS LTD.
MJA COMMUNICATIONS CORP.
NATIONAL TOWER SERVICE LTD.
RALPH'S RADIO INC.
WESTERN TELECOM CONSTRUCTION LTD
WESTOWER COMMUNICATIONS INC.
WESTOWER LEASING CANADA INC.
WTC HOLDINGS INC.
WTC LEASING LTD. PARTNERSHIP
By 582570 ALBERTA LTD., its general
partner 3479021 CANADA INC.
By /s/ Peter Lucas
-----------------------------------
As an authorized officer of each of the
foregoing corporations
BANKBOSTON, N.A.,
as Agent under the Credit Agreement
By /s/ Lenny Mason
-----------------------------------
Title: Vice President
<PAGE>
The foregoing amendment is approved by the
Lenders signing below:
PARIBAS
By /s/ Salo Aizendero
-----------------------------------
Title: Vice President
By /s/ William B Schink
-----------------------------------
Title: Director
PARIBAS BANK OF CANADA
By /s/ James Goodall
-----------------------------------
Title: Managing Director
By /s/ William R. Jeffrey
-----------------------------------
Title: Director
FLEET NATIONAL BANK
By Tanya M. Crossley
-----------------------------------
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By Thomas G. Gunder
-----------------------------------
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By Michael K. McShane
-----------------------------------
Title: Senior Vice President
<PAGE>
Exhibit 10.3
WESTOWER HOLDINGS LTD.
WESTOWER COMMUNICATIONS LTD.
CREDIT AGREEMENT
Amendment No. 3
This Agreement, dated as of March 18, 1999 (this "Agreement"), is among
Westower Corporation, a Washington corporation, its subsidiaries set forth on
the signature pages hereof, including Westower Holdings Ltd., a Wyoming
corporation (the "U.S. Borrower"), and Westower Communications Ltd., a British
Columbia, Canada corporation (the "Canadian Borrower") (together with the U.S.
Borrower, the "Borrowers") and BankBoston, N.A., as Agent for itself and the
other Lenders under the Credit Agreement (as defined below). The parties agree
as follows:
13. Credit Agreement; Definitions. This Agreement amends the Credit
Agreement dated as of June 9, 1998 among the parties hereto and the Lenders (as
in effect prior to giving effect to this Agreement, the "Credit Agreement").
Terms defined in the Credit Agreement as amended hereby (the "Amended Credit
Agreement") and not otherwise defined herein are used with the meaning so
defined.
14. Amendment of Credit Agreement. Effective upon the date all the
conditions set forth in Section 4 hereof are satisfied (the "Amendment Date"),
which conditions must be satisfied no later than March 31, 1999, the Credit
Agreement is amended as follows:
14.1. Amendment of Section 1.157 and Related Provisions. The
definition of "Tower Cash Flow Availability" in Section 1.157 of the
Credit Agreement is amended to read in its entirety as follows: "1.157.
Intentionally Omitted."; the phrase "Tower Cash Flow Availability"
appearing in Sections 1.45, 2.1.1, 2.2.1 and 2.4.1 of the Credit
Agreement, in Exhibit 6.4 to the Credit Agreement and in any other
provisions of the Credit Documents is deleted; and all such Sections,
Exhibit and provisions are amended to make other conforming changes so
that such Sections, Exhibit and provisions read appropriately without
reference to "Tower Cash Flow Availability".
14.2. Amendment of Sections 6.6.7, 6.6.8 and 6.6.14. Each of
Sections 6.6.7, 6.6.8 and 6.6.14 is amended by replacing the amount
"$2,500,000" with "$6,000,000" and Exhibit 6.4 is amended to make
conforming changes.
15. Representation and Warranty. In order to induce the Agent to enter
into this Agreement, each of the Borrowers and the Guarantors jointly and
severally represents and warrants that, after giving effect to this Agreement,
no Default exists.
<PAGE>
16. Conditions. The effectiveness of this Agreement shall be subject to
the satisfaction of the following conditions, which conditions must be satisfied
no later than March 31, 1999 or this Agreement shall terminate:
16.1. Officer's Certificate. The representations and warranties of
the Company and its Subsidiaries set forth or incorporated by reference
herein shall be true and correct as of the Amendment Date as if originally
made on and as of the Amendment Date; no Default shall have occurred on or
prior to the Amendment Date or hereby; and the Agent shall have received a
certificate to these effects signed by a Financial Officer in the event
the Amendment Date occurs after the date hereof.
16.2. Payment of Fees and Expenses. The Company shall have paid to
the Agent (a) for the account of the Lenders in accordance with their
respective Commitments an amendment fee equal to 0.15% of the aggregate
Commitments and (b) the legal fees and expenses of the Agent with respect
to the Credit Documents accrued and billed on or prior to the Amendment
Date.
17. General. The Amended Credit Agreement and all of the Credit Documents
are each confirmed as being in full force and effect. This Agreement, the
Amended Credit Agreement and the other Credit Documents referred to herein or
therein constitute the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior and current
understandings and agreements, whether written or oral. Each of this Agreement
and the Amended Credit Agreement is a Credit Document and may be executed in any
number of counterparts, which together shall constitute one instrument, and
shall bind and inure to the benefit of the parties and their respective
successors and assigns, including as such successors and assigns all holders of
any Credit Obligation. This Agreement shall be governed by and construed in
accordance with the laws (other than the conflict of law rules) of The
Commonwealth of Massachusetts.
[The rest of this page is intentionally blank]
<PAGE>
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first written above.
WESTOWER CORPORATION
By /s/ Peter Lucas
-----------------------------------
Title: Chief Financial officer
WESTOWER HOLDINGS LTD.
WESTOWER COMMUNICATIONS LTD.
MJA COMMUNICATIONS CORP.
NATIONAL TOWER SERVICE LTD.
RALPH'S RADIO INC.
WESTERN TELECOM CONSTRUCTION LTD
WESTOWER COMMUNICATIONS INC.
WESTOWER LEASING CANADA INC.
WTC HOLDINGS INC.
WTC LEASING LTD. PARTNERSHIP
By 582570 ALBERTA LTD., its general
partner 3479021 CANADA INC.
By /s/ Peter Lucas
-----------------------------------
As an authorized officer of each of the
foregoing corporations
BANKBOSTON, N.A.,
as Agent under the Credit Agreement
By /s/ Lenny Mason
-----------------------------------
Title: Vice President
<PAGE>
The foregoing amendment is approved by the
Lenders signing below:
PARIBAS
By /s/ Salo Aizendero
-----------------------------------
Title: Vice President
By /s/ William B Schink
-----------------------------------
Title: Director
PARIBAS BANK OF CANADA
By /s/ James Goodall
-----------------------------------
Title: Managing Director
By /s/ William R. Jeffrey
-----------------------------------
Title: Director
FLEET NATIONAL BANK
By Tanya M. Crossley
-----------------------------------
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By Thomas G. Gunder
-----------------------------------
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By Michael K. McShane
-----------------------------------
Title: Senior Vice President
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED
FINANCIAL STATEMENTS OF WESTOWER CORPORATION FOR THE THREE AND SIX-MONTH PERIOD
ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
DOCUMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 6-MOS<F1> 6-MOS<F1>
<FISCAL-YEAR-END> SEP-30-1999 SEP-30-1998
<PERIOD-START> OCT-1-1998 OCT-1-1997
<PERIOD-END> MAR-31-1999 MAR-31-1998
<CASH> 9,246,000 6,409,000
<SECURITIES> 0 0
<RECEIVABLES> 16,711,000 6,730,000
<ALLOWANCES> 0 0
<INVENTORY> 2,920,000 1,269,000
<CURRENT-ASSETS> 36,847,000 17,631,000
<PP&E> 32,887,000 5,892,000
<DEPRECIATION> 2,358,000 1,525,000
<TOTAL-ASSETS> 106,662,000 24,166,000
<CURRENT-LIABILITIES> 0 7,578,000
<BONDS> 48,067,000 806,000
0 0
0 0
<COMMON> 84,000 61,000
<OTHER-SE> 44,816,000<F2> 13,644,000<F3>
<TOTAL-LIABILITY-AND-EQUITY> 106,662,000 24,166,000
<SALES> 0 0
<TOTAL-REVENUES> 43,271,000 23,358,000
<CGS> 0 0
<TOTAL-COSTS> 30,730,000 17,050,000
<OTHER-EXPENSES> 9,793,000 3,448,000
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,123,000 72,000
<INCOME-PRETAX> 2,029,000 3,016,000
<INCOME-TAX> 883,000 1,057,000
<INCOME-CONTINUING> 1,146,000 1,959,000
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,146,000 1,959,000
<EPS-BASIC> 0.14 0.33
<EPS-DILUTED> 0.13 0.29
<FN>
<F1>THE COMPARATIVE FINANCIAL INFORMATION CONTAINED IN THIS SCHEDULE HAS BEEN
RESTATED TO REFLECT THE OCTOBER 28, 1997 MERGER WITH WESTERN TELECOM
CONSTRUCTION LTD., THE MAY 29, 1998 MERGER WITH MJA COMMUNICATIONS CORP., AND
THE AUGUST 31, 1998 MERGER WITH STANDBY SERVICES, INC., ALL OF WHICH WERE
ACCOUNTED FOR AS POOLINGS-OF-INTERESTS.
<F2>OTHER EQUITY OF $44,816,000 AT MARCH 31, 1999 IS COMPRISED OF ADDITIONAL
PAID-IN CAPITAL OF $39,488,000, ACCUMULATED OTHER COMPREHENSIVE INCOME OF
$(482,000) AND RETAINED EARNINGS OF $5,810,000.
<F3>DATA TO COME
</FN>
</TABLE>
