<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ______________
Commission File Number ________
PINNACLE HOLDINGS INC.
Incorporated in Delaware I.R.S. Employer Identification No. 65-0652634
1549 Ringling Blvd., 3rd Floor, Sarasota, Florida 34236
Telephone: (941) 364-8886
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No X (The Company
-------- ------
has not been subject to such filing requirements for the past 90 days.).
At June 30, 1998, Registrant had outstanding 202,500 shares of $.001 par value
Class A Common Stock; 12,000 shares of $.001 par value Class B Common Stock;
40,000 shares of $.001 par value Class D Common Stock; and 174,766 shares of
$.001 par value Class E Common Stock
<PAGE>
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
----
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of December 31, 1997 and June 30, 1998 1
Consolidated Statements of Operations for the six months ended
June 30, 1998 and 1997 2
Consolidated Statement of Changes in Stockholders' Equity 3
Consolidated Statements of Cash Flows for the six months ended
June 30, 1998 and 1997 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 6-8
Item 3. Not applicable
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Items
2-5. Not Applicable
Item 6. Exhibit and Reports on Form 8-K 9
SIGNATURES
EXHIBIT INDEX 10
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
PINNACLE HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,693,923 $ 2,715,465
Accounts receivable, less allowance for doubtful accounts of $70,000 and
$195,000, respectively 1,577,575 2,139,752
Prepaid expenses and other current assets 1,037,447 1,115,142
----------- -------------
Total current assets 4,308,945 5,970,359
Restricted cash 59,822 60,976
Tower assets, net of accumulated depreciation of $8,278,524 and
$15,223,593, respectively 127,946,070 279,785,438
Fixed assets, net 1,495,121 1,838,776
Land 6,850,951 12,152,758
Deferred debt issue costs, net of accumulated amortization of
$346,618 and $425,429, respectively 1,871,242 11,336,531
Other assets 645,752 854,676
------------ -------------
$ 143,177,903 $311,999,514
------------ -------------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,242,397 $ 2,793,562
Accrued expenses 3,095,049 3,429,557
Deferred revenue 639,460 1,334,677
Current portion of long-term debt 11,122,077 2,943,986
------------ -------------
Total current liabilities 17,098,983 10,501,782
Long-term debt 109,459,790 287,226,872
Other liabilities 105,012 541,082
------------ -------------
126,663,785 298,269,736
------------ -------------
Commitments (Note 3)
Redeemable stock:
Class B common stock, 12,000 shares issued and outstanding at
December 31, 1997 and June 30, 1998 1,761,000 1,761,000
Class D common stock, 39,000 shares issued and outstanding at
December 31, 1997 and 40,000 shares issued and outstanding at June 30, 1998 39 40
------------ -------------
1,761,039 1,761,040
------------ -------------
Stockholders' equity:
Class A common stock -- 202,500 shares issued and outstanding
at December 31, 1997 and June 30, 1998 203 203
Class E common stock -- 67,089 and 174,766 shares issued and outstanding
at December 31, 1997 and June 30, 1998, respectively 67 175
Additional paid-in capital 25,875,752 36,230,464
Accumulated deficit (11,122,943) (24,262,104)
------------ -------------
14,753,079 11,968,738
------------ -------------
$ 143,177,903 $ 311,999,514
------------ -------------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these financial statements.
1
<PAGE>
PINNACLE HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1997 1998
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Tower rental revenue $4,848,314 12,544,096
Tower operating expenses, excluding depreciation and amortization 846,655 2,530,987
Gross margin 4,001,659 10,013,109
Other expenses:
General and administrative 607,986 1,494,861
Corporate development 1,655,551 3,475,619
Depreciation and amortization 2,483,489 7,970,717
4,747,026 12,941,197
Loss from operations (745,367) (2,928,088)
Interest expense 2,243,495 4,550,342
Amortization of original issue discount - 5,660,731
Net loss (2,988,862) (13,139,161)
Loss per common share $(9.76) (34.24)
Weighted average number of common shares outstanding 306,300 383,685
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these financial statements.
2
<PAGE>
PINNACLE HOLDINGS INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Redeemable Stock
------------------------- Additional Accumu- Stock-
Class B Class D Class A Class E paid-in lated holders'
common stock common stock common stock common stock capital deficit equity
---------------- ------------------------------- -------------- ---------- --------- ---------
Shares Amount Shares Amount Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1997 12,000 $1,761,00 39,000 $39 202,500 $203 67,089 $67 $25,875,752 $(11,122,943) $14,753,079
Unaudited:
Issuance of common
stock, net of issuance
costs:
Class D 1,000 1
Class E 107,677 108 10,767,600 10,767,708
Distribution to Class B
common stockholders (412,888) (412,888)
Net loss (13,139,161) (13,139,161)
Balance at
------ --------- ------ ---- ------- ---- ------- ------ ----------- ------------ -----------
June 30, 1998 12,000 $1,761,00 40,000 $ 40 202,500 $203 174,766 $ 175 $36,230,464 $(24,262,104) $11,968,738
====== ========= ====== ==== ======= ==== ======= ====== =========== ============ ===========
</TABLE>
The accompanying Notes to Consolidated Financial Statements are integral part
of these financial statements.
3
<PAGE>
PINNACLE HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1997 1998
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (2,988,862) $(13,139,161)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization 2,483,489 7,970,717
Amortization of original issue discount - 5,660,731
Provision for doubtful accounts (15,000) 125,000
(Increase) decrease in:
Accounts receivable, gross (82,636) (687,177)
Notes receivable - -
Prepaid expenses and other current assets (2,005) (77,695)
Other assets (669,601) (5,121,565)
Increase (decrease) in:
Accounts payable 668,389 551,165
Accrued expenses 334,508
Deferred revenue 78,679 695,217
Other current liabilities - -
Other liabilities 1,105 436,070
-------------- -------------
Total adjustments 2,462,420 9,886,971
-------------- -------------
Net cash provided by operating activities: (526,442) (3,252,190)
-------------- -------------
Cash flows from investing activities:
Payments made in connection with acquisitions:
Tower assets (32,189,173) (134,121,682)
Land (663,458) (5,313,807)
Capital expenditures:
Tower assets (6,471,101) (20,692,616)
Fixed assets (481,043) (630,374)
(Increase) decrease in restricted cash (1,521,810) (1,154)
-------------- -------------
Net cash used in investing activities (41,326,585) (160,759,633)
-------------- -------------
Cash flows from financing activities:
Borrowings under long-term debt, net of deferred loan costs 47,000,000 360,913,785
Repayment of long-term debt (4,966,282) (206,235,241)
Proceeds from issuance of common stock, net of issuance
costs 246,300 10,767,709
Payment of accretion in Class B common stock - (412,888)
-------------- -------------
Net cash provided by financing activities 42,280,018 165,033,365
-------------- -------------
Net increase in cash and cash equivalents 426,991 1,021,542
-------------- -------------
Cash and cash equivalents, beginning of year 47,419 1,693,923
-------------- -------------
Cash and cash equivalents, end of year $ 474,410 $ 2,715,465
============== =============
Supplemental disclosure of cash flows:
Cash paid for interest $ 2,028,345 $ 5,462,202
============== =============
</TABLE>
The accompanying notes Consolidated Financial Statements are an integral part of
these financial statements.
4
<PAGE>
Pinnacle Holdings Inc.
Notes to Consolidated Financial Statements
1. Financial Statements
The accompanying consolidated financial statements reflect the financial
position and results of operations and cash flows of Pinnacle Holdings Inc.
and its wholly owned subsidiaries: Pinnacle Towers Inc., Coverage Plus Antenna
Systems, Inc. and Tower Systems, Inc., collectively referred as the "Company".
All significant intercompany balances and transactions have been eliminated.
Preparation of the consolidated financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the consolidated financial
statements. Actual results may vary from estimates used.
Results of operations for any interim period are not necessarily indicative of
results of any other periods or for the year. The consolidated statements as
of June 30, 1998 and for the six-month periods ended June 30, 1998 and 1997
are unaudited, but in the opinion of management include all adjustments
necessary for a fair presentation of results for such periods. These
consolidated financial statements should be read in conjunction with the
Company's financial statements and notes thereto for the year ended December
31, 1997.
2. Acquisitions
The Company actively acquires towers and assumes the sellers' related customer
activity on an ongoing basis.
The Company completed 63 acquisitions during the year ended December 31, 1997,
all of which were individually insignificant to the Company. The aggregate
purchase price for acquisitions for the year ended December 31, 1997 was
$73,591,373, which consisted of $54,339,523 in cash and $19,251,850 of notes
payable to the former tower owners.
On March 4, 1998, the Company completed the acquisition of 201 towers from
Southern Communications Services, Inc. ("Southern Communications"), a
subsidiary of Southern Company. The Company paid $83,500,000 for these
towers, located in Georgia, Alabama, Mississippi, and Florida. In addition to
the Southern Communications transaction, subsequent to December 31, 1997, the
Company purchased a total of 115 towers for an aggregate consideration of
approximately $56,865,000.
The Company accounts for its acquisitions using the purchase method of
accounting. The results of operations of the acquired assets are included
with those of the Company from the dates of the respective acquisitions. The
pro forma results of operations listed below reflect purchase accounting and
pro forma adjustments as if the transactions occurred as of January 1, 1997.
The unaudited pro forma consolidated financial statements are not necessarily
indicative of the results that would have occurred if the assumed transaction
had occurred on the dates indicated and are not necessarily indicative of the
expected financial position or results of operations in the future.
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Tower rental revenue $ 19,478,425 $ 13,234,011
Gross profit, excluding depreciation and amortization 15,526,592 10,132,041
Net loss (18,787,322) (15,597,380)
Net loss per common share (60.58) (40.65)
</TABLE>
3. Commitments
On July 7, 1998, the Company signed a definitive purchase and sale
agreement, subject to certain conditions, to acquire 163 communications
towers from MobileMedia Communications Inc. ("MobileMedia") and several of
its affiliates for $170 million plus fees and expenses (the "MobileMedia
Acquisition"). In connection with the acquisition, the company entered into
a 15 year lease arrangement to provide rental tower space to MobileMedia
for 683 sites generating initial annual aggregate rent of approximately
$10,655,000 (excluding third party rent), the lease provides for one five
year renewal option exercisable at the customer's option. The U.S.
Bankruptcy Court for the District of Delaware entered an order approving
the MobileMedia Acquisition on August 10, 1998, and such order may be
appealed until August 20, 1998. The MobileMedia Acquisition is also subject
to certain closing conditions, including the completion of due diligence.
Also subsequent to December 31, 1997 the Company entered into several
letters of intent with various third parties to purchase 33 towers,
reflecting an aggregate commitment to pay approximately $16,353,000.
5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations:
The following discussion of the consolidated financial condition and results of
operations of the Company should be read in conjunction with the consolidated
financial statements and related notes thereto. This discussion contains
forward-looking statements within the meaning of the federal securities laws.
The words "believe," "estimate," "expect," "intend," "anticipate," "plan," and
similar expressions and variations of such expressions identify certain of such
forward-looking statements that speak only as of the dates on which they were
made. Prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties. Actual events or results may differ materially from those
discussed in the forward-looking statements as a result of various factors,
including, without limitation, the risk factors set forth in the Company's
Registration Statement on Form S-11 (No. 353-59297) filed on July 17, 1998, as
amended (the "Registration Statement"), and the matters set forth in the
Registration Statement generally.
The Company
The Company is the leading provider of wireless communications rental tower
space in the Southeastern United States. Since commencing operations in May
1995, the Company has completed 181 acquisitions through which it has acquired
597 towers and has constructed an additional 48 towers in such high growth
markets as Atlanta, Birmingham, New Orleans, Orlando and Tampa. The Company
also has agreements or letters of intent to acquire 196 additional towers. As a
result of its extensive existing tower base, the Company believes it is well-
positioned to continue to capitalize on the growth opportunities available in
the rapidly consolidating and highly fragmented tower rental industry.
The Company has a diversified base of over 680 customers consisting of wireless
communications providers, operators of private networks and government agencies
that include Southern Communications, Nextel, Sprint PCS, PageNet, Motorola,
BellSouth Mobility, MobileMedia, Teletouch, Skytel, Pagemart, Federal Bureau of
Investigation and Bureau of Alcohol, Tobacco & Firearms. The Company's leases
generally range in duration from three to five years and many provide for
scheduled minimum rent increases of the greater of a specified percentage (which
typically ranges from 3-5%) or the change for the relevant period in the
Consumer Price Index. Unlike a number of other participants in the tower
rental industry, the Company focuses exclusively on the rental of wireless
communications tower space.
The Company has designed and implemented a three-tiered growth strategy of: (i)
aggressively marketing available rental space on its towers to capitalize on the
operating leverage of its business; (ii) rapidly acquiring towers in key
markets; and (iii) implementing a selective tower construction program designed
to complement its acquisition strategy. In order to effect its strategy, the
Company has created a highly focused, structured organization in which
significant resources are devoted to acquiring or constructing towers on
strategically located sites supported by customer demand. The Company uses its
proprietary information systems and other systems to rapidly integrate new
towers and initiate sales and marketing efforts immediately following their
acquisition or construction.
6
<PAGE>
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997
Tower rental revenue increased 158.7% to $12.5 million for the six month period
ended June 30, 1998 from $4.8 million for the six month period ended June 30,
1997. This increase is attributable to the acquisition and construction of 333
towers during the six month period ended June 30, 1998, the results of which are
reflected in the six month period ended June 30, 1998. In addition, the
increase is due to growth in per tower revenue as a result of expanded marketing
efforts to increase the number of customers per tower, as well as regular,
contractual price escalations for existing customers.
Tower operating expenses, excluding depreciation and amortization, which consist
primarily of costs relating to the ongoing maintenance of properties such as air
conditioning and grounds maintenance, ground lease expenses, utilities, property
taxes and other direct costs of tower operation, increased 198.8% to $2.5
million for the six month period ended June 30, 1998 from $.8 million for the
six months ended June 30, 1997. This increase is consistent with the purchase
and construction of towers as discussed above. During the period, tower
operating expenses (as a percentage of tower rental revenue) remained consistent
with the Company's historical percentage of approximately 20%.
General and administrative expenses, which are expenses associated with
supporting the Company's day-to-day management of its existing properties and
primarily consist of employee compensation and related benefits costs,
advertising, professional and consulting fees, office rent and related expenses
and travel costs, remained relatively constant for the six month period ended
June 30, 1998 and 1997 at approximately 12% of tower revenue.
Corporate development expenses, which represent costs incurred in connection
with acquisitions and construction of new towers, increased 109.9% to $3.5
million for the six month period ended June 30, 1998 from $1.7 million for the
six month period ended June 30, 1997. The increase in corporate development
expenses reflects the higher costs associated with the Company's expansion of
its acquisition and construction strategies. Corporate development expenses
decreased as a percentage of tower rental revenue from 34.2% for the six months
ended June 30, 1997 to 27.7% for the six months ended June 30, 1998 because of
the incremental increase in tower rental revenue from the comparative period in
1997 and economics resulting from such growth.
Interest expense, net of amortization of original issue discount, increased
102.9% to $4.6 million for the six months ended June 30, 1998 from $2.2 million
for the six months ended June 30, 1997. The increase in interest expenses was
attributable to increased borrowing associated with the Company's acquisitions
during the period.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity needs arise from its acquisition-related activities,
debt service, working capital and capital expenditures. The Company has
historically funded its liquidity needs with proceeds from equity contributions,
bank borrowings, cash flow from operations and the offering of its 10% Senior
Discount Notes (the "Senior Notes Offering"). The Company had a working capital
deficit of $4.5 million and $12.8 million as of June 30, 1998 and December 31,
1997, respectively. The Company's ratio of total debt to stockholders' equity
(excluding redeemable stock) was 24.2 to 1 at June 30, 1998 and 8.2 to 1 at
December 31, 1997.
The Company has entered into a senior secured credit agreement (the "Senior
Credit Facility") with NationsBank, N.A. and certain other lenders that provides
a revolving line of credit for borrowings of up to $250 million, of which $150
million is currently committed. The Company intends to obtain commitments that
would increase the total commitment to $250 million. The Company may make
borrowings and repayments until December 31, 2005. Beginning March 31, 2000,
the availability under the revolving line of credit starts reducing by specified
amounts on a quarterly basis until December 31, 2005 when the availability will
be reduced to zero. Loans under the Senior Credit Facility bear interest at a
rate per annum, at the borrower's request, equal to the agent bank's prime rate
plus a margin of up to 1.75% or the 90-day London Interbank Offered Rate
("LIBOR") plus a margin of up to 2.875%. Outstanding borrowings under the
Senior Credit Facility have been used primarily to fund acquisitions and
construction of towers.
The principal stockholders of the Company (ABRY Broadcast Partners II, L.P.
("ABRY II"), and Messrs. Robert J. Wolsey, James M. Dell'Apa and Steven R. Day)
are parties to a Subscription and Stockholders Agreement, dated as of May 16,
1996, as amended (the "Stockholders Agreement"). Pursuant to the Stockholders
Agreement, ABRY II agreed to make capital contributions to the Company, up to an
aggregate capital contribution of $50.0 million. As of June 30, 1998, ABRY II
had contributed $39.7 million (including $2.5 million outstanding under a bridge
loan by ABRY II) and had guaranteed an additional $3.9 million of
other debt of the aggregate $50.0 million capital contribution commitment. Such
capital contribution commitment would terminate upon the closing of the Offering
(as defined below).
The Company also uses seller financing to fund certain of its tower
acquisitions. The Company had outstanding notes that it issued to sellers
bearing interest at rates ranging from 8.5% to 13.0% per annum in the aggregate
7
<PAGE>
amount of $18.7 million at June 30, 1998.
In March 1998, the Company completed its Senior Notes Offering. The Company
received net proceeds of approximately $192.8 million from the Senior Notes
Offering. The proceeds were used to repay outstanding borrowings under the
Senior Credit Facility, to repay in full and retire a $12.5 million bridge loan
from ABRY II and accrued interest thereon and a $20 million subordinated term
loan and accrued interest thereon and to pay a distribution preference to
holders of Class B Common Stock. The Senior Discount Notes were issued under
an Indenture dated as of March 20, 1998 and will mature on March 15, 2008. Until
March 15, 2003, the Company's interest-expense on the Senior Discount Notes will
consist solely of the accretion of original issue discount. Thereafter, the
Senior Discount Notes will require annual cash interest payments of $32.5
million.
On July 17, 1998, the Company filed the Registration Statement with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended, with respect to the offering and sale by the Company of shares of its
Common Stock (the "Offering").
Capital expenditures, including acquisitions, for the six months ended June 30,
1998 were $160.8 million, compared to $39.8 million in the comparable 1997
period. The Company anticipates that it will spend approximately $229 million on
capital expenditures in the second half of 1998, including $170 million for the
MobileMedia Acquisition and $59 million for the acquisition, construction and
upgrading of additional towers. The Company estimates capital expenditures in
1999 and 2000 to be approximately $150 million during each year.
The Company will require additional financing to enable it to complete the
MobileMedia Acquisition and other pending acquisitions, pursue future
acquisitions, fund capital expenditures on existing and acquired towers and
meet the Company's additional working capital requirements. The timing and
amount of the Company's additional financing needs will depend upon, among other
things, the timing of closings of pending and future acquisitions (which are
dependent upon the satisfaction of closing conditions, some of which are beyond
the Company's control). The Company is pursuing additional sources of
financing, including the Offering, borrowings under the Senior Credit Facility
and private sales of debt or equity, to satisfy its ongoing capital needs. The
mix and source of capital used by the Company will depend upon market
conditions, the limitations imposed by the terms of the Company's existing
indebtedness and other factors. There can be no assurance that such financing
will be available on terms acceptable to the Company. To the extent that the
Company is unable to secure sufficient additional capital, it may not be able to
achieve its current business strategy.
8
<PAGE>
Inflation
Because of the relatively low levels of inflation experienced in 1995,
1996, 1997 and as of June 30, 1998, inflation did not have a significant effect
on the Company's results in such years.
Year 2000
The Year 2000 is not expected to have a material impact on the Company's
current information systems because its software is either already Year 2000
compliant or required changes are not expected to be material. Based on the
nature of the Company's business, the Company anticipates it is not likely to
experience material business interruption due to the impact of Year 2000
compliance on its customers and vendors. As a result, the Company does not
anticipate that incremental expenditures to address Year 2000 compliance will be
material to the Company's liquidity, financial position or results of operations
over the next few years.
Recent Accounting Pronouncements
In June 1997, SFAS No. 131, "Disclosures About Segments of an Enterprise
and Related Information," was issued, establishing standards for public
enterprises to disclose certain information about operating segments and related
disclosures about products and services, geographic areas and significant
customers. The Company will adopt this pronouncement in 1998 in accordance with
the implementation requirements. Management believes that the adoption of SFAS
No. 131 will not have a material impact on the Company's financial statements.
Item 3. Not applicable.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is from time to time involved in ordinary litigation incidental to
the conduct of its business. The Company believes that none of its pending
litigation will have a material adverse effect on the Company's business,
financial condition or results of operations.
Items 2, 3, 4 and 5.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) The Exhibits listed in the "Exhibit Index" are filed as part of this
report.
(b) Reports on Form 8-K. The Company filed a report on form 8-K on June 12,
1998, with respect to a press release regarding the engagement of Morgan Stanley
& Co. Incorporated to assist the Company in consideration of strategic
alternatives.
9
<PAGE>
SIGNATURES
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 thereunto duly authorized.
Pinnacle Holdings Inc.
Date August 14, 1998 By /s/ Steven R. Day
-----------------
Steven R. Day
Chief Financial Officer
Vice President
Duly Authorized Officer and Principal Financial Officer.
EXHIBIT INDEX
Designation Description
- ----------- -----------
10.1 Amended Capital Contribution Agreement dated May 29, 1998*
10.2 Third Amended and Restated Credit Agreement dated May 29, 1998*
27.1 Financial Data Schedule
__________________
* Previously filed on June 11, 1998 with Amendment No. 1 to the Company's
Registration Statement on form S-4 (S.E.C. File No. 333-49147).
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1998
<PERIOD-START> JAN-01-1997 JAN-01-1998
<PERIOD-END> JUN-30-1997 JUN-30-1998
<CASH> 1,693,923 2,715,465
<SECURITIES> 0 0
<RECEIVABLES> 1,647,575 2,334,752
<ALLOWANCES> 70,000 195,000
<INVENTORY> 0 0
<CURRENT-ASSETS> 4,308,945 5,970,359
<PP&E> 144,950,415 309,000,565
<DEPRECIATION> 8,658,273 15,223,593
<TOTAL-ASSETS> 143,177,903 311,989,514
<CURRENT-LIABILITIES> 126,663,785 298,269,736
<BONDS> 120,581,867 290,170,858
0 0
0 0
<COMMON> 270 378
<OTHER-SE> 14,752,809 11,968,360
<TOTAL-LIABILITY-AND-EQUITY> 143,177,903 311,999,514
<SALES> 4,848,314 12,544,096
<TOTAL-REVENUES> 4,848,314 12,544,096
<CGS> 0 0
<TOTAL-COSTS> 846,655 2,530,987
<OTHER-EXPENSES> 4,139,040 11,446,336
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 2,243,495 4,550,342
<INCOME-PRETAX> (2,988,862) (13,139,161)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (2,988,862) (13,139,161)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (2,988,862) (13,139,161)
<EPS-PRIMARY> (9.76) (34.24)
<EPS-DILUTED> 0 0
</TABLE>
