SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1997 SEC File No 1-9690
INTERNATIONAL FIBERCOM, INC.
Incorporated in the State of Arizona IRS No. 86-0271282
3615 S. 28th Street
Phoenix, AZ 85040
(602) 941-1900
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 report, and (2) has been subject to such filing
requirements for the past 90 days.
Yes (X) No ( )
Common Stock without par value (6,424,854) shares outstanding at March 31, 1997
<PAGE>
PART 1 - Financial Information
Item 1. Financial Statements
The financial statements are included herewith commencing on page F-1.
Item 2. Management's Discussion any Analysis of Financial Condition and
Results of Operations. Operations.
General
- -------
The Company is a holding company for two wholly-owned subsidiaries: Kleven
Construction, Inc., which specializes in the design, installation and
maintenance of fiber-optic and other cable services for the telecommunications
and cable television industries, and Concepts In Communication, Inc.
("Concepts"), which specializes in systems integration services, including
design engineering and installation and maintenance of structured cable systems,
network hardware and software, work station peripherals and intercommunication
systems, primarily within commercial, industrial and governmental facilities.
The Company derives a substantially all of its revenue from contracts that are
accounted for under the percentage of completion method of accounting. Under
this method, revenues are recorded as construction on the job progresses so that
revenue recognized less cost incurred to date yield the percentage of gross
margin estimated for each contract. Overall gross margin percentages can
increase or decrease based upon changes in estimated gross margin percentages
over the lives of individual contracts on jobs.
The Company completed the acquisition of Concepts effective January 1, 1997.
Concepts' acquisition along with existing wholly owned subsidiary Kleven
Construction has allowed the Company to become one of the few complete
telecommunications service companies in the nation. The Company now can provide
outside plant, complete engineering, construction services, splicing and
retro-fit systems utilizing twisted pair, coaxial cable and a myriad of
fiber-optic cable. In addition, complete integration services can be provided
for end users, as well as structured cable systems and the appropriate
engineering. These services will allow the Company to service both the major
telcos as well as cable companies in their building of the "Information
Superhighway."
Acquisition
- -----------
The accompanying consolidated statements of operations include the results of
operations of Concepts which the Company acquired effective January 1, 1997.
The following unaudited pro forma condensed consolidated financial statements
for the quarter ended March 31, 1996 give effect to the acquisition of Concepts
by the Company pursuant to the Stock Purchase Agreement between the parties, and
are based on the estimates and assumptions set forth herein and in the notes to
such statements. This pro forma information has been prepared utilizing the
historical financial statements and notes thereto, which are incorporated by
reference herein. The pro forma financial data does not purport to be indicative
of the results which actually would have been obtained had the purchase been
effected on the dates indicated or of the results which may be obtained in the
future.
2
<PAGE>
The pro forma financial information is based on the purchase method of
accounting for the acquisition of Concepts. The pro forma entries are described
in the accompanying footnotes to the unaudited pro forma condensed consolidated
statements. The pro forma unaudited condensed consolidated statements of
operations assume the acquisition took place on the first day of the period
presented.
Results of Operations.
- ----------------------
The comparability of the results of operations for the first quarter of 1997
with the same period in 1996 was significantly impacted by the acquisition of
Concepts, as shown in the Unaudited Pro Forma Consolidated Statement of
Operations information contained in this Report. Therefore, Management's
Discussion and Analysis of Financial Condition and Results of Operations for
these periods discusses the operations in 1997 compared with actual operations
in 1996 and the operations in 1997 compared with 1996 pro forma figures as if
the Company had owned Concepts since January 1996, which it has not.
Contract Revenues.
- ------------------
Contract revenues for the three months ended March 31, 1997 increased to
$6,518,315 from the $3,425,867 in 1996, an increase of 190%. This increase in
revenues is primarily attributable to the addition of Concepts' revenues for the
first quarter of 1997. On a pro forma basis contract revenues increased
nominally from $6,469,910 in 1996 to $6,518,135 in 1997.
Gross Profit.
- -------------
The Company's gross profit increased 89% to $1,177,664 for the first quarter in
1997 compared with $624,543 in 1996 due to the increased contract revenues from
the Concepts acquisition. The gross profit margins for both periods were
approximately 18% of contract revenues.
On a pro forma basis, the Company's gross profit for the 1997 quarter was
$1,177,664 compared with $1,166,462 in 1996. In both cases, the gross profit
margin was approximately 18% of contract revenues. The gross profit in 1996 for
Concepts includes an adjustment of $360,000 of overhead to indirect costs of
contract revenue to accurately and consistently state gross profit margins.
General and Administrative Costs.
- ---------------------------------
The Company's general and administrative expenses were $829,600 for the three
months ended March 31, 1997 compared with $531,441 in 1996, an increase of 56%,
chiefly due to the addition of the general and administrative expenses of
Concepts.
On a pro forma basis, general and administrative expenses for the three months
ended March 31, 1997 were $829,600, or 13% of revenues, compared with
$1,022,784, or 16% of revenues, for the 1997 quarter. Such expenses in 1997
decreased by 19% from 1996. Certain overhead of Concepts was transferred to
indirect costs of construction for the 1996 period in order to more accurately
and consistently state gross profit margins. The decrease in general and
administrative costs is due primarily to the reduction of administrative
salaries of Kleven. Administrative expenses of Concepts include its individual
administrative costs, as well as corporate overhead. The Company intends to
consolidate duplicative administrative functions, to the extent possible. In
addition, administrative expenses of the Company include all amortization of
intangibles resulting from the acquisition.
3
<PAGE>
Other Income (Expense).
- -----------------------
The Company's other income increased to $82,005 for the 1997 quarter compared
with net expenses of $26,119 in 1996. Income increased primarily due to a gain
on the sale of certain depreciated assets which consisted of unused equipment
primarily for aerial construction.
Interest expense for 1997 increased from 1996 as a result of the issuance of the
8% Convertible Subordinated Debentures ("Debentures") in February 1997 and the
issuance of the note to the former shareholders of Concepts in connection with
the acquisition of Concepts. The increase in interest expense of Concepts
represents the costs associated with the Debentures.
On a pro forma basis, other income was $82,005 in 1997 compared with a net
expense of $42,660 in 1996 because of the reasons described in the first
paragraph of this section.
Provision for Income Tax Benefit (Expense).
- -------------------------------------------
No income tax expense was accrued in 1997 or 1996 because of net operating loss
carryovers of the Company and Kleven in 1996 and prior years. Such net operating
loss carryovers will be used to offset net income the Company generates in 1997
and possibly future years.
Net Income.
- -----------
The Company generated a net income of $430,069 for the three months ended March
31, 1997 compared with net income of $66,992 for the same period in 1996, an
increase of 642%, chiefly as a result of better profit margins and lower general
and administrative expense of Kleven Construction over the prior period. Net
income in 1997 was approximately 7% of revenues as compared with 2% in 1996 for
the foregoing reasons.
On a pro forma basis, the Company's net income increased to $430,069 compared
with $101,018, or approximately 426%, for the prior period. Such increase was
primarily due to lower general and administrative expenses of Kleven
Construction and Concepts in 1997.
Preferred Stock Dividend
- ------------------------
The Company paid a dividend of $44,370 on its Series A Convertible Preferred
Stock ("Series A Preferred") and $856 on its Series B Convertible Preferred
Stock ("Series B Preferred") for the first quarter of 1997. The Company elected
to pay such dividend by issuing 31,055 shares of its Common Stock, valued at
$1.456 per share. The foregoing dividends decreased net income attributable to
Common Stockholders by the amount of the dividend. The shares of Common Stock
outstanding will not be adjusted for such dividend until the end of the second
quarter of 1997.
Backlog.
- --------
The Company had a backlog of approximately $2.3 million on a work in process
basis as of March 31, 1997. The Company expects such work orders to be completed
by July 1997. Further, the Company has work orders, which were not started at
March 31, 1997, for Cox Communications, the State of Tennessee and other
clients, which total in excess of $3 million. The Company expects to commence
such work during the second quarter of 1997 and complete the same by July 1997.
4
<PAGE>
Liquidity and Capital Resources.
- --------------------------------
The Company has historically financed its operations through operating cash flow
and lines of credit. The Company's liquidity is impacted by the nature of
billing provisions under its contracts. Generally, in the early period of
contracts, cash expenditures and accrued profits are greater than allowed
billings, while contract completion results in billing previously unbilled costs
and profits. In the first quarter of 1997 the Company funded its operations
primarily through equity and debt offerings as described below.
The Company financed the $4.8 million purchase price of Concepts through the
sale of $1.5 million of Debentures and $4.4 million of Series B Preferred in
exempt transactions under Regulation D under the Securities Act of 1934 ("Act").
The Debentures are convertible into Common Stock, commencing October 11, 1997,
at a price of $1.25 per share.
The Series B Preferred is being issued in four tranches of $1.1 million each on
or before the 15th day of March, April, May and June 1997. To date, $2.2 million
of Series B Preferred has been sold privately under the terms of a subscription
agreement executed in February of 1997. The Series B Preferred is convertible
into Common Stock at a price equal to the lower of the Average Stock Price on
the date of each monthly subscription or the Discounted Average Stock Price on
the date of conversion. The "Average Stock Price" is the average of the daily
closing bid prices of the Common Stock for the five consecutive trading days
immediately preceding the relevant date. The "Discounted Average Stock Price" is
(i) 70% of the average of the daily closing bid prices of the Common Stock for
the five consecutive trading days immediately preceding the date of conversion
into Common Stock if the average of the daily bid prices is at or below $3.00
per share or (ii) 75% of the average of such daily closing bid prices if such
average is above $3.00 per share. For the one-year period after the issuance of
the Series B Preferred, the floor on the Conversion Price of the Common Stock
will be the lower of $.75 per share or 50% of the Average Stock Price. There
will be no floor on the Conversion Price if the Company fails to achieve certain
levels of gross profit on a quarterly basis. Dividends will be payable on the
Series B Preferred at the rate of 4% per annum, payable in shares of Common
Stock or cash, at the option of the Company, on a quarterly basis.
The Company committed to issue 220,000 Common Stock Purchase Warrants for each
of the four tranches upon funding of each tranche of the Series B Preferred.
Through April 30, 1997, the Company has issued 440,000 Common Stock Purchase
Warrants, one half with an exercise price of $2.25 per share and one half with
an exercise price of $2.15625 per share. The balance of the Warrants will be
issued with exercise prices 50% above the Average Stock Price on the date of
subscription, but not greater than $2.75 per share for one half of the Warrants
and $3.00 per share for the other half.
In order to provide working capital in 1996 the Company issued $3.3 million of
Series A Preferred, upon which the Company has been declaring and paying
dividends, in shares of Common Stock, at the rate of 9% per annum. At present
1,972 shares of Series A Preferred Stock are outstanding, the balance having
been converted into Common Stock in 1996.
The Company plans to apply approximately $600,000 of proceeds of the Series B
Preferred offering to working capital. Additionally, the Company is seeking an
expanded line of credit. The Company believes the working capital provided by
the 1997 private placement, along with internally generated cash provided by
operating activities from the operation of the business of Kleven Construction
and Concepts, will satisfy its anticipated growth for the next 12 months.
5
<PAGE>
Inflation.
- ----------
The Company does not believe that it is significantly impacted by inflation.
Seasonality.
- ------------
The Company's operations are not seasonal in nature.
Forward-looking Information and Risks of the Business.
- ------------------------------------------------------
This Report contains certain forward-looking statements and information. The
cautionary statements made in this Report should be read as being applicable to
all related forward-looking statements wherever they appear in this Report.
Forward-Looking statements, by their very nature, include risks and
uncertainties. Accordingly, the Company's actual results could differ materially
from those discussed herein. A wide variety of factors could cause or contribute
to such differences and could adversely impact revenues, profitability, cash
flows and capital needs. Such factors, many of which are beyond the control of
the Company, include the following: the Company's success in obtaining new
contracts; the volume and type of work orders that are received under such
contracts; the accuracy of the cost estimates for the projects; the Company's
ability to complete the projects on time and within budget; levels of, and
ability to, collect accounts receivable; availability of trained personnel and
utilization of the Company's capacity to complete work; competition and
competitive pressures on pricing; and economic conditions in the United States
and in the region served by the Company.
6
<PAGE>
INTERNATIONAL FIBERCOM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
March 31, December 31
1997 1996
Current Assets:
<S> <C> <C>
Cash and cash equivalents $138,830 $3,972
Accounts receivable
- trade, net of allowance 5,313,314 2,458,477
- unbilled receivables 116,838 196,815
- other 68,749 27,769
Subscriptions receivable (Note 2) 1,100,000
Inventory 444,701
Income tax refund receivable 10,500
Prepaid expenses 128,252 37,912
Loans receivable - related parties 12,658
Accrued interest receivable 0
Costs and estimated earnings in excess of billings 1,749,581 249,546
================ ================
Total Current Assets 9,083,423 2,974,491
Property and Equipment, net 3,123,355 2,899,055
Other Assets:
Accounts receivable - long term 71,978 88,478
Loans receivable related party 562,025 562,025
Goodwill, net (Note 3) 1,609,703
Deferred acquisition costs 83,625 234,367
Mortgage closing costs 5,956 6,034
Investment in limited partnership 33,021 28,781
Refundable deposits 29,830 9,480
================ ================
2,396,138 929,165
================ ================
Total Assets $14,602,916 $6,802,711
================ ================
</TABLE>
F-1
<PAGE>
INTERNATIONAL FIBERCOM, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS OF MARCH 31, 1997
(Unaudited)
LIABILITIES AND STOCKHOLDERS EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
Current Liabilities:
<S> <C> <C>
Notes payable current portion $748,000 $1,014,986
Notes payable term loans 334,478
Notes payable related party 6,000 6,000
Obligations under capital lease 110,355 110,355
Notes payable - C.I.C. (Note 2) 2,300,000
Accounts payable
- trade 2,864,604 1,965,837
- related parties 45,420 24,610
Accrued offering costs 481,000
Accrued expense 789,453 358,585
Accrued interest 11,516
Billings in excess of cost estimated earnings 418,405 185,119
================ ================
Total Current Liabilities 8,109,231 3,665,492
================ ================
Long-Term Liabilities:
Notes payable-long term 483,433 544,833
Obligations under capital lease 379,608 384,108
Convertible debentures (Note 2) 1,500,000 0
================ ================
Total Long-Term Liabilities 2,363,041 928,941
================ ================
Total Liabilities 10,472,272 4,594,433
================ ================
Stockholder's Equity:
Series A convertible preferred
stock 10,000,000 authorized 1,972 issued and outstanding 1,680,997 1,680,997
Series B convertible preferred
stock 4,400 authorized 1,100 issued and outstanding (Note 2) 3,692,297
Common Stock, no par, 100,000,000 shares authorized:
6,603,544 shares issued, 6,424,854 outstanding 8,600,402 8,555,176
Common stock warrants 99,082 99,082
Additional paid-in capital 462,073 462,073
Retained earnings (7,921,033) (7,921,033)
Current period profit (loss) 384,843
================ ================
6,998,661 2,876,295
================ ================
Less: treasury stock 178,690 shares, at cost (668,017) (668,017)
================ ================
Subscriptions Receivable (2,200,000)
================ ================
Total Stockholders' Equity 4,130,644 2,208,278
================ ================
Total Liabilities and Stockholders' Equity $14,602,916 $6,802,711
================ ================
</TABLE>
F-2
<PAGE>
INTERNATIONAL FIBERCOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
1997 1996
Contract Revenues $ 6,518,135 $ 3,425,867
Direct Cost of Contract Revenues 4,526,686 2,801,324
Indirect Cost of Contract Revenues 813,785
============ ============
Gross Profit 1,177,664 624,543
General and Administrative Expenses 829,600 531,441
============ ============
Profit from operations 348,064 93,102
Other Income (Expense):
Interest income 7 4,906
Interest expense (85,066) (106,934)
Other income 2,402 50,804
Gain on disposal of assets 164,662 25,114
============ ============
82,005 (26,110)
============ ============
Net income before income taxes 430,069 66,992
============ ============
Provision for tax benefit (expense) 0 0
============ ============
Net income 430,069 66,992
============ ============
Preferred stock dividend ($45,226) 0
Net income attributable to
common stockholders $ 384,843 66,992
Earnings per Share:
Basic earnings per share $ 0.06 $ 0.02
------------ ------------
Fully diluted earnings per share $ 0.03 $ 0.01
------------ ------------
Basic weighted average shares outstanding 6,424,854 4,238,382
------------ ------------
Fully diluted weighted average shares
outstanding 14,377,772 5,873,593
------------ ------------
F-3
<PAGE>
INTERNATIONAL FIBERCOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
THREE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 384,843 $ 66,992
Adjustments to reconcile net income (loss)to
net cash provided (used) by operating activities:
Depreciation and Amortization 243,380 196,246
(Increase) decrease in contracts receivable (2,811,998) (86,277)
(Increase) decrease in subscriptions receivable (3,300,000) 2,412,500
(Increase) decrease in inventory (444,701)
(Increase) decrease in costs and estimated earnings in
excess of billings on uncompleted contracts (1,500,035) (38,355)
(Increase) decrease in prepaid expenses (90,340) 5,376
(Increase) decrease in income tax refund (10,500) 2,440
(Decrease) increase in accounts payable 919,577 (762,222)
(Decrease) increase in accrued expenses 442,384 (626,734)
(Decrease) increase in billings in excess of cost and
estimated earnings on uncompleted contracts 233,286 (142,072)
(Decrease) increase in accrued offering costs 481,000 0
=========== ===========
Net cash provided (used) by operating activities (5,453,104) 1,027,894
=========== ===========
Cash flows from investing activities:
(Purchase) sale of property and equipment (467,680) (100,774)
(Increase) decrease in deposits (20,350) 636
(Increase) decrease in goodwill and other assets (1,613,865) (4,163)
(Increase) decrease in deferred acquisition costs 138,742 0
=========== ===========
Net cash provided (uses) by investing activities (1,963,153) (104,301)
Cash flows from financing activities:
(Repayment) increase of loans and other
liabilities payable 2,301,592 (715,470)
Proceeds from public offering, net 5,249,523 0
(Repayment) proceeds from stockholder loan 0 9,130
=========== ===========
Net cash provided (used) by financing activities 7,551,115 (706,340)
=========== ===========
Net (decrease) increase in cash 134,858 217,253
Cash, beginning of period 3,972 (49,002)
Cash, end of period $ 138,830 $ 168,251
=========== ===========
</TABLE>
F-4
<PAGE>
INTERNATIONAL FIBERCOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For The Period Ended March 31, 1997 and
For The Year Ended December 31, 1996
<TABLE>
<CAPTION>
Series A Preferred Series B Preferred Common Stock Stock Accumulated
------------------ ------------------ ------------ ----- -----------
Shares Amount Shares Amount Shares Amount Warrants (Deficit)
------ ------ ------ ------ ------ ------ -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stockholders' Equity,
December 31, 1995 2,750 $2,296,382 - $ - 4,417,072 $7,724,929 $99,082 $(3,699,918)
Issuance of shares
of Series A, 9%
convertible preferred
stock, net of costs 550 493,559 - - - - - -
Conversion of 1,328
shares of Series A, 9%
convertible preferred
stock to common stock (1,328) (1,108,944) - - 1,821,257 1,108,944 - -
Issuance of preferred
stock dividend - - - - 155,470 171,303 - (171,303)
Options issued for
services - - - - - - - -
Net Loss, 1996 - - - - - - - (4,049,812)
----- ---------- ----- ---------- --------- ---------- ------- -----------
Stockholders' Equity,
December 31, 1996 1,972 $1,680,997 - - 6,393,799 8,555,176 99,082 (7,921,033)
Issuance of Series B
convertible
preferred stock - - 4,400 3,692,297 - - - -
Issuance of preferred
stock dividend - - - - 31,055 45,226 - (45,226)
Net Income for the
three month period
ended March 31,
1997 - - - - - - - 430,069
----- ---------- ----- ---------- --------- ---------- ------- -----------
Stockholders' Equity
March 31, 1996 1,972 $1,680,997 4,400 $3,692,297 6,424,854 $8,600,402 $99,082 $(7,536,190)
===== ========== ===== ========== ========= ========== ======= ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Additional Stock
Paid-in Treasury Subscriptions
Capital Stock Receivable
Stockholders' Equity,
<S> <C> <C> <C>
December 31, 1995 $ 352,073 $ (668,017) $ -
Issuance of shares
of Series A, 9%
convertible preferred
stock, net of costs - - -
Conversion of 1,328
shares of Series A, 9%
convertible preferred
stock to common stock - - -
Issuance of preferred
stock dividend - - -
Options issued for
services 110,000 - -
Net Loss, 1996 - - -
-------- --------- -----------
Stockholders' Equity,
December 31, 1996 462,073 (668,017) -
Issuance of Series B
convertible
preferred stock - - (2,200,000)
Issuance of preferred
stock dividend - - -
Net Income for the
three month period
ended March 31,
1997 - - -
-------- --------- -----------
Stockholders' Equity
March 31, 1996 $462,073 $(668,017) $(2,200,000)
======== ========= ===========
</TABLE>
The Accompanying Notes are an Integral Part
of the Consolidated Financial Statements
F-5
<PAGE>
INTERNATIONAL FIBERCOM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Significant accounting policies:
Basis of presentation:
In the opinion of management, the accompanying consolidated financial
statements reflect all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of
March 31, 1997 and the results of its operations for the three months
ended March 31, 1997. Although management believes that the disclosures
in these financial statements are adequate to make the information
presenting not misleading, certain information and footnote disclosures
normally included in financial statements that have been prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the rules and regulations of the
Securities Exchange Commission.
The results of operations for the three months ended March 31, 1997 are
not necessarily indicative of the results that may be expected for the
full year ending December 31, 1997. The accompanying consolidated
financial statements should be read in conjunction with the more
detailed financial statements, and the related footnotes thereto, filed
with the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1996.
Principles of consolidation:
The consolidated financial statements include the financial position,
results of operations and cash flows of International FiberCom, Inc.,
and its wholly-owned subsidiaries, Kleven Construction, Inc. and
Concepts In Communications, Inc. all material intercompany
transactions, accounts and balances have been eliminated.
Stock options, and restricted stock plans:
At September 30, 1996 the Company had a stock-based compensation plan,
described below. The Company applies APB Opinion 25 and related
Interpretations in accounting for its plan. There was no compensation
cost charged against income for its performance-based plan for the
period ended September 30, 1996. Had compensation cost for the
Company's stock-based plan been determined based on the fair value at
the grant dates for awards under the plan consistent with the method of
FASB Statement 123, the Company's net loss and loss per share would
have been changed to the pro forma amounts indicated below:
In January 1997 the Board of Directors adopted the 1997 International
FiberCom, Inc. Stock Option Plan and 1997 Restricted Stock Plan,
subject to approval by the shareholders at the next annual meeting of
shareholders of the Corporation. A total of 1,200,000 shares of the
Company's Common Stock was reserved and set aside for issuance upon the
exercise of options awarded or grants of stock made under the Plans.
Subject to such approval, a total of 590,000 options were issued under
the Option Plan in January 1997 with exercise prices of $.9375 per
share.
F-6
<PAGE>
2. Concepts In Communications, Inc. Purchase
In January 1997 the Company acquired Concepts for $4.8 million from its
two shareholders. The Company paid $1.5 million at the closing, which
occurred on February 13, 1997, and the balance is payable in monthly
installments of $1.0 million in March and April and a final payment of
$1.3 million in May 1997, which balance is represented by a promissory
note bearing interest at a rate of 5% per annum. The Note is secured by
all of the shares of capital stock of Concepts which the Company
purchased in the transaction. The Company has completed the March and
April payments per the terms of the note.
F-7
<PAGE>
INTERNATIONAL FIBERCOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Pro Forma and Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
Concepts IFC/ International
In Kleven Pro Forma FiberCom
Communications Combined Adjustments Consolidated
<S> <C> <C> <C>
Contract Revenues $3,044,043 $3,425,867 $6,469,910
Cost of Contract Revenues 2,142,124 2,801,324 4,943,448
Indirect Costs of Contract Revenues 360,000 360,000
================ =============== ===============
Gross Profit 541,919 624,543 1,166,462
General and Administrative Expenses 464,043 531,441 27,300(1) 1,022,784
Provision for doubtful accounts 0 0
================ =============== ===============
Profits from Operations $77,876 93,102 143,678
Other Income (Expense):
Interest Income 4,906 4,906
Interest expense (9,086) (106,934) (9,792)(3) (125,812)
Other Income 2,327 50,804 53,131
Gain on disposal of assets 25,114 25,114
================ =============== ===============
(6,759) (26,110) (42,661)
================ =============== ===============
Net income before income taxes 71,117 66,992 101,017
================ =============== ===============
Provision for tax benefit (expense) (26,869) 0 26,869(2) 0
================ =============== ===============
Net income 44,248 66,992 101,017
================ =============== ===============
Preferred stock dividend (45,226)(4) (45,226)
Net income attributable to
common stockholders 44,249 66,992 55,791
================ =============== ===============
Earnings (loss) per share:
Income from continuing operations 0.10 0.02 0.01
---------------- --------------- ---------------
Weighted average shares outstanding 4,238,382 4,238,382 4,238,382
---------------- --------------- ---------------
(1) Amortize Goodwill
(2) Revise Income Tax Provision
(3) Interest on Convertible Debentures
(4) Preferred Stock Dividend
</TABLE>
F-8
<PAGE>
PART II
OTHER INFORMATION
-----------------
Response to Items 1-5 are omitted since these items are inapplicable to
this report.
Item 6.
The Company filed a Report on Form 8-K dated March 5, 1997,
with the Securities and Exchange Commission, reporting the acquisition
of Concepts In Communications, Inc. And filed a filed an amended Report
on Form 8-K on April 25, 1997, respecting the acquisition.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
INTERNATIONAL FIBERCOM, INC.
BY /S/ Terry Beiriger
--------------------------------
Terry Beiriger,
Chief Financial Officer
DATED: May 12, 1997
15
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000924632
<NAME> INTERNATIONAL FIBERCOM INC
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-30-1997
<EXCHANGE-RATE> 1
<CASH> 138,830
<SECURITIES> 0
<RECEIVABLES> 6,598,901
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,083,423
<PP&E> 6,140,024
<DEPRECIATION> (3,016,669)
<TOTAL-ASSETS> 14,602,916
<CURRENT-LIABILITIES> 8,109,231
<BONDS> 0
0
5,373,294
<COMMON> 8,600,402
<OTHER-SE> (9,843,052)
<TOTAL-LIABILITY-AND-EQUITY> 14,602,916
<SALES> 6,518,135
<TOTAL-REVENUES> 6,685,199
<CGS> 5,340,471
<TOTAL-COSTS> 6,170,071
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 85,066
<INCOME-PRETAX> 430,069
<INCOME-TAX> 0
<INCOME-CONTINUING> 430,069
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (45,226)
<NET-INCOME> 384,843
<EPS-PRIMARY> .06
<EPS-DILUTED> .03
</TABLE>
