SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 1, 1997
INTERNATIONAL FIBERCOM, INC.
----------------------------
(Exact name of registrant as specified in its charter)
Arizona
----------------------------
(State or other jurisdiction of incorporation)
1-9690 86-0271282
- ------------------------ ------------------------------------
(Commission File Number) (IRS Employer Identification Number)
3615 South 28th Street, Phoenix, Arizona 85040
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (602) 941-1900
Not Applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
(a) Effective October 1, 1997, International FiberCom, Inc. (the
"Company") through its wholly owned subsidiary SCP Acquisition Corporation, an
Arizona corporation ("SCP"), acquired all or substantially all of the assets,
business and real estate ("Assets") of Southern Communications Products, Inc., a
Florida corporation ("Southern"), in exchange for $12 million in cash, a
promissory note in the principal amount of $3.2 million and 2,231,661 shares of
Common Stock of the Company valued at $6.2 million. The Note is payable over a
three-year period and is secured by all of the Assets purchased in the
acquisition.
In order to finance the acquisition of Southern and provide working
capital, in December 1997 the Company sold 2,700,000 shares of its Common Stock
for $13.5 million in a private placement to institutional investors under
Regulation D of the Securities Act of 1933, as amended (the "Act"). The
investors may be entitled to additional shares in the future under certain
circumstances. The Company agreed to provide registration rights covering these
shares. In addition, the Company has the right to repurchase the Common Stock
issued at premiums from 110% to 120% of the purchase price. The Company intends
to repurchase some or all of the shares of Common Stock with the proceeds from
debt and/or equity financing in 1998, although there can be no assurances that
the Company will be able to obtain such financing on acceptable terms or
conditions.
Effective October 1997, the Company acquired all of the issued and
outstanding capital stock of Compass Communications, Inc., a Georgia
corporation ("Compass"), from Selling Shareholders of Compass in exchange for
470,588 shares of Common Stock of the Company.
(b) Southern purchases, sells and deals in used telecommunications
equipment that is utilized in the digital access, switching and transport
systems of telecommunication service providers on a nationwide basis. The
equipment sold by Southern is manufactured by Lucent Technologies, Northern
Telecom, DSC Communications/Digital Switch, ADC Telecommunications, Tellabs,
Alcatel and Fujitsu. Southern's customers and clients, some of which are
existing Company customers, include many of the leading telephone companies,
Regional Bell Operating Companies and telecommunications hardware resellers.
Compass is a leading registered engineering firm providing services to
the telecommunications industry specializing in video, voice and data network
development using state of the art, fiber-rich distribution platforms. The
Company employs over 85 engineers and technicians involved in field data
collection, geographic information system landbase development, network design,
construction management, training and consultation. Compass is based in Atlanta,
Georgia, but also has offices in Colorado. Major customers of Compass include US
West, Time Warner, Motorola, Bellcore, MediaOne, and Australia's Optus Vision.
-2-
<PAGE>
Item 7. Financial Statements and Exhibits
(a) The Financial Statements of Business Acquired. The financial
statements and schedules for Southern are included herewith commencing on page
F-1. Subsequent to the filing of the original Form 8-K to which this Amendment
applies, the Company determined that financial statements for Compass are not
required under Item 310(c)(3)(i) of Regulation S-B. Therefore, the Company is
not filing the financial statements of Compass with this Report.
(b) Pro forma Financial Information. See (a) above.
(c) Exhibits.
The Asset Purchase and Sale Agreement, dated August 25, 1997, by and
among the Company, SCP, Southern, Wallace E. Sapp and Edna M. Sapp and the Stock
Purchase Agreement, dated October 1, 1997, by and among the Company, Compass and
enumerated Selling Shareholders, both filed with the Commission as a part of the
Company's Current Event Report on Form 8-K on December 17, 1997, are
incorporated herein by reference.
-3-
<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 hereunto duly authorized.
INTERNATIONAL FIBERCOM, INC.
/s/ Joseph P. Kealy
----------------------------------------
Joseph P. Kealy
Chairman of the Board and President
Dated: February 10, 1998
-4-
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
-------------------------------
To The Stockholders and Board of Directors of
Southern Communications Products, Inc.
We have audited the accompanying balance sheets of Southern Communications
Products, Inc. as of September 30, 1997 and December 31, 1996, and the related
statements of operations, changes in stockholders' equity, and cash flows for
the nine month period ended September 30, 1997 and for the year ended December
31, 1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Southern Communications
Products, Inc. as of September 30, 1997 and December 31, 1996, and the results
of its operations, changes in stockholders' equity, and its cash flows for the
nine month period ended September 30, 1997, and for the year ended December 31,
1996 in conformity with generally accepted accounting principles.
Semple & Cooper, LLP
Certified Public Accountants
November 20, 1997
F-1
<PAGE>
SOUTHERN COMMUNICATIONS PRODUCTS, INC.
BALANCE SHEETS
ASSETS
December 31, September 30,
1996 1997
---- ----
Current Assets:
Cash and cash equivalents (Notes 1 and 2) $2,524,314 $ 671,477
Accounts receivable - trade, net (Notes 1 and 7) 632,874 741,040
Loan receivable - current portion (Note 3) 8,001 --
Inventory, net (Notes 1 and 4) 935,000 1,608,329
---------- ----------
Total Current Assets 4,100,189 3,020,846
Property and Equipment, net (Notes 1 and 5) 327,155 354,714
Other Assets:
Loan receivable, less current portion (Note 3) 38,551 --
Refundable deposits 633 633
---------- ----------
Total Assets $4,466,528 $3,376,193
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable (Note 7) $ 547,917 $ 175,060
Accrued expenses 16,108 10,682
Accrued dividends -- 185,203
---------- ----------
Total Current Liabilities 564,025 370,945
---------- ----------
Commitments and Contingencies (Note 6) -- --
Stockholders' Equity:
Common stock, $1 par value; 7,500 shares authorized;
2,000 shares issued and outstanding 2,000 2,000
Retained earnings 3,900,503 3,003,248
---------- ----------
Total Stockholders' Equity 3,902,503 3,005,248
---------- ----------
Total Liabilities and Stockholders' Equity $4,466,528 $3,376,193
========== ==========
The Accompanying Notes are an Integral Part
of the Financial Statements
F-2
<PAGE>
SOUTHERN COMMUNICATIONS PRODUCTS, INC.
STATEMENT OF OPERATIONS
December 31, September 30,
1996 1997
---- ----
Revenues $15,566,050 $ 8,486,849
Cost of Revenues 4,483,609 2,755,785
----------- -----------
Gross Profit 11,082,441 5,731,064
General and Administrative Expenses 1,552,120 1,191,856
----------- -----------
Income from Operations 9,530,321 4,539,208
----------- -----------
Other Income (Expense):
Interest income 47,317 40,736
Gain (loss) on sale of fixed assets 150 (22,995)
----------- -----------
47,467 17,741
----------- -----------
Net Income before Pro Forma Income Taxes 9,577,788 4,556,949
Pro Forma Income Taxes (unaudited) (Note 10) 3,831,115 1,822,780
----------- -----------
Pro Forma Net Income (unaudited) $ 5,746,673 $ 2,734,169
=========== ===========
The Accompanying Notes are an Integral Part
of the Financial Statements
F-3
<PAGE>
SOUTHERN COMMUNICATIONS PRODUCTS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Common Stock
------------- Total
Shares Retained Stockholders'
Issued Amount Earnings Equity
------ ------ -------- ------
Stockholders'
equity,
December 31,
1995 2,000 $2,000 $ 1,405,879 $ 1,407,879
Dividends paid -- -- (7,083,164) (7,083,164)
Net income for
the year ended
December 31,
1996 -- -- 9,577,788 9,577,788
----- ------ ----------- -----------
Stockholders'
equity,
December 31,
1996 2,000 2,000 3,900,503 3,902,503
Dividends paid -- -- (5,454,204) (5,454,204)
Net income for
the nine month
period ended
September 30,
1997 -- -- 4,556,949 4,556,949
----- ------ ----------- -----------
Stockholders'
equity,
September 30,
1997 2,000 $2,000 $ 3,003,248 $ 3,005,248
===== ====== =========== ===========
The Accompanying Notes are an Integral Part
of the Financial Statements
F-4
<PAGE>
SOUTHERN COMMUNICATIONS PRODUCTS, INC.
STATEMENT OF CASH FLOWS
December 31, September 30,
1996 1997
---- ----
Increase (Decrease) in Cash and Cash Equivalents:
Cash flows from operating activities:
Cash received from customers $ 15,959,151 $ 8,378,683
Cash paid to suppliers and employees (6,817,062) (4,975,144)
Interest received 47,317 40,736
------------ -----------
Net cash provided by operating activities 9,189,406 3,444,275
------------ -----------
Cash flows from investing activities:
Collection of loan receivable 3,448 4,292
Disbursement for loan receivable (50,000) --
Purchase of property and equipment (113,102) (109,448)
Proceeds from sale of fixed assets 6,390 26,825
------------ -----------
Net cash used by investing activities (153,264) (78,331)
------------ -----------
Cash flows from financing activities:
Dividends paid (7,083,164) (5,218,781)
------------ -----------
Net cash used by financing activities (7,083,164) (5,218,781)
------------ -----------
Net increase (decrease) in cash and cash equivalents 1,952,978 (1,852,837)
Cash and cash equivalents at beginning of period 571,336 2,524,314
------------ -----------
Cash and cash equivalents at end of period $ 2,524,314 $ 671,477
============ ===========
Reconciliation of Net Income to Net Cash
Provided by Operating Activities:
Net Income $ 9,577,788 $ 4,556,949
------------ -----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 61,250 24,109
(Gain) loss on sale of fixed assets (150) 22,995
Changes in Assets and Liabilities:
Accounts receivable 393,101 (108,166)
Inventory (199,167) (673,329)
Refundable deposits (145) --
Accounts payable (654,166) (372,857)
Accrued expenses 10,895 (5,426)
------------ -----------
(388,382) (1,112,674)
------------ -----------
Net Cash Provided by Operating Activities $ 9,189,406 $ 3,444,275
============ ===========
The Accompanying Notes are an Integral Part
of the Financial Statements
F-5
<PAGE>
SOUTHERN COMMUNICATIONS PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies, Nature of Operations and Use
of Estimates:
Nature of Corporation:
Southern Communications Products, Inc. (the Company) is a Corporation
which was duly formed and organized under the laws of the State of
Florida on December 20, 1994. Prior to that time, the Company operated
as a sole proprietorship. The Company's principal business purpose is to
sell surplus new and used telephone equipment to telephone service
providers and other vendors throughout the United States. Effective
October 1, 1997, the business was sold to International FiberCom, Inc.
Pervasiveness of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Interim Financial Information:
The interim financial statements for the nine month period ended
September 30, 1996 are unaudited. In the opinion of management, such
statements reflect all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of the results of the
interim period. The results of operations for the nine month period
ended September 30, 1997 are not necessarily indicative of the results
for the entire year.
Cash and Cash Equivalents:
Cash and cash equivalents are considered to be all highly liquid
investments purchased with an initial maturity of three (3) months or
less.
Accounts Receivable:
Accounts receivable represent amounts billed but uncollected for sales
of telephone equipment.
The Company follows the allowance method of recognizing uncollectible
accounts receivable. The allowance method recognizes bad debt expense
based on a review of the individual accounts outstanding, and the
Company's prior history of uncollectible accounts receivable. For the
nine month period ended September 30, 1997 and for the year ended
December 31, 1996, no allowance has been established for potentially
uncollectible accounts receivable, as management believes that all
accounts are fully collectible.
Inventory:
Inventory, composed of new and used telephone equipment, is stated at
the lower of cost (weighted average method) or market. The Company
periodically reviews its inventory and makes a provision for damaged or
obsolete inventory.
Property and Equipment:
Property and equipment are recorded at cost. Depreciation is provided
for on the straight-line and accelerated methods over the estimated
useful lives of the assets. Maintenance and repairs that neither
materially add to the value of the property nor appreciably prolong its
life are charged to expense as incurred. Betterments or renewals are
capitalized when incurred. The estimated useful lives for asset
classifications, are as follows:
Furniture and fixtures 5-7 years
Machinery and equipment 5-7 years
Vehicles 5 years
Leasehold improvements 10-15 years
Buildings 39 years
F-6
<PAGE>
SOUTHERN COMMUNICATIONS PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
1. Summary of Significant Accounting Policies, Nature of Operations and Use
of Estimates: (Continued)
Income Taxes:
For federal tax reporting purposes, the Company operates as a
Sub-chapter S Corporation. As such, all taxable income and available tax
credits are passed from the corporate entity to the individual
stockholders. It is the responsibility of the individual stockholders to
report the taxable income and related tax credits, if any, and to pay
any resulting income taxes. Therefore, as of September 30, 1997 and
December 31, 1996, there were no provisions made for federal or state
income taxes payable.
2. Concentration of Credit Risk:
The Company maintains cash and cash equivalents at two (2) financial
institutions. Deposits not to exceed $100,000 at each financial
institution are insured by the Federal Deposit Insurance Corporation.
For the nine month period ended September 30, 1997 and for the year
ended December 31, 1996, the Company had uninsured cash and cash
equivalents in the approximate amounts of $490,500 and $2,284,000,
respectively.
3. Loan Receivable:
At December 31, 1996, the loan receivable consists of the following:
<TABLE>
<S> <C>
8% loan receivable from a former employee in monthly installments of
$1,014, including principal and interest, due August, 2001;
unsecured. $ 46,552
Less: current portion of long-term loan receivable (8,001)
----------
$ 38,551
==========
</TABLE>
A schedule of future minimum principal payments due from the loan
receivable outstanding at December 31, 1996, is as follows:
Year Ending
December 31, Amount
------------ ------
1997 $ 8,001
1998 9,422
1999 10,204
2000 11,052
2001 7,873
----------
$ 46,552
==========
4. Inventory:
At September 30, 1997 and December 31, 1996, inventory consists of the
following:
<TABLE>
<CAPTION>
December 31, September 30,
1996 1997
---- ----
<S> <C> <C>
New and used telephone equipment $ 1,984,912 $ 3,164,331
Less: allowance for obsolete
inventory (1,049,912) (1,556,002)
----------- -----------
$ 935,000 $ 1,608,329
=========== ===========
</TABLE>
F-7
<PAGE>
SOUTHERN COMMUNICATIONS PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
4. Inventory: (Continued)
The allowance for obsolete inventory is based on management's best
estimate. Due to the market that the Company operates in, it is
reasonably possible that this estimate may change within one year.
5. Property and Equipment:
At September 30, 1997 and December 31, 1996, property and equipment
consist of the following:
December 31, September 30,
1996 1997
---- ----
Furniture and fixtures $ 51,151 $ 65,922
Machinery and equipment 11,160 28,414
Vehicles 90,669 -
Leasehold improvements 149,209 226,633
Buildings 119,333 119,333
---------- ----------
421,522 440,302
Less: accumulated
depreciation (94,367) (85,588)
---------- ----------
$ 327,155 $ 354,714
========== ==========
6. Commitments and Contingencies:
Operating Leases:
The Company leases office space and equipment under operating lease
agreements, with terms of three (3) to four (4) years. Future minimum
lease payments under long-term operating lease agreements at September
30, 1997 and December 31, 1996, are as follows:
Year Ending Year Ending
Year December 31, September 30
---- ------------ ------------
1997 $ 9,133 $ -
1998 5,474 9,133
1999 732 987
---------- ----------
$ 15,339 $ 10,120
========== ==========
The Company also leases office and warehouse facilities on
month-to-month terms from the stockholders of the Company.
For the nine month period ended September 30, 1997 and for the year
ended December 31, 1996, rent expense totalled $83,707 and $23,907,
respectively.
7. Major Customers and Vendors:
For the nine month period ended September 30, 1997 and for the year
ended December 31, 1996, the Company had two (2) major customers
representing the following percentages of revenues: twenty-three percent
(23%) and twenty-two percent (22%); and eleven percent (11%) and ten
percent (10%), respectively. At September 30, 1997 and December 31,
1996, the amounts due from the two (2) customers included in accounts
receivable totalled $2,049 and $176,043, respectively.
F-8
<PAGE>
SOUTHERN COMMUNICATIONS PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
7. Major Customers and Vendors: (Continued)
For the nine month period ended September 30, 1997 and for the year
ended December 31, 1996, the Company had three (3) and two (2) major
vendors representing the following percentages of total purchases:
fourteen percent (14%), twelve percent (12%) and thirty-five percent
(35%); forty-eight percent (48%) and twenty-three percent (23%),
respectively. At September 30, 1997 and December 31, 1996, the amounts
due to the three and two vendors included in accounts payable were
$35,700 and $94,492, respectively.
8. Fair Value of Financial Instruments:
The carrying amounts of financial instruments including accounts
receivable, loans receivable, and other current maturities of accounts
payable and accrued expenses, approximate fair value because of their
short maturity.
9. Statements of Cash Flows:
During the nine month period ended September 30, 1997, the Company
recognized financing activities that affected assets and stockholders'
equity, but did not result in cash payments. For the nine month period
ended September 30, 1997, these non-cash activities are as follows:
The Company paid dividends to the stockholder in the amount of
$42,260 through the transfer of a loan receivable to the stockholder
individually.
The Company paid dividends to the stockholder in the amount of $7,960
through the transfer of a vehicle at net book value to the
stockholder individually.
The Company accrued dividends of $185,203, payable to the
stockholder.
10. Subsequent Events:
Pending Sale:
Effective October 1, 1997, the Company sold one hundred percent (100%)
of the assets and liabilities of the business to International FiberCom,
Inc., an Arizona publicly-traded Corporation. The accompanying
statements of operations present pro forma income tax expense and pro
forma net income, representing the effect the change in the status from
an S corporation to a C corporation would have on earnings as if the
acquisition had occurred prior to September 30, 1997.
F-9
<PAGE>
11. Unaudited Proforma Condensed Consolidated Financial Statements:
The following unaudited pro forma condensed consolidated financial
statements give effect to the acquisition by International FiberCom,
Inc. of Southern Communications Products, Inc. pursuant to the Asset
Purchase and Sale 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.
The pro forma financial information is based on the purchase method of
accounting for the acquisition of Southern Communications Products, Inc.
The pro forma entries are described in the accompanying footnotes to the
unaudited pro forma condensed consolidated financial statements. The pro
forma unaudited condensed consolidated statements of operations assume
the acquisition took place on the first day of the period presented,
while the unaudited proforma condensed consolidated balance sheet
assumes the acquisition took place on the balance sheet date.
Acquisition:
Effective October 1, 1997, International FiberCom, Inc., acquired
Southern Communications Products, Inc., a privately-held Marianna,
Florida based company. Under the terms of the agreement, the Company
acquired all of the assets and liabilities of Southern Communications
Products, Inc. for approximately $21.4 million, comprised of $12 million
in cash, $6.2 million in common stock, and $3.2 million in a promissory
note.
F-10
<PAGE>
INTERNATIONAL FIBERCOM, INC. AND SUBSIDIARY
PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
September 30, 1997
Pro forma Financial Information:
The following represents a pro forma condensed consolidated balance sheet as of
September 30, 1997, assuming the Company's acquisition of Southern
Communications Products, Inc. was consummated as of that date.
<TABLE>
<CAPTION>
ASSETS
International
FiberCom, Southern Proforma
Inc. and Communications, Proforma Consolidated
Subsidiaries Products, Inc. Adjustments Amounts
------------ -------------- ----------- -------
<S> <C> <C> <C> <C>
Current Assets:
Cash $ 69,478 $ 671,477 $(12,000,000) (2) $ 2,135,955
13,395,000 (1)
Accounts receivable, net 5,968,167 741,040 6,709,207
Inventory 621,686 1,608,329 2,230,015
Other current assets 215,182 - 215,182
Costs and estimated earnings
in excess of uncompleted
contracts 1,905,281 - 1,905,281
----------- ----------- -----------
Total Current Assets 8,779,794 3,020,846 13,195,640
Property and Equipment, Net 3,237,822 354,714 3,592,536
Loans Receivable from Related Parties 562,025 - 562,025
Other Assets, Net 236,969 633 237,602
Goodwill, Net 1,555,103 - 18,394,752 (2) 19,949,855
----------- ----------- -----------
Total Assets $14,371,713 $ 3,376,193 $37,537,658
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Long-term debt - current portion $ 1,271,803 $ - $ 1,271,803
Accounts payable 2,048,522 175,060 2,223,582
Accrued expenses 1,342,605 195,885 1,538,490
Billings in excess of costs
and estimated earnings on
uncompleted contracts 266,873 - 266,873
----------- ----------- -----------
Total Current Liabilities 4,929,803 370,945 5,300,748
Long-Term Liabilities:
Long-term debt 927,054 - 4,127,054
Convertible debentures 1,500,000 - 1,500,000
Stockholders' Equity 7,014,856 3,005,248 3,200,000 (2) 26,609,856
13,395,000 (1)
6,200,000 (2)
(3,005,248) (2)
----------- ----------- -----------
Total Liabilities and
Stockholders' Equity $14,371,713 $ 3,376,193 $37,537,658
=========== =========== ===========
</TABLE>
(1) Record the issuance of 2,700,000 shares of common stock sold in a private
placement to raise the funds for the acquisition.
(2) Record the purchase for $12 million cash, $3.2 million promissory note, and
$6.2 million in common stock.
F-11
<PAGE>
INTERNATIONAL FIBERCOM, INC. AND SUBSIDIARIES
PROFORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For The Year Ended December 31, 1996
Proforma Consolidated Financial Statements:
The following represents proforma condensed statements of operations for the
year ended December 31, 1996, assuming the acquisition of Concepts In
Communications, Incorporated and Southern Communications Products, Inc. was
consummated as of January 1, 1996.
<TABLE>
<CAPTION>
International
FiberCom, Concepts In Southern Proforma
Inc. and Communications, Communications Proforma Consolidated
Subsidiaries Incorporated (1) Products, Inc. Adjustments Amounts
------------ ------------ -------------- ----------- -------
<S> <C> <C> <C> <C> <C>
Contract Revenues $12,161,263 $14,426,376 $15,566,050 $42,153,689
Cost of Contract Revenues (11,387,706) (10,610,612) (4,483,609) (26,481,927)
----------- ----------- ----------- -----------
Gross Profit 773,557 3,815,764 11,082,441 15,671,762
General and Administrative
Expenses (2,261,694) (2,931,202) (1,552,120) $(1,334,803) (2) (8,079,819)
Goodwill Impairment (2,677,490) - - (2,677,490)
----------- ----------- ----------- -----------
Income (Loss) from Operations (4,165,627) 884,562 9,530,321 4,914,453
Other Income (Expense): 115,815 (57,400) 47,467 (376,000) (3) (270,118)
----------- ----------- ----------- -----------
Net Income (Loss) before
Benefit for Income Taxes (4,049,812) 827,162 9,577,788 4,644,335
Benefit (Provision) for
Income Taxes - (324,066) (3,831,115) 2,297,451 (4) (1,857,730)
----------- ----------- ----------- -----------
Net Income (Loss) (4,049,812) 503,096 5,746,673 2,786,605
Preferred Stock Dividends (171,303) - - (132,000) (3) (303,303)
----------- ----------- ----------- -----------
Net Income (Loss) Attribu-
table to Common
Stockholders $(4,221,115) $ 503,096 $ 5,746,673 $ 2,483,302
=========== =========== =========== ===========
Earnings (Loss) per Share
Primary $ (0.74) $ .17
=========== ===========
Fully Diluted N/A $ .17
=========== ===========
Weighted Average Number of
Shares Outstanding
Primary 5,716,600 16,348,266
=========== ===========
Fully Diluted N/A 16,348,266
=========== ===========
</TABLE>
(1) To present pro forma activity of Concepts in Communication, Incorporated
acquired effective January 1, 1997.
(2) To amortize goodwill in connection with the purchase of Southern
Communications Products, Inc. on a straight-line basis over fifteen years.
(3) To record interest on the convertible subordinated debentures, the note
payable, and the dividend on the preferred stock issued to fund the
acquisitions.
(4) To revise the provision for income taxes based on the foregoing proforma
results of operations.
F-12
<PAGE>
INTERNATIONAL FIBERCOM, INC. AND SUBSIDIARIES
PROFORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For The Nine Month Period Ended September 30, 1997
Proforma Consolidated Financial Statements:
The following represents proforma condensed statements of operations for the
nine month period ended September 30, 1997, assuming the acquisition of Southern
Communications Products, Inc. was consummated as of January 1, 1997.
<TABLE>
<CAPTION>
International
FiberCom, Southern Proforma
Inc. and Communications, Proforma Consolidated
Subsidiaries Products, Inc. Adjustments Amounts
------------ -------------- ----------- -------
(Unaudited)
<S> <C> <C> <C> <C>
Contract Revenues $20,362,396 $ 8,486,849 $28,849,245
Cost of Contract Revenues (15,779,368) (2,755,785) (18,535,153)
----------- ----------- -----------
Gross Profit 4,583,028 5,731,064 10,314,092
General and Administrative Expenses (3,294,137) (1,191,856) $ (920,000) (1) (5,405,993)
----------- ----------- -----------
Income from Operations 1,288,891 4,539,208 4,908,099
Other Income (Expense): 125,390 17,741 (190,000) (2) (46,869)
----------- ----------- -----------
Net Income before Provision
for Income Taxes 1,414,281 4,556,949 4,861,230
Benefit (Provision) for Income Taxes - (1,822,780) (121,720) (3) (1,944,500)
----------- ----------- -----------
Net Income 1,414,281 2,734,169 2,916,730
Preferred Stock Dividends (148,063) - (148,063)
----------- ----------- -----------
Net Income Attributable to
Common Stockholders $ 1,266,218 $ 2,734,169 $ 2,768,667
=========== =========== ===========
Earnings per Share:
Primary (4) $ .10 $ .14
=========== ===========
Fully Diluted $ .09 $ .13
=========== ===========
Weighted Average Number of
Shares Outstanding
Primary 14,437,109 19,536,770
=========== ===========
Fully Diluted 15,860,068 20,959,729
=========== ===========
</TABLE>
(1) To amortize goodwill in connection with the purchase of Concepts In
Communications, Incorporated on a straight-line basis over fifteen years.
(2) To revise the provision for income taxes based on the foregoing proforma
results of operations.
(3) To record interest on the convertible subordinated debentures and the
dividend on the preferred stock issued to fund the acquisition.
(4) If presented in accordance with Statements of Financial Accounting Standards
No. 128 "Earnings per Share" (SFAS No. 128), the Company would have reported
basic earnings per share of $.22 on a pro forma basis for the nine month
period ended September 30, 1997.
F-13
