AMERILINK CORP, 424B4, 1997-10-24

AMERILINK CORP
424B4, 1997-10-24
WATER, SEWER, PIPELINE, COMM & POWER LINE CONSTRUCTION

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PROSPECTUS

1,000,000 SHARES

AMERILINK CORPORATION

COMMON SHARES

------------------------

Of the 1,000,000 Common Shares, without par value (the "Common Shares"),
offered hereby, 600,000 shares are being offered by AmeriLink Corporation, an
Ohio corporation (the "Company"), and 400,000 shares are being offered by
certain shareholders (the "Selling Shareholders"). The Company will not receive
any of the proceeds from the sale of the Common Shares being offered by the
Selling Shareholders hereby. See "Selling Shareholders." The Common Shares are
quoted on the Nasdaq National Market under the symbol "ALNK." On October 23,
1997, the last reported sale price of the Common Shares as quoted on the Nasdaq
National Market was $27.625 per share.

------------------------

PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE "RISK FACTORS" BEGINNING ON
PAGE 7.

------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
===================================================================================================================
PROCEEDS TO
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNTS (1) COMPANY (2) SHAREHOLDERS
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Per Share....................................... $25.00 $1.375 $23.625 $23.625
- -------------------------------------------------------------------------------------------------------------------
Total (3)....................................... $25,000,000 $1,375,000 $14,175,000 $9,450,000
===================================================================================================================
</TABLE>

(1) The Company and the Selling Shareholders have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended (the "Securities Act"). See
"Underwriting."

(2) Before deducting expenses payable by the Company estimated to be $350,000.

(3) The Selling Shareholders have granted to the Underwriters a 30-day option to
purchase up to an additional 150,000 Common Shares to cover over-allotments,
if any. If the Underwriters exercise the over-allotment option in full, the
total Price to Public, Underwriting Discounts, Proceeds to Company and
Proceeds to Selling Shareholders will be $28,750,000, $1,581,250,
$14,175,000 and $12,993,750, respectively. See "Underwriting."

------------------------

The Common Shares offered hereby are offered by the Underwriters subject to
prior sale, when, as, and if sold to and accepted by them, subject to their
right to reject any order in whole or in part and to certain other conditions.
The Underwriters reserve the right to withdraw, cancel or modify such offer and
to reject orders in whole or in part. It is expected that delivery of the Common
Shares offered hereby will be made at the offices of Legg Mason Wood Walker,
Incorporated, Baltimore, Maryland, on or about October 29, 1997.

LEGG MASON WOOD WALKER J.C. BRADFORD & CO.
INCORPORATED

October 24, 1997

<PAGE>

[ INSERT PHOTOGRAPHS ]

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON SHARES. SUCH
TRANSACTIONS MAY INCLUDE THE PURCHASE OF COMMON SHARES PRIOR TO THE PRICING OF
THE OFFERING FOR THE PURPOSE OF MAINTAINING THE PRICE OF THE COMMON SHARES, THE
PURCHASE OF COMMON SHARES FOLLOWING THE PRICING OF THE OFFERING TO COVER A
SYNDICATE SHORT POSITION IN THE COMMON SHARES OR FOR THE PURPOSE OF MAINTAINING
THE PRICE OF THE COMMON SHARES, AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING." IN CONNECTION WITH THIS
OFFERING, CERTAIN UNDERWRITERS (AND SELLING GROUP MEMBERS) MAY ENGAGE IN PASSIVE
MARKET MAKING TRANSACTIONS IN THE COMMON SHARES ON THE NASDAQ NATIONAL MARKET IN
ACCORDANCE WITH RULE 103 OF REGULATION M UNDER THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED. SEE "UNDERWRITING."

<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and Financial Statements (including Notes thereto) appearing
elsewhere or incorporated by reference in this Prospectus. Unless otherwise
indicated, the information in this Prospectus does not give effect to the
exercise of the Underwriters' over-allotment option and, unless the context
otherwise requires or indicates, all references to the Company in this
Prospectus include the Company and the business and properties of its
wholly-owned subsidiary. As used in this Prospectus, references to a "fiscal"
year refer to the 52 or 53-week period ending on the last Sunday of March or the
first Sunday of April of such period.

THE COMPANY

The Company is a nationwide provider to the telecommunications industry of
cabling services for the transmission of video, voice and data. The Company
designs, constructs, installs and maintains fiber optic, coaxial and
twisted-pair copper cabling systems for telephone service providers, including
regional Bell operating companies ("RBOCs"), traditional local exchange carriers
("LECs"), competitive local exchange carriers ("CLECs") and long distance
carriers acting as CLECs (collectively, "Telcos"); major cable television
multiple system operators ("MSOs"); systems integrators and users of local area
network ("LAN") systems; and direct broadcast satellite ("DBS") providers. The
Company, which conducts business under the trade name "NaCom," currently markets
and provides its services through a national network of 18 regional offices and
11 satellite offices which in fiscal 1997 served customers in 44 states.
Representative customers of the Company include Ameritech Corporation
("Ameritech"), Cox Communications, Inc. ("Cox"), GTE Corporation ("GTE"),
International Business Machines ("IBM"), Lucent Technologies, Inc. ("Lucent"),
MCI Communciations Corporation ("MCI"), PrimeStar Partners, L.P. ("PrimeStar"),
Time Warner Cable and US West, Inc. ("US West").

The Company's cabling services include the drops and cable feeds to, and
wiring of, residences, multi-family dwelling units ("MDUs") and commercial
buildings (collectively, "premises wiring services") and the construction and
installation of the aerial and underground distribution plant ("outside plant
construction services"). The Company provides premises wiring services
principally to the residential market and believes the Company is the only
independent nationwide provider of residential premises wiring services.

Increased demand for the transmission of video, voice and data into homes
and businesses, as well as regulatory initiatives for greater competition to
provide these services, have created a need to upgrade and expand the capacity
of the telecommunications infrastructure. The Telecommunications Act of 1996
(the "Telecommunications Act"), which was enacted in February 1996, contains
certain key provisions which were designed to enhance competition within the
telecommunications industry. These provisions include: (1) allowing Telcos to
sell video services, and in certain cases, to buy local cable televison
companies, (2) deregulating cable television companies (such as allowing them to
charge what they wish for many channels) once there is effective competition or
after three years, (3) permitting RBOCs and other LECs to enter the long
distance market once certain conditions are met in the local phone market and
(4) allowing long distance providers to enter the local phone business. As MSOs,
Telcos and other companies compete for the delivery of these services, each must
expend significant capital on the deployment of fiber optic and broadband
coaxial cable and other advanced cabling technologies to accommodate
transmission requirements. Substantial expenditures in advanced cabling
technologies are also occurring in the delivery of services to other markets,
including the market for LAN systems, as the installed base of personal
computers ("PCs") further penetrates commercial markets.

<PAGE>

In late fiscal 1996, the Company initiated a two-step strategy to improve
its results of operations and position the Company for future growth. First, the
Company decided to increase its emphasis on premises wiring services and to
shift its outside plant construction services from providing such services for
both construction projects involving retrofit upgrades of existing systems with
active subscribers ("retrofit construction projects") and construction projects
involving new cable systems without active subscribers ("new construction
projects") to providing exclusively outside plant construction services for new
construction projects. Second, the Company restructured the management of its
field operations into four regions, decentralizing regional operations and
marketing decision making to senior field personnel. Since the implementation of
these strategies, the Company's total revenues increased by 12.5% from $56.1
million in fiscal 1996 to $63.0 million in fiscal 1997 and by 60.1% from $13.5
million in the first quarter of fiscal 1997 to $21.7 million in the first
quarter of fiscal 1998. Net income increased by approximately 250% from $457,000
in fiscal 1996 to $1.6 million in fiscal 1997 and by over 400% from $222,000 in
the first quarter of fiscal 1997 to $1.2 million in the first quarter of fiscal
1998.

The Company believes there continue to be growing opportunities in both
residential and commercial markets to design, construct, install and maintain
cabling systems as telecommunications service providers increase capital
expenditures for their infrastructures and implement plans to improve service in
response to competition. In order to eliminate the ongoing expense and effort
required to manage labor intensive, multi-office service organizations, the
cable television industry historically has sought to outsource a large portion
of these services on a unit cost basis to independent contractors, such as the
Company. Telcos and other telecommunications service providers are also
beginning to seek new outsourcing solutions in response to competitive price
pressures. In addition, LAN cabling services are typically performed by third
party vendors which construct, install and maintain LAN systems for businesses
on a contract basis. The Company believes that it will continue to gain
significant cabling opportunities in both residential and commercial markets as
new technologies, increased services and competition fuel the growing demand for
the delivery of video, voice and data into homes and businesses. Finally, the
Company believes that it will continue to gain significant cabling opportunities
to provide services to DBS providers given the potential market for video, audio
and data programming services via satellite.

BUSINESS AND GROWTH STRATEGIES

The Company intends to capitalize on the increasing demand for video, voice
and data services, the increased competition fueled by the Telecommunications
Act and the introduction of new technologies by pursuing the following
strategies:

o Leverage Existing Infrastructure to Capitalize on Industry
Growth. Through its network of 29 regional and satellite offices which
in fiscal 1997 served customers in 44 states, the Company is able to
offer providers of video, voice and data services a one-stop outsourcing
solution for their cabling services needs. Building on its existing
customer base in the telecommunications, cable television and network
services industries, the Company intends to further differentiate itself
from its competitors by aggressively pursuing opportunities to provide
cabling services on a national and regional basis, rather than on a
strictly local basis.

o Focus on Premises Wiring Services. The Company intends to continue its
emphasis on premises wiring services, which have been the Company's core
services for nearly 20 years. Premises wiring services, when provided on
a regional or national scale, are logistically intensive. With its
current residential premises wiring services volume in excess of 15,000
completed work orders per week, the Company believes that, as the only
independent nationwide provider of residential premises wiring services,
it is better positioned to bid on large-scale contracts than its
competitors, allowing the Company to gain market share.

<PAGE>

o Expand Services Performed for Telcos. The Company has already achieved
significant growth in the premises wiring services performed for Telcos
as revenues from Telcos (excluding CLECs) increased by over 400% from
$2.0 million in fiscal 1996 (3.6% of revenues) to $10.3 million in fiscal
1997 (16.4% of revenues). Building on the base of premises wiring
services performed for US West, GTE, Pacific Bell ("PacBell") and
Ameritech, the Company intends to pursue further opportunities within its
existing customer base as well as with additional Telcos it currently
does not serve.

o Build a Nationwide, Diversified Telecommunications Services Business. As
a result of the opportunities presented by the passage of the
Telecommunications Act and the continued industry trend toward the
outsourcing of video, voice and data cabling services, the Company
believes it has strong prospects for growth. The Company intends to gain
greater market share from its existing customer base, to capture new
customers in industries in which it currently competes, and to expand
into new industries requiring cabling services, including the utility
industry. As appropriate, the Company will selectively open new offices
either to fill in existing markets or to gain access to new markets, such
as the Pacific Northwest. Finally, the Company will consider acquisitions
to complement its business if such acquisitions would enable the Company
to add significant new customers, increase its ability to provide
existing or new services or expand its business into new regional
geographic markets.

The executive offices of the Company are located at 1900 East
Dublin-Granville Road, Columbus, Ohio 43229 and its telephone number is (614)
895-1313.

THE OFFERING

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<S> <C>
Common Shares offered:

By the Company........................................ 600,000 shares

By the Selling Shareholders........................... 400,000 shares (1)

Common Shares to be outstanding after this offering..... 4,205,580 shares (1)(2)

Use of proceeds by the Company.......................... For the repayment of certain bank indebtedness and
general corporate purposes, including working capital,
expansion of sales and marketing activities, openings of
new field offices and possible acquisitions of
businesses, services or technology complementary to the
Company's business. See "Use of Proceeds."

Nasdaq National Market symbol........................... ALNK
</TABLE>

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(1) Assumes no exercise of the Underwriters' over-allotment option. See
"Underwriting."

(2) Excludes an aggregate of 667,000 Common Shares reserved for issuance under
the Company's stock option plans and other stock options, of which 551,136
are issuable upon the exercise of options outstanding as of the date of this
Prospectus, after giving effect to the exercise by Larry R. Linhart of
outstanding options to purchase 80,000 Common Shares immediately prior to
Mr. Linhart's sale of such shares pursuant to this offering.

<PAGE>

SUMMARY FINANCIAL DATA

SUPPLEMENTAL PRO FORMA DATA AS ADJUSTED(3):
Income before income taxes......... $ 3,308 $ 2,166
Pro forma net income............... 1,928 1,278
Pro forma net income per common
share............................ $ 0.48 $ 0.32
Pro forma weighted average common
shares outstanding............... 3,980 3,932
</TABLE>

<TABLE>
<CAPTION>
JUNE 29, 1997
-------------------------
ACTUAL AS ADJUSTED(4)
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(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Working capital....................................................................... $ 13,434 $ 19,509
Total assets.......................................................................... 27,676 33,751
Long-term debt........................................................................ 7,750 --
Shareholders' equity.................................................................. 11,983 25,808
</TABLE>

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(1) All fiscal years represent 52-week periods, except fiscal 1994 represents a
53-week period.

(2) Net income for fiscal 1993 and 1994 has been adjusted, on a pro forma basis,
for income taxes that would have been reported had the Company been subject
to federal, state and local income taxes for such periods. See Notes 1 and 7
of Notes to Financial Statements.

(3) Supplemental pro forma as adjusted income before taxes and net income
reflect the elimination of interest on existing debt. The pro forma weighted
average Common Shares outstanding include the estimated number of shares to
be issued to fund the repayment of such debt.

(4) Adjusted to reflect the sale of the Common Shares offered by the Company
hereby and the use of the net proceeds therefrom. See "Use of Proceeds."

<PAGE>

RISK FACTORS

The statements contained in this Prospectus that are not historical facts
or are descriptions of emerging developments in the markets for the Company's
services are forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995). Such forward-looking statements may
be identified by, among other things, the use of forward-looking terminology
such as "believes," "expects," "may," "will," "should," or "anticipates" or the
negative thereof or other variations thereon or comparable terminology, or by
discussions of strategy that involve risks and uncertainties. From time to time,
the Company or its representatives have made or may make forward-looking
statements, orally or in writing. Such forward-looking statements may be
included in various filings made by the Company with the Securities and Exchange
Commission (the "Commission"), or press releases or oral statements made by or
with the approval of an authorized executive officer of the Company. These
forward-looking statements, such as statements regarding anticipated future
revenues, capital expenditures and other statements regarding matters that are
not historical facts, involve predictions. The Company's actual results,
performance or achievements could differ materially from the results expressed
in, or implied by, these forward-looking statements depending upon a variety of
important factors including, among others, competitive and regulatory risks
associated with the telecommunications industry, the risk of changing market
conditions and customer purchase authorizations which may be influenced by
budget cycles of the Company's customers, consolidation within the
telecommunications industry, and the success of various technologies and
business strategies employed by the Company's customers, and other risks
described in the Company's Commission filings and those described under the
headings "Management's Discussion and Analysis of Financial Condition and
Results of Operations," "Business" and in the risk factors set forth below.
Prospective investors should carefully consider the following factors, in
addition to other information contained in this Prospectus, prior to making an
investment in the Common Shares.

Ability to Manage Growth. The Company's ability to manage its anticipated
growth successfully will depend upon the ability of the Company to manage the
corresponding increase in the demands on its administrative and operational
resources and the training and management of its human resources. In particular,
to the extent the Company expands its services, customer base and targeted
markets, there will be additional demands on the Company's customer support,
sales and field management resources. There can be no assurance that the
Company's administrative and operational infrastructure will be adequate to
effectively manage its growth. The inability to manage its growth successfully
could have a material adverse effect on the Company's results of operations and
financial condition.

Short-Term Contracts. The Company has no long-term contractual commitments
to provide its services. However, in order to provide proper support for its
service contracts (which generally can be terminated on 30 days' notice), the
Company must make financial commitments to staff local field offices and incur
overhead expenses, including leases extending for terms of at least one year.
There can be no assurance that the Company will be retained to perform a
sufficient number of projects to fund its long-term commitments and to be
profitable in any given market. See "Business -- Principal Services" and "--
Principal Customer Groups."

Reliance on Continued Use of Outsourcing by Customers. The Company relies
upon outsourcing as the exclusive source of its business. Nearly all MSOs and
Telcos employ personnel who perform the same types of services as those provided
by the Company. Although a significant portion of these services is outsourced
today, there can be no assurance that MSOs and Telcos will continue to outsource
cabling services in the future. Moveover, the Company's reliance upon
outsourcing may make it more vulnerable in an economic downturn to the extent
such downturn causes the Company's customers to change their outsourcing
policies.

Available Sources of Labor. The Company's operating profitability and
capacity to increase revenues are largely dependent upon the Company's ability
to attract and retain qualified regional directors, regional managers, area
managers, project managers and cable installers. When economic activity
increases, sources of such personnel available to the Company may be adversely
affected.

<PAGE>

Customer Concentration. Generally, a field office relies on one customer
for a significant portion of its revenues. If a project for such customer is
completed, curtailed or terminated, and not replaced, the resulting loss of
revenue would have a material adverse effect on the field office and could have
a material adverse effect on the results of operations and financial condition
of the Company. For fiscal 1997, approximately 17%, 13% and 10% of the Company's
revenues were generated from its Los Angeles offices (primary customer GTE),
Columbus offices (primary customer Time Warner Cable) and Houston offices
(primary customer Time Warner Cable), respectively. Time Warner Cable
represented approximately 19% of the Company's revenue for fiscal 1997. No other
customer of the Company represented more than 10% of revenue for fiscal 1997.
Time Warner Cable, GTE and Ameritech represented approximately 17%, 17% and 11%,
respectively, of the Company's revenue for the first quarter of fiscal 1998. See
"Business -- Principal Services" and " -- Principal Customer Groups" and Note 1
of Notes to Financial Statements.

Variability in Quarterly Results and Seasonality. The Company's quarterly
revenues and associated operating results have in the past, and may in the
future, vary depending upon a number of factors. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Variability in
Quarterly Results and Seasonality." The Company has no long-term contractual
commitments to provide its services. The contractual commitments which do exist
generally can be terminated on 30 days' notice and are contracted on a
project-by-project basis. Therefore, the amount of work performed at any given
time and the general mix of customers for which work is being performed can vary
significantly. For example, in June 1997, SBC Communications, Inc. halted
construction of a hybrid fiber-coaxial cable project in California. That project
generated revenues of approximately $1.1 million for the first quarter of fiscal
1997. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Results of Operations -- Thirteen Weeks Ended June 29,
1997 compared to Thirteen Weeks Ended June 30, 1996" and "Business -- Principal
Services" and " -- Principal Customer Groups." Consolidation within the
telecommunications industry may also delay or depress capital spending, as
companies assess their new business plans and strategies and focus on
administrative and operational issues associated with their acquisitions or
alliances. The Company's operations historically have also been influenced by
the budget cycles of the Company's customers. Many of the Company's customers
utilize a calendar year budget cycle funded with quarterly purchase
authorizations, which in certain fiscal years has resulted in a lack of
availability of funds in the Company's third fiscal quarter and has delayed work
authorizations in the Company's fourth fiscal quarter. Telecommunications
providers are also subject to actual and potential local, state, and federal
regulations that influence the availability of work for which the Company may
compete. Weather may affect operating results due to the fact that outside plant
construction services are performed outdoors. Weather can also impact the
Company's premises wiring services due to the limited and lost production
associated with poor driving conditions and generally difficult working
environments. Operating results may also be affected by the success of various
technologies and business strategies employed by them.

Variable Capital Spending by MSOs. Historically, the Company's revenues
and results of operations have been largely impacted by the level of capital
spending by MSOs which, in fiscal 1997, represented approximately 49% of the
Company's revenues. The amount of that capital spending has been cyclical and
affected by anticipated or actual government regulation, industry access to
financial markets, industry consolidation and other demands for capital. In the
past, delayed, depressed or erratic capital spending has negatively affected the
Company's operating results. While various MSOs have recently either increased
their capital expenditures or announced plans to do so, the level of capital
spending by MSOs could be erratic and unpredictable. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Overview."

Competition. The Company faces competition from the in-house service
organizations of MSOs and Telcos and from independent third parties in most of
the markets in which it operates. The Company believes that while it may be
considered a major competitor in many of the markets in which it provides
cabling services, there are few barriers to entry into the cabling service
business and, as a result, any business that has access to persons who possess
technical expertise may become a

<PAGE>

competitor of the Company. The market for providing cabling services to Telcos
is highly competitive and, in the case of outside plant construction services
and cabling services for commercial buildings, includes national competitors
with greater financial resources than the Company which historically have
provided telephone cabling services to Telcos. The markets in which the Company
provides LAN cabling services are highly competitive and many of the competitors
in those markets have greater financial resources than the Company. In addition,
there are a large number of competitors which are smaller than the Company.
Smaller regional and local competitors may be able to offer lower prices because
of lower overhead expenses. Because of the highly competitive bidding
environment for cabling service contracts, the price of a cabling service
contractor's bid has often been the deciding factor in determining whether such
contractor was awarded a contract for a cabling project. There can be no
assurance that the Company's competitors will not develop cabling services that
achieve greater market acceptance or that are superior in both price and quality
to the Company's services. Further, there can be no assurance that the Company
will be able to maintain and enhance its competitive position. See "Business --
Competition."

Government Regulation of Customers. The Telecommunications Act has
resulted in substantial changes in the marketplace for communications services.
There can be no assurance that the intent of the Telecommunications Act to
promote competition among providers of telecommunications services will be
successfully realized in all areas. For example, the Telecommunications Act
contains provisions which are designed to permit access by long distance
providers to local exchanges. The Federal Communication Commission ("FCC")
adopted pricing and other guidelines to implement the interconnection provisions
of the Telecommunications Act, but the 8th Circuit Court of Appeals recently
vacated most of the FCC's guidelines leaving the responsibility for setting
pricing and other guidelines with respect to interconnection up to the
individual state public service commissions. To the extent that implementation
of the Telecommunications Act is delayed or uncertain, some of the Company's
customers may delay capital expenditures, which delay could have an adverse
effect on the Company's results of operations and financial condition.

Technological Displacement of Cabling Technology. Cabling systems that are
used for the transmission of video, voice and data face potential displacement
by various technologies, including wireless technologies, such as DBS services.
Wireless technologies may reduce consumer demand for wired services and, thus,
the need for the Company's cabling services. Although wireless communications
may displace the demand for cable television, current wireless systems depend
upon the use of satellite dishes or other antennae and require residential
cabling services which the Company does perform for DBS providers. There can be
no assurance, however, that if wireless technologies continue to reduce consumer
demand for cable television, that the Company will continue to be able to
replace the work performed for MSOs with projects for DBS providers.

Use of Independent Contractors and Potential Adverse Impact of
Reclassification as Employees by Governmental Authorities. The Company provides
most of its services through independent contractors. The Company's success is
dependent upon its ability to attract and retain the services of qualified
independent contractors. From time to time, state and federal authorities have
asserted that these contractors should be deemed to be employees of the Company
for purposes of taxation and coverage under wage and hour, workers' compensation
and unemployment compensation laws and regulations. None of these asserted
claims has had a material adverse effect on the Company's results of operations
or financial condition. However, if, in the future, additional assertions by
state or federal authorities are upheld, the Company could incur significant
litigation costs and liabilities and, if the Company were required to treat
individual installers as employees rather than independent contractors, the
Company's operating expenses could increase significantly with potential adverse
effects on its results of operations and financial condition. See "Business --
Personnel."

Dependence on Key Employees. The development of the Company's business has
been dependent, to a large extent, on Larry R. Linhart, Chairman of the Board of
Directors, President and Chief Executive Officer of the Company, Joseph L.
Govern, Vice President -- Operations of the Company, James W. Brittan, Treasurer
and Vice President -- Finance and the Company's regional

<PAGE>

directors. The loss of the services of Messrs. Linhart, Govern or Brittan or any
of such regional directors could adversely affect the Company.

State and Local Licenses. The Company is required by many state and local
authorities to obtain various contracting or engineering licenses or permits to
conduct its business. The Company has historically been successful in obtaining
and maintaining proper licensing and acquiring necessary permits from all
appropriate authorities. However, because the standards for certain state and
local licenses and permits are often unclear, there can be no assurance that
state and local regulatory authorities who administer such licenses or permits
will not determine that the Company has not obtained a relevant license or
permit. Although the Company has not experienced significant difficulties in
obtaining a license or permit, the failure of the Company to obtain and maintain
necessary licenses or permits in some of the jurisdictions in which it conducts
business may have an adverse effect on the Company. The Company believes that it
is currently in compliance with all material state and local license and permit
requirements.

Shares Eligible For Future Sale. Future sales of the Common Shares in the
public market following this offering could adversely affect the market price of
the Common Shares. Substantially all outstanding Common Shares are freely
tradeable by persons other than "affiliates" of the Company without restriction,
including 401,260 Common Shares tradeable pursuant to an effective Registration
Statement on Form S-8. The Company, its directors and executive officers have
agreed not to offer to sell, sell, transfer or otherwise dispose of any Common
Shares for a period of 120 days after the date of this Prospectus without the
consent of the representatives of the Underwriters, except for issuances of
Common Shares upon the exercise of outstanding stock options or pursuant to
other employee benefit plans. Pursuant to the Shareholders' Agreement (as
hereinafter defined), Larry R. Linhart, Robert L. Powelson and E. Len Gibson
(the "Principal Shareholders") have registration rights which will obligate the
Company to register Common Shares to be offered and sold on their behalf under
certain circumstances. See "Selling Shareholders -- Principal Shareholders'
Agreement." The offer, issuance or sale or the potential for offer, issuance or
sale of any such Common Shares could have an adverse effect on the market price
for the Common Shares.

Continued Control by Principal Shareholders. The Principal Shareholders
will beneficially own approximately 47.0% of the outstanding Common Shares
immediately after this offering (43.5% if the Underwriters' over-allotment
option is exercised in full), including an aggregate of 270,000 Common Shares
(240,000 Common Shares if the Underwriters' over-allotment option is exercised
in full) issuable upon the exercise of options held by Mr. Linhart, and will
have significant influence over the outcome of all matters submitted to the
shareholders for approval, including the ability to effectively control the
election of all directors of the Company. See "Selling Shareholders" and
"Capital Shares." Pursuant to the terms of the Shareholders' Agreement, the
Principal Shareholders have agreed until August 19, 2004 (i) to nominate or
cause the Board of Directors to nominate and recommend to the shareholders for
election each of the Principal Shareholders and such number of outside directors
as are necessary to fill any vacancies on the Board of Directors, and (ii) to
cause the directors of each subsidiary of the Company to be Messrs. Linhart and
Powelson and a third individual to be selected by them. See "Selling
Shareholders -- Shareholders' Agreement."

Dividend Policy. The Company presently intends to retain its earnings to
finance the growth and development of its business and does not expect to pay
any cash dividends in the foreseeable future. See "Price Range of Common Shares
and Dividend Policy."

Anti-Takeover Provisions. Certain provisions of the Company's Articles of
Incorporation and Code of Regulations, including the provisions in the Company's
Articles of Incorporation which require a supermajority shareholder vote of 75%
of the voting shares to approve certain business combinations and which
authorize the Company to purchase its capital shares by action of its Board of
Directors. The effect of such provisions may inhibit takeover bids and decrease
the chance of shareholders realizing a premium over market price for their
Common Shares as a result of a takeover bid. See "Capital Shares."

<PAGE>

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of the Common
Shares offered by the Company hereby, after deducting the estimated underwriting
discount and offering expenses, are expected to be approximately $13.8 million,
without giving effect to the exercise by Larry R. Linhart of outstanding options
to purchase 80,000 Common Shares for an aggregate purchase price of $320,000
immediately prior to Mr. Linhart's sale of such shares pursuant to this
offering. Approximately $7.8 million will be used to repay in full the Company's
revolving credit note (approximately $7.8 million outstanding at June 29, 1997)
under its loan agreement with a commercial bank which bears interest at prime
minus 1% (7.5% at September 29, 1997) and which matures at September 30, 1998.
The balance will be used for general corporate purposes, including working
capital, expansion of sales and marketing activities, openings of new field
offices and possible acquisitions of businesses, services or technology
complementary to the Company's business; however, the Company currently has no
understandings, commitments or agreements with respect to any material
acquisition. Pending such uses, the net proceeds will be invested in short-term
investment grade securities. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."

PRICE RANGE OF COMMON SHARES AND DIVIDEND POLICY

The Common Shares are quoted on the Nasdaq National Market under the symbol
"ALNK." The following table sets forth for the periods indicated the high and
low last sales prices for the Common Shares as reported by the Nasdaq National
Market.

HIGH LOW
------- --------

FISCAL 1996
First Quarter........................................... $10.000 $ 6.000
Second Quarter.......................................... $ 9.250 $ 7.250
Third Quarter........................................... $ 8.750 $ 6.250
Fourth Quarter.......................................... $ 9.250 $ 6.750

FISCAL 1997
First Quarter........................................... $ 9.000 $ 7.625
Second Quarter.......................................... $ 7.750 $ 6.500
Third Quarter........................................... $ 7.625 $ 5.000
Fourth Quarter.......................................... $ 8.000 $ 5.125

FISCAL 1998
First Quarter........................................... $ 9.500 $ 6.000
Second Quarter.......................................... $33.875 $ 9.406
Third Quarter (through October 23, 1997)................ $36.250 $27.625

On October 23, 1997, the last reported sale price of the Common Shares on
the Nasdaq National Market was $27.625 per share.

As of June 18, 1997, there were approximately 1,468 beneficial owners of
the Company's Common Shares.

The Company has not paid cash dividends since its initial public offering
in August 1994. The Company presently intends to retain its earnings, if any, to
finance the growth and development of its business and does not expect to pay
any cash dividends in the foreseeable future. The payment and rate of future
dividends, if any, are subject to the discretion of the Board of Directors and
will depend upon the Company's earnings, financial condition, capital
requirements and other factors.

<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company, as of
June 29, 1997, and as adjusted, as of that date, to give effect to the sale by
the Company of 600,000 Common Shares in this offering and the application of the
estimated net proceeds from this offering, as described in "Use of Proceeds."
The following table should be read in conjunction with the Financial Statements
of the Company and the related Notes thereto.

<TABLE>
<CAPTION>
JUNE 29, 1997
-------------------------
ACTUAL AS ADJUSTED(1)
-------- --------------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt (2).................................................................. $ 7,750 $ --
Shareholders' equity:
Preferred shares, without par;
1,000,000 shares authorized; none issued and outstanding....................... -- --
Common shares, without par;
10,000,000 shares authorized;
3,481,580 shares issued and outstanding;
4,081,580 shares as adjusted................................................... 8,085 21,910
Retained earnings................................................................... 3,898 3,898
--------- ----------
Total shareholders' equity.......................................................... 11,983 $ 25,808
--------- ----------
Total capitalization................................................................ $ 19,733 $ 25,808
========= ==========
</TABLE>

- ------------------

(1) Adjusted to reflect the sale of Common Shares offered by the Company hereby
and the use of the net proceeds therefrom. See "Use of Proceeds."
Adjustments do not give effect to the exercise by Larry R. Linhart of
outstanding options to purchase 80,000 Common Shares for an aggregate
purchase price of $320,000 immediately prior to Mr. Linhart's sale of such
shares pursuant to this offering.

(2) See Note 4 of Notes to Financial Statements for a description of the
Company's long-term debt.

<PAGE>

SELECTED FINANCIAL DATA

The selected financial data included in the following table should be read
in conjunction with the Company's Financial Statements and related Notes and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing elsewhere in this Prospectus. The selected financial data
relating to the statements of operations for each of the Company's five fiscal
years in the period ended March 30, 1997 and the balance sheet data as of March
28, 1993, April 3, 1994, April 2, 1995, March 31, 1996 and March 30, 1997 have
been derived from the Company's audited financial statements. The selected
financial data as of, and for the thirteen weeks ended, June 30, 1996 and June
29, 1997 are derived from the Company's unaudited financial statements, which,
in management's opinion, include all adjustments (consisting of only normal
recurring adjustments) necessary for a fair presentation of the information set
forth therein but are not necessarily indicative of the results that may be
expected for the full year.

<TABLE>
<CAPTION>
THIRTEEN WEEKS
FISCAL YEAR ENDED ENDED
----------------------------------------------------------- --------------------
MARCH 28, APRIL 3, APRIL 2, MARCH 31, MARCH 30, JUNE 30, JUNE 29,
1993 1994 1995 1996 1997 1996 1997
----------- --------- --------- ----------- ----------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(1):
Revenues............................. $ 24,970 $ 32,833 $ 47,541 $ 56,055 $ 63,036 $ 13,521 $ 21,651
Gross profit......................... 8,496 10,994 15,675 17,105 21,738 4,500 8,302
Selling, general and administrative
expenses........................... 7,810 9,910 12,895 15,935 18,437 4,004 6,136
Income from operations............... 686 1,084 2,780 1,170 3,301 496 2,166
Interest expense..................... 117 245 343 512 617 128 165
Income before income taxes (2)....... 577 841 2,487 686 2,691 369 2,001
Net income (2)....................... 346 505 1,492 457 1,568 222 1,181
Net income per common share (2)...... $ 0.13 $ 0.19 $ 0.45 $ 0.13 $ 0.44 $ 0.06 $ 0.33
Weighted average common shares
outstanding........................ 2,702 2,702 3,351 3,626 3,589 3,640 3,596
SUPPLEMENTAL PRO FORMA DATA AS
ADJUSTED(3):
Income before income taxes........... $ 3,308 $ 2,166
Pro forma net income................. 1,928 1,278
Pro forma net income per common
share.............................. $ 0.48 $ 0.32
Pro forma weighted average common
shares outstanding................. 3,980 3,932
</TABLE>

<TABLE>
<CAPTION>
JUNE 29, 1997
MARCH 28, APRIL 3, APRIL 2, MARCH 31, MARCH 30, JUNE 30, -------------------------
1993 1994 1995 1996 1997 1996 ACTUAL AS ADJUSTED(4)
----------- --------- --------- ----------- ----------- --------- -------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital....... $2,968 $3,691 $7,703 $9,068 $13,679 $9,756 $13,434 $19,509
Total assets.......... 8,334 10,363 17,133 20,554 26,211 21,524 27,676 33,751
Total debt............ 2,321 4,206 4,009 6,563 9,069 6,959 7,750 --
Shareholders' equity
(5)................. 3,641 3,315 8,754 9,211 10,082 9,432 11,983 25,808
</TABLE>

- ------------------
(1) All fiscal years represent 52-week periods, except fiscal 1994 represents a
53-week period.

(3) Supplemental pro forma as adjusted income before taxes and net income
reflect the elimination of interest on existing debt. The pro forma weighted
average common shares outstanding include the estimated number of shares to
be issued to fund the repayment of such debt.

(4) Adjusted to reflect the sale of Common Shares offered by the Company hereby
and the use of the net proceeds therefrom. See "Use of Proceeds."

(5) The Company made S corporation distributions of $940,000 in fiscal 1993, no
distributions in fiscal 1994, and distributions of $3.2 million in fiscal
1995 ($2.7 million of which was made in conjunction with the Company's
initial public offering in August 1994 and $500,000 of which was paid in
April 1994). No dividends have been paid since the Company's initial public
offering.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

OVERVIEW

The Company reported record revenues and operating income for the 1997
fiscal year which ended March 30, 1997. Net income per common share for the year
more than tripled to $0.44 per share versus $0.13 recorded in fiscal 1996. The
Company's increased revenues and operating profitability are the result of three
primary factors: (1) an improving market and more work opportunities as a result
of the Telecommunications Act; (2) successful implementation of a two-step
strategy of (a) increasing its emphasis on premises wiring projects and shifting
its outside plant construction services exclusively to new construction
projects, and (b) restructuring the management of its field operations; and (3)
a continued focus on broadening the Company's customer base beyond its
traditional cable television industry base.

Key provisions of the Telecommunications Act were designed to enhance
competition within the telecommunications industry. These provisions include:
(1) allowing Telcos to sell video services, and in certain cases, to buy local
cable television companies, (2) deregulating cable companies (such as allowing
them to charge what they wish for many channels) once there is effective
competition or after three years, (3) permitting RBOCs and other LECs to enter
the long distance market once certain conditions are met in the local phone
market, and (4) allowing long distance providers to enter the local phone
business. The Company believes that the enhanced competitive environment
fostered by the Telecommunications Act has had, and should continue to have, a
favorable impact on the Company as it should increase spending by
telecommunication providers and the demand for the Company's cabling services.
Faced with competition for video services from both Telcos and DBS providers,
many cable television companies have announced plans to increase their capital
spending in order to expand their existing channel capacity and to offer new
services and next generation technologies and to improve picture and sound
quality. Increased competition and capital spending allows the Company to deploy
its resources on those projects that offer the highest possible profitability.
Since all premises wiring cabling services are substantially similar in nature,
the Company has the ability to shift management and production resources to
those industries, customers, and projects that provide the most economic
potential.

In late fiscal 1996, the Company initiated a two-step strategy to improve
its results of operations and position the Company for future growth. First, the
Company decided to increase its emphasis on premises wiring services and to
shift its outside plant construction services from providing such services for
both retrofit construction projects and new construction projects to providing
exclusively outside plant construction services for new construction projects.
See "Business -- Principal Services." Second, the Company restructured the
management of its field operations into four regions, decentralizing regional
operations and marketing decision making to senior field personnel. As a result
of the implementation of these strategies, the Company's total revenues
increased by 12.5% from $56.1 million in fiscal 1996 to $63.0 million in fiscal
1997 and by 60.1% from $13.5 million in the first quarter of fiscal 1997 to
$21.7 million in the first quarter of fiscal 1998. Net income increased by
approximately 250% from $457,000 in fiscal 1996 to $1.6 million in fiscal 1997
and by over 400% from $222,000 in the first quarter of fiscal 1997 to $1.2
million in the first quarter of fiscal 1998.

<PAGE>

The following table sets forth for fiscal 1996 and 1997 approximate Company
revenues by principal services provided and the change in Company revenues from
each service from fiscal 1996 to fiscal 1997.

<TABLE>
<CAPTION>
CHANGE FROM
PRINCIPAL SERVICES PROVIDED FISCAL 1996 FISCAL 1997 FISCAL 1996
- --------------------------- ---------------------- --------------------- ----------------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Premises wiring...................................... $ 37.3 66% $ 53.4 85% $ 16.1 43%
Outside plant construction........................... 18.8 34% 9.6 15% (9.2) (49%)
--------- --------- --------- --------- ---------
Total.............................................. $ 56.1 100% $ 63.0 100% $ 6.9 12%
========= ========= ========= ========= =========
</TABLE>

In addition, the Company has continued to diversify its customer base
beyond its traditional cable television industry base. Historically, the
Company's revenues and results of operations have largely been impacted by the
level of capital spending within the domestic cable industry. The amount of
capital spending has been cyclical and has been affected by a number of factors,
including perceived or actual government regulation, industry access to
financial markets, industry consolidation, and other demands for capital, such
as personal communication service ("PCS") capital commitments. In the past,
delayed, depressed or erratic capital spending has negatively affected the
Company's operating results. The Company has progressively reduced its
concentration in the cable industry by actively marketing its premises wiring
services to other industries, primarily Telcos and commercial network customers.

The following table sets forth for fiscal 1996 and 1997 approximate Company
revenues by principal customer group and the change in Company revenues by
principal customer group from fiscal 1996 to fiscal 1997.

<TABLE>
<CAPTION>
CHANGE FROM
PRINCIPAL CUSTOMER GROUP FISCAL 1996 FISCAL 1997 FISCAL 1996
- ---------------------------------------------- -------------------- -------------------- --------------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
MSOs(1)....................................... $ 37.8 67% $ 30.7 49% ($ 7.1) (19%)
LAN customers................................. 7.7 14% 13.8 22% 6.1 79%
Telcos(2)..................................... 2.7 5% 11.3 18% 8.6 319%
DBS providers(3).............................. 5.1 9% 6.8 11% 1.7 33%
Other......................................... 2.8 5% 0.4 -- (2.4) (86%)
--------- --------- --------- --------- ---------
Total....................................... $ 56.1 100% $ 63.0 100% $ 6.9 12%
========= ========= ========= ========= =========
</TABLE>

- ------------------
(1) Includes (a) approximately $2.0 million and $1.5 million in fiscal 1996 and
1997, respectively, from an MSO that was acquired by a Telco in late 1996
and (b) approximately $2.4 million in fiscal 1997 from a general contractor
in its capacity as a contractor for an MSO which is owned by a Telco.

(2) Includes (a) approximately $0.4 million and $0.9 million in fiscal 1996 and
1997, respectively, from a CLEC and (b) approximately $0.2 million in fiscal
1996 from a general contractor in its capacity as a contractor for a Telco.

(3) Includes approximately $4.6 million and $5.2 million in fiscal 1996 and
1997, respectively, from a DBS provider which is controlled by MSOs.

RESULTS OF OPERATIONS

Revenue is generated from cabling projects performed via work orders issued
under master contracts. Contract costs may vary depending upon the contract
volume, the level of productivity, competitive factors in the local market, and
other items. Cost of sales includes subcontractor production costs, materials
not supplied by the customer, vehicle and machinery expenses, and business
insurance related costs. Selling, general and administrative expenses consist
primarily of field employee wages and payroll costs. The Company believes that
its selling, general and administrative cost structure is maintained at levels
necessary to adequately support both anticipated near term

<PAGE>

revenue levels and projected longer term revenue levels. These anticipated
revenue levels and associated cost structures may vary among the Company's
regional field offices and geographic market areas.

THIRTEEN WEEKS ENDED JUNE 29, 1997 COMPARED TO THIRTEEN WEEKS ENDED JUNE 30,
1996

Revenues

Total revenues for the first quarter of fiscal 1998 were $21,651,070
compared to $13,521,020 for the first quarter of fiscal 1997, an increase of
60.1%.

Revenues derived from residential and commercial premises wiring activities
increased by 81.1% to a record $18.6 million in the first quarter of fiscal
1998, versus approximately $10.2 million in the prior year period. Such revenues
accounted for 85.7% of the Company's total revenues for the most recent quarter,
versus 75.8% a year earlier, consistent with the Company's announced strategy to
focus efforts on premises wiring activities.

Premises wiring revenues derived from Telcos that are building or expanding
video systems increased to approximately $8.3 million (approximately 38% of
total Company revenues) in the first quarter of fiscal 1998 compared to
approximately $0.6 million (approximately 4% of total Company revenues) in the
first quarter of fiscal 1997. Of the total $8.3 million of revenues from Telcos,
approximately $3.7 million, or 17.2% of total Company revenues, was generated
from work orders issued under contracts with GTE Media Ventures, a division of
GTE.

The Company believes that as a result of the Telecommunications Act,
certain Telcos have increased their capital expenditures for video systems, and
the Company has aggressively marketed its services to these companies. The first
quarter of fiscal 1998 included Telco revenues of approximately $1.1 million
pursuant to a contract that was terminated in June 1997, due to that customer's
decision to stop deployment of its hardwire cable system.

Gross Profit

Gross profit for the first quarter of fiscal 1998 was $8,302,042, or 38.3%
of revenues, as compared to $4,499,776, or 33.3% of revenues, the first quarter
of fiscal 1997. The increase in gross margin is due primarily to a decrease in
cabling materials expense (included in cost of sales) as a percent of total
Company revenues. The majority of the Company's commercial network cabling
contracts are turnkey contracts, in which the Company provides both the labor
and materials necessary for the network installation. These cabling materials,
which are billed at near cost, comprised approximately 8% of total Company
revenues in the first quarter of fiscal 1998 versus approximately 15% in the
comparable period in fiscal 1997. The percentage decline in cabling materials is
primarily due to strong first quarter fiscal 1998 labor only revenues derived
from Telcos. The increase in gross margin is also a result of subcontractor
production costs, which decreased as a percent of labor cabling revenues in the
first quarter of fiscal 1998 compared to the first quarter of fiscal 1997.
Contract and project subcontractor costs are dependent upon a number of factors,
including pricing for the Company's services, the level of productivity,
competitive factors in the local market, and other items.

Selling, General and Administrative

Selling, general and administrative expenses for the first quarter of
fiscal 1998 were $6,136,163, or 28.3% of revenues, as compared to $4,004,152 or
29.6% of revenues for fiscal 1997.

The Company's selling, general and administrative cost structure, which
consists primarily of field employee wages and payroll costs, is maintained at
levels necessary to adequately support both anticipated near term revenues and
projected longer term revenues. These anticipated revenue levels and associated
cost structures may vary among the Company's regional field offices and
geographic market areas. The dollar increase in selling, general, and
administrative expenses for the first quarter of fiscal 1998 is primarily due to
increased employee wages and associated costs incurred to support both current
period revenues and anticipated future revenues.

Interest Expense

Interest expense was $165,051 or 0.8% of revenues for the first quarter of
fiscal 1998 as compared to $127,632 or 0.9% of revenues for the first quarter of
fiscal 1997. The dollar increase in interest expense is primarily due to
increased borrowings to finance accounts receivable and work-in-process.

<PAGE>

FISCAL 1997 COMPARED TO FISCAL 1996

Revenues

Total revenues for fiscal 1997 were $63,035,814 compared to $56,055,416 for
fiscal 1996, an increase of 12.5%.

Total residential and commercial premises wiring revenues for fiscal 1997
increased 43.4% to approximately $53.4 million compared to approximately $37.3
million in fiscal 1996. Revenues derived from network cabling services increased
$6.1 million or 79.0% from the $7.7 million recorded in fiscal 1996 to
approximately $13.8 million in fiscal 1997 due to increased marketing efforts by
the Company for these services. In addition, premises wiring revenues derived
from Telcos that are building or expanding video systems increased to
approximately $10.3 million for fiscal 1997 compared to approximately $2.0
million for the 1996 fiscal year. The Company believes that as a result of the
Telecommunications Act, certain Telcos have increased their capital expenditures
for video systems, and the Company has aggressively marketed its services to
these companies.

Outside plant construction revenues for fiscal 1997 declined to
approximately $9.6 million from approximately $18.8 million in fiscal 1996,
reflecting management's strategy to increase its emphasis on premises wiring
services.

The Company recorded sequential increases in revenues during each quarter
of fiscal 1997, including a record $17,120,507 in the fourth quarter ended March
30, 1997. Revenues during the fourth quarter of fiscal 1996 were negatively
impacted by the following: (1) lower than anticipated capital spending by its
cable television customers in several market areas, (2) delays in the start-up
of network cabling projects, and (3) unusually severe weather in January, 1996.

Gross Profit

Gross profit for fiscal 1997 was $21,738,347, or 34.5% of revenues, as
compared to $17,104,657, or 30.5% of revenues, for fiscal 1996.

The increase in gross margin for fiscal 1997 can primarily be attributed to
the emphasis on premises wiring projects over outside plant construction
projects. Outside plant construction projects require the use of heavy
machinery, specialized trucks, tool systems, and other related construction
equipment which reduce the Company's gross margin. In fiscal 1996, the Company's
overall operating results were negatively impacted by operating losses incurred
on a large outside plant construction project in the San Diego area. These
operating losses totaled approximately $600,000, due primarily to high vehicle,
equipment, and production costs, on contract revenues of approximately $4.9
million. The Company's overall operating results for the first six months of
fiscal 1997 were negatively impacted by operating losses of approximately
$370,000 as a result of the Company's decision to close its San Diego regional
office and the completion of remaining outside plant construction projects
there.

Selling, General and Administrative

Selling, general and administrative expenses for fiscal 1997 were
$18,436,896, or 29.2% of revenues, as compared to $15,935,087 or 28.4% of
revenues, for fiscal 1996.

The dollar increase in selling, general, and administrative expenses for
fiscal 1997 is primarily due to increased employee wages and associated costs
incurred to support both current period revenues and anticipated future
revenues. Selling, general, and administrative expenses also include additional
amounts for sales personnel engaged in marketing the Company's local area
network cabling services. The Company's selling, general and administrative
expenses during the current fiscal year were also impacted by an unusually large
charge to bad debts of $234,000 as a result of a customer filing for protection
under Chapter 11 of the Bankruptcy Code.

Interest Expense

Interest expense was $617,004 or 1.0% of revenues for fiscal 1997 as
compared to $512,214, or 0.9% of revenues, for fiscal 1996.

The dollar increase in interest expense is primarily due to increased
borrowings to finance accounts receivable and work-in-process.

<PAGE>

FISCAL 1996 COMPARED TO FISCAL 1995

Revenues

Total revenues for fiscal 1996 were $56,055,416, compared to $47,541,021
for fiscal 1995, representing an 18% increase.

Approximately $3.3 million and $2.6 million of the total $8.5 million
increase in revenues is the result of growth in both network cabling and DBS
services, respectively. This growth is due to increased marketing efforts for
such services. The remaining revenue increase resulted primarily from an
increase in the volume of work orders from either existing or new contracts. For
the year, residential and commercial premises wiring revenues increased
approximately 27%.

Revenues during the fourth quarter of fiscal 1996 were negatively impacted
by the following: (1) lower than anticipated capital spending by its cable
television customers in several market areas (2) delays in the start-up of
network cabling projects, and (3) unusually severe weather in January, 1996.

Gross Profit

Gross profit was $17,104,657, or 30.5% of revenues, for fiscal 1996, as
compared to $15,674,936, or 33.0% of revenues, for fiscal 1995. The decrease in
gross profit as a percentage of revenues can be attributed primarily to two
factors. The first is higher cabling material revenues generated from the
Company's network cabling services. The cost of these materials, which are
billed at near cost because of competitive pressures, is included in cost of
sales, which decreases gross profit as a percentage of sales. Secondly, the
Company's gross profit for fiscal 1996 was negatively impacted by operating
losses, due primarily to high production costs and vehicle and equipment costs,
incurred on a large construction project in the San Diego area.

Selling, General and Administrative

Selling, general and administrative expenses were $15,935,087, or 28.4% of
revenues, for fiscal 1996 as compared to $12,895,108, or 27.1% of revenues, for
fiscal 1995. The dollar increase in selling, general and administrative expenses
is primarily due to additional employee wages incurred to support both actual
and anticipated increased revenues. During fiscal 1996, the Company also
increased sales personnel for marketing network cabling services.

Interest Expense

Interest expense was $512,214, or 0.9% of revenues, for fiscal 1996, as
compared to $342,891, or 0.7% of revenues, for fiscal 1995. The dollar and
percentage increase in interest expense can principally be attributed to
increased borrowings in fiscal 1996 to finance capital expenditures and for
related receivables financing.

LIQUIDITY AND CAPITAL RESOURCES

General. Historically, the Company's principal sources of liquidity have
come from operating cash flow and credit arrangements. The Company's primary
requirements for working capital are to finance accounts receivable,
work-in-process and capital expenditures. Pursuant to a typical construction,
MDU, or LAN cabling contract, work performed by the Company is generally not
billed to a customer until various stages in a project are complete or until the
entire project is complete. Because the Company pays its suppliers and
subcontractors on a current basis, to the extent that trade payables exceed
customer accounts paid at any given time, the Company draws on its revolving
credit note to finance its work-in-process until project work is billed to and
paid by the customer.

Combined accounts receivable and work-in-process at June 29, 1997 totaled
$19,346,655 compared to $17,853,591 at March 30, 1997, an increase of $1,493,064
or 8.4%. This increase is due primarily to the record level of revenues that the
Company recorded during the fiscal quarter of 1998 which ended June 29, 1997.
Combined accounts receivable and work-in-process at March 30, 1997 totaled
$17,853,591 compared to $11,802,060 at March 31, 1996, an increase of $6,051,531
or 51.3%. This increase is due primarily to the increased level of revenues that
the Company recorded during the 1997 fiscal fourth quarter which ended March 30,
1997. Revenues for all of fiscal 1997 were $63,035,814, an increase of
$6,980,398 or 12.5% from the $56,055,416 recorded in fiscal 1996; however,
revenues for the fourth quarter of fiscal 1997 increased by 32.3% to $17,120,507
compared with $12,935,879 in the comparable quarter last year. In addition,
fiscal 1997 revenues and work-in-

<PAGE>

process include increases in the Company's volume of MDU and network cabling
projects. The Company anticipates that it will continue to receive collections
of its accounts receivable in the ordinary course of business in sufficient
amounts to permit it to comply with all covenants and terms of its revolving
credit note. There is no assurance, however, that the Company will be able to
collect all or substantially all of its accounts receivable outstanding at any
time, although the Company believes it has adequately provided for potential
losses through its allowance for doubtful accounts. The Company's failure to
collect substantially all of its accounts receivable and work-in-process would
have an adverse impact on its working capital and could adversely affect its
results of operations.

Capital requirements are dependent upon a number of factors, including the
Company's revenues, level of operations, and the type of contracts and work that
the Company performs. Due to the fact that the Company generally has no extended
commitments from its customers, it is difficult to forecast longer term revenues
and associated capital expenditure and operating cash requirements.

The Company reviews credit arrangements with its commercial bank annually.
As of June 29, 1997, the Company had available $4,250,000 under its revolving
credit note compared to $3,000,000 available at March 30, 1997, an increase of
$1,250,000 in available funds. The Company does not anticipate difficulties in
obtaining additional credit from its commercial bank should the need arise. The
Company will also periodically examine financing capital needs through the
issuance of additional common stock.

Management believes that current and possible additional credit from its
commercial bank, cash flow from operations, and funds which may be obtained from
the issuance of common stock should provide sufficient capital to meet the
reasonably foreseeable business needs of the Company.

Current Credit Arrangements. Under a loan agreement with its commercial
bank that was amended September 27, 1996, the Company has a $12,000,000
unsecured revolving credit note and had an unsecured term note which has been
paid in full. The interest rate on the revolving credit note is prime minus 1%
and interest is payable monthly. The revolving credit note matures September 30,
1998 and includes a commitment fee of 1/4% on any unused portion of the note.
Borrowings under the revolving credit note were $9,000,000 at March 30, 1997 and
$7,750,000 at June 29, 1997.

The loan agreement limits the Company's ability to create or incur liens on
its assets, to incur additional indebtedness, to guarantee the indebtedness of
others and to make loans or advances. Additionally, the agreement restricts the
Company from entering into merger or acquisition transactions or transactions
involving the sale of substantially all of its assets without the prior consent
of the bank. The loan agreement also requires the Company to meet certain
financial tests.

Cash Flow From Operating Activities. For the first three months of fiscal
1998, net cash provided by operating activities was $2,129,529. This was due
primarily to the Company's net income, depreciation and amortization, and income
taxes payable which totaled $2,443,998. These items were somewhat negated by
increases in accounts receivable and work-in-process that were not offset by
corresponding increases in trade accounts payable and liabilities to
subcontractors. For fiscal 1997, net cash used in operating activities totaled
$258,607. This is principally the result of increases in accounts receivable and
work-in-process that were not offset by corresponding increases in trade
accounts payable and liabilities to subcontractors. The Company is limited in
its ability to offset increases in accounts receivable and work-in-process
through increases in accounts payable or liabilities to subcontractors.
Increased cash requirements due to increased accounts receivable and
work-in-process were somewhat negated by noncash expenses of depreciation and
amortization which totaled $2,242,312.

Cash Used In Investing Activities. Net cash used in investing activities
for the first three months of fiscal 1998 totaled $829,672 compared to $569,856
for the comparable period last year. Cash used in investing activities is
primarily a result of the purchase of property and equipment, which totaled
$1,004,126 (4.6% of revenues) for the fiscal 1998 first quarter versus $609,169
(4.5% of revenues) for the comparable period last year. For fiscal 1997, net
cash used in investing activities totaled $2,205,641. This was mainly due to the
purchase of property and equipment in the amount of $2,752,254. The level of
capital expenditures is dependent largely upon the level of outside plant
construction services that the Company performs. The Company uses heavy
machinery, specialized trucks, and other construction equipment to perform its
construction services. Capital expenditures for fiscal 1997 decreased
approximately $1.5 million or 34.5% from fiscal 1996. This decrease is the
result of the Company doing less outside plant construction work in fiscal 1997.

<PAGE>

VARIABILITY IN QUARTERLY RESULTS AND SEASONALITY

The Company's quarterly revenues and associated operating results have in
the past, and may in the future, vary depending upon a number of factors. The
Company has no long-term contractual commitments to provide its services. The
contractual commitments which do exist generally can be terminated on 30 days'
notice. These contractual commitments do not involve a firm backlog of committed
work because the nature of the Company's contracts with MSOs, Telcos and DBS
providers produce daily work orders only on a project-by-project basis which
must be funded by an approved purchase order. In addition, network cabling
services are generally nonrecurring in nature and are contracted on a
project-by-project basis. Therefore, the amount of work performed at any given
time and the general mix of customers for which work is being performed can vary
significantly. Consolidation within the telecommunications industry may also
delay or depress capital spending, as companies assess their new business plans
and strategies and focus on administrative and operational issues associated
with their acquisitions or alliances. The Company's operations historically have
also been influenced by the budget cycles of the Company's customers. Many of
the Company's MSO customers utilize a calendar year budget cycle, funded with
quarterly purchase authorizations, which in certain fiscal years has resulted in
a lack of availability of funds in the Company's third fiscal quarter and has
delayed work authorizations in the Company's fourth fiscal quarter.
Telecommunications providers are also subject to actual and potential local,
state, and federal regulations that influence the availability of work for which
the Company may compete. For example, the Company believes that uncertainty
regarding pending federal telecommunications legislation decreased capital
spending by many of its customers during the 1996 fiscal year. Weather may
affect operating results due to the fact that construction cabling services are
performed outdoors. Weather can also impact the Company's premises wiring
cabling services due to the limited and lost production associated with poor
driving conditions and generally difficult working environments. Operating
results may also be affected by the capital spending patterns of the Company's
customers and by the success of various technologies and business strategies
employed by them. In fiscal 1997, the Company recorded approximately $10.3
million (or 16.4% of total revenues for the year), and for the first quarter of
fiscal 1998, the Company recorded approximately $8.3 million (38.1% of total
revenues for the quarter) in revenues from Telcos that are building or expanding
video systems. Of the total $8.3 million of revenues from Telcos, approximately
$3.7 million (or 17% of total Company revenues) was generated from work orders
issued under contracts with GTE Media Ventures, a part of GTE Corporation. The
amount of future capital allocated by these companies to their video programs is
largely contingent upon the financial success of these programs. The Company's
operating profitability and capacity to increase revenues is also largely
dependent upon its ability to locate and attract qualified field managers,
project managers, and technical production personnel. Other factors that may
affect the Company's operating results include the size and timing of
significant projects, and the gain or loss of a significant contract or
customer.

INFLATION

Historically, inflation has not been a significant factor to the Company as
labor is the primary cost of operations and its contracts are typically
short-term in nature. On an ongoing basis, the Company attempts to minimize any
effects of inflation on its operating results by controlling operating costs
and, whenever possible, seeking to insure that selling prices reflect increases
in costs due to inflation.

ENVIRONMENTAL MATTERS

The Company anticipates that its compliance with various laws and
regulations relating to the protection of the environment will not have a
material effect on its capital expenditures, future earnings or competitive
position.

<PAGE>

BUSINESS

GENERAL

The Company is a nationwide provider to the telecommunications industry of
cabling services for the transmission of video, voice and data. The Company
provides its services to Telcos, MSOs, systems integrators and end users of LAN
systems and DBS providers. The Company, which conducts business under the trade
name "NaCom," currently markets and provides its services through a national
network of 18 regional offices and 11 satellite offices which in fiscal 1997
served customers in 44 states. Representative customers of the Company include
Ameritech, Cox, GTE, IBM, Lucent, MCI, PrimeStar, Time Warner Cable and US West.

INDUSTRY OVERVIEW

The telecommunications industry has been undergoing rapid change due to
deregulation and the introduction of new technologies, both of which have
resulted in increased competition in the industry. In addition, growing customer
demand for enhanced video, voice and data telecommunications services have
increased bandwidth requirements while highlighting bandwidth limitations of
existing cabling in many markets. The Telecommunications Act has created
incentives for providers of video, voice and data communications services to
upgrade their network infrastructures by opening previously protected markets to
competition. Specifically, the Telecommunications Act, once certain conditions
are met (i) allows RBOCs and other LECs to enter the long distance services
market; (ii) allows long distance carriers, such as AT&T Corp. ("AT&T"), MCI and
Sprint Corporation ("Sprint"), to enter the local telephone services market;
(iii) allows any other entity, including MSOs and utilities, to enter both the
local telephone service and long distance services markets; (iv) allows Telcos
to sell video services, and in certain cases, to buy local cable television
companies; and (v) deregulates MSOs once there is effective competition or after
three years. Further, continuing developments in multimedia applications are
bringing new entrants to the telecommunications market. Internet service
providers and cable television, entertainment and data transmission companies
are all potential users of video, voice and data communications services over
broadband cabling systems. These changes have had, and are expected to continue
to have, a significant impact on each of the Company's customer groups.

TELCOS

Video Communications. The Telecommunications Act allows Telcos to
build systems for the transmission of video communications in their
existing territories. Ameritech and GTE are among the companies which have
already begun to build video systems in their territories. In addition,
PacBell and BellSouth Corporation have either begun, or announced plans to
begin, building digital wireless cable video systems in certain major
metropolitan areas.

Local Telephone Service. There are presently an estimated 30 million
households in the United States with PCs. The rapid growth in residential
customer demand for access to the Internet and for other services, such as
fax machines, has led to increased demand for additional telephone lines.
The increased competition resulting from the Telecommunications Act has
also led to customer demand for improved service. Such increased customer
demand is forcing service providers to upgrade existing networks and to
upgrade or extend the in-home cabling.

Long Distance Providers. The Telecommunications Act allows long
distance providers, such as AT&T, MCI and Sprint, to enter the local
telephone services market. While the ability of such providers to enter the
local telephone services market has been, and may continue to be, delayed
by a variety of legal and procedural challenges which have been mounted by
RBOCs and other LECs, MCI has already expended significant amounts to build
facilities for local telephone service and MCI and other long distance
providers have entered into reselling agreements with certain LECs. These
new providers of local telephone services require cabling resources to
support the interior premises wiring needs of their local telephone
operations.

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<PAGE>

MSOS

Faced with competition for video services from both Telcos and DBS
providers, many MSOs have announced plans to increase their capital
spending in order to expand their existing channel capacity and to offer
new services and next generation technologies and to improve picture and
sound quality. New technology in which video and data communications
converge through the development of platforms which combine high-speed
access to the Internet with a WebTV-like interface, could significantly add
to the demand for premises wiring services.

The cable television industry, which in recent years has generally
been capital constrained, has begun to show signs of renewed financial
strength. Recently Microsoft Corp. invested $1.0 billion in Comcast Corp.
which is the nation's fourth largest cable operator. The two companies have
publicly announced the intention to have trials of both set-top converter
boxes that connect WebTV to hybrid fiber-coaxial networks and cable-ready
PCs by the end of 1998. Tele-Communications, Inc. ("TCI") has recently
announced a three-year $1.7 billion network-upgrade project which will
include preparing 500,000 homes for two-way signalling which will enable
TCI to roll out @Home Network, its high-speed Internet data service.

Although MSOs have been given the opportunity to provide residential
telephone services to their customers, the large majority of MSOs have not
engaged in any meaningful activity beyond technical trials.

SYSTEMS INTEGRATORS AND NETWORK USERS

In the past decade, the commercial use of PCs has become pervasive.
The development of more powerful processors and easier to use software has
expanded applications from word processing, accounting and data base
management to electronic mail and research. As the number of PCs in
businesses has grown, the need to share information among users has also
grown. This has given rise to a large and rapidly expanding networking
industry consisting of LANs. LANs connect PCs to other PCs, file servers,
wide area networks ("WANs") and other devices, such as printers. WANs
connect LANs at one site to other sites and connect users working outside
their offices to their LAN, third party information sources or the
Internet. Rapid technological advances in computers and software, including
the use of more powerful computers and distributed area processing, have
created the need for increasingly sophisticated LAN and WAN technologies.
Such technologies demand an advanced high bandwidth data transmission cable
that enables increased volumes of data to be transmitted at faster speeds
without diminishing data integrity. This rapid rate of technological change
has created demand both for new LANs and for maintenance and upgrades of
existing LAN systems which no longer provide the necessary speed or quality
of data transmission.

DBS PROVIDERS

Two major DBS providers have evolved over the last several years:
PrimeStar, which is controlled by certain MSOs and has approximately 1.9
million subscribers, and DirecTV, which is an indirect wholly-owned
subsidiary of General Motors Corporation and has approximately 2.7 million
subscribers. The Company believes that the potential market in the U.S. for
video, audio and data programming services via satellite consists of (i)
the approximately 8 to 11 million households that do not have access to
cable television (not "passed by cable"), (ii) the approximately 21 million
households currently passed by cable television systems with fewer than 40
channels of programming, (iii) other existing cable subscribers who desire
a greater variety of programming, improved video and audio quality, better
customer service and fewer transmission interruptions, (iv) the commercial
marketplace, including restaurants, bars, hotels, motels, MDUs, businesses
and schools, and (v) the approximately 2.2 million low power C-band
subscribers who may desire to migrate to digital service.

22
<PAGE>

UTILITY COMPANIES

The Telecommunications Act allows public utility companies to provide
local and long distance telecommunications services to third parties.
Additionally, the utility industry is in the preliminary stages of the
deregulation process. Several states have already enacted deregulation
legislation and other states and the federal government are expected to
address deregulation in the next several years. Many utilities have already
announced plans to enter businesses or form joint ventures offering
services, such as local and long distance telephone services, cable
television services and Internet access, to their markets.

The Company believes there will continue to be growing opportunities in
both the residential and commercial markets to design, construct, install and
maintain cabling systems as telecommunications service providers increase
capital expenditures for their infrastructures and implement plans to improve
service in response to competition. In order to eliminate the ongoing expense
and effort required to manage labor intensive, multi-office service
organizations, the cable television industry historically has sought to
outsource a large portion of these services on a unit cost basis with
independent contractors, such as the Company. Telcos are also beginning to seek
new outsourcing solutions in response to competitive price pressures. In
addition, LAN cabling services are typically performed by third party vendors
which construct, install and maintain LAN systems for businesses on a contract
basis. The Company believes that it will continue to gain significant cabling
opportunities in both the residential and commercial markets as new
technologies, increased services and competition fuel the growing demand for the
delivery of video, voice and data into homes and businesses. Finally, the
Company believes that it will continue to gain significant cabling opportunities
to provide services to DBS providers given the potential market for video, audio
and data programming services via satellite.

BUSINESS AND GROWTH STRATEGIES

Leverage Existing Infrastructure to Capitalize on Industry
Growth. Through its network of 29 regional and satellite offices which in
fiscal 1997 served customers in 44 states, the Company is able to offer
providers of video, voice and data services a one-stop outsourcing solution
for their cabling services needs. Building on its existing customer base in
the telecommunications, cable television and network services industries,
the Company intends to further differentiate itself from its competitors by
aggressively pursuing opportunities to provide cabling services on a
national and regional basis, rather than on a strictly local basis.

Focus on Premises Wiring Services. The Company intends to continue
its emphasis on premises wiring services, which have been the Company's
core service for nearly 20 years. Premises wiring services, when provided
on a regional or national scale, are logistically intensive. With its
current residential premises wiring services volume in excess of 15,000
completed work orders per week, the Company believes that, as the only
independent nationwide provider of residential premises wiring services, it
is better positioned to bid on large-scale contracts than its competitors,
allowing the Company to gain market share.

Expand Services Performed for Telcos. The Company has already
achieved significant growth in the premises wiring services performed for
Telcos as revenues from Telcos (excluding CLECs) increased by over 400%
from $2.0 million in fiscal 1996 (3.6% of revenues) to $10.3 million in
fiscal 1997 (16.4% of revenues). Building on the base of premises wiring
services performed for US West, GTE, PacBell and Ameritech, the Company
intends to pursue further opportunities within its existing customer base
as well as with additional Telcos it currently does not serve.

Build a Nationwide, Diversified Telecommunications Services
Business. As a result of the opportunities presented by the passage of the
Telecommunications Act and the continued industry

23
<PAGE>

trend toward the outsourcing of video, voice and data cabling services, the
Company believes it has strong prospects for growth. The Company intends to
gain greater market share from its existing customer base, to capture new
customers in industries in which it currently competes, and to expand into
new industries requiring cabling services, including the utility industry.
As appropriate, the Company will selectively open new offices either to
fill in existing markets or to gain access to new markets, such as the
Pacific Northwest. Finally, the Company will consider acquisitions to
complement its business if such acquisitions would enable the Company to
add significant new customers, increase its ability to provide existing or
new services or expand its business into new regional geographic markets.

PRINCIPAL SERVICES

The Company designs, constructs, installs and maintains fiber optic,
coaxial and twisted-pair copper cabling systems for the transmission of video,
voice, and data. The Company's services include the drops and cable feeds to,
and wiring of, residences, MDUs and commercial buildings (collectively,
"premises wiring services") and the construction and installation of aerial and
underground distribution plant ("outside plant construction services"). The
Company provides these services on a national basis to providers of
telecommunications services, including Telcos, MSOs, systems integrators and
users of LAN systems and DBS providers.

Premises Wiring Services. Premises wiring services include the
installation and maintenance of both hardwire and wireless cable systems.
Installation services for hardwire cable systems include installing coaxial
drops connecting residences to the feeder cable carrying the cable operator's
signal, cabling the exterior and interior of MDUs and single family residences
and installing converter units within the residence. Maintenance services for
hardwire cable systems include (1) replacement of damaged or obsolete cable, (2)
reconnection and disconnection of subscriber services, (3) day-to-day additions
and changes to installed drops, (4) upgrade sales and service changes and (5)
miscellaneous service calls.

Wireless cabling services include both installation and maintenance
services for DBS systems or digital wireless multi-channel multi-point
distribution systems ("MMDS"), popularly known as "wireless cable." DBS
installation services consist of attaching a satellite dish to the subscriber's
property, hooking up the digital set-top converter box and installing the
related cabling, grounding, and connective materials. DBS maintenance services
include the replacement of damaged cable, grounding and connective materials and
satellite receiving equipment. MMDS cable system installations consist of
attaching a microwave receiving antenna to the subscriber's property and
installing the digital set-top converter and related cabling, grounding, and
connective materials. Maintenance services for MMDS are essentially the same as
maintenance services for DBS.

Premises wiring services also include the design and data cabling of LAN
and WAN systems for commercial business, governments and educational
organizations. The Company's network cabling design services begin with an on
location site survey to determine the most efficient cable routing path and the
location of end user outlets. The Company may then utilize a computer-assisted
design system to finalize a cabling plan that meets network requirements and
performance specifications. Once approved by the customer, a blueprint or other
working print is generated which is used as a guide for the network
installation. The Company installs a variety of voice and data cabling,
including coaxial, fiber optic, and twisted-pair copper wiring. Upon completion
of a network installation, the Company generally delivers to the customer test
documentation and an as-built design layout.

Total premises wiring revenues increased by 43.4% from approximately $37.3
million (66.5% of total revenues) in fiscal 1996 to approximately $53.4 million
(84.7% of total revenues) in fiscal 1997 and by 81.1% from approximately $10.2
million (75.8% of total revenues) in the first quarter of fiscal 1997 to
approximately $18.6 million (85.7% of total revenues) in the first quarter of
fiscal 1998.

Outside Plant Construction Services. Outside plant construction projects
can either involve retrofit upgrades of existing systems with active subscribers
("retrofit construction projects") or work performed for the construction of new
systems without active subscribers ("new construction projects"). Outside plant
construction services involve the installation of fiber optic cable and coaxial

24
<PAGE>

cable for aerial and underground portions of cable systems. These services also
include installation of all necessary electronic components, including signal
amplification and conversion devices and the performance of diagnostic
engineering tests at all levels of the infrastructure to determine whether new
and existing systems are within appropriate manufacturer or FCC specifications.
The Company uses heavy machinery, specialized trucks and other construction
equipment to perform its outside plant construction services. In fiscal 1997,
the Company implemented a strategy to shift its outside plant construction
services from providing such services for both retrofit construction projects
and new construction projects to providing exclusively outside plant
construction services for new construction projects. Retrofit construction
projects involve different skill sets than new construction projects. The
Company believes that the competitive environment associated with retrofit
construction projects, along with uncertainty regarding customer work
commitments on these projects, make them less desirable for the Company's
current resources than new construction projects and premises wiring projects.
Revenues from outside plant construction projects for fiscal 1997 decreased
approximately 49% to approximately $9.6 million (15.3% of total revenues), from
approximately $18.8 million (33.5% of total revenues) recorded in fiscal 1996.

PRINCIPAL CUSTOMER GROUPS

Telcos. The Company provides premises wiring services to RBOCs and other
LECs and outside plant construction services to CLECs. The Company provides
premises wiring services for video systems to GTE, PacBell, Ameritech and US
West and outside plant construction services to MFS Communications Company. The
Company has recently begun to provide premises wiring services for voice
telecommunications systems to MCI and US West. Revenues from Telcos (excluding
CLECs) in fiscal 1997 were approximately $10.3 million.

Telcos are more centralized in their purchasing requirements for cabling
services than MSOs. Telcos require cabling contractors to be qualified approved
bidders and meet certain financial, technical, operational, and administrative
prequalifications; therefore, they tend to use a limited number of larger
contractors.

MSOs. The Company provides both premises wiring and outside plant
construction services to MSOs. Historically, broadband video networks in the
United States were almost exclusively provided by cable television operators.
Accordingly, the Company had historically derived a large percentage of its
revenues from this customer base. The Company has been diversifying its customer
base beyond its traditional cable television industry base. The Company's
revenues derived from services performed for or on behalf of MSOs for fiscal
1997 were approximately $30.7 million. See the Principal Customer Group table in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Overview." Representative customers of the Company include Time
Warner Cable, TCI, Comcast Cable, Charter Cable and Marcus Cable. Other than
Time Warner Cable, which comprised approximately 19% of the Company's revenue in
fiscal 1997, no other customer represented more than 10% of Company's revenues.

MSOs generally contract for cabling services through their local and
regional offices. As a result, the Company markets its services to MSOs in a
decentralized manner. The Company seeks to develop contacts and learn of
potential opportunities through attendance at trade shows and by membership of
its key managers and corporate personnel in the Society of Cable Television
Engineers and local cable associations. The Company's regional directors,
regional managers and area managers are responsible for developing and
maintaining relationships with local and regional cable operators. The Company's
marketing and operations functions have recently been decentralized, giving
regional directors, regional managers and area managers greater flexibility in
their regions to maintain and develop relationships with existing customers and
to pursue new opportunities. The Company believes that the development and
maintenance of customer relationships as well as the consistent performance of
quality services allows it to gain repeat business.

Currently, MSOs are facing competition for video services primarily from
DBS providers and, to a lesser extent, from Telcos. In response to this
competition, many MSOs have announced plans to increase their capital spending
in order to increase existing channel capacity to improve picture and sound
quality and to offer new services and next generation technologies. See
"Business -- Industry

25
<PAGE>

Overview." Increased capital spending by MSOs should benefit the Company by
increasing the demand for its cabling services. See "Risk Factors -- Variability
in Quarterly Results and Seasonality."

Systems Integrators and Network Users. Since 1987, the Company has
provided network cabling services, consisting of design and premises wiring of
network systems, for commercial businesses, governments, and educational
organizations. Since the introduction of LANs and WANs, this industry has grown
rapidly and comprises a growing portion of the overall communications market.
Company revenues derived from network cabling services in fiscal 1997 were
approximately $13.8 million.

The Company provides network cabling services to both systems integrators
of network systems and directly to the end users of the network. Systems
integrators such as Unisys, IBM and Lucent submit competitive bids for network
systems to third party customers. The Company submits a competitive bid to the
systems integrator for the cabling portion of the overall proposal. If the
systems integrator is awarded the project, the Company will perform the required
cabling services if its bid is accepted and will invoice the systems integrator
directly. In other projects, the end users request bids directly from third
party suppliers for network related services. In this case, the Company submits
a proposal directly to the end user.

The Company provides network cabling services through all of its regional
offices. This capability provides customers with a single source for large
regional or nationwide network installation projects. For example, in 1996, the
Company began work on a multi-year contract through Unisys to provide network
cabling services to over 5,000 Nationwide Insurance Company offices located in
26 states. As of August 1997, approximately 2,000 of those offices had been
completed.

The Company employs a combined corporate and regional approach to marketing
its network cabling services. In 1992, the Company created a dedicated corporate
sales and installation support group to identify and establish relationships
with systems integrators that can provide an ongoing source of network cabling
business in markets in which the Company has regional offices. The Company
augments this national sales effort with network sales engineers who market
multi-state sales territories from key regional offices.

DBS Providers. The Company provides premises wiring, installation and
maintenance services to DBS providers, such as PrimeStar and DirecTV. During
fiscal 1997, the Company recorded approximately $6.8 million in revenues from
DBS providers, of which approximately $5.2 million, or 76.5%, was with
PrimeStar, which is currently owned by certain MSOs. In early fiscal 1997, the
Company performed work for DirecTV and EchoStar Communications Corporation but
is not currently providing services to either company.

The Company markets its services to PrimeStar in a manner similar to that
used to market to MSOs.

OPERATIONS

The Company's projects are managed under the direct supervision of over 40
project managers who generally report to area or regional managers or, in
certain cases, directly to one of the Company's four regional directors. The
regional directors are all under the supervision of the Company's Vice President
- -- Operations. The Company's marketing and operations functions have recently
been decentralized, giving regional directors, regional managers and area
managers greater flexibility in their regions to maintain and develop
relationships with existing customers and to pursue new opportunities. The
Company provides its services predominantly through the use of independent
contractors via its national network of regional and satellite field offices.
Each regional office is headed by a regional manager or area manager whose
primary duties consist of new business development and contract oversight.
Regional managers and area managers employ the project managers who are
responsible for locating and qualifying independent contractor production
personnel, maintaining and deploying vehicles and equipment, and supporting the
regional managers and area managers in maintaining customer relationships. The
smaller satellite offices report to and are supervised by the larger regional
offices. Regional offices are "full service" providers and can typically offer
both

26
<PAGE>

premises wiring services, including LAN design and wiring services and outside
plant construction services. The Company's operating profitability and capacity
to increase revenues are largely dependent upon its ability to locate, attract
and retain qualified regional directors, regional managers, area managers,
project managers and production personnel.

The Company's corporate headquarters in Columbus, Ohio provides national
marketing support, strategic planning, administrative services and operations
support for the Company's field offices. The corporate office develops and
maintains customer relationships with national companies and provides support
for field offices performing work for these customers in local markets. In
addition, the corporate office assists regional directors and area managers in
responding to all bid requests by providing engineering support, performing cost
analyses to determine pricing, and preparing proposal response documentation.
All purchasing and accounting functions are managed at the corporate level.

The following table summarizes, by regional office, the primary services
provided and primary customers served as of August 1997.

<TABLE>
<CAPTION>
REGIONAL OFFICE PRIMARY SERVICES PROVIDED PRIMARY CUSTOMERS
--------------- ------------------------- -----------------
<S> <C> <C>
Atlanta MSO single family residential, MSO MDU CableCom, Inc. (MediaOne), Knology of
Montgomery, Inc.
Chicago Telco single family residential, Telco Ameritech
MDU, LAN
Cincinnati MSO single family residential, LAN, DBS Time Warner Cable, PrimeStar
Cleveland MSO single family residential, MSO MDU, Cablevision, Cox
MSO construction
Columbus Telco single family residential, Telco Time Warner Cable, Ameritech, PrimeStar
MDU, MSO single family residential,
MSO construction, LAN, DBS
Detroit Telco single family residential, LAN Ameritech
Houston MSO single family residential, MSO MDU, Time Warner Cable, PrimeStar
MSO construction, LAN, DBS
Indianapolis DBS PrimeStar
Los Angeles Telco single family residential, Telco GTE, PacBell, Marcus Cable, MediaOne
MDU, MSO single family residential,
MSO construction, LAN
Louisville MSO single family residential, LAN Intermedia, Insight Cable
New York MSO single family residential, LAN, DBS Comcast, PrimeStar
Omaha Telco single family residential, Telco US West, Cox, MFS
construction, MSO single family
residential, MSO MDU
Phoenix Telco single family residential, MSO US West, Cox
single family residential, LAN
Richmond LAN, DBS PrimeStar
San Antonio MSO single family residential Time Warner Cable
San Francisco MSO single family residential, LAN, Century Cable, National Water and Power
Utility single family residential
St. Louis MSO single family residential, MSO MDU, Charter Communications, Time Warner
LAN Cable
Tampa Bay Telco single family residential, Telco GTE
MDU, LAN
</TABLE>

27
<PAGE>

CONTRACTS

Many Telcos, MSOs and DBS providers require cabling service contractors,
such as the Company, to first enter into a master contract which establishes
certain requirements to be met before actual work orders are issued. However,
master contracts do not bind these companies to use any one cabling service
contractor in any given locality or for any given project. Rather, they
negotiate with individual cabling service contractors, nationally, regionally
and locally, on a project-by-project basis. Therefore, the Company has no
extended commitment from any single Telco, MSO or DBS provider and bids on
individual projects along with its competitors. See "Risk Factors -- Short-Term
Contracts." The Company is typically compensated on these projects on a per unit
basis for actual services performed. The Company's network cabling and
construction services, in contrast, are generally nonrecurring in nature and are
contracted on a project-by-project basis. Since the Company's services are
generally provided on a project-by-project basis, the amount of work being
performed at any given time for any particular customer and the general mix of
customers for which work is being performed can vary significantly.

MATERIALS

The Company provides both consignment and material turnkey services. In the
majority of non-network cabling contracts, the Company's customers supply most
or all of the materials required for the project. The majority of the Company's
network contracts are turnkey contracts in which the Company provides both the
labor and materials necessary for the network cabling installation. The Company
purchases cabling materials directly from independent third party suppliers, and
does not manufacture any materials for resale to customers. The Company is not
dependent upon any one supplier for network cabling materials and has not
experienced, nor does it anticipate experiencing, difficulties in obtaining
network cabling materials.

COMPETITION

The Company competes both with the in-house service organizations of MSOs
and Telcos and with independent third parties in most of the markets in which it
operates. The Company believes that its competitive advantages include its track
record of performance, the depth of its management and field office network, its
ability to commit manpower and equipment to multiple ongoing projects, and its
competitive pricing. In order to eliminate the ongoing expense and effort
required to manage labor intensive, multi-office service organizations, the
cable television and telephone industries historically have sought to outsource
a large portion of these services to independent contractors, such as the
Company. The Company believes that while it may be considered a major competitor
in many of the markets in which it provides cabling services, there are few
barriers to entry into the cabling service business and, as a result, any
business that has access to persons who possess technical expertise may become a
competitor of the Company. The market for providing cabling services to Telcos
is highly competitive and, in the case of outside plant construction services
and cabling services for commercial buildings, includes national competitors
with greater financial resources than the Company which historically have
provided telephone cabling services to Telcos. The markets in which the Company
provides LAN cabling services are highly competitive and many of the competitors
in those markets have greater financial resources than the Company. While
certain of the companies with which the Company competes are larger than the
Company and have greater technical, marketing and financial resources, a large
number of its competitors are smaller than the Company. Smaller regional and
local competitors may be able to offer lower prices because of lower overhead
expenses. Because of the highly competitive bidding environment in recent years
for cable service contracts, the price of the cable service contractor's bid has
often been the deciding factor in determining whether such contractor was
awarded a contract for a cabling project. As the demand for cabling services has
increased, the Company believes that contracts are increasingly being awarded
based on the combination of a contractor's price, its track record for
completing projects, its ability to dedicate management and production personnel
to the project, and its financial and operational resources to complete the
contract. See "Risk Factors -- Competition."

28
<PAGE>

PERSONNEL

As of March 30, 1997, the Company had 487 employees, of which 51 are
employees at the Corporate Office in Columbus, Ohio and 436 are employed in the
Company's field offices. The Company believes that its relationship with its
employees is good.

The Company provides most of its cabling services through the use of
independent contractors which are either sole proprietorships or small business
entities. Independent contractors are engaged and compensated on a
project-by-project basis to perform local work. They generally provide their own
vehicles, tools and insurance coverage. Independent contractors are paid in
accordance with a schedule of unit rates for the performance of specific
services. See "Risk Factors -- Use of Independent Contractors and Potential
Impact of Reclassification as Employees by Governmental Authorities."

PROPERTIES

The Company does not own any real property. The Company's corporate
headquarters are located in Columbus, Ohio. The Company's regional field offices
service the following metropolitan areas: Atlanta, Chicago, Cincinnati,
Cleveland, Columbus, Detroit, Houston, Indianapolis, Los Angeles, Louisville,
New York, Omaha, Phoenix, Richmond, San Antonio, San Francisco, St. Louis and
Tampa Bay. A typical regional office consists of an office with an attached
warehouse for the storage of materials, tools and equipment and an adjacent
secure outside storage area. The Company leases its corporate headquarters and
all of its regional and satellite offices from unaffiliated lessors. The lease
terms, including options exercisable by the Company, range from one month to
five years. The Company believes that its present facilities are sufficient for
its needs for the foreseeable future.

LEGAL PROCEEDINGS

The Company is involved in various legal proceedings, most of which arise
in the ordinary course of business and many of which are covered by insurance.
In the opinion of the Company's management, none of the claims relating to such
proceedings will have a material adverse effect on the financial condition or
results of operations of the Company.

29
<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table and biographies set forth information as of September
29, 1997, concerning the executive officers and directors of the Company:

<TABLE>
<CAPTION>
JOINED THE
NAME AGE COMPANY IN POSITION
---- --- ---------- --------
<S> <C> <C> <C>
Larry R. Linhart............................. 51 1984 Chairman of the Board of Directors, President
and Chief Executive Officer

Joseph L. Govern............................. 39 1985 Vice President -- Operations

James W. Brittan............................. 38 1986 Treasurer and Vice President -- Finance

Robert B. Horn............................... 48 1997 Vice President -- Human Resources

E. Len Gibson................................ 48 1978 Director

Robert L. Powelson........................... 55 1978 Secretary and Director

William H. Largent........................... 42 1994 Director

George R. Manser............................. 66 1994 Director

Richard W. Rubenstein........................ 53 1997 Director
</TABLE>

- ------------------

Larry R. Linhart is the Chairman of the Board of Directors, President and
Chief Executive Officer of the Company. Mr. Linhart has been the President and
Chief Executive Officer of the Company since 1986 and a director of the Company
since 1984. From 1984 to 1986, Mr. Linhart served as Executive Vice President,
Treasurer and General Counsel of the Company. Mr. Linhart was previously a
partner in the Columbus law firm of Murphey, Young and Smith (currently, Squire,
Sanders & Dempsey L.L.P.) which he joined in 1971.

Joseph L. Govern is the Vice President -- Operations of the Company. Mr.
Govern has been Vice President -- Operations of the Company since 1992. From
1991 to 1992, Mr. Govern served as the Company's Vice President -- Finance and
Director of Operations. From 1986 to 1991, Mr. Govern was the Vice President --
Finance and Administration for the Company. He is a certified public accountant
and from 1980 through mid-1985 was employed by Coopers & Lybrand.

James W. Brittan is the Treasurer and Vice President -- Finance of the
Company. Mr. Brittan has been Treasurer and Vice President -- Finance of the
Company since May 1994. Mr. Brittan served as the Company's Controller from 1986
to May 1994. From 1984 to 1986, Mr. Brittan was employed by The Limited, Inc., a
national fashion retailer, as Senior Accountant. Mr. Brittan is a certified
public accountant and from 1981 through 1984 was employed by Coopers & Lybrand.

Robert B. Horn is the Vice President -- Human Resources of the Company. Mr.
Horn has been Vice President -- Human Resources of the Company since February
1997. From 1993 to 1997, Mr. Horn was the Vice President of Human Resources of
Damon's International, Inc., a 110 unit casual dining restaurant chain. From
1985 to 1993, Mr. Horn owned and operated five restaurants, co-owned and
operated an international meeting planning firm and served as a management
consultant to various small companies and trade associations. From 1974 to 1985,
Mr. Horn was employed by RAX Restaurants, Inc. and served as Executive Vice
President -- Operations.

E. Len Gibson is a director of the Company. Mr. Gibson has been a director
of the Company since 1981. Mr. Gibson and Robert L. Powelson founded the Company
in 1978 as a joint venture between their respective cable television
installation companies. From 1987 through 1994, Mr. Gibson served as a
consultant for the Company.

30
<PAGE>

Robert L. Powelson is a director of the Company. Mr. Powelson has been a
director of the Company since 1981 and was a co-founder of the Company with E.
Len Gibson. Since 1987, Mr. Powelson has served as a consultant for the Company.

William H. Largent has been a director of the Company since the completion
of its initial public offering in 1994. Since May 1997, Mr. Largent has been
Senior Vice President of Operations and Chief Financial Officer of Applied
Innovation, Inc., a provider of electronic data monitoring network equipment to
Telcos, including all seven RBOCs. From 1993 to 1997, Mr. Largent was the Chief
Financial Officer of Metatec Corporation, a leading provider of CD-ROM products
and services and was a director of that corporation from 1990 to 1997. From 1990
to 1993, Mr. Largent was President of Liebert Capital Management Corporation, an
affiliate of a major shareholder of Metatec Corporation. From 1981 to 1988, Mr.
Largent served in various capacities for Liebert Corporation including Chief
Financial Officer upon his departure in 1988. Mr. Largent is a Certified Public
Accountant and co-founded his own accounting firm in 1988, the interest in which
he sold in 1990. From 1976 to 1981, Mr. Largent was employed by Touche Ross &
Co.

George R. Manser has been a director of the Company since the completion of
its initial public offering in 1994. Mr. Manser is Chairman of Uniglobe Travel
(Capital Cities) Inc. and Director of Corporate Finance for Uniglobe Travel USA
(LLC). Mr. Manser has served as Chairman and a director of North American
National Corporation, a life insurance holding company, since 1984 and as its
President from 1969 to 1984. In addition, Mr. Manser currently is serving as a
director of Cardinal Health, Inc., State Auto Financial Corp., Checkfree
Corporation, Hallmark Financial Services, Inc. and Advisory Director to J.C.
Bradford & Co.

Richard W. Rubenstein has been a director of the Company since his election
at the Annual Shareholders' Meeting held on August 19, 1997. Since 1994, Mr.
Rubenstein has been a partner of the law firm of Squire, Sanders & Dempsey
L.L.P. From 1980 until 1994, Mr. Rubenstein was a partner of the law firm of
Schwartz, Kelm, Warren & Rubenstein.

31
<PAGE>

SELLING SHAREHOLDERS

The following table sets forth the name of each Selling Shareholder, the
number of Common Shares to be sold by each such person in this offering as of
September 29, 1997 and the number of Common Shares which will be beneficially
owned by each such person as of completion of this offering:

<TABLE>
<CAPTION>
COMMON SHARES COMMON SHARES COMMON SHARES TO BE
BENEFICIALLY OWNED TO BE SOLD BENEFICIALLY OWNED
PRIOR TO OFFERING (1) IN OFFERING (2) AFTER OFFERING (1)(2)
------------------------ --------------- ------------------------
NAME NUMBER PERCENT NUMBER PERCENT
---- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Larry R. Linhart............................ 748,728(3) 19.3% 80,000 668,728(4) 14.9%
E. Len Gibson (5)........................... 803,855 22.8% 160,000 643,855 15.3%
Robert L. Powelson.......................... 948,855 26.9% 160,000 788,855 18.7%
</TABLE>
- ------------------
(1) Unless otherwise indicated, the beneficial owner has sole voting and
dispositive power over these shares subject to spousal rights, if any.

(2) If the Underwriters' over-allotment option is exercised in full, Messrs.
Linhart, Gibson and Powelson would sell in this offering an additional
30,000 shares, 60,000 shares and 60,000 shares, respectively, and, as of
completion of this offering, would own beneficially 638,728 shares, or 14.3%
(assuming Mr. Linhart exercises outstanding options to purchase an
additional 30,000 shares immediately prior to the sale of such shares),
583,855 shares, or 13.8%, and 728,855 shares, or 17.2%, respectively.

(3) Includes exercisable options to purchase 350,000 Common Shares.

(4) Assumes that Larry R. Linhart will exercise outstanding options to purchase
80,000 Common Shares immediately prior to the sale of the Common Shares
pursuant to this offering and includes exercisable options to purchase
270,000 Common Shares after giving effect to such exercise by Mr. Linhart.

(5) Mr. Gibson's shares are held in trust for the benefit of Mr. Gibson.

SHAREHOLDERS' AGREEMENT

Messrs. Gibson, Powelson and Linhart (the "Principal Shareholders") and the
Company are parties to a Shareholders' Agreement (the "Shareholders'
Agreement"). The Shareholders' Agreement provides that the Principal
Shareholders each (for so long as he owns at least 100,000 Common Shares) shall
vote all Common Shares owned by him in favor of the election or removal of
directors such that, among other things: (i) the Board of Directors of the
Company shall initially consist of the Principal Shareholders and three persons,
who are not affiliates (as defined in the Shareholders' Agreement) of any of the
Principal Shareholders, named by the Nominating Committee of the Board of
Directors and approved by the Board of Directors ("Public Directors"); (ii)
until August 19, 2004, the Principal Shareholders shall nominate or cause the
Board of Directors to nominate and recommend to the shareholders as proposed
members of the Board of Directors, each of the Principal Shareholders and such
number of Public Directors as are necessary to fill any vacancies on the Board
of Directors; and (iii) until August 19, 2004, the number of directors
constituting the board of directors of each subsidiary of the Company shall be
fixed at three and such directors shall include Messrs. Linhart and Powelson and
a third individual selected by them.

Pursuant to the Shareholders' Agreement, each of the Principal Shareholders
has the right ("Demand Registration Right") on one occasion to require the
Company to prepare and file a registration statement under the Securities Act of
1933, as amended (the "Securities Act") with respect to a public offering of
Common Shares that he holds ("Demand Registration"). The effective date of any
registration statement filed pursuant to the exercise of Demand Registration
Rights by one of the Principal Shareholders shall not be within six months after
the date of this Prospectus. The Company is required to bear the expenses
(except for underwriting discounts and underwriting commissions and fees and
expenses of counsel to the selling shareholders) of Demand Registrations.
Further, under the terms of the Shareholders' Agreement, in the event that the
Company proposes to register any of its securities under the Securities Act for
its own account (subject to certain exceptions),

32
<PAGE>

or pursuant to the exercise of a Demand Registration Right or any registration
rights of any person not a Principal Shareholder, the other Principal
Shareholders are entitled to include shares in such registration, subject to the
right of the underwriters of any such offering to limit the number of shares
included in such registration. Each of the Principal Shareholders has agreed
with the Representatives (defined below) not to sell or dispose of any shares
owned by them (other than those Common Shares sold hereby) without the consent
of the Representatives for a period of 120 days after the date of this
Prospectus.

Pursuant to the Shareholders' Agreement, the Principal Shareholders have
agreed that they will not sell or transfer any of their Common Shares except (i)
pursuant to a Demand Registration Right, (ii) to the Company, (iii) pursuant to
Rule 144 promulgated under the Securities Act, (iv) to heirs or family members
who agree to be bound by the Shareholders' Agreement, (v) by bona fide gift to a
charity or (vi) by pledge to secure indebtedness to a financial institution. The
Shareholders' Agreement contains certain non-competition and non-solicitation
provisions which prohibit each of the Principal Shareholders from engaging in
certain conduct during certain restricted periods and for three years
thereafter. The restricted period applicable to Mr. Linhart is the term of his
employment with the Company and the restricted period applicable to each of
Messrs. Gibson and Powelson is the period during which each is a director or the
owner of Common Shares possessing not less than 10% of the combined voting power
of all voting securities of the Company.

CAPITAL SHARES

AUTHORIZED CAPITAL STOCK

The authorized capital stock of the Company consists of 10,000,000 Common
Shares, without par value, and 1,000,000 Preferred Shares, without par value,
consisting of 500,000 Class A Voting Preferred Shares ("Class A Preferred
Shares") and 500,000 Class B Nonvoting Preferred Shares ("Class B Preferred
Shares" and together with the Class A Preferred Shares the "Preferred Shares").

COMMON SHARES

When the Common Shares sold in this offering are fully paid for, they will
be validly issued, fully paid and nonassessable. Holders of Common Shares are
entitled to one vote per share on all matters that properly come before the
shareholders, including the election of directors. The Common Shares do not have
cumulative voting rights and, therefore, a simple majority of the Common Shares
present and voting at a meeting of shareholders will be able to elect all of the
directors to be elected at such meeting. Holders of Common Shares are entitled
to receive dividends when, as and if declared by the Board of Directors of the
Company out of funds legally available therefor. The Company presently intends
to retain its earnings to finance the future growth and development of its
business and, therefore, does not expect to pay cash dividends in the
foreseeable future. See "Risk Factors -- Dividend Policy." In the event of the
liquidation, dissolution or winding up of the affairs of the Company, holders of
Common Shares are entitled to receive ratably the net assets of the Company
available for distribution after the Company's creditors are paid. Holders of
Common Shares have no preemptive, redemption or conversion rights.

TRANSFER AGENT

The transfer agent for the Common Shares is American Stock Transfer and
Trust Company.

PREFERRED SHARES

No Preferred Shares are outstanding. The Class A Preferred Shares and the
Class B Preferred Shares are identical except that Class A Preferred Shares have
voting rights and Class B Preferred Shares generally do not have voting rights.
However, holders of Class A Preferred Shares and Class B Preferred Shares,
voting as a single class, have the right to elect two additional directors
during any period in which dividends on either Class A Preferred Shares or Class
B Preferred Shares are cumulatively in arrears in the amount of six or more full
quarterly dividends. No other terms of any Preferred Shares have been
established. The Board of Directors has the authority, without shareholder

33
<PAGE>

approval, to issue Preferred Shares and to determine their terms (except voting
rights) including the dividend or distribution rate, the dates of payment of
dividends or distributions and the dates from which they are cumulative,
liquidation price, redemption rights and price, conversion rights and other
rights to the extent permitted by law from time to time. Class A Preferred
Shares may be issued with voting or conversion rights which may adversely affect
the voting power of holders of Common Shares. The issuance of a series or class
of Preferred Shares could be used to hinder or delay a takeover bid for the
Company which might have the effect of inhibiting such bids and decreasing the
chance of the shareholders realizing a premium over market price for their
Common Shares as a result of such a takeover bid. The Company does not have any
current plan, arrangement or understanding to issue any Preferred Shares.

CERTAIN CHARTER PROVISIONS

Certain provisions of the Company's Articles of Incorporation and Code of
Regulations may have the effect of deterring companies or other persons from
making takeover bids for control of the Company or may be used to hinder or
delay a takeover bid thereby decreasing the chance of the shareholders of
realizing a premium over market price for their Common Shares as a result of
such bids. The relevant provisions of the Company's Articles of Incorporation
are (a) a provision that requires the approval of holders of 75% of the
Company's voting shares and holders of a majority of the voting shares held by
disinterested persons for certain business combinations involving shareholders
who beneficially own more than 20% of the Company's outstanding shares and (b) a
provision authorizing the Company to purchase its capital shares by action of
the Board of Directors. The relevant provisions of the Code of Regulations are
(i) a provision that divides the Board of Directors into two classes with
staggered two year terms if the size of the Board of Directors is six or more
but less than nine persons, and that will divide the Board into three classes
with staggered terms of three years each if the size of the Board is increased
to nine or more, which may be done by the Board of Directors, (ii) a provision
that restricts the right of shareholders to nominate directors from the floor at
the annual meeting, (iii) a provision that requires a vote of holders of 75% of
the voting shares to remove a director which removal must be for cause, (iv) a
provision that requires the approval of an amendment to certain provisions of
the Code of Regulations by holders of 75% of the voting shares if it is not
approved by at least three-fourths of the directors, (v) a provision that
restricts the right of shareholders to call a special meeting of shareholders
unless holders of 50% of the voting shares join in the request for a call, and
(vi) a provision that requires a vote of holders of 75% of the voting shares to
change the number of directors although such number may be changed within the
range of 3 to 15 by the Board of Directors without shareholder approval.

CERTAIN LAWS

The Company is subject to the Ohio Control Share Acquisition Law, which
requires that, subject to certain exemptions, any acquisition of shares having
one-fifth to one-third, one-third to one-half or a majority or more of the
Company's voting power be made only with the prior authorization of the holders
of a majority of the voting shares present at the meeting held to obtain such
authorization and a majority of the holders of shares who are disinterested. The
Company is also subject to Chapter 1704 of the Ohio Revised Code. Under Chapter
1704, the Company may not engage in a Chapter 1704 transaction (a term that
broadly includes mergers, asset and stock sales and other financing
transactions) with an interested shareholder (a person or entity that controls
10% or more of the Company's voting power) for three years after the interested
shareholder became such unless the directors of the Company approved the
transaction or the purchase of shares by the interested shareholder in advance.
The Company has exempted the Principal Shareholders from Chapter 1704. Chapter
1704 transactions between an interested shareholder who has held such shares for
three years and the Company that were not approved by the directors in advance
are subject to additional shareholder approval requirements or fairness
criteria. The provisions of Chapter 1704 may deter or prevent takeover bids that
have not been approved in advance by the directors and may decrease the chances
of shareholders realizing a premium over market price for their Common Shares as
the result of such a takeover bid.

34
<PAGE>

UNDERWRITING

The Underwriters named below, acting through their representatives, Legg
Mason Wood Walker, Incorporated and J.C. Bradford & Co. (the "Representatives"),
have severally agreed, subject to the terms and conditions of the Underwriting
Agreement, to purchase 600,000 Common Shares from the Company and 400,000 Common
Shares from the Selling Shareholders. The Underwriters are committed to purchase
all of such shares if any are purchased. Under certain circumstances the
commitments of non-defaulting Underwriters may be increased. The names of the
several Underwriters and the respective number of Common Shares to be purchased
by each of them are as follows:

<TABLE>
<CAPTION>
NUMBER
NAME OF SHARES
---- -----------
<S> <C>
Legg Mason Wood Walker, Incorporated..................................................... 395,000
J.C. Bradford & Co....................................................................... 395,000
Robert W. Baird & Co. Incorporated....................................................... 30,000
Jefferies & Company...................................................................... 30,000
McDonald & Company Securities, Inc....................................................... 30,000
The Ohio Company......................................................................... 30,000
The Robinson-Humphrey Company, LLC....................................................... 30,000
Hoak Breedlove Wesneski & Co............................................................. 20,000
Natcity Investments, Inc................................................................. 20,000
Sterne, Agee & Leach, Inc................................................................ 20,000
-----------
Total.................................................................................. 1,000,000
===========
</TABLE>

The Underwriters propose to offer the Common Shares to the public initially
at the offering price per share set forth on the cover page of this Prospectus
and to certain dealers at such price less a concession not in excess of $0.82
per share, and the Underwriters may allow, and such dealers may reallow, a
concession not in excess of $0.10 per share on sales to other dealers. After the
commencement of the public offering of the Common Shares, the offering price and
concession may be changed.

The Company and the Selling Shareholders have agreed to indemnify the
several Underwriters against certain liabilities which may be incurred in
connection with this offering, including liabilities under the Securities Act.

The Selling Shareholders have granted an option to the Underwriters,
exercisable during the 30-day period after the date of this Prospectus, to
purchase up to an aggregate of 150,000 Common Shares from the Company at the
same price per share as the public offering price. The Underwriters may exercise
such option only to cover over-allotments in the sale of the Common Shares that
the Underwriters have agreed to purchase. To the extent the Underwriters
exercise this option, each of the Underwriters has a firm commitment, subject to
certain conditions, to purchase the same percentage of the option shares as the
number of shares to be purchased and offered by that Underwriter as shown in the
above table bears to the 1,000,000 Common Shares initially offered hereby.

All of the directors and executive officers of the Company have agreed with
the Representatives not to offer to sell, sell, transfer or otherwise dispose of
any shares owned by them or for their benefit without the consent of the
Representatives for a period of 120 days after the date of this Prospectus. See
"Risk Factors -- Shares Eligible for Future Sale."

In connection with this offering, certain Underwriters may engage in
passive market making transactions in the Common Shares in accordance with
Regulation M under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), during the two business day period before the commencement of
offers of sales of the Common Shares. Passive market makers must comply with
applicable volume and price limitations and must be identified as such. In
general, a passive market maker must display its bid at a price not in excess of
the highest independent bid for such security; if all independent bids are
lowered below the passive market maker's bid, however, such bid must then be
lowered when certain purchase limits are exceeded.

35
<PAGE>

Until the distribution of the Common Shares is completed, rules of the SEC
Commission may limit the ability of the Underwriters and certain Selling
Shareholders, if any, to bid for and purchase the Common Shares. As an exception
to these rules, the Representatives are permitted to engage in certain
transactions that stabilize the price of the Common Shares. Such transactions
may consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the Common Shares.

If the Underwriters create a short position in the Common Shares in
connection with the offering thereof (i.e., if they sell more Common Shares than
are set forth on the cover page of the Prospectus), the Representatives may
reduce that short position by purchasing Common Shares in the open market. The
Representatives also may elect to reduce any short position by exercising all or
part of the over-allotment option described in the Prospectus.

The Representatives also may impose a penalty bid on certain Underwriters
and selling group members. This means that if the Representatives purchase
Common Shares in the open market to reduce the Underwriters' short position or
to stabilize the price of the Common Shares, they may reclaim the amount of the
selling concession from the Underwriters and selling group members who sold
those shares as part of this offering.

In general, purchases of Common Shares for the purpose of stabilization or
to reduce a syndicate short position could cause the price of the Common Shares
to be higher than it might otherwise be in the absence of such purchases. The
imposition of a penalty bid might have an effect on the price of the Common
Shares to the extent that it were to discourage resales of the Common Shares by
purchasers in this offering.

Neither the Company nor the Underwriters make any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Common Shares. In addition, neither
the Company nor the Underwriters make any representation that the
Representatives will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.

LEGAL MATTERS

The validity of the issuance of Common Shares in the offering will be
passed upon by counsel for the Company, Squire, Sanders & Dempsey L.L.P.,
Columbus, Ohio. Attorneys of Squire, Sanders & Dempsey L.L.P. participating in
the preparation of this Prospectus own an aggregate of 200 Common Shares.
Richard W. Rubenstein, a partner of Squire, Sanders & Dempsey L.L.P., is a
member of the Board of Directors of the Company. Certain legal matters will be
passed upon for the Underwriters by Wolf, Block, Schorr and Solis-Cohen LLP,
Philadelphia, Pennsylvania.

EXPERTS

The consolidated Financial Statements of AmeriLink Corporation at March 31,
1996 and March 30, 1997, and for each of the three fiscal years in the period
ended March 30, 1997, appearing in this Prospectus and Registration Statement,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon appearing elsewhere herein, and are included in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.

36
<PAGE>

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information are available for inspection
without charge at the public reference facilities maintained by the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549-1004, as well as the Regional
Offices of the Commission at Seven World Trade Center, 13th Floor, New York, New
York 10048, and Northwestern Atrium Center, 500 West Madison Street, 14th Floor,
Chicago, Illinois 60661-2511. Copies of such materials may be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission maintains a Web
site, located at http://www.sec.gov, that contains reports, proxy and
information statements and other information regarding registrants, including
the Company, that file electronically with the Commission. The Common Shares are
quoted on the Nasdaq National Market, and reports, proxy statements and other
information concerning the Company may also be inspected at the offices of the
Nasdaq National Market, 1735 K Street, N.W. Washington, D.C. 20006-1506.

The Company has filed a Registration Statement on Form S-2 (the
"Registration Statement," which term shall include any amendments thereto) under
the Securities Act, with the Commission with respect to the Common Shares
offered hereby. This Prospectus does not contain all the information set forth
in the Registration Statement and the exhibits and schedules thereto, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission, and to which reference is hereby made. For further information,
reference is made to the Registration Statement and the exhibits and schedules
thereto. Statements contained in this Prospectus as to contents of any contract
or other document referred to herein are not necessarily complete and, where
such contract or other document is an exhibit to the Registration Statement,
each such statement is qualified in all respects by the provisions of such
exhibit, to which reference is hereby made.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed with the Commission by the Company (File No.
000-24334) are incorporated in this Prospectus by reference:

(1) The Company's Annual Report on Form 10-K for the fiscal year ended
March 30, 1997.

(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 29, 1997.

The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any and all of the foregoing documents, other than the exhibits to such
documents (unless such exhibits are specifically incorporated by reference in
such documents). Requests should be directed to AmeriLink Corporation, 1900 E.
Dublin-Granville Road, Columbus, Ohio 43229, Attention: Investor Relations,
(614) 895-1313, Extension 4545.

<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----------
<S> <C>
Report of Independent Auditors............................................................................. F-2

Consolidated Balance Sheets as of March 31, 1996
March 30, 1997 and June 29, 1997 (unaudited)............................................................. F-3

Consolidated Statements of Income for the years ended April 2, 1995,
March 31, 1996 and March 30, 1997 and the thirteen weeks ended June 30, 1996 and June 29, 1997
(unaudited).............................................................................................. F-4

Consolidated Statements of Changes in Shareholders' Equity for the years
ended April 2, 1995, March 31, 1996 and March 30, 1997 and the thirteen weeks ended June 29, 1997
(unaudited).............................................................................................. F-5

Consolidated Statements of Cash Flows for the years ended April 2, 1995,
March 31, 1996 and March 30, 1997 and the thirteen weeks ended June 30, 1996 and June 29, 1997
(unaudited).............................................................................................. F-6

Notes to Consolidated Financial Statements................................................................. F-7
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareholders
AmeriLink Corporation

We have audited the accompanying consolidated balance sheets of AmeriLink
Corporation and Subsidiary (the "Company") as of March 31, 1996 and March 30,
1997, and the related consolidated statements of income, changes in
shareholders' equity and cash flows for each of the three years in the period
ended March 30, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
AmeriLink Corporation and Subsidiary at March 31, 1996 and March 30, 1997, and
the consolidated results of its operations and its cash flows for each of the
three years in the period ended March 30, 1997, in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Columbus, Ohio
May 16, 1997

F-2
<PAGE>

AMERILINK CORPORATION

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
MARCH 31, MARCH 30, JUNE 29,
1996 1997 1997
-------------- -------------- --------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents..................................... $ 78,680 $ 120,395 $ 101,062
Accounts receivable-trade, net of allowance for doubtful
accounts of $95,000 in 1996; $171,000 in 1997; $252,000 at
June 29, 1997.............................................. 8,899,443 13,558,789 12,795,095
Work-in-process............................................... 2,902,617 4,294,802 6,551,560
Materials and supply inventories.............................. 1,710,084 1,509,840 1,345,345
Other receivables............................................. 221,659 308,217 251,942
Deferred income taxes......................................... 127,286 142,593 142,593
Other......................................................... 510,263 153,125 189,252
-------------- -------------- --------------
Total current assets....................................... 14,450,032 20,087,761 21,376,849
Property and equipment -- net................................... 6,032,551 5,928,062 6,111,356
Deposits and other assets....................................... 71,217 183,578 175,689
Deferred income taxes........................................... -- 11,710 11,710
-------------- -------------- --------------
Total assets.................................................... $ 20,553,800 $ 26,211,111 $ 27,675,604
============== ============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable........................................ $ 1,802,121 $ 2,318,675 $ 2,416,782
Liability to subcontractors................................... 1,083,186 1,960,754 2,369,386
Accrued compensation and related expenses..................... 1,078,935 1,435,672 1,803,228
Accrued insurance............................................. 536,872 368,257 429,894
Income taxes.................................................. -- 173,270 785,292
Other......................................................... 160,952 82,881 137,782
Current maturities of long-term debt.......................... 720,000 69,190 --
-------------- -------------- --------------
Total current liabilities.................................. 5,382,066 6,408,699 7,942,364
Long-term debt, less current maturities......................... 5,843,227 9,000,000 7,750,000
Deferred income taxes........................................... 117,839 -- --
-------------- -------------- --------------
Total liabilities.......................................... 11,343,132 15,408,699 15,692,364
Shareholders' equity:
Preferred stock, without par; 1,000,000 shares authorized;
none issued or outstanding................................. -- -- --
Common Stock, without par; 10,000,000 shares authorized;
3,478,580 in 1996 and 3,481,580 in 1997 and at June 29,
1997 shares issued and outstanding......................... 8,061,395 8,084,645 8,084,645
Retained earnings............................................. 1,149,273 2,717,767 3,898,595
-------------- -------------- --------------
Total shareholders' equity................................. 9,210,668 10,802,412 11,983,240
-------------- -------------- --------------
Total liabilities and shareholders' equity.................... $ 20,553,800 $ 26,211,111 $ 27,675,604
============== ============== ==============
</TABLE>

See notes to financial statements.

F-3
<PAGE>

AMERILINK CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
FIFTY-TWO WEEKS ENDED THIRTEEN WEEKS ENDED
---------------------------------------- --------------------------
APRIL 2, MARCH 31, MARCH 30, JUNE 30, JUNE 29,
1995 1996 1997 1996 1997
------------ ------------ ------------ ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues................................... $ 47,541,021 $ 56,055,416 $ 63,035,814 $ 13,521,020 $ 21,651,070
Cost of sales.............................. 31,866,085 38,950,759 41,297,467 9,021,244 13,349,028
------------ ------------ ------------ ------------ ------------
Gross profit............................... 15,674,936 17,104,657 21,738,347 4,499,776 8,302,042
Selling, general and administrative
expenses................................. 12,895,108 15,935,087 18,436,896 4,004,152 6,136,163
------------ ------------ ------------ ------------ ------------
Income from operations..................... 2,779,828 1,169,570 3,301,451 495,624 2,165,879
Interest expense........................... (342,891) (512,214) (617,004) (127,632) (165,051)
Other income............................... 7,825 28,688 7,047 622 --
------------ ------------ ------------ ------------ ------------
Income before income taxes................. 2,444,762 686,044 2,691,494 368,614 2,000,828
Provision for income taxes................. 994,988 229,000 1,123,000 147,000 820,000
------------ ------------ ------------ ------------ ------------
Net income................................. $ 1,449,774 $ 457,044 $ 1,568,494 $ 221,614 $ 1,180,828
============ ============ ============ ============ ============
Net income per common share................ $ 0.13 $ 0.44 $ 0.06 $ 0.33
============ ============ ============ ============
Weighted average common shares
outstanding.............................. 3,350,521 3,625,510 3,589,131 3,639,952 3,596,027

UNAUDITED PRO FORMA INFORMATION (NOTE 7)
Pro forma income before income taxes....... $ 2,487,221
Pro forma provision for income taxes....... 994,888
------------
Pro forma net income....................... $ 1,492,333
============
Pro forma net income per common share...... $ 0.45
============
</TABLE>

See notes to financial statements.

F-4
<PAGE>

AMERILINK CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK NOTE
---------------------- RETAINED RECEIVABLE
SHARES AMOUNT EARNINGS NACOM CORP. TOTAL
--------- ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Balance at April 3, 1994..................... 2,588,580 $ 191,963 $ 4,386,689 $ (1,264,038) $ 3,314,614
Net income................................. -- -- 1,449,774 -- 1,449,774
Dividends paid............................. -- -- (3,200,000) -- (3,200,000)
Proceeds from note receivable --
NaCom Corp............................... -- -- -- 1,264,038 1,264,038
Net proceeds from sale of common stock,
less issuance expenses of $678,602....... 890,000 5,925,198 -- -- 5,925,198
Reclassification of undistributed S
Corporation retained earnings............ -- 1,944,234 (1,944,234) -- --
--------- ----------- ----------- ------------ ------------
Balance at April 2, 1995..................... 3,478,580 8,061,395 692,229 -- 8,753,624
Net income................................. -- -- 457,044 -- 457,044
--------- ----------- ----------- ------------ ------------
Balance at March 31, 1996.................... 3,478,580 8,061,395 1,149,273 -- 9,210,668
Net income................................. -- -- 1,568,494 -- 1,568,494
Issuance of restricted stock............... 3,000 23,250 -- -- 23,250
--------- ----------- ----------- ------------ ------------
Balance at March 30, 1997.................... 3,481,580 8,084,645 2,717,767 -- 10,802,412
Net income (unaudited)..................... -- -- 1,180,828 -- 1,180,828
--------- ----------- ----------- ------------ ------------
Balance at June 29, 1997 (unaudited)......... 3,481,580 $ 8,084,645 $ 3,898,595 $ -- $ 11,983,240
========= =========== =========== ============ ============
</TABLE>

See notes to financial statements.

F-5
<PAGE>

AMERILINK CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FIFTY-TWO WEEKS ENDED THIRTEEN WEEKS ENDED
---------------------------------------- ------------------------
APRIL 2, MARCH 31, MARCH 30, JUNE 30, JUNE 29,
1995 1996 1997 1996 1997
------------ ------------ ------------ ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income................................... $ 1,449,774 $ 457,044 $ 1,568,494 $ 221,614 $1,180,828
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization.............. 1,458,698 1,950,215 2,242,312 534,322 651,147
Net loss (gain) on disposal of fixed
assets................................... 34,737 9,667 (14,950) (4,745) 3,120
Gain on investments........................ (1,534) (23,534) (6,199) -- --
Deferred income taxes...................... 86,000 (169,500) (145,000) -- --
Changes in operating assets and
liabilities:
Accounts receivable and work-in-process.. (4,634,586) (1,169,784) (6,051,531) (701,768) (1,493,064)
Materials and supply inventories......... (592,802) (470,529) 200,244 (348,070) 164,495
Other receivables........................ 19,517 (1,742) (86,558) 42,578 56,275
Other current assets..................... 9,898 13,027 24,409 32,518 (36,127)
Trade accounts payable................... 674,812 493,369 516,554 437,650 98,107
Liability to subcontractors.............. 180,677 65,404 877,568 152,773 408,632
Accrued compensation and related
expenses............................... 256,271 74,024 356,737 13,066 367,556
Accrued insurance........................ 222,357 (111,023) (168,615) (257,546) 61,637
Income taxes............................. (184,459) (215,770) 505,999 105,395 612,023
Other current liabilities................ 94,935 10,930 (78,071) 6,816 54,900
------------ ------------ ------------ --------- ---------
Net cash provided by (used in) operating
activities............................... (925,705) 911,798 (258,607) 234,603 2,129,529
INVESTING ACTIVITIES
Purchase of property and equipment......... (2,894,798) (4,206,245) (2,752,254) (609,169) (1,004,126)
Proceeds from sale of property and
equipment................................ 56,212 500,801 629,525 85,065 166,565
Deposits and other assets.................. 20,755 246,345 (82,912) (45,752) 7,889
Proceeds from note receivable --
NaCom Corp............................... 1,264,038 -- -- -- --
------------ ------------ ------------ --------- ---------
Net cash used in investing activities........ (1,553,793) (3,459,099) (2,205,641) (569,856) (829,672)
FINANCING ACTIVITIES
Principal payments on long-term debt....... (18,997,065) (18,645,963) (20,400,000) (4,430,000) (8,394,190)
Proceeds from borrowings on long-term
debt..................................... 18,800,000 21,200,000 22,905,963 4,825,963 7,075,000
Proceeds from issuance of common stock..... 5,925,198 -- -- -- --
Dividends paid............................. (3,200,000) -- -- -- --
------------ ------------ ------------ --------- ---------
Net cash provided by (used in) financing
activities................................. 2,528,133 2,554,037 2,505,963 395,963 (1,319,190)
------------ ------------ ------------ --------- ---------
Increase (decrease) in cash and cash
equivalents.............................. 48,635 6,736 41,715 60,710 (19,333)
Cash and cash equivalents at beginning of
period..................................... 23,309 71,944 78,680 78,680 120,395
------------ ------------ ------------ --------- ---------
Cash and cash equivalents at end of period... $ 71,944 $ 78,680 $ 120,395 $ 139,390 $ 101,062
============ ============ ============ ========= =========
SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest paid.............................. $ 364,794 $ 508,587 $ 619,192 $ 129,633 $ 166,454
Income taxes paid.......................... $ 1,023,094 $ 604,192 $ 762,048 $ 41,605 $ 210,188
</TABLE>

See notes to financial statements.

F-6
<PAGE>

AMERILINK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS AND DISCLOSURE AT AND FOR THE THIRTEEN WEEKS
ENDED JUNE 30, 1996 AND JUNE 29, 1997 ARE UNAUDITED)

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

AmeriLink Corporation (the "Company") is a nationwide provider of cabling
systems for the transmission of video, voice and data. The Company offers its
services on a national basis to providers of telecommunications services,
including: cable television multiple system operators ("MSO"s); traditional
telephone service providers, including local exchange carriers ("LEC"s) and long
distance carriers; competitive local exchange carriers ("CLECs"); Direct
Broadcast Satellite ("DBS") providers; and users of Local Area Network ("LAN")
systems. The Company's cabling services include the designing, constructing,
installing and maintaining of fiber optic, copper and coaxial cabling systems.
The Company provides these services predominately through the use of independent
contractors via its national network of regional and satellite field offices. As
of June 29, 1997, the Company had 18 regional offices that serviced the
following metropolitan areas: Los Angeles, San Francisco, Phoenix, Houston, San
Antonio, Louisville, Chicago, St. Louis, Columbus, Cincinnati, Omaha, New York,
Richmond, Tampa Bay, Atlanta, Indianapolis, Cleveland, and Detroit.

PRINCIPLES OF CONSOLIDATION AND RECAPITALIZATION

These financial statements include the accounts of both AmeriLink
Corporation (the holding company) and its wholly owned subsidiary AmeriLink
Corp. (the operating company). Prior to consummation of the Company's initial
public offering in August, 1994, the business of the Company was conducted
solely under AmeriLink Corp. In conjunction with the public offering, the
shareholders of AmeriLink Corp. received 13,500 shares of AmeriLink Corporation
stock for each share of AmeriLink Corp. stock held. As a result of the
recapitalization, AmeriLink Corporation is the sole shareholder of AmeriLink
Corp. (See note 5).

INTERIM UNAUDITED FINANCIAL INFORMATION

The accompanying interim unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all
information and footnotes required by generally accepted accounting principles
for complete financial statements. The information reflects all adjustments
(consisting of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of the results for interim
periods. The results for the thirteen weeks ended June 29, 1997 are not
necessarily indicative of the results to be expected for the full year.

FISCAL YEAR

Fiscal years are designated in the financial statements and notes by the
year in which the fiscal year ends. Accordingly, results for the fiscal years
1995, 1996 and 1997 represent the 52 weeks ended April 2, 1995, March 31, 1996
and March 30, 1997, respectively.

REVENUES AND COST RECOGNITION

The Company recognizes revenues from its fixed and unit price contracts in
process on the percentage of completion method of accounting. Anticipated losses
on these contracts are recorded when identified. Contract costs include all
direct labor, material, subcontract and other direct project costs related to
contract performance.

Work-in-process typically represents amounts earned under the Company's
contracts but not billed due to timing or not billable to clients according to
contract terms, which usually consider passage of time, achievement of certain
milestones or completion of the project.

F-7
<PAGE>

AMERILINK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURE AT AND FOR THE THIRTEEN WEEKS
ENDED JUNE 30, 1996 AND JUNE 29, 1997 ARE UNAUDITED)

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES -- (CONTINUED)

MAJOR CUSTOMERS

Customers comprising 10% or greater of the Company's fiscal year net sales
are summarized as follows:

<TABLE>
<CAPTION>
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Time Warner Cable....................................... 16% 26% 19%
Cox Cable Communications................................ 13% 13% 2%
</TABLE>

As of June 29, 1997, GTE Media Ventures (a part of GTE Corporation) and
Ameritech Corporation became major customers of the Company. For the thirteen
weeks ended June 29, 1997, GTE Media Ventures and Ameritech Corporation
comprised 17% and 11%, respectively, of the Company's net sales.

CONCENTRATIONS OF CREDIT RISK

Financial instruments, which potentially subject the Company to
concentration of credit risk, consist principally of uncollateralized trade
receivables and unbilled work-in-process. The Company performs ongoing credit
evaluations of its customers' financial conditions but does not require
collateral to support customer receivables. The Company establishes an allowance
for doubtful accounts based upon factors surrounding the credit risk of specific
customers, historical trends and other information.

MATERIALS AND SUPPLY INVENTORIES

Materials and supply inventories are comprised primarily of cabling
materials and are stated at cost. Cost is determined using the first-in,
first-out (FIFO) method.

PROPERTY AND EQUIPMENT

Property and equipment is recorded at cost. Depreciation and amortization
for financial reporting purposes is computed using the straight-line method over
the estimated useful lives of the assets. Generally, the useful lives for all
major classes of assets are three to seven years. Recovery of capital costs for
income tax reporting purposes is primarily provided by the use of accelerated
methods over the statutory recovery periods. The costs of assets sold or retired
and the related accumulated depreciation are removed from the accounts in the
year of disposal, and any gain or loss is included in net income. Maintenance
and repairs are charged to expense as incurred.

CASH AND CASH EQUIVALENTS

For purposes of the statements of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less at the time of
purchase to be cash equivalents.

INCOME TAXES

Income taxes are calculated in accordance with Statement of Financial
Accounting Standards (SFAS No. 109), "Accounting for Income Taxes." Deferred tax
assets and liabilities are recognized based on the difference between the
financial statement and tax bases of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.

COMMON STOCK AND EARNINGS PER SHARE

Net income per common share and pro forma net income per common share are
based on weighted average common and common equivalent shares outstanding during
the respective years.

All common shares and per share data have been adjusted to give effect to
the recapitalization.

F-8
<PAGE>

AMERILINK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURE AT AND FOR THE THIRTEEN WEEKS
ENDED JUNE 30, 1996 AND JUNE 29, 1997 ARE UNAUDITED)

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES -- (CONTINUED)

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the 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. Management believes those estimates and assumptions utilized
in preparing the financial statements are reasonable. Actual results could
differ from those estimates.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings per Share", which is required to be adopted on December 15,
1997. At that time, the Company will be required to change the method currently
used to compute earnings per share and to restate all prior periods. Under the
new requirements for calculating primary earnings per share, the dilutive effect
of stock options will be excluded. The impact is not expected to have a
significant effect on previously reported earnings per share.

RECLASSIFICATIONS

Certain reclassifications have been made to the fiscal 1995, 1996 and 1997
consolidated financial statements to conform to the fiscal 1998 presentation.

2. PROPERTY AND EQUIPMENT

Property and equipment consists of the following for the periods ended
March 31, 1996 and March 30, 1997:

<TABLE>
<CAPTION>
1996 1997
------------- -------------
<S> <C> <C>
Leasehold improvements................................................ $ 168,295 $ 181,486
Transportation equipment.............................................. 4,987,939 5,371,718
Machinery and equipment............................................... 4,552,090 4,469,496
Computer equipment and related software............................... 1,115,039 1,430,884
Furniture and fixtures................................................ 812,189 906,593
------------- -------------
Total............................................................... 11,635,552 12,360,177
Less accumulated depreciation......................................... (5,603,001) (6,432,115)
------------- -------------
Net property and equipment............................................ $ 6,032,551 $ 5,928,062
============= =============
</TABLE>

3. EMPLOYEE BENEFIT PLANS

The Company has a Profit Sharing and 401(k) Plan covering substantially all
of its employees. Profit sharing contributions are at the discretion of the
Board of Directors, although limited to the maximum amount permitted under the
Internal Revenue Code. The Company did not make a profit sharing contribution
for the years ended April 2, 1995, March 31, 1996, and March 30, 1997. The
401(k) Plan allows eligible employees to contribute a portion of their
compensation to the Plan. The employer may make an additional contribution
subject to the terms of the Plan. The contribution expense for the Company to
the 401(k) Plan for the years ended April 2, 1995, March 31, 1996, and March 30,
1997 was $30,377, $42,901, and $66,109, respectively.

F-9
<PAGE>

AMERILINK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURE AT AND FOR THE THIRTEEN WEEKS
ENDED JUNE 30, 1996 AND JUNE 29, 1997 ARE UNAUDITED)

4. NOTES PAYABLE AND LONG-TERM DEBT

On September 27, 1996, the Company amended its existing loan agreement with
its commercial bank. Under terms of the new agreement, the Company increased
available borrowings under its unsecured revolving credit note (the "credit
facility") from $10,000,000 to $12,000,000. Interest is payable at a rate of
prime minus 1% (7.50% at March 30, 1997). The revolving credit note matures
September 30, 1998 and includes a commitment fee of 1/4% on any unused portion
of the note.

The Company also has an unsecured term note in the amount of $1,629,190
which matures May 31, 1997. Principal payments of $60,000 and interest at a rate
of prime (8.50% at March 30, 1997) are paid monthly on the term note. The
balance of this note at March 30, 1997 was $69,190. As of June 29, 1997, this
note has been paid in full.

The new loan agreement contains certain restrictive covenants which, among
others, require the Company to maintain certain financial ratios. Borrowings
under the loan agreement as of March 31, 1996, March 30, 1997 and June 29, 1997
consist of the following:

<TABLE>
<CAPTION>
1996 1997 1998
------------- ------------- -------------
<S> <C> <C> <C>
Credit facility.......................................... $ 5,774,037 $ 9,000,000 $ 7,750,000
Term note................................................ 789,190 69,190 --
------------- ------------- -------------
6,563,227 9,069,190 7,750,000
Less current portion..................................... 720,000 69,190 --
------------- ------------- -------------
Net long-term debt....................................... $ 5,843,227 $ 9,000,000 $ 7,750,000
============= ============= =============
</TABLE>

The amount of long-term debt maturing in each of the next two years is
$69,190 in 1998 and $9,000,000 in 1999.

5. INITIAL PUBLIC OFFERING

On August 12, 1994, the Company's initial public offering was declared
effective by the SEC and its stock began trading on the NASDAQ national market.
Pursuant to the terms of the offering, the Company issued 850,000 shares which
were sold at $8.00 per share.

On September 22, 1994, the over-allotment option with the offering was
exercised, pursuant to which the Company issued an additional 40,000 shares at
$8.00 per share.

The net proceeds from the offering were $5,925,198. Upon completion of the
public offering, AmeriLink Corporation terminated its S Corporation election,
and paid $2,700,000 in dividends from the proceeds of the offering to the former
shareholders for undistributed earnings associated with its S Corporation
status. These shareholders, who are also the shareholders of N.C. Utility
Services, Inc. (formerly NaCom Corp.), used a portion of these dividends to
repay the outstanding balance of the Company's note receivable from N.C. Utility
Services, Inc.

6. INCOME TAXES

Prior to the initial public offering, the income of the Company was taxed
under the provisions of Subchapter S of the Internal Revenue Code, which
provides that in lieu of corporate income taxes, the shareholders of the S
Corporation are taxed on their proportionate share of the Company's taxable
income. Therefore, no provision or liability for federal income tax has been
included in historical financial statements prior to August 12, 1994, the date
of the offering. To the extent certain states and localities did not recognize
the S Corporation election, taxes were provided.

F-10
<PAGE>

AMERILINK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURE AT AND FOR THE THIRTEEN WEEKS
ENDED JUNE 30, 1996 AND JUNE 29, 1997 ARE UNAUDITED)

6. INCOME TAXES -- (CONTINUED)

Effective March 29, 1993 the Company converted from the cash method to the
accrual method of accounting for income tax purposes. This conversion created an
adjustment of taxable income of approximately $3,473,000 that the Company
elected to recognize in six equal installments ("Cash to accrual adjustment").
The unpaid portion of the related liability is recorded as a temporary
difference in deferred tax liabilities.

The provision for income taxes consists of the following for the fifty-two
weeks ended April 2, 1995, March 31, 1996 and March 30, 1997:

<TABLE>
<CAPTION>
1995 1996 1997
----------- ----------- -------------
<S> <C> <C> <C>
Current:
Federal................................................ $ 652,647 $ 315,200 $ 1,013,000
State and local........................................ 256,341 83,300 255,000
----------- ----------- -------------
908,988 398,500 1,268,000
Tax adjustment due to change in tax status............... 376,000

Deferred:
Federal................................................ (246,500) (144,000) (123,000)
State and local........................................ (43,500) (25,500) (22,000)
----------- ----------- -------------
(290,000) (169,500) (145,000)
----------- ----------- -------------
$ 994,988 $ 229,000 $ 1,123,000
=========== =========== =============
</TABLE>

Deferred tax assets and liabilities recorded in the consolidated balance
sheets at March 31, 1996 and March 30, 1997 consist of the following:

<TABLE>
<CAPTION>
1996 1997
----------- -----------
<S> <C> <C>
Deferred tax assets:
Depreciation............................................................ $ 95,909 $ --
Accrued compensation.................................................... 149,250 164,170
Accrued insurance....................................................... 147,402 90,128
Allowance for doubtful accounts......................................... 38,000 68,400
Other................................................................... 47,903 73,173
----------- -----------
Total deferred tax assets............................................... 478,464 395,871
----------- -----------
Deferred tax liabilities:
Cash to accrual adjustment.............................................. (469,017) (234,509)
Depreciation............................................................ -- (7,059)
----------- -----------
Total deferred tax liabilities.......................................... (469,017) (241,568)
----------- -----------
Net deferred tax assets................................................... $ 9,447 $ 154,303
=========== ===========
</TABLE>

F-11
<PAGE>

AMERILINK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURE AT AND FOR THE THIRTEEN WEEKS
ENDED JUNE 30, 1996 AND JUNE 29, 1997 ARE UNAUDITED)

6. INCOME TAXES -- (CONTINUED)

A reconciliation of the federal corporate income tax rate and the effective
tax rate on income taxes is summarized below for the periods ended March 31,
1996 and March 30, 1997.

<TABLE>
<CAPTION>
1996 1997
------- -------
<S> <C> <C>
Statutory income tax rate........................................................ 34.0% 34.0%
State and local taxes, net of Federal benefit.................................... 5.2% 5.2%
Permanent differences............................................................ 5.6% 2.5%
Adjustment due to change in accounting estimate.................................. (11.4%) --
------- -------
Effective income tax rate........................................................ 33.4% 41.7%
======= =======
</TABLE>

7. PRO FORMA NET INCOME PER SHARE (UNAUDITED)

Pro forma net income per share is calculated by dividing pro forma net
income by the weighted average number of shares outstanding during the period,
including, when their effect is dilutive, common stock equivalents consisting of
shares subject to stock options.

Pro forma income taxes represent the estimated taxes that would have been
reported had the Company been subject to federal, state, and local taxes for
each period presented. Pro forma income before taxes for the fifty-two weeks
ended April 2, 1995 includes a foreign tax credit of approximately $42,000 from
its operations in Mexico that the Company would have recognized had it operated
as a C Corporation for the entire fiscal year.

8. OPERATING LEASES

The Company is committed under noncancellable operating leases for offices
and warehouse space which will require future minimum rental commitments in the
amount of $369,834 in 1998, $201,923 in 1999 and $101,842 in 2000.

Rental expense under all operating leases amounted to $603,471, $769,779
and $923,752 for the years ended April 2, 1995, March 31, 1996 and March 30,
1997, respectively.

9. STOCK OPTIONS AND STOCK INCENTIVE PLAN

Prior to the Company's initial public offering, key officers were granted
options to purchase outstanding shares of common stock from the majority
shareholders of the Company, and in connection with the recapitalization agreed
to restated option agreements. The Chief Executive Officer was granted options
to purchase 135,000 shares at $4.00 per share and 225,000 shares at $6.35 per
share. The 135,000 options shall remain effective throughout employment with the
Company, and the 225,000 options shall remain effective until the later of
termination of employment or, in the event employment is terminated by death,
one year after death. All options are currently exercisable and no options had
been exercised as of the fiscal year ended March 30, 1997. The Company's Vice
President of Operations was granted options to purchase 81,000 shares at $4.69
per share. These options shall remain effective until the earlier of May 1, 2004
or the termination of employment (if employment is terminated by death, then one
year after death). Options to purchase fifty percent of the shares will become
exercisable on April 1, 1997 and the remaining options will become exercisable,
on a cumulative basis, at the rate of 10% per year commencing on April 1, 1998.
There have been no options exercised as of March 30, 1997.

F-12
<PAGE>

AMERILINK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURE AT AND FOR THE THIRTEEN WEEKS
ENDED JUNE 30, 1996 AND JUNE 29, 1997 ARE UNAUDITED)

9. STOCK OPTIONS AND STOCK INCENTIVE PLAN -- (CONTINUED)

Effective August 1994, the Company adopted a stock incentive plan (the
"Plan") for key employees and directors of the Company. The Plan is administered
by the Compensation Committee of the Board of Directors, and provides for grants
of stock options, stock appreciation rights, restricted stock awards and phantom
stock. The maximum aggregate number of common shares which may be granted under
the Plan is 350,000 shares, and the maximum number of shares that may be awarded
during any calendar year may not exceed 10% of the total number of issued and
outstanding common shares of the Company. Any awards that lapse or are canceled
are available for re-grant under the terms of the Plan.

Stock option grants may be in the form of incentive stock options or
non-qualified options. As of March 30, 1997, all options granted have been
non-qualified options. Key employee options awarded under the plan vest 20%
annually from the date of the grant, and non-employee Director option awards
vest 25% annually from the date of the grant. Stock options awarded under the
plan are at exercise prices that equal or exceed the fair market value at the
date of the grant, and any shares not exercised lapse on the earliest of ten
years from the grant date or 90 days after termination with the Company. In
February, 1997, an initial grant of 3,000 shares of restricted stock was issued
to non-employee Directors of the Company. One-third of the shares become
exercisable on each of the next three anniversaries of the date of the award.

The following table summarizes all stock option transactions under the
Stock Incentive Plan for the fiscal years ended April 2, 1995, March 31, 1996,
and March 30, 1997.

<TABLE>
<CAPTION>
1995 1996 1997
---------------------- ---------------------- ----------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
OPTIONS PRICE OPTIONS PRICE OPTIONS PRICE
--------- ----------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Outstanding -- beginning of year.................. -- 124,875 142,450
Granted......................................... 134,125 $ 8.75 26,375 $ 8.00 48,425 $ 7.75
Forfeited....................................... (9,250) $ 8.00 (8,800) $ 8.00 (13,385) $ 7.95
--------- --------- ---------
Outstanding -- end of year........................ 124,875 $ 8.80 142,450 $ 8.70 177,490 $ 8.50
========= ========= =========
Exercisable at end of year........................ -- 23,684 $ 8.84 49,125 $ 8.81
========= ========= =========
</TABLE>

The following table summarizes information about stock options outstanding
at March 30, 1997:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
--------------------------------------- ------------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
REMAINING AVERAGE AVERAGE
CONTRACTUAL EXERCISE EXERCISE
RANGE OF EXERCISE PRICES OPTIONS LIFE PRICE OPTIONS PRICE
- ------------------------ --------- --------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$7.75 -- $8.00............................................. 127,490 8.3 $ 7.91 29,125 $ 8.00
$10.00..................................................... 50,000 7.4 $ 10.00 20,000 $ 10.00
--------- ---------
Exercisable at end of year................................. 177,490 49,125
========= =========
</TABLE>

The Company adopted the disclosure requirements of Statement of Financial
Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation", but
has elected to continue to measure compensation expense in accordance with
Accounting Principles Board Opinion No. 25, ("APB 25") "Accounting for Stock
Issued to Employees". Under APB 25, no compensation expense for stock options
has been recognized because the exercise price equals or exceeds the market
price of the

F-13
<PAGE>

AMERILINK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURE AT AND FOR THE THIRTEEN WEEKS
ENDED JUNE 30, 1996 AND JUNE 29, 1997 ARE UNAUDITED)

9. STOCK OPTIONS AND STOCK INCENTIVE PLAN -- (CONTINUED)

underlying stock on the date of grant. If compensation expense had been
determined based on the estimated fair value of options granted in fiscal 1996
and 1997, consistent with the methodology in SFAS 123, the pro-forma effects on
the Company's net income and net income per share would have been immaterial,
and therefore, have not been provided.

10. QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of the unaudited quarterly results from
operations for the 52 weeks ended March 31, 1996 and March 30, 1997 (in
thousands, except per share amounts).

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Fiscal 1996...................................................... $ 11,044 $ 16,415 $ 15,661 $ 12,936
Fiscal 1997...................................................... 13,521 15,663 16,731 17,121
Gross profit:
Fiscal 1996...................................................... 3,185 4,955 4,866 4,099
Fiscal 1997...................................................... 4,500 5,181 5,850 6,207
Income (loss) before income taxes:
Fiscal 1996...................................................... (344) 890 341 (201)
Fiscal 1997...................................................... 369 514 830 978
Net income (loss):
Fiscal 1996...................................................... (206) 534 245 (116)
Fiscal 1997...................................................... 222 308 498 540

Income (loss) per share:
Fiscal 1996...................................................... $ (0.06) $ 0.15 $ 0.07 $ (0.03)
Fiscal 1997...................................................... $ 0.06 $ 0.09 $ 0.14 $ 0.15
</TABLE>

F-14
<PAGE>

[ LOGO ]

[ PHOTOGRAPHS ]

[ DIAGRAM IN COLOR ]

(SEE BUSINESS -- INDUSTRY OVERVIEW -- FIGURE 1)

<PAGE>

================================================================================

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH THIS PROSPECTUS RELATES OR
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY TO ANY PERSON IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary............................. 3
Risk Factors................................... 7
Use of Proceeds................................ 11
Price Range of Common Shares and Dividend
Policy....................................... 11
Capitalization................................. 12
Selected Financial Data........................ 13
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................... 14
Business....................................... 21
Management..................................... 30
Selling Shareholders........................... 32
Capital Shares................................. 33
Underwriting................................... 35
Legal Matters.................................. 36
Experts........................................ 36
Available Information.......................... 37
Incorporation of Certain Documents by
Reference.................................... 37
Index to Consolidated Financial
Statements................................... F-1
</TABLE>

================================================================================

1,000,000 SHARES

AMERILINK
CORPORATION

COMMON SHARES

-------------------
PROSPECTUS
-------------------

LEGG MASON WOOD WALKER
INCORPORATED

J.C. BRADFORD & CO.

OCTOBER 24, 1997

================================================================================