<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
FOR THE QUARTERLY PERIOD ENDED JUNE 29, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-24334
---------------------------
AMERILINK CORPORATION
-----------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 31-1409345
------------------------------- ------------------------------------
(STATE OF OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1900 E. DUBLIN-GRANVILLE ROAD, COLUMBUS, OHIO 43229
------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(614) 895-1313
----------------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO
SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES X . NO .
------- -------
3,481,580 SHARES OF COMMON STOCK WERE OUTSTANDING AS OF AUGUST 6, 1997
1
<PAGE>
AMERILINK CORPORATION
QUARTERLY REPORT FOR THE QUARTER ENDED JUNE 29, 1997
Index Page No.
----- --------
PART I: FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheets as of March 30, 1997 and
June 29, 1997 (Unaudited). . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Income (Unaudited) for the
thirteen weeks ended June 30, 1996 and June 29, 1997 . . . . . 4
Consolidated Statements of Changes in Shareholders' Equity
(Unaudited) for the thirteen weeks ended June 29, 1997 . . . . 5
Consolidated Statements of Cash Flows (Unaudited) for the
thirteen weeks ended June 30, 1996 and June 29, 1997 . . . . . 6
Notes to Consolidated Financial Statements . . . . . . . . . . 7 - 8
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . 8 - 11
PART II: OTHER INFORMATION
Items 1-6. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2
<PAGE>
AMERILINK CORPORATION
CONSOLIDATED BALANCE SHEETS
- -------------------------------------------------------------------------------
March 30, 1997 June 29, 1997
- -------------------------------------------------------------------------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents. . . . . . . . . . $ 120,395 $ 101,062
Accounts receivable-trade, net of
allowance for doubtful accounts of
$171,000 and $252,000 . . . . . . . . . . . 13,558,789 12,795,095
Work-in-process. . . . . . . . . . . . . . . 4,294,802 6,551,560
Materials and supply inventories . . . . . . 1,509,840 1,345,345
Other receivables. . . . . . . . . . . . . . 308,217 251,942
Deferred income taxes. . . . . . . . . . . . 142,593 142,593
Other. . . . . . . . . . . . . . . . . . . . 153,125 189,252
------------- ------------
Total current assets. . . . . . . . . . 20,087,761 21,376,849
Property and equipment - net. . . . . . . . . . . 5,928,062 6,111,356
Deposits and other assets . . . . . . . . . . . . 183,578 175,689
Deferred income taxes . . . . . . . . . . . . . . 11,710 11,710
------------- ------------
Total assets. . . . . . . . . . . . . . . . . . . $ 26,211,111 $ 27,675,604
------------- ------------
------------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable . . . . . . . . . . . $ 2,318,675 $ 2,416,782
Liability to subcontractors. . . . . . . . . 1,960,754 2,369,386
Accrued compensation and related expenses. . 1,435,672 1,803,228
Accrued insurance. . . . . . . . . . . . . . 368,257 429,894
Income taxes . . . . . . . . . . . . . . . . 173,269 785,292
Other. . . . . . . . . . . . . . . . . . . . 82,882 137,782
Current maturities of long-term debt . . . . 69,190 --
------------- ------------
Total current liabilities . . . . . . . 6,408,699 7,942,364
Long-term debt, less current maturities . . . . . 9,000,000 7,750,000
------------- ------------
Total liabilities . . . . . . . . . . . 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; 3,481,580 shares issued
and outstanding . . . . . . . . . . . . . . 8,084,645 8,084,645
Retained earnings. . . . . . . . . . . . . . 2,717,767 3,898,595
------------- ------------
Total shareholders' equity. . . . . . . 10,802,412 11,983,240
------------- ------------
Total liabilities and shareholders' equity. . . . $ 26,211,111 $ 27,675,604
------------- ------------
------------- ------------
See notes to financial statements.
3
<PAGE>
AMERILINK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
- -------------------------------------------------------------------------------
Thirteen Weeks Ended
June 30, 1996 June 29, 1997
- -------------------------------------------------------------------------------
Revenues. . . . . . . . . . . . . . . . . . . . . $ 13,521,020 $ 21,651,070
Cost of sales . . . . . . . . . . . . . . . . . . 9,021,244 13,349,028
------------- ------------
Gross profit. . . . . . . . . . . . . . . . . . . 4,499,776 8,302,042
Selling, general and administrative expenses. . . 4,004,152 6,136,163
------------- ------------
Income from operations. . . . . . . . . . . . . . 495,624 2,165,879
Interest expense. . . . . . . . . . . . . . . . . (127,632) (165,051)
Other income. . . . . . . . . . . . . . . . . . . 622 --
------------- ------------
Income before income taxes. . . . . . . . . . . . 368,614 2,000,828
Provision for income taxes. . . . . . . . . . . . 147,000 820,000
------------- ------------
Net income. . . . . . . . . . . . . . . . . . . . $ 221,614 $ 1,180,828
------------- ------------
------------- ------------
Net income per common share . . . . . . . . . . . $ 0.06 $ 0.33
------------- ------------
------------- ------------
Weighted average common shares outstanding. . . . 3,639,952 3,596,027
See notes to financial statements.
4
<PAGE>
AMERILINK CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THIRTEEN WEEKS ENDED JUNE 29, 1997
(UNAUDITED)
- -------------------------------------------------------------------------------
Number Common Retained
of Shares Stock Earnings Total
- -------------------------------------------------------------------------------
Balance at March 30,1997. . . 3,481,580 $ 8,084,645 $ 2,717,767 $ 10,802,412
Net income. . . . . . . . . . -- -- 1,180,828 1,180,828
--------- ----------- ----------- ------------
Balance at June 29, 1997. . . 3,481,580 $ 8,084,645 $ 3,898,595 $ 11,983,240
--------- ----------- ----------- ------------
--------- ----------- ----------- ------------
See notes to financial statements.
5
<PAGE>
AMERILINK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Thirteen Weeks Ended
June 30, 1996 June 29, 1997
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income. . . . . . . . . . . . . . . . . . . . . . $ 221,614 $ 1,180,828
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization . . . . . . . . . . 534,322 651,147
Net gain (loss) on disposal of fixed assets . . . (4,745) 3,120
Changes in operating assets and liabilities:
Accounts receivable and work-in-process. . . . (701,768) (1,493,064)
Materials and supply inventories . . . . . . . (348,070) 164,495
Other receivables. . . . . . . . . . . . . . . 42,578 56,275
Other current assets . . . . . . . . . . . . . 32,518 (36,127)
Trade accounts payable . . . . . . . . . . . . 437,650 98,107
Liability to subcontractors. . . . . . . . . . 152,773 408,632
Accrued compensation and related expenses. . . 13,066 367,556
Accrued insurance. . . . . . . . . . . . . . . (257,546) 61,637
Income taxes . . . . . . . . . . . . . . . . . 105,395 612,023
Other current liabilities. . . . . . . . . . . 6,816 54,900
------------ ------------
Net cash provided by operating activities . . . . . . 234,603 2,129,529
INVESTING ACTIVITIES
Purchase of property and equipment. . . . . . . . (609,169) (1,004,126)
Proceeds from sale of property and equipment. . . 85,065 166,565
Deposits and other assets . . . . . . . . . . . . (45,752) 7,889
------------ ------------
Net cash used in investing activities . . . . . . . . (569,856) (829,672)
FINANCING ACTIVITIES
Principal payments on long-term debt. . . . . . . (4,430,000) (8,394,190)
Proceeds from borrowings on long-term debt. . . . 4,825,963 7,075,000
------------ ------------
Net cash provided by (used in) financing activities . 395,963 (1,319,190)
------------ ------------
Increase (decrease) in cash and cash equivalents. 60,710 (19,333)
Cash and cash equivalents at beginning of period. . . 78,680 120,395
------------ ------------
Cash and cash equivalents at end of period. . . . . . $ 139,390 $ 101,062
------------ ------------
------------ ------------
SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest paid . . . . . . . . . . . . . . . . . . $ 129,633 $ 166,454
Income taxes paid . . . . . . . . . . . . . . . . $ 41,605 $ 210,188
</TABLE>
See notes to financial statements.
6
<PAGE>
AMERILINK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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.
These financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements.
These financial statements should be read in conjunction with the March 30,
1997 audited financial statements of AmeriLink Corporation contained in its
Annual Report to Shareholders.
The financial information included herein reflects all adjustments
(consisting of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of the results for interim
periods. The results of operations for the thirteen weeks ended June 29,
1997 are not necessarily indicative of the results to be expected for the
full year.
RECENTLY ISSUED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings per Share", which is effective for both interim
and annual periods ending after 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 Company does not believe the adoption of the standard
will have a significant effect on previous reported earnings per share.
RECLASSIFICATIONS
Certain reclassifications have been made to the fiscal 1997
consolidated financial statements to conform to the fiscal 1998 presentation.
2. NET INCOME PER SHARE
Net income per share is calculated by dividing net income by the
weighted average shares outstanding for the period presented, including, when
their effect is dilutive, common stock equivalents consisting of shares
subject to stock options.
7
<PAGE>
3. NOTES PAYABLE AND LONG-TERM DEBT
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 which matures September 30, 1998. Interest on the note is prime minus 1%
and is payable monthly, and there is a commitment fee of 1/4% on any unused
portion of the note. Borrowings under the revolving credit note were
$7,750,000 at June 29, 1997.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION ACT OF 1995
The Company cautions that any forward-looking statements (as such
term is defined in the Private Securities Litigation Act of 1995) contained
in this Report or made by management of the Company involve risks and
uncertainties, and are subject to change based on various important factors.
These important factors include, 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 Securities and Exchange Commission filings.
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's selling, general and administrative cost structure is
maintained at levels necessary to adequately support both anticipated near
term 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.
COMPARISONS OF THIRTEEN WEEKS ENDED JUNE 30, 1996 AND JUNE 29, 1997
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%.
Revenues derived from residential and commercial premises wiring
activities increased by 81% 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 86% of the Company's total revenues for the most
recent quarter, versus 76% a year earlier, consistent with the Company's
announced strategy to focus efforts on premises wiring activities.
Premises wiring revenues derived from telephone companies 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 telephone companies
(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.
8
<PAGE>
The Company believes that as a result of the Telecommunications Act of 1996,
certain telephone companies 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 telephone company
revenues of approximately $1.1 million via a contract that was terminated in
June 1997, due to the customer's decision to stop deployment of its hardwire
cable system.
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 last year. The
percentage decline in cabling materials is primarily due to strong first
quarter fiscal 1998 labor only revenues derived from telephone companies.
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 corresponding period last year.
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.
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 (multiple dwelling unit), 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.
9
<PAGE>
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%. This increase is due primarily to the record level of
revenues that the Company recorded during the fiscal 1998 first quarter which
ended June 29, 1997. 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 versus $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 which matures September 30, 1998.
Interest on the note is prime minus 1% and is payable monthly, and there is a
commitment fee of 1/4% on any unused portion of the note. Borrowings under
the revolving credit note were $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 combined 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. 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.
CASH FLOW FROM INVESTING ACTIVITIES. Net cash used in investing
activities for the first three months of fiscal 1998 totaled $829,672 versus
$569,856 for the corresponding 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.
10
<PAGE>
SEASONALITY AND VARIABILITY IN QUARTERLY RESULTS
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,
CLECs, 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. The Company's operations
historically have also been influenced by the budget cycles of the Company's
customers. Many of the Company's cable television 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. 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. Telecommunication 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.
For the first quarter of fiscal 1998, the Company recorded approximately
$8.3 million in revenues (38% of total company revenues) from telephone
companies that were investing in relatively new markets by building or
expanding broadband or wireless video systems. Of the total $8.3 million of
revenues from telephone companies (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.
11
<PAGE>
AMERILINK CORPORATION
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS. NOT APPLICABLE
Item 2. CHANGE IN SECURITIES. NOT APPLICABLE
Item 3. DEFAULTS UPON SENIOR SECURITIES. NOT APPLICABLE
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. NOT APPLICABLE
Item 5. OTHER INFORMATION. NOT APPLICABLE
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit No. Description
----------- -----------
27 Financial Data Schedule filed herewith
as part of this report on Form 10-Q.
(b) No reports on Form 8-K have been filed
during the quarter ended June 29, 1997.
12
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERILINK CORPORATION
(Registrant)
Date: August 11, 1997 By:/s/Larry R. Linhart
-------------------------------
Larry R. Linhart
Chief Executive Officer
President
Date: August 11, 1997 By:/s/James W. Brittan
-------------------------------
James W. Brittan
Vice President of Finance
(Principal Financial and Accounting
Officer)
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF JUNE 29, 1997 AND THE STATEMENT OF INCOME FOR THE THIRTEEN WEEKS
ENDED JUNE 29, 1997 OF AMERILINK CORPORATION.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-29-1998
<PERIOD-START> MAR-31-1997
<PERIOD-END> JUN-29-1997
<CASH> 101,062
<SECURITIES> 0
<RECEIVABLES> 13,047,095
<ALLOWANCES> 252,000
<INVENTORY> 1,345,345
<CURRENT-ASSETS> 21,376,849
<PP&E> 6,111,356<F1>
<DEPRECIATION> 0<F1>
<TOTAL-ASSETS> 27,675,604
<CURRENT-LIABILITIES> 7,942,364
<BONDS> 7,750,000
0
0
<COMMON> 8,084,645
<OTHER-SE> 3,898,595
<TOTAL-LIABILITY-AND-EQUITY> 27,675,604
<SALES> 21,651,070
<TOTAL-REVENUES> 21,651,070
<CGS> 13,349,028
<TOTAL-COSTS> 19,485,191
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 165,051
<INCOME-PRETAX> 2,000,828
<INCOME-TAX> 820,000
<INCOME-CONTINUING> 1,180,828
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,180,828
<EPS-PRIMARY> 0.33
<EPS-DILUTED> 0.33
<FN>
<F1>PROPERTY, PLANT, AND EQUIPMENT IS REPORTED NET OF ACCUMULATED DEPRECIATION ON
THE CONSOLIDATED BALANCE SHEET.
</FN>
</TABLE>
