-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cubkh5keq4P2FrA7nBB718cjRoW7of4Wh91is3CSKD4SPazuf90ZMw9L0GuL6n+s miaoyB/M1nPdcIB5HScUKQ== 0000912057-97-004598.txt : 19970222 0000912057-97-004598.hdr.sgml : 19970222 ACCESSION NUMBER: 0000912057-97-004598 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961229 FILED AS OF DATE: 19970212 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERILINK CORP CENTRAL INDEX KEY: 0000924774 STANDARD INDUSTRIAL CLASSIFICATION: WATER, SEWER, PIPELINE, COMM AND POWER LINE CONSTRUCTION [1623] IRS NUMBER: 311409345 STATE OF INCORPORATION: OH FISCAL YEAR END: 0329 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-24334 FILM NUMBER: 97527248 BUSINESS ADDRESS: STREET 1: 1900 E DUBLIN GRANVILLE RD CITY: COLUMBUS STATE: OH ZIP: 43229 BUSINESS PHONE: 6148951313 10-Q 1 FORM 10-Q 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 December 29, 1996 ----------------- 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 . ------ ------ 3,478,580 shares of common stock were outstanding as of February 5, 1997 1 AMERILINK CORPORATION QUARTERLY REPORT FOR THE QUARTER ENDED DECEMBER 29, 1996 Index Page No. ----- -------- PART I: FINANCIAL INFORMATION Item 1 - Financial Statements Consolidated Balance Sheets as of March 31, 1996 and December 29, 1996 (Unaudited) 3 Consolidated Statements of Income (Unaudited) for the thirty-nine weeks ended December 31, 1995 and December 29, 1996 4 Consolidated Statements of Income (Unaudited) for the thirteen weeks ended December 31, 1995 and December 29, 1996 5 Consolidated Statement of Changes in Shareholders' Equity (Unaudited) for the thirty-nine weeks ended December 29, 1996 6 Consolidated Statements of Cash Flows (Unaudited) for the thirty-nine weeks ended December 31, 1995 and December 29, 1996 7 Notes to Consolidated Financial Statements 8 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 9-12 PART II: OTHER INFORMATION Items 1-6 13 Signatures 14 2 AMERILINK CORPORATION CONSOLIDATED BALANCE SHEETS - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
March 31, 1996 December 29, 1996 - ---------------------------------------------------------------------------------------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 78,680 $ 146,506 Accounts receivable-trade, net of allowance for doubtful accounts of $95,000 and $98,000 8,899,443 12,785,322 Work-in-process 2,902,617 4,500,140 Materials and supply inventories 1,710,084 1,439,055 Other receivables 221,659 268,932 Deferred tax benefit 127,286 127,286 Other 510,263 187,631 ------------- ------------- Total current assets 14,450,032 19,454,872 Property and equipment - net 6,032,551 5,791,184 Deposits and other assets 71,217 171,355 ------------- ------------- Total assets $ 20,553,800 $ 25,417,411 ------------- ------------- ------------- ------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Trade accounts payable $ 1,802,121 $ 2,016,391 Liability to subcontractors 1,083,186 1,415,364 Accrued compensation and related expenses 1,078,935 1,267,149 Accrued insurance 536,872 346,590 Other 160,952 191,283 Current maturities of long-term debt 720,000 249,190 ------------- ------------- Total current liabilities 5,382,066 5,485,967 Long-term debt, less current maturities 5,843,227 9,575,000 Deferred income taxes 117,839 117,839 ------------- ------------- Total liabilities 11,343,132 15,178,806 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 shares issued and outstanding 8,061,395 8,061,395 Retained earnings 1,149,273 2,177,210 ------------- ------------- Total shareholders' equity 9,210,668 10,238,605 ------------- ------------- Total liabilities and shareholders' equity $ 20,553,800 $ 25,417,411 ------------- ------------- ------------- -------------
- -------------------------------------------------------------------------------- See notes to financial statements. 3 AMERILINK CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Thirty-nine Weeks Ended December 31, 1995 December 29, 1996 - -------------------------------------------------------------------------------- Revenues $ 43,119,537 $ 45,915,307 Cost of sales 30,113,634 30,384,268 ------------ ------------ Gross profit 13,005,903 15,531,039 Selling, general and administrative expenses 11,758,263 13,364,015 ------------ ------------ Income from operations 1,247,640 2,167,024 Interest expense (387,990) (461,106) Other income 27,323 7,019 ------------ ------------ Income before income taxes 886,973 1,712,937 Provision for income taxes 314,000 685,000 ------------ ------------ Net income $ 572,973 $ 1,027,937 ------------ ------------ ------------ ------------ Net income per common share $ 0.16 $ 0.29 ------------ ------------ ------------ ------------ Weighted average common shares outstanding 3,626,210 3,591,514 - -------------------------------------------------------------------------------- See notes to financial statements. 4 AMERILINK CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Thirteen Weeks Ended December 31, 1995 December 29, 1996 - -------------------------------------------------------------------------------- Revenues $ 15,661,152 $ 16,731,323 Cost of sales 10,795,421 10,880,892 ------------ ------------ Gross profit 4,865,731 5,850,431 Selling, general and administrative expenses 4,384,851 4,841,170 ------------ ------------ Income from operations 480,880 1,009,261 Interest expense (164,737) (182,400) Other income 24,656 3,191 ------------ ------------ Income before income taxes 340,799 830,052 Provision for income taxes 96,000 332,000 ------------ ------------ Net income $ 244,799 $ 498,052 ------------ ------------ ------------ ------------ Net income per common share $ 0.07 $ 0.14 ------------ ------------ ------------ ------------ Weighted average common shares outstanding 3,615,352 3,543,033 - -------------------------------------------------------------------------------- See notes to financial statements. 5 AMERILINK CORPORATION CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE THIRTY-NINE WEEKS ENDED DECEMBER 29, 1996 (UNAUDITED) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Number Common Retained of Shares Stock Earnings Total - -------------------------------------------------------------------------------- Balance at March 31, 1996 3,478,580 $ 8,061,395 $ 1,149,273 $ 9,210,668 Net income ---- ---- 1,027,937 1,027,937 --------- ----------- ----------- ----------- Balance at December 29, 1996 3,478,580 $ 8,061,395 $ 2,177,210 $10,238,605 --------- ----------- ----------- ----------- --------- ----------- ----------- ----------- - -------------------------------------------------------------------------------- See notes to financial statements. 6 AMERILINK CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
- ----------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------- Thirty-nine Weeks Ended December 31, 1995 December 29, 1996 - ----------------------------------------------------------------------------------------- OPERATING ACTIVITIES Net income $ 572,973 $ 1,027,935 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 1,426,478 1,597,738 Net gain on disposal of fixed assets (37,536) (26,143) Gain on investments (23,534) -- Deferred income taxes (30,324) -- Changes in operating assets and liabilities: Accounts receivable and work-in-process (2,922,386) (5,483,402) Materials and supply inventories (336,154) 271,029 Other receivables (7,993) (47,273) Other current assets (33,744) 322,632 Trade accounts payable 798,213 214,272 Liability to subcontractors 30,390 332,178 Accrued compensation and related expenses 204,686 188,214 Accrued insurance (193,915) (190,282) Other current liabilities (320) 30,331 ----------- ----------- Net cash used in operating activities (553,166) (1,762,771) INVESTING ACTIVITIES Purchase of property and equipment (3,241,850) (1,947,346) Proceeds from sale of property and equipment 171,516 617,118 Deposits and other assets 225,925 (100,138) ----------- ----------- Net cash used in investing activities (2,844,409) (1,430,366) FINANCING ACTIVITIES Principal payments on long-term debt (11,915,000) (12,745,000) Proceeds from borrowings on long-term debt 15,375,000 16,005,963 ----------- ----------- Net cash provided by financing activities 3,460,000 3,260,963 ----------- ----------- Increase in cash and cash equivalents 62,425 67,826 Cash and cash equivalents at beginning of period 71,944 78,680 ----------- ----------- Cash and cash equivalents at end of period $ 134,369 $ 146,506 ----------- ----------- ----------- ----------- SUPPLEMENTAL CASH FLOW DISCLOSURES Interest paid $ 388,709 $ 465,223 Income taxes paid $ 424,149 $ 294,932 - -----------------------------------------------------------------------------------------
See notes to financial statements. 7 AMERILINK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION 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 ("TELCOs"), including local exchange carriers ("LEC"s) and long distance carriers; competitive access providers ("CAPS"); 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 31, 1996 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 thirty-nine weeks ended December 29, 1996 are not necessarily indicative of the results to be expected for the full year. 2. INCOME TAXES The provision for income taxes for the thirteen and thirty-nine weeks ended December 31, 1995 includes a benefit of approximately $40,000 due to the adjustment of deferred tax balances. 3. 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. 4. NOTES PAYABLE AND LONG-TERM DEBT On September 27, 1996, the Company amended its credit agreement with its commercial bank. Under the agreement, the Company has a $12,000,000 unsecured revolving credit note and an unsecured term note. 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 $9,575,000 at December 29, 1996. The unsecured term note in the amount of $1,629,190 matures May 31, 1997. Interest is payable monthly at the rate of prime. The balance of the unsecured term note at December 29, 1996 was $249,190. 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS COMPARISONS OF THIRTY-NINE WEEKS ENDED DECEMBER 31, 1995 AND DECEMBER 29, 1996 REVENUES Total revenues for the first nine months of fiscal 1997 were $45,915,307 compared to $43,119,537 for the first nine months of fiscal 1996, an increase of 6.5%. Total residential and commercial premises wiring revenues (non-construction cabling services) for the first nine months of fiscal 1997 increased 38% to approximately $38.4 million compared to approximately $27.7 million in fiscal 1996. Revenues from local area network cabling services almost doubled during the first nine months of fiscal 1997 to approximately $10.8 million (vs. $5.6 million during the comparable period in fiscal 1996) due to increased marketing efforts by the Company for these services. In addition, premises wiring revenues derived from telephone companies increased to approximately $4.9 million for the first nine months of fiscal 1997 compared to approximately $1.2 million for the corresponding period last year. 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. Outside plant construction revenues for the first nine months of fiscal 1997 declined to approximately $7.5 million from approximately $15.4 million during the comparable period in fiscal 1996. The decrease in outside plant construction revenues reflects management's strategy to de-emphasize these services. GROSS PROFIT Gross profit for the first nine months of fiscal 1997 was $15,531,039, or 33.8% of revenues, as compared to $13,005,903, or 30.2% of revenues, for the corresponding period last year. The increase in gross margin for the first nine months of 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. During the first nine months of fiscal 1996, the Company's overall operating results were negatively impacted by operating losses incurred on a large construction project in the San Diego area. These operating losses totaled approximately $(450,000), due primarily to high vehicle, equipment, and production costs, on contract revenues of approximately $4.1 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 the first nine months of fiscal 1997 were $13,364,015 or 29.1% of revenues as compared to $11,758,263 or 27.3% of revenues for the corresponding period last year. 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 9 increase in selling, general, and administrative expenses for the first nine months of 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 a 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 $461,106 or 1.0% of revenues for the first nine months of fiscal 1997 as compared to $387,990 or 0.9% of revenues for the first nine months of fiscal 1996. The dollar increase in interest expense is primarily due to increased borrowings to finance accounts receivable and work-in-process. COMPARISONS OF THIRTEEN WEEKS ENDED DECEMBER 31, 1995 AND DECEMBER 29, 1996 REVENUES Third quarter revenues for fiscal 1997 rose 6.8% to a record level of $16,731,323 as compared to $15,661,152 for the third quarter of fiscal 1996. Total residential and commercial premises wiring revenues comprised approximately 88% of third quarter revenues vs. approximately 67% of third quarter revenues for the prior period. Premises wiring revenues from telephone companies made a large impact during the third quarter of fiscal 1997 increasing to an all time high of approximately $3.5 million from approximately $0.9 million in the corresponding period last year. The Company believes the increase in these revenues is attributed to the passage of the Telecommunications Act of 1996, which has resulted in certain telephone companies increasing their capital spending for video systems, and to the Company's marketing efforts to provide its services to these Telco providers. Premises wiring revenues from local area network services for the third quarter of fiscal 1997 posted a 55% increase to approximately $3.0 million compared to approximately $1.9 million in the corresponding period a year ago. Outside plant construction revenues for the third quarter of fiscal 1997 were approximately $2.0 million compared to approximately $5.1 million for the third quarter of fiscal 1996. This decrease is consistent with the Company's strategy of focusing its marketing efforts on premises wiring services. GROSS PROFIT Gross profit for the third quarter of fiscal 1997 was $5,850,431 or 35% of revenues as compared to $4,865,731, or 31.1% of revenues for the corresponding period last year. The increase in gross margin for the third quarter of fiscal 1997 can principally be attributed to a decrease in vehicle and equipment costs as a result of a reduction of outside plant construction projects. These projects require the use of heavy machinery, specialized trucks, tool systems and other related construction equipment. During the third quarter of fiscal 1996, the Company's overall operating results were negatively impacted by operating losses incurred on a large construction project in the San Diego area. These operating losses totaled approximately $(230,000), due mainly to high vehicle, equipment and production costs, on contract revenues of approximately $1.1 million. SELLING, GENERAL AND ADMINISTRATIVE Selling, general and administrative expenses for the third quarter of fiscal 1997 were $4,841,170 or 28.9% of revenues as compared to $4,384,851 or 28% of revenues for the corresponding period last year. 10 The dollar increase in selling, general and administrative expenses is principally due to increased employee payroll and associated costs incurred to support both actual and anticipated increased revenues. Third quarter selling, general and administrative expenses for fiscal 1997 were negatively impacted by a charge of $134,000 as a result of a customer filing for protection under Chapter 11 of the Bankruptcy Code. INTEREST EXPENSE Interest expense was $182,400, or 1.1% of revenues for the third quarter of fiscal 1997, as compared to $164,737, or 1.1% of revenues for the third quarter of fiscal 1996. The dollar increase in interest expense is primarily due to increased borrowings needed 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) installation, 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 December 29, 1996 totaled $17,285,462, as compared to $13,554,662 at December 31, 1995, an increase of $3,730,800 or 28%. This increase is due to a number of factors, including a general increase in revenues and increases in the Company's volume of MDU projects and LAN cabling contracts. 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. As of January 31, 1997, the Company received subsequent collections of accounts receivable balances which allowed for the reduction of approximately $2.7 million from 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. 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 credit agreement with its commercial bank that was amended September 27, 1996, the Company has a $12,000,000 unsecured revolving credit note and an unsecured term note. 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 $9,575,000 at December 29, 1996 and $6,925,000 at January 31, 1997. The unsecured term note in the amount of $1,629,190 matures May 31, 1997. Interest is payable monthly at the bank's prime rate. The balance of the unsecured term note at December 29, 1996 was $249,190. 11 CASH FLOW FROM OPERATING ACTIVITIES. For the first nine months of fiscal 1997, net cash used in operating activities totaled $1,762,771. 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. CASH FLOW FROM INVESTING ACTIVITIES. For the first nine months of fiscal 1997, net cash used in investing activities totaled $1,430,366. This was mainly due to the purchase of property and equipment that totaled $1,947,346 for the first nine months of fiscal 1997. The level of capital expenditures is dependent largely upon the level of 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 the first nine months of fiscal 1997 have decreased approximately $1.3 million or 40% as compared to the corresponding period last year. This decrease is the result of the Company doing less outside plant construction work in fiscal 1997. SEASONALITY AND VARIABILITY IN QUARTERLY RESULTS 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, CAPs, 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, the Company's operations historically have been influenced by the budget cycles of the Company's customers and by the impact of weather conditions. Most 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. Weather can affect the amount of construction cabling services provided by the Company since they are performed outdoors. Weather can also impact the Company's non-construction cabling services due to the limited and lost production associated with poor driving conditions and generally difficult working environments. Additionally, the construction of new and the rebuilding of existing aerial and underground cable systems is dependent on the cable television and the telephone industries' demands, which may fluctuate on a seasonal basis. 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. CAUTION CONCERNING FORWARD-LOOKING STATEMENTS The Company cautions that this report contains forward-looking statements (as such term is defined in the Private Securities Litigation Act of 1995) and cautions further that any forward-looking statements 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, the risk of changing market conditions and customer purchase authorizations, competitive and regulatory risks associated with the telecommunications industry, and other risks described in the Company's Securities and Exchange Commission filings. 12 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 December 29, 1996. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has july caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERILINK CORPORATION (Registrant) Date: February 10, 1997 By: /s/ Larry R. Linhart --------------------------------- Larry R. Linhart Chief Executive Officer President Date: February 10, 1997 By: /s/ James W. Brittan --------------------------------- James W. Brittan Vice President of Finance (Principal Financial and Accounting Officer) 14 EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AS OF DECEMBER 29, 1996 AND STATEMENT OF OPERATIONS FOR THE THIRTY-NINE WEEKS ENDED DECEMBER 29, 1996 OF AMERILINK CORPORATION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS MAR-30-1997 APR-01-1996 DEC-29-1996 146,506 0 12,883,322 98,000 1,439,055 19,454,872 5,791,184 0 25,417,411 5,485,967 9,575,000 0 0 8,061,395 2,177,210 25,417,411 45,915,307 45,915,307 30,384,268 43,748,283 (7,019) 0 461,106 1,712,937 685,000 1,027,937 0 0 0 1,027,937 0.29 0.29 PROPERTY, PLANT, AND EQUIPMENT IS REPORTED NET OF ACCUMULATED DEPRECIATION ON THE CONSOLIDATED BALANCE SHEET
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