##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 o
    
    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 001-33337
 COLEMAN CABLE, INC.
  Delaware
    
    36-4410887(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 1530 Shields Drive, Waukegan, Illinois 60085
 (847) 672-2300
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



INDEX
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited)
    
    
    3Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2008
and 2007
    
    
    3Condensed Consolidated Balance Sheets as of September 30, 2008 and 2007 and December 31, 2007
    
    
    4Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2008 and 2007
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    23Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    36PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    37Item 6. Exhibits
    
    
    37Signatures
    
    
    38Exhibit Index
    
    
    39Certification of Chief Executive OfficerCertification of Chief Financial OfficerSection 1350 Certification
  2




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##### Table of Contents



PART I.
 
 ITEM 1. Financial Statements
 COLEMAN CABLE, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except per share data)
(unaudited)
 Three months ended September 30,
    
    
    Nine months ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007NET SALES
    
    $
    270,712
    
    
    $
    253,453
    
    
    $
    790,775
    
    
    $
    609,867COST OF GOODS SOLD
    
    
    240,814
    
    
    
    224,287
    
    
    
    703,736
    
    
    
    535,837GROSS PROFIT
    
    
    29,898
    
    
    
    29,166
    
    
    
    87,039
    
    
    
    74,030SELLING, ENGINEERING, GENERAL
AND ADMINISTRATIVE EXPENSES
    
    
    14,228
    
    
    
    11,753
    
    
    
    40,472
    
    
    
    31,238INTANGIBLE AMORTIZATION EXPENSE
    
    
    3,121
    
    
    
    2,522
    
    
    
    8,889
    
    
    
    5,085RESTRUCTURING CHARGES
    
    
    2,504
    
    
    
    53
    
    
    
    5,515
    
    
    
    580OPERATING INCOME
    
    
    10,045
    
    
    
    14,838
    
    
    
    32,163
    
    
    
    37,127INTEREST EXPENSE
    
    
    7,211
    
    
    
    8,187
    
    
    
    22,545
    
    
    
    19,411OTHER (INCOME) LOSS, NET
    
    
    (56
    )
    
    
    2
    
    
    
    68
    
    
    
    29INCOME BEFORE INCOME TAXES
    
    
    2,890
    
    
    
    6,649
    
    
    
    9,550
    
    
    
    17,687INCOME TAX EXPENSE
    
    
    1,153
    
    
    
    2,606
    
    
    
    3,716
    
    
    
    6,752NET INCOME
    
    $
    1,737
    
    
    $
    4,043
    
    
    $
    5,834
    
    
    $
    10,935EARNINGS PER COMMON SHARE DATANET INCOME PER SHAREBasic
    
    $
    0.10
    
    
    $
    0.24
    
    
    $
    0.35
    
    
    $
    0.65Diluted
    
    
    0.10
    
    
    
    0.24
    
    
    
    0.35
    
    
    
    0.65WEIGHTED AVERAGE COMMON
SHARES OUTSTANDINGBasic
    
    
    16,787
    
    
    
    16,787
    
    
    
    16,787
    
    
    
    16,787Diluted
    
    
    16,825
    
    
    
    16,796
    
    
    
    16,811
    
    
    
    16,789
  3




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COLEMAN CABLE, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands, except per share data)
(unaudited)
 September 30,
    
    
    December 31,2008
    
    
    2007ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    3,504
    
    
    $
    8,877Accounts receivable, net of allowances of $3,384 and $4,601, respectively
    
    
    174,134
    
    
    
    159,133Inventories
    
    
    115,998
    
    
    
    138,359Deferred income taxes
    
    
    4,327
    
    
    
    3,776Assets held for sale
    
    
    4,116
    
    
    
    661Prepaid expenses and other current assets
    
    
    4,490
    
    
    
    8,647Total current assets
    
    
    306,569
    
    
    
    319,453PROPERTY, PLANT AND EQUIPMENT:Land
    
    
    1,675
    
    
    
    2,772Buildings and leasehold improvements
    
    
    14,954
    
    
    
    14,780Machinery, fixtures and equipment
    
    
    106,979
    
    
    
    101,701123,608
    
    
    
    119,253Less accumulated depreciation and amortization
    
    
    (53,532
    )
    
    
    (42,918
    )Construction in progress
    
    
    4,309
    
    
    
    3,628Property, plant and equipment, net
    
    
    74,385
    
    
    
    79,963GOODWILL
    
    
    111,000
    
    
    
    108,461INTANGIBLE ASSETS, NET OF AMORTIZATION of $16,537 and $7,669, respectively
    
    
    49,299
    
    
    
    58,181OTHER ASSETS, NET
    
    
    8,147
    
    
    
    9,594TOTAL ASSETS
    
    $
    549,400
    
    
    $
    575,652LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    502
    
    
    $
    936Accounts payable
    
    
    54,831
    
    
    
    49,519Accrued liabilities
    
    
    41,372
    
    
    
    38,473Total current liabilities
    
    
    96,705
    
    
    
    88,928LONG-TERM DEBT
    
    
    330,788
    
    
    
    366,905LONG-TERM LIABILITIES
    
    
    1,546
    
    
    
    281DEFERRED INCOME TAXES
    
    
    16,803
    
    
    
    23,567SHAREHOLDERS EQUITY:Common stock, par value $0.001; 75,000 authorized; and 16,787 issued and
outstanding on September 30, 2008 and December 31, 2007
    
    
    17
    
    
    
    17Additional paid-in capital
    
    
    85,724
    
    
    
    83,709Retained earnings
    
    
    18,127
    
    
    
    12,293Accumulated other comprehensive loss
    
    
    (310
    )
    
    
    (48
    )Total shareholders equity
    
    
    103,558
    
    
    
    95,971TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    549,400
    
    
    $
    575,652
  4




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COLEMAN CABLE, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands)
(unaudited)
 Nine months ended September 30,2008
    
    
    2007CASH FLOW FROM OPERATING ACTIVITIES:Net income
    
    $
    5,834
    
    
    $
    10,935Adjustments to reconcile net income to net cash flow from operating activities:Depreciation and amortization
    
    
    22,306
    
    
    
    14,811Stock-based compensation
    
    
    2,015
    
    
    
    3,121Inventory theft insurance receivable allowance
    
    
    1,588
    
    
    
    Deferred tax provision (credit)
    
    
    (5,737
    )
    
    
    (3,924
    )(Gain) loss on disposal of fixed assets
    
    
    178
    
    
    
    (12
    )Changes in operating assets and liabilities, excluding impact of acquisitions:Accounts receivable
    
    
    (15,183
    )
    
    
    (25,950
    )Inventories
    
    
    22,312
    
    
    
    (20,180
    )Prepaid expenses and other assets
    
    
    2,564
    
    
    
    (1,706
    )Accounts payable
    
    
    6,503
    
    
    
    7,891Accrued liabilities
    
    
    (15
    )
    
    
    9,654Net cash flow from operating activities
    
    
    42,365
    
    
    
    (5,360
    )CASH FLOW FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (10,930
    )
    
    
    (4,929
    )Acquisition of businesses, net of cash acquired
    
    
    (708
    )
    
    
    (214,810
    )Proceeds from sale of fixed assets
    
    
    17
    
    
    
    18Proceeds from sale of investment
    
    
    
    
    
    
    59Net cash flow from investing activities
    
    
    (11,621
    )
    
    
    (219,662
    )CASH FLOW FROM FINANCING ACTIVITIES:Net borrowings (repayments) under revolving loan facilities
    
    
    (35,188
    )
    
    
    98,196Issuance of senior notes, net of issuance costs
    
    
    
    
    
    
    119,380Common stock issuance costs
    
    
    
    
    
    
    (451
    )Repayment of long-term debt
    
    
    (1,027
    )
    
    
    (917
    )Net cash flow from financing activities
    
    
    (36,215
    )
    
    
    216,208Effect of exchange rate changes on cash and cash equivalents
    
    
    98
    
    
    
    DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (5,373
    )
    
    
    (8,814
    )CASH AND CASH EQUIVALENTS  Beginning of period
    
    
    8,877
    
    
    
    14,734CASH AND CASH EQUIVALENTS  End of period
    
    $
    3,504
    
    
    $
    5,920NONCASH ACTIVITYUnpaid capital expenditures
    
    
    202
    
    
    
    210Capital lease obligations
    
    
    135
    
    
    
    16SUPPLEMENTAL CASH FLOW INFORMATIONIncome taxes paid
    
    
    4,821
    
    
    
    12,244Cash interest paid
    
    
    16,272
    
    
    
    9,557
  5




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COLEMAN CABLE, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Thousands, except per share data)  (unaudited)
 1. BASIS OF PRESENTATION
   2. NEW ACCOUNTING PRONOUNCEMENTS
 Business Combinations
 Fair Value Measurements.
 The Fair Value Option for Financial Assets and
Financial Liabilities including an Amendment of FASB Statement No. 115
 Noncontrolling Interests in Consolidated
Financial Statements  an Amendment of ARB No. 51
 6




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Disclosures about Derivative Instruments and
Hedging Activitiesan Amendment of FASB Statement No. 133
   Accounting for Financial Guarantee Insurance Contractsan interpretation of FASB Statement No. 60.
 3. ACQUISITIONS
 Copperfield, LLC
   Woods Industries
  7




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Purchase Price Allocations
 Business Combinations
  Copperfield
    
    
    Woods
    
    
    TotalCash and cash equivalents
    
    $
    639
    
    
    $
    4,884
    
    
    $
    5,523Accounts receivable
    
    
    61,592
    
    
    
    30,644
    
    
    
    92,236Inventories
    
    
    41,601
    
    
    
    27,231
    
    
    
    68,832Prepaid expenses and other current assets
    
    
    832
    
    
    
    2,942
    
    
    
    3,774Property, Plant and equipment
    
    
    62,656
    
    
    
    1,604
    
    
    
    64,260Intangible assets
    
    
    64,400
    
    
    
    1,400
    
    
    
    65,800Goodwill
    
    
    43,733
    
    
    
    6,705
    
    
    
    50,438Other assets
    
    
    607
    
    
    
    
    
    
    
    607Total assets acquired
    
    
    276,060
    
    
    
    75,410
    
    
    
    351,470Current liabilities
    
    
    (36,806
    )
    
    
    (21,280
    )
    
    
    (58,086
    )Long-term liabilities
    
    
    (42
    )
    
    
    
    
    
    
    (42
    )Deferred income taxes
    
    
    (23,763
    )
    
    
    (327
    )
    
    
    (24,090
    )Total liabilities assumed
    
    
    (60,611
    )
    
    
    (21,607
    )
    
    
    (82,218
    )Net assets acquired
    
    $
    215,449
    
    
    $
    53,803
    
    
    $
    269,252
  Weighted AverageAmortization Period
    
    
    Copperfield
    
    
    Woods
    
    
    TotalCustomer relationships
    
    
    4
    
    
    $
    55,600
    
    
    $
    900
    
    
    $
    56,500Trademarks and trade names
    
    
    11
    
    
    
    7,800
    
    
    
    500
    
    
    
    8,300Non-competition agreements
    
    
    2
    
    
    
    1,000
    
    
    
    
    
    
    
    1,000Total intangible assets
    
    
    
    
    
    $
    64,400
    
    
    $
    1,400
    
    
    $
    65,800
  Unaudited Selected Pro Forma Financial Information
  8




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Three months
    
    Nine monthsended
    
    endedSeptember 30, 2007
    
    September 30, 2007Net sales
    
    $
    305,072
    
    
    $
    858,905Net income
    
    $
    4,989
    
    
    $
    13,634Earnings per share:Basic
    
    $
    0.30
    
    
    $
    0.81Diluted
    
    $
    0.30
    
    
    $
    0.81
 4. RESTRUCTURING AND INTEGRATION ACTIVITIES
 2008 Restructuring and Integration Activities
     9




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EmployeeSeverance
    
    
    Leaseand
    
    
    Termination
    
    
    EquipmentRelocation
    
    
    & Facility
    
    
    Relocation
    
    
    OtherCosts
    
    
    Closure Costs
    
    
    Costs
    
    
    Costs
    
    
    TotalBALANCE  December 31, 2007
    
    $
    385
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    385Provision
    
    
    381
    
    
    
    
    
    
    
    3,705
    
    
    
    1,371
    
    
    
    5,457Purchase accounting adjustments
    
    
    740
    
    
    
    2,802
    
    
    
    
    
    
    
    132
    
    
    
    3,674Uses
    
    
    (1,023
    )
    
    
    (810
    )
    
    
    (3,705
    )
    
    
    (1,479
    )
    
    
    (7,017
    )BALANCE  September 30, 2008
    
    $
    483
    
    
    $
    1,992
    
    
    $
    
    
    
    $
    24
    
    
    $
    2,499
 2006 Restructuring Activities
  5. INVENTORIES
  September 30,
    
    
    December 31,2008
    
    
    2007FIFO cost:Raw materials
    
    $
    30,568
    
    
    $
    31,626Work in progress
    
    
    4,169
    
    
    
    4,324Finished products
    
    
    81,261
    
    
    
    102,409Total
    
    $
    115,998
    
    
    $
    138,359
 6. ACCRUED LIABILITIES
  September 30,
    
    
    December 31,2008
    
    
    2007Salaries, wages and employee benefits
    
    $
    5,578
    
    
    $
    9,503Sales incentives
    
    
    12,483
    
    
    
    14,383Income taxes
    
    
    239
    
    
    
    Interest
    
    
    12,053
    
    
    
    6,505Other
    
    
    11,019
    
    
    
    8,082Total
    
    $
    41,372
    
    
    $
    38,473
 10




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7. DEBT
 September 30,
    
    
    December 31,2008
    
    
    2007Revolving credit facility expiring April 2012
    
    $
    88,250
    
    
    $
    123,4389.875% Senior notes due October 2012,
including unamortized premium of $2,509 and
$2,980, respectively
    
    
    242,509
    
    
    
    242,980Capital lease obligations
    
    
    531
    
    
    
    782Other long-term debt
    
    
    
    
    
    
    641331,290
    
    
    
    367,841Less current portion
    
    
    (502
    )
    
    
    (936
    )Long-term debt
    
    $
    330,788
    
    
    $
    366,905
 Revolving Credit Facility
      9.875% Senior Notes
  11




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8. EARNINGS PER SHARE
  Three Months Ended September 30,
    
    Nine Months Ended September 30,2008
    
    2007
    
    2008
    
    2007Basic weighted average shares
outstanding
    
    
    16,787
    
    
    
    16,787
    
    
    
    16,787
    
    
    
    16,787Dilutive effect of share-based awards
    
    
    38
    
    
    
    9
    
    
    
    24
    
    
    
    2Diluted weighted average share
outstanding
    
    
    16,825
    
    
    
    16,796
    
    
    
    16,811
    
    
    
    16,789
  9. SHAREHOLDERS EQUITY
 Stock-Based Compensation
  Stock Options
  12




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Weighted-AverageWeighted-Average
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Terms
    
    
    ValueOutstanding January 1, 2008
    
    
    888
    
    
    $
    15.52
    
    
    
    8.8
    
    
    
    Granted
    
    
    206
    
    
    
    8.38
    
    
    
    9.8Exercised
    
    
    
    
    
    
    Forfeited or expired
    
    
    (65
    )
    
    
    15.00Outstanding September 30, 2008
    
    
    1,029
    
    
    $
    14.12
    
    
    
    8.3
    
    
    
    341Vested or expected to vest
    
    
    987
    
    
    $
    14.19
    
    
    
    
    
    
    
    315Exercisable
    
    
    
    
    
    
    
  Stock Awards
  Comprehensive Income
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net Income
    
    $
    1,737
    
    
    $
    4,043
    
    
    $
    5,834
    
    
    $
    10,935Other comprehensive incomeCurrency translation adjustment, net of tax
    
    
    (250
    )
    
    
    
    
    
    
    (262
    )
    
    
    Total comprehensive income
    
    $
    1,487
    
    
    $
    4,043
    
    
    $
    5,572
    
    
    $
    10,935
 10. RELATED PARTIES
   13




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11. INVENTORY THEFT
  12. COMMITMENTS AND CONTINGENCIES
 Operating Leases
  Legal Matters
    14




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Tax Matters Agreement
   Derivative Financial Instruments
  13. BUSINESS SEGMENT INFORMATION
   Three months ended September 30,
    
    
    Nine months ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net Sales:Distribution Segment
    
    $
    188,384
    
    
    $
    152,599
    
    
    $
    528,886
    
    
    $
    410,213OEM Segment
    
    
    82,328
    
    
    
    100,854
    
    
    
    261,889
    
    
    
    199,654Total
    
    $
    270,712
    
    
    $
    253,453
    
    
    $
    790,775
    
    
    $
    609,867Operating Income:Distribution Segment
    
    $
    18,961
    
    
    $
    15,044
    
    
    $
    51,872
    
    
    $
    40,046OEM Segment
    
    
    264
    
    
    
    4,086
    
    
    
    3,730
    
    
    
    6,795Total segments
    
    
    19,225
    
    
    
    19,130
    
    
    
    55,602
    
    
    
    46,841Corporate
    
    
    (9,180
    )
    
    
    (4,292
    )
    
    
    (23,439
    )
    
    
    (9,714
    )Consolidated operating income
    
    $
    10,045
    
    
    $
    14,838
    
    
    $
    32,163
    
    
    $
    37,127
 15




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14. SUPPLEMENTAL GUARANTOR INFORMATION
  16




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COLEMAN CABLE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008
 Guarantor
    
    Non GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalNET SALES
    
    $
    141,396
    
    
    $
    115,639
    
    
    $
    13,677
    
    
    $
    
    
    
    $
    270,712COST OF GOODS SOLD
    
    
    121,804
    
    
    
    108,390
    
    
    
    10,620
    
    
    
    
    
    
    
    240,814GROSS PROFIT
    
    
    19,592
    
    
    
    7,249
    
    
    
    3,057
    
    
    
    
    
    
    
    29,898SELLING, ENGINEERING,
GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    11,584
    
    
    
    1,451
    
    
    
    1,193
    
    
    
    
    
    
    
    14,228INTANGIBLE AMORTIZATION
    
    
    65
    
    
    
    3,030
    
    
    
    26
    
    
    
    
    
    
    
    3,121RESTRUCTURING CHARGES
    
    
    412
    
    
    
    2,092
    
    
    
    
    
    
    
    
    
    
    
    2,504OPERATING INCOME
    
    
    7,531
    
    
    
    676
    
    
    
    1,838
    
    
    
    
    
    
    
    10,045INTEREST EXPENSE
    
    
    7,176
    
    
    
    (52
    )
    
    
    87
    
    
    
    
    
    
    
    7,211OTHER LOSS (GAIN), NET
    
    
    11
    
    
    
    
    
    
    
    (67
    )
    
    
    
    
    
    
    (56
    )INCOME BEFORE INCOME TAXES
    
    
    344
    
    
    
    728
    
    
    
    1,818
    
    
    
    
    
    
    
    2,890INCOME FROM SUBSIDIARIES
    
    
    1,608
    
    
    
    
    
    
    
    
    
    
    
    (1,608
    )
    
    
    INCOME TAX EXPENSE
    
    
    215
    
    
    
    285
    
    
    
    653
    
    
    
    
    
    
    
    1,153NET INCOME
    
    $
    1,737
    
    
    $
    443
    
    
    $
    1,165
    
    
    $
    (1,608
    )
    
    $
    1,737
 COLEMAN CABLE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2007
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalNET SALES
    
    $
    107,690
    
    
    $
    150,976
    
    
    $
    (5,213
    )
    
    $
    253,453COST OF GOODS SOLD
    
    
    89,791
    
    
    
    134,496
    
    
    
    
    
    
    
    224,287GROSS PROFIT
    
    
    17,899
    
    
    
    16,480
    
    
    
    (5,213
    )
    
    
    29,166SELLING, ENGINEERING, GENERAL
AND ADMINISTRATIVE EXPENSES
    
    
    10,082
    
    
    
    6,884
    
    
    
    (5,213
    )
    
    
    11,753INTANGIBLE AMORTIZATION EXPENSE
    
    
    3
    
    
    
    2,519
    
    
    
    
    
    
    
    2,522RESTRUCTURING CHARGES
    
    
    53
    
    
    
    
    
    
    
    
    
    
    
    53OPERATING INCOME
    
    
    7,761
    
    
    
    7,077
    
    
    
    
    
    
    
    14,838INTEREST EXPENSE
    
    
    5,208
    
    
    
    2,979
    
    
    
    
    
    
    
    8,187OTHER LOSS
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2INCOME BEFORE INCOME TAXES
    
    
    2,551
    
    
    
    4,098
    
    
    
    
    
    
    
    6,649INCOME TAX EXPENSE
    
    
    2,289
    
    
    
    317
    
    
    
    
    
    
    
    2,606INCOME FROM SUBSIDIARIES
    
    
    3,781
    
    
    
    
    
    
    
    (3,781
    )
    
    
    NET INCOME
    
    $
    4,043
    
    
    $
    3,781
    
    
    $
    (3,781
    )
    
    $
    4,043
 17




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##### Table of Contents



COLEMAN CABLE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008
 Guarantor
    
    Non GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalNET SALES
    
    $
    376,613
    
    
    $
    383,634
    
    
    $
    30,528
    
    
    $
    
    
    
    $
    790,775COST OF GOODS SOLD
    
    
    320,954
    
    
    
    360,081
    
    
    
    22,701
    
    
    
    
    
    
    
    703,736GROSS PROFIT
    
    
    55,659
    
    
    
    23,553
    
    
    
    7,827
    
    
    
    
    
    
    
    87,039SELLING, ENGINEERING,
GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    33,154
    
    
    
    3,921
    
    
    
    3,397
    
    
    
    
    
    
    
    40,472INTANGIBLE AMORTIZATION
    
    
    200
    
    
    
    8,605
    
    
    
    84
    
    
    
    
    
    
    
    8,889RESTRUCTURING CHARGES
    
    
    668
    
    
    
    4,847
    
    
    
    
    
    
    
    
    
    
    
    5,515OPERATING INCOME
    
    
    21,637
    
    
    
    6,180
    
    
    
    4,346
    
    
    
    
    
    
    
    32,163INTEREST EXPENSE
    
    
    22,411
    
    
    
    (71
    )
    
    
    205
    
    
    
    
    
    
    
    22,545OTHER LOSS, NET
    
    
    36
    
    
    
    
    
    
    
    32
    
    
    
    
    
    
    
    68INCOME BEFORE INCOME TAXES
    
    
    (810
    )
    
    
    6,251
    
    
    
    4,109
    
    
    
    
    
    
    
    9,550INCOME FROM SUBSIDIARIES
    
    
    7,317
    
    
    
    
    
    
    
    
    
    
    
    (7,317
    )
    
    
    INCOME TAX EXPENSE
    
    
    673
    
    
    
    1,565
    
    
    
    1,478
    
    
    
    
    
    
    
    3,716NET INCOME
    
    $
    5,834
    
    
    $
    4,686
    
    
    $
    2,631
    
    
    $
    (7,317
    )
    
    $
    5,834
 COLEMAN CABLE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalNET SALES
    
    $
    324,270
    
    
    $
    298,745
    
    
    $
    (13,148
    )
    
    $
    609,867COST OF GOODS SOLD
    
    
    270,709
    
    
    
    265,128
    
    
    
    
    
    
    
    535,837GROSS PROFIT
    
    
    53,561
    
    
    
    33,617
    
    
    
    (13,148
    )
    
    
    74,030SELLING, ENGINEERING, GENERAL
AND ADMINISTRATIVE EXPENSES
    
    
    27,716
    
    
    
    16,670
    
    
    
    (13,148
    )
    
    
    31,238INTANGIBLE AMORTIZATION EXPENSE
    
    
    10
    
    
    
    5,075
    
    
    
    
    
    
    
    5,085RESTRUCTURING CHARGES
    
    
    580
    
    
    
    
    
    
    
    
    
    
    
    580OPERATING INCOME
    
    
    25,255
    
    
    
    11,872
    
    
    
    
    
    
    
    37,127INTEREST EXPENSE
    
    
    13,840
    
    
    
    5,571
    
    
    
    
    
    
    
    19,411OTHER LOSS
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    29INCOME BEFORE INCOME TAXES
    
    
    11,386
    
    
    
    6,301
    
    
    
    
    
    
    
    17,687INCOME TAX EXPENSE
    
    
    6,285
    
    
    
    467
    
    
    
    
    
    
    
    6,752INCOME FROM SUBSIDIARIES
    
    
    5,834
    
    
    
    
    
    
    
    (5,834
    )
    
    
    NET INCOME
    
    $
    10,935
    
    
    $
    5,834
    
    
    $
    (5,834
    )
    
    $
    10,935
 18




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##### Table of Contents



COLEMAN CABLE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING BALANCE SHEET AS OF SEPTEMBER 30, 2008
 Guarantor
    
    Non GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    1,933
    
    
    $
    49
    
    
    $
    1,522
    
    
    $
    
    
    
    $
    3,504Accounts receivablenet of allowances
    
    
    102,821
    
    
    
    60,351
    
    
    
    10,962
    
    
    
    
    
    
    
    174,134Intercompany receivable
    
    
    
    
    
    
    28,207
    
    
    
    
    
    
    
    (28,207
    )
    
    
    Inventories
    
    
    64,364
    
    
    
    42,251
    
    
    
    9,383
    
    
    
    
    
    
    
    115,998Deferred income taxes
    
    
    4,322
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    4,327Assets held for sale
    
    
    4,116
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,116Prepaid expenses and other current assets
    
    
    645
    
    
    
    3,717
    
    
    
    128
    
    
    
    
    
    
    
    4,490Total current assets
    
    
    178,201
    
    
    
    134,580
    
    
    
    21,995
    
    
    
    (28,207
    )
    
    
    306,569PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    19,055
    
    
    
    54,747
    
    
    
    583
    
    
    
    
    
    
    
    74,385GOODWILL
    
    
    64,650
    
    
    
    43,957
    
    
    
    2,393
    
    
    
    
    
    
    
    111,000INTANGIBLE ASSETS, NET
    
    
    822
    
    
    
    48,192
    
    
    
    285
    
    
    
    
    
    
    
    49,299OTHER ASSETS, NET
    
    
    16,900
    
    
    
    651
    
    
    
    104
    
    
    
    (9,508
    )
    
    
    8,147INVESTMENT IN SUBSIDIARIES
    
    
    251,941
    
    
    
    
    
    
    
    
    
    
    
    (251,941
    )
    
    
    TOTAL ASSETS
    
    $
    531,569
    
    
    $
    282,127
    
    
    $
    25,360
    
    
    $
    (289,656
    )
    
    $
    549,400LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    502
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    502Accounts payable
    
    
    33,908
    
    
    
    15,477
    
    
    
    5,446
    
    
    
    
    
    
    
    54,831Intercompany payable
    
    
    26,055
    
    
    
    
    
    
    
    2,152
    
    
    
    (28,207
    )
    
    
    Accrued liabilities
    
    
    18,663
    
    
    
    17,365
    
    
    
    5,344
    
    
    
    
    
    
    
    41,372Total current liabilities
    
    $
    79,128
    
    
    $
    32,842
    
    
    $
    12,942
    
    
    $
    (28,207
    )
    
    $
    96,705LONG-TERM DEBT
    
    
    330,788
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    330,788Long-term liabilities
    
    
    1,163
    
    
    
    383
    
    
    
    9,508
    
    
    
    (9,508
    )
    
    
    1,546DEFERRED INCOME TAXES
    
    
    16,932
    
    
    
    (68
    )
    
    
    (61
    )
    
    
    
    
    
    
    16,803SHAREHOLDERS EQUITY:Common stock
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17Additional paid-in capital
    
    
    85,724
    
    
    
    215,449
    
    
    
    
    
    
    
    (215,449
    )
    
    
    85,724Accumulated other comprehensive income
    
    
    (310
    )
    
    
    
    
    
    
    (310
    )
    
    
    310
    
    
    
    (310
    )Retained earnings
    
    
    18,127
    
    
    
    33,521
    
    
    
    3,281
    
    
    
    (36,802
    )
    
    
    18,127Total shareholders equity
    
    
    103,558
    
    
    
    248,970
    
    
    
    2,971
    
    
    
    (251,941
    )
    
    
    103,558TOTAL LIABILITIES AND SHAREHOLDERS
EQUITY
    
    $
    531,569
    
    
    $
    282,127
    
    
    $
    25,360
    
    
    $
    (289,656
    )
    
    $
    549,400
 19




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##### Table of Contents



COLEMAN CABLE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2007
 Guarantor
    
    Non GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    3,822
    
    
    $
    14
    
    
    $
    5,041
    
    
    $
    
    
    
    $
    8,887Accounts receivablenet of allowances
    
    
    83,596
    
    
    
    68,533
    
    
    
    7,004
    
    
    
    
    
    
    
    159,133Intercompany receivable
    
    
    27,006
    
    
    
    17,273
    
    
    
    1,736
    
    
    
    (46,015
    )
    
    
    Inventories
    
    
    80,231
    
    
    
    51,303
    
    
    
    6,825
    
    
    
    
    
    
    
    138,359Deferred income taxes
    
    
    3,169
    
    
    
    607
    
    
    
    
    
    
    
    
    
    
    
    3,776Assets held for sale
    
    
    661
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    661Prepaid expenses and other current assets
    
    
    7,839
    
    
    
    3,167
    
    
    
    187
    
    
    
    (2,546
    )
    
    
    8,647Total current assets
    
    
    206,324
    
    
    
    140,897
    
    
    
    20,793
    
    
    
    (48,561
    )
    
    
    319,453PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    16,352
    
    
    
    63,104
    
    
    
    507
    
    
    
    
    
    
    
    79,963GOODWILL
    
    
    62,413
    
    
    
    43,638
    
    
    
    2,410
    
    
    
    
    
    
    
    108,461INTANGIBLE ASSETS, NET
    
    
    1,022
    
    
    
    56,788
    
    
    
    371
    
    
    
    
    
    
    
    58,181OTHER ASSETS, NET
    
    
    8,811
    
    
    
    783
    
    
    
    
    
    
    
    
    
    
    
    9,594INVESTMENT IN SUBSIDIARIES
    
    
    260,247
    
    
    
    
    
    
    
    
    
    
    
    (260,247
    )
    
    
    TOTAL ASSETS
    
    $
    555,169
    
    
    $
    305,210
    
    
    $
    24,081
    
    
    $
    (308,808
    )
    
    $
    575,652LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    310
    
    
    $
    626
    
    
    $
    
    
    
    $
    
    
    
    $
    936Accounts payable
    
    
    25,515
    
    
    
    21,586
    
    
    
    2,418
    
    
    
    
    
    
    
    49,519Intercompany payable
    
    
    19,009
    
    
    
    27,006
    
    
    
    
    
    
    
    (46,015
    )
    
    
    Accrued liabilities
    
    
    24,051
    
    
    
    11,217
    
    
    
    5,751
    
    
    
    (2,546
    )
    
    
    38,473Total current liabilities
    
    $
    68,885
    
    
    $
    60,435
    
    
    
    8,169
    
    
    $
    (48,561
    )
    
    $
    88,928LONG-TERM DEBT
    
    
    366,635
    
    
    
    270
    
    
    
    
    
    
    
    
    
    
    
    366,905LONG-TERM LIABILITIES NET
    
    
    
    
    
    
    281
    
    
    
    
    
    
    
    
    
    
    
    281DEFERRED INCOME TAXES
    
    
    23,519
    
    
    
    48
    
    
    
    
    
    
    
    
    
    
    
    23,567SHAREHOLDERS EQUITY:Common stock
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17Additional paid-in capital
    
    
    83,709
    
    
    
    215,341
    
    
    
    15,421
    
    
    
    (230,762
    )
    
    
    83,709Accumulated other comprehensive income
    
    
    111
    
    
    
    
    
    
    
    (159
    )
    
    
    
    
    
    
    (48
    )Retained earnings (accumulated deficit)
    
    
    12,293
    
    
    
    28,835
    
    
    
    650
    
    
    
    (29,485
    )
    
    
    12,293Total shareholders equity
    
    
    96,130
    
    
    
    244,176
    
    
    
    15,912
    
    
    
    (260,247
    )
    
    
    95,971TOTAL LIABILITIES AND SHAREHOLDERS
EQUITY
    
    $
    555,169
    
    
    $
    305,210
    
    
    $
    24,081
    
    
    $
    (308,308
    )
    
    $
    575,652
 20




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##### Table of Contents



COLEMAN CABLE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008
 Guarantor
    
    Non GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalCASH FLOW FROM OPERATING ACTIVITIES:Net income
    
    $
    5,834
    
    
    $
    4,686
    
    
    $
    2,631
    
    
    $
    (7,317
    )
    
    $
    5,834Adjustments to reconcile net income to net cash flow from
operating activities:Depreciation and amortization
    
    
    4,578
    
    
    
    17,523
    
    
    
    205
    
    
    
    
    
    
    
    22,306Stock-based compensation
    
    
    2,015
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,015Inventory theft insurance receivable allowance
    
    
    1,588
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,588Deferred tax provision
    
    
    (6,163
    )
    
    
    486
    
    
    
    (60
    )
    
    
    
    
    
    
    (5,737
    )Loss on disposal of fixed assets
    
    
    36
    
    
    
    142
    
    
    
    
    
    
    
    
    
    
    
    178Equity in consolidated subsidiaries
    
    
    (7,317
    )
    
    
    
    
    
    
    
    
    
    
    7,317
    
    
    
    Changes in operating assets and liabilities excluding impact of acquisitions:Accounts receivable
    
    
    (19,225
    )
    
    
    8,182
    
    
    
    (4,140
    )
    
    
    
    
    
    
    (15,183
    )Inventories
    
    
    15,867
    
    
    
    9,052
    
    
    
    (2,607
    )
    
    
    
    
    
    
    22,312Prepaid expenses and other assets
    
    
    5,608
    
    
    
    (454
    )
    
    
    (44
    )
    
    
    (2,546
    )
    
    
    2,564Accounts payable
    
    
    8,436
    
    
    
    (4,903
    )
    
    
    2,970
    
    
    
    
    
    
    
    6,503Intercompany accounts
    
    
    35,619
    
    
    
    (33,727
    )
    
    
    (1,892
    )
    
    
    
    
    
    
    Accrued liabilities
    
    
    (8,161
    )
    
    
    6,045
    
    
    
    (445
    )
    
    
    2,546
    
    
    
    (15
    )Net cash flow from operating activities
    
    
    38,715
    
    
    
    7,032
    
    
    
    (3,382
    )
    
    
    
    
    
    
    42,365CASH FLOW FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (4,324
    )
    
    
    (6,371
    )
    
    
    (235
    )
    
    
    
    
    
    
    (10,930
    )Acquisition of businesses, net of cash acquired
    
    
    (708
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (708
    )Proceeds from sale of fixed assets
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17Net cash flow from investing activities
    
    
    (5,015
    )
    
    
    (6,371
    )
    
    
    (235
    )
    
    
    
    
    
    
    (11,621
    )CASH FLOW FROM FINANCING ACTIVITIES:Net borrowings under revolving loan facilities
    
    
    (35,188
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,188
    )Repayment of long -term debt
    
    
    (401
    )
    
    
    (626
    )
    
    
    
    
    
    
    
    
    
    
    (1,027
    )Net cash flow from financing activities
    
    
    (35,589
    )
    
    
    (626
    )
    
    
    
    
    
    
    
    
    
    
    (36,215
    )Effect of exchange rate on cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    98
    
    
    
    
    
    
    
    98INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (1,889
    )
    
    
    35
    
    
    
    (3,519
    )
    
    
    
    
    
    
    (5,373
    )CASH AND CASH EQUIVALENTS  Beginning of period
    
    
    3,822
    
    
    
    14
    
    
    
    5,041
    
    
    
    
    
    
    
    8,877CASH AND CASH EQUIVALENTS  End of period
    
    $
    1,933
    
    
    $
    49
    
    
    $
    1,522
    
    
    $
    
    
    
    $
    3,504NONCASH ACTIVITYUnpaid capital expenditures
    
    
    
    
    
    
    202
    
    
    
    
    
    
    
    
    
    
    
    202Capital lease obligation
    
    
    135
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135SUPPLEMENTAL CASH FLOW INFORMATIONIncome taxes paid
    
    
    3,660
    
    
    
    
    
    
    
    1,161
    
    
    
    
    
    
    
    4,821Cash interest paid
    
    
    16,272
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,272
 21




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##### Table of Contents



COLEMAN CABLE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalCASH FLOW FROM OPERATING ACTIVITIES:Net income
    
    $
    10,935
    
    
    $
    5,834
    
    
    $
    (5,834
    )
    
    $
    10,935Adjustments to reconcile net income to net cash flow from
operating activities:Depreciation and amortization
    
    
    3,431
    
    
    
    11,380
    
    
    
    
    
    
    
    14,811Stock-based compensation
    
    
    2,974
    
    
    
    147
    
    
    
    
    
    
    
    3,121Deferred tax provision
    
    
    20,547
    
    
    
    (24,471
    )
    
    
    
    
    
    
    (3,924
    )(Gain) loss on disposal of fixed assets
    
    
    (12
    )
    
    
    
    
    
    
    
    
    
    
    (12
    )Equity in consolidated subsidiaries
    
    
    (5,834
    )
    
    
    
    
    
    
    5,834
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (9,733
    )
    
    
    (16,217
    )
    
    
    
    
    
    
    (25,950
    )Inventories
    
    
    (9,742
    )
    
    
    (10,438
    )
    
    
    
    
    
    
    (20,180
    )Prepaid expenses and other assets
    
    
    (1,513
    )
    
    
    (1,250
    )
    
    
    1,057
    
    
    
    (1,706
    )Accounts payable
    
    
    8,855
    
    
    
    (964
    )
    
    
    
    
    
    
    7,891Intercompany accounts
    
    
    (36,718
    )
    
    
    36,718
    
    
    
    
    
    
    
    Accrued liabilities
    
    
    8,236
    
    
    
    2,475
    
    
    
    (1,057
    )
    
    
    9,654Net cash flow from operating activities
    
    
    (8,574
    )
    
    
    3,214
    
    
    
    
    
    
    
    (5,360
    )CASH FLOW FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (1,510
    )
    
    
    (3,419
    )
    
    
    
    
    
    
    (4,929
    )Acquisition of business, net of cash acquired
    
    
    (215,449
    )
    
    
    639
    
    
    
    
    
    
    
    (214,810
    )Proceeds from sale of fixed assets
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    18Proceeds from sale of investment
    
    
    59
    
    
    
    
    
    
    
    
    
    
    
    59Net cash flow from investing activities
    
    
    (216,882
    )
    
    
    (2,780
    )
    
    
    
    
    
    
    (219,662
    )CASH FLOW FROM FINANCING ACTIVITIES:Net borrowings under revolving loan facilities, net
of issuance costs
    
    
    98,196
    
    
    
    
    
    
    
    
    
    
    
    98,196Issuance of senior notes, net of issuance costs
    
    
    119,380
    
    
    
    
    
    
    
    
    
    
    
    119,380Common stock issuance costs
    
    
    (451
    )
    
    
    
    
    
    
    
    
    
    
    (451
    )Repayment of long -term debt
    
    
    (483
    )
    
    
    (434
    )
    
    
    
    
    
    
    (917
    )Net cash flow from financing activities
    
    
    216,642
    
    
    
    (434
    )
    
    
    
    
    
    
    216,208INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (8,814
    )
    
    
    
    
    
    
    
    
    
    
    (8,814
    )CASH AND CASH EQUIVALENTS  Beginning of period
    
    
    14,719
    
    
    
    15
    
    
    
    
    
    
    
    14,734CASH AND CASH EQUIVALENTS  End of period
    
    $
    5,905
    
    
    $
    15
    
    
    $
    
    
    
    
    5,920NONCASH ACTIVITYUnpaid capital expenditures
    
    
    210
    
    
    
    
    
    
    
    
    
    
    
    210Capital lease obligations
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    16SUPPLEMENTAL CASH FLOW INFORMATIONIncome taxes paid
    
    
    12,209
    
    
    
    35
    
    
    
    
    
    
    
    12,244Cash Interest paid
    
    
    9,497
    
    
    
    60
    
    
    
    
    
    
    
    9,557
 22




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##### Table of Contents



ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those anticipated in these
forward-looking statements as a result of a variety of risks and uncertainties, including those
described in this report under Cautionary Note Regarding Forward-Looking Statements and under
Item 1A.Risk Factors in our Annual Report on Form 10-K , for the fiscal year ended December 31,
2007. We assume no obligation to update any of these forward-looking statements. You should read
the following discussion in conjunction with our condensed consolidated financial statements and
the notes thereto included in this report.
 Overview
 General
   Acquisitions
  Copperfield, LLC
  Woods Industries, Inc.
  23




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##### Table of Contents



Raw Material Costs
  Consolidated Results of Operations
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %(In thousands)Net sales
    
    $
    270,712
    
    
    
    100.0
    %
    
    $
    253,453
    
    
    
    100.0
    %
    
    $
    790,775
    
    
    
    100.0
    %
    
    $
    609,867
    
    
    
    100.0
    %Gross profit
    
    
    29,898
    
    
    
    11.0
    
    
    
    29,166
    
    
    
    11.5
    
    
    
    87,039
    
    
    
    11.0
    
    
    
    74,030
    
    
    
    12.1Selling,
engineering, general
and Administrative
expenses
    
    
    14,228
    
    
    
    5.3
    
    
    
    11,753
    
    
    
    4.6
    
    
    
    40,472
    
    
    
    5.1
    
    
    
    31,238
    
    
    
    5.1Intangible
amortization expense
    
    
    3,121
    
    
    
    1.2
    
    
    
    2,522
    
    
    
    1.0
    
    
    
    8,889
    
    
    
    1.1
    
    
    
    5,085
    
    
    
    0.8Restructuring charges
    
    
    2,504
    
    
    
    0.9
    
    
    
    53
    
    
    
    0.0
    
    
    
    5,515
    
    
    
    0.7
    
    
    
    580
    
    
    
    0.1Operating income
    
    
    10,045
    
    
    
    3.7
    
    
    
    14,838
    
    
    
    5.9
    
    
    
    32,163
    
    
    
    4.1
    
    
    
    37,127
    
    
    
    6.1Interest expense
    
    
    7,211
    
    
    
    2.7
    
    
    
    8,187
    
    
    
    3.2
    
    
    
    22,545
    
    
    
    2.9
    
    
    
    19,411
    
    
    
    3.2Other expense
(income), net
    
    
    (56
    )
    
    
    0.0
    
    
    
    2
    
    
    
    0.0
    
    
    
    68
    
    
    
    0.0
    
    
    
    29
    
    
    
    0.0Income before income
taxes
    
    
    2,890
    
    
    
    1.0
    
    
    
    6,649
    
    
    
    2.6
    
    
    
    9,550
    
    
    
    1.2
    
    
    
    17,687
    
    
    
    2.9Income tax expense
    
    
    1,153
    
    
    
    0.4
    
    
    
    2,606
    
    
    
    1.0
    
    
    
    3,716
    
    
    
    0.5
    
    
    
    6,752
    
    
    
    1.1Net income
    
    $
    1,737
    
    
    
    0.6
    
    
    $
    4,043
    
    
    
    1.6
    
    
    $
    5,834
    
    
    
    0.7
    
    
    $
    10,935
    
    
    
    1.8Earnings per diluted
share
    
    $
    0.10
    
    
    
    
    
    
    $
    0.24
    
    
    
    
    
    
    $
    0.35
    
    
    
    
    
    
    $
    0.65
 24




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##### Table of Contents



Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)Net income
    
    $
    1,737
    
    
    $
    4,043
    
    
    $
    5,834
    
    
    $
    10,935Interest expense
    
    
    7,211
    
    
    
    8,187
    
    
    
    22,545
    
    
    
    19,411Income tax expense
    
    
    1,153
    
    
    
    2,606
    
    
    
    3,716
    
    
    
    6,752Depreciation and amortization expense
    
    
    7,294
    
    
    
    6,422
    
    
    
    21,184
    
    
    
    13,945EBITDA
    
    $
    17,395
    
    
    $
    21,258
    
    
    $
    53,279
    
    
    $
    51,043
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)Net cash flow from operating activities
    
    $
    30,055
    
    
    $
    8,616
    
    
    $
    42,365
    
    
    $
    (5,360
    )Interest expense
    
    
    7,211
    
    
    
    8,187
    
    
    
    22,545
    
    
    
    19,411Income tax expense
    
    
    1,153
    
    
    
    2,606
    
    
    
    3,716
    
    
    
    6,752Deferred tax provisions
    
    
    5,794
    
    
    
    1,977
    
    
    
    5,737
    
    
    
    3,924Gain (loss) on sale of fixed assets
    
    
    (110
    )
    
    
    11
    
    
    
    (178
    )
    
    
    12Stock-based compensation
    
    
    (693
    )
    
    
    (1,099
    )
    
    
    (2,015
    )
    
    
    (3,121
    )Changes in operating assets and liabilities
    
    
    (26,015
    )
    
    
    960
    
    
    
    (18,891
    )
    
    
    29,425EBITDA
    
    $
    17,395
    
    
    $
    21,258
    
    
    $
    53,279
    
    
    $
    51,043
 25




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##### Table of Contents



Earnings and Performance Summary
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Earnings per diluted share
    
    $
    0.10
    
    
    $
    0.24
    
    
    $
    0.35
    
    
    $
    0.65Less impact of:Restructuring charges
    
    
    0.09
    
    
    
    
    
    
    
    0.20
    
    
    
    0.02Insurance recovery allowance
    
    
    0.06
    
    
    
    
    
    
    
    0.06
    
    
    
    Earnings per diluted share
excluding above items
    
    $
    0.25
    
    
    $
    0.24
    
    
    $
    0.61
    
    
    $
    0.67
    26




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##### Table of Contents



Restructuring and Integration of 2007 Acquisitions
    27




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##### Table of Contents



Three Months Ended September 30, 2008 Compared with Three Months Ended September 30, 2007
 Net sales
 Gross profit
 Selling, engineering, general and administrative (SEG&A) expenses
 Intangible amortization expense
 Restructuring charges
 Interest expense 
 28




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##### Table of Contents



Income tax expense
 Nine Months Ended September 30, 2008 Compared with Nine Months Ended September 30, 2007
 Net sales
 Gross profit
 Selling, engineering, general and administrative (SEG&A) expenses
 Intangible amortization expense
 Restructuring charges
 Interest expense 
 29




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##### Table of Contents



Income tax expense
 Segment Results
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %(In thousands)Net Sales:Distribution
    
    $
    188,384
    
    
    
    69.6
    %
    
    $
    152,599
    
    
    
    60.2
    %
    
    $
    528,886
    
    
    
    66.9
    %
    
    $
    410,213
    
    
    
    67.3
    %OEM
    
    
    82,328
    
    
    
    30.4
    
    
    
    100,854
    
    
    
    39.8
    
    
    
    261,889
    
    
    
    33.1
    
    
    
    199,654
    
    
    
    32.7Total
    
    $
    270,712
    
    
    
    100.0
    %
    
    $
    253,453
    
    
    
    100.0
    %
    
    $
    790,775
    
    
    
    100.0
    %
    
    $
    609,867
    
    
    
    100.0
    %Operating Income:Distribution
    
    $
    18,961
    
    
    
    10.1
    %
    
    $
    15,044
    
    
    
    9.9
    %
    
    $
    51,872
    
    
    
    9.8
    %
    
    $
    40,046
    
    
    
    9.8
    %OEM
    
    
    264
    
    
    
    0.3
    
    
    
    4,086
    
    
    
    4.1
    
    
    
    3,730
    
    
    
    1.4
    
    
    
    6,795
    
    
    
    3.4Total segments
    
    
    19,225
    
    
    
    
    
    
    
    19,130
    
    
    
    
    
    
    
    55,602
    
    
    
    
    
    
    
    46,841Corporate
    
    
    (9,180
    )
    
    
    
    
    
    
    (4,292
    )
    
    
    
    
    
    
    (23,439
    )
    
    
    
    
    
    
    (9,714
    )Consolidated
operating income
    
    $
    10,045
    
    
    
    3.7
    %
    
    $
    14,838
    
    
    
    5.9
    %
    
    $
    32,163
    
    
    
    4.1
    %
    
    $
    37,127
    
    
    
    6.1
    %
   Three Months Ended September 30, 2008 Compared with Three Months Ended September 30, 2007
 Distribution Segment
  30




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##### Table of Contents



OEM Segment
   Nine Months Ended September 30, 2008 Compared with Nine Months Ended September 30, 2007
 Distribution Segment
   OEM Segment
   31




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##### Table of Contents



Liquidity and Capital Resources
 Debt
  As of
    
    
    As ofSeptember 30,
    
    
    December 31,2008
    
    
    2007Revolving credit facility
    
    $
    88,250
    
    
    $
    123,438Senior notes
    
    
    242,509
    
    
    
    242,980Capital lease obligations
    
    
    531
    
    
    
    782Other long-term debt
    
    
    
    
    
    
    641Total long-term debt, including current portion
    
    $
    331,290
    
    
    $
    367,841
 Revolving Credit Facility
      9.875% Senior Notes
 32




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##### Table of Contents



Current and Future Liquidity
        33




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##### Table of Contents



New Accounting Pronouncements
 Business Combinations
 Fair Value Measurements.
 The Fair Value Option for Financial Assets and
Financial Liabilities including an Amendment of FASB Statement No. 115
 Noncontrolling Interests in Consolidated
Financial Statements  an amendment of ARB No. 51
 Disclosures about Derivative Instruments and
Hedging Activitiesan Amendment of FASB Statement No. 133
   Accounting for Financial Guarantee Insurance Contractsan interpretation of FASB Statement No. 60.
 34




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##### Table of Contents



Cautionary Note Regarding Forward-Looking Statements
  www.sec.gov)
  
    
    fluctuations in the supply or price of copper and other raw materials;
    
    increased competition from other wire and cable manufacturers, including foreign
manufacturers;
    
    pricing pressures causing margins to decrease;
    
    general economic conditions and changes in the demand for our products by key customers;
    
    the consummation of acquisitions;
    
    failure to identify, finance or integrate acquisitions;
    
    failure to accomplish integration activities on a timely basis;
    
    failure to achieve expected efficiencies in our manufacturing and integration
consolidations;
    
    changes in the cost of labor or raw materials, including PVC and fuel costs;
    
    inaccuracies in purchase agreements relating to acquisitions;
    
    failure of customers to make expected purchases, including customers of acquired companies;
    
    unforeseen developments or expenses with respect to our acquisition, integration and
consolidation efforts; and
    
    other risks and uncertainties, including those described under Item 1A. Risk Factors in
our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.
  35




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##### Table of Contents



ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
  Commodity Risk.
 Interest Rate Risk.
 
 ITEM 4. Controls and Procedures
   36




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##### Table of Contents



PART II OTHER INFORMATION
 
 ITEM 1. Legal Proceedings
  
 ITEM 6. Exhibits
 See Index to Exhibits
 37




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##### Table of Contents



SIGNATURES
  COLEMAN CABLE, INC.
(Registrant)Date: November 6, 2008
    By
    /s/ G. Gary YetmanChief Executive Officer and President Date: November 6, 2008
    By
    /s/ Richard N. BurgerChief Financial Officer, ExecutiveVice President, Secretary and
Treasurer 38




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##### Table of Contents



Item No.
    
    Description2.0 
    
    Equity Interest Purchase Agreement dated as of March 11, 2007, among Coleman Cable, Inc., the
Copperfield Sellers defined therein and, solely with respect to Section 10.10 thereof, the
additional signatures thereto; incorporated herein by reference to our quarterly report on Form
10-Q for the quarter ended March 31, 2007.2.1 
    
    Purchase Agreement, dated as of November 1, 2007, by and among Coleman Cable, Inc., Woods
Industries, Inc., Woods Industries (Canada) Inc. and Katy Industries, Inc., incorporated by
reference herein to our Current Report on Form 8-K filed on November 2, 2007.3.1 
    
    Certificate of Incorporation of Coleman Cable, Inc., as filed with the Delaware Secretary of State
on October 10, 2006, incorporated herein by reference to our Quarterly Report on Form 10-Q for the
quarter ended September 30, 2006.3.2 
    
    Amended and Restated By-Laws of Coleman Cable, Inc., incorporated herein by reference to our
Current Report on Form 8-K as filed on May 5, 2008.4.1 
    
    Registration Rights Agreement dated September 28, 2004 between Coleman Cable, Inc. and Wachovia
Capital Markets, LLC, as Initial Purchaser under the Purchase Agreement, incorporated herein by
reference to our Form S-4 filed on April 26, 2005.4.2 
    
    Indenture dated as of September 28, 2004 among Coleman Cable, Inc., the Note Guarantors from time
to time party thereto and Deutsche Bank Trust Company Americas, as Trustee, incorporated herein by
reference to our Form S-4 filed on April 26, 2005.4.3 
    
    Registration Rights Agreement, dated October 11, 2006 between Coleman Cable, Inc. and Friedman,
Billings, Ramsey & Co., Inc., incorporated herein by reference to our Quarterly Report on Form
10-Q for the quarter ended September 30, 2006.4.4 
    
    Shareholders Agreement, dated October 11, 2006 between Coleman Cable, Inc. and its Existing
Holders, incorporated herein by reference to our Quarterly Report on Form 10-Q for the quarter
ended September 30, 2006.4.5 
    
    Registration Rights Agreement dated April 2, 2007 between Coleman Cable, Inc. and Wachovia Capital
Markets, LLC, as Initial Purchaser under the Purchase Agreement, incorporated herein by reference
to our Form S-4 filed on July 13, 2007.10.1 
    
    Amended and Restated Credit Agreement dated as of April 2, 2007 among Coleman Cable, Inc., certain
of its Subsidiaries, the Lenders named therein, and Wachovia Bank, National Association, as
administrative agent, incorporated herein by reference to our Quarterly Report on Form 10-Q for
the quarter ended March 31, 2007.10.2 
    
    First Amendment to Amended and Restated Credit Agreement dated as of November 1, 2007 by and among
Coleman Cable, Inc., certain of its Subsidiaries, the Lenders named therein, and Wachovia Bank,
National Association, as administrative agent, incorporated herein by reference to our Form 8-K
filed on November 2, 2007.10.3 
    
    Lease dated as of September 11, 2003, by and between Panattoni Development Company, LLC and
Coleman Cable, Inc., as subsequently assumed by HQ2 Properties, LLC pursuant to an Assignment and
Assumption of Lease, dated as of August 15, 2005, amended by First Amendment to Lease, dated as of
August 15, 2005, by and between HQ2 Properties, LLC and Coleman Cable, Inc., incorporated herein
by reference to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2005.
 39




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##### Table of Contents



Item No.
    
    Description10.4 
    
    Amended and Restated Employment Agreement, dated as of September 1, 2006 by and between Coleman
Cable, Inc. and G. Gary Yetman, incorporated herein by reference to our Quarterly Report on Form
10-Q for the quarter ended September 30, 2006.10.5 
    
    Amended and Restated Employment Agreement, dated as of September 1, 2006 by and between Coleman
Cable, Inc. and Richard N. Burger, incorporated herein by reference to our Quarterly Report on
Form 10-Q for the quarter ended September 30, 2006.10.6 
    
    Amended and Restated Employment Agreement, dated as of September 1, 2006 by and between Coleman
Cable, Inc. and Jeffrey D. Johnston, incorporated herein by reference to our Quarterly Report on
Form 10-Q for the quarter ended September 30, 2006.10.7 
    
    Long-Term Incentive Plan, as amended and restated on April 30, 2008, incorporated herein by
reference to our Proxy Statement filed on April 3, 2008.10.8 
    
    Form of Non-Qualified Stock Option Agreement Under the Long-Term Incentive Plan, incorporated
herein by reference to our Form- S-1 filed on November 16, 2006.10.9 
    
    Indemnification Agreement, dated as of November 13, 2007, by and between Coleman Cable, Inc. and
Morgan Capital LLC, incorporated herein by reference to our Quarterly Report on Form 10-Q for the
quarter ended September 30, 2007.10.10 
    
    Lease by and between Copperfield,
LLC and DJR Ventures, LLC dated as of February 1, 2008,
incorporated herein by reference to our Quarterly Report on Form
10-Q/A for the quarter ended June 30, 2008.31.1 
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2 
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1 
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section
1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Denotes management contract or compensatory plan or arrangement. 40