##### 



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, 2007
 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
(State or other jurisdiction of incorporation or organization)
    
    36-4410887
(I.R.S. Employer Identification No.)
 1530 Shields Drive, Waukegan, Illinois 60085
 (847) 672-2300
 þ o
  o o þ
 o þ




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##### 



INDEX
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited)
    
    
    1Condensed Consolidated Statements of Operations for the three and nine months ended
September 30, 2006 and 2007
    
    
    1Condensed Consolidated Balance Sheets as of December 31, 2006 and September 30, 2006 and 2007
    
    
    2Condensed Consolidated Statements of Cash Flows for the nine months ended
September 30, 2006 and 2007
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    22Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    36Item 4. Controls and Procedures
    
    
    36PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    37Item 1A. Risk Factors
    
    
    37Item 5. Other Information
    
    
    37Signatures
    
    
    38Exhibit Index
    
    
    39Certification of Chief Executive OfficerCertification of Chief Financial OfficerSection 1350 Certification




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##### 



PART I.
 
 ITEM 1. Financial Statements
 COLEMAN CABLE, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Thousands, except per share data)
 (unaudited)
 Three months ended September 30,
    
    
    Nine months ended September 30,2006
    
    
    2007
    
    
    2006
    
    
    2007NET SALES
    
    $
    114,925
    
    
    $
    253,453
    
    
    $
    320,137
    
    
    $
    609,867COST OF GOODS SOLD
    
    
    90,697
    
    
    
    224,287
    
    
    
    254,712
    
    
    
    535,837GROSS PROFIT
    
    
    24,228
    
    
    
    29,166
    
    
    
    65,425
    
    
    
    74,030SELLING, ENGINEERING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    9,158
    
    
    
    11,753
    
    
    
    23,049
    
    
    
    31,238INTANGIBLE AMORTIZATION EXPENSE
    
    
    
    
    
    
    2,522
    
    
    
    
    
    
    
    5,085RESTRUCTURING CHARGES
    
    
    891
    
    
    
    53
    
    
    
    1,210
    
    
    
    580OPERATING INCOME
    
    
    14,179
    
    
    
    14,838
    
    
    
    41,166
    
    
    
    37,127INTEREST EXPENSE, NET
    
    
    4,185
    
    
    
    8,187
    
    
    
    12,506
    
    
    
    19,411OTHER (INCOME) LOSS, NET
    
    
    
    
    
    
    2
    
    
    
    (11)
    
    
    
    29INCOME BEFORE INCOME TAXES
    
    
    9,994
    
    
    
    6,649
    
    
    
    28,671
    
    
    
    17,687INCOME TAX EXPENSE
    
    
    235
    
    
    
    2,606
    
    
    
    1,009
    
    
    
    6,752NET INCOME
    
    $
    9,759
    
    
    $
    4,043
    
    
    $
    27,662
    
    
    $
    10,935EARNINGS PER COMMON SHARE DATANET INCOME PER SHAREBasic
    
    $
    0.77
    
    
    $
    0.24
    
    
    $
    2.17
    
    
    $
    0.65Diluted
    
    
    0.77
    
    
    
    0.24
    
    
    
    2.17
    
    
    
    0.65WEIGHTED AVERAGE COMMON SHARES OUTSTANDINGBasic
    
    
    12,753
    
    
    
    16,787
    
    
    
    12,751
    
    
    
    16,787Diluted
    
    
    12,753
    
    
    
    16,796
    
    
    
    12,751
    
    
    
    16,789UNAUDITED PRO FORMA DATAPRO FORMA NET INCOMEIncome before income taxes
    
    $
    9,994
    
    
    
    
    
    
    $
    28,671Pro forma income tax expense
    
    
    4,024
    
    
    
    
    
    
    
    11,483Pro forma net income
    
    
    5,970
    
    
    
    
    
    
    
    17,188PRO FORMA NET INCOME PER SHAREBasic
    
    $
    0.47
    
    
    
    
    
    
    $
    1.35Diluted
    
    
    0.47
    
    
    
    
    
    
    
    1.35
  1




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##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Thousands, except per share data)
 (unaudited)
 December 31,
    
    
    September 30,
    
    
    September 30,2006
    
    
    2006
    
    
    2007ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    14,734
    
    
    $
    52
    
    
    $
    5,920Accounts receivable, less allowance for uncollectible accounts of
$2,092, $2,262 and $3,711, respectively
    
    
    62,318
    
    
    
    73,672
    
    
    
    149,860Inventories
    
    
    66,765
    
    
    
    80,377
    
    
    
    128,546Deferred income taxes
    
    
    2,136
    
    
    
    104
    
    
    
    2,313Assets held for sale
    
    
    
    
    
    
    
    
    
    
    661Prepaid expenses and other current assets
    
    
    2,739
    
    
    
    4,133
    
    
    
    5,237Total current assets
    
    
    148,692
    
    
    
    158,338
    
    
    
    292,537PROPERTY, PLANT AND EQUIPMENT:Land
    
    
    579
    
    
    
    579
    
    
    
    2,809Buildings and leasehold improvements
    
    
    7,636
    
    
    
    7,535
    
    
    
    15,112Machinery, fixtures and equipment
    
    
    45,125
    
    
    
    44,684
    
    
    
    98,94653,340
    
    
    
    52,798
    
    
    
    116,867Less accumulated depreciation and amortization
    
    
    (31,762
    )
    
    
    (30,634
    )
    
    
    (39,137
    )Construction in progress
    
    
    244
    
    
    
    693
    
    
    
    3,184Property, plant and equipment, net
    
    
    21,822
    
    
    
    22,857
    
    
    
    80,914GOODWILL
    
    
    60,628
    
    
    
    60,642
    
    
    
    103,398INTANGIBLE ASSETS, NET
    
    
    10
    
    
    
    
    
    
    
    59,326OTHER ASSETS, NET
    
    
    4,593
    
    
    
    4,826
    
    
    
    9,857TOTAL ASSETS
    
    $
    235,745
    
    
    $
    246,663
    
    
    $
    546,032LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    936
    
    
    $
    44,973
    
    
    $
    901Accounts payable
    
    
    13,091
    
    
    
    36,589
    
    
    
    53,952Accrued liabilities
    
    
    19,582
    
    
    
    19,458
    
    
    
    32,687Total current liabilities
    
    
    33,609
    
    
    
    101,020
    
    
    
    87,540LONG-TERM DEBT
    
    
    121,571
    
    
    
    121,721
    
    
    
    343,846LONG-TERM LIABILITIES, NET
    
    
    
    
    
    
    
    
    
    
    39DEFERRED INCOME TAXES
    
    
    2,724
    
    
    
    160
    
    
    
    23,161SHAREHOLDERS EQUITY:Common stock, par value $0.001; 31,260 authorized; and 12,787 issued and outstanding on September 30, 2006 and
16,787 on December 31, 2006 and September 30, 2007
    
    
    17
    
    
    
    13
    
    
    
    17Additional paid-in capital
    
    
    80,421
    
    
    
    26,077
    
    
    
    83,091Retained earnings (accumulated deficit)
    
    
    (2,597
    )
    
    
    (2,328
    )
    
    
    8,338Total shareholders equity
    
    
    77,841
    
    
    
    23,762
    
    
    
    91,446TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    235,745
    
    
    $
    246,663
    
    
    $
    546,032
  2




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##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Thousands)
 (unaudited)
 Nine months ended September 30,2006
    
    
    2007CASH FLOW FROM OPERATING ACTIVITIES:Net income
    
    $
    27,662
    
    
    $
    10,935Adjustments to reconcile net income to net cash flow from operating activities:Depreciation and amortization
    
    
    4,799
    
    
    
    14,811Stock-based compensation
    
    
    531
    
    
    
    3,121Deferred tax provision (credit)
    
    
    147
    
    
    
    (3,924
    )(Gain) loss on disposal of fixed assets
    
    
    313
    
    
    
    (12
    )Gain on sale of investment
    
    
    (11
    )
    
    
    Changes in
operating assets and liabilities (net of acquisitions):Accounts receivable
    
    
    (14,832
    )
    
    
    (25,950
    )Inventories
    
    
    (12,488
    )
    
    
    (20,180
    )Prepaid expenses and other assets
    
    
    (1,251
    )
    
    
    (1,706
    )Accounts payable
    
    
    14,583
    
    
    
    7,891Accrued liabilities
    
    
    2,682
    
    
    
    9,654Net cash flow from operating activities
    
    
    22,135
    
    
    
    (5,360
    )CASH FLOW FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (2,157
    )
    
    
    (4,929
    )Acquisition of business, net of cash acquired
    
    
    
    
    
    
    (214,810
    )Proceeds from sale of fixed assets
    
    
    42
    
    
    
    18Proceeds from sale of investment
    
    
    82
    
    
    
    59Net cash flow from investing activities
    
    
    (2,033
    )
    
    
    (219,662
    )CASH FLOW FROM FINANCING ACTIVITIES:Net borrowings (repayments) under revolving
loan facilities, net of issuance
costs
    
    
    (1,950
    )
    
    
    98,196Issuance of senior notes, net of issuance costs
    
    
    
    
    
    
    119,380Common stock issuance costs
    
    
    
    
    
    
    (451
    )Repayment of long-term debt
    
    
    (656
    )
    
    
    (917
    )Dividends paid to shareholders
    
    
    (17,502
    )
    
    
    Net cash flow from financing activities
    
    
    (20,108
    )
    
    
    216,208DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (6
    )
    
    
    (8,814
    )CASH AND CASH EQUIVALENTS  Beginning of period
    
    
    58
    
    
    
    14,734CASH AND CASH EQUIVALENTS  End of period
    
    $
    52
    
    
    $
    5,920NONCASH ACTIVITYUnpaid capital expenditures
    
    
    46
    
    
    
    210Capital lease obligation
    
    
    
    
    
    
    16SUPPLEMENTAL CASH FLOW INFORMATIONIncome taxes paid
    
    
    387
    
    
    
    12,244Cash interest paid
    
    
    8,865
    
    
    
    9,557
  3




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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
  Unaudited Pro Forma Data
  2. NEW ACCOUNTING PRONOUNCEMENTS
 FIN No. 48
 Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement No. 109 .
   4




---



##### 



SFAS No. 157
 Fair Value Measurement
 SFAS No. 159
 The Fair Value Option for Financial Assets and
Financial Liabilities including an Amendment of FASB Statement No. 115
 3.
    
    ACQUISITION OF COPPERFIELD, LLC
    
    
    The Company issued additional senior notes (the 2007 Notes) in an aggregate
principal amount of $120,000. See Note 7 for further discussion.
    
    The Company entered into an Amended and Restated Credit Facility (the Revolving
Credit Facility) with Wachovia Bank, National Association, which amended and
restated the existing revolving credit agreement in its entirety. See Note 7 for
further discussion.
    
    All outstanding equity interests of Copperfield were acquired for $215,449, which
includes (a) a reduction to the purchase price as a result of a working capital
true-up adjustment of $467 and (b) acquisition related costs of $2,916.
 Business Combinations
 5




---



##### 



Cash
    
    $
    639Accounts receivable
    
    
    61,592Inventory
    
    
    41,601Other current assets
    
    
    832Property and equipment
    
    
    63,445Intangible assets
    
    
    64,400Goodwill
    
    
    42,770Other assets
    
    
    607Total assets acquired
    
    
    275,886Current liabilities
    
    
    (36,211
    )Long-term liabilities, net
    
    
    (42
    )Deferred income taxes
    
    
    (24,184
    )Total liabilities assumed
    
    
    (60,437
    )Net assets acquired
    
    $
    215,449
  Weighted Average Life
    
    
    BalanceCustomer relationships
    
    
    9
    
    
    $
    55,600Trademarks and trade names
    
    
    20
    
    
    
    7,800Non-competition agreements
    
    
    3
    
    
    
    1,000Total intangible assets
    
    
    
    
    
    $
    64,400
  2007
    
    $
    7,6122008
    
    
    11,6262009
    
    
    10,1782010
    
    
    8,0592011
    
    
    6,457
   6




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##### 



Three months ended September 30,
    
    Nine months ended September 30,2006
    
    2007
    
    2006
    
    2007Net sales
    
    $
    248,496
    
    
    $
    253,453
    
    
    $
    697,039
    
    
    $
    731,193Net income
    
    $
    4,306
    
    
    $
    3,954
    
    
    $
    14,028
    
    
    $
    10,336Earnings per share:Basic
    
    $
    0.34
    
    
    $
    0.24
    
    
    $
    1.10
    
    
    $
    0.62Diluted
    
    $
    0.34
    
    
    $
    0.24
    
    
    $
    1.10
    
    
    $
    0.62
 4. RESTRUCTURING CHARGES
    Employee
    
    
    Lease
    
    
    Equipment
    
    
    OtherSeverance
    
    
    Termination
    
    
    Relocation
    
    
    ClosingCosts
    
    
    Costs
    
    
    Costs
    
    
    Costs
    
    
TotalBalance December 31, 2005
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Provision
    
    
    147
    
    
    
    662
    
    
    
    262
    
    
    
    325
    
    
    
    1,396Uses
    
    
    (77
    )
    
    
    (662
    )
    
    
    (262
    )
    
    
    (325
    )
    
    
    (1,326
    )Balance-December 31, 2006
    
    $
    70
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    70Provision
    
    
    41
    
    
    
    
    
    
    
    320
    
    
    
    219
    
    
    
    580Uses
    
    
    (111
    )
    
    
    
    
    
    
    (320
    )
    
    
    (219
    )
    
    
    (650
    )Balance September 30,
2007
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 5. INVENTORIES
  December 31, 2006
    
    
    September 30, 2006
    
    
    September 30, 2007FIFO cost:Raw materials
    
    $
    11,975
    
    
    $
    15,789
    
    
    $
    39,920Work in progress
    
    
    3,293
    
    
    
    3,803
    
    
    
    6,163Finished products
    
    
    51,497
    
    
    
    60,785
    
    
    
    82,463Total
    
    $
    66,765
    
    
    $
    80,377
    
    
    $
    128,546
 7




---



##### 



6. ACCRUED LIABILITIES
  December 31, 2006
    
    
    September 30, 2006
    
    
    September 30, 2007Salaries, wages and employee benefits
    
    $
    5,117
    
    
    $
    3,821
    
    
    $
    7,276Sales incentives
    
    
    7,359
    
    
    
    6,793
    
    
    
    7,337Income taxes
    
    
    568
    
    
    
    
    
    
    
    484Interest
    
    
    3,023
    
    
    
    6,051
    
    
    
    12,343Other
    
    
    3,515
    
    
    
    2,793
    
    
    
    5,247Total
    
    $
    19,582
    
    
    $
    19,458
    
    
    $
    32,687
 7. DEBT
 December 31, 2006
    
    
    September 30, 2006
    
    
    September 30, 2007Revolving credit facility
    
    $
    
    
    
    $
    44,050
    
    
    $
    100,004Senior notes
    
    
    120,000
    
    
    
    120,000
    
    
    
    243,136Capital lease obligations
    
    
    1,129
    
    
    
    1,222
    
    
    
    851Other long-term debt, annual interest
rates
up to 6.25%, payable through 2019
    
    
    1,378
    
    
    
    1,422
    
    
    
    756122,507
    
    
    
    166,694
    
    
    
    344,747Less current portion
    
    
    (936
    )
    
    
    (44,973
    )
    
    
    (901
    )Long-term debt
    
    $
    121,571
    
    
    $
    121,721
    
    
    $
    343,846
    8




---



##### 



9




---



##### 



8. COMMITMENTS AND CONTINGENCIES
 Operating Leases
  Capital Leases
   Employee Benefits
  Legal Matters
   10




---



##### 



Self-Insurance
  Tax Matters Agreement
  9. EARNINGS PER SHARE
  Three Months Ended September 30,
    
    Nine Months Ended September 30,2006
    
    2007
    
    2006
    
    2007Basic weighted average shares outstanding
    
    
    12,753
    
    
    
    16,787
    
    
    
    12,751
    
    
    
    16,787Dilutive effect of stock options
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    2Diluted weighted average share outstanding
    
    
    12,753
    
    
    
    16,796
    
    
    
    12,751
    
    
    
    16,789
  10. STOCK BASED COMPENSATION
   11




---



##### 



Weighted-AverageWeighted-Average
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Terms
    
    
    ValueOutstanding January 1, 2007
    
    
    825
    
    
    $
    15.00
    
    
    
    9.03Granted
    
    
    60
    
    
    
    23.40
    
    
    
    9.61Exercised
    
    
    
    
    
    
    Forfeited or expired
    
    
    2
    
    
    
    23.62Outstanding September 30, 2007
    
    
    883
    
    
    
    15.57
    
    
    
    9.07
    
    
    
    Vested or expected to vest
    
    
    851
    
    
    
    15.57
    
    
    
    9.07
    
    
    
    Exercisable
    
    
    
    
    
    
    
    
    
    
    
   11. RELATED PARTIES
    12. INVENTORY THEFT
  12




---



##### 



13. BUSINESS SEGMENT INFORMATION
  Disclosure about Segments of an Enterprise
and Related Information.
    Three months ended September 30,
    
    
    Nine months ended September 30,2006
    
    
    2007
    
    
    2006
    
    
    2007Net Sales:Electrical/Wire and Cable Distributors
    
    $
    40,540
    
    
    $
    38,737
    
    
    $
    111,447
    
    
    $
    111,059Specialty Distributors and OEMs
    
    
    58,325
    
    
    
    55,553
    
    
    
    170,430
    
    
    
    173,066Consumer Outlets
    
    
    16,060
    
    
    
    17,593
    
    
    
    38,260
    
    
    
    53,349Copperfield
    
    
    
    
    
    
    141,570
    
    
    
    
    
    
    
    272,393Total
    
    $
    114,925
    
    
    $
    253,453
    
    
    $
    320,137
    
    
    $
    609,867Operating Income:Electrical/Wire and Cable Distributors
    
    $
    7,238
    
    
    $
    3,394
    
    
    $
    20,058
    
    
    $
    10,166Specialty Distributors and OEMs
    
    
    8,829
    
    
    
    5,697
    
    
    
    24,227
    
    
    
    16,818Consumer Outlets
    
    
    1,542
    
    
    
    1,437
    
    
    
    2,424
    
    
    
    5,183Copperfield
    
    
    
    
    
    
    6,083
    
    
    
    
    
    
    
    9,599Total
    
    
    17,609
    
    
    
    16,611
    
    
    
    46,709
    
    
    
    41,766Corporate
    
    
    (3,430
    )
    
    
    (1,773
    )
    
    
    (5,543
    )
    
    
    (4,639
    )Consolidated operating income
    
    $
    14,179
    
    
    $
    14,838
    
    
    $
    41,166
    
    
    $
    37,127
 14. SUPPLEMENTAL GUARANTOR INFORMATION
  13




---



##### 



14




---



##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalNET SALES
    
    $
    95,604
    
    
    $
    23,225
    
    
    $
    (3,904
    )
    
    $
    114,925COST OF GOODS SOLD
    
    
    71,777
    
    
    
    18,920
    
    
    
    
    
    
    
    90,697GROSS PROFIT
    
    
    23,827
    
    
    
    4,305
    
    
    
    (3,904
    )
    
    
    24,228SELLING, ENGINEERING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    9,704
    
    
    
    3,358
    
    
    
    (3,904
    )
    
    
    9,158RESTRUCTURING CHARGES
    
    
    891
    
    
    
    
    
    
    
    
    
    
    
    891OPERATING INCOME
    
    
    13,232
    
    
    
    947
    
    
    
    
    
    
    
    14,179INTEREST EXPENSE, NET
    
    
    3,960
    
    
    
    225
    
    
    
    
    
    
    
    4,185INCOME BEFORE INCOME TAXES
    
    
    9,272
    
    
    
    722
    
    
    
    
    
    
    
    9,994INCOME TAX EXPENSE
    
    
    177
    
    
    
    58
    
    
    
    
    
    
    
    235INCOME FROM GUARANTOR SUBSIDIARIES
    
    
    664
    
    
    
    
    
    
    
    (664
    )
    
    
    NET INCOME
    
    $
    9,759
    
    
    $
    664
    
    
    $
    (664
    )
    
    $
    9,759
 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, NET
    
    
    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 GUARANTOR SUBSIDIARIES
    
    
    3,781
    
    
    
    
    
    
    
    (3,781
    )
    
    
    NET INCOME
    
    $
    4,043
    
    
    $
    3,781
    
    
    $
    (3,781
    )
    
    $
    4,043
 15




---



##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalNET SALES
    
    $
    262,162
    
    
    $
    69,532
    
    
    $
    (11,557
    )
    
    $
    320,137COST OF GOODS SOLD
    
    
    198,633
    
    
    
    56,079
    
    
    
    
    
    
    
    254,712GROSS PROFIT
    
    
    63,529
    
    
    
    13,453
    
    
    
    (11,557
    )
    
    
    65,425SELLING, ENGINEERING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    24,696
    
    
    
    9,910
    
    
    
    (11,557
    )
    
    
    23,049RESTRUCTURING CHARGES
    
    
    1,210
    
    
    
    
    
    
    
    
    
    
    
    1,210OPERATING INCOME
    
    
    37,623
    
    
    
    3,543
    
    
    
    
    
    
    
    41,166INTEREST EXPENSE, NET
    
    
    11,875
    
    
    
    631
    
    
    
    
    
    
    
    12,506OTHER INCOME
    
    
    (11
    )
    
    
    
    
    
    
    
    
    
    
    (11
    )INCOME BEFORE INCOME TAXES
    
    
    25,759
    
    
    
    2,912
    
    
    
    
    
    
    
    28,671INCOME TAX EXPENSE
    
    
    435
    
    
    
    574
    
    
    
    
    
    
    
    1,009INCOME FROM GUARANTOR SUBSIDIARIES
    
    
    2,338
    
    
    
    
    
    
    
    (2,338
    )
    
    
    NET INCOME
    
    $
    27,662
    
    
    $
    2,338
    
    
    $
    (2,338
    )
    
    $
    27,662
 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, NET
    
    
    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 GUARANTOR SUBSIDIARIES
    
    
    5,834
    
    
    
    
    
    
    
    (5,834
    )
    
    
    NET INCOME
    
    $
    10,935
    
    
    $
    5,834
    
    
    $
    (5,834
    )
    
    $
    10,935
 16




---



##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2006
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    14,719
    
    
    $
    15
    
    
    $
    
    
    
    $
    14,734Accounts receivablenet of allowances
    
    
    60,789
    
    
    
    1,529
    
    
    
    
    
    
    
    62,318Intercompany receivable
    
    
    
    
    
    
    16,168
    
    
    
    (16,168
    )
    
    
    Inventories
    
    
    60,007
    
    
    
    6,758
    
    
    
    
    
    
    
    66,765Deferred income taxes
    
    
    1,931
    
    
    
    205
    
    
    
    
    
    
    
    2,136Prepaid expenses and other current assets
    
    
    2,268
    
    
    
    1,838
    
    
    
    (1,367
    )
    
    
    2,739Total current assets
    
    
    139,714
    
    
    
    26,513
    
    
    
    (17,535
    )
    
    
    148,692PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    16,197
    
    
    
    5,625
    
    
    
    
    
    
    
    21,822GOODWILL
    
    
    60,487
    
    
    
    141
    
    
    
    
    
    
    
    60,628INTANGIBLE ASSETS, NET
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    10OTHER ASSETS, NET
    
    
    4,590
    
    
    
    3
    
    
    
    
    
    
    
    4,593INVESTMENT IN SUBSIDIARIES
    
    
    22,480
    
    
    
    
    
    
    
    (22,480
    )
    
    
    TOTAL ASSETS
    
    $
    243,478
    
    
    $
    32,282
    
    
    $
    (40,015
    )
    
    $
    235,745LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    356
    
    
    $
    580
    
    
    $
    
    
    
    $
    936Accounts payable
    
    
    12,245
    
    
    
    846
    
    
    
    
    
    
    
    13,091Intercompany payable
    
    
    12,676
    
    
    
    3,492
    
    
    
    (16,168
    )
    
    
    Accrued liabilities
    
    
    17,049
    
    
    
    3,900
    
    
    
    (1,367
    )
    
    
    19,582Total current liabilities
    
    $
    42,326
    
    
    $
    8,818
    
    
    $
    (17,535
    )
    
    $
    33,609LONG-TERM DEBT
    
    
    120,686
    
    
    
    885
    
    
    
    
    
    
    
    121,571DEFERRED INCOME TAXES
    
    
    2,625
    
    
    
    99
    
    
    
    
    
    
    
    2,724SHAREHOLDERS EQUITY:Common stock
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    17Additional paid-in capital
    
    
    80,421
    
    
    
    1
    
    
    
    (1
    )
    
    
    80,421Retained earnings (accumulated deficit)
    
    
    (2,597
    )
    
    
    22,479
    
    
    
    (22,479
    )
    
    
    (2,597
    )Total shareholders equity
    
    
    77,841
    
    
    
    22,480
    
    
    
    (22,480
    )
    
    
    77,841TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    243,478
    
    
    $
    32,282
    
    
    $
    (40,015
    )
    
    $
    235,745
 17




---



##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET AS OF SEPTEMBER 30, 2006
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    33
    
    
    $
    19
    
    
    $
    
    
    
    $
    52Accounts receivablenet of allowances
    
    
    71,387
    
    
    
    2,285
    
    
    
    
    
    
    
    73,672Intercompany receivable
    
    
    
    
    
    
    15,950
    
    
    
    (15,950
    )
    
    
    Inventories
    
    
    72,087
    
    
    
    8,290
    
    
    
    
    
    
    
    80,377Deferred income taxes
    
    
    
    
    
    
    104
    
    
    
    
    
    
    
    104Prepaid expenses and other current assets
    
    
    3,325
    
    
    
    2,484
    
    
    
    (1,676
    )
    
    
    4,133Total current assets
    
    
    146,832
    
    
    
    29,132
    
    
    
    (17,626
    )
    
    
    158,338PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    16,893
    
    
    
    5,964
    
    
    
    
    
    
    
    22,857GOODWILL
    
    
    60,501
    
    
    
    141
    
    
    
    
    
    
    
    60,642INTANGIBLE ASSETS, NET
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    OTHER ASSETS, NET
    
    
    4,823
    
    
    
    3
    
    
    
    
    
    
    
    4,826INVESTMENT IN SUBSIDIARIES
    
    
    23,066
    
    
    
    
    
    
    
    (23,066
    )
    
    
    TOTAL ASSETS
    
    $
    252,115
    
    
    $
    35,240
    
    
    $
    (40,692
    )
    
    $
    246,663LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    44,395
    
    
    $
    578
    
    
    $
    
    
    
    $
    44,973Accounts payable
    
    
    35,342
    
    
    
    1,247
    
    
    
    
    
    
    
    36,589Intercompany payable
    
    
    10,465
    
    
    
    5,485
    
    
    
    (15,950
    )
    
    
    Accrued liabilities
    
    
    17,370
    
    
    
    3,764
    
    
    
    (1,676
    )
    
    
    19,458Total current liabilities
    
    $
    107,572
    
    
    $
    11,074
    
    
    $
    (17,626
    )
    
    $
    101,020LONG-TERM DEBT
    
    
    120,781
    
    
    
    940
    
    
    
    
    
    
    
    121,721DEFERRED INCOME TAXES
    
    
    
    
    
    
    160
    
    
    
    
    
    
    
    160SHAREHOLDERS EQUITY:Common stock
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    13Additional paid-in capital
    
    
    26,077
    
    
    
    1
    
    
    
    (1
    )
    
    
    26,077Retained earnings (accumulated deficit)
    
    
    (2,328
    )
    
    
    23,065
    
    
    
    (23,065
    )
    
    
    (2,328
    )Total shareholders equity
    
    
    23,762
    
    
    
    23,066
    
    
    
    (23,066
    )
    
    
    23,762|
    
    | | |TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    252,115
    
    
    $
    35,240
    
    
    $
    (40,692
    )
    
    $
    246,663
 18




---



##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET AS OF SEPTEMBER 30, 2007
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    5,905
    
    
    $
    15
    
    
    $
    
    
    
    $
    5,920Accounts receivablenet of allowances
    
    
    70,522
    
    
    
    79,338
    
    
    
    
    
    
    
    149,860Intercompany receivable
    
    
    39,730
    
    
    
    15,634
    
    
    
    (55,364
    )
    
    
    Inventories, net
    
    
    69,749
    
    
    
    58,797
    
    
    
    
    
    
    
    128,546Deferred income taxes
    
    
    1,858
    
    
    
    455
    
    
    
    
    
    
    
    2,313Assets held for sale
    
    
    661
    
    
    
    
    
    
    
    
    
    
    
    661Prepaid expenses and other current assets
    
    
    3,722
    
    
    
    3,939
    
    
    
    (2,424
    )
    
    
    5,237Total current assets
    
    
    192,147
    
    
    
    158,178
    
    
    
    (57,788
    )
    
    
    292,537PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    14,694
    
    
    
    66,220
    
    
    
    
    
    
    
    80,914GOODWILL
    
    
    60,541
    
    
    
    42,857
    
    
    
    
    
    
    
    103,398INTANGIBLE ASSETS, NET
    
    
    1
    
    
    
    59,325
    
    
    
    
    
    
    
    59,326OTHER ASSETS, NET
    
    
    9,289
    
    
    
    568
    
    
    
    
    
    
    
    9,857INVESTMENT IN SUBSIDIARIES
    
    
    243,709
    
    
    
    
    
    
    
    (243,709
    )
    
    
    TOTAL ASSETS
    
    $
    520,381
    
    
    $
    327,148
    
    
    $
    (301,497
    )
    
    $
    546,032LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    285
    
    
    $
    616
    
    
    $
    
    
    
    $
    901Accounts payable
    
    
    21,310
    
    
    
    32,642
    
    
    
    
    
    
    
    53,952Intercompany payable
    
    
    15,634
    
    
    
    39,730
    
    
    
    (55,364
    )
    
    
    Accrued liabilities
    
    
    25,192
    
    
    
    9,919
    
    
    
    (2,424
    )
    
    
    32,687Total current liabilities
    
    
    62,421
    
    
    
    82,907
    
    
    
    (57,788
    )
    
    
    87,540LONG-TERM DEBT
    
    
    343,415
    
    
    
    431
    
    
    
    
    
    
    
    343,846LONG-TERM LIABILITIES, NET
    
    
    
    
    
    
    39
    
    
    
    
    
    
    
    39DEFERRED INCOME TAXES
    
    
    23,099
    
    
    
    62
    
    
    
    
    
    
    
    23,161SHAREHOLDERS EQUITY:Common Stock
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    17Additional paid-in capital
    
    
    83,091
    
    
    
    215,396
    
    
    
    (215,396
    )
    
    
    83,091Retained earnings
    
    
    8,338
    
    
    
    28,313
    
    
    
    (28,313
    )
    
    
    8,338Total shareholders equity
    
    
    91,446
    
    
    
    243,709
    
    
    
    (243,709
    )
    
    
    91,446TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    520,381
    
    
    $
    327,148
    
    
    $
    (301,497
    )
    
    $
    546,032
 19




---



##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalCASH FLOW FROM OPERATING ACTIVITIES:Net income
    
    $
    27,662
    
    
    $
    2,338
    
    
    $
    (2,338
    )
    
    $
    27,662Adjustments to reconcile net income to net cash
flow from operating activities:Depreciation and amortization
    
    
    4,151
    
    
    
    648
    
    
    
    
    
    
    
    4,799Stock-based compensation
    
    
    531
    
    
    
    
    
    
    
    
    
    
    
    531Deferred tax provision
    
    
    
    
    
    
    147
    
    
    
    
    
    
    
    147Loss on disposal of fixed assets
    
    
    313
    
    
    
    
    
    
    
    
    
    
    
    313Gain on sale of investment
    
    
    (11
    )
    
    
    
    
    
    
    
    
    
    
    (11
    )Equity in consolidated subsidiaries
    
    
    (2,338
    )
    
    
    
    
    
    
    2,338
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (13,985
    )
    
    
    (847
    )
    
    
    
    
    
    
    (14,832
    )Inventories
    
    
    (10,805
    )
    
    
    (1,683
    )
    
    
    
    
    
    
    (12,488
    )Prepaid expenses and other assets
    
    
    (1,308
    )
    
    
    (1,619
    )
    
    
    1,676
    
    
    
    (1,251
    )Accounts payable
    
    
    14,306
    
    
    
    277
    
    
    
    
    
    
    
    14,583Intercompany accounts
    
    
    (1,851
    )
    
    
    1,851
    
    
    
    
    
    
    
    Accrued liabilities
    
    
    4,751
    
    
    
    (393
    )
    
    
    (1,676
    )
    
    
    2,682Net cash flow from operating activities
    
    
    21,416
    
    
    
    719
    
    
    
    
    
    
    
    22,135CASH FLOW FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (1,855
    )
    
    
    (302
    )
    
    
    
    
    
    
    (2,157
    )Proceeds from sale of fixed assets
    
    
    42
    
    
    
    
    
    
    
    
    
    
    
    42Proceeds from sale of investment
    
    
    82
    
    
    
    
    
    
    
    
    
    
    
    82Net cash flow from investing activities
    
    
    (1,731
    )
    
    
    (302
    )
    
    
    
    
    
    
    (2,033
    )CASH FLOW FROM FINANCING ACTIVITIES:Net repayment under revolving loan facilities
    
    
    (1,950
    )
    
    
    
    
    
    
    
    
    
    
    (1,950
    )Repayment of long-term debt
    
    
    (238
    )
    
    
    (418
    )
    
    
    
    
    
    
    (656
    )Dividends paid to shareholders
    
    
    (17,502
    )
    
    
    
    
    
    
    
    
    
    
    (17,502
    )Net cash flow from financing activities
    
    
    (19,690
    )
    
    
    (418
    )
    
    
    
    
    
    
    (20,108
    )DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (5
    )
    
    
    (1
    )
    
    
    
    
    
    
    (6
    )CASH AND CASH EQUIVALENTS  Beginning of period
    
    
    38
    
    
    
    20
    
    
    
    
    
    
    
    58CASH AND CASH EQUIVALENTS  End of period
    
    $
    33
    
    
    $
    19
    
    
    $
    
    
    
    $
    52NONCASH ACTIVITYUnpaid capital expenditures
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    46SUPPLEMENTAL CASH FLOW INFORMATIONIncome taxes paid
    
    
    
    
    
    
    387
    
    
    
    
    
    
    
    387Cash Interest paid
    
    
    8,779
    
    
    
    86
    
    
    
    
    
    
    
    8,865
 20




---



##### 



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
    )
    
    
    
    
    
    
    216,208DECREASE 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
 21




---



##### 



15. SUBSEQUENT EVENTS
    
 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,
2006. 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
  22




---



##### 



th
      Acquisition of Copperfield, LLC
  23




---



##### 



Business Segment Information
  Consolidated Results of Operations
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2006
    
    
    2007
    
    
    2006
    
    
    2007Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %(In thousands)Net sales
    
    $
    114,925
    
    
    
    100.0
    %
    
    $
    253,453
    
    
    
    100.0
    %
    
    $
    320,137
    
    
    
    100.0
    %
    
    $
    609,867
    
    
    
    100.0
    %Gross profit
    
    
    24,228
    
    
    
    21.1
    
    
    
    29,166
    
    
    
    11.5
    
    
    
    65,425
    
    
    
    20.4
    
    
    
    74,030
    
    
    
    12.1Selling, engineering, general
and administrative expenses
    
    
    9,158
    
    
    
    8.0
    
    
    
    11,753
    
    
    
    4.6
    
    
    
    23,049
    
    
    
    7.2
    
    
    
    31,238
    
    
    
    5.1Intangible amortization
expense
    
    
    
    
    
    
    0.0
    
    
    
    2,522
    
    
    
    1.0
    
    
    
    
    
    
    
    0.0
    
    
    
    5,085
    
    
    
    0.8Restructuring charges
    
    
    891
    
    
    
    0.8
    
    
    
    53
    
    
    
    0.0
    
    
    
    1,210
    
    
    
    0.4
    
    
    
    580
    
    
    
    0.1Operating income
    
    
    14,179
    
    
    
    12.3
    
    
    
    14,838
    
    
    
    5.9
    
    
    
    41,166
    
    
    
    12.9
    
    
    
    37,127
    
    
    
    6.1Interest expense, net
    
    
    4,185
    
    
    
    3.6
    
    
    
    8,187
    
    
    
    3.2
    
    
    
    12,506
    
    
    
    3.9
    
    
    
    19,411
    
    
    
    3.2Other (income) expense, net
    
    
    
    
    
    
    0.0
    
    
    
    2
    
    
    
    0.0
    
    
    
    (11
    )
    
    
    0.0
    
    
    
    29
    
    
    
    0.0Income before income taxes
    
    
    9,994
    
    
    
    8.7
    
    
    
    6,649
    
    
    
    2.6
    
    
    
    28,671
    
    
    
    9.0
    
    
    
    17,687
    
    
    
    2.9Income tax expense
    
    
    235
    
    
    
    0.2
    
    
    
    2,713
    
    
    
    1.0
    
    
    
    1,009
    
    
    
    0.3
    
    
    
    6,752
    
    
    
    1.1Net income
    
    $
    9,759
    
    
    
    8.5
    
    
    $
    3,936
    
    
    
    1.6
    
    
    $
    27,662
    
    
    
    8.6
    
    
    $
    10,935
    
    
    
    1.8Capital expenditures
    
    $
    604
    
    
    
    
    
    
    $
    1,884
    
    
    
    
    
    
    $
    2,157
    
    
    
    
    
    
    $
    4,929Depreciation and amortization
expense
    
    $
    1,264
    
    
    
    
    
    
    $
    6,422
    
    
    
    
    
    
    $
    4,089
    
    
    
    
    
    
    
    13,945EBITDA (1)
    
    $
    15,443
    
    
    
    
    
    
    $
    21,258
    
    
    
    
    
    
    $
    45,266
    
    
    
    
    
    
    $
    51,043
 
 (1)
    
    EBITDA represents net income (loss) before interest expense, income tax expense and
depreciation and amortization expense. EBITDA is a performance measure and liquidity measure
used by our management, and we believe it is commonly reported and widely used by investors and
other interested parties as a measure of a companys operating performance and ability to incur
and service debt. Our management believes that EBITDA is useful to investors in evaluating our
operating performance because it provides a means to evaluate the operating performance of our
business on an ongoing basis using criteria that are used by our internal decision-makers for
evaluation and planning purposes, including the preparation of annual operating budgets and the
determination of levels of operating and capital investments. In particular, our management
believes that EBITDA is a meaningful measure because it allows management to readily view
operating trends, perform analytical comparisons and identify strategies to improve operating
performance. For example, our management believes that the inclusion of items such as taxes,
interest expense, and interest income can make it more difficult to identify and assess
operating trends affecting our business and industry. Furthermore, 24




---



##### 



our management believes that EBITDA is a performance measure that provides investors,
securities analysts and other interested parties with a measure of operating results unaffected
by differences in capital structures, capital investment cycles and ages of related assets
among otherwise comparable companies in our industry. Finally, EBITDA also closely tracks
Consolidated EBITDA, a liquidity measurement that is used in calculating financial covenants in
both our credit facility and the indenture for our senior notes.EBITDAs usefulness as a performance measure is limited by the fact that it excludes the impact
of interest expense, depreciation and amortization expense and taxes. We borrow money in order
to finance our operations; therefore, interest expense is a necessary element of our costs and
ability to generate revenue. Similarly, our use of capital assets makes depreciation and
amortization expense a necessary element of our costs and ability to generate income. Since we,
effective as of October 10, 2006, in addition to our C corporation subsidiary, are subject to
state and federal income taxes, any measure that excludes tax expense has material limitations.Due to these limitations, we do not, and you should not, use EBITDA as the only measure of our
performance and liquidity.We also use, and recommend that you consider, net income in accordance with GAAP as a measure
of our performance or cash flows from operating activities in accordance with GAAP as a measure
of our liquidity. The following is a reconciliation of net income (loss), as determined in
accordance with GAAP, to EBITDA.2006 EBITDA includes restructuring charges of $0.9 and $1.2 million in the three and nine
months ended September 30, respectively, and $0.5 million of stock-based compensation to one of
our board members in connection with the exploration and development of strategic alternatives
and certain other matters in the three and nine months ended September 30, 2006.2007 EBITDA includes $0.1 and $0.6 million of restructuring charges and $1.1 million and $3.1
million for stock-based compensation expense in the three months and nine months ended
September 30, respectively, and $2.7 million of inventory fair valuation due to the Copperfield
acquisition in the nine months ended September 30, 2007.Changes in operating assets and liabilities exclude amortization of debt issuance costs, which
is included in interest expense. Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2006
    
    
    2007
    
    
    2006
    
    
    2007(In thousands)Net income
    
    $
    9,759
    
    
    $
    4,043
    
    
    $
    27,662
    
    
    $
    10,935Interest expense, net
    
    
    4,185
    
    
    
    8,187
    
    
    
    12,506
    
    
    
    19,411Income tax expense
    
    
    235
    
    
    
    2,606
    
    
    
    1,009
    
    
    
    6,752Depreciation and
amortization expense
    
    
    1,264
    
    
    
    6,422
    
    
    
    4,089
    
    
    
    13,945EBITDA
    
    $
    15,443
    
    
    $
    21,258
    
    
    $
    45,266
    
    
    $
    51,043
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2006
    
    
    2007
    
    
    2006
    
    
    2007(In thousands)Net cash flow from operating activities
    
    $
    16,430
    
    
    $
    8,616
    
    
    $
    22,135
    
    
    $
    (5,360
    )Interest expense, net
    
    
    4,185
    
    
    
    8,187
    
    
    
    12,506
    
    
    
    19,411Income tax expense
    
    
    235
    
    
    
    2,606
    
    
    
    1,009
    
    
    
    6,752Deferred tax provisions
    
    
    (126
    )
    
    
    1,977
    
    
    
    (147
    )
    
    
    3,924Gain (loss) on sale of fixed assets
    
    
    (172
    )
    
    
    11
    
    
    
    (313
    )
    
    
    12Gain on sale of investment-net
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    Stock-based compensation
    
    
    (531
    )
    
    
    (1,099
    )
    
    
    (531
    )
    
    
    (3,121
    )Changes in operating assets and
liabilities
    
    
    (4,578
    )
    
    
    960
    
    
    
    10,596
    
    
    
    29,425EBITDA
    
    $
    15,443
    
    
    $
    21,258
    
    
    $
    45,266
    
    
    $
    51,043
 Three Months Ended September 30, 2007 Compared with Three Months Ended September 30, 2006
 Net sales
 25




---



##### 



Gross profit
 Selling, engineering, general and administrative (SEG&A)
 Intangible amortization expense
 Restructuring charges
 Interest expense, net 
 Income tax expense
 Nine Months Ended September 30, 2007 Compared with Nine Months Ended September 30, 2006
 Net sales
 Gross profit
 26




---



##### 



Selling, engineering, general and administrative (SEG&A)
 Intangible amortization expense
 Restructuring charges
 Interest expense, net 
 Income tax expense
 Segment Results
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2006
    
    
    2007
    
    
    2006
    
    
    2007Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %(In thousands)Net Sales:Electrical / Wire and Cable Distributors
    
    $
    40,540
    
    
    
    35.3
    %
    
    $
    38,737
    
    
    
    15.3
    %
    
    $
    111,447
    
    
    
    34.8
    %
    
    $
    111,059
    
    
    
    18.2
    %Specialty Distributors and OEMs
    
    
    58,325
    
    
    
    50.7
    
    
    
    55,553
    
    
    
    21.9
    
    
    
    170,430
    
    
    
    53.2
    
    
    
    173,066
    
    
    
    28.4Consumer Outlets
    
    
    16,060
    
    
    
    14.0
    
    
    
    17,593
    
    
    
    6.9
    
    
    
    38,260
    
    
    
    12.0
    
    
    
    53,349
    
    
    
    8.7Copperfield
    
    
    
    
    
    
    0.0
    
    
    
    141,570
    
    
    
    55.9
    
    
    
    
    
    
    
    0.0
    
    
    
    272,393
    
    
    
    44.7Total
    
    $
    114,925
    
    
    
    100.0
    %
    
    $
    253,453
    
    
    
    100.0
    %
    
    $
    320,137
    
    
    
    100.0
    %
    
    $
    609,867
    
    
    
    100.0
    %Operating Income:Electrical / Wire and Cable Distributors
    
    $
    7,238
    
    
    
    17.9
    %
    
    $
    3,394
    
    
    
    8.8
    %
    
    $
    20,058
    
    
    
    18.0
    %
    
    $
    10,166
    
    
    
    9.2
    %Specialty Distributors and OEMs
    
    
    8,829
    
    
    
    15.1
    
    
    
    5,697
    
    
    
    10.3
    
    
    
    24,227
    
    
    
    14.2
    
    
    
    16,818
    
    
    
    9.7Consumer Outlets
    
    
    1,542
    
    
    
    9.6
    
    
    
    1,437
    
    
    
    8.2
    
    
    
    2,424
    
    
    
    6.3
    
    
    
    5,183
    
    
    
    9.7Copperfield
    
    
    
    
    
    
    0.0
    
    
    
    6,083
    
    
    
    4.3
    
    
    
    
    
    
    
    0.0
    
    
    
    9,599
    
    
    
    3.5Total
    
    
    17,609
    
    
    
    
    
    
    
    16,611
    
    
    
    
    
    
    
    46,709
    
    
    
    
    
    
    
    41,766Corporate
    
    
    (3,430
    )
    
    
    
    
    
    
    (1,773
    )
    
    
    
    
    
    
    (5,543
    )
    
    
    
    
    
    
    (4,639
    )Consolidated operating income
    
    $
    14,179
    
    
    
    12.3
    %
    
    $
    14,838
    
    
    
    5.9
    %
    
    $
    41,166
    
    
    
    12.9
    %
    
    $
    37,127
    
    
    
    6.1
    %
 27




---



##### 



Three Months Ended September 30, 2007 Compared with Three Months Ended September 30, 2006
 Electrical/Wire and Cable Distributors
   Specialty Distributors and OEMs
   Consumer Outlets
   Copperfield
   28




---



##### 



Nine Months Ended September 30, 2007 Compared with Nine Months Ended September 30, 2006
 Electrical/Wire and Cable Distributors
   Specialty Distributors and OEMs
   Consumer Outlets
   29




---



##### 



Copperfield
   30




---



##### 



Liquidity and Capital Resources
 Debt
  As ofSeptember 30, 2007Revolving credit facility
    
    $
    100,004Senior notes
    
    
    243,136Capital lease obligations
    
    
    851Other long-term debt
    
    
    756Total long-term debt
    
    $
    344,747
 Senior Secured Revolving Credit Facility
     
    
    require us to maintain a fixed charge coverage ratio of not less than 1.1 to 1.0
for any month during which excess availability under the credit facility falls below
$30.0 million, and
 31




---



##### 




    
    require us to maintain excess availability under the credit facility of not less
than $10.0 million.
  Senior Notes
      Current and Future Liquidity
  32




---



##### 




    
    our historical earnings and cash flow performance;
    
    managements assessment of our future working capital needs;
    
    our current and projected debt service expenses;
    
    managements planned capital expenditures; and
    
    our ability to borrow additional funds under the terms of our credit facility and our
senior notes.
       33




---



##### 



Seasonality
  Contractual Obligations
  Payments Due by PeriodLessthan
    
    
    
    
    
    
    
    
    
    AfterContractual Obligations
    
    Total
    
    1 Year
    
    2-3 Years
    
    4-5 Years
    
    5 Years(in thousands)Current and long-term debt obligations (including interest)
    
    $
    368,411
    
    
    $
    24,830
    
    
    $
    48,846
    
    
    $
    48,689
    
    
    $
    246,046Capital lease obligations (including interest)
    
    
    953
    
    
    
    519
    
    
    
    434
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    20,055
    
    
    
    4,246
    
    
    
    6,412
    
    
    
    4,832
    
    
    
    4,565Purchase obligations
    
    
    64,999
    
    
    
    64,999
    
    
    
    
    
    
    
    
    
    
    
    
 Other Obligations
  34




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##### 



Off-Balance Sheet Assets and Obligations
  New Accounting Pronouncements
 Fair Value Measurement .
 The Fair Value Option for Financial Assets and
Financial Liabilities including an Amendment of FASB Statement No. 115
 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;
 35




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##### 




    
    general economic conditions and changes in the demand for our products by key customers;
    
    the consummation of acquisitions, including Woods;
    
    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, 2006.
  
 ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
  Commodity Risk.
 Interest Rate Risk.
 
 ITEM 4. Controls and Procedures
   36




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##### 



PART II OTHER INFORMATION
 
 ITEM 1. Legal Proceedings
  
 ITEM 1A. Risk Factors
  We may have difficulty integrating the operations of Copperfield and Woods. Should we fail to
integrate their operations, our results of operations and profitability could be negatively
impacted.
  
 ITEM 5. Other Information
 Election
of New Directors
       37




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##### 



SIGNATURES
  COLEMAN CABLE, INC.(Registrant)Date: November 13, 2007
    
    By
    
    /s/ G. Gary Yetman

Chief Executive Officer and PresidentDate: November 13, 2007
    
    By
    
    /s/ Richard N. Burger

Chief Financial Officer, ExecutiveVice President, Secretary andTreasurer
 38




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##### 



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.,
effective as of October 11, 2006, incorporated herein by
reference to our Quarterly Report on Form 10-Q for the
quarter ended September 30, 2006.4.1
    
    
    
    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
    
    
    
    Credit Agreement dated as of September 28, 2004 among
Coleman Cable, Inc. and certain of its U.S.
Subsidiaries, as Borrowers, the Lenders named therein,
Wachovia Bank, National Association, as Administrative
Agent, ING Capital LLC and National City Business
Credit, Inc., as Syndication Agents, and PNC Bank,
National Association and Associated Bank, National
Association, as Documentation Agents, incorporated
herein by reference to our Form S-4 filed on April 26,
2005.10.2
    
    
    
    First Amendment and Waiver to Credit Agreement dated as
of September 30, 2004 among Coleman Cable, Inc. and
certain of its U.S. Subsidiaries, as Borrowers, the
Lenders named therein, and Wachovia Bank, National
Association, as administrative agent, incorporated
herein by reference to our Form S-4 filed on April 26,
2005.
 39




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##### 



Item No.
    
    
    
    Description10.3
    
    
    
    Second Amendment to Credit Agreement dated as of
September 30, 2004 among Coleman Cable, Inc. and certain
of its U.S. Subsidiaries, as Borrowers, the Lenders
named therein, and Wachovia Bank, National Association,
as administrative agent, incorporated herein by
reference to our Form S-4 filed on April 26, 2005.10.4
    
    
    
    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, 2005.10.5
    
    
    
    Third Amendment to Credit Agreement dated as of
November 2, 2005 among Coleman Cable, Inc. and certain
of its U.S. Subsidiaries, as Borrowers, 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 September 30, 2005.10.6
    
    
    
    Fourth Amendment to Credit Agreement dated as of August
14, 2006, among Coleman Cable, Inc. and certain of its
U.S. Subsidiaries, as Borrowers, 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 September 30, 2006.10.7
    
    
    
    Amended and Restated Credit Agreement dated as of April
2, 2007, among Coleman Cable, Inc. and certain of its
U.S. Subsidiaries, as Borrowers, 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, 2007.10.8
    
    
    
    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.*10.9
    
    
    
    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.*10.10
    
    
    
    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, 2006.10.11
    
    
    
    Consulting Agreement dated as of October 11, 2006 by and
between Coleman Cable, Inc. and David Bistricer,
incorporated herein by reference to our Quarterly Report
on Form 10-Q for the quarter ended September 30, 2006.10.12
    
    
    
    Consulting Agreement dated as of October 11, 2006 by and
between Coleman Cable, Inc. and Nachum Stein,
incorporated herein by reference to our Quarterly Report
on Form 10-Q for the quarter ended September 30, 2006.10.13
    
    
    
    2006 Long-Term Incentive Plan, incorporated herein by
reference to our Quarterly Report on Form 10-Q for the
quarter ended September 30, 2006.
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##### 



Item No.
    
    
    
    Description10.14
    
    
    
    Form of Non-Qualified Stock Option Agreement Under the
2006 Long-Term Incentive Plan, incorporated herein by
reference to our Form- S-1 filed on November 16, 2006.10.15
    
    
    
    First Amendment to Amended and Restated Credit
Agreement, dated as of November 1, 2007, by and among
Coleman Cable, Inc., the Subsidiaries that are
signatories thereto, and the lenders that are
signatories thereto, incorporated by reference herein to
our Current Report on Form 8-K on November 2, 2007.10.16
    
    
    
    Indemnification Agreement dated as
of November 13, 2007 by and between Coleman Cable Inc. and Morgan Capital LLC.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. 41