##### 



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 June 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 þ
  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 six months ended June 30, 2006 and 2007
    
    
    1Condensed Consolidated Balance Sheets as of December 31, 2006 and June 30, 2006 and 2007
    
    
    2Condensed Consolidated Statements of Cash Flows for the six months ended June 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
    
    
    34Item 4. Controls and Procedures
    
    
    34PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    35Item 1A. Risk Factors
    
    
    35Item 4. Submission of Matters to a Vote of Security Holders
    
    
    35Item 6. Exhibits
    
    
    35Signatures
    
    
    36Exhibit Index
    
    
    37Certification 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 share data)
(unaudited)
 Three months ended June 30,
    
    
    Six months ended June 30,2006
    
    
    2007
    
    
    2006
    
    
    2007NET SALES
    
    $
    114,414
    
    
    $
    247,018
    
    
    $
    205,212
    
    
    $
    356,414COST OF GOODS SOLD
    
    
    89,786
    
    
    
    218,640
    
    
    
    164,015
    
    
    
    311,550GROSS PROFIT
    
    
    24,628
    
    
    
    28,378
    
    
    
    41,197
    
    
    
    44,864SELLING, ENGINEERING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    7,149
    
    
    
    11,005
    
    
    
    13,891
    
    
    
    19,485INTANGIBLE AMORTIZATION EXPENSE
    
    
    
    
    
    
    2,563
    
    
    
    
    
    
    
    2,563RESTRUCTURING CHARGES
    
    
    319
    
    
    
    163
    
    
    
    319
    
    
    
    527OPERATING INCOME
    
    
    17,160
    
    
    
    14,647
    
    
    
    26,987
    
    
    
    22,289INTEREST EXPENSE, NET
    
    
    4,256
    
    
    
    8,120
    
    
    
    8,321
    
    
    
    11,224OTHER (INCOME) LOSS, NET
    
    
    
    
    
    
    17
    
    
    
    (11
    )
    
    
    27INCOME BEFORE INCOME TAXES
    
    
    12,904
    
    
    
    6,510
    
    
    
    18,677
    
    
    
    11,038INCOME TAX EXPENSE
    
    
    109
    
    
    
    2,412
    
    
    
    774
    
    
    
    4,146NET INCOME
    
    $
    12,795
    
    
    $
    4,098
    
    
    $
    17,903
    
    
    $
    6,892EARNINGS PER COMMON SHARE DATANET INCOME PER SHAREBasic
    
    $
    1.00
    
    
    $
    0.24
    
    
    $
    1.40
    
    
    $
    0.41Diluted
    
    
    1.00
    
    
    
    0.24
    
    
    
    1.40
    
    
    
    0.41WEIGHTED AVERAGE COMMON SHARES OUTSTANDINGBasic
    
    
    12,749
    
    
    
    16,787
    
    
    
    12,749
    
    
    
    16,787Diluted
    
    
    12,749
    
    
    
    16,933
    
    
    
    12,749
    
    
    
    16,798UNAUDITED PRO FORMA DATAPRO FORMA NET INCOMEIncome before income taxes
    
    $
    12,904
    
    
    
    
    
    
    $
    18,677Pro forma income tax expense
    
    
    4,980
    
    
    
    
    
    
    
    7,207Pro forma net income
    
    
    7,924
    
    
    
    
    
    
    
    11,470PRO FORMA NET INCOME PER SHAREBasic
    
    $
    0.62
    
    
    
    
    
    
    $
    0.90Diluted
    
    
    0.62
    
    
    
    
    
    
    
    0.90
  1




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##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands, except share data)
(unaudited)
 December 31,
    
    
    June 30,
    
    
    June 30,2006
    
    
    2006
    
    
    2007ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    14,734
    
    
    $
    51
    
    
    $
    131Accounts receivable, less allowance for uncollectible accounts of
$2,092, $2,085 and $3,260, respectively
    
    
    62,318
    
    
    
    67,603
    
    
    
    141,447Inventories
    
    
    66,765
    
    
    
    78,330
    
    
    
    129,179Deferred income taxes
    
    
    2,136
    
    
    
    157
    
    
    
    2,131Assets held for sale
    
    
    
    
    
    
    
    
    
    
    661Prepaid expenses and other current assets
    
    
    2,739
    
    
    
    3,070
    
    
    
    6,704Total current assets
    
    
    148,692
    
    
    
    149,211
    
    
    
    280,253PROPERTY, PLANT AND EQUIPMENT:Land
    
    
    579
    
    
    
    579
    
    
    
    2,809Buildings and leasehold improvements
    
    
    7,636
    
    
    
    7,793
    
    
    
    14,939Machinery, fixtures and equipment
    
    
    45,125
    
    
    
    43,700
    
    
    
    97,65053,340
    
    
    
    52,072
    
    
    
    115,398Less accumulated depreciation and amortization
    
    
    (31,762
    )
    
    
    (29,843
    )
    
    
    (35,343
    )Construction in progress
    
    
    244
    
    
    
    1,415
    
    
    
    2,666Property, plant and equipment, net
    
    
    21,822
    
    
    
    23,644
    
    
    
    82,721GOODWILL
    
    
    60,628
    
    
    
    60,628
    
    
    
    103,344INTANGIBLE
ASSETS, NET
    
    
    10
    
    
    
    17
    
    
    
    61,867OTHER ASSETS, NET
    
    
    4,593
    
    
    
    5,060
    
    
    
    10,081TOTAL ASSETS
    
    $
    235,745
    
    
    $
    238,560
    
    
    $
    538,266LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    936
    
    
    $
    905
    
    
    $
    1,119Accounts payable
    
    
    13,091
    
    
    
    28,243
    
    
    
    57,721Accrued liabilities
    
    
    19,582
    
    
    
    14,237
    
    
    
    23,041Total current liabilities
    
    
    33,609
    
    
    
    43,385
    
    
    
    81,881LONG-TERM DEBT
    
    
    121,571
    
    
    
    173,409
    
    
    
    345,086DEFERRED INCOME TAXES
    
    
    2,724
    
    
    
    87
    
    
    
    24,956SHAREHOLDERS EQUITY:Common stock, par value $0.001; 31,260 authorized; and 12,749 issued
and outstanding on June 30, 2006 and 16,787 on December 31, 2006 and
June 30, 2007
    
    
    17
    
    
    
    13
    
    
    
    17Additional paid-in capital
    
    
    80,421
    
    
    
    25,546
    
    
    
    82,031Retained earnings (accumulated deficit)
    
    
    (2,597
    )
    
    
    (3,880
    )
    
    
    4,295Total shareholders equity
    
    
    77,841
    
    
    
    21,679
    
    
    
    86,343TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    235,745
    
    
    $
    238,560
    
    
    $
    538,266
  2




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##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands)
(unaudited)
 Six months ended June 30,2006
    
    
    2007CASH FLOW FROM OPERATING ACTIVITIES:Net income
    
    $
    17,903
    
    
    $
    6,892Adjustments to reconcile net income to net cash flow from operating activities:Depreciation and amortization
    
    
    3,299
    
    
    
    8,062Stock-based compensation
    
    
    
    
    
    
    2,022Deferred tax provision (credit)
    
    
    21
    
    
    
    (1,947
    )(Gain) loss on disposal of fixed assets
    
    
    141
    
    
    
    (1
    )Gain on sale of investment
    
    
    (11
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (8,763
    )
    
    
    (17,537
    )Inventories
    
    
    (10,441
    )
    
    
    (20,813
    )Prepaid expenses and other assets
    
    
    (188
    )
    
    
    (3,373
    )Accounts payable
    
    
    6,283
    
    
    
    11,833Accrued liabilities
    
    
    (2,539
    )
    
    
    886Net cash flow from operating activities
    
    
    5,705
    
    
    
    (13,976
    )CASH FLOW FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (1,553
    )
    
    
    (3,045
    )Acquisition of business, net of cash acquired
    
    
    
    
    
    
    (215,395
    )Proceeds from sale of fixed assets
    
    
    40
    
    
    
    7Proceeds from sale of investment
    
    
    82
    
    
    
    Net cash flow from investing activities
    
    
    (1,431
    )
    
    
    (218,433
    )CASH FLOW FROM FINANCING ACTIVITIES:Net borrowings under revolving loan facilities, net of issuance costs
    
    
    5,450
    
    
    
    99,056Issuance of senior notes, net of issuance costs
    
    
    
    
    
    
    119,621Common stock issuance costs
    
    
    
    
    
    
    (412
    )Repayment of long-term debt
    
    
    (436
    )
    
    
    (459
    )Dividends paid to shareholders
    
    
    (9,295
    )
    
    
    Net cash flow from financing activities
    
    
    (4,281
    )
    
    
    217,806DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (7
    )
    
    
    (14,603
    )CASH AND CASH EQUIVALENTS  Beginning of period
    
    
    58
    
    
    
    14,734CASH AND CASH EQUIVALENTS  End of period
    
    $
    51
    
    
    $
    131NONCASH ACTIVITYUnpaid capital expenditures
    
    
    
    
    
    
    37SUPPLEMENTAL CASH FLOW INFORMATIONIncome taxes paid
    
    
    244
    
    
    
    6,503Cash interest paid
    
    
    7,897
    
    
    
    7,670
  3




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##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Thousands, except share data)
 (unaudited)
 1. BASIS OF PRESENTATION
  Unaudited Pro Forma Data
  2. NEW ACCOUNTING PROCOUNCEMENTS
 FIN No. 48
 Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement No. 109 .
   4




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##### 



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 (the Revolving Credit Agreement). See Note 7 for
further discussion.
    
    All outstanding equity interests of Copperfield were acquired for $215,395,
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 $2,862.
 Business Combinations
 5




---



##### 



Accounts receivable
    
    $
    61,592Inventory
    
    
    41,601Other current assets
    
    
    594Property and equipment
    
    
    63,445Intangible assets
    
    
    64,400Goodwill
    
    
    42,716Other assets
    
    
    566Total assets acquired
    
    
    274,914Current liabilities
    
    
    (35,335
    )Deferred income taxes
    
    
    (24,184
    )Total liabilities assumed
    
    
    (59,519
    )Net assets acquired
    
    $
    215,395
  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
    Three months ended June 30,
    
    Six months ended June 30,2006
    
    2007
    
    2006
    
    2007Net sales
    
    $
    252,230
    
    
    $
    247,018

    
    
    $
    448,543
    
    
    $
    477,740Net income
    
    $
    7,511
    
    
    $
    3,799

    
    
    $
    9,635
    
    
    $
    7,788Earnings per shareBasic
    
    $
    0.59
    
    
    $
    0.23

    
    
    $
    0.76
    
    
    $
    0.46Diluted
    
    $
    0.59
    
    
    $
    0.22

    
    
    $
    0.76
    
    
    $
    0.46
 6




---



##### 



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
    
    
    37
    
    
    
    
    
    
    
    293
    
    
    
    197
    
    
    
    527Uses
    
    
    (93
    )
    
    
    
    
    
    
    (293
    )
    
    
    (197
    )
    
    
    (583
    )Balance June 30, 2007
    
    $
    14
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    14
 5. INVENTORIES
  December 31, 2006
    
    June 30, 2006
    
    June 30, 2007FIFO cost:Raw materials
    
    $
    11,975
    
    
    $
    18,099
    
    
    $
    48,819Work in progress
    
    
    3,293
    
    
    
    3,048
    
    
    
    5,287Finished products
    
    
    51,497
    
    
    
    57,183
    
    
    
    75,073Total
    
    $
    66,765
    
    
    $
    78,330
    
    
    $
    129,179
 7




---



##### 



6. ACCRUED LIABILITIES
  December 31, 2006
    
    
    June 30, 2006
    
    
    June 30, 2007Salaries, wages and employee benefits
    
    $
    5,117
    
    
    $
    3,586
    
    
    $
    5,329Sales incentives
    
    
    7,359
    
    
    
    5,068
    
    
    
    5,641Income taxes
    
    
    568
    
    
    
    10
    
    
    
    1,315Interest
    
    
    3,023
    
    
    
    3,070
    
    
    
    6,321Other
    
    
    3,515
    
    
    
    2,503
    
    
    
    4,435Total
    
    $
    19,582
    
    
    $
    14,237
    
    
    $
    23,041
 7. DEBT
 December 31,2006
    
    
    June 30, 2006
    
    
    June 30, 2007Revolving credit facility
    
    $
    
    
    
    $
    51,450
    
    
    $
    100,864Senior notes
    
    
    120,000
    
    
    
    120,000
    
    
    
    243,293Capital lease obligations
    
    
    1,129
    
    
    
    1,311
    
    
    
    936Other long-term debt, annual interest rates
up to 6.25%, payable through 2019
    
    
    1,378
    
    
    
    1,553
    
    
    
    1,112122,507
    
    
    
    174,314
    
    
    
    346,205Less current portion
    
    
    (936
    )
    
    
    (905
    )
    
    
    (1,119
    )Total long-term debt
    
    $
    121,571
    
    
    $
    173,409
    
    
    $
    345,086
   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 June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2007
    
    
    2006
    
    
    2007Basic weighted average shares outstanding
    
    
    12,749
    
    
    
    16,787
    
    
    
    12,749
    
    
    
    16,787Dilutive effect of stock options
    
    
    
    
    
    
    146
    
    
    
    
    
    
    
    11Diluted weighted average share outstanding
    
    
    12,749
    
    
    
    16,933
    
    
    
    12,749
    
    
    
    16,798
 10. STOCK BASED COMPENSATION
   11




---



##### 



Weighted-AverageWeighted-Average
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Terms
    
    
    ValueOutstanding January 1, 2007
    
    
    825
    
    
    $
    15.00
    
    
    
    9.28Granted
    
    
    60
    
    
    
    23.40
    
    
    
    9.86Exercised
    
    
    
    
    
    
    Forfeited or expired
    
    
    
    
    
    
    Outstanding June 30, 2007
    
    
    885
    
    
    
    15.57
    
    
    
    9.32
    
    
    
    9,107Vested or expected to vest
    
    
    853
    
    
    
    15.59
    
    
    
    9.32
    
    
    
    8,761Exercisable
    
    
    
    
    
    
    
    
    
    
    Fair value of options granted
    
    
    885
    
    
    $
    8.36
    
    
    
    9.32
    
    
    
    9,107
  11. RELATED PARTIES
   12. INVENTORY THEFT
  12




---



##### 



13. BUSINESS SEGMENT INFORMATION
  Disclosure about Segments of an Enterprise
and Related Information.
    Three months ended June 30,
    
    
    Six months ended June 30,2006
    
    
    2007
    
    
    2006
    
    
    2007Net Sales:Electrical/Wire and Cable Distributors
    
    $
    38,894
    
    
    $
    36,640
    
    
    $
    70,907
    
    
    $
    72,322Specialty Distributors and OEMs
    
    
    63,261
    
    
    
    61,944
    
    
    
    112,105
    
    
    
    117,513Consumer Outlets
    
    
    12,259
    
    
    
    17,611
    
    
    
    22,200
    
    
    
    35,756Copperfield
    
    
    
    
    
    
    130,823
    
    
    
    
    
    
    
    130,823Total
    
    $
    114,414
    
    
    $
    247,018
    
    
    $
    205,212
    
    
    $
    356,414Operating Income:Electrical/Wire and Cable Distributors
    
    $
    7,861
    
    
    $
    4,010
    
    
    $
    12,821
    
    
    $
    6,772Specialty Distributors and OEMs
    
    
    9,690
    
    
    
    6,800
    
    
    
    15,400
    
    
    
    11,121Consumer Outlets
    
    
    776
    
    
    
    1,756
    
    
    
    883
    
    
    
    3,746Copperfield
    
    
    
    
    
    
    3,516
    
    
    
    
    
    
    
    3,516Total
    
    
    18,327
    
    
    
    16,082
    
    
    
    29,104
    
    
    
    25,155Corporate
    
    
    (1,167
    )
    
    
    (1,435
    )
    
    
    (2,117
    )
    
    
    (2,866
    )Consolidated operating income
    
    $
    17,160
    
    
    $
    14,647
    
    
    $
    26,987
    
    
    $
    22,289
 14. SUPPLEMENTAL GUARANTOR INFORMATION
  13




---



##### 









14



---



##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2006
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalNET SALES
    
    $
    93,453
    
    
    $
    24,133
    
    
    $
    (3,172
    )
    
    $
    114,414COST OF GOODS SOLD
    
    
    69,668
    
    
    
    20,118
    
    
    
    
    
    
    
    89,786GROSS PROFIT
    
    
    23,785
    
    
    
    4,015
    
    
    
    (3,172
    )
    
    
    24,628SELLING, ENGINEERING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    7,188
    
    
    
    3,133
    
    
    
    (3,172
    )
    
    
    7,149RESTRUCTURING CHARGES
    
    
    319
    
    
    
    
    
    
    
    
    
    
    
    319OPERATING INCOME
    
    
    16,278
    
    
    
    882
    
    
    
    
    
    
    
    17,160INTEREST EXPENSE
    
    
    4,081
    
    
    
    175
    
    
    
    
    
    
    
    4,256INCOME BEFORE INCOME TAXES
    
    
    12,197
    
    
    
    707
    
    
    
    
    
    
    
    12,904INCOME TAX EXPENSE
    
    
    29
    
    
    
    80
    
    
    
    
    
    
    
    109INCOME FROM GUARANTOR SUBSIDIARIES
    
    
    627
    
    
    
    
    
    
    

    (627
    )
        
    NET INCOME
    
    $
    12,795
    
    
    $
    627
    
    
    $
    (627
    )
    
    $
    12,795
 COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2007
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalNET SALES
    
    $
    111,290
    
    
    $
    140,129
    
    
    $
    (4,401
    )
    
    $
    247,018COST OF GOODS SOLD
    
    
    91,774
    
    
    
    126,866
    
    
    
    
    
    
    
    218,640GROSS PROFIT
    
    
    19,516
    
    
    
    13,263
    
    
    
    (4,401
    )
    
    
    28,378SELLING, ENGINEERING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    9,107
    
    
    
    6,299
    
    
    
    (4,401
    )
    
    
    11,005INTANGIBLE AMORTIZATION EXPENSE
    
    
    7
    
    
    
    2,556
    
    
    
    
    
    
    
    2,563RESTRUCTURING CHARGES
    
    
    163
    
    
    
    
    
    
    
    
    
    
    
    163OPERATING INCOME
    
    
    10,239
    
    
    
    4,408
    
    
    
    
    
    
    
    14,647INTEREST EXPENSE
    
    
    5,726
    
    
    
    2,394
    
    
    
    
    
    
    
    8,120OTHER LOSS
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    17INCOME BEFORE INCOME TAXES
    
    
    4,496
    
    
    
    2,014
    
    
    
    
    
    
    
    6,510INCOME TAX EXPENSE
    
    
    2,321
    
    
    
    91
    
    
    
    
    
    
    
    2,412INCOME FROM GUARANTOR SUBSIDIARIES
    
    
    1,923
    
    
    
    
    
    
    
    (1,923
    )
    
    
    NET INCOME
    
    $
    4,098
    
    
    $
    1,923
    
    
    $
    (1,923
    )
    
    $
    4,098
 15




---



##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2006
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalNET SALES
    
    $
    166,558
    
    
    $
    46,307
    
    
    $
    (7,653
    )
    
    $
    205,212COST OF GOODS SOLD
    
    
    126,856
    
    
    
    37,159
    
    
    
    
    
    
    
    164,015GROSS PROFIT
    
    
    39,702
    
    
    
    9,148
    
    
    
    (7,653
    )
    
    
    41,197SELLING, ENGINEERING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    14,992
    
    
    
    6,552
    
    
    
    (7,653
    )
    
    
    13,891RESTRUCTURING CHARGES
    
    
    319
    
    
    
    
    
    
    
    
    
    
    
    319OPERATING INCOME
    
    
    24,391
    
    
    
    2,596
    
    
    
    
    
    
    
    26,987INTEREST EXPENSE
    
    
    7,915
    
    
    
    406
    
    
    
    
    
    
    
    8,321OTHER INCOME
    
    
    (11
    )
    
    
    
    
    
    
    
    
    
    
    (11
    )INCOME BEFORE INCOME TAXES
    
    
    16,487
    
    
    
    2,190
    
    
    
    
    
    
    
    18,677INCOME TAX EXPENSE
    
    
    258
    
    
    
    516
    
    
    
    
    
    
    
    774INCOME FROM GUARANTOR SUBSIDIARIES
    
    
    1,674
    
    
    
    
    
    
    
    (1,674
    )
    
    
    NET INCOME
    
    $
    17,903
    
    
    $
    1,674
    
    
    $
    (1,674
    )
    
    $
    17,903
 COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2007
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalNET SALES
    
    $
    216,580
    
    
    $
    147,769
    
    
    $
    (7,935
    )
    
    $
    356,414COST OF GOODS SOLD
    
    
    180,918
    
    
    
    130,632
    
    
    
    
    
    
    
    311,550GROSS PROFIT
    
    
    35,662
    
    
    
    17,137
    
    
    
    (7,935
    )
    
    
    44,864SELLING, ENGINEERING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    17,634
    
    
    
    9,786
    
    
    
    (7,935
    )
    
    
    19,485INTANGIBLE AMORTIZATION EXPENSE
    
    
    7
    
    
    
    2,556
    
    
    
    
    
    
    
    2,563RESTRUCTURING CHARGES
    
    
    527
    
    
    
    
    
    
    
    
    
    
    
    527OPERATING INCOME
    
    
    17,494
    
    
    
    4,795
    
    
    
    
    
    
    
    22,289INTEREST EXPENSE
    
    
    8,632
    
    
    
    2,592
    
    
    
    
    
    
    
    11,224OTHER LOSS
    
    
    27
    
    
    
    
    
    
    
    
    
    
    
    27INCOME BEFORE INCOME TAXES
    
    
    8,835
    
    
    
    2,203
    
    
    
    
    
    
    
    11,038INCOME TAX EXPENSE
    
    
    3,996
    
    
    
    150
    
    
    
    
    
    
    
    4,146INCOME FROM GUARANTOR SUBSIDIARIES
    
    
    2,053
    
    
    
    
    
    
    
    (2,053
    )
    
    
    NET INCOME
    
    $
    6,892
    
    
    $
    2,053
    
    
    $
    (2,053
    )
    
    $
    6,892
 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 JUNE 30, 2006
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    37
    
    
    $
    14
    
    
    $
    
    
    
    $
    51Accounts receivablenet of allowances
    
    
    65,357
    
    
    
    2,246
    
    
    
    
    
    
    
    67,603Intercompany receivable
    
    
    
    
    
    
    15,349
    
    
    
    (15,349
    )
    
    
    Inventories
    
    
    70,144
    
    
    
    8,186
    
    
    
    
    
    
    
    78,330Deferred income taxes
    
    
    
    
    
    
    157
    
    
    
    
    
    
    
    157Prepaid expenses and other current assets
    
    
    2,630
    
    
    
    1,619
    
    
    
    (1,179
    )
    
    
    3,070Total current assets
    
    
    138,168
    
    
    
    27,571
    
    
    
    (16,528
    )
    
    
    149,211PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    17,554
    
    
    
    6,090
    
    
    
    
    
    
    
    23,644GOODWILL
    
    
    60,487
    
    
    
    141
    
    
    
    
    
    
    
    60,628INTANGIBLE
ASSETS, NET
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    17OTHER ASSETS, NET
    
    
    5,057
    
    
    
    3
    
    
    
    
    
    
    
    5,060INVESTMENT IN SUBSIDIARIES
    
    
    22,402
    
    
    
    
    
    
    
    (22,402
    )
    
    
    TOTAL ASSETS
    
    $
    243,685
    
    
    $
    33,805
    
    
    $
    (38,930
    )
    
    $
    238,560LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    336
    
    
    $
    569
    
    
    $
    
    
    
    $
    905Accounts payable
    
    
    27,197
    
    
    
    1,046
    
    
    
    
    
    
    
    28,243Intercompany payable
    
    
    9,921
    
    
    
    5,428
    
    
    
    (15,349
    )
    
    
    Accrued liabilities
    
    
    12,233
    
    
    
    3,183
    
    
    
    (1,179
    )
    
    
    14,237Total current liabilities
    
    $
    49,687
    
    
    $
    10,226
    
    
    $
    (16,528
    )
    
    $
    43,385LONG-TERM DEBT
    
    
    172,319
    
    
    
    1,090
    
    
    
    
    
    
    
    173,409DEFERRED INCOME TAXES
    
    
    
    
    
    
    87
    
    
    
    
    
    
    
    87SHAREHOLDERS EQUITY:Common stock
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    13Additional paid-in capital
    
    
    25,546
    
    
    
    1
    
    
    
    (1
    )
    
    
    25,546Retained earnings (accumulated deficit)
    
    
    (3,880
    )
    
    
    22,401
    
    
    
    (22,401
    )
    
    
    (3,880
    )Total shareholders equity
    
    
    21,679
    
    
    
    22,402
    
    
    
    (22,402
    )
    
    
    21,679TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    243,685
    
    
    $
    33,805
    
    
    $
    (38,930
    )
    
    $
    238,560
 18




---



##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET AS OF JUNE 30, 2007
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    107
    
    
    $
    24
    
    
    $
    
    
    
    $
    131Accounts receivablenet of allowances
    
    
    69,640
    
    
    
    71,807
    
    
    
    
    
    
    
    141,447Intercompany receivable
    
    
    33,886
    
    
    
    14,998
    
    
    
    (48,884
    )
    
    
    Inventories, net
    
    
    65,886
    
    
    
    63,293
    
    
    
    
    
    
    
    129,179Deferred income taxes
    
    
    1,867
    
    
    
    264
    
    
    
    
    
    
    
    2,131Assets held for sale
    
    
    661
    
    
    
    
    
    
    
    
    
    
    
    661Prepaid expenses and other current assets
    
    
    4,619
    
    
    
    3,832
    
    
    
    (1,747
    )
    
    
    6,704Total current assets
    
    
    176,666
    
    
    
    154,218
    
    
    
    (50,631
    )
    
    
    280,253PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    14,571
    
    
    
    68,150
    
    
    
    
    
    
    
    82,721GOODWILL
    
    
    60,487
    
    
    
    42,867
    
    
    
    215,395
    
    
    
    103,344INTANGIBLE ASSETS, NET
    
    
    4
    
    
    
    61,863
    
    
    
    
    
    
    
    61,867OTHER ASSETS, NET
    
    
    9,512
    
    
    
    569
    
    
    
    
    
    
    
    10,081INVESTMENT IN SUBSIDIARIES
    
    
    239,928
    
    
    
    
    
    
    
    (239,928
    )
    
    
    TOTAL ASSETS
    
    $
    501,168
    
    
    $
    327,657
    
    
    $
    (290,559
    )
    
    $
    538,266LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    520
    
    
    $
    599
    
    
    $
    
    
    
    $
    1,119Accounts payable
    
    
    26,662
    
    
    
    31,059
    
    
    
    
    
    
    
    57,721Intercompany payable
    
    
    
    
    
    
    48,884
    
    
    
    (48,884
    )
    
    
    Accrued liabilities
    
    
    18,258
    
    
    
    6,530
    
    
    
    (1,747
    )
    
    
    23,041Total current liabilities
    
    
    45,440
    
    
    
    87,072
    
    
    
    (50,631
    )
    
    
    81,881LONG-TERM DEBT
    
    
    344,506
    
    
    
    580
    
    
    
    
    
    
    
    345,086DEFERRED INCOME TAXES
    
    
    24,879
    
    
    
    77
    
    
    
    
    
    
    
    24,956SHAREHOLDERS EQUITY:Common Stock
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    17Additional paid-in capital
    
    
    82,031
    
    
    
    215,396
    
    
    
    (215,396
    )
    
    
    82,031Retained earnings (accumulated deficit)
    
    
    4,295
    
    
    
    24,532
    
    
    
    (24,532
    )
    
    
    4,295Total shareholders equity
    
    
    86,343
    
    
    
    239,928
    
    
    
    (239,928
    )
    
    
    86,343TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    501,168
    
    
    $
    327,657
    
    
    $
    (290,559
    )
    
    $
    538,266
 19




---



##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2006
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalCASH FLOW FROM OPERATING ACTIVITIES:Net income
    
    $
    17,903
    
    
    $
    1,674
    
    
    $
    (1,674
    )
    
    $
    17,903Adjustments to reconcile net income to net cash
flow from operating activities:Depreciation and amortization
    
    
    2,867
    
    
    
    432
    
    
    
    
    
    
    
    3,299Deferred tax provision
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    21Loss on disposal of fixed assets
    
    
    141
    
    
    
    
    
    
    
    
    
    
    
    141Gain on sale of investment
    
    
    (11
    )
    
    
    
    
    
    
    
    
    
    
    (11
    )Equity in consolidated subsidiaries
    
    
    (1,674
    )
    
    
    
    
    
    
    1,674
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (7,955
    )
    
    
    (808
    )
    
    
    
    
    
    
    (8,763
    )Inventories
    
    
    (8,862
    )
    
    
    (1,579
    )
    
    
    
    
    
    
    (10,441
    )Prepaid expenses and other assets
    
    
    (613
    )
    
    
    (754
    )
    
    
    1,179
    
    
    
    (188
    )Accounts payable
    
    
    6,207
    
    
    
    76
    
    
    
    
    
    
    
    6,283Intercompany accounts
    
    
    (2,395
    )
    
    
    2,395
    
    
    
    
    
    
    
    Accrued liabilities
    
    
    (386
    )
    
    
    (974
    )
    
    
    (1,179
    )
    
    
    (2,539
    )Net cash flow from operating activities
    
    
    5,222
    
    
    
    483
    
    
    
    
    
    
    
    5,705CASH FLOW FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (1,341
    )
    
    
    (212
    )
    
    
    
    
    
    
    (1,553
    )Proceeds from the sale of fixed assets
    
    
    40
    
    
    
    
    
    
    
    
    
    
    
    40Proceeds from sale of investment
    
    
    82
    
    
    
    
    
    
    
    
    
    
    
    82Net cash flow from investing activities
    
    
    (1,219
    )
    
    
    (212
    )
    
    
    
    
    
    
    (1,431
    )CASH FLOW FROM FINANCING ACTIVITIES:Net repayment under revolving loan facilities
    
    
    5,450
    
    
    
    
    
    
    
    
    
    
    
    5,450Repayment of long-term debt
    
    
    (159
    )
    
    
    (277
    )
    
    
    
    
    
    
    (436
    )Dividends paid to shareholders
    
    
    (9,295
    )
    
    
    
    
    
    
    
    
    
    
    (9,295
    )Net cash flow from financing activities
    
    
    (4,004
    )
    
    
    (277
    )
    
    
    
    
    
    
    (4,281
    )INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (1
    )
    
    
    (6
    )
    
    
    
    
    
    
    (7
    )CASH AND CASH EQUIVALENTS  Beginning of period
    
    
    38
    
    
    
    20
    
    
    
    
    
    
    
    58CASH AND CASH EQUIVALENTS  End of period
    
    $
    37
    
    
    $
    14
    
    
    $
    
    
    
    $
    51NONCASH ACTIVITYUnpaid capital expenditures
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    SUPPLEMENTAL CASH FLOW INFORMATIONIncome taxes paid
    
    
    
    
    
    
    244
    
    
    
    
    
    
    
    244Interest paid
    
    
    7,837
    
    
    
    60
    
    
    
    
    
    
    
    7,897
 20




---



##### 



COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2007
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalCASH FLOW FROM OPERATING ACTIVITIES:Net income
    
    $
    6,892
    
    
    $
    2,053
    
    
    $
    (2,053
    )
    
    $
    6,892Adjustments to reconcile net income to net cash
flow from operating activities:Depreciation and amortization
    
    
    2,254
    
    
    
    5,808
    
    
    
    
    
    
    
    8,062Stock-based compensation
    
    
    1,968
    
    
    
    54
    
    
    
    
    
    
    
    2,022Deferred tax provision
    
    
    22,318
    
    
    
    (24,265
    )
    
    
    
    
    
    
    (1,947
    )Gain on sale of fixed assets -net
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    (1
    )Equity in consolidated subsidiaries
    
    
    (2,053
    )
    
    
    
    
    
    
    2,053
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (8,851
    )
    
    
    (8,686
    )
    
    
    
    
    
    
    (17,537
    )Inventories
    
    
    (5,880
    )
    
    
    (14,933
    )
    
    
    
    
    
    
    (20,813
    )Prepaid expenses and other assets
    
    
    (2,351
    )
    
    
    (1,402
    )
    
    
    380
    
    
    
    (3,373
    )Accounts payable
    
    
    14,379
    
    
    
    (2,546
    )
    
    
    
    
    
    
    11,833Intercompany accounts
    
    
    (46,488
    )
    
    
    46,488
    
    
    
    
    
    
    
    Accrued liabilities
    
    
    1,211
    
    
    
    55
    
    
    
    (380
    )
    
    
    886Net cash flow from operating activities
    
    
    (16,602
    )
    
    
    2,626
    
    
    
    
    
    
    
    (13,976
    )CASH FLOW FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (714
    )
    
    
    (2,331
    )
    
    
    
    
    
    
    (3,045
    )Acquisition of business, net of cash acquired
    
    
    (215,395
    )
    
    
    
    
    
    
    
    
    
    
    (215,395
    )Proceeds from sale of fixed assets
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    7Net cash flow from investing activities
    
    
    (216,102
    )
    
    
    (2,331
    )
    
    
    
    
    
    
    (218,433
    )CASH FLOW FROM FINANCING ACTIVITIES:Net borrowings under revolving loan facilities
    
    
    99,056
    
    
    
    
    
    
    
    
    
    
    
    99,056Issuance of senior notes, net of financing fees
    
    
    119,621
    
    
    
    
    
    
    
    
    
    
    
    119,621Common stock issuance costs
    
    
    (412
    )
    
    
    
    
    
    
    
    
    
    
    (412
    )Repayment of long-term debt
    
    
    (173
    )
    
    
    (286
    )
    
    
    
    
    
    
    (459
    )Net cash flow from financing activities
    
    
    218,092
    
    
    
    (286
    )
    
    
    
    
    
    
    217,806INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
    
    
    (14,612
    )
    
    
    9
    
    
    
    
    
    
    
    (14,603
    )CASH AND CASH EQUIVALENTS  Beginning of period
    
    
    14,719
    
    
    
    15
    
    
    
    
    
    
    
    14,734CASH AND CASH EQUIVALENTS  End of period
    
    $
    107
    
    
    $
    24
    
    
    $
    
    
    
    $
    131NONCASH ACTIVITYUnpaid capital expenditures
    
    $
    37
    
    
    
    
    
    
    
    
    
    
    $
    37SUPPLEMENTAL CASH FLOW INFORMATIONIncome taxes paid
    
    
    6,468
    
    
    
    35
    
    
    
    
    
    
    
    6,503Interest paid
    
    
    7,658
    
    
    
    12
    
    
    
    
    
    
    
    7,670
 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




---



##### 



Acquisition of Copperfield, LLC
   Business Segment Information
  23




---



##### 



Consolidated Results of Operations
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2007
    
    
    2006
    
    
    2007Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %(In thousands)Net sales
    
    $
    114,414
    
    
    
    100.0
    %
    
    $
    247,018
    
    
    
    100.0
    %
    
    $
    205,212
    
    
    
    100.0
    %
    
    $
    356,414
    
    
    
    100.0
    %Gross profit
    
    
    24,628
    
    
    
    21.5
    
    
    
    28,378
    
    
    
    11.5
    
    
    
    41,197
    
    
    
    20.1
    
    
    
    44,864
    
    
    
    12.6Selling, engineering, general
and administrative expenses
    
    
    7,149
    
    
    
    6.2
    
    
    
    11,005
    
    
    
    4.5
    
    
    
    13,891
    
    
    
    6.8
    
    
    
    19,485
    
    
    
    5.5Intangible amortization expense
    
    
    
    
    
    
    0.0
    
    
    
    2,563
    
    
    
    0.1
    
    
    
    
    
    
    
    0.0
    
    
    
    2,563
    
    
    
    0.7Restructuring charges
    
    
    319
    
    
    
    0.3
    
    
    
    163
    
    
    
    1.0
    
    
    
    319
    
    
    
    0.2
    
    
    
    527
    
    
    
    0.1Operating income
    
    
    17,160
    
    
    
    15.0
    
    
    
    14,647
    
    
    
    5.9
    
    
    
    26,987
    
    
    
    13.2
    
    
    
    22,289
    
    
    
    6.3Interest expense, net
    
    
    4,256
    
    
    
    3.7
    
    
    
    8,120
    
    
    
    3.3
    
    
    
    8,321
    
    
    
    4.1
    
    
    
    11,224
    
    
    
    3.1Other (income) expense, net
    
    
    
    
    
    
    0.0
    
    
    
    17
    
    
    
    0.0
    
    
    
    (11
    )
    
    
    0.0
    
    
    
    27
    
    
    
    0.0Income before income taxes
    
    
    12,904
    
    
    
    11.3
    
    
    
    6,510
    
    
    
    2.6
    
    
    
    18,677
    
    
    
    9.1
    
    
    
    11,038
    
    
    
    3.1Income tax expense
    
    
    109
    
    
    
    0.1
    
    
    
    2,412
    
    
    
    1.0
    
    
    
    774
    
    
    
    0.4
    
    
    
    4,146
    
    
    
    1.2Net income
    
    $
    12,795
    
    
    
    11.2
    
    
    $
    4,098
    
    
    
    1.7
    
    
    $
    17,903
    
    
    
    8.7
    
    
    $
    6,892
    
    
    
    1.9Capital expenditures
    
    $
    645
    
    
    
    
    
    
    $
    2,743
    
    
    
    
    
    
    $
    1,553
    
    
    
    
    
    
    $
    3,045Depreciation and amortization
expense
    
    $
    1,321
    
    
    
    
    
    
    $
    6,412
    
    
    
    
    
    
    $
    2,825
    
    
    
    
    
    
    $
    7,523EBITDA (1)
    
    $
    18,481
    
    
    
    
    
    
    $
    21,042
    
    
    
    
    
    
    $
    29,823
    
    
    
    
    
    
    $
    29,785
 
 (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, 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 a restructuring charge of $0.3 million. 2007 EBITDA includes $0.2 and $0.5
million of restructuring charges and $1.0 million and $2.0 million for stock-based compensation
expense in the three months and six months ended June 30, respectively, and $2.7 million of
inventory fair valuation due to the Copperfield acquisition. Changes in operating assets and
liabilities exclude amortization of debt issuance costs, which is included in interest expense. 24




---



##### 



Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2007
    
    
    2006
    
    
    2007(In thousands)Net income
    
    $
    12,795
    
    
    $
    4,098
    
    
    $
    17,903
    
    
    $
    6,892Interest expense, net
    
    
    4,256
    
    
    
    8,120
    
    
    
    8,321
    
    
    
    11,224Income tax expense
    
    
    109
    
    
    
    2,412
    
    
    
    774
    
    
    
    4,146Depreciation and amortization expense
    
    
    1,321
    
    
    
    6,412
    
    
    
    2,825
    
    
    
    7,523EBITDA
    
    $
    18,481
    
    
    $
    21,042
    
    
    $
    29,823
    
    
    $
    29,785
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2007
    
    
    2006
    
    
    2007(In thousands)Net cash flow from operating activities
    
    $
    (2,785
    )
    
    $
    (28,196
    )
    
    $
    5,705
    
    
    $
    (13,976
    )Interest expense, net
    
    
    4,256
    
    
    
    8,120
    
    
    
    8,321
    
    
    
    11,224Income tax expense
    
    
    109
    
    
    
    2,412
    
    
    
    774
    
    
    
    4,146Deferred tax provisions
    
    
    (10
    )
    
    
    1,594
    
    
    
    (21
    )
    
    
    1,947Gain (loss) on sale of fixed assets
    
    
    (77
    )
    
    
    
    
    
    
    (141
    )
    
    
    1Gain on sale of investment-net
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    Stock-based compensation
    
    
    
    
    
    
    (1,049
    )
    
    
    
    
    
    
    (2,022
    )Changes in operating assets and liabilities
    
    
    16,988
    
    
    
    38,161
    
    
    
    15,174
    
    
    
    28,465EBITDA
    
    $
    18,481
    
    
    $
    21,042
    
    
    $
    29,823
    
    
    $
    29,785
 Three Months Ended June 30, 2007 Compared with Three Months Ended June 30, 2006
 Net sales
 Gross profit
 Selling, engineering, general and administrative (SEG&A)
 Restructuring Charges
 25




---



##### 



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




---



##### 



Segment Results
  Three months ended June 30,
    
    
    Six months ended June 30,2006
    
    
    2007
    
    
    2006
    
    
    2007Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %(In thousands)Net Sales:Electrical / Wire and Cable
Distributors
    
    $
    38,894
    
    
    
    34.0
    %
    
    $
    36,640
    
    
    
    14.8
    %
    
    $
    70,907
    
    
    
    34.6
    %
    
    $
    72,322
    
    
    
    20.3
    %Specialty Distributors and OEMs
    
    
    63,261
    
    
    
    69.6
    
    
    
    61,944
    
    
    
    25.1
    
    
    
    112,105
    
    
    
    54.6
    
    
    
    117,513
    
    
    
    33.0Consumer Outlets
    
    
    12,259
    
    
    
    10.7
    
    
    
    17,611
    
    
    
    7.1
    
    
    
    22,200
    
    
    
    10.8
    
    
    
    35,756
    
    
    
    10.0Copperfield
    
    
    
    
    
    
    
    
    
    
    130,823
    
    
    
    53.0
    
    
    
    
    
    
    
    
    
    
    
    130,823
    
    
    
    36.7Total
    
    $
    114,414
    
    
    
    100.0
    %
    
    $
    247,018
    
    
    
    100.0
    %
    
    $
    205,212
    
    
    
    100.0
    %
    
    $
    356,414
    
    
    
    100.0
    %Operating Income:Electrical / Wire and Cable
Distributors
    
    $
    7,861
    
    
    
    20.2
    %
    
    $
    4,010
    
    
    
    10.9
    %
    
    $
    12,821
    
    
    
    18.1
    %
    
    $
    6,772
    
    
    
    9.4
    %Specialty Distributors and OEMs
    
    
    9,690
    
    
    
    12.2
    
    
    
    6,800
    
    
    
    11.0
    
    
    
    15,400
    
    
    
    13.7
    
    
    
    11,121
    
    
    
    9.5Consumer Outlets
    
    
    776
    
    
    
    6.4
    
    
    
    1,756
    
    
    
    10.0
    
    
    
    883
    
    
    
    4.0
    
    
    
    3,746
    
    
    
    10.5Copperfield
    
    
    
    
    
    
    
    
    
    
    3,516
    
    
    
    2.7
    
    
    
    
    
    
    
    
    
    
    
    3,516
    
    
    
    2.7Total
    
    
    18,327
    
    
    
    
    
    
    
    16,082
    
    
    
    
    
    
    
    29,104
    
    
    
    
    
    
    
    25,155Corporate
    
    
    (1,167
    )
    
    
    
    
    
    
    (1,435
    )
    
    
    
    
    
    
    (2,117
    )
    
    
    
    
    
    
    (2,866
    )Consolidated operating income
    
    $
    17,160
    
    
    
    15.0
    %
    
    $
    14,647
    
    
    
    5.9
    %
    
    $
    26,987
    
    
    
    13.2
    %
    
    $
    22,289
    
    
    
    6.3
    %
 Three Months Ended June 30, 2007 Compared with Three Months Ended June 30, 2006
 Electrical/Wire and Cable Distributors
   Specialty Distributors and OEMs
  27




---



##### 



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




---



##### 



Consumer Outlets
   Copperfield
   Liquidity and Capital Resources
 Debt
  As ofJune 30, 2007Revolving credit facility
    
    $
    100,864Senior notes
    
    
    243,293Capital lease obligations
    
    
    515Other long-term debt
    
    
    414Total long-term debt
    
    $
    345,086
 Senior Secured Revolving Credit Facility
    29




---



##### 




    
    require us to maintain a fixed share 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
    
    require us to maintain excess availability under the credit facility of not less
than $10.0 million.
 Senior Notes
     30




---



##### 



Current and Future Liquidity
   
    
    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.
     31




---



##### 



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)
    
    $
    374,862
    
    
    $
    24,934
    
    
    $
    73,452
    
    
    $
    276,369
    
    
    $
    107Capital lease obligations (including interest)
    
    
    1,064
    
    
    
    509
    
    
    
    555
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    19,756
    
    
    
    4,055
    
    
    
    5,681
    
    
    
    4,922
    
    
    
    5,098Purchase obligations
    
    
    73,927
    
    
    
    73,927
    
    
    
    
    
    
    
    
    
    
    
    
  32




---



##### 



Off-Balance Sheet Assets and Obligations
  New Accounting Pronouncements
 Accounting for Uncertainty in
Income Taxes.
 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
   33




---



##### 



www.sec.gov
  
 
 
 
 
 
 
  ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
  Commodity Risk.
 Interest Rate Risk.
 ITEM 4. Controls and Procedures
   34




---



##### 



PART II OTHER INFORMATION
 ITEM 1. Legal Proceedings
  ITEM 1A. Risk Factors
  We may have difficulty integrating the operations of Copperfield. Should we fail to integrate
their operations, our results of operations and profitability could be negatively impacted.
  ITEM 4. Submission of Matters to a Vote of Security Holders
   Name
    
    Votes For
    
    Votes WithheldNachum Stein
    
    
    11,910,268
    
    
    
    1,382,059G. Gary Yetman
    
    
    12,614,291
    
    
    
    678,036Denis Springer
    
    
    12,335,788
    
    
    
    956,539
   ITEM 6. Exhibits
 See Index to Exhibits
 35




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##### 



SIGNATURES
  COLEMAN CABLE, INC.
(Registrant)Date: August 14, 2007
    By
    /s/ G. Gary YetmanChief Executive Officer and PresidentDate: August 14, 2007
    By
    /s/ Richard N. BurgerChief Financial Officer, ExecutiveVice President, Secretary and
Treasurer 36




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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 therof, the
additional signatures thereto., incorporated
herein by reference to our Quarterly Report on
Form 10-Q for the quarter ended March 31, 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,
2005.10.3
    
    
    
    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.
 37




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##### 



Item No.
    
    
    
    Description10.5
    
    
    
    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,
2006.10.14
    
    
    
    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, 2006.31.1
    
    
    
    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. 38