##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2005
 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 333-124334
 
 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
  Registrants Telephone Number, including Area Code (847) 672-2300
 
 o þ
 o þ




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INDEX
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial Statements.
    
    
    1Condensed Consolidated Statements of Operations
for the three and six months ended June 30, 2005 and 2004
    
    
    1Condensed Consolidated Balance Sheets as of June 30, 2005 and 2004
and December 31, 2004
    
    
    2Condensed Consolidated Statement of Cash Flows
for the six months ended June 30, 2005 and 2004
    
    
    3Note to Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Conditions and
Results of Operations.
    
    
    16Item 3. Quantitative and Qualitative Disclosures about Market Risk.
    
    
    30Item 4. Controls and Procedures.
    
    
    30PART II. OTHER INFORMATIONItem 1. Legal Proceedings.
    
    
    31Item 6. Exhibits.
    
    
    31Signatures
    
    
    33Exhibit Index
    
    
    34CertificationCertificationCertification




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##### Table of Contents



PART I.
 
 ITEM 1. Financial Statements
 COLEMAN CABLE, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
 
 Three months ended June 30,
    
    Six months ended June 30,2004
    
    2005
    
    2004
    
    2005(unaudited)
    
    (unaudited)
    
    (unaudited)
    
    (unaudited)NET SALES
    
    $
    67,428
    
    
    $
    82,865
    
    
    $
    130,330
    
    
    $
    157,626COST OF GOODS SOLD
    
    
    56,007
    
    
    
    71,176
    
    
    
    108,217
    
    
    
    135,776GROSS PROFIT
    
    
    11,421
    
    
    
    11,689
    
    
    
    22,113
    
    
    
    21,850SELLING, ENGINEERING,
GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    5,943
    
    
    
    5,815
    
    
    
    10,853
    
    
    
    11,738OPERATING INCOME
    
    
    5,478
    
    
    
    5,874
    
    
    
    11,260
    
    
    
    10,112INTEREST EXPENSE, NET
    
    
    2,659
    
    
    
    3,840
    
    
    
    5,118
    
    
    
    7,497OTHER INCOME, NET
    
    
    (2
    )
    
    
    (1,264
    )
    
    
    (2
    )
    
    
    (1,259
    )INCOME BEFORE INCOME TAXES
    
    
    2,821
    
    
    
    3,298
    
    
    
    6,144
    
    
    
    3,874INCOME TAX EXPENSE
    
    
    850
    
    
    
    639
    
    
    
    1,469
    
    
    
    1,155NET INCOME
    
    $
    1,971
    
    
    $
    2,659
    
    
    $
    4,675
    
    
    $
    2,719
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COLEMAN CABLE, INC. AND SUBSIDARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
 
 December 31,
    
    June 30,
    
    June 30,2004
    
    2004
    
    2005(unaudited)
    
    (unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    1,034
    
    
    $
    44
    
    
    $
    55Accounts receivable, less allowance for uncollectible accounts of
$1,655, $1,608 and $1,722, respectively
    
    
    48,613
    
    
    
    43,197
    
    
    
    53,004Inventories, net
    
    
    50,134
    
    
    
    46,158
    
    
    
    58,601Prepaid expenses and other current assets
    
    
    1,402
    
    
    
    2,418
    
    
    
    1,947Total current assets
    
    
    101,183
    
    
    
    91,817
    
    
    
    113,607PROPERTY, PLANT AND EQUIPMENT:Land
    
    
    579
    
    
    
    579
    
    
    
    579Buildings and leasehold improvements
    
    
    8,024
    
    
    
    7,669
    
    
    
    7,543Machinery, fixtures and equipment
    
    
    41,440
    
    
    
    39,064
    
    
    
    40,48950,043
    
    
    
    47,312
    
    
    
    48,611Less accumulated depreciation and amortization
    
    
    (26,658
    )
    
    
    (24,248
    )
    
    
    (26,485
    )Construction in progress
    
    
    2,216
    
    
    
    1,635
    
    
    
    2,385Property, plant and equipment, net
    
    
    25,601
    
    
    
    24,699
    
    
    
    24,511GOODWILL AND INTELLECTUAL PROPERTY, NET
    
    
    60,663
    
    
    
    60,676
    
    
    
    60,657DEFERRED DEBT ISSUANCE COSTS, NET AND OTHER ASSETS
    
    
    9,609
    
    
    
    5,481
    
    
    
    6,096TOTAL ASSETS
    
    $
    197,056
    
    
    $
    182,673
    
    
    $
    204,871LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    3,430
    
    
    $
    6,056
    
    
    $
    3,386Accounts payable
    
    
    19,975
    
    
    
    21,756
    
    
    
    25,180Accrued liabilities
    
    
    14,664
    
    
    
    7,941
    
    
    
    12,265Deferred income taxes
    
    
    358
    
    
    
    508
    
    
    
    444Total current liabilities
    
    
    38,427
    
    
    
    36,261
    
    
    
    41,275LONG-TERM DEBT
    
    
    156,297
    
    
    
    114,747
    
    
    
    158,546DEFERRED INCOME TAXES
    
    
    132
    
    
    
    
    
    
    
    131SHAREHOLDERS EQUITY:Common stock, par $.001; 100,000 shares authorized and 36,684
issued and outstanding June 30, 2004 and 40,784 issued and
outstanding December 31, 2005 and June 30, 2005, respectively
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    25,559
    
    
    
    26,911
    
    
    
    25,559Retained earnings (accumulated deficit)
    
    
    (23,359
    )
    
    
    4,754
    
    
    
    (20,640
    )Total shareholders equity
    
    
    2,200
    
    
    
    31,665
    
    
    
    4,919TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    197,056
    
    
    $
    182,673
    
    
    $
    204,871
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COLEMAN CABLE, INC. AND SUBSIDARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 Six months ended June 30,2004
    
    2005(unaudited)
    
    (unaudited)CASH FLOW FROM OPERATING ACTIVITIES:Net income
    
    $
    4,675
    
    
    $
    2,719Adjustments to reconcile net income to net cash
flow from operating activities:Depreciation and amortization
    
    
    3,269
    
    
    
    2,895Noncash interest expense
    
    
    763
    
    
    
    Noncash interest income
    
    
    (112
    )
    
    
    (109
    )Deferred tax provision
    
    
    
    
    
    
    85(Gain) loss on disposal of fixed assets  net
    
    
    (2
    )
    
    
    5Gain on sale of investment  net
    
    
    
    
    
    
    (1,264
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    (5,893
    )
    
    
    (4,391
    )Inventories
    
    
    (10,005
    )
    
    
    (8,467
    )Prepaid expenses and other assets
    
    
    (1,504
    )
    
    
    (505
    )Accounts payable
    
    
    (626
    )
    
    
    5,205Accrued and other long-term liabilities
    
    
    (2,027
    )
    
    
    (2,399
    )Net cash flow from operating activities
    
    
    (11,462
    )
    
    
    (6,226
    )CASH FLOW FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (1,377
    )
    
    
    (3,215
    )Proceeds from sale of assets
    
    
    2
    
    
    
    Proceeds from sale of investment
    
    
    
    
    
    
    4,379Net cash flow from investing activities
    
    
    (1,375
    )
    
    
    1,164CASH FLOW FROM FINANCING ACTIVITIES:Net borrowings under revolving loan facilities
    
    
    16,490
    
    
    
    8,380Repayment of extinguished debt
    
    
    
    
    
    
    (3,822
    )Repayment of long-term debt
    
    
    (3,218
    )
    
    
    (475
    )Tax distribution to shareholders
    
    
    (440
    )
    
    
    Net cash flow from financing activities
    
    
    12,832
    
    
    
    4,083DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (5
    )
    
    
    (979
    )CASH AND CASH EQUIVALENTS  Beginning of period
    
    
    49
    
    
    
    1,034CASH AND CASH EQUIVALENTS  End of period
    
    $
    44
    
    
    $
    55NONCASH ACTIVITYRevaluation of Oswego fixed assets
    
    
    
    
    
    $
    1,878
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COLEMAN CABLE, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Dollars in thousands)
(Unaudited)
 
 1.
    
    BASIS OF PRESENTATIONThe Condensed Consolidated Balance Sheets for June 30, 2004 and June 30, 2005, the Condensed
Consolidated Statements of Operations for the three and six months ended June 30, 2004 and
2005, and the Condensed Consolidated Statements of Cash Flows for the six months ended June
30, 2004 and 2005 are unaudited. In addition, certain information and footnote disclosures
normally included in financial statements prepared in accordance with United States generally
accepted accounting principles (GAAP) have been condensed or omitted. The interim condensed
consolidated financial statements reflect all adjustments (consisting only of normal recurring
accruals) which are, in the opinion of management, necessary for a fair presentation in
conformity with GAAP. The interim condensed consolidated financial statements should be read
in conjunction with the consolidated financial statements and notes thereto included in the
Companys Registration Statement on Form S-4, as amended on August 3, 2005. The results of
operations for the interim periods should not be considered indicative of results to be
expected for the full year.2.
    
    INVENTORIESInventories  net consisted of the following:
 December 31, 2004
    
    June 30, 2004
    
    June 30, 2005FIFO cost:Raw materials
    
    $
    13,158
    
    
    $
    10,618
    
    
    $
    14,749Work in progress
    
    
    3,468
    
    
    
    2,257
    
    
    
    5,371Finished products
    
    
    33,508
    
    
    
    33,283
    
    
    
    38,481Total
    
    $
    50,134
    
    
    $
    46,158
    
    
    $
    58,601
 3.
    
    ACCRUED LIABILITIESAccrued liabilities consisted of the following:
 December 31, 2004
    
    June 30, 2004
    
    June 30, 2005Salaries, wages
and employee
benefits
    
    $
    4,364
    
    
    $
    2,934
    
    
    $
    3,113Sales incentives
    
    
    4,604
    
    
    
    2,831
    
    
    
    3,864Income taxes
    
    
    
    
    
    
    357
    
    
    
    67Interest
    
    
    3,186
    
    
    
    26
    
    
    
    3,088Other
    
    
    2,510
    
    
    
    1,793
    
    
    
    2,133Total
    
    $
    14,664
    
    
    $
    7,941
    
    
    $
    12,265
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4.
    
    DEBT
 December 31,2004
    
    June 30, 2004
    
    June 30, 2005Revolving credit facility
    
    $
    29,820
    
    
    $
    45,990
    
    
    $
    38,200Term Loans A and B
    
    
    
    
    
    
    30,249
    
    
    
    Subordinated notes, less discount
    
    
    
    
    
    
    34,833
    
    
    
    Senior notes
    
    
    120,000
    
    
    
    
    
    
    
    120,000Capital lease obligations
    
    
    7,593
    
    
    
    7,159
    
    
    
    1,671Other long-term debt, annual interest
rates up to 11.3%, payable
through 2019
    
    
    2,314
    
    
    
    2,572
    
    
    
    2,061159,727
    
    
    
    120,803
    
    
    
    161,932Less current portion
    
    
    (3,430
    )
    
    
    (6,056
    )
    
    
    (3,386
    )Total long-term debt
    
    $
    156,297
    
    
    $
    114,747
    
    
    $
    158,546
 In the third quarter of 2004, the Company completed a comprehensive refinancing of its bank
debt. The refinancing included the following: (i) the private placement of 8-year senior
unsecured notes (the Notes) and (ii) a new senior secured revolving credit facility (the
Revolving Credit Facility). The Notes were issued in the amount of $120,000, bear interest
at a fixed rate of 9.875% and mature in 2012. In connection with the refinancing, the Company
incurred fees and expenses totaling $6,608, which are included in Deferred debt issuance
costs, net and other assets in the accompanying condensed consolidated balance sheets. The
applicable fees and expenses are amortized over the respective lives of the Revolving Credit
Facility and the Notes on a straight-line basis over 5 and 8 years, respectively.
Amortization was $234 and $468 for the three and six months ended June 30, 2005, respectively.
Accumulated amortization was $702 as of June 30, 2005.The indenture governing the Companys Notes contains covenants that, among other things, limit
the Companys ability and the ability of certain of its subsidiaries to: incur additional
indebtedness; make restricted payments; create liens; pay dividends; consolidate, merge or
sell substantially all of its assets; enter into sale and leaseback transactions; and enter
into transactions with affiliates. As of June 30, 2005, the Company was in compliance with
all of the covenants contained in the indenture.The Revolving Credit Facility will mature on September 28, 2009 and is an asset-based lending
agreement whereby the Company can receive advances based on the lesser of $75,000 or the sum
of 85% of eligible accounts receivable and 55% of inventories, with a sublimit for letters of
credit of up to $5,000. The Revolving Credit Facility is secured by substantially all of the
Companys assets, including accounts receivable, inventory and any other tangible and
intangible assets. Interest is payable at the banks prime rate plus a range of .25% to
1.25%, or at the option of the Company, LIBOR plus 1.75% to 2.75%. The Company classifies the
portion of the Revolving Credit Facility that is expected to be repaid within the next year as
a current liability. The Revolving Credit Facility accrued interest at an average rate of
5.37% and 5.09%, and the Companys average borrowed
amount was $38,339 and $32,936, in the three and six month periods ended June 30, 2005,
respectively, none of which were against the sublimit for letters of credit. As of June 30,
2005 the Company had $29,222 of additional borrowing capacity. The leverage ratio in the
Revolving Credit Facility, however, would have effectively limited the Companys additional
borrowing capacity to $15,200.
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The Revolving Credit Facility contains more restrictive covenants than the indenture governing
the Notes, which consist of certain financial covenants, including, but not limited to, a
fixed charge coverage ratio and a leverage ratio. In addition, the Revolving Credit Facility
contains other customary affirmative and negative covenants relating to limitations on
dividends and other indebtedness, liens, investments, guarantees, mergers and acquisitions,
sales of assets, capital expenditures and leases. The Company was in compliance with all
covenants at June 30, 2005.The Notes and the Revolving Credit Facility both have restrictions on dividend distributions
to shareholders, including but not limited to, a percentage of net income (less distributions
for tax purposes). The distributions for tax purposes are computed at the shareholder
applicable tax rate, net of any aggregated tax benefit received for prior periods.
Distributions for tax purposes are not restricted so long as the Company qualifies as an S
corporation.The Companys former revolving credit facility had a weighted average interest rate on
borrowings of 4.09% and 4.10% and a weighted average borrowing amount of $44,657 and $40,608
for the three and six months ended June 30, 2004, respectively.The Term A and Term B loans had a weighted average interest rate on borrowings of 4.35% and
4.35% and a weighted average borrowing amount of $31,122 and $31,777 for the three and six
months ended June 30, 2004, respectively.In connection with the Oswego Wire Incorporated facility (Oswego) and certain related
equipment Oswego acquired the rights and assumed the capital lease obligation of Copperweld
Corporation (Copperweld) under a certain Amended and Restated Sale Agreement (Sale
Agreement) between Copperweld and the County of Oswego Industrial Development Agency (IDA).
Terms of the Sale Agreement specified payment of $5,700 on July 1, 2012. Interest is paid
quarterly through that date on the outstanding balance at a rate of 55% of prime. In order to
secure payment of the loan, in 1987, the Company purchased and placed in a dedicated fund $675
of 8.7% zero coupon bonds issued by the Municipal Authority of Westmoreland County,
Pennsylvania, redeemable in the amount of $5,700 on July 1, 2012.On May 16, 2005, Oswego and Copperweld reached a definitive agreement regarding the
accelerated payment of the $5,700 lease obligation due under the Sale Agreement. Oswego sold
the zero coupon bonds for $4,379 and made a cash payment of $3,822 to Copperweld, in exchange
for complete settlement of Oswegos obligations under the Amended and Restated Sale Agreement
and the conveyance by Copperweld to Oswego all of Copperwelds right, title and interest in
and to the Oswego facility, free and clear of any liens and encumbrances held by Oswego
County. The Company recognized a gain of $1,264 related to the sale of the zero coupon bonds,
which is included in Other income and reduced the carrying value of the Oswego fixed assets
by $1,878, the amount by which the lease obligation exceeded the amount paid to settle the
obligation.5.
    
    COMMITMENTS AND CONTINGENCIESOperating LeasesThe Company leases certain of its buildings, machinery and equipment under
operating lease agreements which expire at various dates over the next ten years. Rent expense
for all operating leases for the three months ended June 30, 2004 and June 30, 2005 was $731
and $866, respectively. Rent expense for the six months ended June 30, 2004 and June 30, 2005 was $1,396
and $1,536, respectively.
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##### Table of Contents



Capital LeasesThe Company leases various manufacturing, office and warehouse properties and
office equipment under capital leases which expire at various dates through 2009. The assets
are amortized/depreciated over the shorter of their related lease terms or their estimated
productive lives.Obligations under capital leases are included with debt in the accompanying consolidated
balance sheets.Legal ProceedingsThe Company is a party to various environmental and other claims and
lawsuits that have arisen in the ordinary course of business. Estimates of related costs and
losses have been accrued in the financial statements. In determining these accruals, the
Company does not discount environmental or legal accruals and does not reduce them by
anticipated insurance recoveries. The Company believes that its accruals related to
environmental, litigation and other claims are sufficient and that, based on the information
currently available, these items and the Companys rights to available insurance and indemnity
will be resolved without material adverse effect on the Companys consolidated financial
position, cash flow or results of operations. There can be no assurance, however, that this
will be the case.6.
    
    MANAGEMENT FEESTwo of the Companys shareholders have consulting arrangements with the Company whereby, in
addition to their service as directors of the Company, they provide advice and counsel on
business planning and strategy, including advice on potential acquisitions. Pursuant to these
arrangements, and for their service as directors, the Company paid each eligible individual
$37 and $63 for the three months ended June 2004 and June 2005, respectively, and paid each
eligible individual $37 and $125 for six months ended June 30, 2004 and June 2005,
respectively.7.
    
    BUSINESS SEGMENT INFORMATIONThe Company has three reportable business segments: Electrical/Wire and Cable Distributors,
Specialty Distributors and OEMs, and Consumer Outlets. These segment classifications are based
on an aggregation of customer groupings and distribution channels because this is the way our
chief operating decision maker evaluates the results of each operating segment.The Company has aggregated operating segments into three reportable business segments in
accordance with the criteria defined in SFAS No. 131, Disclosure about Segments of an
Enterprise and Related Information.The Companys operating segments have common production
processes and manufacturing capacity. Accordingly, the Company does
not identify all of its net assets to its operating segments. Depreciation expense is not allocated to our
segments but is included in our manufacturing overhead cost pools and is absorbed into product
cost (and inventory) as each product passes through our numerous manufacturing work centers.
Accordingly, as products are sold across multiple segments, it is impracticable to determine
the amount of depreciation expense included in the operating results of each operating
segment.No one customer or group of customers under common control accounted for more than 10% of
consolidated net sales. Export sales are not material. Intercompany sales among segments
represent primarily the sale of fabricated base wire products by Oswego Wire, which is
included in the
Companys Specialty Distributors and OEMs segment, to other segments and are eliminated in
consolidation.
 7




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Segment operating income represents income from continuing operations before interest income
or expense, other income and income taxes. Corporate consists of items not charged or
allocated to a particular segment, including costs for employee relocation, discretionary
bonuses, professional fees, restructuring, management fees and intangible amortization.Financial data for our business segments is as follows:
 Three months ended June 30,
    
    Six months ended June 30,2004
    
    2005
    
    2004
    
    2005Net Sales:Electrical / Wire and Cable
Distributors
    
    $
    23,416
    
    
    $
    27,393
    
    
    $
    45,351
    
    
    $
    53,693Specialty Distributors and OEMs
    
    
    34,451
    
    
    
    44,011
    
    
    
    66,417
    
    
    
    82,321Consumer Outlets
    
    
    10,551
    
    
    
    12,599
    
    
    
    20,519
    
    
    
    23,924Intercompany eliminations
    
    
    (990
    )
    
    
    (1,138
    )
    
    
    (1,957
    )
    
    
    (2,312
    )Total
    
    $
    67,428
    
    
    $
    82,865
    
    
    $
    130,330
    
    
    $
    157,626Operating Income:Electrical / Wire and Cable
Distributors
    
    
    2,529
    
    
    
    3,035
    
    
    
    4,769
    
    
    
    5,511Specialty Distributors and OEMs
    
    
    3,501
    
    
    
    3,074
    
    
    
    7,266
    
    
    
    5,783Consumer Outlets
    
    
    578
    
    
    
    595
    
    
    
    714
    
    
    
    630Total
    
    
    6,608
    
    
    
    6,704
    
    
    
    12,749
    
    
    
    11,924Corporate
    
    
    (1,130
    )
    
    
    (830
    )
    
    
    (1,489
    )
    
    
    (1,812
    )Consolidated operating income
    
    $
    5,478
    
    
    $
    5,874
    
    
    $
    11,260
    
    
    $
    10,112
 8.
    
    SUPPLEMENTAL GUARANTOR INFORMATIONThe payment obligations of the Company under the Notes and the Revolving Credit Facility (see
Note 4) are guaranteed by the Companys wholly owned subsidiaries. Such guarantees are full,
unconditional and joint and several. The following unaudited supplemental financial
information sets forth, on a combined basis, balance sheets, statements of operations and
statements of cash flows for Coleman Cable, Inc. (the Parent) and the Companys material
guarantor subsidiaries  CCI Enterprises, Inc., Oswego Wire Incorporated and CCI International
(the Guarantor Subsidiaries).
 8




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COLEMAN CABLE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2004
 
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalNET SALES
    
    $
    62,488
    
    
    $
    8,268
    
    
    $
    (3,328
    )
    
    $
    67,428COST OF GOODS SOLD
    
    
    52,769
    
    
    
    3,238
    
    
    
    
    
    
    
    56,007GROSS PROFIT
    
    
    9,719
    
    
    
    5,030
    
    
    
    (3,328
    )
    
    
    11,421SELLING, ENGINEERING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    6,437
    
    
    
    2,834
    
    
    
    (3,328
    )
    
    
    5,943OPERATING INCOME
    
    
    3,282
    
    
    
    2,196
    
    
    
    
    
    
    
    5,478INTEREST EXPENSE, NET
    
    
    2,574
    
    
    
    85
    
    
    
    
    
    
    
    2,659OTHER INCOME, NET
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    (2
    )INCOME BEFORE INCOME TAXES
    
    
    710
    
    
    
    2,111
    
    
    
    
    
    
    
    2,821INCOME TAX EXPENSE
    
    
    83
    
    
    
    767
    
    
    
    
    
    
    
    850INCOME FROM GUARANTOR
SUBSIDIARIES
    
    
    1,344
    
    
    
    
    
    
    
    (1,344
    )
    
    
    NET INCOME
    
    $
    1,971
    
    
    $
    1,344
    
    
    $
    (1,344
    )
    
    $
    1,971
 COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2005
 
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalNET SALES
    
    $
    77,142
    
    
    $
    8,299
    
    
    $
    (2,576
    )
    
    $
    82,865COST OF GOODS SOLD
    
    
    67,686
    
    
    
    3,490
    
    
    
    
    
    
    
    71,176GROSS PROFIT
    
    
    9,456
    
    
    
    4,809
    
    
    
    (2,576
    )
    
    
    11,689SELLING, ENGINEERING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    5,435
    
    
    
    2,956
    
    
    
    (2,576
    )
    
    
    5,815OPERATING INCOME
    
    
    4,021
    
    
    
    1,853
    
    
    
    
    
    
    
    5,874INTEREST EXPENSE, NET
    
    
    3,760
    
    
    
    80
    
    
    
    
    
    
    
    3,840OTHER INCOME, NET
    
    
    
    
    
    
    (1,264
    )
    
    
    
    
    
    
    (1,264
    )INCOME BEFORE INCOME TAXES
    
    
    261
    
    
    
    3,037
    
    
    
    
    
    
    
    3,298INCOME TAX EXPENSE
    
    
    26
    
    
    
    613
    
    
    
    
    
    
    
    639INCOME FROM GUARANTOR
SUBSIDIARIES
    
    
    2,424
    
    
    
    
    
    
    
    (2,424
    )
    
    
    NET INCOME
    
    $
    2,659
    
    
    $
    2,424
    
    
    $
    (2,424
    )
    
    $
    2,659
 9




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##### Table of Contents



COLEMAN CABLE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2004
 
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalNET SALES
    
    $
    120,271
    
    
    $
    15,587
    
    
    $
    (5,528
    )
    
    $
    130,330COST OF GOODS SOLD
    
    
    102,063
    
    
    
    6,154
    
    
    
    
    
    
    
    108,217GROSS PROFIT
    
    
    18,208
    
    
    
    9,433
    
    
    
    (5,528
    )
    
    
    22,113SELLING, ENGINEERING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    11,118
    
    
    
    5,263
    
    
    
    (5,528
    )
    
    
    10,853OPERATING INCOME
    
    
    7,090
    
    
    
    4,170
    
    
    
    
    
    
    
    11,260INTEREST EXPENSE, NET
    
    
    4,931
    
    
    
    187
    
    
    
    
    
    
    
    5,118OTHER INCOME EXPENSE, NET
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    (2
    )INCOME BEFORE INCOME TAXES
    
    
    2,161
    
    
    
    3,983
    
    
    
    
    
    
    
    6,144INCOME TAX EXPENSE
    
    
    146
    
    
    
    1,323
    
    
    
    
    
    
    
    1,469INCOME FROM GUARANTOR
SUBSIDIARIES
    
    
    2,660
    
    
    
    
    
    
    
    (2,660
    )
    
    
    NET INCOME
    
    $
    4,675
    
    
    $
    2,660
    
    
    $
    (2,660
    )
    
    $
    4,675
 COLEMAN CABLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2005
 
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalNET SALES
    
    $
    146,046
    
    
    $
    16,456
    
    
    $
    (4,876
    )
    
    $
    157,626COST OF GOODS SOLD
    
    
    128,682
    
    
    
    7,094
    
    
    
    
    
    
    
    135,776GROSS PROFIT
    
    
    17,364
    
    
    
    9,362
    
    
    
    (4,876
    )
    
    
    21,850SELLING, ENGINEERING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    10,798
    
    
    
    5,816
    
    
    
    (4,876
    )
    
    
    11,738OPERATING INCOME
    
    
    6,566
    
    
    
    3,546
    
    
    
    
    
    
    
    10,112INTEREST EXPENSE, NET
    
    
    7,310
    
    
    
    187
    
    
    
    
    
    
    
    7,497OTHER (INCOME) EXPENSE, NET
    
    
    5
    
    
    
    (1,264
    )
    
    
    
    
    
    
    (1,259
    )INCOME BEFORE INCOME TAXES
    
    
    (749
    )
    
    
    4,623
    
    
    
    
    
    
    
    3,874INCOME TAX EXPENSE
    
    
    33
    
    
    
    1,122
    
    
    
    
    
    
    
    1,155INCOME FROM GUARANTOR
SUBSIDIARIES
    
    
    3,501
    
    
    
    
    
    
    
    (3,501
    )
    
    
    NET INCOME
    
    $
    2,719
    
    
    $
    3,501
    
    
    $
    (3,501
    )
    
    $
    2,719
 10




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##### Table of Contents



COLEMAN CABLE, INC. AND SUBIDIARIES
 CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2004
 
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    1,024
    
    
    $
    10
    
    
    $
    
    
    
    $
    1,034Accounts receivablenet of allowances
    
    
    
    
    
    
    48,613
    
    
    
    
    
    
    
    48,613Intercompany receivable
    
    
    34,389
    
    
    
    
    
    
    
    (34,389
    )
    
    
    Inventories, net
    
    
    47,203
    
    
    
    2,931
    
    
    
    
    
    
    
    50,134Prepaid expenses and other current assets
    
    
    3,005
    
    
    
    697
    
    
    
    (2,300
    )
    
    
    1,402Total current assets
    
    
    85,621
    
    
    
    52,251
    
    
    
    (36,689
    )
    
    
    101,183PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    16,785
    
    
    
    8,816
    
    
    
    
    
    
    
    25,601GOODWILL AND INTELLECTUAL PROPERTY, NET
    
    
    60,522
    
    
    
    141
    
    
    
    
    
    
    
    60,663DEFERRED DEBT ISSUANCE COSTS, NET AND
OTHER ASSETS
    
    
    6,601
    
    
    
    3,008
    
    
    
    
    
    
    
    9,609INVESTMENT IN SUBSIDIARIES
    
    
    15,226
    
    
    
    
    
    
    
    (15,226
    )
    
    
    TOTAL ASSETS
    
    $
    184,755
    
    
    $
    64,216
    
    
    $
    (51,915
    )
    
    $
    197,056LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    2,907
    
    
    $
    523
    
    
    $
    
    
    
    $
    3,430Accounts payable
    
    
    19,264
    
    
    
    711
    
    
    
    
    
    
    
    19,975Intercompany payable
    
    
    
    
    
    
    34,389
    
    
    
    (34,389
    )
    
    
    Accrued liabilities
    
    
    11,700
    
    
    
    5,264
    
    
    
    (2,300
    )
    
    
    14,664Deferred income taxes
    
    
    
    
    
    
    358
    
    
    
    
    
    
    
    358Total current liabilities
    
    $
    33,871
    
    
    $
    41,245
    
    
    $
    (36,689
    )
    
    $
    38,427LONG-TERM DEBT
    
    
    148,684
    
    
    
    7,613
    
    
    
    
    
    
    
    156,297DEFERRED INCOME TAXES
    
    
    
    
    
    
    132
    
    
    
    
    
    
    
    132SHAREHOLDERS EQUITY:Additional paid-in capital
    
    
    25,559
    
    
    
    1
    
    
    
    (1
    )
    
    
    25,559Retained earnings (accumulated deficit)
    
    
    (23,359
    )
    
    
    15,225
    
    
    
    (15,225
    )
    
    
    (23,359
    )Total shareholders equity
    
    
    2,200
    
    
    
    15,226
    
    
    
    (15,226
    )
    
    
    2,200TOTAL LIABILITIES AND SHAREHOLDERS
EQUITY
    
    $
    184,755
    
    
    $
    64,216
    
    
    $
    (51,915
    )
    
    $
    197,056
 11




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##### Table of Contents



COLEMAN CABLE, INC. AND SUBIDIARIES
 CONDENSED CONSOLIDATING BALANCE SHEET AS OF JUNE 30, 2004
 
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    34
    
    
    $
    10
    
    
    $
    
    
    
    $
    44Accounts receivablenet of allowances
    
    
    61
    
    
    
    43,136
    
    
    
    
    
    
    
    43,197Intercompany receivable
    
    
    31,058
    
    
    
    893
    
    
    
    (31,951
    )
    
    
    Inventories, net
    
    
    44,812
    
    
    
    1,346
    
    
    
    
    
    
    
    46,158Prepaid expenses and other current assets
    
    
    3,422
    
    
    
    1,396
    
    
    
    (2,400
    )
    
    
    2,418Total current assets
    
    
    79,387
    
    
    
    46,781
    
    
    
    (34,351
    )
    
    
    91,817PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    16,534
    
    
    
    8,165
    
    
    
    
    
    
    
    24,699GOODWILL AND INTELLECTUAL PROPERTY, NET
    
    
    60,535
    
    
    
    141
    
    
    
    
    
    
    
    60,676DEFERRED DEBT ISSUANCE COSTS, NET AND OTHER ASSETS
    
    
    2,606
    
    
    
    2,875
    
    
    
    
    
    
    
    5,481INVESTMENT IN SUBSIDIARIES
    
    
    11,915
    
    
    
    
    
    
    
    (11,915
    )
    
    
    TOTAL ASSETS
    
    $
    170,977
    
    
    $
    57,962
    
    
    $
    (46,266
    )
    
    $
    182,673LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    5,643
    
    
    $
    413
    
    
    $
    
    
    
    $
    6,056Accounts payable
    
    
    20,783
    
    
    
    973
    
    
    
    
    
    
    
    21,756Intercompany payable
    
    
    
    
    
    
    31,951
    
    
    
    (31,951
    )
    
    
    Accrued liabilities
    
    
    5,482
    
    
    
    4,859
    
    
    
    (2,400
    )
    
    
    7,941Deferred income taxes
    
    
    
    
    
    
    508
    
    
    
    
    
    
    
    508Total current liabilities
    
    $
    31,908
    
    
    $
    38,704
    
    
    $
    (34,351
    )
    
    $
    36,261LONG-TERM DEBT
    
    
    107,404
    
    
    
    7,343
    
    
    
    
    
    
    
    114,747DEFERRED INCOME TAXES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    SHAREHOLDERS EQUITY:Additional paid-in capital
    
    
    26,911
    
    
    
    1
    
    
    
    (1
    )
    
    
    26,911Retained earnings (accumulated deficit)
    
    
    4,754
    
    
    
    11,914
    
    
    
    (11,914
    )
    
    
    4,754Total shareholders equity
    
    
    31,665
    
    
    
    11,915
    
    
    
    (11,915
    )
    
    
    31,665TOTAL LIABILITIES AND SHAREHOLDERS
EQUITY
    
    $
    170,977
    
    
    $
    57,962
    
    
    $
    (46,266
    )
    
    $
    182,673
 12




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##### Table of Contents



COLEMAN CABLE, INC. AND SUBIDIARIES
 CONDENSED CONSOLIDATING BALANCE SHEET AS OF JUNE 30, 2005
 
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    45
    
    
    $
    10
    
    
    $
    
    
    
    $
    55Accounts receivablenet of allowances
    
    
    
    
    
    
    53,004
    
    
    
    
    
    
    
    53,004Intercompany receivable
    
    
    34,889
    
    
    
    1,463
    
    
    
    (36,352
    )
    
    
    Inventories, net
    
    
    57,083
    
    
    
    1,518
    
    
    
    
    
    
    
    58,601Prepaid expenses and other current assets
    
    
    4,169
    
    
    
    578
    
    
    
    (2,800
    )
    
    
    1,947Total current assets
    
    
    96,186
    
    
    
    56,573
    
    
    
    (39,152
    )
    
    
    113,607PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    17,877
    
    
    
    6,634
    
    
    
    
    
    
    
    24,511GOODWILL AND INTELLECTUAL PROPERTY, NET
    
    
    60,516
    
    
    
    141
    
    
    
    
    
    
    
    60,657DEFERRED DEBT ISSUANCE COSTS, NET AND
OTHER ASSETS
    
    
    6,093
    
    
    
    3
    
    
    
    
    
    
    
    6,096INVESTMENT IN SUBSIDIARIES
    
    
    18,727
    
    
    
    
    
    
    
    (18,727
    )
    
    
    TOTAL ASSETS
    
    $
    199,399
    
    
    $
    63,351
    
    
    $
    (57,879
    )
    
    $
    204,871LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    2,859
    
    
    $
    527
    
    
    $
    
    
    
    $
    3,386Accounts payable
    
    
    24,690
    
    
    
    490
    
    
    
    
    
    
    
    25,180Intercompany payable
    
    
    
    
    
    
    36,352
    
    
    
    (36,352
    )
    
    
    Accrued liabilities
    
    
    10,026
    
    
    
    5,039
    
    
    
    (2,800
    )
    
    
    12,265Deferred income taxes
    
    
    
    
    
    
    444
    
    
    
    
    
    
    
    444Total current liabilities
    
    
    37,575
    
    
    
    42,852
    
    
    
    (39,152
    )
    
    
    41,275LONG-TERM DEBT
    
    
    156,905
    
    
    
    1,641
    
    
    
    
    
    
    
    158,546DEFERRED INCOME TAXES
    
    
    
    
    
    
    131
    
    
    
    
    
    
    
    131SHAREHOLDERS EQUITY:Additional paid-in capital
    
    
    25,559
    
    
    
    1
    
    
    
    (1
    )
    
    
    25,559Retained earnings (accumulated deficit)
    
    
    (20,640
    )
    
    
    18,726
    
    
    
    (18,726
    )
    
    
    (20,640
    )Total shareholders equity
    
    
    4,919
    
    
    
    18,727
    
    
    
    (18,727
    )
    
    
    4,919TOTAL LIABILITIES AND SHAREHOLDERS
EQUITY
    
    $
    199,399
    
    
    $
    63,351
    
    
    $
    (57,879
    )
    
    $
    204,871
 13




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##### Table of Contents



COLEMAN CABLE, INC. AND SUBSIDARIES
 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2004
 
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalCASH FLOW FROM OPERATING ACTIVITIES:Net income
    
    $
    4,675
    
    
    $
    2,660
    
    
    $
    (2,660
    )
    
    $
    4,675Adjustments to reconcile net income to net cash
flow from operating activities:Depreciation and amortization
    
    
    2,845
    
    
    
    424
    
    
    
    
    
    
    
    3,269Other noncash charges, net
    
    

    763
    
    
    
    
    
    
    
    
    
    
    
    763Noncash interest income
    
    
    
    
    
    
    (112
    )
    
    
    
    
    
    
    (112
    )Gain on disposal of fixed assets-net
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    (2
    )Equity in consolidated subsidiaries
    
    
    (2,660
    )
    
    
    
    
    
    
    2,660
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (61
    )
    
    
    (5,832
    )
    
    
    
    
    
    
    (5,893
    )Inventories
    
    
    (10,725
    )
    
    
    720
    
    
    
    
    
    
    
    (10,005
    )Prepaid expenses and other assets
    
    
    (783
    )
    
    
    (921
    )
    
    
    200
    
    
    
    (1,504
    )Accounts payable
    
    
    (955
    )
    
    
    329
    
    
    
    
    
    
    
    (626
    )Intercompany accounts
    
    
    (3,433
    )
    
    
    3,433
    
    
    
    
    
    
    
    Accrued and other long-term liabilities
    
    
    (1,543
    )
    
    
    (284
    )
    
    
    (200
    )
    
    
    (2,027
    )Net cash flow from operating activities
    
    
    (11,879
    )
    
    
    417
    
    
    
    
    
    
    
    (11,462
    )CASH FLOW FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (1,377
    )
    
    
    
    
    
    
    
    
    
    
    (1,377
    )Proceeds from the sale of fixed assets
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2Net cash flow from investing activities
    
    
    (1,375
    )
    
    
    
    
    
    
    
    
    
    
    (1,375
    )CASH FLOW FROM FINANCING ACTIVITIES:Net borrowings under revolving credit facility
    
    
    16,490
    
    
    
    
    
    
    
    
    
    
    
    16,490Repayment of long-term debt
    
    
    (2,801
    )
    
    
    (417
    )
    
    
    
    
    
    
    (3,218
    )Tax distributions to shareholders
    
    
    (440
    )
    
    
    
    
    
    
    
    
    
    
    (440
    )Net cash flow from financing activities
    
    
    13,249
    
    
    
    (417
    )
    
    
    
    
    
    
    12,832DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    (5
    )CASH AND CASH EQUIVALENTS  Beginning of period
    
    
    39
    
    
    
    10
    
    
    
    
    
    
    
    49CASH AND CASH EQUIVALENTS  End of period
    
    $
    34
    
    
    $
    10
    
    
    $
    
    
    
    $
    44
 14




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##### Table of Contents



COLEMAN CABLE, INC. AND SUBSIDARIES
 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2005
 
 GuarantorParent
    
    Subsidiaries
    
    Eliminations
    
    TotalCASH FLOW FROM OPERATING ACTIVITIES:Net income
    
    $
    2,719
    
    
    $
    3,501
    
    
    $
    (3,501
    )
    
    $
    2,719Adjustments to reconcile net income to net cash
flow from operating activities:Depreciation and amortization
    
    
    2,397
    
    
    
    498
    
    
    
    
    
    
    
    2,895Noncash interest income
    
    
    
    
    
    
    (109
    )

    
    
    
    
    
    
    (109
    )Deferred tax provision
    
    
    
    
    
    
    85
    
    
    
    
    
    
    
    85Loss on disposal of fixed assets -net
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    5Gain on sale of investment  net
    
    
    
    
    
    
    (1,264
    )
    
    
    
    
    
    
    (1,264
    )Equity in consolidated subsidiaries
    
    
    (3,501
    )
    
    
    
    
    
    
    3,501
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    
    
    
    
    (4,391
    )
    
    
    
    
    
    
    (4,391
    )Inventories
    
    
    (9,880
    )
    
    
    1,413
    
    
    
    
    
    
    
    (8,467
    )Prepaid expenses and other assets
    
    
    (1,124
    )
    
    
    119
    
    
    
    500
    
    
    
    (505
    )Accounts payable
    
    
    5,425
    
    
    
    (220
    )
    
    
    
    
    
    
    5,205Intercompany accounts
    
    
    (500
    )
    
    
    500
    
    
    
    
    
    
    
    Accrued and other long-term liabilities
    
    
    (1,671
    )
    
    
    (228
    )
    
    
    (500
    )
    
    
    (2,399
    )Net cash flow from operating activities
    
    
    (6,130
    )
    
    
    (96
    )
    
    
    
    
    
    
    (6,226
    )CASH FLOW FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (3,022
    )
    
    
    (193
    )
    
    
    
    
    
    
    (3,215
    )Proceeds from sale of investment
    
    
    
    
    
    
    4,379
    
    
    
    
    
    
    
    4,379Net cash flow from investing activities
    
    
    (3,022
    )
    
    
    4,186
    
    
    
    
    
    
    
    1,164CASH FLOW FROM FINANCING ACTIVITIES:Net borrowings under revolving credit facility
    
    
    8,380
    
    
    
    
    
    
    
    
    
    
    
    8,380Repayment of long-term debt
    
    
    (207
    )
    
    
    (268
    )
    
    
    
    
    
    
    (475
    )Repayment of extinguished debt
    
    
    
    
    
    
    (3,822
    )
    
    
    
    
    
    
    (3,822
    )Net cash flow from financing activities
    
    
    8,173
    
    
    
    (4,090
    )
    
    
    
    
    
    
    4,083DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (979
    )
    
    
    
    
    
    
    
    
    
    
    (979
    )CASH AND CASH EQUIVALENTS  Beginning of period
    
    
    1,024
    
    
    
    10
    
    
    
    
    
    
    
    1,034CASH AND CASH EQUIVALENTS  End of period
    
    $
    45
    
    
    $
    10
    
    
    $
    
    
    
    $
    55
 15




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##### Table of Contents



ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those anticipated in these
forward-looking statements as a result of a variety of risks and uncertainties, including those
described in this report under Cautionary Note Regarding Forward-Looking Statements and under
Risk Factors in our Registration Statement on Form S-4 , as amended on August 3, 2005, a copy of
which is available from us upon request. We assume no obligation to update any of these
forward-looking statements. You should read the following discussion in conjunction with our
consolidated financial statements and the notes thereto included in this report.
 Overview
     16




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##### Table of Contents



Business Segment Information
  Consolidated Results of Operations
  Three Months Ended June 30,
    
    Six Months Ended June 30,2004
    
    2005
    
    2004
    
    2005Amount
    
    %
    
    Amount
    
    %
    
    Amount
    
    %
    
    Amount
    
    %Net sales
    
    $
    67,428
    
    
    
    100.0
    %
    
    $
    82,865
    
    
    
    100.0
    %
    
    $
    130,330
    
    
    
    100.0
    %
    
    $
    157,626
    
    
    
    100.0
    %Gross profit
    
    
    11,421
    
    
    
    16.9
    
    
    
    11,689
    
    
    
    14.1
    
    
    
    22,113
    
    
    
    17.0
    
    
    
    21,850
    
    
    
    13.8Selling, engineering, general
and administrative expenses
    
    
    5,943
    
    
    
    8.8
    
    
    
    5,815
    
    
    
    7.0
    
    
    
    10,853
    
    
    
    8.3
    
    
    
    11,738
    
    
    
    7.4Operating income
    
    
    5,478
    
    
    
    8.1
    
    
    
    5,874
    
    
    
    7.0
    
    
    
    11,260
    
    
    
    8.6
    
    
    
    10,112
    
    
    
    6.4Interest expense, net
    
    
    2,659
    
    
    
    3.9
    
    
    
    3,840
    
    
    
    4.6
    
    
    
    5,118
    
    
    
    3.9
    
    
    
    7,497
    
    
    
    4.8Other (income)expense, net
    
    
    (2
    )
    
    
    0.0
    
    
    
    (1,264
    )
    
    
    1.5
    
    
    
    (2
    )
    
    
    0.0
    
    
    
    (1,259
    )
    
    
    (0.8
    )Income before income taxes
    
    
    2,821
    
    
    
    4.1
    
    
    
    3,298
    
    
    
    3.9
    
    
    
    6,144
    
    
    
    4.7
    
    
    
    3,874
    
    
    
    2.5Income tax expense
    
    
    850
    
    
    
    1.2
    
    
    
    639
    
    
    
    0.7
    
    
    
    1,469
    
    
    
    1.2
    
    
    
    1,155
    
    
    
    0.7Net income
    
    $
    1,971
    
    
    
    2.9
    
    
    $
    2,659
    
    
    
    3.2
    
    
    $
    4,675
    
    
    
    3.6
    
    
    $
    2,719
    
    
    
    1.7Capital expenditures
    
    $
    749
    
    
    
    
    
    
    $
    2,025
    
    
    
    
    
    
    $
    1,377
    
    
    
    
    
    
    $
    3,215Depreciation and amortization
expense
    
    
    1,731
    
    
    
    
    
    
    
    1,441
    
    
    
    
    
    
    
    3,269
    
    
    
    
    
    
    
    2,895
 17




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##### Table of Contents



Three Months Ended June 30, 2005 Compared with Three Months Ended June 30, 2004
 Net sales
 Gross profit margin
 Selling, engineering, general and administrative (SEG&A)
 Interest expense, net 
 Other income, net
 Income tax expense 
 18




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##### Table of Contents



Six Months Ended June 30, 2005 Compared with Six Months Ended June 30, 2004
 Net sales
 Gross profit margin
 Selling, engineering, general and administrative (SEG&A)
 Interest expense, net 
 Other income, net
 Income tax expense 
 19




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##### Table of Contents



Segment Results
  Three months ended June 30,
    
    Six months ended June 30,2004
    
    2005
    
    2004
    
    2005Amount
    
    %
    
    Amount
    
    %
    
    Amount
    
    %
    
    Amount
    
    %Net Sales:Electrical / Wire and Cable Distributors
    
    $
    23,416
    
    
    
    34.7
    %
    
    $
    27,394
    
    
    
    33.1
    %
    
    $
    45,351
    
    
    
    34.8
    %
    
    $
    53,693
    
    
    
    34.1
    %Specialty Distributors and OEMs
    
    
    34,451
    
    
    
    51.1
    
    
    
    44,011
    
    
    
    53.1
    
    
    
    66,417
    
    
    
    51.0
    
    
    
    82,321
    
    
    
    52.2Consumer Outlets
    
    
    10,551
    
    
    
    15.7
    
    
    
    12,599
    
    
    
    15.2
    
    
    
    20,519
    
    
    
    15.7
    
    
    
    23,924
    
    
    
    15.2Intercompany eliminations
    
    
    (990
    )
    
    
    (1.5
    )
    
    
    (1,139
    )
    
    
    (1.4
    )
    
    
    (1,957
    )
    
    
    (1.5
    )
    
    
    (2,312
    )
    
    
    (1.5
    )Total
    
    $
    67,428
    
    
    
    100.0
    %
    
    $
    82,865
    
    
    
    100.0
    %
    
    $
    130,330
    
    
    
    100.0
    %
    
    $
    157,626
    
    
    
    100.0
    %Operating Income:Electrical / Wire and Cable Distributors
    
    $
    2,529
    
    
    
    10.8
    %
    
    $
    3,035
    
    
    
    11.1
    %
    
    $
    4,769
    
    
    
    10.5
    %
    
    $
    5,511
    
    
    
    10.3
    %Specialty Distributors and OEMs
    
    
    3,501
    
    
    
    10.2
    
    
    
    3,074
    
    
    
    6.9
    
    
    
    7,266
    
    
    
    10.9
    
    
    
    5,783
    
    
    
    7.0Consumer Outlets
    
    
    578
    
    
    
    5.5
    
    
    
    595
    
    
    
    4.7
    
    
    
    714
    
    
    
    3.5
    
    
    
    630
    
    
    
    2.6Total
    
    
    6,608
    
    
    
    
    
    
    
    6,704
    
    
    
    
    
    
    
    12,749
    
    
    
    
    
    
    
    11,924Corporate
    
    
    (1,130
    )
    
    
    
    
    
    
    (830
    )
    
    
    
    
    
    
    (1,489
    )
    
    
    
    
    
    
    (1,812
    )Consolidated operating income
    
    $
    5,478
    
    
    
    8.1
    %
    
    $
    5,874
    
    
    
    7.1
    %
    
    $
    11,260
    
    
    
    8.6
    %
    
    $
    10,112
    
    
    
    6.4
    %
 Three Months Ended June 30, 2005 Compared with Three Months Ended June 30, 2004
 Electrical/Wire and Cable Distributors
   Specialty Distributors and OEMs
  20




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Consumer Outlets
   Six Months Ended June 30, 2005 Compared with Six Months Ended June 30, 2004
 Electrical/Wire and Cable Distributors
   Specialty Distributors and OEMs
   21




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##### Table of Contents



Consumer Outlets
   Liquidity and Capital Resources
 Debt
   As ofJune 30, 2005(dollars in thousands)Revolving credit facility
    
    $
    38,200Senior notes
    
    
    120,000Capital lease obligations
    
    
    1,671Other long-term debt
    
    
    2,061Total long-term debt
    
    $
    161,932
  Senior Secured Revolving Credit Facility
  22




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
 
 
    
 
 
 23




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##### Table of Contents




 
 
   
 
 
 Senior Notes
  Capital Lease Obligation
   24




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##### Table of Contents



Other
   Current and Future Liquidity
    
 
 
 
 
   25




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##### Table of Contents



Seasonality
  Contractual Obligations
  Payments Due by PeriodLess than
    
    
    
    
    
    
    
    
    
    AfterContractual Obligations
    
    Total
    
    1 Year
    
    1-3 Years
    
    3-5 Years
    
    5 Years(dollars in thousands)Current and long-term debt obligations
(including interest)
    
    $
    208,267
    
    
    $
    12,456
    
    
    $
    37,081
    
    
    $
    23,770
    
    
    $
    134,960Capital lease obligations (including interest)
    
    
    2,101
    
    
    
    559
    
    
    
    1,429
    
    
    
    113
    
    
    
    Operating lease obligations
    
    
    11,683
    
    
    
    2,776
    
    
    
    3,908
    
    
    
    1,930
    
    
    
    3,069Purchase obligations
    
    
    26,693
    
    
    
    26,693
    
    
    
    
    
    
    
    
    
    
    
    
  26




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##### Table of Contents



Off-Balance Sheet Assets and Obligations
  Critical Accounting Policies
  Revenue Recognition
  Allowance for Doubtful Accounts
  Inventories
  27




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##### Table of Contents



Plant and Equipment
 Accounting for the Impairment of Disposal of Long-Lived Assets
 Goodwill
 Goodwill and Other Intangible Assets
 Income Taxes
 Accounting for Income
Taxes
  New Accounting Pronouncements
 Shared-Based Payment
 28




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##### Table of Contents



Inventory Costs  An Amendment of ARB No. 43,
Chapter 4 Inventory Pricing
 Exchanges of Nonmonetary Assets  An Amendment
of APB Opinion No. 29, Accounting for Nonmonetary Transactions
 Cautionary Note Regarding Forward-Looking Statements
   
    
    fluctuations in the supply or price of copper and other raw materials;
    
    increased competition from other wire and cable manufacturers, including foreign
manufacturers;
    
    pricing pressures causing margins to decrease;
    
    general economic conditions and changes in the demand for our products by key customers;
    
    failure to identify, finance or integrate acquisitions; and
    
    other risks and uncertainties, including those described under Risk Factors.
  29




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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
  Commodity Risk.
 Interest Rate Risk.
 
 ITEM 4. Controls and Procedures
   30




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##### Table of Contents



PART II OTHER INFORMATION
 
 ITEM 1. Legal Proceedings
  
 ITEM 6. Exhibits
 Exhibit No.
    
    Description1.1
    
    Purchase Agreement dated September 21, 2004 between Coleman
Cable, Inc. and Wachovia Capital Markets, LLC, incorporated
herein by reference to our Form S-4/A filed on August 3, 2005.3.1
    
    Certificate of Incorporation of Coleman Cable, Inc.,
incorporated herein by reference to our Form S-4/A filed on
August 3, 2005.3.2
    
    By-Laws of Coleman Cable, Inc., incorporated herein by
reference to our Form S-4/A filed on August 3, 2005.4.1
    
    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/A filed on August 3, 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/A filed on August 3, 2005.10.1
    
    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/A filed on August 3, 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/A filed on August 3, 2005.10.3
    
    Second Amendment to Credit Agreement dated as of September 30,
2005 among Coleman Cable, Inc. and certain of its U.S.
Subsidiaries, as Borrowers, the
 31




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##### Table of Contents



Exhibit No.
    
    DescriptionLenders named therein, and
Wachovia Bank, National Association, as administrative agent,
incorporated herein by reference to our Form S-4/A filed on
August 3, 2005.10.4
    
    Consulting Agreement dated as of October 1, 2004 by and
between Coleman Cable, Inc. and David Bistricer, incorporated
herein by reference to our Form S-4/A filed on August 3, 2005.10.5
    
    Consulting Agreement dated as of October 1, 2004 by and
between Coleman Cable, Inc. and Nachum Stein, incorporated
herein by reference to our Form S-4/A filed on August 3, 2005.31.1
    
    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.
 32




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##### Table of Contents



SIGNATURES
  COLEMAN CABLE, INC.
(Registrant)Date: August 15, 2005
    
    By/s/ G. Gary YetmanChief Executive Officer and PresidentDate: August 15, 2005
    
    By/s/ Richard N. BurgerChief Financial Officer, ExecutiveVice President, Secretary and Treasurer
 33