##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q







|þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2010



| ̈ | 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.

(Exact Name of Registrant as Specified in its Charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 36-4410887                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

1530 Shields Drive, Waukegan, Illinois 60085

(Address of Principal
Executive Offices)

(847) 672-2300

(Registrants Telephone Number, including Area Code)





Indicate by
check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the past 90
days.    þ  Yes     ̈  No

Indicate by check mark whether the registrant has submitted electronically and posted on its Web Site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     ̈  Yes     ̈  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  |  ̈
|                        |  |                                                  | 
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller reporting company |  | þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).     ̈  Yes    þ  No

Common shares outstanding as of November 1, 2010: 17,344,480









---

##### Table of Contents



INDEX



|                                                                                                                |  |      |    | 
|--------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                                |  | Page |   
|PART I. FINANCIAL INFORMATION                                                                                   |  |      | 3  | 
|Item 1. Financial Statements (unaudited)                                                                        |  |      | 3  | 
|Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2010 and 2009 |  |      | 3  | 
|Condensed Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009                            |  |      | 4  | 
|Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and 2009           |  |      | 5  | 
|Notes to Condensed Consolidated Financial Statements                                                            |  |      | 6  | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations                   |  |      | 23 | 
|Item 3. Quantitative and Qualitative Disclosures about Market Risk                                              |  |      | 36 | 
|Item 4. Controls and Procedures                                                                                 |  |      | 37 | 
|PART II. OTHER INFORMATION                                                                                      |  |      | 38 | 
|Item 1. Legal Proceedings                                                                                       |  |      | 38 | 
|Item 1A. Risk Factors                                                                                           |  |      | 38 | 
|Item 6. Exhibits                                                                                                |  |      | 38 | 
|Signatures                                                                                                      |  |      | 39 | 
|Exhibit Index                                                                                                   |  |      | 40 | 



2



---

##### Table of Contents



PART I. FINANCIAL INFORMATION



|ITEM 1. | Financial Statements
|------- | --------------------

COLEMAN CABLE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Thousands, except per share data)

(unaudited)



|                                                          |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|--------------------------------------------------------- |  | -------------------------------- | ------- | - | ------------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                          |  | Three Months Ended September 30, |         |   | Nine Months Ended September 30, |  
|                                                          |  | 2010                             |         |   | 2009                            |   |         | 2010 |  |   | 2009    |  
|NET SALES                                                 |  | $                                | 187,597 |   |                                 | $ | 133,795 |      |  | $ | 517,588 |   |  | $ | 364,049 |  
|COST OF GOODS SOLD                                        |  |                                  | 162,923 |   |                                 |   | 113,475 |      |  |   | 444,079 |   |  |   | 310,171 |  
|                                                          |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|GROSS PROFIT                                              |  |                                  | 24,674  |   |                                 |   | 20,320  |      |  |   | 73,509  |   |  |   | 53,878  |  
|SELLING, ENGINEERING, GENERAL AND ADMINISTRATIVE EXPENSES |  |                                  | 11,465  |   |                                 |   | 9,916   |      |  |   | 34,524  |   |  |   | 30,408  |  
|INTANGIBLE ASSET AMORTIZATION                             |  |                                  | 1,606   |   |                                 |   | 2,071   |      |  |   | 5,228   |   |  |   | 6,773   |  
|ASSET IMPAIRMENTS                                         |  |                                  | 202     |   |                                 |   | 300     |      |  |   | 202     |   |  |   | 69,798  |  
|RESTRUCTURING CHARGES                                     |  |                                  | 235     |   |                                 |   | 1,692   |      |  |   | 1,560   |   |  |   | 4,049   |  
|                                                          |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|OPERATING INCOME (LOSS)                                   |  |                                  | 11,166  |   |                                 |   | 6,341   |      |  |   | 31,995  |   |  |   | (57,150 | )
|INTEREST EXPENSE                                          |  |                                  | 6,969   |   |                                 |   | 6,242   |      |  |   | 20,471  |   |  |   | 19,014  |  
|GAIN ON REPURCHASE OF SENIOR NOTES                        |  |                                  |        |   |                                 |   | (385    | )    |  |   |        |   |  |   | (3,285  | )
|LOSS ON EXTINGUISHMENT OF DEBT                            |  |                                  |        |   |                                 |   |        |      |  |   | 8,566   |   |  |   |        |  
|OTHER INCOME, NET                                         |  |                                  | (170    | ) |                                 |   | (674    | )    |  |   | (56     | ) |  |   | (1,068  | )
|                                                          |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|INCOME (LOSS) BEFORE INCOME TAXES                         |  |                                  | 4,367   |   |                                 |   | 1,158   |      |  |   | 3,014   |   |  |   | (71,811 | )
|INCOME TAX EXPENSE (BENEFIT)                              |  |                                  | 1,259   |   |                                 |   | 374     |      |  |   | 621     |   |  |   | (8,125  | )
|                                                          |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|NET INCOME (LOSS)                                         |  | $                                | 3,108   |   |                                 | $ | 784     |      |  | $ | 2,393   |   |  | $ | (63,686 | )
|                                                          |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|EARNINGS (LOSS) PER COMMON SHARE DATA                     |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|NET INCOME (LOSS) PER SHARE                               |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                     |  | $                                | 0.18    |   |                                 | $ | 0.05    |      |  | $ | 0.14    |   |  | $ | (3.79   | )
|Diluted                                                   |  |                                  | 0.18    |   |                                 |   | 0.05    |      |  |   | 0.14    |   |  |   | (3.79   | )
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                     |  |                                  | 16,939  |   |                                 |   | 16,809  |      |  |   | 16,925  |   |  |   | 16,809  |  
|Diluted                                                   |  |                                  | 17,012  |   |                                 |   | 17,180  |      |  |   | 16,981  |   |  |   | 16,809  |  

See notes to condensed
consolidated financial statements.



3



---

##### Table of Contents



COLEMAN CABLE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Thousands, except per share data)

(unaudited)



|                                                                                                                                        |  |                   |         |   |                  |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                        |  | September 30,2010 |         |   | December 31,2009 |  
|ASSETS                                                                                                                                  |  |                   |         |   |                  |   |         |  
|CURRENT ASSETS:                                                                                                                         |  |                   |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                               |  | $                 | 8,478   |   |                  | $ | 7,599   |  
|Accounts receivable, net of allowances of $2,618 and $2,565, respectively                                                               |  |                   | 112,857 |   |                  |   | 86,393  |  
|Inventories                                                                                                                             |  |                   | 93,169  |   |                  |   | 66,222  |  
|Deferred income taxes                                                                                                                   |  |                   | 3,225   |   |                  |   | 3,129   |  
|Assets held for sale                                                                                                                    |  |                   | 2,476   |   |                  |   | 3,624   |  
|Prepaid expenses and other current assets                                                                                               |  |                   | 7,908   |   |                  |   | 5,959   |  
|                                                                                                                                        |  |                   |         |   |                  |   |         |  
|Total current assets                                                                                                                    |  |                   | 228,113 |   |                  |   | 172,926 |  
|                                                                                                                                        |  |                   |         |   |                  |   |         |  
|PROPERTY, PLANT AND EQUIPMENT, NET                                                                                                      |  |                   | 46,397  |   |                  |   | 50,666  |  
|GOODWILL                                                                                                                                |  |                   | 29,093  |   |                  |   | 29,064  |  
|INTANGIBLE ASSETS                                                                                                                       |  |                   | 25,359  |   |                  |   | 30,584  |  
|DEFERRED INCOME TAXES                                                                                                                   |  |                   |        |   |                  |   | 434     |  
|OTHER ASSETS                                                                                                                            |  |                   | 9,532   |   |                  |   | 6,433   |  
|                                                                                                                                        |  |                   |         |   |                  |   |         |  
|TOTAL ASSETS                                                                                                                            |  | $                 | 338,494 |   |                  | $ | 290,107 |  
|                                                                                                                                        |  |                   |         |   |                  |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                    |  |                   |         |   |                  |   |         |  
|CURRENT LIABILITIES:                                                                                                                    |  |                   |         |   |                  |   |         |  
|Current portion of long-term debt                                                                                                       |  | $                 | 9       |   |                  | $ | 14      |  
|Accounts payable                                                                                                                        |  |                   | 27,267  |   |                  |   | 17,693  |  
|Accrued liabilities                                                                                                                     |  |                   | 23,907  |   |                  |   | 23,980  |  
|                                                                                                                                        |  |                   |         |   |                  |   |         |  
|Total current liabilities                                                                                                               |  |                   | 51,183  |   |                  |   | 41,687  |  
|                                                                                                                                        |  |                   |         |   |                  |   |         |  
|LONG-TERM DEBT                                                                                                                          |  |                   | 271,708 |   |                  |   | 236,839 |  
|OTHER LONG-TERM LIABILITIES                                                                                                             |  |                   | 3,799   |   |                  |   | 3,823   |  
|DEFERRED INCOME TAXES                                                                                                                   |  |                   | 2,695   |   |                  |   | 2,498   |  
|COMMITMENTS AND CONTINGENCIES                                                                                                           |  |                   |         |   |                  |   |         |  
|SHAREHOLDERS EQUITY:                                                                                                                   |  |                   |         |   |                  |   |         |  
|Common stock, par value $0.001; 75,000 authorized; 17,344 and 16,809 issued and outstanding on September 30, 2010 and
December 31, 2009 |  |                   | 17      |   |                  |   | 17      |  
|Additional paid-in capital                                                                                                              |  |                   | 89,926  |   |                  |   | 88,475  |  
|Accumulated deficit                                                                                                                     |  |                   | (80,594 | ) |                  |   | (82,987 | )
|Accumulated other comprehensive loss                                                                                                    |  |                   | (240    | ) |                  |   | (245    | )
|                                                                                                                                        |  |                   |         |   |                  |   |         |  
|Total shareholders equity                                                                                                              |  |                   | 9,109   |   |                  |   | 5,260   |  
|                                                                                                                                        |  |                   |         |   |                  |   |         |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                                                                              |  | $                 | 338,494 |   |                  | $ | 290,107 |  
|                                                                                                                                        |  |                   |         |   |                  |   |         |  

See notes to condensed consolidated financial statements.



4



---

##### Table of Contents



COLEMAN CABLE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Thousands)

(unaudited)



|                                                                              |  |                                 |          |   |      |   |         |  
|----------------------------------------------------------------------------- |  | ------------------------------- | -------- | - | ---- | - | ------- | -
|                                                                              |  | Nine Months Ended September 30, |         
|                                                                              |  | 2010                            |          |   | 2009 |  
|CASH FLOW FROM OPERATING ACTIVITIES:                                          |  |                                 |          |   |      |   |         |  
|Net income (loss)                                                             |  | $                               | 2,393    |   |      | $ | (63,686 | )
|Adjustments to reconcile net loss to net cash flow from operating activities: |  |                                 |          |   |      |   |         |  
|Depreciation and amortization                                                 |  |                                 | 15,141   |   |      |   | 17,622  |  
|Stock-based compensation                                                      |  |                                 | 1,715    |   |      |   | 1,895   |  
|Foreign currency transaction gain                                             |  |                                 | (56      | ) |      |   | (1,068  | )
|Gain on repurchase of senior notes                                            |  |                                 |         |   |      |   | (3,285  | )
|Loss on extinguishment of debt                                                |  |                                 | 8,566    |   |      |   |        |  
|Asset impairments                                                             |  |                                 | 202      |   |      |   | 69,798  |  
|Deferred taxes                                                                |  |                                 | 698      |   |      |   | (9,096  | )
|Loss on disposal of fixed assets                                              |  |                                 | 395      |   |      |   | 446     |  
|Changes in operating assets and liabilities:                                  |  |                                 |          |   |      |   |         |  
|Accounts receivable                                                           |  |                                 | (26,599  | ) |      |   | 13,418  |  
|Inventories                                                                   |  |                                 | (26,913  | ) |      |   | (267    | )
|Prepaid expenses and other assets                                             |  |                                 | (1,792   | ) |      |   | 5,037   |  
|Accounts payable                                                              |  |                                 | 9,427    |   |      |   | (647    | )
|Accrued liabilities                                                           |  |                                 | (792     | ) |      |   | (753    | )
|                                                                              |  |                                 |          |   |      |   |         |  
|Net cash flow from operating activities                                       |  |                                 | (17,615  | ) |      |   | 29,414  |  
|                                                                              |  |                                 |          |   |      |   |         |  
|CASH FLOW FROM INVESTING ACTIVITIES:                                          |  |                                 |          |   |      |   |         |  
|Capital expenditures                                                          |  |                                 | (4,500   | ) |      |   | (2,790  | )
|Purchases of investments                                                      |  |                                 | (1,576   | ) |      |   |        |  
|Proceeds from sale of fixed assets                                            |  |                                 | 1,170    |   |      |   | 123     |  
|                                                                              |  |                                 |          |   |      |   |         |  
|Net cash flow from investing activities                                       |  |                                 | (4,906   | ) |      |   | (2,667  | )
|                                                                              |  |                                 |          |   |      |   |         |  
|CASH FLOW FROM FINANCING ACTIVITIES:                                          |  |                                 |          |   |      |   |         |  
|Borrowings under revolving loan facilities                                    |  |                                 | 34,961   |   |      |   | 31,809  |  
|Repayments under revolving credit facility                                    |  |                                 | (45,200  | ) |      |   | (55,959 | )
|Payment of debt financing and amendment fees                                  |  |                                 | (6,695   | ) |      |   | (1,012  | )
|Repayment of long-term debt                                                   |  |                                 | (231,657 | ) |      |   | (12,004 | )
|Proceeds from the issuance of 2018 Senior Notes                               |  |                                 | 271,911  |   |      |   |        |  
|                                                                              |  |                                 |          |   |      |   |         |  
|Net cash flow from financing activities                                       |  |                                 | 23,320   |   |      |   | (37,166 | )
|                                                                              |  |                                 |          |   |      |   |         |  
|Effect of exchange rate changes on cash and cash equivalents                  |  |                                 | 80       |   |      |   | 176     |  
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                              |  |                                 | 879      |   |      |   | (10,243 | )
|CASH AND CASH EQUIVALENTS  Beginning of period                               |  |                                 | 7,599    |   |      |   | 16,328  |  
|                                                                              |  |                                 |          |   |      |   |         |  
|CASH AND CASH EQUIVALENTS  End of period                                     |  | $                               | 8,478    |   |      | $ | 6,085   |  
|                                                                              |  |                                 |          |   |      |   |         |  
|NONCASH ACTIVITY                                                              |  |                                 |          |   |      |   |         |  
|Unpaid capital expenditures                                                   |  |                                 | 199      |   |      |   | 251     |  
|Capital lease obligation                                                      |  |                                 | 10       |   |      |   |        |  
|SUPPLEMENTAL CASH FLOW INFORMATION                                            |  |                                 |          |   |      |   |         |  
|Income taxes paid (refunded), net                                             |  |                                 | 88       |   |      |   | (3,215  | )
|Cash interest paid                                                            |  |                                 | 21,936   |   |      |   | 12,899  |  

See notes to condensed
consolidated financial statements.



5



---

##### Table of Contents



COLEMAN CABLE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Thousands, except per share data)

(unaudited)

1. BASIS OF PRESENTATION

The condensed
consolidated financial statements included herein are unaudited. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with United States (U.S.) generally accepted
accounting principles (GAAP) have been condensed or omitted. The condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for
a fair presentation in conformity with GAAP. All amounts are in thousands, unless otherwise indicated. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto
included in the Companys Form 10-K for the fiscal year ended December 31, 2009. The results of operations for the interim periods should not be considered indicative of results to be expected for the full year.

Condensed Consolidated Statements of Cash Flows

The Company has corrected the presentation of borrowings and repayments on its revolving credit facility for 2009 within the condensed consolidated statement of cash flows. Related amounts had previously
been presented on a net basis, rather than on a gross basis in accordance with accounting guidance. The correction had no effect on net cash used in financing activities.

2. NEW ACCOUNTING PRONOUNCEMENTS

Fair Value Measurements and
Disclosures

In January 2010, the FASB issued an accounting update on fair value measurement and disclosures. This update provides
guidance clarifying fair value measurement valuation techniques as well as disclosure requirements concerning transfers between levels within the fair value hierarchy. This update, which was effective for the first quarter of 2010, did not have a
significant impact on our financial statements.

Variable Interest Entity

In June 2009, the FASB issued an update to the accounting guidance for consolidation. Accordingly, new accounting standards concerning the treatment of
variable interest entities were issued. This guidance addresses the effects on certain provisions of consolidation of variable interest entities as a result of the elimination of the qualifying special-purpose entity concept. This guidance also
addresses the ability to provide timely and useful information about an enterprises involvement in a variable interest entity. The accounting update is effective for a reporting entitys first annual reporting period that begins after
November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. This update, which was effective for the first quarter of 2010, did not have a significant impact on our
financial statements.

3. ASSET IMPAIRMENTS

Under goodwill accounting rules, we are required to assess goodwill for impairment annually (our annual measurement date is December 31st), or more frequently if events or circumstances indicate impairment may have occurred. The analysis of potential
impairment of goodwill employs a two-step process. The first step involves the estimation of fair value of our reporting units. If step one indicates that impairment of goodwill potentially exists, the second step is performed to measure the amount
of impairment, if any. Goodwill impairment exists when the estimated implied fair value of goodwill is less than its carrying value. No potential goodwill impairment indicators existed for the period ended September 30, 2010.

During the first quarter of 2009, we concluded that there were sufficient indicators to require us to perform an interim goodwill impairment analysis
based on a combination of factors which were in existence at that time, including a significant decline in our market capitalization, as well as the recessionary economic environment and its then estimated potential impact on our business.
Accordingly, we recorded a non-cash goodwill impairment charge of $69,498, representing our best estimate of the impairment loss incurred within three of the four reporting units within our Distribution segment: Electrical distribution, Wire and
Cable distribution and Industrial distribution. At the March 31, 2009 test date, no indication of impairment under the goodwill impairment test existed relative to our Retail distribution reporting unit, and we did not have any goodwill
recorded within our OEM segment. For the purposes of the goodwill impairment analysis, our estimates of fair value were based primarily on estimates generated using the income approach, which estimates the fair value of our reporting units based on
their projected future discounted cash flows.



6



---

##### Table of Contents



The goodwill impairment testing
process involves the use of significant assumptions, estimates and judgments, and is subject to inherent uncertainties and subjectivity. Estimating a reporting units projected cash flows involves the use of significant assumptions, estimates
and judgments with respect to numerous factors, including future sales, gross profit, selling, engineering, general and administrative expense rates, capital expenditures, and cash flows. These estimates are based on our business plans and
forecasts. These estimates are then discounted, which necessitates the selection of an appropriate discount rate. The discount rate used reflects market-based estimates of the risks associated with the projected cash flows of the reporting unit. The
allocation of the estimated fair value of our reporting units to the estimated fair value of their net assets required under the second step of the goodwill impairment test also involves the use of significant assumptions, estimates and judgments.

The use of different assumptions, estimates or judgments in either step of the goodwill impairment testing process, such as the estimated
future cash flows of our reporting units, the discount rate used to discount such cash flows, or the estimated fair value of the reporting units tangible and intangible assets and liabilities, could significantly increase or decrease the
estimated fair value of a reporting unit or its net assets, and therefore, impact the related impairment charge. For example, as of March 31, 2009, (1) a 5% increase or decrease in the aggregate estimated undiscounted cash flows of our
reporting units (without any change in the discount rate used in the first step of our goodwill impairment test as of such date) would have resulted in an increase or decrease of approximately $14,000 in the aggregate estimated fair value of our
reporting units as of such date, (2) a 100 basis point increase or decrease in the discount rate used to discount the aggregate estimated cash flows of our reporting units to their net present value (without any change in the aggregate
estimated cash flows of our reporting units used in the first step of our goodwill impairment test as of such date) would have resulted in a decrease or increase of approximately $18,000 in the aggregate estimated fair value of our reporting units
as of such date, and (3) a 1% increase or decrease in the estimated sales growth rate without a change in the discount rate of each reporting unit would have resulted in an increase or decrease of approximately $7,000 in the aggregate estimated
fair value of our reporting units as of such date. The goodwill impairment testing process is complex, and can be affected by the inter-relationship between certain assumptions, estimates and judgments that may apply to both the first and second
steps of the process and the fact that the maximum potential impairment of the goodwill of any reporting unit is limited to the carrying value of the goodwill of that reporting unit. Accordingly, the above-described sensitivities around changes in
the aggregate estimated fair values of our reporting units would not necessarily have had a dollar-for-dollar impact on the amount of goodwill impairment we recognized in the first quarter of 2009 as a result of our analysis. These sensitivities are
presented solely to illustrate the effects that a hypothetical change in one or more key variables affecting a reporting units fair value might have on the outcomes produced by the goodwill impairment testing process.

Further goodwill impairment charges may be recognized in future periods in one or more of the Distribution reporting units to the extent changes in
factors or circumstances occur, including further deterioration in the macro-economic environment or in the equity markets, including the market value of our common shares, deterioration in our performance or future projections, or changes in our
plans for one or more reporting units.

The $202 asset impairment charge recorded in the third quarter of 2010, and the $300 asset impairment
charge recorded in the third quarter of 2009 were to write a held for sale property down to fair value.

4. RESTRUCTURING ACTIVITIES

We incurred restructuring costs of $235 and $1,560 during the third quarter and first nine months of 2010, respectively. For the first
nine months of 2010, these expenses were primarily comprised of holding costs associated with nine facilities closed throughout 2008 and 2009. The $2,952 liability as of September 30, 2010 primarily relates to lease liabilities associated with
certain leased facilities closed during 2008 in connection with the integration of our 2007 acquisitions. Our reserve for lease termination costs represents our estimate of the liability existing relative to closed properties under lease and is
equal to our remaining obligation under such leases reduced by estimated sublease rental income reasonably expected for the properties. Accordingly, the liability may be increased or decreased in future periods as facts and circumstances change,
including possible negotiation of one or more lease terminations, sublease agreements, or changes in the related markets in which the properties are located.



|                             |  |                       |        |   |                               |   |        |       |  |   |        |  
|---------------------------- |  | --------------------- | ------ | - | ----------------------------- | - | ------ | ----- |  | - | ------ | -
|                             |  | LeaseTerminationCosts |        |   | Severance &Other ClosingCosts |   |        | Total | 
|BALANCE  December 31, 2009  |  | $                     | 4,362  |   |                               | $ | 23     |       |  | $ | 4,385  |  
|Provision                    |  |                       | 260    |   |                               |   | 1,300  |       |  |   | 1,560  |  
|Cash payments                |  |                       | (1,706 | ) |                               |   | (1,287 | )     |  |   | (2,993 | )
|                             |  |                       |        |   |                               |   |        |       |  |   |        |  
|BALANCE  September 30, 2010 |  | $                     | 2,916  |   |                               | $ | 36     |       |  | $ | 2,952  |  
|                             |  |                       |        |   |                               |   |        |       |  |   |        |  



7



---

##### Table of Contents



5. INVENTORIES

Inventories consisted of the following:



|                  |  |                   |        |  |                  |   |        | 
|----------------- |  | ----------------- | ------ |  | ---------------- | - | ------ | 
|                  |  | September 30,2010 |        |  | December 31,2009 |  
|FIFO cost:        |  |                   |        |  |                  |   |        | 
|Raw materials     |  | $                 | 32,175 |  |                  | $ | 20,962 | 
|Work in progress  |  |                   | 3,875  |  |                  |   | 3,807  | 
|Finished products |  |                   | 57,119 |  |                  |   | 41,453 | 
|                  |  |                   |        |  |                  |   |        | 
|Total             |  | $                 | 93,169 |  |                  | $ | 66,222 | 
|                  |  |                   |        |  |                  |   |        | 

6. ACCRUED LIABILITIES

Accrued liabilities consisted of the following:



|                                      |  |                   |        |  |                  |   |        | 
|------------------------------------- |  | ----------------- | ------ |  | ---------------- | - | ------ | 
|                                      |  | September 30,2010 |        |  | December 31,2009 |  
|Salaries, wages and employee benefits |  | $                 | 7,071  |  |                  | $ | 3,113  | 
|Sales incentives                      |  |                   | 8,188  |  |                  |   | 8,302  | 
|Interest                              |  |                   | 3,349  |  |                  |   | 5,824  | 
|Other                                 |  |                   | 5,299  |  |                  |   | 6,741  | 
|                                      |  |                   |        |  |                  |   |        | 
|Total                                 |  | $                 | 23,907 |  |                  | $ | 23,980 | 
|                                      |  |                   |        |  |                  |   |        | 

7. DEBT



|                                                                                            |  |                   |         |   |                  |   |         |  
|------------------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                            |  | September 30,2010 |         |   | December 31,2009 |  
|Revolving credit facility expiring April 2012                                               |  | $                 |        |   |                  | $ | 10,239  |  
|9.875% 2012 Senior Notes extinguished January 2010, including unamortized premium of $1,617 |  |                   |        |   |                  |   | 226,597 |  
|9% Senior Notes due February 2018, including unamortized discount of $3,297                 |  |                   | 271,703 |   |                  |   |        |  
|Capital lease obligations                                                                   |  |                   | 14      |   |                  |   | 17      |  
|                                                                                            |  |                   |         |   |                  |   |         |  
|                                                                                            |  |                   | 271,717 |   |                  |   | 236,853 |  
|Less current portion                                                                        |  |                   | (9      | ) |                  |   | (14     | )
|                                                                                            |  |                   |         |   |                  |   |         |  
|Long-term debt                                                                              |  | $                 | 271,708 |   |                  | $ | 236,839 |  
|                                                                                            |  |                   |         |   |                  |   |         |  

Senior Secured Revolving Credit Facility

Our Senior Secured Revolving Credit Facility (Revolving Credit Facility) is a senior secured facility that provides for aggregate borrowings
of up to $200,000, subject to certain limitations as discussed below. The proceeds from the Revolving Credit Facility are available for working capital and other general corporate purposes, including merger and acquisition activity. At
September 30, 2010, we had $0 in borrowings under the facility, with $121,613 in remaining excess availability. At December 31, 2009, we had $10,239 in borrowings outstanding under the facility, with $80,838 in remaining excess
availability.

On June 18, 2009, the Revolving Credit Facility was amended to permit us to spend up to $30,000 to redeem, retire or
repurchase our 9.875% 2012 Senior Notes (the 2012 Senior Notes) so long as (i) no default or event of default existed at the time of the repurchase or would have resulted from the repurchase and (ii) excess availability under
the Revolving Credit Facility after giving effect to the repurchase remained above $40,000 (the 2009 Amendment). Prior to the 2009 Amendment, we were prohibited from making prepayments on or repurchases of the 2012 Senior Notes. We were
required to pay an upfront amendment fee of $1,000, and the 2009 Amendment also increased the applicable interest rate margins by 1.25% and the unused line fee increased by 0.25%. Accordingly, subsequent to the 2009 Amendment, interest is payable,
at our option, at the agents prime rate plus a range of 1.25% to 1.75% or the Eurodollar rate plus a range of 2.50% to 3.00%, in each case based on quarterly average excess availability under the Revolving Credit Facility. In addition, we pay
a 0.50% unused line fee pursuant to the terms of the Revolving Credit Facility for unutilized availability.



8



---

##### Table of Contents



In order to complete the refinancing
of our 2012 Senior Notes in January 2010 as described below, we were required to amend the terms of our Revolving Credit Facility to allow for such refinancing. Accordingly, on January 19, 2010, our Revolving Credit Facility was amended
(i) to permit the Initial Private Placement (defined below), (ii) to enhance our ability to create and finance foreign subsidiaries, and (iii) to change covenants and make other provisions to increase operating flexibility (the
2010 Amendment). Pursuant to the terms of the Revolving Credit Facility, we are required to maintain a minimum of $10,000 in excess availability under the facility at all times. Borrowing availability under the Revolving Credit Facility
is limited to the lesser of (i) $200,000 or (ii) the sum of 85% of eligible accounts receivable, 55% of eligible inventory and an advance rate to be determined of certain appraised fixed assets, with a $10,000 sublimit for letters of
credit. Pursuant to the 2010 Amendment, borrowing availability under the Revolving Credit Facility for foreign subsidiaries is limited to the greater of (i) the sum of 85% of the aggregate book value of accounts receivable of such foreign
subsidiaries plus 60% of the aggregate book value of the inventory of such foreign subsidiaries and (ii) $25,000 (excluding permitted intercompany indebtedness of such foreign subsidiaries).

The Revolving Credit Facility is guaranteed by our domestic subsidiary and is secured by substantially all of our assets and the assets of our domestic
subsidiary, including accounts receivable, inventory and any other tangible and intangible assets (including real estate, machinery and equipment and intellectual property) as well as by a pledge of all the capital stock of our domestic subsidiary
and 65% of the capital stock of our Canadian foreign subsidiary, but not our Chinese 100%-owned entity.

The Revolving Credit Facility
contains financial and other covenants that limit or restrict our ability to pay dividends or distributions, incur indebtedness, permit liens on property, make investments, provide guarantees, enter into mergers, acquisitions or consolidations,
conduct asset sales, enter into leases or sale and lease back transactions, and enter into transactions with affiliates. In addition to maintaining a minimum of $10,000 in excess availability under the facility at all times, the financial covenants
in the Revolving Credit Facility require us to maintain a fixed charge coverage ratio of not less than 1.1 to 1.0 for any month during which our excess availability under the Revolving Credit Facility falls below $30,000. We maintained greater than
$30,000 of monthly excess availability for the first nine months of 2010 and during 2009.

Refinancing of 2012 Senior
Notes with 2018 Senior Notes

In the first quarter of 2010, in order to take advantage of what we believed were favorable refinancing
conditions at the time, we undertook a refinancing of our 2012 Senior Notes in order to extend the maturity date of such long-term, unsecured debt, and lower the coupon rate on such debt. In total, we issued $275,000 of 2018 Senior Notes (defined
below), which resulted in $271,911 in proceeds (after giving effect to $3,597 in original issuance discounts and $500 of prepaid interest). A portion of these proceeds were used to retire $224,980 in par value of our remaining 2012 Senior Notes, and
the remainder is available to be used in the future for general corporate purposes, including potential acquisitions. As detailed below, the issuance of our 2018 Senior Notes occurred in two parts, both completed during the first quarter of 2010.

On February 3, 2010 we completed a private placement under Rule 144A under the Securities Act of 1933, as amended (the Securities
Act) of $235,000 aggregate principal amount of 9.0% unsecured senior notes due in 2018 (the Initial Private Placement) to refinance our 2012 Senior Notes. The Initial Private Placement resulted in gross proceeds of approximately
$231,703, which reflects a discounted issue price of 98.597% of the principal amount. The proceeds were used, together with other available funds, for payment of consideration and costs relating to a cash tender offer and consent solicitation for
our 2012 Senior Notes. A total of $199,429 aggregate principal amount of the 2012 Senior Notes were tendered, which represented approximately 88.6% of the $224,980 aggregate principal amount of the 2012 Senior Notes outstanding. We redeemed the
remaining $25,551 of 2012 Senior Notes on March 22, 2010. On March 23, 2010, we completed another private placement offering under Rule 144A under the Securities Act (the Supplemental Private Placement) of $40,000 aggregate
principal amount of 9.0% unsecured senior notes due in 2018 (together with the senior notes offered in the Initial Private Placement, the 2018 Senior Notes). We received gross proceeds from the Supplemental Private Placement of
approximately $39,700, which reflects a discounted issue price of 99.25% of the principal amount. The proceeds were used, together with the proceeds of the Initial Private Placement, for payment of consideration and costs relating to a cash tender
offer for the final $25,551 of original 2012 Senior Note redemptions. The 2018 Senior Notes mature on February 15, 2018 and interest on these notes accrues at a rate of 9.0% per annum and is payable semi-annually on each February 15
and August 15.



9



---

##### Table of Contents



Pursuant to the
terms of registration rights agreements we entered into in connection with the issuance of the 2018 Senior Notes, we agreed, among other things, to make commercially reasonable efforts to file and cause to become effective an exchange offer
registration statement with the SEC, filed May 24th2010, with respect to a registered offer (the Exchange Offer) to exchange the 2018 Senior Notes for registered notes substantially identical in all material respects to the 2018 Senior Notes (the Exchange Notes). The Exchange
Offer was launched on June 16, 2010 and expired on July 16, 2010. In connection with the Exchange Offer, $275,000, or 100%, of the outstanding 2018 Senior Notes were exchanged for Exchange Notes in the Exchange Offer.

We recorded a loss of $8,566 in the first quarter of 2010 on the early extinguishment of our 2012 Senior Notes. This amount included the write-off of
approximately $1,897 of remaining unamortized debt issuance costs and bond premium amounts related to the 2012 Senior Notes, as well as the impact of the call and tender premiums paid in connection with the refinancing.

In connection with the issuance of 2018 Senior Notes, we incurred approximately $6,695 in costs that have been recorded as deferred financing costs to be
amortized over the term of the 2018 Senior Notes.

As of September 30, 2010, we were in compliance with all of the covenants of our 2018
Senior Notes.

The fair value of our debt and capitalized lease obligations was approximately $282,906 at September 30, 2010, with the
fair value of our 2018 Senior Notes based on sales prices of recent trading activity.

8. EARNINGS PER SHARE

We compute earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and
participating securities. Our participating securities are our grants of time-based vesting restricted stock, as such awards contain non-forfeitable rights to dividends. Security holders are not obligated to fund the Companys losses, and
therefore participating securities are not allocated a portion of these losses in periods where a net loss is recorded. As of September 30, 2010, there were 406 shares of time-based vesting restricted stock outstanding.

As of September 30, 2010 and 2009, the impact of participating securities on net income allocated to common shareholders and the dilutive effect of
share-based awards outstanding on weighted average shares outstanding was as follows:



|                                                               |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |         |  
|-------------------------------------------------------------- |  | ------------------------------- | ------ | - | ------------------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------- | -
|                                                               |  | Three Months EndedSeptember 30, |        |   | Nine Months EndedSeptember 30, |  
|Components of Basic and Diluted Earnings (Loss) per Share      |  | 2010                            |        |   | 2009                           |   |        | 2010 |  |   | 2009   |  
|Basic EPS Numerator:                                           |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |         |  
|Net income (loss)                                              |  | $                               | 3,108  |   |                                | $ | 784    |      |  | $ | 2,393  |   |  | $ | (63,686 | )
|Less: Earnings allocated to participating securities           |  |                                 | (73    | ) |                                |   | (17    | )    |  |   | (56    | ) |  |   |        |  
|                                                               |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |         |  
|Net income (loss) allocated to common shareholders             |  | $                               | 3,035  |   |                                | $ | 767    |      |  | $ | 2,337  |   |  | $ | (63,686 | )
|                                                               |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |         |  
|Basic EPS Denominator:                                         |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |         |  
|Weighted average shares outstanding                            |  |                                 | 16,939 |   |                                |   | 16,809 |      |  |   | 16,925 |   |  |   | 16,809  |  
|Basic earnings (loss) per common share                         |  | $                               | 0.18   |   |                                | $ | 0.05   |      |  | $ | 0.14   |   |  | $ | (3.79   | )
|Diluted EPS Numerator:                                         |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |         |  
|                                                               |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |         |  
|Net income (loss)                                              |  | $                               | 3,108  |   |                                | $ | 784    |      |  | $ | 2,393  |   |  | $ | (63,686 | )
|Less: Earnings allocated to participating securities           |  |                                 | (72    | ) |                                |   | (9     | )    |  |   | (56    | ) |  |   |        |  
|                                                               |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |         |  
|Net income (loss) allocated to common shareholders             |  | $                               | 3,036  |   |                                | $ | 775    |      |  | $ | 2,337  |   |  | $ | (63,686 | )
|                                                               |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |         |  
|Diluted EPS Denominator:                                       |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |         |  
|                                                               |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |         |  
|Weighted average shares outstanding                            |  |                                 | 16,939 |   |                                |   | 16,809 |      |  |   | 16,925 |   |  |   | 16,809  |  
|Dilutive common shares issuable upon exercise of stock options |  |                                 | 73     |   |                                |   | 371    |      |  |   | 56     |   |  |   |        |  
|                                                               |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |         |  
|Diluted weighted average share outstanding                     |  |                                 | 17,012 |   |                                |   | 17,180 |      |  |   | 16,981 |   |  |   | 16,809  |  
|                                                               |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |         |  
|Diluted earnings (loss) per common share                       |  | $                               | 0.18   |   |                                | $ | 0.05   |      |  | $ | 0.14   |   |  | $ | (3.79   | )

Options

Options with respect to 1,121 common shares were not included in the computation of diluted earnings per share for the three and nine
months ended September 30, 2010 because they were antidilutive. Options with respect to 1,301 common shares were not included in the computation of diluted earnings per share for the three and nine months ended September 30, 2009 because
they were antidilutive.



10



---

##### Table of Contents



9. SHAREHOLDERS EQUITY

Stock-Based Compensation

The Company has a stock-based compensation plan for its directors, executives and certain key employees under which the grant of stock options and other share-based awards is authorized. We recorded $631
and $1,715 in stock compensation expense for the three and nine months ended September 30, 2010, respectively, compared to $684 and $1,895 for the three and nine months ended September 30, 2009, respectively.

Stock Options

In
March 2010, 150 options with an exercise price equal to the value of a common share at the date of grant, or $4.42 per share, were granted to certain executives and key employees. The options become exercisable over a four-year vesting period in
three equal installments beginning two years from the date of grant, and expire 10 years from the date of grant. Using the Black-Scholes option-pricing model, we estimated the March 2, 2010 grant date fair value of each option to be $3.30,
using an estimated 0% dividend yield, an expected term of 6.125 years, expected volatility of 88.5% and a risk-free rate of 2.7%.

Changes in
stock options were as follows:



|                               |  |        |       |   |                               |   |       |                                           |  |  |                         |  |  |  |     | 
|------------------------------ |  | ------ | ----- | - | ----------------------------- | - | ----- | ----------------------------------------- |  |  | ----------------------- |  |  |  | --- | 
|                               |  | Shares |       |   | Weighted-AverageExercisePrice |   |       | Weighted-AverageRemainingContractualTerms |  |  | AggregateIntrinsicValue | 
|Outstanding January 1, 2010    |  |        | 1,300 |   |                               | $ | 11.86 |                                           |  |  | 7.5                     |  |  |  |    | 
|Granted                        |  |        | 150   |   |                               |   | 4.42  |                                           |  |  | 9.4                     |  |  |  | 236 | 
|Exercised                      |  |        |      |   |                               |   |      |                                           |  |  |                         |  |  |  |     | 
|Forfeited or expired           |  |        | (42   | ) |                               |   | 13.00 |                                           |  |  | 6.4                     |  |  |  |     | 
|                               |  |        |       |   |                               |   |       |                                           |  |  |                         |  |  |  |     | 
|Outstanding September 30, 2010 |  |        | 1,408 |   |                               |   | 11.03 |                                           |  |  | 7.1                     |  |  |  | 809 | 
|Vested or expected to vest     |  |        | 1,361 |   |                               |   | 11.23 |                                           |  |  | 7.0                     |  |  |  | 744 | 
|Exercisable                    |  |        | 96    |   |                               |   | 3.99  |                                           |  |  | 8.3                     |  |  |  | 191 | 
|                               |  |        |       |   |                               |   |       |                                           |  |  |                         |  |  |  |     | 

Intrinsic value for stock options is defined as the difference between the current market value of the
Companys common stock and the exercise price of the stock option. When the current market value is less than the exercise price, there is no aggregate intrinsic value.

Stock Awards

In January 2010, the Company awarded restricted stock to members of
its board of directors. In total, non-management board members were awarded 166 unvested shares with an approximate aggregate fair value of $557. One-third of the shares vest on the first, second and third anniversary of the grant date. These
awarded shares are participating securities which provide the recipient with both voting rights and, to the extent dividends, if any, are paid by the Company, non-forfeitable dividend rights with respect to such shares. Additionally, in March 2010,
we awarded 775 performance shares to certain executives and key employees. Of the total performance shares awarded, 517 are convertible to stock, on a one-to-one basis, contingent upon future stock price performance. If, at any time up to ten years
after the date of grant, the Companys common stock attains three separate incrementally increasing stock price goals beginning with a price representing approximately 350% of the average stock price on the date of grant, a portion of the
awards will vest. Of the total 517 performance shares convertible to stock, 117, 200, and 200 awards will vest upon reaching the first, second and third stock price targets, respectively. For accounting purposes, performance shares convertible to
stock were measured on the grant date using a Monte Carlo model, with an assumption of 88.5% volatility, and a risk-free rate of 3.6%, resulting in an estimated aggregate fair value of approximately $1,974, which is required to be amortized as
non-cash stock compensation expense over the estimated derived service period (also estimated using a Monte Carlo model) of approximately 2.5 years.



11



---

##### Table of Contents



Changes in nonvested shares for the
first nine months of 2010 were as follows:



|                                |  |        |      |   |                                       |   |      | 
|------------------------------- |  | ------ | ---- | - | ------------------------------------- | - | ---- | 
|                                |  | Shares |      |   | Weighted-AverageGrant
-DateFair Value |  
|Nonvested at January 1, 2010    |  |        | 371  |   |                                       | $ | 4.52 | 
|Granted                         |  |        | 683  |   |                                       |   | 3.98 | 
|Vested                          |  |        | (131 | ) |                                       |   | 4.75 | 
|Forfeited                       |  |        |     |   |                                       |   |     | 
|                                |  |        |      |   |                                       |   |      | 
|Nonvested at September 30, 2010 |  |        | 923  |   |                                       | $ | 4.09 | 

The remaining 258 performance shares
vest under the same terms as those performance awards to be settled in stock, but are settled in cash rather than stock. Of the total 258 performance shares settled in cash, 58, 100, and 100 awards will vest upon reaching the first, second and third
stock price targets, respectively. The estimated fair value of these cash-settled shares is remeasured and the estimated service period is recalculated each balance sheet date using a Monte Carlo model (using the same assumptions noted above updated
for any necessary changes since the date of the initial grant) and recorded as a liability. These awards had an estimated aggregate fair value of approximately $1,292 as of September 30, 2010, which will be recorded as stock compensation
expense over the estimated derived service period (also estimated using a Monte Carlo model), which was approximately 2.25 years as of September 30, 2010.

Comprehensive Income (Loss)



|                                                                                       |  |                                 |       |   |                                |   |     |      |  |   |       |   |  |   |         |  
|-------------------------------------------------------------------------------------- |  | ------------------------------- | ----- | - | ------------------------------ | - | --- | ---- |  | - | ----- | - |  | - | ------- | -
|                                                                                       |  | Three Months EndedSeptember 30, |       |   | Nine Months EndedSeptember 30, |  
|                                                                                       |  | 2010                            |       |   | 2009                           |   |     | 2010 |  |   | 2009  |  
|Net income (loss)                                                                      |  | $                               | 3,108 |   |                                | $ | 784 |      |  | $ | 2,393 |   |  | $ | (63,686 | )
|Other comprehensive income (loss):                                                     |  |                                 |       |   |                                |   |     |      |  |   |       |   |  |   |         |  
|Currency translation adjustment, net of tax                                            |  |                                 | 68    |   |                                |   | 20  |      |  |   | 181   |   |  |   | 56      |  
|Unrealized losses on available for sale securities (Level 1), net of tax (see Note 15) |  |                                 | (221  | ) |                                |   |    |      |  |   | (176  | ) |  |   |        |  
|Derivative gains, net of tax                                                           |  |                                 |      |   |                                |   | 100 |      |  |   |      |   |  |   | 470     |  
|                                                                                       |  |                                 |       |   |                                |   |     |      |  |   |       |   |  |   |         |  
|Total comprehensive income (loss)                                                      |  | $                               | 2,955 |   |                                | $ | 904 |      |  | $ | 2,398 |   |  | $ | (63,160 | )
|                                                                                       |  |                                 |       |   |                                |   |     |      |  |   |       |   |  |   |         |  

For the three and nine months ended September 30, 2010, the changes in other comprehensive income were net of tax
benefits of $134 and $107, respectively, related to the change in fair value of available for sale securities (classified as Level 1 securities under the fair value hierarchy-see Note 15), and a tax provision of $34 and $137, respectively, for
unrealized foreign currency adjustments. For the three and nine months ended September 30, 2009, the changes in other comprehensive income were net of tax provisions of $63 and $304, respectively, related to the change in fair value of
derivatives, and a provision of $10 and $14, respectively, for unrealized foreign currency adjustments.

10. RELATED PARTIES

We lease our corporate office facility from certain members of our Board of Directors and executive management, and we made rental
payments of $101 and $297 for the three and nine months ended September 30, 2010, respectively. We made rental payments of $98 and $290 for our corporate facility for the three and nine months ended September 30, 2009, respectively. In
addition, we lease three manufacturing facilities from an entity in which one of our executive officers has a substantial minority interest, and we paid a total of $260 and $850 for the three and nine months ended September 30, 2010,
respectively. We made payments of $232 and $836 for these manufacturing facilities for the three and nine months ended September 30, 2009, respectively.

11. COMMITMENTS AND CONTINGENCIES

Operating Leases

We lease certain of our buildings, machinery and equipment under lease agreements that expire at various dates over the next ten
years. Rental expense under operating leases was $1,509 and $4,555 for the three and nine months ended September 30, 2010, respectively, and was $1,352 and $4,473 for the three and nine months ended September 30, 2009, respectively.



12



---

##### Table of Contents



Legal Matters

We are party to one environmental claim. The Leonard Chemical Company Superfund site consists of approximately 7.1 acres of land in an
industrial area located a half mile east of Catawba, York County, South Carolina. The Leonard Chemical Company operated this site until the early 1980s for recycling of waste solvents. These operations resulted in the contamination of soils and
groundwaters at the site with hazardous substances. In 1984, the U.S. Environmental Protection Agency (the EPA) listed this site on the National Priorities List. Riblet Products Corporation, with which the Company merged in 2000, was
identified through documents as a company that sent solvents to the site for recycling and was one of the companies receiving a special notice letter from the EPA identifying it as a party potentially liable under the Comprehensive Environmental
Response, Compensation, and Liability Act for cleanup of the site.

In 2004, along with other potentially responsible parties
(PRPs), we entered into a Consent Decree with the EPA requiring the performance of a remedial design and remedial action (RD/RA) for this site. We have entered into a Site Participation Agreement with the other PRPs for
fulfillment of the requirements of the Consent Decree. Under the Site Participation Agreement, we are responsible for 9.19% share of the costs for the RD/RA. As of September 30, 2010 and 2009, we had a $400 accrual recorded for this liability.

Though no assurances are possible, we believe that our accruals related to the environmental litigation and other claims are sufficient and
that these items and our rights to available insurance and indemnity will be resolved without material adverse effect on our financial position, results of operations or cash flows.

12. DERIVATIVES

We are exposed to certain commodity price risks including fluctuations in
the price of copper. From time to time, we enter into copper futures contracts to mitigate the potential impact of fluctuations in the price of copper on our pricing terms with certain customers. All of our copper futures contracts are tied to the
COMEX copper market index and the value of our futures contracts varies directly with underlying changes in the related COMEX copper futures prices. We recognize all of our derivative instruments on our balance sheet at fair value, and record
changes in the fair value of such contracts within cost of goods sold in the statement of operations as they occur unless specific hedge accounting criteria are met. For those hedging relationships that meet such criteria, and for which hedge
accounting is applied, we formally document our hedge relationships, including identifying the hedging instruments and the hedged items, as well as the risk management objectives involved. We had no hedge positions at September 30, 2010, to
which hedge accounting was applied. However, all of our hedges for which hedge accounting has been applied in the past qualified and were designated as cash flow hedges. We assess both at inception and at least quarterly thereafter, whether the
derivatives used in these cash flow hedges are highly effective in offsetting changes in the cash flows associated with the hedged item. The effective portion of the related gains or losses on these derivative instruments are recorded in
shareholders equity as a component of Other Comprehensive Income (OCI), and are subsequently recognized in income or expense in the period in which the related hedged items are recognized. The ineffective portion of these hedges
related to an over-hedge (extent to which a change in the value of the derivative contract does not perfectly offset the change in value of the designated hedged item) is immediately recognized in income. Cash settlements related to derivatives are
included in the operating section of the consolidated statement of cash flows, with prepaid expenses and other current assets or accrued liabilities, depending on the position.

We calculate the fair value of our copper futures contracts quarterly based on the quoted market price for the same or similar financial instruments. These derivatives have been determined to be Level 1
under the fair value hierarchy due to available market prices (see Note 15). As our derivatives are part of a legally enforceable master netting agreement, for purposes of presentation within our condensed consolidated balance sheets, gross values
are netted and classified within prepaid expenses and other current assets or accrued liabilities depending upon our aggregate net position at the balance sheet date.

At September 30, 2010, we had outstanding copper futures contracts, with an aggregate fair value of negative $254, consisting of contracts to sell 1,150 pounds of copper in December 2010, as well as
contracts to buy 100 pounds of copper in December 2010, respectively. At September 30, 2010, we had $678 cash collateral posted relative to our outstanding derivative positions within other current assets. At September 30, 2009, we had
outstanding copper futures contracts, with an aggregate fair value of $433, consisting of contracts to sell 675 pounds of copper in December 2009, as well as contracts to buy 350 pounds of copper at December 2009. At September 30, 2009, we had
no cash collateral posted relative to our then outstanding derivative positions. As hedge accounting has not been applied to any of our open hedges at September 30, 2010, no associated gains or losses have been recorded within OCI. At
September 30, 2009, cumulative gains of $773 existed in OCI.



13



---

##### Table of Contents



|                                                               |  |                                            |     |  |                                                       |   |    |                                              |  |                   
|-------------------------------------------------------------- |  | ------------------------------------------ | --- |  | ----------------------------------------------------- | - | -- | -------------------------------------------- |  | ------------------
|Derivatives accounted for as Hedges under the Accounting Rules |  | Gain Recognized in 
OCI(Effective Portion) |     |  | Gain (Loss) Recognized inIncome (Ineffective Portion) |   |    | Location of Gain (Loss)
Recognized in Income
|Copper commodity contracts:                                    |  |                                            |     |  |                                                       |   |    |                                              |  |                   
|Three months ended September 30, 2009                          |  | $                                          | 162 |  |                                                       | $ | (2 | )                                            |  | Cost of goods sold
|Nine months ended September 30, 2009                           |  | $                                          | 773 |  |                                                       | $ | 12 |                                              |  | Cost of goods sold



|                                                                   |  |                           |        |   |                                       |                   
|------------------------------------------------------------------ |  | ------------------------- | ------ | - | ------------------------------------- | ------------------
|Derivatives not accounted for as Hedges under the Accounting Rules |  | LossRecognized in 
Income |        |   | Location of Loss
Recognized in Income
|Copper commodity contracts:                                        |  |                           |        |   |                                       |                   
|Three months ended September 30, 2010                              |  | $                         | (386   | ) |                                       | Cost of goods sold
|Nine months ended September 30, 2010                               |  | $                         | (131   | ) |                                       | Cost of goods sold
|Three months ended September 30, 2009                              |  | $                         | (358   | ) |                                       | Cost of goods sold
|Nine months ended September 30, 2009                               |  | $                         | (1,396 | ) |                                       | Cost of goods sold

13. INCOME TAXES



|                   |  |                                 |      |   |                                |  |      |      |  |  |      |   |  |  |      |  
|------------------ |  | ------------------------------- | ---- | - | ------------------------------ |  | ---- | ---- |  |  | ---- | - |  |  | ---- | -
|                   |  | Three Months EndedSeptember 30, |      |   | Nine Months EndedSeptember 30, | 
|                   |  | 2010                            |      |   | 2009                           |  |      | 2010 |  |  | 2009 |  
|Effective Tax Rate |  |                                 | 28.8 | % |                                |  | 32.3 | %    |  |  | 20.6 | % |  |  | 11.3 | %

The decrease in our tax rate for the third
quarter of 2010, as compared to the third quarter of 2009, reflects the impact of a $309 tax credit utilized in the third quarter of 2010. The increase in our effective tax rate for the first nine months of 2010 as compared to the first nine months
of 2009 reflects the $69,498 pre-tax goodwill impairment charge recorded during the first quarter of 2009. A significant amount of the related book goodwill did not have a corresponding tax basis, thereby reducing the associated tax benefit and our
effective tax rate for the first quarter of 2009. Income tax expense for the fourth quarter of 2009 included an out-of-period adjustment to correct an error in the amount of tax benefit initially recorded in relation to the non-cash goodwill
impairment charge of $69,498 recorded in the first quarter of 2009. The adjustment resulted in a $2,900 decrease in the tax benefit associated with the impairment charge and a corresponding decrease in the non-current deferred income taxes reported
in the first nine months of 2009. The adjustment would have resulted in an effective tax rate of 7.3% for the nine months ended September 30, 2009.

14. BENEFIT PLANS

Employee Savings Plan

We provide defined contribution savings plans for employees meeting certain age and service requirements. We currently make matching contributions for a
portion of employee contributions to the plans. Including such matching contributions, we recorded expenses totaling $232 and $720 related to these savings plans during the three and nine months ended September 30, 2010, respectively. We
recorded expense of $28 and $271 for the three and nine months ended September 30, 2009, respectively.

Riblet
Pension Plan

As previously disclosed in the financial statements for the fiscal year ending December 31, 2009, as a result of its
merger with Riblet Products Corporation (Riblet) in 2000, the Company is responsible for a defined-benefit pension plan of Riblet. The Riblet plan was frozen in 1990 and no additional benefits have been earned by plan participants since
that time. A total of 85 former employees of Riblet currently receive or may be eligible to receive future benefits under the plan. The Company does not expect to make any plan contributions in 2010.

The following table summarizes the components of net periodic benefit cost:



|                                         |  |                                 |     |   |                                |   |     |      |  |   |      |   |  |   |     |  
|---------------------------------------- |  | ------------------------------- | --- | - | ------------------------------ | - | --- | ---- |  | - | ---- | - |  | - | --- | -
|                                         |  | Three Months EndedSeptember 30, |     |   | Nine Months EndedSeptember 30, |  
|                                         |  | 2010                            |     |   | 2009                           |   |     | 2010 |  |   | 2009 |  
|Components of net periodic benefit cost: |  |                                 |     |   |                                |   |     |      |  |   |      |   |  |   |     |  
|Service Cost                             |  |                                 | N/A |   |                                |   | N/A |      |  |   | N/A  |   |  |   | N/A |  
|Interest cost                            |  | $                               | 16  |   |                                | $ | 16  |      |  | $ | 48   |   |  | $ | 48  |  
|Expected return on plan assets           |  |                                 | (9  | ) |                                |   | (9  | )    |  |   | (27  | ) |  |   | (27 | )
|Recognized net actuarial loss            |  |                                 |    |   |                                |   |    |      |  |   |     |   |  |   |    |  
|                                         |  |                                 |     |   |                                |   |     |      |  |   |      |   |  |   |     |  
|Net periodic benefit cost                |  | $                               | 7   |   |                                | $ | 7   |      |  | $ | 21   |   |  | $ | 21  |  
|                                         |  |                                 |     |   |                                |   |     |      |  |   |      |   |  |   |     |  



14



---

##### Table of Contents



15. FAIR VALUE DISCLOSURE

Accounting guidance for fair value measurements specifies a hierarchy of valuation techniques based upon whether the inputs to those
valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources or reflect our own assumptions of market participant valuation. The hierarchy is broken down into three levels
based on the reliability of the inputs as follows:

Level 1 Inputs  Level 1 inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 Inputs  Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly.

Level 3 Inputs  Level 3 inputs are unobservable inputs for the asset or
liability.

As of the periods ending September 30, 2010 and December 31, 2009, we utilized Level 1 inputs to determine the fair
value of cash and cash equivalents, derivatives, and equity securities. There were no transfers of assets between levels for the three and nine months ended September 30, 2010.

We classify cash on hand and deposits in banks, including money market accounts, commercial paper, and other investments with an original maturity of three months or less, that we hold from time to time,
as cash and cash equivalents. The primary objective of our investment activities is to preserve our capital for the purpose of funding operations.

Financial assets measured at fair value on a recurring basis are summarized below:



|                                     |  |                        |        |  |                   |   |   |         |  |   |            |  |  |         |        |  |         |   |       |         |  |   |            |  |  |   |   |  |  |   |       | 
|------------------------------------ |  | ---------------------- | ------ |  | ----------------- | - | - | ------- |  | - | ---------- |  |  | ------- | ------ |  | ------- | - | ----- | ------- |  | - | ---------- |  |  | - | - |  |  | - | ----- | 
|                                     |  | Fair Value Measurement |       
|                                     |  | September 30, 2010     |        |  | December 31, 2009 |  
|                                     |  | Level 1                |        |  | Level 2           |   |   | Level 3 |  |   | Fair Value |  |  | Level 1 |        |  | Level 2 |   |       | Level 3 |  |   | Fair Value | 
|Assets:                              |  |                        |        |  |                   |   |   |         |  |   |            |  |  |         |        |  |         |   |       |         |  |   |            |  |  |   |   |  |  |   |       | 
|Cash & Cash Equivalents              |  | $                      | 8,478  |  |                   | $ |  |         |  | $ |           |  |  | $       | 8,478  |  |         | $ | 7,599 |         |  | $ |           |  |  | $ |  |  |  | $ | 7,599 | 
|Derivative Assets, Net of Collateral |  |                        | 424    |  |                   |   |  |         |  |   |           |  |  |         | 424    |  |         |   | 91    |         |  |   |           |  |  |   |  |  |  |   | 91    | 
|Available for Sale Securities        |  |                        | 1,295  |  |                   |   |  |         |  |   |           |  |  |         | 1,295  |  |         |   |      |         |  |   |           |  |  |   |  |  |  |   |      | 
|                                     |  |                        |        |  |                   |   |   |         |  |   |            |  |  |         |        |  |         |   |       |         |  |   |            |  |  |   |   |  |  |   |       | 
|Total                                |  | $                      | 10,197 |  |                   | $ |  |         |  | $ |           |  |  | $       | 10,197 |  |         | $ | 7,690 |         |  | $ |           |  |  | $ |  |  |  | $ | 7,690 | 
|                                     |  |                        |        |  |                   |   |   |         |  |   |            |  |  |         |        |  |         |   |       |         |  |   |            |  |  |   |   |  |  |   |       | 

16. OTHER INCOME

We recorded other income of $170 and $56 for the third quarter and first nine months of 2010, respectively, primarily reflecting a favorable exchange rate impact on our Canadian subsidiary. We recorded
other income of $674 and $1,068, for the third quarter and first nine months of 2009, respectively, primarily reflecting a favorable rate impact on our Canadian subsidiary.

17. BUSINESS SEGMENT INFORMATION

We have two reportable segments: (1) Distribution
and (2) Original Equipment Manufacturers (OEM). The Distribution segment serves our customers in distribution businesses, who are resellers of our products, while our OEM segment serves our OEM customers, who generally purchase more
tailored products from us, which are used as inputs into subassemblies of manufactured finished goods.

Financial data for the Companys
reportable segments is as follows:



|                                     |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|------------------------------------ |  | ------------------------------- | ------- | - | ------------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                     |  | Three Months EndedSeptember 30, |         |   | Nine Months EndedSeptember 30, |  
|                                     |  | 2010                            |         |   | 2009                           |   |         | 2010 |  |   | 2009    |  
|Net Sales:                           |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Distribution                         |  | $                               | 142,222 |   |                                | $ | 104,875 |      |  | $ | 383,091 |   |  | $ | 281,801 |  
|OEM                                  |  |                                 | 45,375  |   |                                |   | 28,920  |      |  |   | 134,497 |   |  |   | 82,248  |  
|                                     |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Total                                |  | $                               | 187,597 |   |                                | $ | 133,795 |      |  | $ | 517,588 |   |  | $ | 364,049 |  
|                                     |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Operating Income (Loss):             |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Distribution                         |  | $                               | 12,561  |   |                                | $ | 10,210  |      |  | $ | 36,507  |   |  | $ | 24,770  |  
|OEM                                  |  |                                 | 3,099   |   |                                |   | 2,615   |      |  |   | 10,388  |   |  |   | 4,982   |  
|                                     |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Total segments                       |  |                                 | 15,660  |   |                                |   | 12,825  |      |  |   | 46,895  |   |  |   | 29,752  |  
|Corporate                            |  |                                 | (4,494  | ) |                                |   | (6,484  | )    |  |   | (14,900 | ) |  |   | (86,902 | )
|                                     |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Consolidated operating income (loss) |  | $                               | 11,166  |   |                                | $ | 6,341   |      |  | $ | 31,995  |   |  | $ | (57,150 | )
|                                     |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  



15



---

##### Table of Contents



Our operating segments have common
production processes and manufacturing facilities. Accordingly, we do not identify all of our net assets to our segments. Thus, we do not report capital expenditures at the segment level. Additionally, depreciation expense is not allocated to our
segments but is included in manufacturing overhead cost pools and is absorbed into product cost (and inventory) as each product passes through our manufacturing work centers. Accordingly, as products are sold across our segments, it is impracticable
to determine the amount of depreciation expense included in the operating results of each segment.

Segment operating income represents income
from continuing operations before interest income or expense, other income or expense, and income taxes. Corporate consists of items not charged or allocated to the segments, including costs for employee relocation, discretionary bonuses,
professional fees, restructuring expenses, asset impairments, share-based compensation expense, and intangible amortization.

18.
SUPPLEMENTAL GUARANTOR INFORMATION

Our payment obligations under the 2018 Senior Notes and the Revolving Credit Facility (see Note 7) are
guaranteed by our 100% owned subsidiary, CCI International, Inc. (Guarantor Subsidiary). 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 income and statements of cash flows for Coleman Cable, Inc. (the Parent) and the Guarantor Subsidiary, which is 100% owned by the Parent. These statements were prepared on the same basis as the
consolidated financial statements of the Parent.



16



---

##### Table of Contents



COLEMAN CABLE, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED

SEPTEMBER 30, 2010



|                                                          |  |        |         |  |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|--------------------------------------------------------- |  | ------ | ------- |  | ------------------- | - | - | ------------------------ |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                          |  | Parent |         |  | GuarantorSubsidiary |   |   | Non 
GuarantorSubsidiary |  |   | Eliminations |   |  | Total |       
|NET SALES                                                 |  | $      | 173,292 |  |                     | $ |  |                          |  | $ | 14,305       |   |  | $     |       |   |  | $ | 187,597 |  
|COST OF GOODS SOLD                                        |  |        | 151,569 |  |                     |   |  |                          |  |   | 11,354       |   |  |       |       |   |  |   | 162,923 |  
|                                                          |  |        |         |  |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|GROSS PROFIT                                              |  |        | 21,723  |  |                     |   |  |                          |  |   | 2,951        |   |  |       |       |   |  |   | 24,674  |  
|SELLING, ENGINEERING, GENERAL AND ADMINISTRATIVE EXPENSES |  |        | 10,090  |  |                     |   |  |                          |  |   | 1,375        |   |  |       |       |   |  |   | 11,465  |  
|INTANGIBLE ASSET AMORTIZATION                             |  |        | 1,594   |  |                     |   |  |                          |  |   | 12           |   |  |       |       |   |  |   | 1,606   |  
|ASSET IMPAIRMENTS                                         |  |        | 202     |  |                     |   |  |                          |  |   |             |   |  |       |       |   |  |   | 202     |  
|RESTRUCTURING CHARGES                                     |  |        | 235     |  |                     |   |  |                          |  |   |             |   |  |       |       |   |  |   | 235     |  
|                                                          |  |        |         |  |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|OPERATING INCOME                                          |  |        | 9,602   |  |                     |   |  |                          |  |   | 1,564        |   |  |       |       |   |  |   | 11,166  |  
|INTEREST EXPENSE                                          |  |        | 6,909   |  |                     |   |  |                          |  |   | 60           |   |  |       |       |   |  |   | 6,969   |  
|OTHER INCOME, NET                                         |  |        |        |  |                     |   |  |                          |  |   | (170         | ) |  |       |       |   |  |   | (170    | )
|                                                          |  |        |         |  |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|INCOME BEFORE INCOME TAXES                                |  |        | 2,693   |  |                     |   |  |                          |  |   | 1,674        |   |  |       |       |   |  |   | 4,367   |  
|INCOME FROM SUBSIDIARIES                                  |  |        | 1,130   |  |                     |   |  |                          |  |   |             |   |  |       | (1,130 | ) |  |   |        |  
|INCOME TAX EXPENSE                                        |  |        | 715     |  |                     |   |  |                          |  |   | 544          |   |  |       |       |   |  |   | 1,259   |  
|                                                          |  |        |         |  |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|NET INCOME                                                |  | $      | 3,108   |  |                     | $ |  |                          |  | $ | 1,130        |   |  | $     | (1,130 | ) |  | $ | 3,108   |  
|                                                          |  |        |         |  |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  

COLEMAN CABLE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED

SEPTEMBER 30, 2009



|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|--------------------------------------------------------- |  | ------ | ------- | - | ------------------- | - | - | ------------------------ |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                          |  | Parent |         |   | GuarantorSubsidiary |   |   | Non 
GuarantorSubsidiary |  |   | Eliminations |   |  | Total |       
|NET SALES                                                 |  | $      | 122,163 |   |                     | $ |  |                          |  | $ | 11,632       |   |  | $     |       |   |  | $ | 133,795 |  
|COST OF GOODS SOLD                                        |  |        | 104,429 |   |                     |   |  |                          |  |   | 9,046        |   |  |       |       |   |  |   | 113,475 |  
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|GROSS PROFIT                                              |  |        | 17,734  |   |                     |   |  |                          |  |   | 2,586        |   |  |       |       |   |  |   | 20,320  |  
|SELLING, ENGINEERING, GENERAL AND ADMINISTRATIVE EXPENSES |  |        | 8,636   |   |                     |   |  |                          |  |   | 1,280        |   |  |       |       |   |  |   | 9,916   |  
|INTANGIBLE ASSET AMORTIZATION                             |  |        | 2,047   |   |                     |   |  |                          |  |   | 24           |   |  |       |       |   |  |   | 2,071   |  
|ASSET IMPAIRMENTS                                         |  |        | 300     |   |                     |   |  |                          |  |   |             |   |  |       |       |   |  |   | 300     |  
|RESTRUCTURING CHARGES                                     |  |        | 1,692   |   |                     |   |  |                          |  |   |             |   |  |       |       |   |  |   | 1,692   |  
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|OPERATING INCOME                                          |  |        | 5,059   |   |                     |   |  |                          |  |   | 1,282        |   |  |       |       |   |  |   | 6,341   |  
|INTEREST EXPENSE                                          |  |        | 6,202   |   |                     |   |  |                          |  |   | 40           |   |  |       |       |   |  |   | 6,242   |  
|GAIN ON REPURCHASE OF SENIOR NOTES                        |  |        | (385    | ) |                     |   |  |                          |  |   |             |   |  |       |       |   |  |   | (385    | )
|OTHER INCOME, NET                                         |  |        |        |   |                     |   |  |                          |  |   | (674         | ) |  |       |       |   |  |   | (674    | )
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|INCOME (LOSS) BEFORE INCOME TAXES                         |  |        | (758    | ) |                     |   |  |                          |  |   | 1,916        |   |  |       |       |   |  |   | 1,158   |  
|INCOME FROM SUBSIDIARIES                                  |  |        | 1,121   |   |                     |   |  |                          |  |   |             |   |  |       | (1,121 | ) |  |   |        |  
|INCOME TAX EXPENSE (BENEFIT)                              |  |        | (421    | ) |                     |   |  |                          |  |   | 795          |   |  |       |       |   |  |   | 374     |  
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|NET INCOME                                                |  | $      | 784     |   |                     | $ |  |                          |  | $ | 1,121        |   |  | $     | (1,121 | ) |  | $ | 784     |  
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  



17



---

##### Table of Contents



COLEMAN CABLE, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 2010



|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|--------------------------------------------------------- |  | ------ | ------- | - | ------------------- | - | - | ------------------------ |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                          |  | Parent |         |   | GuarantorSubsidiary |   |   | Non 
GuarantorSubsidiary |  |   | Eliminations |   |  | Total |       
|NET SALES                                                 |  | $      | 487,483 |   |                     | $ |  |                          |  | $ | 30,105       |   |  | $     |       |   |  | $ | 517,588 |  
|COST OF GOODS SOLD                                        |  |        | 420,282 |   |                     |   |  |                          |  |   | 23,797       |   |  |       |       |   |  |   | 444,079 |  
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|GROSS PROFIT                                              |  |        | 67,201  |   |                     |   |  |                          |  |   | 6,308        |   |  |       |       |   |  |   | 73,509  |  
|SELLING, ENGINEERING, GENERAL AND ADMINISTRATIVE EXPENSES |  |        | 30,661  |   |                     |   |  |                          |  |   | 3,863        |   |  |       |       |   |  |   | 34,524  |  
|INTANGIBLE ASSET AMORTIZATION                             |  |        | 5,194   |   |                     |   |  |                          |  |   | 34           |   |  |       |       |   |  |   | 5,228   |  
|ASSET IMPAIRMENTS                                         |  |        | 202     |   |                     |   |  |                          |  |   |             |   |  |       |       |   |  |   | 202     |  
|RESTRUCTURING CHARGES                                     |  |        | 1,560   |   |                     |   |  |                          |  |   |             |   |  |       |       |   |  |   | 1,560   |  
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|OPERATING INCOME                                          |  |        | 29,584  |   |                     |   |  |                          |  |   | 2,411        |   |  |       |       |   |  |   | 31,995  |  
|INTEREST EXPENSE                                          |  |        | 20,302  |   |                     |   |  |                          |  |   | 169          |   |  |       |       |   |  |   | 20,471  |  
|LOSS ON EXTINGUISHMENT OF DEBT                            |  |        | 8,566   |   |                     |   |  |                          |  |   |             |   |  |       |       |   |  |   | 8,566   |  
|OTHER INCOME, NET                                         |  |        |        |   |                     |   |  |                          |  |   | (56          | ) |  |       |       |   |  |   | (56     | )
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|INCOME BEFORE INCOME TAXES                                |  |        | 716     |   |                     |   |  |                          |  |   | 2,298        |   |  |       |       |   |  |   | 3,014   |  
|INCOME FROM SUBSIDIARIES                                  |  |        | 1,486   |   |                     |   |  |                          |  |   |             |   |  |       | (1,486 | ) |  |   |        |  
|INCOME TAX EXPENSE (BENEFIT)                              |  |        | (191    | ) |                     |   |  |                          |  |   | 812          |   |  |       |       |   |  |   | 621     |  
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|NET INCOME                                                |  | $      | 2,393   |   |                     | $ |  |                          |  | $ | 1,486        |   |  | $     | (1,486 | ) |  | $ | 2,393   |  
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  

COLEMAN CABLE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 2009



|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|--------------------------------------------------------- |  | ------ | ------- | - | ------------------- | - | - | ------------------------ |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                          |  | Parent |         |   | GuarantorSubsidiary |   |   | Non 
GuarantorSubsidiary |  |   | Eliminations |   |  | Total |       
|NET SALES                                                 |  | $      | 339,615 |   |                     | $ |  |                          |  | $ | 24,434       |   |  | $     |       |   |  | $ | 364,049 |  
|COST OF GOODS SOLD                                        |  |        | 291,292 |   |                     |   |  |                          |  |   | 18,879       |   |  |       |       |   |  |   | 310,171 |  
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|GROSS PROFIT                                              |  |        | 48,323  |   |                     |   |  |                          |  |   | 5,555        |   |  |       |       |   |  |   | 53,878  |  
|SELLING, ENGINEERING, GENERAL AND ADMINISTRATIVE EXPENSES |  |        | 27,153  |   |                     |   |  |                          |  |   | 3,255        |   |  |       |       |   |  |   | 30,408  |  
|INTANGIBLE ASSET AMORTIZATION                             |  |        | 6,691   |   |                     |   |  |                          |  |   | 82           |   |  |       |       |   |  |   | 6,773   |  
|ASSET IMPAIRMENTS                                         |  |        | 69,798  |   |                     |   |  |                          |  |   |             |   |  |       |       |   |  |   | 69,798  |  
|RESTRUCTURING CHARGES                                     |  |        | 3,989   |   |                     |   |  |                          |  |   | 60           |   |  |       |       |   |  |   | 4,049   |  
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|OPERATING INCOME (LOSS)                                   |  |        | (59,308 | ) |                     |   |  |                          |  |   | 2,158        |   |  |       |       |   |  |   | (57,150 | )
|INTEREST EXPENSE                                          |  |        | 18,761  |   |                     |   |  |                          |  |   | 253          |   |  |       |       |   |  |   | 19,014  |  
|GAIN ON REPURCHASE OF SENIOR NOTES                        |  |        | (3,285  | ) |                     |   |  |                          |  |   |             |   |  |       |       |   |  |   | (3,285  | )
|OTHER INCOME, NET                                         |  |        |        |   |                     |   |  |                          |  |   | (1,068       | ) |  |       |       |   |  |   | (1,068  | )
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|INCOME (LOSS) BEFORE INCOME TAXES                         |  |        | (74,784 | ) |                     |   |  |                          |  |   | 2,973        |   |  |       |       |   |  |   | (71,811 | )
|INCOME FROM SUBSIDIARIES                                  |  |        | 1,847   |   |                     |   |  |                          |  |   |             |   |  |       | (1,847 | ) |  |   |        |  
|INCOME TAX EXPENSE (BENEFIT)                              |  |        | (9,251  | ) |                     |   |  |                          |  |   | 1,126        |   |  |       |       |   |  |   | (8,125  | )
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  
|NET INCOME (LOSS)                                         |  | $      | (63,686 | ) |                     | $ |  |                          |  | $ | 1,847        |   |  | $     | (1,847 | ) |  | $ | (63,686 | )
|                                                          |  |        |         |   |                     |   |   |                          |  |   |              |   |  |       |        |   |  |   |         |  



18



---

##### Table of Contents



COLEMAN CABLE, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET AS OF SEPTEMBER 30, 2010



|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|------------------------------------------ |  | ------ | ------- | - | ------------------- | - | -- | ----------------------- |  | - | ------------ | - |  | ----- | ------- | - |  | - | ------- | -
|                                           |  | Parent |         |   | GuarantorSubsidiary |   |    | Non GuarantorSubsidiary |  |   | Eliminations |   |  | Total |        
|ASSETS                                     |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|CURRENT ASSETS:                            |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|Cash and cash equivalents                  |  | $      | 6,421   |   |                     | $ | 67 |                         |  | $ | 1,990        |   |  | $     |        |   |  | $ | 8,478   |  
|Accounts receivable  net of allowances    |  |        | 103,169 |   |                     |   |   |                         |  |   | 9,688        |   |  |       |        |   |  |   | 112,857 |  
|Intercompany receivable                    |  |        | 5,005   |   |                     |   |   |                         |  |   |             |   |  |       | (5,005  | ) |  |   |        |  
|Inventories                                |  |        | 83,442  |   |                     |   |   |                         |  |   | 9,727        |   |  |       |        |   |  |   | 93,169  |  
|Deferred income taxes                      |  |        | 2,751   |   |                     |   |   |                         |  |   | 474          |   |  |       |        |   |  |   | 3,225   |  
|Assets held for sale                       |  |        | 2,476   |   |                     |   |   |                         |  |   |             |   |  |       |        |   |  |   | 2,476   |  
|Prepaid expenses and other current assets  |  |        | 11,411  |   |                     |   | 1  |                         |  |   | 1,854        |   |  |       | (5,358  | ) |  |   | 7,908   |  
|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|Total current assets                       |  |        | 214,675 |   |                     |   | 68 |                         |  |   | 23,733       |   |  |       | (10,363 | ) |  |   | 228,113 |  
|PROPERTY, PLANT AND EQUIPMENT, NET         |  |        | 46,107  |   |                     |   |   |                         |  |   | 290          |   |  |       |        |   |  |   | 46,397  |  
|GOODWILL                                   |  |        | 27,599  |   |                     |   |   |                         |  |   | 1,494        |   |  |       |        |   |  |   | 29,093  |  
|INTANGIBLE ASSETS                          |  |        | 25,246  |   |                     |   |   |                         |  |   | 113          |   |  |       |        |   |  |   | 25,359  |  
|OTHER ASSETS                               |  |        | 9,560   |   |                     |   |   |                         |  |   | (28          | ) |  |       |        |   |  |   | 9,532   |  
|INVESTMENT IN SUBSIDIARIES                 |  |        | 8,247   |   |                     |   |   |                         |  |   |             |   |  |       | (8,247  | ) |  |   |        |  
|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|TOTAL ASSETS                               |  | $      | 331,434 |   |                     | $ | 68 |                         |  | $ | 25,602       |   |  | $     | (18,610 | ) |  | $ | 338,494 |  
|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY       |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|CURRENT LIABILITIES:                       |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|Current portion of long-term debt          |  | $      | 9       |   |                     | $ |   |                         |  | $ |             |   |  | $     |        |   |  | $ | 9       |  
|Accounts payable                           |  |        | 23,886  |   |                     |   | 8  |                         |  |   | 3,373        |   |  |       |        |   |  |   | 27,267  |  
|Intercompany payable                       |  |        |        |   |                     |   | 46 |                         |  |   | 4,959        |   |  |       | (5,005  | ) |  |   |        |  
|Accrued liabilities                        |  |        | 20,780  |   |                     |   | 14 |                         |  |   | 3,113        |   |  |       |        |   |  |   | 23,907  |  
|Other liabilities                          |  |        |        |   |                     |   |   |                         |  |   | 5,358        |   |  |       | (5,358  | ) |  |   |        |  
|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|Total current liabilities                  |  |        | 44,675  |   |                     |   | 68 |                         |  |   | 16,803       |   |  |       | (10,363 | ) |  |   | 51,183  |  
|LONG-TERM DEBT                             |  |        | 271,708 |   |                     |   |   |                         |  |   |             |   |  |       |        |   |  |   | 271,708 |  
|OTHER LONG-TERM LIABILITIES                |  |        | 3,799   |   |                     |   |   |                         |  |   |             |   |  |       |        |   |  |   | 3,799   |  
|DEFERRED INCOME TAXES                      |  |        | 2,143   |   |                     |   |   |                         |  |   | 552          |   |  |       |        |   |  |   | 2,695   |  
|SHAREHOLDERS EQUITY:                      |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|Common stock                               |  |        | 17      |   |                     |   |   |                         |  |   |             |   |  |       |        |   |  |   | 17      |  
|Additional paid-in capital                 |  |        | 89,926  |   |                     |   |   |                         |  |   | 1,000        |   |  |       | (1,000  | ) |  |   | 89,926  |  
|Accumulated other comprehensive loss       |  |        | (240    | ) |                     |   |   |                         |  |   | (165         | ) |  |       | 165     |   |  |   | (240    | )
|Retained earnings (accumulated deficit)    |  |        | (80,594 | ) |                     |   |   |                         |  |   | 7,412        |   |  |       | (7,412  | ) |  |   | (80,594 | )
|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|Total shareholders equity                 |  |        | 9,109   |   |                     |   |   |                         |  |   | 8,247        |   |  |       | (8,247  | ) |  |   | 9,109   |  
|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |  | $      | 331,434 |   |                     | $ | 68 |                         |  | $ | 25,602       |   |  | $     | (18,610 | ) |  | $ | 338,494 |  
|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  



19



---

##### Table of Contents



COLEMAN CABLE, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2009



|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|------------------------------------------ |  | ------ | ------- | - | ------------------- | - | -- | ----------------------- |  | - | ------------ | - |  | ----- | ------- | - |  | - | ------- | -
|                                           |  | Parent |         |   | GuarantorSubsidiary |   |    | Non GuarantorSubsidiary |  |   | Eliminations |   |  | Total |        
|ASSETS                                     |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|CURRENT ASSETS:                            |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|Cash and cash equivalents                  |  | $      | 4,018   |   |                     | $ | 57 |                         |  | $ | 3,524        |   |  | $     |        |   |  | $ | 7,599   |  
|Accounts receivable  net of allowances    |  |        | 78,904  |   |                     |   |   |                         |  |   | 7,489        |   |  |       |        |   |  |   | 86,393  |  
|Intercompany receivable                    |  |        | 2,674   |   |                     |   |   |                         |  |   |             |   |  |       | (2,674  | ) |  |   |        |  
|Inventories                                |  |        | 61,277  |   |                     |   |   |                         |  |   | 4,945        |   |  |       |        |   |  |   | 66,222  |  
|Deferred income taxes                      |  |        | 2,770   |   |                     |   |   |                         |  |   | 359          |   |  |       |        |   |  |   | 3,129   |  
|Assets held for sale                       |  |        | 3,624   |   |                     |   |   |                         |  |   |             |   |  |       |        |   |  |   | 3,624   |  
|Prepaid expenses and other current assets  |  |        | 4,499   |   |                     |   | 12 |                         |  |   | 1,448        |   |  |       |        |   |  |   | 5,959   |  
|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|Total current assets                       |  |        | 157,766 |   |                     |   | 69 |                         |  |   | 17,765       |   |  |       | (2,674  | ) |  |   | 172,926 |  
|PROPERTY, PLANT AND EQUIPMENT, NET         |  |        | 50,272  |   |                     |   |   |                         |  |   | 394          |   |  |       |        |   |  |   | 50,666  |  
|GOODWILL                                   |  |        | 27,598  |   |                     |   |   |                         |  |   | 1,466        |   |  |       |        |   |  |   | 29,064  |  
|INTANGIBLE ASSETS                          |  |        | 30,440  |   |                     |   |   |                         |  |   | 144          |   |  |       |        |   |  |   | 30,584  |  
|DEFERRED INCOME TAXES                      |  |        |        |   |                     |   |   |                         |  |   | 434          |   |  |       |        |   |  |   | 434     |  
|OTHER ASSETS                               |  |        | 10,785  |   |                     |   |   |                         |  |   | 6            |   |  |       | (4,358  | ) |  |   | 6,433   |  
|INVESTMENT IN SUBSIDIARIES                 |  |        | 6,581   |   |                     |   |   |                         |  |   |             |   |  |       | (6,581  | ) |  |   |        |  
|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|TOTAL ASSETS                               |  | $      | 283,442 |   |                     | $ | 69 |                         |  | $ | 20,209       |   |  | $     | (13,613 | ) |  | $ | 290,107 |  
|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY       |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|CURRENT LIABILITIES:                       |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|Current portion of long-term debt          |  | $      | 14      |   |                     | $ |   |                         |  | $ |             |   |  | $     |        |   |  | $ | 14      |  
|Accounts payable                           |  |        | 15,106  |   |                     |   |   |                         |  |   | 2,587        |   |  |       |        |   |  |   | 17,693  |  
|Intercompany payable                       |  |        |        |   |                     |   | 56 |                         |  |   | 2,618        |   |  |       | (2,674  | ) |  |   |        |  
|Accrued liabilities                        |  |        | 19,988  |   |                     |   | 13 |                         |  |   | 3,979        |   |  |       |        |   |  |   | 23,980  |  
|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|Total current liabilities                  |  |        | 35,108  |   |                     |   | 69 |                         |  |   | 9,184        |   |  |       | (2,674  | ) |  |   | 41,687  |  
|LONG-TERM DEBT                             |  |        | 236,839 |   |                     |   |   |                         |  |   |             |   |  |       |        |   |  |   | 236,839 |  
|OTHER LONG-TERM LIABILITIES                |  |        | 3,823   |   |                     |   |   |                         |  |   | 4,358        |   |  |       | (4,358  | ) |  |   | 3,823   |  
|DEFERRED INCOME TAXES                      |  |        | 2,412   |   |                     |   |   |                         |  |   | 86           |   |  |       |        |   |  |   | 2,498   |  
|SHAREHOLDERS EQUITY:                      |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|Common stock                               |  |        | 17      |   |                     |   |   |                         |  |   |             |   |  |       |        |   |  |   | 17      |  
|Additional paid-in capital                 |  |        | 88,475  |   |                     |   |   |                         |  |   | 1,000        |   |  |       | (1,000  | ) |  |   | 88,475  |  
|Accumulated other comprehensive loss       |  |        | (245    | ) |                     |   |   |                         |  |   | (345         | ) |  |       | 345     |   |  |   | (245    | )
|Retained earnings (accumulated deficit)    |  |        | (82,987 | ) |                     |   |   |                         |  |   | 5,926        |   |  |       | (5,926  | ) |  |   | (82,987 | )
|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|Total shareholders equity                 |  |        | 5,260   |   |                     |   |   |                         |  |   | 6,581        |   |  |       | (6,581  | ) |  |   | 5,260   |  
|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |  | $      | 283,442 |   |                     | $ | 69 |                         |  | $ | 20,209       |   |  | $     | (13,613 | ) |  | $ | 290,107 |  
|                                           |  |        |         |   |                     |   |    |                         |  |   |              |   |  |       |         |   |  |   |         |  



20



---

##### Table of Contents



COLEMAN CABLE, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 2010



|                                                                                |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|------------------------------------------------------------------------------- |  | ------ | -------- | - | ------------------- | - | --- | ------------------------ |  | - | ------------ | - |  | ----- | ------ | - |  | - | -------- | -
|                                                                                |  | Parent |          |   | GuarantorSubsidiary |   |     | Non 
GuarantorSubsidiary |  |   | Eliminations |   |  | Total |       
|CASH FLOW FROM OPERATING ACTIVITIES:                                            |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|Net income                                                                      |  | $      | 2,393    |   |                     | $ |    |                          |  | $ | 1,486        |   |  | $     | (1,486 | ) |  | $ | 2,393    |  
|Adjustments to reconcile net income to net cash flow from operating activities: |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|Depreciation and amortization                                                   |  |        | 14,996   |   |                     |   |    |                          |  |   | 145          |   |  |       |       |   |  |   | 15,141   |  
|Stock-based compensation                                                        |  |        | 1,715    |   |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | 1,715    |  
|Foreign currency transaction gain                                               |  |        |         |   |                     |   |    |                          |  |   | (56          | ) |  |       |       |   |  |   | (56      | )
|Loss on extinguishment of debt, net                                             |  |        | 8,566    |   |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | 8,566    |  
|Asset impairments                                                               |  |        | 202      |   |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | 202      |  
|Deferred taxes                                                                  |  |        | (144     | ) |                     |   |    |                          |  |   | 842          |   |  |       |       |   |  |   | 698      |  
|Loss on disposal of fixed assets                                                |  |        | 395      |   |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | 395      |  
|Equity in consolidated subsidiaries                                             |  |        | (1,486   | ) |                     |   |    |                          |  |   |             |   |  |       | 1,486  |   |  |   |         |  
|Changes in operating assets and liabilities:                                    |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|Accounts receivable                                                             |  |        | (24,265  | ) |                     |   |    |                          |  |   | (2,334       | ) |  |       |       |   |  |   | (26,599  | )
|Inventories                                                                     |  |        | (22,165  | ) |                     |   |    |                          |  |   | (4,748       | ) |  |       |       |   |  |   | (26,913  | )
|Prepaid expenses and other assets                                               |  |        | (6,896   | ) |                     |   | 11  |                          |  |   | 5,093        |   |  |       |       |   |  |   | (1,792   | )
|Accounts payable                                                                |  |        | 8,609    |   |                     |   | 8   |                          |  |   | 810          |   |  |       |       |   |  |   | 9,427    |  
|Intercompany accounts                                                           |  |        | 2,029    |   |                     |   | (10 | )                        |  |   | (2,019       | ) |  |       |       |   |  |   |         |  
|Accrued liabilities                                                             |  |        | 40       |   |                     |   | 1   |                          |  |   | (833         | ) |  |       |       |   |  |   | (792     | )
|                                                                                |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|Net cash flow from operating activities                                         |  |        | (16,011  | ) |                     |   | 10  |                          |  |   | (1,614       | ) |  |       |       |   |  |   | (17,615  | )
|                                                                                |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|CASH FLOW FROM INVESTING ACTIVITIES:                                            |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|Capital expenditures                                                            |  |        | (4,500   | ) |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | (4,500   | )
|Purchase of investments                                                         |  |        | (1,576   | ) |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | (1,576   | )
|Proceeds from sale of fixed assets                                              |  |        | 1,170    |   |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | 1,170    |  
|                                                                                |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|Net cash flow from investing activities                                         |  |        | (4,906   | ) |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | (4,906   | )
|                                                                                |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|CASH FLOW FROM FINANCING ACTIVITIES:                                            |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|Borrowings under revolving loan facilities                                      |  |        | 34,961   |   |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | 34,961   |  
|Repayments under revolving credit facility                                      |  |        | (45,200  | ) |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | (45,200  | )
|Payment of debt financing and amendment fees                                    |  |        | (6,695   | ) |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | (6,695   | )
|Repayment of long-term debt                                                     |  |        | (231,657 | ) |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | (231,657 | )
|Proceeds from issuance of 2018 Senior Notes                                     |  |        | 271,911  |   |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | 271,911  |  
|                                                                                |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|Net cash flow from financing activities                                         |  |        | 23,320   |   |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | 23,320   |  
|                                                                                |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|Effect of exchange rate on cash and cash equivalents                            |  |        |         |   |                     |   |    |                          |  |   | 80           |   |  |       |       |   |  |   | 80       |  
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                |  |        | 2,403    |   |                     |   | 10  |                          |  |   | (1,534       | ) |  |       |       |   |  |   | 879      |  
|CASH AND CASH EQUIVALENTS  Beginning of period                                 |  |        | 4,018    |   |                     |   | 57  |                          |  |   | 3,524        |   |  |       |       |   |  |   | 7,599    |  
|                                                                                |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|CASH AND CASH EQUIVALENTS  End of period                                       |  | $      | 6,421    |   |                     | $ | 67  |                          |  | $ | 1,990        |   |  | $     |       |   |  | $ | 8,478    |  
|                                                                                |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|NONCASH ACTIVITY                                                                |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|Unpaid capital expenditures                                                     |  |        | 199      |   |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | 199      |  
|Capital lease obligation                                                        |  |        | 10       |   |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | 10       |  
|SUPPLEMENTAL CASH FLOW INFORMATION                                              |  |        |          |   |                     |   |     |                          |  |   |              |   |  |       |        |   |  |   |          |  
|Income taxes paid (refunded), net                                               |  |        | (932     | ) |                     |   |    |                          |  |   | 1,020        |   |  |       |       |   |  |   | 88       |  
|Cash interest paid                                                              |  |        | 21,936   |   |                     |   |    |                          |  |   |             |   |  |       |       |   |  |   | 21,936   |  



21



---

##### Table of Contents



COLEMAN CABLE, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 2009



|                                                                                       |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|-------------------------------------------------------------------------------------- |  | ------ | ------- | - | ------------------- | - | --- | ----------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                                                       |  | Parent |         |   | GuarantorSubsidiary |   |     | Non GuarantorSubsidiary |  |   | Eliminations |   |  | Total |       
|CASH FLOW FROM OPERATING ACTIVITIES:                                                   |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|Net income (loss)                                                                      |  | $      | (63,686 | ) |                     | $ |    |                         |  | $ | 1,847        |   |  | $     | (1,847 | ) |  | $ | (63,686 | )
|Adjustments to reconcile net income (loss) to net cash flow from operating activities: |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|Depreciation and amortization                                                          |  |        | 17,431  |   |                     |   |    |                         |  |   | 191          |   |  |       |       |   |  |   | 17,622  |  
|Stock-based compensation                                                               |  |        | 1,895   |   |                     |   |    |                         |  |   |             |   |  |       |       |   |  |   | 1,895   |  
|Foreign currency transaction gain                                                      |  |        |        |   |                     |   |    |                         |  |   | (1,068       | ) |  |       |       |   |  |   | (1,068  | )
|Gain on repurchase of Senior Notes                                                     |  |        | (3,285  | ) |                     |   |    |                         |  |   |             |   |  |       |       |   |  |   | (3,285  | )
|Asset impairments                                                                      |  |        | 69,798  |   |                     |   |    |                         |  |   |             |   |  |       |       |   |  |   | 69,798  |  
|Deferred taxes                                                                         |  |        | (10,296 | ) |                     |   |    |                         |  |   | 1,200        |   |  |       |       |   |  |   | (9,096  | )
|Loss on disposal of fixed assets                                                       |  |        | 446     |   |                     |   |    |                         |  |   |             |   |  |       |       |   |  |   | 446     |  
|Equity in consolidated subsidiaries                                                    |  |        | (1,847  | ) |                     |   |    |                         |  |   |             |   |  |       | 1,847  |   |  |   |        |  
|Changes in operating assets and liabilities:                                           |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|Accounts receivable                                                                    |  |        | 15,430  |   |                     |   |    |                         |  |   | (2,012       | ) |  |       |       |   |  |   | 13,418  |  
|Inventories                                                                            |  |        | 1,836   |   |                     |   |    |                         |  |   | (2,103       | ) |  |       |       |   |  |   | (267    | )
|Prepaid expenses and other assets                                                      |  |        | 7,786   |   |                     |   | (3  | )                       |  |   | (2,746       | ) |  |       |       |   |  |   | 5,037   |  
|Accounts payable                                                                       |  |        | (2,584  | ) |                     |   | (10 | )                       |  |   | 1,947        |   |  |       |       |   |  |   | (647    | )
|Intercompany accounts                                                                  |  |        | 587     |   |                     |   | 37  |                         |  |   | (624         | ) |  |       |       |   |  |   |        |  
|Accrued liabilities                                                                    |  |        | (2,346  | ) |                     |   | (9  | )                       |  |   | 1,602        |   |  |       |       |   |  |   | (753    | )
|                                                                                       |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|Net cash flow from operating activities                                                |  |        | 31,165  |   |                     |   | 15  |                         |  |   | (1,766       | ) |  |       |       |   |  |   | 29,414  |  
|                                                                                       |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|CASH FLOW FROM INVESTING ACTIVITIES:                                                   |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|Capital expenditures                                                                   |  |        | (2,751  | ) |                     |   |    |                         |  |   | (39          | ) |  |       |       |   |  |   | (2,790  | )
|Proceeds from sale of fixed assets                                                     |  |        | 123     |   |                     |   |    |                         |  |   |             |   |  |       |       |   |  |   | 123     |  
|                                                                                       |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|Net cash flow from investing activities                                                |  |        | (2,628  | ) |                     |   |    |                         |  |   | (39          | ) |  |       |       |   |  |   | (2,667  | )
|                                                                                       |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|CASH FLOW FROM FINANCING ACTIVITIES:                                                   |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|Borrowings under revolving loan facilities                                             |  |        | 31,809  |   |                     |   |    |                         |  |   |             |   |  |       |       |   |  |   | 31,809  |  
|Repayments under revolving credit facility                                             |  |        | (55,959 | ) |                     |   |    |                         |  |   |             |   |  |       |       |   |  |   | (55,959 | )
|Payment of debt financing and amendment fees                                           |  |        | (1,012  | ) |                     |   |    |                         |  |   |             |   |  |       |       |   |  |   | (1,012  | )
|Repayment of long-term debt                                                            |  |        | (12,004 | ) |                     |   |    |                         |  |   |             |   |  |       |       |   |  |   | (12,004 | )
|                                                                                       |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|Net cash flow from financing activities                                                |  |        | (37,166 | ) |                     |   |    |                         |  |   |             |   |  |       |       |   |  |   | (37,166 | )
|                                                                                       |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|Effect of exchange rate on cash and cash equivalents                                   |  |        |        |   |                     |   |    |                         |  |   | 176          |   |  |       |       |   |  |   | 176     |  
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                       |  |        | (8,629  | ) |                     |   | 15  |                         |  |   | (1,629       | ) |  |       |       |   |  |   | (10,243 | )
|CASH AND CASH EQUIVALENTS  Beginning of period                                        |  |        | 12,617  |   |                     |   | 49  |                         |  |   | 3,662        |   |  |       |       |   |  |   | 16,328  |  
|                                                                                       |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|CASH AND CASH EQUIVALENTS  End of period                                              |  | $      | 3,988   |   |                     | $ | 64  |                         |  | $ | 2,033        |   |  | $     |       |   |  | $ | 6,085   |  
|                                                                                       |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|NONCASH ACTIVITY                                                                       |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|Unpaid capital expenditures                                                            |  |        | 251     |   |                     |   |    |                         |  |   |             |   |  |       |       |   |  |   | 251     |  
|SUPPLEMENTAL CASH FLOW INFORMATION                                                     |  |        |         |   |                     |   |     |                         |  |   |              |   |  |       |        |   |  |   |         |  
|Income taxes paid (refunded), net                                                      |  |        | (4,186  | ) |                     |   |    |                         |  |   | 971          |   |  |       |       |   |  |   | (3,215  | )
|Cash interest paid                                                                     |  |        | 12,899  |   |                     |   |    |                         |  |   |             |   |  |       |       |   |  |   | 12,899  |  



22



---

##### Table of Contents



|ITEM 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as
a result of a variety of risks and uncertainties, including those described in this report under Cautionary Note Regarding Forward-Looking Statements and under Item 1A. Risk Factors in our Annual Report on Form 10-K, for the
fiscal year ended December 31, 2009 and under Item 1A. Risk Factors in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010 and June 30, 2010. 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

We are a leading designer, developer, manufacturer and supplier of electrical wire
and cable products for consumer, commercial and industrial applications, with operations primarily in the U.S. and, to a lesser degree, Canada. We manufacture and supply a broad line of wire and cable products, which enables us to offer our
customers a single source of supply for many of their wire and cable product requirements. We manufacture our products in eight domestic manufacturing facilities and supplement our domestic production with both international and domestic sourcing.
We sell our products to a variety of customers, including a wide range of specialty distributors, retailers and original equipment manufacturers (OEM). Virtually all of our products are sold to customers located in the U.S. and Canada.

Raw materials, primarily copper, comprise the primary component of our cost of goods sold. The price of copper is particularly volatile and
fluctuations in copper prices can significantly affect our sales and profitability. We generally attempt to pass along increases in the price of copper and other raw materials to our customers. However, it has been proven difficult to pass along the
increased price of copper and other raw materials recently, mainly because of lower overall demand and excess capacity in the wire and cable industry. In contrast, when the price of copper declines marginally and slowly over time, we attempt to
maintain our prices.

Consolidated Results of Operations

The following table sets forth, for the periods indicated, our consolidated results of operations and related data in thousands of dollars and as a
percentage of net sales.



|                                                          |  |                                    |         |   |                                    |  |       |        |  |   |         |   |  |        |       |   |   |   |         |        |  |  |       |   |  |   |         |   |  |  |       |  
|--------------------------------------------------------- |  | ---------------------------------- | ------- | - | ---------------------------------- |  | ----- | ------ |  | - | ------- | - |  | ------ | ----- | - | - | - | ------- | ------ |  |  | ----- | - |  | - | ------- | - |  |  | ----- | -
|                                                          |  | Three Months Ended September 30,   |         |   | Nine Months Ended September 30,    | 
|                                                          |  | 2010                               |         |   | 2009                               |  |       | 2010   |  |   | 2009    |  
|                                                          |  | Amount                             |         |   | %                                  |  |       | Amount |  |   | %       |   |  | Amount |       |   | % |   |         | Amount |  |  | %     |  
|                                                          |  | (Thousands, except per share data) |         |   | (Thousands, except per share data) | 
|Net sales                                                 |  | $                                  | 187,597 |   |                                    |  | 100.0 | %      |  | $ | 133,795 |   |  |        | 100.0 | % |   | $ | 517,588 |        |  |  | 100.0 | % |  | $ | 364,049 |   |  |  | 100.0 | %
|Gross profit                                              |  |                                    | 24,674  |   |                                    |  | 13.2  |        |  |   | 20,320  |   |  |        | 15.2  |   |   |   | 73,509  |        |  |  | 14.2  |   |  |   | 53,878  |   |  |  | 14.8  |  
|Selling, engineering, general and administrative expenses |  |                                    | 11,465  |   |                                    |  | 6.1   |        |  |   | 9,916   |   |  |        | 7.4   |   |   |   | 34,524  |        |  |  | 6.7   |   |  |   | 30,408  |   |  |  | 8.4   |  
|Intangible asset amortization                             |  |                                    | 1,606   |   |                                    |  | 0.9   |        |  |   | 2,071   |   |  |        | 1.5   |   |   |   | 5,228   |        |  |  | 1.0   |   |  |   | 6,773   |   |  |  | 1.9   |  
|Asset impairments                                         |  |                                    | 202     |   |                                    |  | 0.1   |        |  |   | 300     |   |  |        | 0.2   |   |   |   | 202     |        |  |  | 0.0   |   |  |   | 69,798  |   |  |  | 19.2  |  
|Restructuring charges                                     |  |                                    | 235     |   |                                    |  | 0.1   |        |  |   | 1,692   |   |  |        | 1.3   |   |   |   | 1,560   |        |  |  | 0.3   |   |  |   | 4,049   |   |  |  | 1.1   |  
|                                                          |  |                                    |         |   |                                    |  |       |        |  |   |         |   |  |        |       |   |   |   |         |        |  |  |       |   |  |   |         |   |  |  |       |  
|Operating income (loss)                                   |  |                                    | 11,166  |   |                                    |  | 6.0   |        |  |   | 6,341   |   |  |        | 4.7   |   |   |   | 31,995  |        |  |  | 6.2   |   |  |   | (57,150 | ) |  |  | (15.7 | )
|Interest expense                                          |  |                                    | 6,969   |   |                                    |  | 3.7   |        |  |   | 6,242   |   |  |        | 4.7   |   |   |   | 20,471  |        |  |  | 4.0   |   |  |   | 19,014  |   |  |  | 5.2   |  
|Gain on repurchase of 2012 Senior Notes                   |  |                                    |        |   |                                    |  |      |        |  |   | (385    | ) |  |        | (0.3  | ) |   |   |        |        |  |  |      |   |  |   | (3,285  | ) |  |  | (0.9  | )
|Loss on extinguishment of 2012 Senior Notes               |  |                                    |        |   |                                    |  |      |        |  |   |        |   |  |        |      |   |   |   | 8,566   |        |  |  | 1.7   |   |  |   |        |   |  |  |      |  
|Other income, net                                         |  |                                    | (170    | ) |                                    |  | (0.1  | )      |  |   | (674    | ) |  |        | (0.5  | ) |   |   | (56     | )      |  |  | (0.0  | ) |  |   | (1,068  | ) |  |  | (0.3  | )
|                                                          |  |                                    |         |   |                                    |  |       |        |  |   |         |   |  |        |       |   |   |   |         |        |  |  |       |   |  |   |         |   |  |  |       |  
|Income (loss) before income taxes                         |  |                                    | 4,367   |   |                                    |  | 2.3   |        |  |   | 1,158   |   |  |        | 0.9   |   |   |   | 3,014   |        |  |  | 0.6   |   |  |   | (71,811 | ) |  |  | (19.7 | )
|Income tax expense (benefit)                              |  |                                    | 1,259   |   |                                    |  | 0.7   |        |  |   | 374     |   |  |        | 0.3   |   |   |   | 621     |        |  |  | 0.1   |   |  |   | (8,125  | ) |  |  | (2.2  | )
|                                                          |  |                                    |         |   |                                    |  |       |        |  |   |         |   |  |        |       |   |   |   |         |        |  |  |       |   |  |   |         |   |  |  |       |  
|Net income (loss)                                         |  | $                                  | 3,108   |   |                                    |  | 1.7   |        |  | $ | 784     |   |  |        | 0.6   |   |   | $ | 2,393   |        |  |  | 0.5   |   |  | $ | (63,686 | ) |  |  | (17.5 | )
|                                                          |  |                                    |         |   |                                    |  |       |        |  |   |         |   |  |        |       |   |   |   |         |        |  |  |       |   |  |   |         |   |  |  |       |  
|Diluted earnings (loss) per share                         |  | $                                  | 0.18    |   |                                    |  |       |        |  | $ | 0.05    |   |  |        |       |   |   | $ | 0.14    |        |  |  |       |   |  | $ | (3.79   | ) |  |  |       |  



23



---

##### Table of Contents

In addition to net income (loss) determined in accordance with GAAP, we use certain non-GAAP measures in
assessing our operating performance. These non-GAAP measures used by management include: (1) EBITDA, which we define as net income before interest, income taxes, depreciation and amortization expense (EBITDA), (2) Adjusted
EBITDA, which is our measure of EBITDA adjusted to exclude the impact of certain specifically identified items (Adjusted EBITDA), and (3) Adjusted earnings per share, which we calculate as diluted earnings per share adjusted to
exclude the estimated per share impact of the same specifically identified items used to calculate Adjusted EBITDA (Adjusted EPS). For the periods presented in this report, the specifically identified items excluded from our calculations
of Adjusted EBITDA and Adjusted EPS include asset impairments and restructuring charges, gains and losses on our repurchase or extinguishment of our 9.875% Senior Notes due October 2012 (the 2012 Senior Notes), share-based compensation
expense, and foreign currency transaction gains recorded at our Canadian subsidiary.

We believe both EBITDA and Adjusted EBITDA serve as
appropriate measures to be used in evaluating the performance of our business. We use these measures in the preparation of our annual operating budgets and in determining levels of operating and capital investments. We believe both EBITDA and
Adjusted EBITDA allow us to readily view operating trends, perform analytical comparisons and identify strategies to improve operating performance. For example, we believe the inclusion of items such as taxes, interest expense and intangible asset
amortization can make it more difficult to identify and assess operating trends affecting our business and industry. We also believe both EBITDA and Adjusted EBITDA are performance measures that provide investors, securities analysts and other
interested parties a measure of operating results unaffected by differences in capital structures, business acquisitions, capital investment cycles and ages of related assets among otherwise comparable companies in our industry. However, the
usefulness of both EBITDA and Adjusted EBITDA as performance measures are limited by the fact that they both exclude 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 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 either EBITDA or Adjusted EBITDA as the only measures of our
performance. We also use, and recommend that you consider, net income in accordance with GAAP as a measure of our performance. Finally, other companies may define EBITDA and Adjusted EBITDA differently and, as a result, our measure of EBITDA and
Adjusted EBITDA may not be directly comparable to EBITDA and Adjusted EBITDA measures of other companies.

Similarly, we believe our use of
Adjusted EPS provides an appropriate measure to use in assessing our performance across periods given that this measure provides an adjustment for certain significant items, the magnitude of which may vary drastically from period to period and,
thereby, have a disproportionate effect on the earnings reported for a given period. However, we do not, and do not recommend that you, solely use Adjusted EPS to assess our financial and earnings performance. We also use, and recommend that you
use, diluted earnings per share in addition to Adjusted EPS in assessing our earnings performance. Finally, other companies may define Adjusted EPS differently and, as a result, our measure of Adjusted EPS may not be directly comparable to Adjusted
EPS measures of other companies.



24



---

##### Table of Contents



The following tables, which reconcile
our measure of Adjusted EPS to diluted earnings per shares, and Adjusted EBITDA to net income, respectively, should be used along with the above statements of operations for the periods presented, in conjunction with the results of operations review
that follows.



|                                                                                         |      |                                 |        |      |                                |   |        |   |  |      |        |   |  |   |         |  
|---------------------------------------------------------------------------------------- | ---- | ------------------------------- | ------ | ---- | ------------------------------ | - | ------ | - |  | ---- | ------ | - |  | - | ------- | -
|Diluted earnings (loss) per share, as determined in accordance with GAAP, to
AdjustedEPS |      | Three Months EndedSeptember 30, |        |      | Nine Months EndedSeptember 30, |  
|                                                                                         | 2010 |                                 |        | 2009 |                                |   | 2010   |   |  | 2009 |       
|Diluted earnings (loss) per share                                                        |      | $                               | 0.18   |      |                                | $ | 0.05   |   |  | $    | 0.14   |   |  | $ | (3.79   | )
|Asset impairments (1)                                                                    |      |                                 | 0.01   |      |                                |   | 0.01   |   |  |      | 0.01   |   |  |   | 3.65    |  
|Restructuring charges (2)                                                                |      |                                 | 0.01   |      |                                |   | 0.07   |   |  |      | 0.06   |   |  |   | 0.16    |  
|Loss (gain) on extinguishment (repurchase) of debt (3)                                   |      |                                 |       |      |                                |   | (0.02  | ) |  |      | 0.31   |   |  |   | (0.13   | )
|Share-based compensation expense (4)                                                     |      |                                 | 0.02   |      |                                |   | 0.03   |   |  |      | 0.06   |   |  |   | 0.08    |  
|Foreign currency transaction gain (5)                                                    |      |                                 | (0.01  | )    |                                |   | (0.03  | ) |  |      |       |   |  |   | (0.04   | )
|                                                                                         |      |                                 |        |      |                                |   |        |   |  |      |        |   |  |   |         |  
|Adjusted EPS                                                                             |      | $                               | 0.21   |      |                                | $ | 0.11   |   |  | $    | 0.58   |   |  | $ | (0.07   | )
|                                                                                         |      |                                 |        |      |                                |   |        |   |  |      |        |   |  |   |         |  
|                                                                                         |      |                                
|Net income (loss), as determined in accordance with GAAP, to EBITDA and
AdjustedEBITDA   |      | Three Months EndedSeptember 30, |        |      | Nine Months EndedSeptember 30, |  
|                                                                                         | 2010 |                                 |        | 2009 |                                |   | 2010   |   |  | 2009 |       
|                                                                                         |      | (Thousands)                     |        |      | (Thousands)                    |  
|Net income (loss)                                                                        |      | $                               | 3,108  |      |                                | $ | 784    |   |  | $    | 2,393  |   |  | $ | (63,686 | )
|Interest expense                                                                         |      |                                 | 6,969  |      |                                |   | 6,242  |   |  |      | 20,471 |   |  |   | 19,014  |  
|Income tax expense (benefit)                                                             |      |                                 | 1,259  |      |                                |   | 374    |   |  |      | 621    |   |  |   | (8,125  | )
|Depreciation and amortization expense (a)                                                |      |                                 | 4,377  |      |                                |   | 5,157  |   |  |      | 13,562 |   |  |   | 16,569  |  
|                                                                                         |      |                                 |        |      |                                |   |        |   |  |      |        |   |  |   |         |  
|EBITDA                                                                                   |      | $                               | 15,713 |      |                                | $ | 12,557 |   |  | $    | 37,047 |   |  | $ | (36,228 | )
|                                                                                         |      |                                 |        |      |                                |   |        |   |  |      |        |   |  |   |         |  
|Asset impairments (1)                                                                    |      |                                 | 202    |      |                                |   | 300    |   |  |      | 202    |   |  |   | 69,798  |  
|Restructuring charges (2)                                                                |      |                                 | 235    |      |                                |   | 1,692  |   |  |      | 1,560  |   |  |   | 4,049   |  
|Loss (gain) on extinguishment (repurchase) of debt (3)                                   |      |                                 |       |      |                                |   | (385   | ) |  |      | 8,566  |   |  |   | (3,285  | )
|Share-based compensation expense (4)                                                     |      |                                 | 631    |      |                                |   | 684    |   |  |      | 1,715  |   |  |   | 1,895   |  
|Foreign currency transaction gain (5)                                                    |      |                                 | (170   | )    |                                |   | (674   | ) |  |      | (56    | ) |  |   | (1,068  | )
|                                                                                         |      |                                 |        |      |                                |   |        |   |  |      |        |   |  |   |         |  
|ADJUSTED EBITDA                                                                          |      | $                               | 16,611 |      |                                | $ | 14,174 |   |  | $    | 49,034 |   |  | $ | 35,161  |  



|(a) | Depreciation and amortization expense shown in the above schedule excludes amortization of debt issuance costs, which are included as a component of interest expense.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

The nature of each individual item listed in the table above, each of which has been excluded from EBITDA in order to arrive at
our measure of Adjusted EBITDA for each of the periods presented, is detailed in the analysis of operating results that follows.



25



---

##### Table of Contents



Earnings and
Performance Summary

We recorded net income of $3.1 million (or $0.18 per diluted share) in the third quarter of 2010, as compared to net
income of $0.8 million (or $0.05 per diluted share) for the third quarter of 2009. For the third quarter of 2010, we recorded EBITDA of $15.7 million, as compared to $12.6 million in EBITDA for the third quarter of 2009. As set forth below, results
for these periods were impacted by certain significant items, the magnitude of which may vary significantly from period to period and, thereby, have a disproportionate effect on the earnings reported for any given period. The income-statement review
below contains further detail regarding these items.



|(1) | Asset impairments: Our results for the three and nine months ended September 30, 2010 included $0.2 million ($0.1 million after tax or $0.01 per diluted share) for
non-cash asset impairment charges. Our results for the three and nine months ended September 30, 2009 were impacted by non-cash asset impairments of $0.3 million ($0.2 million after tax, or $0.01 per diluted share) and $69.8 million ($61.4
million after tax, or $3.65 per diluted share), respectively, related mainly to a $69.5 million non-cash goodwill impairment recorded relative to our Distribution segment.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Restructuring charges: Our results for the three and nine months ended September 30, 2010 included $0.2 million ($0.1 million after tax, or $0.01 per diluted
share) and $1.6 million ($1.0 million after tax, or $0.06 per diluted share), respectively, in restructuring charges. For the three and nine months ended September 30, 2010, these expenses were primarily comprised of holding costs associated
with facilities closed throughout 2008 and 2009. Our results for the three and nine months ended September 30, 2009 included $1.7 million ($1.1 million after tax, or $0.07 per diluted share) and $4.0 million ($2.7 million after tax, or $0.16
per diluted share), respectively, of restructuring charges. For the three and nine months ended September 30, 2009, these expenses were primarily incurred in connection with severance for headcount reductions and for certain holding costs
incurred relative to the closure of our East Longmeadow facility, and relative to those facilities closed during 2008 in connection with the integration of our 2007 Acquisitions.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Loss (gain) on extinguishment (repurchase) of 2012 Senior Notes: We refinanced our 2012 Senior Notes in the first quarter of 2010 by issuing $275.0 million in 2018
Senior Notes. We recorded a loss of $8.6 million ($5.3 million after tax, or $0.31 per diluted share) associated with this refinancing. During the three and nine months ended September 30, 2009, we repurchased $2.2 and $12.8 million par value
of 2012 Senior Notes, respectively. As a result of these repurchases, we recorded an associated gain of $0.4 million ($0.3 million after tax, or $0.02 per diluted share) and $3.3 million ($2.2 million after tax, or $0.13 per diluted share),
respectively, for the three and nine months ended September 30, 2009.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Share-based compensation expense: We recorded share-based compensation expense of $0.6 million ($0.4 million after tax, or $0.02 per diluted share) in the third quarter
of 2010 and $1.7 million ($1.1 million after tax, or $0.06 per diluted share) during the nine months ended September 30, 2010. Our results for the three and nine months ended September 30, 2009 included $0.7 million ($0.5 million after
tax, or $0.03 per diluted share) and $1.9 million ($1.3 million after tax, or $0.08 per diluted share), respectively, of stock-based compensation. Stock-based compensation is non-cash in nature and is excluded from our measures of adjusted earnings
in order for such measures to reflect more closely operational results due to the periodic fluctuations in the estimated fair value of a significant portion of the underlying share-based instruments.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Foreign currency transaction gain: We recorded a foreign currency transaction gain of $0.2 million ($0.1 million after tax, or $0.01 per diluted share) and $0.1 million
($0.0 million after tax, or $0.00 per diluted share) for the three and nine months ended September 30, 2010, respectively. We recorded a foreign currency transaction gain of $0.7 million ($0.5 million after tax, or $0.03 per diluted share) and
$1.1 million ($0.7 million after tax, or $0.04 per diluted share) for the three and nine months ended September 30, 2009. These gains and losses related to the impact of exchange rate fluctuations on our Canadian subsidiary.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Excluding the impact of the above-noted items, our results for the third quarter and first nine months of 2010, as compared to
the third quarter and first nine months of 2009, primarily reflect the impact of improved market conditions which have resulted in increased demand levels, and the favorable impact of such increased demand on our profitability, primarily in the form
of higher overall gross profit. Our Adjusted EBITDA increased to $16.6 million and $49.0 million for the third quarter and first nine months of 2010, respectively, as compared to $14.2 million and $35.2 million for the third quarter and first nine
months of 2009, respectively, primarily as a result of the impact of higher demand levels and our ability to leverage our fixed costs over an increased sales base.



26



---

##### Table of Contents



The following is a reconciliation for
the periods indicated of cash flow from operating activities, as determined in accordance with GAAP, to EBITDA.



|                                                   |  |                                 |         |   |                                |   |        |      |  |   |         |   |  |   |         |  
|-------------------------------------------------- |  | ------------------------------- | ------- | - | ------------------------------ | - | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                                   |  | Three Months EndedSeptember 30, |         |   | Nine Months EndedSeptember 30, |  
|                                                   |  | 2010                            |         |   | 2009                           |   |        | 2010 |  |   | 2009    |  
|                                                   |  | (Thousands)                     |         |   | (Thousands)                    |  
|Net cash flow from operating activities            |  | $                               | (10,242 | ) |                                | $ | (7,417 | )    |  | $ | (17,615 | ) |  | $ | 29,414  |  
|Interest expense                                   |  |                                 | 6,969   |   |                                |   | 6,242  |      |  |   | 20,471  |   |  |   | 19,014  |  
|Income tax expense (benefit)                       |  |                                 | 1,259   |   |                                |   | 374    |      |  |   | 621     |   |  |   | (8,125  | )
|Deferred taxes                                     |  |                                 | (1,355  | ) |                                |   | (267   | )    |  |   | (698    | ) |  |   | 9,096   |  
|Gain (loss) on disposals of fixed assets           |  |                                 | 81      |   |                                |   | (432   | )    |  |   | (395    | ) |  |   | (446    | )
|Share-based compensation expense                   |  |                                 | (631    | ) |                                |   | (684   | )    |  |   | (1,715  | ) |  |   | (1,895  | )
|Gain (loss) on repurchase (extinguishment) of debt |  |                                 |        |   |                                |   | 385    |      |  |   | (8,566  | ) |  |   | 3,285   |  
|Asset impairments                                  |  |                                 | (202    | ) |                                |   | (300   | )    |  |   | (202    | ) |  |   | (69,798 | )
|Foreign currency transaction gain                  |  |                                 | 170     |   |                                |   | 674    |      |  |   | 56      |   |  |   | 1,068   |  
|Amortization of debt issuance costs (a)            |  |                                 | (543    | ) |                                |   | (417   | )    |  |   | (1,579  | ) |  |   | (1,052  | )
|Changes in operating assets and liabilities        |  |                                 | 20,207  |   |                                |   | 14,399 |      |  |   | 46,669  |   |  |   | (16,789 | )
|                                                   |  |                                 |         |   |                                |   |        |      |  |   |         |   |  |   |         |  
|EBITDA                                             |  | $                               | 15,713  |   |                                | $ | 12,557 |      |  | $ | 37,047  |   |  | $ | (36,228 | )
|                                                   |  |                                 |         |   |                                |   |        |      |  |   |         |   |  |   |         |  



|(a) | Amortization of debt issuance costs are included within depreciation and amortization for cash flow presentation, and are included as a component of interest expense
for income statement presentation.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Three Months Ended September 30, 2010 Compared with Three Months
Ended September 30, 2009

Net sales



|             |  |                                  |         |  |      |  |       |        |  |   |         |  |  |  |       |  
|------------ |  | -------------------------------- | ------- |  | ---- |  | ----- | ------ |  | - | ------- |  |  |  | ----- | -
|             |  | Three Months Ended September 30, |        
|             |  | 2010                             |         |  | 2009 | 
|             |  | Amount                           |         |  | %    |  |       | Amount |  |   | %       | 
|             |  | (Thousands)                      |        
|Net Sales:   |  |                                  |         | 
|Distribution |  | $                                | 142,222 |  |      |  | 75.8  | %      |  | $ | 104,875 |  |  |  | 78.4  | %
|OEM          |  |                                  | 45,375  |  |      |  | 24.2  |        |  |   | 28,920  |  |  |  | 21.6  |  
|             |  |                                  |         |  |      |  |       |        |  |   |         |  |  |  |       |  
|Total        |  | $                                | 187,597 |  |      |  | 100.0 | %      |  | $ | 133,795 |  |  |  | 100.0 | %
|             |  |                                  |         |  |      |  |       |        |  |   |         |  |  |  |       |  

Net sales for the third quarter of 2010 were $187.6 million compared to $133.8 million for the third quarter of 2009, an
increase of $53.8 million or 40.2%. The increase reflects significantly higher average copper prices and increased volumes during the third quarter of 2010 as compared to the same quarter last year. During the third quarter of 2010, the average
daily selling price of copper cathode on the COMEX was $3.30 per pound as compared to an average of $2.67 per pound for the third quarter of 2009, an increase of 23.6%. For the third quarter of 2010, our total sales volume (measured in total pounds
shipped) increased 18.5% compared to the third quarter of 2009, with increases of 10.6% and 41.7% within our Distribution and OEM segments, respectively. These increases reflect improved overall market conditions, and to a lesser degree, volume
added as a result of new products introduced late in 2009 and early in 2010. The significant year over year volume growth in our OEM segment also reflects the favorable impact of increased demand from existing customers which had been particularly
affected by the economic circumstances in existence during the third quarter of 2009. On a quarter-over-quarter basis, total volume for the third quarter of 2010 was 2.7% higher than total volume for the second quarter of 2010, as the favorable
impact of a modest seasonal uptick in our Distribution business more than offset a modest decline in volume in our OEM segment. Our overall OEM segment volumes declined 4.5% in the third quarter of 2010, as compared to the second quarter of 2010.
This OEM volume decline from second to third quarter of 2010 is consistent with past years patterns. Historically, OEM segment volumes trend lower in the second half of the year, with fourth quarter demand in particular being impacted by OEM
industry-related temporary seasonal and holiday plant shutdowns. While we would expect to record year over year volume growth in the fourth quarter of 2010, as compared to the fourth quarter of 2009, we remain cautious as we head into the fourth
quarter of 2010 as we have noted a level of demand inconsistency, as well as modest volume contraction on a sequential basis within certain areas of our business, which may be a sign of potential market retrenchment rather than normal seasonal
softness, as well as by continued uncertainty regarding the overall sustainability of the economic recovery.



27



---

##### Table of Contents



Gross profit

We generated $24.7 million in total gross profit for the third quarter of 2010, as compared to $20.3 million in the third quarter of 2009,
an increase of $4.4 million, or 21.7%. This significant increase in gross profit primarily reflects the impact of the above-noted volume increases, with increased gross profit being recorded in both our Distribution and OEM segments as compared to
the third quarter of 2009. The increase also reflects the favorable impact of lower overhead variances and increased expense leverage as our fixed costs were spread over an increased net sales base. Our gross profit as a percentage of net sales
(gross profit rate) was 13.2% for the third quarter of 2010, as compared to 15.2% for the third quarter of 2009. The decline in our gross profit rate reflects, in part, a moderate shift in sales mix between our OEM and Distribution
segments and the impact of overall higher average copper prices during the third quarter of 2010 as compared to the third quarter of 2009. OEM sales, which generally carry a lower gross profit rate, comprised approximately 24.2% of our consolidated
net sales for the third quarter of 2010, as compared to 21.6% of consolidated net sales for the same quarter last year. We also continue to face marketplace pricing pressure caused by excess industry capacity relative to market demand. During the
third quarter of 2010, the impact of excess industry capacity on pricing was coupled with persistent month-over-month increases in copper prices during each month of the third quarter of 2010. The average price of copper COMEX for the month of
September 2010 was approximately 20% higher than the average for the month of June 2010. These factors combined to cause a lowering in the spread between the cost of copper in our manufactured products and the prices we were able to charge for our
products which resulted in gross profit contraction during the third quarter of 2010, as compared to both the first and second quarters of 2010.

Selling, engineering, general and administrative (SEG&A) expense

We
incurred total SEG&A expense of $11.5 million for the third quarter of 2010, as compared to $9.9 million for the third quarter of 2009, while our SEG&A as a percentage of total net sales decreased to 6.1% for the third quarter of 2010, as
compared to 7.4% for the third quarter of 2009. This decline in SEG&A rate reflects the favorable impact of increased expense leverage as our fixed costs were spread over a higher net sales base. The $1.6 million increase in SEG&A expense
for the third quarter of 2010, as compared to the third quarter of 2009, primarily reflects the fact that our SEG&A in the third quarter of 2009 included the favorable impact of our having resolved certain customer-related collection and other
matters which collectively accounted for $0.9 million in lower SEG&A expenses during the third quarter of 2009. The majority of the remaining $0.7 million increase reflects increased payroll and related expenses mainly in the form of increased
commissions and accrued discretionary pay given increased sales levels and profitability as compared to the same period last year.

Intangible amortization expense

Intangible amortization expense for the third quarter of
2010 was $1.6 million, as compared to $2.1 million for the third quarter of 2009, with the expense in both periods arising from the amortization of intangible assets recorded in relation to our 2007 Acquisitions. These intangible assets are
amortized using an accelerated amortization method which reflects our estimate of the pattern in which the economic benefit derived from such assets is to be consumed. Amortization for the third quarter of 2010 was lower than the third quarter of
2009, primarily as a function of the impact of the aforementioned accelerated amortization methodology.

Asset impairments

The $0.2 million and $0.3 million impairment charges recorded in the third quarter of 2010 and 2009, respectively, were for properties
being marketed for sale. The resulting adjusted carrying value reflected our estimate of the propertys fair value as determined by management, after considering the best information available and our own assessments about the assumptions
market participant would use in valuing the asset.

Restructuring charges

Restructuring charges for the third quarter of 2010 were $0.2 million, as compared to $1.7 million for the third quarter of 2009. For the third quarter of
2010, these expenses were primarily comprised of holding costs associated with facilities closed throughout 2008 and 2009. For the third quarter of 2009, these expenses were primarily incurred in connection with the closure of our East Longmeadow,
Massachusetts manufacturing facility in the second quarter of 2009 and our Oswego, New York facility during the third quarter of 2009, accounting for $0.9 million of the total $1.7 million recorded in the third quarter of 2009 and, to a lesser
degree, included lease and other holding costs incurred relative to facilities closed during 2008.



28



---

##### Table of Contents



Operating income

The following table sets forth operating income by segment, in thousands of dollars and segment operating income as a percentage of
segment net sales.



|                              |  |                                  |        |   |      |  |     |        |  |   |        |   |  |  |     |  
|----------------------------- |  | -------------------------------- | ------ | - | ---- |  | --- | ------ |  | - | ------ | - |  |  | --- | -
|                              |  | Three Months Ended September 30, |       
|                              |  | 2010                             |        |   | 2009 | 
|                              |  | Amount                           |        |   | %    |  |     | Amount |  |   | %      |  
|                              |  | (Thousands)                      |       
|Operating Income:             |  |                                  |        |  
|Distribution                  |  | $                                | 12,561 |   |      |  | 8.8 | %      |  | $ | 10,210 |   |  |  | 9.7 | %
|OEM                           |  |                                  | 3,099  |   |      |  | 6.8 |        |  |   | 2,615  |   |  |  | 9.0 |  
|                              |  |                                  |        |   |      |  |     |        |  |   |        |   |  |  |     |  
|Total segments                |  |                                  | 15,660 |   |      |  |     |        |  |   | 12,825 |   |  |  |     |  
|Corporate                     |  |                                  | (4,494 | ) |      |  |     |        |  |   | (6,484 | ) |  |  |     |  
|                              |  |                                  |        |   |      |  |     |        |  |   |        |   |  |  |     |  
|Consolidated operating income |  | $                                | 11,166 |   |      |  | 6.0 | %      |  | $ | 6,341  |   |  |  | 4.7 | %
|                              |  |                                  |        |   |      |  |     |        |  |   |        |   |  |  |     |  

Segment operating income represents income from continuing operations before interest income or expense, other
income or expense, and income taxes. Corporate consists of items not charged or allocated to the segments, including costs for employee relocation, discretionary bonuses, professional fees, restructuring expenses, asset impairments, share-based
compensation expense, and intangible amortization. Our segments have common production processes, and manufacturing and distribution capacity. Accordingly, we do not identify net assets to our segments. Depreciation expense is not allocated to
segments but is included in 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 our segments, it is impracticable to determine the amount of depreciation expense included in the operating results of each segment.

Distribution operating income was $12.6 million for the third quarter of 2010, as compared to $10.2 million for the third quarter of 2009, an increase of
$2.4 million, primarily reflecting the favorable gross profit impact of the above-noted increased sales volumes in 2010. Our segment operating income rate was 8.8% for the third quarter of 2010, as compared to 9.7% for the same quarter last year.
The decrease in the operating income rate reflects a lower gross profit rate, partially offset by increased fixed-cost leverage, as such costs were spread over a higher overall sales base for 2010. In addition, a portion of our Distribution sales
are priced to earn a fixed dollar margin, which causes our gross profit rate, and thus our operating profit rate, to decline when copper prices increase, as was the case during the third quarter of 2010.

OEM operating income was $3.1 million for the third quarter of 2010, as compared to $2.6 million for the third quarter of 2009, an increase of $0.5
million, primarily reflecting the favorable gross profit impact of the above-noted increased sales volumes in 2010. Our segment operating income rate was 6.8% for the 2010 quarter, as compared to 9.0% for the same quarter last year. The decrease in
the operating income rate reflects a lower gross profit rate, partially offset by increased fixed-cost leverage, as such fixed costs are spread over a higher overall sales base. In addition, a significant portion of our OEM sales are priced to earn
a fixed dollar margin, which causes our gross profit rate, and thus our operating profit rate, to decline when copper prices increase as was the case during the third quarter of 2010.

Interest expense

We
incurred $7.0 million in interest expense for the third quarter of 2010, as compared to $6.2 million for the third quarter of 2009, with the increase due to higher average outstanding borrowings for the third quarter of 2010 compared to the same
quarter last year.

Gain on 2012 Senior Notes repurchases

We recorded a $0.4 million gain in the third quarter of 2009 resulting from our repurchase of $2.2 million in par value of our 2012 Senior Notes.



29



---

##### Table of Contents



Other income, net

We recorded other income of $0.2 million and $0.7 million for the third quarter of 2010 and 2009, respectively, primarily reflecting an
exchange rate impact on our Canadian subsidiary.

Income tax expense (benefit)

We recorded an income tax expense of $1.3 million for the third quarter of 2010 compared to income tax expense of $0.4 million for the third quarter of
2009, with the increase primarily reflecting increased pre-tax income. The 3.5% decrease in our effective tax rate from 28.8% in the third quarter of 2010, as compared to 32.3% in the third quarter of 2009, reflects the impact of a $0.3 million tax
credit utilized during the third quarter of 2010.

Nine Months Ended September 30, 2010 Compared with Nine months
Ended September 30, 2009

Net sales



|             |  |                                 |         |  |      |  |       |        |  |   |         |  |  |  |       |  
|------------ |  | ------------------------------- | ------- |  | ---- |  | ----- | ------ |  | - | ------- |  |  |  | ----- | -
|             |  | Nine Months Ended September 30, |        
|             |  | 2010                            |         |  | 2009 | 
|             |  | Amount                          |         |  | %    |  |       | Amount |  |   | %       | 
|             |  | (Thousands)                     |        
|Net Sales:   |  |                                 |         | 
|Distribution |  | $                               | 383,091 |  |      |  | 74.0  | %      |  | $ | 281,801 |  |  |  | 77.4  | %
|OEM          |  |                                 | 134,497 |  |      |  | 26.0  |        |  |   | 82,248  |  |  |  | 22.6  |  
|             |  |                                 |         |  |      |  |       |        |  |   |         |  |  |  |       |  
|Total        |  | $                               | 517,588 |  |      |  | 100.0 | %      |  | $ | 364,049 |  |  |  | 100.0 | %
|             |  |                                 |         |  |      |  |       |        |  |   |         |  |  |  |       |  

Net sales for the nine months ended September 30, 2010 were $517.6 million compared to $364.0 million for the nine
months ended September 30, 2009, an increase of $153.6 million or 42.2%. The increase reflects significantly higher average copper prices and increased volumes during the first nine months of 2010 as compared to the same period last year.
During the first nine months of 2010, the average daily selling price of copper cathode on the COMEX, averaged $3.26 per pound as compared to an average of $2.13 per pound for the first nine months of 2009, an increase of 53.1%. For the nine months
ended September 30, 2010, our total sales volume (measured in total pounds shipped) increased 18.1% compared to the first nine months of 2009 due to improved overall market conditions within the industrial and OEM markets, and to a lesser
degree, volume added as a result of new products introduced late in 2009 and early in 2010, primarily industrial cable products.

For the nine
months ended September 30, 2010, Distribution net sales were $383.1 million, as compared to $281.8 million for the nine months ended September 30, 2009, an increase of $101.3 million, or 35.9%. As noted above in our discussion of
consolidated results, this increase was due primarily to an increase in copper prices and sales volumes as compared to the same period last year. For the first nine months of 2010, our Distribution segment total sales volume (measured in total
pounds shipped) increased 14.2% compared to the first nine months of 2009, reflecting improved overall market conditions and the favorable impact of sales of new products, primarily industrial cable products.

For the nine months ended September 30, 2010, OEM net sales were $134.5 million compared to $82.2 million for the nine months ended
September 30, 2009, an increase of $52.3 million, or 63.6%. As noted above in our discussion of consolidated results, this increase was due primarily to an increase in copper prices and sales volumes as compared to the same period last year.
For the nine months ended September 30, 2010, our OEM segment total sales volume (measured in total pounds shipped) increased 27.6% compared to the nine months ended September 30, 2009, primarily reflecting improved market conditions and
increased demand from existing customers which had been particularly affected by the economic circumstances in existence during the third quarter of 2009.

Gross profit

We generated $73.5 million in total gross profit for the nine months ended
September 30, 2010, as compared to $53.9 million in the nine months ended September 30, 2009, an increase of $19.6 million, or 36.4%. The improvement primarily reflects the impact of the above-noted volume increases, with increased gross
profit being recorded in both our Distribution and OEM segments as compared to the same nine-month period last year. Our gross profit rate was 14.2% for the first nine months of 2010 compared to 14.8% for the first nine months of 2009, with the
decline reflecting, in part, a moderate shift in sales mix between our OEM and Distribution segments. OEM sales, which generally carry a lower gross profit rate, comprised approximately 26.0% of our consolidated net sales for the first nine months
of 2010, as compared to 22.6% of consolidated net sales for the same quarter last year. The decline in gross profit rate also reflects, in part, the impact of increased average copper prices. A significant portion of our business involves the
production and sale of products which are priced to earn a fixed dollar margin, which causes our gross profit rate to compress in higher copper price environments, as was the case in the first nine months of 2010 as compared to the first nine months
of 2009.



30



---

##### Table of Contents



Selling,
engineering, general and administrative (SEG&A) expense

We incurred total SEG&A expense of $34.5 million for
the nine months ended September 30, 2010, as compared to $30.4 million for the nine months ended September 30, 2009, while our SEG&A as a percentage of total net sales decreased to 6.7% for the first nine months of 2010, as compared to
8.4% for the first nine months of 2009. This decline in SEG&A rate reflects the favorable impact of increased expense leverage as our fixed costs were spread over a higher net sales base. The $4.1 million increase in SEG&A expense for the
first nine months of 2010, as compared to the first nine months of 2009, primarily reflects increased payroll and related expenses mainly in the form of increased commissions and accrued discretionary pay given increased sales levels and
profitability as compared to the same period last year. Total payroll and related costs, including commission expense, accounted for approximately $1.8 million of the total $4.1 million increase. Additionally, as noted above,the remaining
$2.3 million increase in period ending September 30, 2010 reflects the fact that the year to date period ending September 30, 2009 included the favorable impact of our having resolved certain customer-related collection and other matters
which collectively accounted for $1.0 million in lower SEG&A expenses during the period, with the remaining $1.3 million attributed across a number of expense categories.

Intangible amortization expense

Intangible amortization expense for the nine months ended September 30, 2010 was $5.2 million as compared to $6.8 million for the nine months ended September 30, 2009, with the expense in both
periods arising from the amortization of intangible assets recorded in relation to our 2007 Acquisitions. These intangible assets are amortized using an accelerated amortization method which reflects our estimate of the pattern in which the economic
benefit derived from such assets is to be consumed. Amortization for the first nine months of 2010 was lower than the first nine months of 2009, primarily as a function of the impact of the aforementioned accelerated amortization methodology.

Goodwill impairment

During the first quarter of 2009, based on a combination of factors in existence at the time, including a significant decline in our market capitalization during the first quarter of 2009, as well as the
recessionary economic environment and its then estimated potential impact on our business, we concluded that there were sufficient indicators to require us to perform an interim goodwill impairment analysis. Based on the work performed, we concluded
that a goodwill impairment had occurred within three of the four reporting units within our Distribution segment: Electrical distribution, Wire and Cable distribution and Industrial distribution. Accordingly, we recorded a non-cash goodwill
impairment charge of approximately $69.5 million, representing our best estimate of the impairment loss during the first quarter of 2009. No indicators of impairment existed during the first nine months of 2010.

Restructuring charges

Restructuring charges for the nine months ended September 30, 2010 were $1.6 million, as compared to $4.0 million for the nine months ended
September 30, 2009. For the first nine months of 2010, these expenses were primarily comprised of holding costs associated with facilities closed throughout 2008 and 2009. For the first nine months of 2009, these expenses were primarily
incurred in connection with severance for headcount reductions and for certain holding costs incurred relative to the closure of our East Longmeadow and Oswego facilities, as noted above in the discussion of our third quarter results, as well as
holding costs related to those facilities closed in 2008.

Operating income

The following table sets forth operating income by segment, in thousands of dollars and segment operating income as a percentage of segment net sales.



|                                     |  |                                 |         |   |      |  |     |        |  |   |         |   |  |  |       |   
|------------------------------------ |  | ------------------------------- | ------- | - | ---- |  | --- | ------ |  | - | ------- | - |  |  | ----- | --
|                                     |  | Nine Months Ended September 30, |        
|                                     |  | 2010                            |         |   | 2009 | 
|                                     |  | Amount                          |         |   | %    |  |     | Amount |  |   | %       |  
|                                     |  | (Thousands)                     |        
|Operating Income:                    |  |                                 |         |  
|Distribution                         |  | $                               | 36,507  |   |      |  | 9.5 | %      |  | $ | 24,770  |   |  |  | 8.8   | % 
|OEM                                  |  |                                 | 10,388  |   |      |  | 7.7 |        |  |   | 4,982   |   |  |  | 6.1   |   
|                                     |  |                                 |         |   |      |  |     |        |  |   |         |   |  |  |       |   
|Total segments                       |  |                                 | 46,895  |   |      |  |     |        |  |   | 29,752  |   |  |  |       |   
|Corporate                            |  |                                 | (14,900 | ) |      |  |     |        |  |   | (86,902 | ) |  |  |       |   
|                                     |  |                                 |         |   |      |  |     |        |  |   |         |   |  |  |       |   
|Consolidated operating income (loss) |  | $                               | 31,995  |   |      |  | 6.2 | %      |  | $ | (57,150 | ) |  |  | (15.7 | )%
|                                     |  |                                 |         |   |      |  |     |        |  |   |         |   |  |  |       |   



31



---

##### Table of Contents



Distribution operating income was
$36.5 million for the nine months ended September 30, 2010, as compared to $24.8 million for the nine months ended September 30, 2009, an increase of $11.7 million, primarily reflecting the favorable gross profit impact of the above-noted
increased sales volumes in 2010. Our segment operating income rate was 9.5% for the nine months ended September 30, 2010, as compared to 8.8% for the same period last year. The increase in the operating income rate was primarily due to
increased expense leverage of fixed expenses given the higher sales base for the first nine months of 2010 as compared to the same period last year.

OEM operating income was $10.4 million for the nine months ended September 30, 2010, as compared to $5.0 million for the nine months ended September 30, 2009, an increase of $5.4 million,
primarily reflecting the favorable gross profit impact of the increased sales volumes in 2010. Our segment operating income rate was 7.7% for the nine months ended September 30, 2010, as compared to 6.1% for the same period last year. The
increase in the operating income rate was primarily due to increased expense leverage of fixed expenses given the higher sales base for the first nine months of 2010 as compared to the same period last year.

Interest expense

We
incurred $20.5 million in interest expense for the nine months ended September 30, 2010, as compared to $19.0 million for the nine months ended September 30, 2009, with the increase due to higher average outstanding borrowings for the
first nine months of 2010 compared to the first nine months of 2009.

Gain on 2012 Senior Notes repurchases

We recorded a $3.3 million gain for the nine months ended September 30, 2009 resulting from our repurchase of $15.0 million in par value of our 2012
Senior Notes throughout the second and third quarters of 2009.

Loss on extinguishment of debt

We recorded a loss of $8.6 million for the nine months ended September 30, 2010 on the early extinguishment of our 2012 Senior Notes. This amount
included the write-off of approximately $1.9 million of remaining unamortized debt issuance cots and bond premium amounts related to the 2012 Senior Notes, as well as the impact of the call and tender premiums paid in connection with the
refinancing.

Other income, net

We recorded other income of $0.1 million and other income of $1.1 million for the first nine months of 2010 and 2009, respectively, primarily reflecting an exchange rate impact on our Canadian subsidiary.

Income tax expense (benefit)

We recorded an income tax expense of $0.6 million for the nine months ended September 30, 2010, compared to an income tax benefit of $8.1 million for the nine months ended September 30, 2009.
The 9.3% increase in our tax rate from 20.6% in the first nine months of 2010, as compared to 11.3% in the first nine months of 2009, primarily reflects the $69.5 million pre-tax goodwill impairment charge recorded during the first quarter of 2009.
A significant amount of the related goodwill did not have a corresponding tax basis, thereby reducing the associated tax benefit and our effective tax rate for the first quarter of 2009.

Liquidity and Capital Resources

Debt

The following summarizes long-term debt (including current portion and capital lease
obligations) outstanding in thousands of dollars:



|                                                                      |  |                        |         |  |                       |   |         | 
|--------------------------------------------------------------------- |  | ---------------------- | ------- |  | --------------------- | - | ------- | 
|                                                                      |  | As ofSeptember 30,2010 |         |  | As ofDecember 31,2009 |  
|Revolving credit facility expiring April 2012                         |  | $                      |        |  |                       | $ | 10,239  | 
|Senior notes due February 15, 2018 and October 15, 2012, respectively |  |                        | 271,703 |  |                       |   | 226,597 | 
|Capital lease obligations                                             |  |                        | 14      |  |                       |   | 17      | 
|                                                                      |  |                        |         |  |                       |   |         | 
|Total long-term debt, including current portion                       |  | $                      | 271,717 |  |                       | $ | 236,853 | 
|                                                                      |  |                        |         |  |                       |   |         | 



32



---

##### Table of Contents



As of September 30, 2010, we had
a total of $8.5 million in cash and cash equivalents and no outstanding borrowings under our Senior Secured Revolving Credit Facility (Revolving Credit Facility). Also, as of September 30, 2010, we have no required debt repayments
until our Senior Notes mature in 2018.

Revolving Credit Facility

Our Revolving Credit Facility, which expires in April 2012, is a senior secured facility that provides for aggregate borrowings of up to $200.0 million,
subject to certain limitations. The proceeds from the Revolving Credit Facility are available for working capital and other general corporate purposes, including merger and acquisition activity. At September 30, 2010, we had $121.6 million in
remaining excess availability. Interest on borrowings under the Revolving Credit Facility is payable, at our option, at the agents prime rate plus a range of 1.25% to 1.75% or the Eurodollar rate plus a range of 2.50% to 3.00%, in each case
based on quarterly average excess availability under the Revolving Credit Facility. In addition, we pay a 0.50% unused line fee pursuant to the terms of the Revolving Credit Facility for unutilized availability.

Pursuant to the terms of the Revolving Credit Facility, we are required to maintain a minimum of $10.0 million in excess availability under the facility
at all times. Borrowing availability under the Revolving Credit Facility is limited to the lesser of (1) $200.0 million or (2) the sum of 85% of eligible accounts receivable, 55% of eligible inventory and an advance rate to be determined
of certain appraised fixed assets, with a $10.0 million sublimit for letters of credit.

We amended our Revolving Credit Facility on
January 19, 2010, in connection with the issuance of the 2018 Senior Notes (defined below) (i) to permit the sale of the 2018 Senior Notes (ii) to enhance our ability to create and finance foreign subsidiaries, (iii) to change
covenants and make other provisions to increase operating flexibility. Pursuant to this amendment, borrowing availability under the Revolving Credit Facility for foreign subsidiaries is limited to the greater of (i) the sum of 85% of the
aggregate book value of accounts receivable of such foreign subsidiaries plus 60% of the aggregate book value of the inventory of such foreign subsidiaries and (ii) $25 million (excluding permitted intercompany indebtedness of such foreign
subsidiaries).

The Revolving Credit Facility is guaranteed by our domestic subsidiary and is secured by substantially all of our assets and
the assets of our domestic subsidiary, including accounts receivable, inventory and any other tangible and intangible assets (including real estate, machinery and equipment and intellectual property), as well as by a pledge of all the capital stock
of our domestic subsidiary and 65% of the capital stock of our Canadian foreign subsidiary, but not our Chinese 100%-owned entity.

The
Revolving Credit Facility contains financial and other covenants that limit or restrict our ability to pay dividends or distributions, incur indebtedness, permit liens on property, make investments, provide guarantees, enter into mergers,
acquisitions or consolidations, conduct asset sales, enter into leases or sale and lease back transactions, and enter into transactions with affiliates. In addition to maintaining a minimum of $10.0 million in excess availability under the facility
at all times, the financial covenants in the Revolving Credit Facility require us to maintain a fixed charge coverage ratio of not less than 1.1 to 1.0 for any month during which our excess availability under the Revolving Credit Facility falls
below $30.0 million. We maintained greater than $30.0 million of monthly excess availability during the first nine months of 2010.

As of
September 30, 2010, we were in compliance with all of the covenants of our Revolving Credit Facility.

Refinancing of
2012 Senior Notes with 2018 Senior Notes

In the first quarter of 2010, in order to take advantage of what we believed were favorable
refinancing conditions, we undertook a refinancing of our 2012 Senior Notes in order to extend the maturity date of such long-term, unsecured debt, and lower the coupon rate on such debt. In total, we issued $275 million of 2018 Senior Notes
(defined below), which resulted in $271.9 million in proceeds (after giving effect to $3.6 million in original issuance discounts and $0.5 million of prepaid interest). A portion of the proceeds were used to retire $225 million in par value of our
remaining 2012 Senior Notes, and the remainder is available to be used in the future for general corporate purposes, including potential acquisitions. As detailed below, the issuance of our 2018 Senior Notes occurred in two parts, both completed
during the first quarter of 2010.



33



---

##### Table of Contents



On February 3, 2010 we completed
a private placement under Rule 144A under the Securities Act of 1933, as amended (the Securities Act) of $235 million aggregate principal amount of 9.0% unsecured senior notes due in 2018 (the Initial Private Placement) to
refinance our 2012 Senior Notes. The Initial Private Placement resulted in gross proceeds of approximately $231.7 million, which reflects a discounted issue price of 98.597% of the principal amount. The proceeds were used, together with other
available funds, for payment of consideration and costs relating to a cash tender offer and consent solicitation for our 2012 Senior Notes. A total of $199.4 million aggregate principal amount of the 2012 Senior Notes were tendered, which
represented approximately 88.6% of the $225 million aggregate principal amount of the 2012 Senior Notes outstanding. We redeemed the remaining $25.6 million of 2012 Senior Notes on March 22, 2010. On March 23, 2010, we completed another
private placement offering under Rule 144A under the Securities Act (the Supplemental Private Placement) of $40 million aggregate principal amount of 9.0% unsecured senior notes due in 2018 (together with the senior notes offered in the
Initial Private Placement, the 2018 Senior Notes). We received gross proceeds from the Supplemental Private Placement of approximately $39.7 million, which reflects a discounted issue price of 99.25% of the principal amount. The proceeds
were used, together with the proceeds of the Initial Private Placement, for payment of consideration and costs relating to a cash tender offer for the final $25.6 million of original 2012 Senior Note redemptions. The 2018 Senior Notes mature on
February 15, 2018 and interest on these notes accrues at a rate of 9.0% per annum and is payable semi-annually on each February 15 and August 15.

Pursuant to the terms of registration rights agreements we entered into in connection with the issuance of the 2018 Senior Notes, we agreed, among other things, to make commercially reasonable efforts to
file and cause to become effective an exchange offer registration statement with the SEC with respect to a registered offer (the Exchange Offer) to exchange the 2018 Senior Notes for registered notes substantially identical in all
material respects to the 2018 Senior Notes (the Exchange Notes). The Exchange Offer was launched on June 16, 2010 and expired on July 16, 2010. In connection with the Exchange Offer, $275 million, or 100%, of the outstanding
2018 Senior Notes were exchanged for Exchange Notes in the Exchange Offer.

We recorded a loss of $8.6 million in the first quarter of 2010 on
the early extinguishment of our 2012 Senior Notes. This amount included the write-off of approximately $1.9 million of remaining unamortized debt issuance costs and bond premium amounts related to the 2012 Senior Notes, as well as the impact of the
call and tender premiums paid in connection with the refinancing.

In connection with the issuance of 2018 Senior Notes, we incurred
approximately $6.7 million in costs that have been recorded as deferred financing costs to be amortized over the term of the 2018 Senior Notes.

As of September 30, 2010, we were in compliance with all of the covenants of our 2018 Senior Notes.

Current and Future Liquidity

In general, we require cash for working capital, capital expenditures, debt repayment and interest. Our working capital requirements tend to increase when we experience significant increased demand for
products or significant copper price increases. Accordingly, we may be required to borrow against our Revolving Credit Facility in the future if, among a number of other potential factors, the price of copper continues to increase, thereby
increasing our working capital requirements.

Our management assesses the future cash needs of our business by considering a number of
factors, including: (1) historical earnings and cash flow performance, (2) future working capital needs, (3) current and projected debt service expenses, (4) planned capital expenditures, and (5) our ability to borrow
additional funds under the terms of our Revolving Credit Facility.

Based on the foregoing, we believe that our operating cash flows and
borrowing capacity under the Revolving Credit Facility will be sufficient to fund our operations, meet our debt service requirements and fund our planned capital expenditures for the foreseeable future. We had no outstanding borrowings against our
$200.0 million Revolving Credit Facility and had $121.6 million in excess availability at September 30, 2010, as well as $8.5 million in cash on hand. We have no required debt repayments until our Senior Notes mature in 2018.

If we experience a deficiency in earnings with respect to our fixed charges in the future, we would need to fund the fixed charges through a combination
of cash flows from operations and borrowings under the Revolving Credit Facility. If cash flows generated from our operations, together with borrowings under our Revolving Credit Facility, are not sufficient to fund our operations, meet our debt
service requirements and fund our capital expenditures and we need to seek additional sources of capital, the limitations on our ability to incur debt contained in the Revolving Credit Facility and the Indenture relating to our Senior Notes could
prevent us from securing additional capital through the issuance of debt. In that case, we would need to secure additional capital through other means, such as the issuance of equity. In addition, we may not be able to obtain additional debt or
equity financing on terms acceptable to us, or at all. If we were not able to secure additional capital, we could be required to delay or forego capital spending or other corporate initiatives, such as the development of products, or acquisition
opportunities.

Our Revolving Credit Facility permits us to redeem, retire, or repurchase our 2018 Senior Notes subject to certain
limitations. We may repurchase our 2018 Senior Notes in the future but whether we do so will depend on a number of factors and there can be no assurance that we will repurchase any amounts of our 2018 Senior Notes.



34



---

##### Table of Contents



Net cash used by operating activities
for the nine months ended September 30, 2010 was $17.6 million compared to net cash provided by operating activities of $29.4 million for the first nine months of 2009. The $47.0 million decline in cash provided by operating activities for the
first nine months of 2010 as compared to 2009 was largely a result of the impact of changes in working capital items, primarily changes in accounts receivable and inventory. Our receivables balance increased from December 31, 2009, and resulted
in the use of approximately $26.6 million in operating cash flows during the first nine months of 2010 driven by increased volumes and higher copper prices. This use of cash relative to receivables in 2010 contrasted to the generation of $13.4
million in operating cash flows from receivables during the first nine months of 2009. During the first nine months of 2009, we generated $13.4 million in operating cash flows from accounts receivable as a result of lower outstanding receivable
levels at September 30, 2009 compared to December 31, 2008, reflecting a reduction in receivable levels relative to seasonal business within our distribution segment in 2009, which significantly lowered our required working capital
investment in accounts receivable at September 30, 2009, as compared to December 31, 2008. The $26.9 million cash used in inventories in 2010 is a function of increased inventory levels measured in both dollars and pounds, reflective of
higher copper prices and increased demand levels, as compared to the same period ended September 30, 2009. The impact of these two items on year over year cash flows was partially offset, however, by changes in our accounts payable levels over
the same periods.For the first nine months of 2010, we recorded $9.4 million in operating cash flows relative to accounts payable compared to a use of $0.6 million in 2009. This change largely reflects increased copper prices to relative
inventory purchases for the period ending September 30, 2010, as compared to the period ended September 30, 2009.

Net cash used in
investing activities for the first nine months of 2010 was $4.9 million, primarily due to capital expenditures. We also purchased $1.6 million in investments during the first nine months of 2010, as compared to no investment purchases made during
the first nine months of 2009.

Net cash provided by financing activities for the first nine months of 2010 was $23.3 million due primarily to
the refinancing of our 2012 Senior Notes during the first nine months of 2010, as discussed above, inclusive of approximately $6.7 million in bond issuance costs. In addition as a result of the bond offering, we were able to repay our outstanding
revolver balance of approximately $10.2 million. Net cash used by financing activities for the nine months ended September 30, 2009 was $37.2 million due to $24.2 million in repayments made under our Revolving Credit Facility during the first
quarter of 2009, and $11.5 million used to repurchase a portion of our 2012 Senior Notes and to amend our Revolving Credit Facility.

New Accounting Pronouncements

Fair Value Measurements and
Disclosures

In January 2010, the FASB issued an accounting update on fair value measurement and disclosures. This update provides
guidance clarifying fair value measurement valuation techniques as well as disclosure requirements concerning transfers between levels within the fair value hierarchy. This update, which was effective for the first quarter of 2010, did not have a
significant impact on our financial statements.

Variable Interest Entity

In June 2009, the FASB issued an update to the accounting guidance for consolidation. Accordingly, new accounting standards concerning the treatment of
variable interest entities were issued. This guidance addresses the effects on certain provisions of consolidation of variable interest entities as a result of the elimination of the qualifying special-purpose entity concept. This guidance also
addresses the ability to provide timely and useful information about an enterprises involvement in a variable interest entity. The accounting update is effective for a reporting entitys first annual reporting period that begins after
November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. This update, which was effective for the first quarter of 2010, did not have a significant impact on our
financial statements.

There were no significant changes to our critical accounting policies during the first nine months of 2010.

Cautionary Note Regarding Forward-Looking Statements

Various statements contained in this report, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements.
These statements may be identified by the use of forward-looking terminology such as anticipate, believe, continue, could, estimate, expect, intend, may,
might, plan, potential, predict, should, or the negative thereof or other variations thereon or comparable terminology. In particular, statements about our expectations, beliefs, plans,
objectives, assumptions or future events or performance contained in this report, including certain statements contained in Managements Discussion and Analysis of Financial Condition and Results of Operations, are forward-looking
statements.



35



---

##### Table of Contents



We have based these forward-looking
statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and
unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed under Item 1A. Risk Factors, and elsewhere in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2009 and under Item 1A. Risk Factors, in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010 and June 30, 2010 (available at www.sec.gov), may cause our actual results, performance
or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements.

Some of the key factors that could cause actual results to differ from our expectations include:



| |  |  | 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;
| | - |  | ----------------------------------------------



| |  |  | further adverse changes in general economic and capital market conditions;
| | - |  | --------------------------------------------------------------------------



| |  |  | changes in the demand for our products by key customers;
| | - |  | --------------------------------------------------------



| |  |  | additional impairment charges related to our goodwill and long-lived assets;
| | - |  | ----------------------------------------------------------------------------



| |  |  | failure of customers to make expected purchases, including customers of acquired companies;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | changes in the cost of labor or raw materials, including PVC and fuel;
| | - |  | ----------------------------------------------------------------------



| |  |  | failure to identify, finance or integrate acquisitions;
| | - |  | -------------------------------------------------------



| |  |  | failure to accomplish integration activities on a timely basis;
| | - |  | ---------------------------------------------------------------



| |  |  | failure to achieve expected efficiencies in our manufacturing and integration consolidations;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | unforeseen developments or expenses with respect to our acquisition, integration and consolidation efforts;
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | increase in exposure to political and economic development crises, instability, terrorism, civil strife, expropriation, and other risks of doing
business in foreign markets;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | impact of foreign currency fluctuations and changes on exchange rates; and
| | - |  | --------------------------------------------------------------------------



| |  |  | other risks and uncertainties, including those described under Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2009.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition, any forward-looking statements represent our views only as of today and should
not be relied upon as representing our views as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change and,
therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.



|ITEM 3. | Quantitative and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------

As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, our principal market risks are exposure to changes in commodity prices, primarily copper prices, and
exchange rate risk relative to our operations in Canada. As of September 30, 2010, we have no variable-rate borrowings outstanding which would expose us to interest rate risk from variable-rate debt.

Commodity Risk

Certain raw materials used in our products are subject to price volatility, most notably copper, which is the primary raw material used in our products.
The price of copper is particularly volatile and can affect our net sales and profitability. We purchase copper at prevailing market prices and, through multiple pricing strategies, generally attempt to pass along to our customers changes in the
price of copper and other raw materials. From time-to-time, we enter into derivative contracts, including copper futures contracts, to mitigate the potential impact of fluctuations in the price of copper on our pricing terms with certain customers.
We do not speculate on copper prices. We record these derivative contracts at fair value on our consolidated balance sheet as either an asset or liability. At September 30, 2010, we had outstanding copper futures contracts, with an aggregate
fair value of negative $0.3 million, consisting of contracts to sell 1,150 pounds of copper in December 2010, as well as contracts to buy 100 pounds of copper in December 2010, respectively. A hypothetical adverse movement of 10% in the price of
copper at September 30, 2010, with all other variables held constant, would have resulted in an additional loss in the fair value of our commodity futures contracts of approximately $0.3 million as of September 30, 2010.



36



---

##### Table of Contents



Interest Rate
Risk

As of September 30, 2010, we had no variable-rate debt outstanding as we had no outstanding borrowings under our Revolving
Credit Facility for which interest costs are based on either the lenders prime rate or LIBOR.



|ITEM 4. | Controls and Procedures
|------- | -----------------------

Our management,
including our Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), as of September 30, 2010.
Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.

There were no changes in our internal controls over financial reporting (as defined in Exchange Act Rule 13a-15(d) and 15d-15(f)) during the quarter ended September 30, 2010 that have materially
affected, or are reasonably likely to materially affect, our internal controls over financial reporting.



37



---

##### Table of Contents



PART IIOTHER INFORMATION



|ITEM 1. | Legal Proceedings
|------- | -----------------

We are involved in
legal proceedings and litigation arising in the ordinary course of business. In those cases in which we are the defendant, plaintiffs may seek to recover large and sometimes unspecified amounts or other types of relief and some matters may remain
unresolved for several years. We believe that none of the litigation that we now face, individually or in the aggregate, will have a material effect on our consolidated financial position, cash flow or results of operations. We maintain insurance
coverage for litigation that arises in the ordinary course of our business and believe such coverage is adequate.



|ITEM 1A. | Risk Factors
|-------- | ------------

In addition to the other
information set forth in this Quarterly Report on Form 10-Q, the reader should carefully consider the factors discussed in Part I, Item 1A. Risk Factors in our annual Report on Form 10-K for the fiscal year ended December 31, 2009
and our Quarterly Report on From 10-Q for the period ended March 31, 2010. There have been no material changes in our risk factors from those disclosed in Part I, Item 1A, of the Companys Annual Report on Form 10-K for the fiscal
year ended December 31, 2009 and the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2010.



|ITEM 6. | Exhibits
|------- | --------

See Index to Exhibits



38



---

##### Table of Contents



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



| |  |                        |  |                                  |  |    |  |                                                                           
| |  | ---------------------- |  | -------------------------------- |  | -- |  | --------------------------------------------------------------------------
| |  |                        |  | COLEMAN CABLE, INC. (Registrant)
| |  |                        |  |                                 
| |  | Date: November 4, 2010 |  |                                  |  | By |  | /s/    G. GARY
YETMAN                                                     
| |  |                        |  |                                  |  |    |  | Chief Executive Officer and President                                     
| |  |                        |  |                                 
| |  | Date: November 4, 2010 |  |                                  |  | By |  | /s/    RICHARD N.
BURGER                                                  
| |  |                        |  |                                  |  |    |  | Chief Financial Officer, Executive
Vice President, Secretary and Treasurer



39



---

##### Table of Contents



INDEX TO EXHIBITS



|         |  |                                                                                                                                                                                                                                        
|-------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item No. |  | Description                                                                                                                                                                                                                            
|         | 
|3.1     |  | Certificate of Incorporation of Coleman Cable, Inc., as filed with the Delaware Secretary of State on October 10, 2006, incorporated herein by reference to our Quarterly Report on
Form 10-Q for the quarter ended September 30, 2006.
|         | 
|3.2     |  | Amended and Restated By-Laws of Coleman Cable, Inc., incorporated herein by reference to our Current Report on Form 8-K as filed on May 5, 2009.                                                                                       
|         | 
|31.1    |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                    
|         | 
|31.2    |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                    
|         | 
|32.1    |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.                                                            



|* | Denotes management contract or compensatory plan or arrangement.
|- | ----------------------------------------------------------------



40