---

---

SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

---

FORM 10-Q

|ý                                            | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|-------------------------------------------- | ----------------------------------------------------------------------------------------
|For the Quarterly Period Ended June 30, 2003
|o                                            | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  to

Commission file number 1-9078

---

THE ALPINE GROUP, INC.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

22-1620387(I.R.S. Employer Identification No.)One Meadowlands Plaza
East Rutherford, New Jersey(Address of principal executive offices)

07073(Zip code)


Registrant's telephone number, including area code201-549-4400

---

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. Yes ý    No o

Indicate
by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act). Yes o    No ý

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

|Class                        |  | Outstanding at August 8, 2003
|---------------------------- |  | -----------------------------
|Common Stock, $.10 Par Value |  | 11,637,315                   

---

---

---



PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934 and, therefore, do not include all information and footnotes required by generally accepted accounting principles. However, in the opinion of management, all
adjustments (which, except as disclosed elsewhere herein, consist only of normal recurring accruals) necessary for a fair presentation of the results of operations for the relevant periods have been
made. Results for the interim periods are not necessarily indicative of the results to be expected for the year. These financial statements should be read in conjunction with the summary of
significant accounting policies and the notes to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

2

---

THE ALPINE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

|                                                                                                                              |                                                                                                                                  | June 30,
2003               |                                             | December 31,
2002 |         
|----------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------------------------------------------- | ----------------- | --------
|
|ASSETS                                                                                                                        |                                                                                                                                  |                             |                                             |                   |         
|Current assets:                                                                                                               |                                                                                                                                  |                             |                                             |                   |         
|                                                                                                                              | Cash and cash equivalents                                                                                                        |                             | $                                           | 10,788            |         
|                                                                                                                              | Accounts receivable (less allowance for doubtful accounts of $493 and $413 at June 30, 2003 and December 31, 2002, respectively) |                             |                                             | 47,427            |         
|                                                                                                                              | Inventories                                                                                                                      |                             |                                             | 48,386            |         
|                                                                                                                              | Other current assets                                                                                                             |                             |                                             | 4,193             |         
|                                                                                                                              |                                                                                                                                  |                             |                                             |                   |         
|                                                                                                                              |                                                                                                                                  | Total current assets        |                                             |                   | 110,794 
|Property, plant and equipment, net                                                                                            |                                                                                                                                  |                             | 18,602                                      |                   |         
|Long-term investments and other assets                                                                                        |                                                                                                                                  |                             | 4,246                                       |                   |         
|                                                                                                                              |                                                                                                                                  |                             |                                             |                   |         
|                                                                                                                              |                                                                                                                                  | Total assets                |                                             | $                 | 133,642 
|                                                                                                                              |                                                                                                                                  |                             |                                             |                   |         
|LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                         |                                                                                                                                  |                             |                                             |                   |         
|Current liabilities:                                                                                                          |                                                                                                                                  |                             |                                             |                   |         
|                                                                                                                              | Current portion of long-term debt                                                                                                |                             | $                                           | 2,154             |         
|                                                                                                                              | Accounts payable                                                                                                                 |                             |                                             | 19,506            |         
|                                                                                                                              | Accrued expenses                                                                                                                 |                             |                                             | 13,552            |         
|                                                                                                                              | Deferred and current income taxes                                                                                                |                             |                                             | 11,121            |         
|                                                                                                                              |                                                                                                                                  |                             |                                             |                   |         
|                                                                                                                              |                                                                                                                                  | Total current liabilities   |                                             |                   | 46,333  
|Long-term debt, less current portion                                                                                          |                                                                                                                                  |                             | 31,082                                      |                   |         
|Deferred income taxes                                                                                                         |                                                                                                                                  |                             | 18,918                                      |                   |         
|Other long-term liabilities                                                                                                   |                                                                                                                                  |                             | 2,113                                       |                   |         
|                                                                                                                              |                                                                                                                                  |                             |                                             |                   |         
|                                                                                                                              |                                                                                                                                  | Total liabilities           |                                             |                   | 98,446  
|Accumulated losses in excess of net investment in Superior Telecom Inc.                                                       |                                                                                                                                  |                             | 865,887                                     |                   |         
|Warrant                                                                                                                       |                                                                                                                                  |                             | 1,000                                       |                   |         
|Mandatorily redeemable Series A cumulative convertible preferred stock (8,287 shares issued and outstanding at June 30, 2003) |                                                                                                                                  |                             | 3,149                                       |                   |         
|Stockholders' deficit:                                                                                                        |                                                                                                                                  |                             |                                             |                   |         
|                                                                                                                              | 9% cumulative convertible preferred stock at liquidation value                                                                   |                             |                                             | 427               |         
|                                                                                                                              | Common stock, $.10 par value, 25,000,000 shares authorized (22,084,694 shares issued at June 30, 2003 and December 31, 2002)     |                             |                                             | 2,208             |         
|                                                                                                                              | Capital in excess of par value                                                                                                   |                             |                                             | 164,507           |         
|                                                                                                                              | Accumulated other comprehensive deficit                                                                                          |                             |                                             | (11,624           | )       
|                                                                                                                              | Accumulated deficit                                                                                                              |                             |                                             | (896,328          | )       
|                                                                                                                              |                                                                                                                                  |                             |                                             |                   |         
|                                                                                                                              |                                                                                                                                  |                             | (740,810                                    | )                 |         
|                                                                                                                              | Treasury stock, at cost (7,872,798 shares at June 30, 2003 and 7,963,203 December 31, 2002)                                      |                             |                                             | (93,512           | )       
|                                                                                                                              | Receivable from stockholders                                                                                                     |                             |                                             | (518              | )       
|                                                                                                                              |                                                                                                                                  |                             |                                             |                   |         
|                                                                                                                              |                                                                                                                                  | Total stockholders' deficit |                                             |                   | (834,840
|                                                                                                                              |                                                                                                                                  |                             |                                             |                   |         
|                                                                                                                              |                                                                                                                                  |                             | Total liabilities and stockholders' deficit |                   | $       
|                                                                                                                              |                                                                                                                                  |                             |                                             |                   |         

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

---

THE ALPINE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

|                                                          |                                                                                                                                            | Three Months Ended
June 30, |       
|--------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------- | ------
|
|Net sales                                                 |                                                                                                                                            | $                           | 87,264
|Cost of goods sold                                        |                                                                                                                                            |                             | 77,972
|                                                          |                                                                                                                                            |                             |       
|                                                          | Gross profit                                                                                                                               |                             |       
|Selling, general and administrative expenses              |                                                                                                                                            |                             | 10,851
|Restructuring and other charges                           |                                                                                                                                            |                             | 2,390 
|                                                          |                                                                                                                                            |                             |       
|                                                          | Operating loss                                                                                                                             |                             |       
|Interest expense                                          |                                                                                                                                            |                             | (860  
|Gain (loss) on investment in securities                   |                                                                                                                                            |                             | 81    
|Other income (expense), net                               |                                                                                                                                            |                             | (97   
|                                                          |                                                                                                                                            |                             |       
|                                                          | Loss before income taxes, distributions on preferred securities of subsidiary trust, minority interest and equity in earnings of affiliate |                             |       
|Income tax benefit                                        |                                                                                                                                            |                             | 1,857 
|                                                          |                                                                                                                                            |                             |       
|                                                          | Loss before distributions on preferred securities of subsidiary trust, minority interest and equity in earnings of affiliate               |                             |       
|Distributions on preferred securities of subsidiary trust |                                                                                                                                            |                             |      
|                                                          |                                                                                                                                            |                             |       
|                                                          | Loss before minority interest and equity in earnings of affiliate                                                                          |                             |       
|Minority interest in losses of subsidiaries               |                                                                                                                                            |                             |      
|Equity in loss of affiliate                               |                                                                                                                                            |                             | (806  
|                                                          |                                                                                                                                            |                             |       
|Net loss                                                  |                                                                                                                                            |                             | (3,774
|Preferred stock dividends                                 |                                                                                                                                            |                             | (10   
|                                                          |                                                                                                                                            |                             |       
|                                                          | Net loss applicable to common stock                                                                                                        |                             | $     
|                                                          |                                                                                                                                            |                             |       
|Net loss per share of common stockbasic and diluted      |                                                                                                                                            | $                           | (0.25 
|                                                          |                                                                                                                                            |                             |       
|Weighted average shares outstandingbasic and diluted     |                                                                                                                                            |                             | 15,107
|                                                          |                                                                                                                                            |                             |       

The
accompanying notes are an integral part of these condensed consolidated financial statements.

4

---

THE ALPINE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

|                                                                                         |                                                                                                                                                                                                            | Six Months Ended
June 30,                                                  |                           
|---------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------- | --------------------------
|
|Net sales                                                                                |                                                                                                                                                                                                            | $                                                                          | 184,805                   
|Cost of goods sold                                                                       |                                                                                                                                                                                                            |                                                                            | 165,782                   
|                                                                                         |                                                                                                                                                                                                            |                                                                            |                           
|                                                                                         | Gross profit                                                                                                                                                                                               |                                                                            |                           
|Selling, general and administrative expenses                                             |                                                                                                                                                                                                            |                                                                            | 22,327                    
|Restructuring and other charges                                                          |                                                                                                                                                                                                            |                                                                            | 4,976                     
|                                                                                         |                                                                                                                                                                                                            |                                                                            |                           
|                                                                                         | Operating loss                                                                                                                                                                                             |                                                                            |                           
|Interest expense                                                                         |                                                                                                                                                                                                            |                                                                            | (2,011                    
|Gain (loss) on investment in securities                                                  |                                                                                                                                                                                                            |                                                                            | 81                        
|Other income (expense), net                                                              |                                                                                                                                                                                                            |                                                                            | (127                      
|                                                                                         |                                                                                                                                                                                                            |                                                                            |                           
|                                                                                         | Loss before income taxes, distributions on preferred securities of subsidiary trust, minority interest, equity in earnings of affiliate and cumulative effect of accounting change for goodwill impairment |                                                                            |                           
|Income tax benefit                                                                       |                                                                                                                                                                                                            |                                                                            | 3,982                     
|                                                                                         |                                                                                                                                                                                                            |                                                                            |                           
|                                                                                         | Loss before distributions on preferred securities of subsidiary trust, minority interest, equity in earnings of affiliate and cumulative effect of accounting change for goodwill impairment               |                                                                            |                           
|Distributions on preferred securities of subsidiary trust                                |                                                                                                                                                                                                            |                                                                            |                          
|                                                                                         |                                                                                                                                                                                                            |                                                                            |                           
|                                                                                         | Loss before minority interest, equity in earnings of affiliate and cumulative effect of accounting change for goodwill impairment                                                                          |                                                                            |                           
|Minority interest in losses of subsidiaries                                              |                                                                                                                                                                                                            |                                                                            |                          
|Equity in earnings of affiliate                                                          |                                                                                                                                                                                                            |                                                                            | 267                       
|                                                                                         |                                                                                                                                                                                                            |                                                                            |                           
|                                                                                         | Loss before cumulative effect of accounting change for goodwill impairment                                                                                                                                 |                                                                            |                           
|Cumulative effect of accounting change for goodwill impairment, net of minority interest |                                                                                                                                                                                                            |                                                                            |                          
|                                                                                         |                                                                                                                                                                                                            |                                                                            |                           
|Net loss                                                                                 |                                                                                                                                                                                                            |                                                                            | (6,088                    
|Preferred stock dividends                                                                |                                                                                                                                                                                                            |                                                                            | (19                       
|                                                                                         |                                                                                                                                                                                                            |                                                                            |                           
|                                                                                         | Net loss applicable to common stock                                                                                                                                                                        |                                                                            | $                         
|                                                                                         |                                                                                                                                                                                                            |                                                                            |                           
|                                                                                         | Net loss per share of common stock-basic and diluted:                                                                                                                                                      |                                                                            |                           
|                                                                                         |                                                                                                                                                                                                            | Loss before cumulative effect of accounting change for goodwill impairment |                           
|                                                                                         |                                                                                                                                                                                                            | Cumulative effect of accounting change for goodwill impairment             |                           
|                                                                                         |                                                                                                                                                                                                            |                                                                            |                           
|                                                                                         |                                                                                                                                                                                                            |                                                                            | Net lossbasic and diluted
|                                                                                         |                                                                                                                                                                                                            |                                                                            |                           
|Weighted average shares outstandingbasic and diluted                                    |                                                                                                                                                                                                            |                                                                            | 15,019                    
|                                                                                         |                                                                                                                                                                                                            |                                                                            |                           

The
accompanying notes are an integral part of these condensed consolidated financial statements.

5

---

THE ALPINE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

(in thousands, except share data)

(unaudited)

|                                           |                                                          | Six Months Ended
June 30, 2003 |           
|------------------------------------------ | -------------------------------------------------------- | ------------------------------ | ----------
|
|9% cumulative convertible preferred stock: |                                                          |                                |           
|                                           | Balance at beginning of period                           |                                | 427       
|                                           |                                                          | Balance at end of period       |           
|                                           |                                                          |                                |           
|Common stock:                              |                                                          |                                |           
|                                           | Balance at beginning of period                           |                                | 22,084,694
|                                           |                                                          | Balance at end of period       |           
|                                           |                                                          |                                |           
|Capital in excess of par value:            |                                                          |                                |           
|                                           | Balance at beginning of period                           |                                |           
|                                           | Stock grants                                             |                                |           
|                                           |                                                          |                                |           
|                                           |                                                          | Balance at end of period       |           
|                                           |                                                          |                                |           
|Accumulated other comprehensive deficit:   |                                                          |                                |           
|                                           | Balance at beginning of period                           |                                |           
|                                           | Foreign currency translation adjustment                  |                                |           
|                                           | Change in unrealized gains on securities, net of tax     |                                |           
|                                           |                                                          |                                |           
|                                           |                                                          | Balance at end of period       |           
|                                           |                                                          |                                |           
|Accumulated deficit:                       |                                                          |                                |           
|                                           | Balance at beginning of period                           |                                |           
|                                           | Net loss                                                 |                                |           
|                                           | Dividends on preferred stock                             |                                |           
|                                           |                                                          |                                |           
|                                           |                                                          | Balance at end of period       |           
|                                           |                                                          |                                |           
|Treasury stock:                            |                                                          |                                |           
|                                           | Balance at beginning of period                           |                                | (7,963,203
|                                           |                                                          | Stock options and grants       |           
|                                           |                                                          |                                |           
|                                           |                                                          | Balance at end of period       |           
|                                           |                                                          |                                |           
|Receivable from stockholders:              |                                                          |                                |           
|                                           | Balance at beginning of period                           |                                |           
|                                           | Compensation expense related to stock options and grants |                                |           
|                                           |                                                          |                                |           
|                                           |                                                          | Balance at end of period       |           
|                                           |                                                          |                                |           
|Total stockholders' deficit                |                                                          |                                |           
|                                           |                                                          |                                |           

The
accompanying notes are an integral part of these condensed consolidated financial statements.

6

---

THE ALPINE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

|                                                       |                                                                                                                                      | Six Months Ended
June 30,                                                   |                                      
|------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------- | -------------------------------------
|
|Cash flows from operating activities:                  |                                                                                                                                      |                                                                             |                                      
|                                                       | Loss before cumulative effect of accounting change for goodwill impairment                                                           |                                                                             | $                                    
|                                                       | Adjustments to reconcile loss before cumulative effect of accounting change to net cash provided by (used for) operating activities: |                                                                             |                                      
|                                                       |                                                                                                                                      | Depreciation and amortization                                               |                                      
|                                                       |                                                                                                                                      | Deferred distributions on Trust Convertible Preferred Securities            |                                      
|                                                       |                                                                                                                                      | Loss (gain) on investment in securities                                     |                                      
|                                                       |                                                                                                                                      | Amortization of deferred debt issuance costs and accretion of debt discount |                                      
|                                                       |                                                                                                                                      | Gain on early extinguishment of debt                                        |                                      
|                                                       |                                                                                                                                      | Write-down of idled property, plant and equipment                           |                                      
|                                                       |                                                                                                                                      | Gain on settlement of derivatives                                           |                                      
|                                                       |                                                                                                                                      | Compensation expense related to stock options and grants                    |                                      
|                                                       |                                                                                                                                      | Minority interest in losses of subsidiary                                   |                                      
|                                                       |                                                                                                                                      | Equity in earnings of affiliates                                            |                                      
|                                                       |                                                                                                                                      | Change in assets and liabilities:                                           |                                      
|                                                       |                                                                                                                                      |                                                                             | Accounts receivable, net             
|                                                       |                                                                                                                                      |                                                                             | Inventories, net                     
|                                                       |                                                                                                                                      |                                                                             | Other current and non-current assets 
|                                                       |                                                                                                                                      |                                                                             | Accounts payable and accrued expenses
|                                                       |                                                                                                                                      |                                                                             | Deferred and current income taxes    
|                                                       |                                                                                                                                      |                                                                             | Other, net                           
|                                                       |                                                                                                                                      |                                                                             |                                      
|Cash flows provided by (used for) operating activities |                                                                                                                                      |                                                                             | 38,122                               
|                                                       |                                                                                                                                      |                                                                             |                                      
|Cash flows from investing activities:                  |                                                                                                                                      |                                                                             |                                      
|                                                       | Capital expenditures                                                                                                                 |                                                                             |                                      
|                                                       | Proceeds from sale of investment                                                                                                     |                                                                             |                                      
|                                                       | Proceeds from sale of assets                                                                                                         |                                                                             |                                      
|                                                       | Superior Israel customer loans                                                                                                       |                                                                             |                                      
|                                                       | Restricted cash                                                                                                                      |                                                                             |                                      
|                                                       | Other                                                                                                                                |                                                                             |                                      
|                                                       |                                                                                                                                      |                                                                             |                                      
|Cash flows provided by investing activities            |                                                                                                                                      |                                                                             | 314                                  
|                                                       |                                                                                                                                      |                                                                             |                                      
|Cash flows from financing activities:                  |                                                                                                                                      |                                                                             |                                      
|                                                       | Borrowings (repayments) under revolving credit facilities, net                                                                       |                                                                             |                                      
|                                                       | Short-term borrowings, net                                                                                                           |                                                                             |                                      
|                                                       | Repayments of long-term borrowings                                                                                                   |                                                                             |                                      
|                                                       | Long-term borrowings                                                                                                                 |                                                                             |                                      
|                                                       | Issuance of long-term debt                                                                                                           |                                                                             |                                      
|                                                       | Debt issuance and amendment costs                                                                                                    |                                                                             |                                      
|                                                       | Issue of preferred stock, net                                                                                                        |                                                                             |                                      
|                                                       | Purchase of treasury shares                                                                                                          |                                                                             |                                      
|                                                       | Other, net                                                                                                                           |                                                                             |                                      
|                                                       |                                                                                                                                      |                                                                             |                                      
|Cash flows used for financing activities               |                                                                                                                                      |                                                                             | (35,787                              
|Effect of exchange rate on cash                        |                                                                                                                                      |                                                                             |                                     
|Net increase (decrease) in cash and cash equivalents   |                                                                                                                                      |                                                                             | 2,649                                
|Cash and cash equivalents at beginning of period       |                                                                                                                                      |                                                                             | 8,139                                
|                                                       |                                                                                                                                      |                                                                             |                                      
|Cash and cash equivalents at end of period             |                                                                                                                                      | $                                                                           | 10,788                               
|                                                       |                                                                                                                                      |                                                                             |                                      
|Supplemental disclosures:                              |                                                                                                                                      |                                                                             |                                      
|                                                       | Cash paid for interest                                                                                                               |                                                                             | $                                    
|                                                       | Cash received for income taxes, net                                                                                                  |                                                                             | $                                    
|                                                       |                                                                                                                                      |                                                                             |                                      

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

---

THE ALPINE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2003

(unaudited)

1. General



The accompanying unaudited condensed consolidated financial statements include the accounts of The Alpine Group, Inc. and its consolidated subsidiaries
(collectively, unless the context otherwise requires, "Alpine" or the "Company").

Prior
to December 11, 2002, Alpine's operations include the consolidated results of its then controlled subsidiary Superior TeleCom Inc. ("Superior") and Superior's then majority-owned
subsidiary Superior Cables Ltd. ("Superior Israel"). As a result of the vesting of certain Superior restricted stock arrangements in 2002, Alpine's common equity ownership in Superior declined from
50.2% at December 31, 2001 to 48.9%. Notwithstanding the decline in Alpine's direct equity ownership in Superior, through December 11, 2002 Alpine had a controlling interest in Superior
based on its additional indirect equity ownership position (including certain common share voting interests controlled by Alpine). In connection with Alpine's acquisition of Superior's electrical wire
business and DNE Systems Inc. (the "Electrical Acquisition")(see Note 2), certain changes were made with respect to Alpine's indirect voting interests such that Alpine no longer
controlled Superior.
Additionally, Alpine acquired approximately 47% of Superior Israel from Superior as part of the Electrical Acquisition. Accordingly, effective for periods after December 11, 2002, Superior and
Superior Israel are accounted for under the equity method and are no longer consolidated with Alpine.

On
March 3, 2003, Superior and its U.S. subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. On July 30, 2003 Superior and its U.S.
subsidiaries filed a proposed plan of reorganization (the "Plan of Reorganization") with the bankruptcy court. The Plan of Reorganization, among other things, provides for the elimination and
conversion into equity of a significant amount of debt resulting in a substantial deleveraging of Superior's capital structure. Superior's stockholders, including Alpine, would not receive any
distribution under the Plan of Reorganization. However, there can be no assurance that the final restructuring and reorganization plan will contain the terms of the Plan of Reorganization, that such
plan will receive the requisite approvals or that such plan will be confirmed by the bankruptcy court or consummated. If the Plan of Reorganization is approved and confirmed by the bankruptcy court,
the Company's equity interest in Superior (carried as a negative investment of $865.9 million in the consolidated balance sheet) will be eliminated as Superior's stockholders, including Alpine, would
not receive any distributions for their equity interests.

As
a result of the net losses incurred by Superior in 2002, Alpine recorded losses in excess of its investment in Superior of $865.9 million through December 11, 2002. This
negative investment is required under generally accepted accounting principles to be reflected in Alpine's consolidated balance sheet, notwithstanding the fact that Alpine is not obligated to fund any
operating losses or deficits of Superior, nor is Alpine liable for nor has it guaranteed any debt or other obligations of Superior (other than certain capital lease obligations of Superior). Alpine
will not record any future losses of Superior unless it has a positive investment in Superior. If Alpine were to liquidate or substantially reduce its investment in Superior, then Alpine would
eliminate its negative investment in Superior and recognize a corresponding gain (based on the amount of the negative investment). If the Plan of Reorganization

8

---

is
ultimately confirmed by the bankruptcy court, Alpine's equity interest in Superior would be eliminated.



The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets" effective January 1, 2002. SFAS
No. 142 required that the amortization of goodwill and certain other intangible assets cease as of January 1, 2002 and that the related recorded value of goodwill be allocated to the identified
reporting units of the Company and its consolidated subsidiaries (in this case, Superior) and be reviewed annually for impairment.

The
transitional rules for implementing SFAS No. 142 provided that an initial assessment as to whether there was an implied impairment to the carrying value of goodwill was to be
completed within six months of adoption of SFAS No. 142, with the final determination of goodwill impairment completed by the end of 2002. SFAS No. 142 required any goodwill impairment resulting from
initial application to be reflected through a charge to income as a cumulative effect of an accounting change, as of January 1, 2002.

Superior
completed its determination of initial goodwill impairment in August 2002 and recorded a non-cash goodwill impairment charge of $424 million including $166 million related to
Superior's Electrical segment and $258 million related to Superior's original equipment manufacturers ("OEM") segment. The goodwill impairment charge at Superior was recorded retroactively to
January 1, 2002 as a cumulative effect of accounting change for goodwill impairment in accordance with SFAS No. 142. Additionally, as a result of initial implementation, Alpine recorded a
further goodwill impairment charge of $3 million relating to additional goodwill associated with its investment in Superior. The cumulative effect of the accounting change as presented in the
accompanying statement of operations for the six months ended June 30, 2002 is summarized as follows (millions):

Superior's goodwill impairment loss

$
424Additional goodwill impairment recorded by Alpine


3Less: Impairment allocable to Superior's minority interest


(39
)$
388




The Company applies the intrinsic-value based method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations including FASB Interpretation No. 44,Accounting for
Certain Transactions involving Stock Compensation, an interpretation of APB Opinion No. 25,issued in March 2000, to account for its stock-based compensation plans. Under this
method, compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. SFAS No. 123, Accounting for Stock-Based Compensation,established accounting and disclosure requirements using a fair-value based method of accounting for
stock-based employee compensation plans. As

9

---

allowed
by SFAS No. 123, the Company has elected to continue to apply the intrinsic-value based method of accounting described above, and has adopted only the disclosure requirements of SFAS
No. 123. The following table illustrates the effect on net loss if the fair value based method had been applied to all outstanding and unvested awards in each period (in thousands, except per
share amounts).

Three Months Ended
June 30,2003

2002Net loss, as reported

$
(3,774
)
$
(26,069
)Add stock-based employee compensation expense included in reported net loss, net of tax


128


255Deduct total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects


(159
)

81Pro forma net loss

$
(3,805
)
$
(25,733
)Net loss per share:Basic and dilutedas reported

$
(0.25
)
$
(1.76
)Basic and dilutedpro forma

$
(0.25
)
$
(1.74
)


Six Months Ended
June 30,2003

2002Net loss, as reported

$
(6,088
)
$
(434,177
)Add stock-based employee compensation expense included in reported net loss, net of tax


243


510Deduct total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects


(327
)

(411
)Pro forma net loss

$
(6,172
)
$
(434,078
)Net loss per share:Basic and dilutedas reported

$
(0.41
)
$
(29.34
)Basic and dilutedpro forma

$
(0.41
)
$
(29.22
)


The
effects of applying SFAS No. 123 in the pro forma disclosure are not necessarily indicative of future amounts, since the estimated fair value of stock options is amortized to expense
over the vesting period and additional options may be granted in future years. The fair value for these options was estimated at the date of grant using the Black-Scholes option-pricing model with the
following weighted-average assumptions for the the six months ended June 30, 2003 and 2002, respectively: dividend yield of 0% for each period; expected volatility of 99% and 99%, risk-free interest
rate of

10

---

1.8%
and 2.8% and expected life of four years and five years. The weighted average per share fair value of options granted (using the Black-Scholes option-pricing model) for the six months ended
June 30, 2003 and 2002 was $0.52 and $1.20, respectively.

During
the six months ended June 30, 2003, approximately 1.4 million stock options and 0.4 million shares of restricted stock were granted to directors and certain
employees and approximately 2.3 million stock options were cancelled or forfeited. As of June 30, 2003 there were 1.8 million stock options outstanding.

Included
in treasury stock shares at June 30, 2003 and December 31, 2002 are 903,948 and 805,783 shares of stock, respectively, issued upon the exercise of stock options or in connection
with deferred stock awards and held in irrevocable grantor trusts in connection with a deferred stock account plan sponsored by the Company.



The Company adopted SFAS No. 143, "Accounting for Asset Retirement Obligations" effective January 1, 2003. SFAS No. 143 requires entities to record the
fair value of a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the entity capitalizes the cost by increasing the carrying
amount of the related long-lived asset. Over time, the liability is accreted to its present value each period and the capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, the entity either settles the obligation for the amount recorded or incurs a gain or loss. The adoption of SFAS No. 143 did not have a material impact on the results of
operations or financial position of the Company.

The
Company adopted SFAS No. 145,Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Correctionseffective January 1, 2003. SFAS No. 145 amends existing guidance to eliminate the requirement that gains and losses on early extinguishment of debt must be
classified as extraordinary items and permits such classification only if the debt extinguishment meets the criteria for classification as an extraordinary item under APB Opinion No. 30, Reporting the Results of
OperationsReporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions. SFAS No. 145 also amends
SFAS No. 13 to require sale-leaseback accounting for certain lease modifications that have economic effects similar to sale-leaseback transactions. As a result of the adoption of SFAS No. 145, the
Company reclassified to other income (expense) a $2.2 million gain on the early extinguishment of debt previously recognized as an extraordinary item in the Company's consolidated statement of
operations for the six months ended June 30, 2002.

The
Company adopted SFAS No. 146,Accounting for Costs Associated with Exit or Disposal Activitieseffective January 1, 2003. SFAS
No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue 94-3,Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity. The provisions of this Statement are effective for exit or disposal activities that
are initiated after December 31, 2002. The restructuring costs incurred during the three and six months ended June 30, 2003 have been accounted for in accordance with SFAS No. 146.

11

---

In
May 2003, the FASB issued SFAS No. 150,Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and
Equity. SFAS No. 150 established standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity,
and imposes certain additional disclosure requirements. The provisions of SFAS No. 150 are generally effective for all financial instruments entered into or modified after May 31, 2003,
and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. SFAS No. 150 did not have a significant effect on the consolidated financial
statements of the Company.

The
Company adopted FASB Interpretation No. 45,Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness
to Others,an interpretation of FASB Statements No. 5, 57 and 107 and a rescission of FASB Interpretation No. 34effective
January 1, 2003. This Interpretation elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees issued. The
Interpretation also clarifies that a guarantor is required to recognize, at inception of a guarantee, a liability for the fair value of the obligation undertaken. The initial recognition and
measurement provisions of the Interpretation are applicable to guarantees issued or modified after December 31, 2002. Implementation of Interpretation No. 45 did not have a material effect on the
Company's financial statements. The Company historically is a party to a guaranty of Superior's obligations under a capital lease with respect to one of Superior's manufacturing facilities. The lease
currently provides for monthly payments of $56,000 subject to tri-annual adjustments for changes in the consumer price index. The initial lease term expires in 2018. The Company believes the facility
and underlying lease are valuable assets of Superior and it is anticipated that as part of its reorganization Superior will assume the lease and perform as tenant thereunder.



The cost of copper, the Company's most significant raw material, has been subject to significant volatility over the past several years. In anticipation of a
significant reduction in inventory levels in 2003, the Company entered into copper futures sales contracts to minimize the price risk associated with declining copper costs. At June 30, 2003,
future sales contracts for 12 million pounds of copper, or $9.2 million, with an estimated fair value of $0.2 million were outstanding. These future contracts have been designated
as fair value hedges with changes in the fair value of these contracts recorded in the consolidated income statement of operations on the same line item as the underlying exposure being hedged.

2. Electrical Acquisition

On December 11, 2002, Alpine, through Alpine Holdco Inc. ("Alpine Holdco"), a wholly-owned subsidiary of Alpine, acquired the following assets and securities from
Superior and its subsidiaries: (1) substantially all of the assets, subject to related accounts payable and accrued liabilities, of Superior's electrical wire business, which is currently owned
and operated by Essex Electric Inc. ("Essex Electric"), a wholly-owned subsidiary of Alpine Holdco; (2) all of the outstanding shares of capital stock of DNE Systems, Inc. ("DNE"), a
manufacturer of multiplexers and other communications and electronic products; and (3) all of the outstanding shares of capital stock of Texas SUT Inc. and

12

---

Superior
Cable Holdings (1997) Ltd., which together owned approximately 47% of Superior Israel, the largest Israeli-based producer of wire and cable products. This acquisition is referred to as the
"Electrical Acquisition." The aggregate purchase price was approximately $87.4 million in cash (including $2.5 million of out-of-pocket costs) plus the issuance of a warrant to Superior
to purchase 19.9% of the common stock of Essex Electric. The warrant is only exercisable during the 30 day period prior to its expiration on December 11, 2007 or upon the earlier occurrence of
certain specified transactions. The total exercise price is $0.6 million. The warrant was valued at $1 million based upon a Black-Scholes option pricing model. The portion of the
Electrical Acquisition attributable to the non-controlling interest in Superior was accounted for as a purchase and Alpine's consolidated financial statements for periods subsequent to the acquisition
date reflect the pro rata allocation of the purchase price. Assets acquired and liabilities assumed with respect to Alpine's 48.9% interest in Superior were recorded at their historical cost basis.

In
connection with the Electrical Acquisition, Alpine Holdco, Essex Electric and Superior entered into a Supply and Transitional Services Agreement (the "Supply Agreement"). Under the
Supply Agreement, Essex Electric, among other things, has agreed to purchase from Superior certain specified quantities of its overall requirements of copper rod. The specified quantities represent a
range of Essex Electric's estimated total annual copper rod requirements for use in its wire manufacturing process. The purchase price for copper rod specified in the Supply Agreement is based on the
COMEX price plus an adder to reflect conversion to copper rod. The costs of freight are paid by Essex Electric. The
Supply Agreement also states that Superior will provide certain administrative services to Essex Electric, including accounting, legal, risk management, personnel, data processing, and employee
relations services. Charges for these services are generally based on actual usage or an allocated portion of the total cost to Superior. The Supply Agreement expires on December 31, 2004 but may be
terminated at any time prior to that by mutual consent of Alpine and Superior. Additionally, the parties may terminate various services provided for under the Supply Agreement upon certain prior
notice as provided therein. Superior may terminate its obligations to supply copper rod upon 60 days notice given to Essex Electric any time after January 1, 2004 if Essex Electric has
purchased less than certain minimum quantities of copper rod specified in the Supply Agreement. The total cost of copper rod purchased under the Supply Agreement was $20.9 million and
$59.5 million and the cost for administrative services was $1.3 million and $2.6 million, respectively, for the three and six months ended June 30, 2003. Included in
accounts payable at June 30, 2003 is $6.2 million due to Superior related to services and copper rod purchased under the Supply Agreement.

3. Asset sale

In February 2003, the Company sold its plant in Lafayette, Indiana together with the related equipment and inventory which comprised substantially all of its
industrial wire business. The total purchase price was approximately $12.6 million in cash which approximated the book value of the assets sold. Additionally, the Company is leasing its
Orleans, Indiana plant to the purchaser for an annual rental of $350,000. The lease expires in February 2004.

13

---



4. Inventories

At June 30, 2003 and December 31, 2002, the components of inventories were as follows:

June 30,
2003

December 31,
2002(in thousands)Raw materials

$
6,547

$
4,933Work in process


7,547


10,167Finished goods


35,823


66,09849,917


81,198LIFO reserve


(1,531
)

$
48,386

$
81,198


Inventories
valued using the LIFO method amounted to $42.0 million and $74.1 million at June 30, 2003 and December 31, 2002, respectively.

5. Comprehensive loss

The components of comprehensive loss for the three and six months ended June 30, 2003 and 2002 were as follows:

Three Months Ended
June 30,2003

2002(in thousands)Net loss

$
(3,774
)
$
(26,069
)Foreign currency translation adjustment


(8
)

2,958Change in unrealized gains (losses) on derivatives, net





113Realized losses on securities, net of tax





1,500Change in unrealized losses on securities, net of tax


92


(1,463
)Comprehensive loss

$
(3,690
)
$
(22,961
)


Six Months Ended
June 30,2003

2002(in thousands)Net loss

$
(6,088
)
$
(434,177
)Foreign currency translation adjustment


(8
)

2,036Change in unrealized gains (losses) on derivatives, net





130Realized losses on securities, net of tax





3,324Change in unrealized losses on securities, net of tax


(19
)

(3,324
)Comprehensive loss

$
(6,115
)
$
(432,011
)


14

---

The
components of accumulated other comprehensive deficit at June 30, 2003 and December 31, 2002 were as follows:

June 30,
2003

December 31,
2002(in thousands)Foreign currency translation adjustment

$
(4,030
)
$
(4,022
)Additional minimum pension liability


(7,594
)

(7,594
)Other





19$
(11,624
)
$
(11,597
)


6. Restructuring and other charges

During the three and six months ended June 30, 2003 the Company recorded $2.4 million and $5.0 million, respectively, of restructuring and other charges.
Approximately $0.6 million and $0.4 million of the total year-to-date charges consist of employee severance costs and facility exit costs, respectively, related to the sale of the assets
comprising the Company's industrial wire business (see Note 3). An additional $0.6 million related to ongoing facility exit costs with respect to the Company's plant in Columbia City,
Indiana which was closed in December 2002 and $0.9 million related to start-up costs as a result of product transfers from the aforementioned plant closures. Charges for the three months ended
June 30, 2003 included $0.1 million of employee severance costs and $0.8 million of facility exit costs related to closure of the Company's regional distribution center in St.
Joseph, Missouri as well as $0.6 million of employee severance costs for corporate administrative staff reductions. The remaining year-to-date charge of $1.0 million consisted of employee
severance costs incurred in connection with the Company's plan to idle its plant in Sikeston, Missouri in the third quarter of 2003. A summary of accrued restructuring costs and other charges for the
six months ended June 30, 2003 is as follows:

December 31,
2002

Charges

Payments

June 30,
2003(in thousands)Employee severance

$
1,227

$
2,374

$
(2,462
)
$
1,139Facility exit costs





2,602


(1,810
)

792$
1,227

$
4,976

$
(4,272
)
$
1,931


During
the six months ended June 30, 2002, Superior recorded restructuring and other charges of $31.7 million related to (i) the closure of its Communications Group
Elizabethtown, Kentucky and Winnipeg, Canada manufacturing facilities; (ii) the closure of its OEM Group Rockford, Illinois manufacturing facility; (iii) the shutdown of its Electrical
Group Canadian operations and (iv) operational restructuring activities at Superior Israel. These actions were taken to more closely align productive capacity with market demand levels and to
reduce overall manufacturing costs. The $31.7 million charge included an $18.3 million write-down of idled property, plant and equipment, $8.7 million of employee separation costs
and $4.7 million of other facility related closure costs.

15

---

Additionally,
during the six months ended June 30, 2002, Alpine recorded restructuring and other charges of $1.4 million related to certain termination and retirement benefits paid in
connection with Alpine's corporate administrative staffing reductions.

7. Debt

In connection with the Electrical Acquisition (see Note 2), Alpine Holdco entered into a Loan and Security Agreement (the "Loan Agreement"), dated as of December
11, 2002, by and among Alpine Holdco, Essex Electric, DNE and its wholly-owned subsidiaries, DNE Manufacturing and Service Company and DNE Technologies, Inc. (collectively the "Companies"), certain
financial institutions party thereto as lenders, Congress Financial Corporation, as documentation agent, and Foothill Capital Corporation, as arranger and administrative agent. Following consummation
of the acquisition, the borrowers under the Loan Agreement are Essex Electric, DNE Manufacturing and Services Company and DNE Technologies, Inc.

The
terms of the Loan Agreement provide for a maximum committed amount of $100 million, with borrowing availability determined by reference to a borrowing base. Interest is payable
monthly in cash in arrears and is based on, at Alpine Holdco's option, LIBOR or prime rates plus a variable margin that is subject to periodic adjustment based on utilization and on a ratio relating
to leverage amounts. The weighted average interest rate at June 30, 2003 and December 31, 2002 was 4.54% and 5.02%, respectively. The Loan Agreement also provides for maintenance of financial
covenants and ratios relating to minimum EBITDA and tangible net worth and restrictions on capital expenditures, payment of cash dividends and incurrence of indebtedness. Outstanding obligations under
the Loan Agreement are guaranteed by DNE and are secured by a lien on all of the Companies' tangible and intangible assets, other than the investment in Superior Israel and certain equipment used by
DNE in connection with its U.S. government contracts. The obligations under the Loan Agreement are without recourse to Alpine. The Loan Agreement matures in five years and the Companies may terminate
the Loan Agreement at any time upon 45 days' prior written notice and payment of all outstanding borrowings, together with unpaid interest, and a termination fee equal to 0.75% of the maximum
committed amount. At any time after the second anniversary of the closing of the Loan Agreement the Companies may, upon 30 days' prior written notice, permanently reduce the maximum commitments
without penalty or premium. At June 30, 2003, outstanding borrowings under the Loan Agreement were $30.2 million and the Companies had $23.8 million of borrowing availability.

Alpine
Holdco has implemented restructuring actions to rationalize manufacturing capacity, lower costs and reduce working capital. These actions are expected to result in restructuring
costs of approximately $10 million during 2003 and further reductions of outstanding borrowings. These restructuring activities are anticipated to have a negative impact on operating income and, as a
result, the Company amended the Loan Agreement in May 2003 to reflect the planned restructuring activities. The amended Loan Agreement permits necessary expenditures and modifies certain financial
covenants to accommodate the impact of these restructuring actions. Based on the terms of the amended Loan Agreement, the Company believes it will comply with all financial covenants during 2003 as
applicable under the amended Loan Agreement.

16

---

On
August 4, 2003, the Company completed an exchange offer whereby holders of its common stock exchanged 3,479,656 shares for $4.3 million principal amount of 6% Junior
Subordinated Notes (the "Subordinated Notes") issued by the Company plus a nominal amount of cash in lieu of fractional notes. The Subordinated Notes accrue interest at 6% per annum payable in cash
semiannually each December 31 and June 30. The Subordinated Notes are the Company's general unsecured obligations subordinated and subject in right of payment to all of the Company's
existing and future senior indebtedness, which excludes trade payables incurred in the ordinary course of business. The Company will be required to repay 1/8 of the outstanding
principal amount of the Subordinated Notes commencing on June 30, 2007 and semiannually thereafter, so that all of the Subordinated Notes will be repaid by December 31, 2010. The
Subordinated Notes are redeemable, at the Company's option, in whole at any time or in part from time to time, at the principal amount to be redeemed plus accrued and unpaid interest thereon to the
redemption date, together with a premium if the Subordinated Notes are redeemed prior to 2007. In addition, the Company must offer to redeem all of the Subordinated Notes at the redemption price then
in effect in the event of a change of control. The Subordinated Notes were issued under an indenture which does not subject the Company to any financial covenants.

8. Series A Cumulative Convertible Preferred Stock

On June 23, 2003 the Company completed a private placement of 8,287 shares of a new issue of Series A Cumulative Convertible Preferred Stock (the "Series A
Preferred Stock") to its directors and certain officers for a purchase price of $380 per share, or an aggregate of approximately $3.1 million. Holders of the Series A Preferred Stock are
entitled to receive, when, as and if declared by the board of directors out of funds legally available for payment, cash dividends at an annual rate of $30.40 per share. Each share of Series A
Preferred Stock is convertible at the option of the holder into 691 shares of Alpine common stock beginning on the earlier of completion of the rights offering discussed below and March 31, 2004,
subject to customary adjustments. The Company may cause conversion of the Series A Preferred Stock into common stock after the earlier of (i) consummation of the rights offering discussed
below, and (ii) March 31, 2004, if the Company's common stock is then listed on the New York Stock Exchange or the American Stock Exchange or is traded on the Nasdaq National Market
System and the average closing price of a share of the Company's common stock for any 20 consecutive trading days equals or exceeds 300% of the conversion price then in effect. The Series A Preferred
Stock is subject to mandatory redemption by the Company ratably on the last day of each quarter during the three-year period commencing on December 31, 2009 at the liquidation value of $380 per
share, plus accrued and unpaid dividends. Additionally, if the Company experiences a change in control it will, subject to certain limitations, offer to redeem the Series A Preferred Stock at a cash
price of $380 per share plus (i) accrued and unpaid dividends and (ii) if the change of control occurs prior to December 31, 2007, all dividends that would be payable from the
redemption date through December 31, 2007.

Holders
of the Series A Preferred Stock are entitled to vote their shares on an as-converted basis together with the Company's common stockholders. In addition, the Company may not
(a) enter into a merger, sale of all or substantially all of its assets or similar transaction without the approval of holders

17

---

of
at least a majority of the shares of Series A Preferred Stock, or (b) alter or change the powers, preferences or special rights (including, without limitation, those relating to
dividends, redemption, conversion, liquidation preference or voting) of the shares of Series A Preferred Stock so as to affect them materially and adversely, or issue any senior stock, without
the approval of holders of at least a majority of the shares of Series A Preferred Stock. In the event of any liquidation, dissolution or winding up of Alpine, after the payment of the
liquidation preference in respect of any senior stock, holders of the Series A Preferred Stock will be entitled to receive the liquidation price of $380 per share plus an amount equal to
(a) if the liquidation, dissolution or winding up occurs prior to December 31, 2007, all dividends that would be payable on a share of Series A Preferred Stock from the date of
liquidation, dissolution or winding up through December 31, 2007 and (b) any accrued and unpaid dividends to the payment date, before any payment is made to the holders of common stock
or any other junior securities, subject to certain exceptions.

On
August 7, 2003, the Company filed a registration statement with the United States Securities and Exchange Commission (the "SEC") covering up to 16,000 shares of Series A Preferred
Stock and shares of common stock into which the Series A Preferred Stock may be converted to be issued in connection with a proposed rights offering to holders of the Company's common stock. Pursuant
to this proposed rights offering, holders of the Company's common stock will be offered a right to purchase one share of Series A Preferred Stock at a price of $380 per share for each 500 shares of
common stock that they own. Other terms of the Series A Preferred Stock are the same as that purchased by the officers and directors in the private placement discussed in the preceding paragraph. Any
offer of rights to purchase Series A Preferred Stock may be made only pursuant to an effective registration statement filed with the SEC.

9. Loss per share

The computation of basic and diluted loss per share for the three and six months ended June 30, 2003 and 2002 is as follows:

|                                                                                      |  | Three Months Ended June 30, |       
|------------------------------------------------------------------------------------- |  | --------------------------- | ------
|
|
|Loss before cumulative effect of accounting change                                    |  | $                           | (3,774
|Less: preferred stock dividends                                                       |  |                             | (10   
|                                                                                      |  |                             |       
|Basic and diluted loss per common share before cumulative effect of accounting change |  | $                           | (3,784
|                                                                                      |  |                             |       

18

---



|                                                                                      |  | Six Months Ended June 30, |       
|------------------------------------------------------------------------------------- |  | ------------------------- | ------
|
|
|Loss before cumulative effect of accounting change                                    |  | $                         | (6,088
|Less: preferred stock dividends                                                       |  |                           | (19   
|                                                                                      |  |                           |       
|Basic and diluted loss per common share before cumulative effect of accounting change |  | $                         | (6,107
|                                                                                      |  |                           |       

The
Company has excluded the assumed conversion of Superior's Trust Convertible Preferred Securities and the Series A Preferred Stock from the diluted earnings per share calculation as
the impact would be anti-dilutive. Stock options and unvested stock awards with respect to 2.4 million and 3.8 million shares of common stock outstanding at June 30, 2003 and
2002, respectively, and the warrant issued in
connection with the Electrical Acquisition have not been included in the computation of diluted earnings per share because to do so would be anti-dilutive for all periods presented.

10. Business segments

The Company's reportable segments have historically included the communications, OEM and electrical businesses of Superior. The communications segment included
(i) outside plant wire and cable for voice and data transmission in telecommunications networks (ii) copper and fiber optic datacom or premise wire and cable for use within homes and
offices for local networks, Internet connectivity and other applications, and (iii) prior to December 11, 2002 all of Superior Israel's and DNE's products. The OEM segment included
magnet wire and related products. The electrical segment includes building and industrial wire and cable. As a result of the Electrical Acquisition and the deconsolidation of Superior effective
December 11, 2002, the Company's reportable segments consist of the electrical segment and DNE. Accordingly, the segment information for the three and six months ended June 30, 2002
presented below has been restated to separately present segment information for DNE.

The
Company evaluates segment performance based on a number of factors, with operating income, excluding restructuring charges, being the most critical. Intersegment sales are generally
recorded at cost, are not significant and, therefore, have been eliminated below.

19

---

Operating
results for each of the Company's reportable segments are presented below. Corporate and other items shown below are provided to reconcile to the Company's consolidated
statements of operations and balance sheets.

Three Months Ended
June 30,

Six Months Ended
June 30,2003

2002

2003

2002(in thousands)Net sales:Communications

$


$
126,836

$


$
241,806OEM





131,757





260,087Electrical


80,155


121,650


169,508


244,863DNE


7,109


11,554


15,297


21,819$
87,264

$
391,797

$
184,805

$
768,575


Three Months Ended
June 30,

Six Months Ended
June 30,2003

2002

2003

2002(in thousands)Operating income (loss):Communications

$


$
7,114

$


$
12,490OEM





12,225





22,407Electrical


(2,346
)

(2,943
)

(5,067
)

(5,979
)DNE


1,535


1,624


3,027


2,954Corporate and other


(748
)

(6,852
)

(1,264
)

(12,589
)Restructuring and other charges


(2,390
)

(19,089
)

(4,976
)

(33,079
)$
(3,949
)
$
(7,921
)
$
(8,280
)
$
(13,796
)


June 30,
2003

December 31,
2002(in thousands)Total assets:Electrical

$
110,854

$
158,793DNE


10,414


12,326Corporate and other


12,374


12,002$
133,642

$
183,121


20

---

11. Summarized financial information of Superior and Superior Israel

Summarized unaudited consolidated financial information for Superior for the three and six months ended June 30, 2003 and 2002 and for Superior Israel for
the three and six months ended June 30, 2003 is as follows:

|                                                                                                                    |  | Three Months Ended
June 30, |        
|------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | -------
|
|
|
|
|Results of Operations                                                                                               |  |                             |        
|Sales                                                                                                               |  | $                           | 248,780
|Operating income (loss)                                                                                             |  |                             | 8,389  
|Income (loss) before reorganization items, income taxes, distribution on preferred securities and minority interest |  |                             | 6,210  
|Net income (loss)                                                                                                   |  | $                           | 6,557  

|                                                                                                                                                            |  | Six Months Ended
June 30, |        
|----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | -------
|
|
|
|
|Results of Operations                                                                                                                                       |  |                           |        
|Sales                                                                                                                                                       |  | $                         | 498,318
|Operating income (loss)                                                                                                                                     |  |                           | 9,565  
|Income (loss) before reorganization items, income taxes, distribution on preferred securities, minority interest and cumulative effect of accounting change |  |                           | (13,486
|Income (loss) before cumulative effect of accounting change                                                                                                 |  |                           | (49,444
|Net income (loss)                                                                                                                                           |  | $                         | (49,444

21

---



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

On December 11, 2002, Alpine, through its wholly-owned subsidiary, Alpine Holdco Inc. ("Alpine Holdco"), acquired the following assets and securities from
Superior TeleCom Inc. ("Superior") and its subsidiaries: (1) substantially all of the assets, subject to related accounts payable and accrued liabilities, comprising Superior's electrical wire
business; (2) all of the outstanding shares of capital stock of DNE Systems, Inc. ("DNE"), a manufacturer of multiplexers and other communications and electronic products; and (3) all of
the outstanding shares of capital stock of Texas SUT Inc. and Superior Cable Holdings (1997) Ltd., which together owned approximately 47% of Superior Cables Ltd. ("Superior Israel"), the largest
Israeli-based producer of wire and cable products. The acquisition is hereinafter referred to as the "Electrical Acquisition."

Prior
to December 11, 2002, Alpine's operations include the consolidated results of its then controlled subsidiary Superior and Superior's then majority-owned subsidiary Superior Israel.
As a result of the vesting of certain Superior restricted stock grants in 2002, Alpine's common equity ownership in Superior declined from 50.2% at December 31, 2001 to 48.9%. Notwithstanding the
decline in Alpine's direct equity ownership in Superior, Alpine had a controlling interest in Superior based on its additional indirect equity ownership position (including certain common share voting
interests controlled by Alpine). In connection with the Electrical Acquisition, certain changes were made with respect to Alpine's indirect voting interests such that Alpine no longer controlled
Superior. Accordingly, effective for periods after December 11, 2002, Superior Israel, in which Alpine, as a result of the Electrical Acquisition, now has a 47% indirect equity interest, and Superior
are accounted for under the equity method and are no longer consolidated with Alpine.

Alpine's
consolidated net income (loss) has historically reflected its share of Superior's net income (loss), after giving effect to the impact of minority interest. However, in the case
of net losses incurred by a consolidated subsidiary, the amount of such losses allocable to minority interest in the consolidated statement of operations is limited under generally accepted accounting
principles to the carrying value of minority interest in the consolidated balance sheet. As a result of the loss incurred by Superior upon adoption of SFAS 142, effective January 1, 2002 the minority
interest was completely eliminated and therefore Alpine's consolidated statement of operations reflects 100% of the net losses
incurred by Superior after January 1, 2002 and through December 11, 2002. Due to Superior's net losses in 2002, Alpine had a negative investment in Superior of $865.9 million when Superior was
deconsolidated. This negative investment is required under generally accepted accounting principles to be reflected in Alpine's consolidated balance sheet, notwithstanding the fact that Alpine is not
obligated to fund any operating losses or deficits of Superior, nor is Alpine liable for nor has it guaranteed any debt or other obligations of Superior (other than certain capital lease obligations
of Superior). Alpine will not record its equity in any future losses of Superior unless it has a positive investment in Superior. If Alpine were to liquidate or substantially reduce its investment in
Superior, then Alpine would eliminate its negative investment in Superior and recognize a corresponding gain (based on the amount of the negative investment and other related items).

On
March 3, 2003 Superior and its U.S. subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. On July 30, 2003 Superior and its U.S.
subsidiaries filed a proposed plan of reorganization (the "Plan of Reorganization") with the bankruptcy court. The Plan of Reorganization, among other things, provides for the elimination and
conversion into equity of a significant amount of debt resulting in a substantial deleveraging of Superior's capital structure. Superior's stockholders, including Alpine, would not receive any
distribution under the Plan of Reorganization. If the Plan of Reorganization is approved and confirmed by the bankruptcy court, Alpine's equity interest in Superior would be eliminated as Superior's
stockholders, including Alpine,

22

---

would
not receive any distributions for their equity interests and Alpine would recognize a gain (based on the amount of the negative equity investment and other related items) upon confirmation.

Following
the Electrical Acquisition, the Company's principal operations consist of the electrical wire business previously constituting Superior's Electrical Group, the operations of
DNE, and the Company's equity method investments in Superior and Superior Israel. The Company's operations for 2002 include the consolidated operations of Superior through December 11, 2002 and
the continuing operations of the businesses acquired in the Electrical Acquisition for periods subsequent to December 11, 2002. As a result of the deconsolidation of Superior effective
December 11, 2002, the Company's consolidated operations no longer include the results of Superior's Communications Group (other than DNE) and OEM Group segments. Segment financial data
(including sales and operating income by segment) for the three and six month periods ended June 30, 2003 and 2002 is included in Note 10 to the accompanying consolidated financial
statements.

Impact of Copper Price Fluctuations on Operating Results

Copper is one of the principal raw materials used by the Company. Fluctuations in the price of copper do affect per unit product pricing and related revenues.
However, the cost of copper has not had a material impact on profitability as the Company, in most cases, has the ability to adjust prices billed for its products to properly match the copper cost
component of its inventory shipped.

Results of OperationsThree Month Period Ended June 30, 2003 as Compared to the Three Month Period Ended June 30, 2002

Consolidated sales for the quarter ended June 30, 2003 were $87.3 million, a decrease of 78% as compared to sales of $391.8 million for the quarter ended June 30,
2002. The decrease is due primarily to the effects of the deconsolidation of Superior. Revenues for Superior's Communications Group and OEM Group for the three months ended June 30, 2002 were $126.8
million and $131.8 million, respectively. Excluding the Communications Group and OEM Group, sales decreased $45.9 million or 34% due primarily to lower Electrical Group sales volume and selling prices
caused by market softness and resultant competitive pressures.

Essex
Electric sales were $80.2 million for the June 30, 2003 quarter representing a decrease of $41.5 million or 34% (30% on a copper price adjusted basis) as compared to the quarter
ended June 30, 2002. The comparative sales decline was due principally to (i) the Company's decision to reduce volume in response to continuing weak industry-wide pricing conditions
caused by severe competitive pressures in the building wire market, (ii) reduced demand in the non-residential building wire market segment, and (iii) the February 2003 sale of the
automotive and industrial wire business. Automotive and industrial wire product sales accounted for approximately $11.5 million of the Electrical Group's sales for the three months ended
June 30, 2002.

DNE
sales were $7.1 million for the three months ended June 30, 2003, a decrease of 38% as compared to sales of $11.6 million for the comparable prior year period. The sales decrease
during this period was primarily due to a decline in contract manufacturing sales of $3.9 million as a result of DNE's decision to exit this market.

Gross
profit for the June 30, 2003 quarter was $9.3 million, a decline of $39.3 million as compared to gross profit for the quarter ended June 30, 2002 due to the deconsolidation of
Superior. The gross profit margin in the June 30, 2003 quarter was 10.7% which, after excluding the Communications Group and OEM Group, compares to a gross profit margin of 8.0% for the three months
ended June 30, 2002. The increased margin percentage reflects margin improvements at both Essex Electric and DNE. The gross margin at Essex Electric improved due to improved product pricing,
manufacturing cost reductions resulting from closure of less efficient manufacturing facilities and

23

---

reductions
in depreciation charges due to the revaluation of assets acquired in the Electrical Acquisition. The DNE margin percentage increase reflects improved product mix.

Selling,
general and administrative expense ("SG&A expense") for the three month period ended June 30, 2003 was $10.9 million, a decrease of 71%, as compared to SG&A expense of
$37.4 million for the three months ended June 30, 2002. The comparative decrease for the three month period ended
June 30, 2003 was due primarily to the effects of the deconsolidation of Superior as well as decreases at Essex Electric resulting from implementation of its restructuring plan.

During
the three months ended June 30, 2003 the Company recorded $2.4 million of restructuring and other charges. Charges for the quarter included $0.1 million of employee severance
costs and $0.8 million facility exit costs related to the closure of the Company's regional distribution center in St. Joseph, Missouri as well as $0.6 million of employee severance costs for
corporate administrative staff reductions. An additional $0.2 million related to ongoing facility exit costs with respect to the Company's plant in Columbia City, Indiana which was closed in December
2002 and $0.6 million related to start-up costs as a result of product transfers from the aforementioned plant closures. The remaining charge of $0.1 million consisted of additional employee severance
costs accrued in connection with the Company's plan to idle its plant in Sikeston, Missouri in the third quarter of 2003.

The
Company incurred restructuring and other charges of $19.1 million for the three month period ended June 30, 2002 related to (i) the closure of Superior's Communications Group
manufacturing facilities in Elizabethtown, Kentucky and Winnepeg, Canada (ii) the closure of Superior's OEM Group Rockford, Illinois manufacturing facility; (iii) the shutdown of the
Electrical Group Canadian operations and (iv) operational restructuring activities at Superior Israel.

The
Company incurred an operating loss of $3.9 million for the June 30, 2003 three month period compared to an operating loss of $7.9 million for the 2002 quarter. The operating loss in
2002 included restructuring and other charges of $19.1 million, as compared to $2.4 million of such charges for the June 30, 2003 quarter. The comparative decline in operating loss is due to
the decrease in restructuring and other charges offset by the effects of the deconsolidation of Superior as both the Communications Group and the OEM Group reported operating income for the second
quarter of 2002.

Interest
expense for the three month period ended June 30, 2003 was $0.9 million, representing a decrease of $26.7 million from the prior year three month period ended June 30, 2002. The
decrease is due to the deconsolidation of Superior. Excluding interest expense related to borrowings of Superior, interest expense for the 2002 quarter was $0.1 million. The increase in 2003 is due to
higher borrowings incurred to finance the Electrical Acquisition.

The
Company reported a loss of $0.9 million for the three months ended June 30, 2003 representing its equity in the net loss of its equity-method investee, Superior Israel. The Company's
equity in any future net losses of Superior Israel is limited to the amount of its investment which was $0.4 million at June 30, 2003.

Results of OperationsSix Month Period Ended June 30, 2003 as Compared to the Six Month Period Ended June 30, 2002

Consolidated sales for the six months ended June 30, 2003 were $184.8 million, a decrease of 76% as compared to sales of $768.6 million for the comparable prior
year period. The decrease is due primarily to the effects of the deconsolidation of Superior. Revenues for Superior's Communications Group and OEM Group for the six months ended June 30, 2002 were
$241.8 million and $260.1 million, respectively. Excluding the Communications Group and OEM Group, sales decreased $81.9 million or 31% due primarily to lower sales volume and selling
prices at Essex Electric caused by market softness and resultant competitive pressures.

24

---

Essex
Electric sales were $169.5 million for the six months ended June 30, 2003 representing a decrease of $75.4 million or 31% (32% on a copper price adjusted basis) as compared to the
six months ended June 30, 2002. The comparative sales decline was due principally to (i) the Company's decision to reduce volume in response to weak industry-wide pricing conditions caused by severe
competitive pressures in the building wire market, (ii) reduced demand in the non-residential building wire market segment, and (iii) the February 2003 sale of the automotive and industrial wire
business. Automotive and industrial wire product sales accounted for approximately $7.2 million and $20.9 million of Essex Electric's sales for the six months ended June 30, 2003 and 2002,
respectively.

DNE
sales were $15.3 million for the six months ended June 30, 2003, a decrease of 30% as compared to sales of $21.8 million for the comparable prior year period. The sales decrease
during this period was primarily due to a decline in contract manufacturing sales of $6.7 million as a result of DNE's decision to exit this market.

Gross
profit for the six months June 30, 2003 was $19.0 million, a decline of $75.6 million as compared to gross profit for the comparable 2002 period due to the deconsolidation of
Superior. The gross profit margin in 2003 was 10.3% which, after excluding the Communications Group and OEM Group, compares to a gross profit margin of 7.9% for the six months ended June 30, 2002. The
increased margin percentage reflects margin improvements at both Essex Electric and DNE. The gross margin at Essex Electric improved due to improved product pricing attributable primarily to improved
product mix and customer mix, manufacturing cost reductions resulting from closure of less efficient manufacturing facilities and reductions in depreciation charges due to the revaluation of assets
acquired in the Electrical Acquisition. The DNE margin percentage increase reflects improved product mix.

Selling,
general and administrative expense ("SG&A expense") for the six month period ended June 30, 2003 was $22.3 million, a decrease of 70%, as compared to SG&A expense of $75.3
million for the six months ended June 30, 2002. The comparative decrease for the six month period ended June 30,
2003 was due primarily to the effects of the deconsolidation of Superior as well as decreases at Essex Electric resulting from implementation of its restructuring plan.

During
the six months ended June 30, 2003 the Company recorded $5.0 million of restructuring and other charges. Approximately $0.6 million and $0.4 million of the total year-to-date
charges related to employee severance costs and facility exit costs, respectively, related to the sale of the assets comprising the Company's industrial wire business. An additional $0.6 million
related to ongoing facility exit costs with respect to the Company's plant in Columbia City, Indiana which was closed in December 2002 and $0.9 million related to start-up costs as a result of product
transfers from the aforementioned plant closures. Charges for the period also included $0.1 million of employee severance costs and $0.8 million facility exit costs related to the June 2003
closure of the Company's regional distribution center in St. Joseph, Missouri as well as $0.6 million of employee severance costs for corporate administrative staff reductions. The remaining
2003 year-to-date charge of $1.0 million consisted of employee severance costs incurred in connection with the Company's plan to idle its plant in Sikeston, Missouri in the third quarter of
2003. The Company incurred restructuring and other charges of $33.1 million for the six month period ended June 30, 2002 comprised of $31.7 million related to (i) the closure of Superior's
Communications Group manufacturing facility in Elizabethtown, Kentucky and Winnepeg, Canada (ii) the closure of Superior's OEM Group Rockford, Illinois manufacturing facility; (iii) the
shutdown of the Electrical Group Canadian operations and (iv) operational restructuring activities at Superior Israel and $1.4 million related to certain termination and retirement
arrangement payments made in connection with Alpine's corporate staffing reductions.

The
Company incurred an operating loss of $8.3 million for the six month period ended June 30, 2003 compared to an operating loss of $13.8 million for the comparable 2002 period. The
operating loss in 2002 included restructuring and other charges of $33.1 million as compared to $5.0 million of such charges for the 2003 period. The comparative decline in operating loss is due to
the decrease in

25

---

restructuring
and other charges offset by the effects of the deconsolidation of Superior as both the Communications Group and the OEM Group reported operating income for the six months ended June 30,
2002.

Interest
expense for the six month period ended June 30, 2003 was $2.0 million, representing a decrease of $51.2 million from the prior year comparable period. The decrease is due to the
deconsolidation of Superior. Excluding interest expense related to borrowings of Superior, interest expense for the 2002 six month period was $0.6 million. The increase in 2003 is due to an increase
in the Company's indebtedness resulting from borrowings incurred to finance the Electrical Acquisition.

The
Company reported income of $0.3 million for the six months ended June 30, 2003 representing its equity in the net earning of its equity-method investee, Superior Israel. Superior
Israel's net earnings for the first quarter of 2003 were positively impacted by a gain recognized on the sale of certain real property. Excluding the gain on sale, Superior Israel incurred a net loss
for the six months ended June
30, 2003. The Company's equity in any future net losses of Superior Israel is limited to the amount of its investment which was $0.4 million at June 30, 2003.

The
Company adopted SFAS No. 142,Goodwill and Other Intangible Assetseffective January 1, 2002. SFAS No. 142 required that the
amortization of goodwill and certain other intangible assets cease as of January 1, 2002 and that the related recorded value of goodwill be allocated to the identified reporting units of the Company
and its consolidated subsidiaries and be reviewed annually for impairment. The transitional rules for implementing SFAS No. 142 provided that any goodwill impairment resulting from initial application
of this new rule be reflected through a charge to income as a cumulative effect of an accounting change, applied retroactively to January 1, 2002. The impact of economic and industry specific
conditions affecting Superior's business segments resulted in substantially reduced fair values and thus initial implementation of SFAS No. 142 gave rise to a non-cash goodwill impairment charge at
Superior of $424 million which was recorded retroactively to January 1, 2002 as a cumulative effect of accounting change. The charge was comprised of $166 million related to Superior's Electrical
segment and $258 million related to Superior's OEM segment. Additionally, as a result of initial implementation, Alpine recorded a further goodwill impairment charge of $3 million relating to
additional goodwill associated with its investment in Superior. The total cumulative effect of the change in accounting principle, after allocating $39 million to the minority interest, was $388
million.

Liquidity and Capital Resources

General

As previously mentioned, prior to December 11, 2002 the consolidated financial statements of Alpine include the operating results and balance sheet of Superior.
On March 3, 2003, Superior and its U.S. subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. On July 30, 2003 Superior and its U.S. subsidiaries
filed the Plan of Reorganization with the bankruptcy court. The Plan of Reorganization, among other things, provides for the elimination and conversion into equity of a significant amount of debt
resulting in a substantial deleveraging of Superior's capital structure. Superior's stockholders, including Alpine, would not receive any distribution under the Plan of Reorganization. However, there
can be no assurance that the final restructuring and reorganization plan will contain the terms of the Plan of Reorganization, that such plan will receive the requisite approvals or that such plan
will be confirmed by the bankruptcy court or consummated. If the Plan of Reorganization is approved and confirmed by the bankruptcy court, the Company's equity interest in Superior will be eliminated
as Superior's stockholders, including Alpine, would not receive any distributions for their equity interests. Alpine has a negative investment in Superior at June 30, 2003 of $865.9 million, thus
Superior's restructuring is not expected to adversely impact Alpine's financial condition.

26

---

Alpine Holdco

The Electrical Acquisition was financed by approximately $10 million of Alpine's cash and cash equivalents and borrowings by Alpine Holdco under a Loan and
Security Agreement (the "Loan Agreement"), dated as of December 11, 2002, by and among Alpine Holdco, Essex Electric, DNE and its wholly-owned subsidiaries, DNE Manufacturing and Service Company and
DNE Technologies, Inc. (collectively the "Companies"), certain financial institutions party thereto as lenders, Congress Financial Corporation, as documentation agent, and Foothill Capital
Corporation, as arranger and administrative agent. Upon consummation of the acquisition approximately $78 million was outstanding under the Loan Agreement. Following consummation of the acquisition,
the borrowers under the Loan Agreement are Essex Electric, DNE Manufacturing and Services Company and DNE Technologies, Inc.

The
terms of the Loan Agreement provide for a maximum committed amount of $100 million, with borrowing availability determined by reference to a borrowing base. Interest is payable
monthly in cash in arrears and is based on, at Alpine Holdco's option, LIBOR or prime rates plus a variable margin that is subject to periodic adjustment based on utilization and on a ratio relating
to leverage amounts. The Loan Agreement also provides for maintenance of financial covenants and ratios relating to minimum EBITDA and tangible net worth and restrictions on capital expenditures,
payment of cash dividends and incurrence of indebtedness. Outstanding obligations under the Loan Agreement are guaranteed by DNE and are secured by a lien on all of the Companies' tangible and
intangible assets, other than the investment in Superior Israel and certain equipment used by DNE in conjunction with its U.S. government contracts. The obligations under the Loan Agreement are
without recourse to Alpine. The Loan Agreement matures in five years and the Companies may terminate the Loan Agreement at any time upon 45 days' prior written notice and payment of all outstanding
borrowings, together with unpaid interest, and a termination fee equal to 0.75% of the maximum committed amount. At any time after the second anniversary of the closing of the Loan Agreement the
Companies may, upon 30 days' prior written notice, permanently reduce the maximum commitments without penalty or premium. At June 30, 2003, outstanding borrowings under the Loan Agreement were
$30.2 million and the Companies had $23.8 million of borrowing availability.

In
February 2003, Essex Electric sold inventory and certain property and equipment related to its industrial wire business for total cash proceeds of approximately $12.6 million.

Alpine Corporate

During 2002 Alpine redeemed $10.1 aggregate face amount of its 12.25% Senior Subordinated Notes for a cash payment of $7.6 million. Further, in February 2002,
Alpine repaid loans totaling $22 million upon early settlement of certain forward sale derivative contracts related to 10.5 million ordinary shares of Cookson (FTSE: CKSN.L). In April
2003, Alpine sold its remaining investment in Cookson ordinary shares for proceeds totaling approximately $1.3 million. As a result of the above transactions, Alpine's total debt at
June 30, 2003, exclusive of borrowings under the Loan Agreement, amounted to $3.0 million, including $2 million in 12.25% Senior Subordinated Notes due in July 2003. On July 15,
2003
the entire remaining principal amount of the outstanding 12.5% Senior Subordinated Notes together with all accrued and unpaid interest was repaid.

On
June 23, 2003 Alpine completed a private placement of 8,287 shares of a new issue of Series A Cumulative Convertible Preferred Stock (the "Series A Preferred Stock") to its directors
and certain officers for a purchase price of $380 per share, or an aggregate of approximately $3.1 million. Holders of the Series A Preferred Stock are entitled to receive, when, as and if
declared by the board of directors out of funds legally available for payment, cash dividends at an annual rate of $30.40 per share. Each share of Series A Preferred Stock is convertible at the
option of the holder into 691 shares of Alpine common stock beginning on the earlier of completion of the rights offering discussed below and March 31, 2004, subject to customary adjustments. The
Company may cause conversion of the

27

---

Series
A Preferred Stock into common stock after the earlier of (i) consummation of the rights offering discussed below, and (ii) March 31, 2004, if the Company's common stock is then
listed on the New York Stock Exchange or the American Stock Exchange or is traded on the Nasdaq National Market System and the average closing price of a share of the Company's common stock for any 20
consecutive trading days equals or exceeds 300% of the conversion price then effect. The Series A Preferred Stock is subject to mandatory redemption by the Company ratably on the last day of each
quarter during the three-year period commencing on December 31, 2009 at the liquidation value of $380 per share, plus accrued and unpaid dividends. Additionally, if the Company experiences a change in
control it will, subject to certain limitations, offer to redeem the Series A Preferred Stock at a cash price of $380 per share plus (i) accrued and unpaid dividends and (ii) if the
change of control occurs prior to December 31, 2007, all dividends that would be payable from the redemption date through December 31, 2007.

Holders
of the Series A Preferred Stock are entitled to vote their shares on an as-converted basis together with the Company's common stockholders. In addition, the Company may not
(a) enter into a merger, sale of all or substantially all of its assets or similar transaction without the approval of holders of at least a majority of the shares of Series A Preferred
Stock, or (b) alter or change the powers, preferences or special rights (including, without limitation, those relating to dividends, redemption, conversion, liquidation preference or voting) of
the shares of Series A Preferred Stock so as to affect them materially and adversely, or issue any senior stock, without the approval of holders of at least a majority of the shares of
Series A Preferred Stock. In the event of any liquidation, dissolution or winding up of Alpine, after the payment of the liquidation preference in respect of any senior stock, holders of the
Series A Preferred Stock will be entitled to receive the liquidation price of $380 per share plus an amount equal to (a) if the liquidation, dissolution or winding up occurs prior to
December 31, 2007, all dividends that would be payable on a share of Series A Preferred Stock from the date of liquidation, dissolution or winding up through December 31, 2007 and
(b) any accrued and unpaid dividends to the payment date, before any payment is made to the holders of common stock or any other junior securities, subject to certain exceptions. Proceeds from
the sale of the Series A Preferred Stock were used to reduce existing indebtedness and for general corporate purposes.

On
August 7, 2003, the Company filed a registration statement with the SEC covering up to 16,000 shares of Series A Preferred Stock and shares of common stock into which the Series A
Preferred Stock may be converted to be issued in connection with a proposed rights offering to holders of the
Company's common stock. Pursuant to this proposed rights offering, holders of the Company's common stock will be offered a right to purchase one share of Series A Preferred Stock at a price of $380
per share for each 500 shares of common stock that they own. Other terms of the Series A Preferred Stock are the same as that purchased by the officers and directors in the private placement discussed
in the preceding paragraph. Any offer to purchase Series A Preferred Stock my be made only pursuant to an effective registration statement filed with the SEC.

On
August 4, 2003, the Company completed an exchange offer whereby holders of its common stock exchanged 3,479,656 shares for $4.3 million principal amount of 6% Junior
Subordinated Notes (the "Subordinated Notes") issued by the Company plus a nominal amount of cash in lieu of fractional notes. The Subordinated Notes accrue interest at 6% per annum payable in cash
semiannually each December 31 and June 30. The Subordinated Notes are the Company's general unsecured obligations subordinated and subject in right of payment to all of the Company's existing and
future senior indebtedness, which excludes trade payables incurred in the ordinary course of business. The Company will be required to repay 1/8 of the outstanding principal amount of
the Subordinated Notes commencing on June 30, 2007 and semiannually thereafter, so that all of the Subordinated Notes will be repaid by December 31, 2010. The Subordinated Notes are
redeemable, at the Company's option, in whole at any time or in part from time to time, at the principal amount to be redeemed plus accrued and unpaid interest thereon to the redemption date, together
with a premium if the Subordinated

28

---

Notes
are redeemed prior to 2007. In addition, the Company must offer to redeem all of the Subordinated Notes at the redemption price then in effect in the event of a change of control. The
Subordinated Notes were issued under an indenture which does not subject the Company to any financial covenants.

As
of June 30, 2003 Alpine has unrestricted corporate cash and cash equivalents of approximately $8.1 million. Alpine's current and anticipated sources of liquidity include existing cash
and cash equivalents, cash proceeds from asset sales and from Alpine's private placement of its Series A Preferred Stock in June 2003 and its proposed rights offering in respect of such Series
A Preferred Stock. Additionally, pursuant to a management agreement with Alpine Holdco dated December 11, 2002, so long as no event of default exists or is created by such payment under the Loan
Agreement, Alpine is paid by Alpine Holdco an annual management fee of $0.9 million payable monthly, and is reimbursed for all direct costs incurred by it related to the business of Alpine
Holdco. Alpine's ability to receive distributions from Alpine Holdco is limited by the Loan Agreement to a maximum of $1.0 million of the aforementioned management fee and amounts representing
Alpine's tax liability in respect of the operations of Alpine Holdco plus $250,000 per year.

Alpine
estimates that capital expenditures for 2003 will approximate $8 to $9 million. Alpine historically is a party to a guaranty of Superior's obligations as tenant under a capital
lease covering one of Superior's facilities. However, the facility and underlying lease are a valuable asset of Superior and it is anticipated that as part of its reorganization Superior will assume
the lease and perform as tenant thereunder. Alpine Holdco has implemented restructuring actions to rationalize manufacturing capacity, lower costs and reduce working capital. These actions are
expected to result in restructuring costs of approximately $10 million during 2003 and further reductions of outstanding borrowings. These
restructuring activities are anticipated to have a negative impact on operating income and, as a result, the Company amended the Loan Agreement in May 2003 to reflect the planned restructuring
activities. The amended Loan Agreement permits necessary expenditures and modifies certain financial covenants to accommodate the impact of these restructuring activities. Based on the terms of the
amended Loan Agreement, the Company believes it will comply with all financial covenants during 2003 as applicable under the amended Loan Agreement. Alpine believes that existing cash and cash
equivalents, cash provided by operations and working capital reductions together with borrowings under the Loan Agreement and proceeds from its private placement and anticipated rights offering will
be sufficient to meet its capital requirements for 2003.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's exposure to market risk primarily relates to interest rates on long-term debt. A one percent increase in interest rates affecting the Loan Agreement
and Alpine's long-term debt at June 30, 2003 would increase annual interest expense by approximately $0.3 million.

The
cost of copper, the Company's most significant raw material, has been subject to significant volatility over the past several years. In anticipation of a significant reduction in
inventory levels in 2003, the Company entered into copper futures sales contracts to minimize the price risk associated with declining copper costs. At June 30, 2003, future sales contracts for
12 million pounds of copper, or $9.2 million, with an estimated fair value of $0.2 million were outstanding. These future contracts have been designated as fair value hedges with
changes in the fair value of these contracts recorded in the consolidated income statement of operations on the same line item as the underlying exposure being hedged.

29

---

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation of the effectiveness of the design and operation of
the Company's disclosure controls and
procedures was carried out by the Company under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures have been designed and are being operated in a manner that provides
reasonable assurance that the information required to be disclosed by the Company in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms. A system of controls, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the
system of controls are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. There have been no
changes in the Company's internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

---

Except for the historical information herein, the matters discussed in this Form 10-Q include forward-looking statements that may involve a number of risks
and uncertainties. Actual results may vary significantly based on a number of factors, including, but not limited to, risks in product and technology development, market acceptance of new products and
continuing product demand, prediction and timing of customer orders, the impact of competitive products and pricing, changing economic conditions, including changes in short-term interest rates and
foreign exchange rates, and other risk factors detailed in the Company's most recent filings with the Securities and Exchange Commission.

30

---



PART II. OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

On June 23, 2003 Alpine completed a private placement to the following officers and directors of the following number of shares of a new issue of Series A
Preferred Stock for a cash purchase price of $380 per share, or an aggregate of $3.1 million:

Name

Number of
Shares PurchasedKenneth G. Byers, Jr.

500Steven S. Elbaum

3,948Randolph Harrison

265John C. Jansing

620James R. Kanely

400Harold M. Karp

53David A. Owen

80K. Mitchell Posner

1,316Bragi F. Schut

800Dana P. Sidur

40Stewart H. Wahrsager

265Total

8,287


The
transaction is intended to be exempt from registration under the Securities Act of 1933 by virtue of Section 4(2) of the Securities Act of 1933 and the provisions of Regulation D
promulgated thereunder and based upon applicable representations and warranties made by the participating officers and directors.

Holders
of the Series A Preferred Stock are entitled to receive, when, as and if declared by the board of directors out of funds legally available for payment, cash dividends at
an annual rate of $30.40 per share. Each share of Series A Preferred Stock is convertible at the option of the holder into 691 shares of Alpine common stock beginning on the earlier of
completion of a public offering of rights to purchase shares of the Series A Preferred Stock and March 31, 2004. The Company may cause conversion of the Series A Preferred Stock into common
stock after the earlier of (i) consummation of a public offering of rights to purchase shares of the Series A Preferred Stock, or (ii) March 31, 2004, if the Company's common stock is then listed on
the New York Stock Exchange or the American Stock Exchange or is traded on the Nasdaq National Market System and the average closing price of a share of the Company's common stock for any 20
consecutive trading days equals or exceeds 300% of the conversion price then effect. The Series A Preferred Stock is subject to mandatory redemption by the Company ratably on the last day of
each quarter during the three-year period commencing on December 31, 2009 at the liquidation value of $380 per share, plus accrued and unpaid dividends. Additionally, if the Company
experiences a change in control it will, subject to certain limitations, offer to redeem the Series A Preferred Stock at a cash price of $380 per share plus (i) accrued and unpaid
dividends and (ii) if the change of control occurs prior to December 31, 2007, all dividends that would be payable from the redemption date through December 31, 2007.

The
holders of the Series A Preferred Stock are entitled to vote their shares on an as-converted basis together with the Company's common stockholders. In addition, the Company may not
(a) enter into a merger, sale of all or substantially of its assets or similar transaction without the approval of holders of at least a majority of the shares of Series A Preferred Stock, or (b)
alter or change the powers, preferences or special rights (including, without limitation, those relating to dividends, redemption, conversion, liquidation preference or voting) of the shares of Series
A Preferred Stock so as to affect them materially and adversely, or issue any senior stock, without the approval of holders of

31

---

at
least a majority of the shares of Series A Preferred Stock. In the event of any liquidation, dissolution or winding up of Alpine, after the payment of the liquidation preference in respect of any
senior stock, holders of the Series A Preferred Stock will be entitled to receive the liquidation price of $380 per share plus an amount equal to (a) if the liquidation, dissolution or winding up
occurs prior to December 31, 2007, all dividends that would be payable on a share of Series A Preferred Stock from the date of liquidation, dissolution or winding up through December 31, 2007 and (b)
any accrued and unpaid dividends to the payment date, before any payment is made to the holders of common stock or any other junior securities, subject to certain exceptions.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

3.1

Certificate of the Powers, Designations, Preferences and Rights of the Series A Cumulative Convertible Preferred Stock of Alpine (incorporated herein by reference to Exhibit 3(h) to the Registration Statement on
Form S-2 (File No. 333-107726) filed by the Company with the Securities and Exchange Commission on August 7, 2003 (the "Form S-2")).4.1

Indenture, dated as of August 4, 2003, between Alpine and American Stock Transfer & Trust Company, as Trustee, relating to Alpine's 6% junior subordinated notes (incorporated herein by reference to
Exhibit 4(c) to the Form S-2).10.1*

Third Amendment, dated May 31, 2003, to the Loan and Security Agreement by and among the lenders identified on the signature pages thereof (together with their respective successors and assigns), Congress Financial
Corporation, as documentation agent, Foothill Capital Corporation, as arranger and administrative agent, Alpine Holdco Inc., DNE Manufacturing and Services Company, DNE Technologies, Inc., Essex Electric Inc. as borrowers, and DNE Systems, Inc. as a
credit party.10.2

Form of subscription agreement for Series A Preferred Stock purchased by Alpine's directors and officers (incorporated herein by reference to Exhibit 99(d)-1 of the Tender Offer Statement on Schedule TO filed by
the Company with the Securities and Exchange Commission on June 23, 2003).31.1*

Certification of the Company's Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2*

Certification of the Company's Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1*

Certification of the Company's Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2*

Certification of the Company's Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




---

32

---



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.

|                      |  | THE ALPINE GROUP, INC.
|--------------------- |  | ----------------------
|Date: August 14, 2003 |  | By:                   

33

---

QuickLinks