**EXHIBIT 99.1**

 

**COMMSCOPE, INC.FORWARD-LOOKING INFORMATION**

 

The Securities ExchangeAct of 1934, the Private Securities Litigation Reform Act of 1995 and otherrelated laws provide a “safe harbor” for forward-looking statements. Our Form 10-Kfor the year ended December 31, 2004, our Annual Report to Stockholders,any Form 10-Q or Form 8-K of ours, or any other oral or writtenstatements made by us or on our behalf, may include forward-looking statementswhich reflect our current views with respect to future events and financialperformance. These forward-looking statements are identified, including withoutlimitation, by their use of such terms and phrases as “intends,” “intend,” “intended,”“goal,” “estimate,” “estimates,” “expects,” “expect,” “expected,” “project,” “projects,”“projected,” “projections,” “plans,” “anticipates,” “anticipated,” “should,” “think,”“thinks,” “designed to,” “foreseeable future,” “believe,” “believes” and “scheduled”and similar expressions. Readers are cautioned not to place undue reliance onthese forward-looking statements, which speak only as of the date the statementwas made. We do not intend, and are not undertaking any duty or obligation, toupdate any forward-looking statements to reflect developments or informationobtained after the date of this Exhibit 99.1.

 

Our actual results maydiffer significantly from the results discussed in forward-looking statements.Factors that might cause such a difference include, but are not limited to (a) thegeneral political, military, economic and competitive conditions in the UnitedStates and other markets where we operate; (b) changes in capitalavailability or costs, such as changes in interest rates, market perceptions ofthe industry in which we operate, security ratings or general stock marketfluctuations; (c) employee workforce factors; (d) authoritativegenerally accepted accounting principles or policy changes from such standard-settingbodies as the Financial Accounting Standards Board, the Public CompanyAccounting Oversight Board and the Securities and Exchange Commission (“SEC”); (e) theimpact of corporate governance, accounting and securities law reforms by theUnited States Congress, the SEC and the New York Stock Exchange; (f) risksrelated to inventory, including warranty costs, obsolescence charges, excesscapacity and material and labor costs; and (g) the factors set forthbelow.

 

**We mayfail to realize the anticipated benefits of our acquisition of ConnectivitySolutions because of the challenges of integrating and operating theConnectivity Solutions business.**

 

On January 31, 2004,we acquired substantially all of the assets and assumed certain specifiedliabilities of the Connectivity Solutions business (“Connectivity Solutions”)of Avaya Inc. (“Avaya”). Although we expect to realize strategic,operational and financial benefits as a result of the Connectivity Solutionsacquisition, we cannot predict whether and to what extent such benefits will beachieved. There are significant challenges to integrating the ConnectivitySolutions operations into our business, including, but not limited to:

 

•                                          successfully managing the operations, manufacturingfacilities and technology of Connectivity Solutions;

 

•                                          maintainingand increasing the customer base for Connectivity Solutions products;

 

•                                          successfully marketing and selling two potentially competinglocal area networks (“LAN”) products;

 

•                                          integratingmanagement information, inventory, accounting and sales systems of CommScopeand Connectivity Solutions; and significant operating losses related to certainproduct lines.

 

The ConnectivitySolutions acquisition is significant to us in size and range of productofferings and we have not previously had comparable experience integratingoperations as substantial and geographically diverse as those of ConnectivitySolutions. As a result of this acquisition, we now have

 

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subsidiariesor representative branch offices in numerous foreign countries, subjecting usto diverse foreign laws and regulations.

 

In connection with ouracquisition of Connectivity Solutions, our wholly owned subsidiary ConnectivitySolutions Manufacturing, Inc. (“CSMI”) assumed a collective bargainingagreement, with applicable modifications, effective January 31, 2004 withthe International Brotherhood of Electrical Workers. This agreement expires on May 31,2006. Disputes under this agreement, our inability to successfully negotiatefuture agreements or attempts to organize our non-union employees could resultin disruption of our operations and higher ongoing labor costs. Prior to theConnectivity Solutions acquisition, none of our domestic employees were subjectto a collective bargaining agreement.

 

Also, in connection withthe Connectivity Solutions acquisition, we assumed underfunded pension andretiree medical plan liabilities for U.S. represented employees of CSMI.Declines in equity and fixed income markets could decrease the value of planassets and further increase the unfunded amount of our obligations under theseplans, resulting in increased costs and the possibility of having to establisha minimum pension liability and record a charge to accumulatedother comprehensive income/loss.

 

During the fourth quarterof 2004, CSMI began implementation of organizational and cost reductioninitiatives at its Omaha, Nebraska facility designed to improve the competitiveposition of its operations. These initiatives are expected to be substantiallyin place by mid-year 2005. As a result of these initiatives, we recognizedpretax restructuring charges of $14.2 million and $2.0 million during thefourth quarter of 2004 and the first quarter of 2005, respectively, and expectto incur additional pretax costs during the second quarter of 2005 of up to$3.0 million to complete these initiatives. The actual cost and timing of implementation of the initiatives will bedependent on future business conditions, including sales volume, pricing andseasonality.

 

Our failure tosuccessfully integrate and operate the Connectivity Solutions business and torealize the anticipated benefits of the acquisition and cost reductioninitiatives, could adversely impact our operating performance and financialresults.

 

**Thehistorical financial information of Connectivity Solutions is not necessarilyindicative of the future financial condition or performance of the ConnectivitySolutions business subsequent to the acquisition.**

 

The historical financialinformation of Connectivity Solutions as a division of Avaya differs from thefuture financial condition and performance of the Connectivity Solutionsbusiness subsequent to the acquisition because, among other reasons:

 

•                                          the Connectivity Solutions financial statements includeassets and liabilities that were not acquired or assumed by us;

 

•                                          the Connectivity Solutions financial statements include anallocation of corporate overhead from Avaya which would not be applicable afterthe acquisition;

 

•                                          the financial information does not reflect anticipatedtransaction costs or expected synergies resulting from the acquisition;

 

•                                          the financial results of Connectivity Solutions may not beindicative of the actual results of the Connectivity Solutions business whenoperated as a part of our company; and

 

•                                          ConnectivitySolutions’ balance sheet as of September 30, 2003 does not reflect thecurrent market value of the assets acquired as of January 31, 2004.

 

Accordingly, thehistorical financial information of the Connectivity Solutions business as adivision of Avaya should not be relied upon as being indicative of the futurefinancial condition or performance of the Connectivity Solutions businesssubsequent to the acquisition.

 

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**The proforma financial information of CommScope and Connectivity Solutions is notnecessarily indicative of the future financial condition or performance of thecombined businesses.**

 

The pro forma financialinformation of CommScope with respect to the acquisition of ConnectivitySolutions that is included in our SEC filings is intended to provideinformation regarding how CommScope might have looked if the acquisition hadoccurred as of the dates indicated in such information. The amounts for theConnectivity Solutions business of Avaya included in this pro forma informationfor periods in the year ended December 31, 2003 and the month of January 2004are based on the historical results of the Connectivity Solutions business as adivision of Avaya, however, and therefore may not be indicative of the actualresults of the Connectivity Solutions business when operated as part ofCommScope going forward. Moreover, the pro forma information does not reflectall of the changes that may result from the acquisition, including, but notlimited to, challenges of transition, integration and restructuring associatedwith the transaction; challenges of achieving anticipated synergies; ability toretain qualified employees and existing business alliances; maintainingsatisfactory relationships with represented employees; and customer demand for ConnectivitySolutions products. The pro forma adjustments represent management’s bestestimates based on information available at the time the pro forma informationwas prepared and may differ from the adjustments that may actually have beenrequired. Accordingly, the pro forma financial information should not be reliedupon as being indicative of the historical results that would have beenrealized had the acquisition occurred as of the dates indicated or that may beachieved in the future.

 

**Ourdependence on commodities subjects us to price fluctuations which couldmaterially adversely affect our profitability.**

 

Our profitability may bematerially affected by changes in the market price and availability of certainraw materials, most of which are linked to the commodity markets. The principalraw materials we purchase are plastics and other polymers, copper, steel,fabricated aluminum and optical fiber. Polymers are used to insulate andprotect cables and fabricated aluminum, copper and steel are used in theproduction of coaxial and twister pair cables. Prices for copper,fluoropolymers and certain other polymers, derived from oil and natural gas,have increased substantially over the last twelve months. As a result, we havesignificantly increased our prices for certain products and may have toincrease prices again in the future. Delays in implementing price increases andour inability to achieve market acceptance of future price increases could havea material impact on the results of our operations.

 

**Our salesand profitability have been adversely affected by a reduction in capitalspending in the cable television and telecommunications industries.**

 

A substantial portion ofsales of our Broadband segment products have come from sales of communicationscable products to the cable television industry. Demand for such communicationscable products depends primarily on capital spending by cable television systemoperators for maintaining, constructing, rebuilding or upgrading their systems.Capital spending in the cable television and telecommunications industries iscyclical. The amount of this capital spending, and, therefore, our sales andprofitability, will be affected by a variety of factors, including, withoutlimitation:

 

•                                          general economic conditions;

 

•                                          availability and cost of capital;

 

•                                          changes in ownership of cable television operators;

 

•                                          cable system consolidation within the industry;

 

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•                                          the financial condition of domestic and international cable televisionoperators and their access to financing;

 

•                                          competition from satellite and wireless television providersand telephone companies;

 

•                                          technological developments;

 

•                                          levels of network maintenance spending; and

 

•                                          new legislation and regulation of cable television operators

 

In recent years, cabletelevision capital spending has been volatile and has experienced somesubstantial declines and we expect ongoing volatility in the near term. Wecannot assure you that cable television capital spending will not decrease inthe future or when, if at all, it will increase. Lack of demand could increasecompetition for existing customers and negatively affect pricing. In addition,if we are unable to adequately manage our costs in response to reduced demand forour products, there could be a material adverse effect on our profitability.

 

**Thesales and profitability of Connectivity Solutions have been adversely affectedby a reduction in capital spending in the corporate information technologysector as well as in the telecommunications industry.**

 

The majority ofConnectivity Solutions sales have been derived from corporate informationtechnology spending by global enterprises. In recent years, global enterprisesreduced their information technology capital spending in light of, and to agreater extent than, the overall decline in the economy. In addition, asignificant portion of the sales of Connectivity Solutions historically werederived from capital spending by telecommunications service providers. These telecommunicationscustomers have greatly reduced their spending on communications equipment, asdemand for products in the telecommunications equipment market remains athistorically low levels due to general economic conditions and over-capacity insegments of the telecommunications industry. If capital spending levels in thecorporate information technology sector and in the telecommunications industrycontinue to decline and/or do not increase, our sales and profitabilityrelating to our Enterprise and Carrier segments will be adversely affected.

 

**Ourcommunications cable customers are subject to significant government regulationthat could materially adversely affect our business.**

 

In recent years, cabletelevision capital spending has been affected by new legislation and regulationon the federal, state and local level. Many aspects of government regulationare currently the subject of judicial proceedings and administrative orlegislative proposals. The Federal Communications Commission is continuing its implementationof the Telecommunications Act of 1996, referred to herein as the “Telecom Act”which, when fully implemented, may significantly impact the communicationsindustry and alter federal, state and local laws and regulations regarding theprovision of cable, internet and telephony services. The Telecom Act eliminatessubstantially all restrictions on the entry of telephone companies and certainpublic utilities into the cable television business. Telephone companies maynow enter the cable television business as traditional cable operators, commoncarrier conduits for programming supplied by others, operators of wirelessdistribution systems or hybrid common carrier/cable operator providers ofprogramming on so-called “open video systems.” The economic impactof the Telecom Act, ongoing litigation in this regard, other recentfederal legislation and the rules implementing these laws on the cabletelevision industry and, therefore, on our business, is still uncertain.

 

**The lossof one or more of our principal customers, distributors, system integrators andvalue-added resellers could materially adversely affect us.**

 

Although the domesticcable television industry is comprised of thousands of cable systems, a smallnumber of cable television operators own a majority of cable television systemsand account for a majority of the capital expenditures made by cable televisionoperators. Although we sell to a wide

 

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varietyof customers dispersed across many different geographic areas, sales to thefive largest domestic broadband service providers represented approximately 18%of our consolidated net sales for the quarter ended March 31, 2005.Accordingly, the loss of one or more of our principal communications cablecustomers could have a material adverse effect on our results of operations andfinancial condition.

 

We distribute enterpriseproducts and certain other products through a worldwide network of more than2,000 distributors, system integrators and value-added resellers. For thequarter ended March 31, 2005, sales of such products to the top threedistributors, system integrators and value-added resellers representedapproximately 44% of our consolidated net sales. In particular, AnixterInternational Inc. and affiliates accounted for approximately 32% of ourconsolidated net sales during the quarter ended March 31, 2005. The lossof one or more of our principal distributors, system integrators or value-addedresellers could have a material adverse effect on our results of operations andfinancial condition. In addition, selling products through distributors hasassociated risks, including, without limitation, that sales can be negativelyaffected on a short-term basis as a result of changes in inventory levelsmaintained by distributors; these inventory changes may be unrelated to thepurchasing trends by the ultimate customer.

 

**Consolidationamong our major customers could materially adversely affect our business.**

 

The telecommunicationsindustry has experienced the consolidation of many industry participants andthis trend is expected to continue. In November, 2002, AT&T Broadband, thelargest domestic multiple system operator and one of our significant customers,merged with Comcast Corporation to form a new company named ComcastCorporation, creating a concentration for us in the new merged entity. Mergershave recently been announced between Nextel Communications, Inc. andSprint Corporation and SBC Communications, Inc. and AT&T Corp.  MCI, Inc. is also involved with mergerdiscussions with potential acquirers.  Asale of all or substantially all of the assets of Adelphia CommunicationsCorporation has been announced.

 

Consolidations in thetelecommunications industry could result in delays in purchasing decisions bythe merged businesses, and we could play either a greater or lesser role insupplying products to the merged entity. These purchasing decisions of themerged companies could have a material adverse effect on our business. BecauseCommScope sells directly or indirectly to a very small group oftelecommunications service providers, primarily the former Bell operatingcompanies and their extended supply chain, consolidation of providers or theloss of access to their product portfolios could have a material adverse effecton our business and financial condition. In addition, we cannot determinewhether or to what extent future potential regional clustering of cable systemsand subscriber will delay expected cable spending or negatively impact oursales volumes or profits.

 

**Thefinancial condition of some of our major communications cable customers has deteriorated, which has resulted in write-offs and increasedour credit risk.**

 

Some of our majorcommunications cable customers have experienced financial difficulties as aresult of weakness in the telecommunications industry or for other reasons inthe past few years.

 

One of our significantcommunications cable customers, Adelphia, filed for Chapter 11debtor-in-possession reorganization on June 25, 2002. During 2002, wewrote off $21.4 million of Adelphia receivables, which we sold in 2003. Wehave continued to do business with Adelphia during its Chapter 11reorganization, but we do not expect a significant recovery of business withAdelphia in the near term.

 

If the weakness in thetelecommunications industry continues, or if conditions deteriorate further, orfor other reasons, our customers may experience financial difficulties, becomesubject to government investigation or file with the courts seeking protectionunder the applicable bankruptcy or reorganization laws. Upon the financialfailure of a customer, we may experience losses as a result of our inability tocollect, in a timely manner or at all, the accounts receivable outstanding to suchcustomer, as well as the loss of such customer’s ongoing business. If ourcustomers fail to meet their payment obligations to us, we could experiencereduced cash flows and losses in excess of amounts reserved.

 

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**Althoughwe believe that our existing goodwill and other intangible assets are notcurrently impaired, we may incur impairment charges related to these assets inthe future.**

 

Statement of FinancialAccounting Standards No. 142, “Goodwill and Other Intangible Assets”requires the use of a nonamortization approach to account for purchasedgoodwill and other intangible assets with indefinite lives and also requiresthat such assets be tested for impairment annually at the same time each yearand on an interim basis when events or circumstances change. We elected toperform our annual impairment test as of August 31. We completed our mostrecent annual impairment tests as of August 31, 2004 and believe thatgoodwill and other intangible assets with indefinite lives were not impaired asof this date.

 

Existing goodwill, whichtotaled approximately $151 million as of March 31, 2005, arose fromprevious acquisitions accounted for under the purchase method of accounting. Inconnection with the acquisition of Connectivity Solutions, we recognized anintangible asset of approximately $12 million for trademarks which wasdetermined to have an indefinite life. If the current weakness in thetelecommunications industry is prolonged or further deteriorates, we cannotassure you that future tests will not result in impairment of existing goodwilland other intangible assets with indefinite lives and that potential futureimpairment will not materially adversely affect our results of operations andfinancial position.

 

**We haverecognized impairment charges for fixed assets and may need to do so again inthe future.**

 

As a result of theorganizational and cost reduction initiatives at the CSMI Omaha, Nebraskafacility, fixed assets (including production equipment and a warehousebuilding) that have been taken out of service and are no longer needed werewritten down to their estimated fair value, resulting in pretax impairmentcharges of $1.7 million and $6.8 million which were included in the firstquarter 2005 and fourth quarter 2004 restructuring charges, respectively.

 

Long-lived assets must betested for impairment whenever events or changes in circumstances indicate thattheir carrying amounts may not be recoverable. Due to the difficult businessenvironment in telecommunications and the continuing decline in demand forcertain of our products, we recognized impairment charges of $31.7 millionduring the second quarter of 2003 primarily related to our broadband cablemanufacturing assets. We previously recognized impairment charges of$25.1 million during the third quarter of 2002 primarily related to fixedassets used in the manufacture of our wireless, fiber optic cable and othertelecommunications products. These impairment charges represented approximately17% and 11% of our total net property, plant and equipment as of June 30,2003 and September 30, 2002, respectively.

 

Utilization in ourfacilities is subject to change based on customer demand. We currently haveexcess capacity in our worldwide manufacturing operations and can give noassurances that we will not continue to have excess manufacturing capacity overthe long-term. If the current weakness in the telecommunications industry isprolonged or further deteriorates, we cannot assure you that future tests willnot result in additional impairment of long-lived assets and that potentialfuture impairment of long-lived assets will not materially adversely affect ourresults of operations and financial position.

 

**Ourfailure to introduce new products successfully, and changes in technology,could materially adversely affect us.**

 

Many of our markets arecharacterized by advances in information processing and communicationscapabilities which require increased transmission speeds and greater capacity,or “bandwidth,” for carrying information. These advances require ongoingimprovements in the capabilities of wire and cable products. We believe thatour future success will depend in part upon our ability to enhance existingproducts and to develop and manufacture new products that meet or anticipatethese changes. The failure to introduce successful new or enhanced products ona timely

 

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andcost-competitive basis or the inability to continue to market existing productson a cost-competitive basis could materially adversely affect our results ofoperations and financial condition.

 

Fiber optic technologypresents a potential substitute for some of the communications cable productswe sell. A significant decrease in the cost of fiber optic systems could makethese systems superior on a price/performance basis to copper systems. Asignificant decrease in the cost of fiber optic systems would reasonably beexpected to have a materially adverse effect on our coaxial cable sales.

 

**Thecommunications cable industry is highly competitive globally and rapidtechnological change may lead to further competition.**

 

Our coaxial, fiber opticand electronic cable products compete with those of a substantial number offoreign and domestic companies, some of which have greater resources (financialor otherwise), or lower operating costs, than we have. The rapid technologicalchanges occurring in the telecommunications industry could lead to the entry ofnew competitors. Existing competitors’ actions, such as price reductions, useof Internet auctions or introduction of new innovative products, and newentrants may have a materially adverse impact on our sales and profitability.We cannot assure you that we will continue to compete successfully with ourexisting competitors or that we will be able to compete successfully with newcompetitors.

 

**Difficultieswith our key suppliers could materially adversely affect us.**

 

For certain of our rawmaterial purchases, including fluorinated ethylene propylene (“FEP”), copperrods, fine aluminum wire, steel and optical fiber, we are dependant on keysuppliers.

 

FEP is the primary rawmaterial used throughout the industry for producing flame-retarding cables forLAN applications. There are few worldwide producers of FEP and market supplieshave been periodically limited over the past several years. Availability ofadequate supplies of FEP will be critical to future LAN cable sales growth. IfFEP is not available in adequate quantities on acceptable terms, our results ofoperations and financial condition could be materially adversely affected.

 

We internally produce asignificant portion of our requirements for fine aluminum wire, which isavailable externally from only a limited number of suppliers. Our failure tomanufacture or adequately expand our internal production of fine aluminum wire,and/or our inability to obtain these materials from other sources in adequatequantities on acceptable terms, could have a materially adverse effect on ourresults of operations and financial condition.

 

Optical fiber is aprimary material used for making fiber optic cables. There are few worldwidesuppliers of these premium optical fibers. Availability of adequate supplies ofpremium optical fibers will be critical to future fiber optic cable salesgrowth. We believe that our optical fiber supply arrangements with twosuppliers address concerns about the continuing availability of these materialsto us, although there can be no assurance of this.

 

Our key suppliers couldexperience financial difficulties, or there may be global shortages of the rawmaterials we use, and our inability to find sources of supply on reasonableterms could materially adversely affect our ability to manufacture products ina cost effective way.

 

**Becauseof our vertical integration of supply and production of some products, adisruption or failure at one of our manufacturing facilities could materiallyadversely affect our ability to manufacture products at other manufacturingfacilities in a cost-effective and timely manner.**

 

We internally produce asignificant portion of some of the components used in our finished products,including bimetallic center conductors and fine aluminum wire, at certain ofour manufacturing facilities. Disruption of our ability to produce at ordistribute from these facilities due to failure of our technology, fire,electrical outage, natural disaster, acts of terrorism or some othercatastrophic event could materially adversely affect our ability to manufactureproducts at our other manufacturing facilities in a cost-effective and timelymanner.

 

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**If ourproducts or components purchased from our suppliers experience performanceissues, our business will suffer.**

 

Our business depends onour producing excellent products of consistently high quality. To this end, ourproducts, including components and raw materials purchased from our suppliers,are rigorously tested for quality both by us and our customers. Nevertheless, ourproducts are highly complex and our customers’ testing procedures are limitedto evaluating our products under likely and foreseeable failure scenarios. Forvarious reasons (including, among others, the occurrence of performanceproblems unforeseeable in testing), our products and components and rawmaterials purchased from our suppliers may fail to perform as expected.Performance issues could result from faulty design or problems inmanufacturing. We have experienced such performance issues in the past andremain exposed to such performance issues. In some cases, recall of some or allaffected products, product redesigns or additional capital equipment may berequired to correct a defect. In addition, we warrant or indemnify certainproducts for periods ranging from one to twenty-five years from the date ofsale, depending upon the product subject to the warranty. In particular, wewarrant the operation of our SYSTIMAX products for a period of 20 yearsfrom installation. Although historical warranty and indemnity claims have notbeen significant, we cannot assure you that future claims will not have amaterially adverse effect on our results of operations and financial position.Any significant or systemic product failure could also result in lost future salesof the affected product and other products, as well as customer relationsproblems.

 

**Ourbusiness is subject to the economic uncertainties and political risks of makingand selling our products in foreign countries.**

 

With the acquisition ofConnectivity Solutions, we have significantly increased our internationalmanufacturing operations and international sales. For the quarter ended March 31,2005, international sales represented approximately 33% of our net sales. Ourinternational sales and operations are subject to the risks inherent inoperating abroad, including risks with respect to currency exchange rates,economic and political destabilization, restrictive actions by foreigngovernments, nationalizations, the laws and policies of the United Statesaffecting trade, foreign investment and loans, foreign tax laws, compliancewith local laws and regulations, armed conflict, war, terrorism and majorhealth concerns (such as SARS).

 

**Potentialenvironmental liabilities may arise in the future and materially adverselyimpact our financial position.**

 

We are subject to variousfederal, state, local and foreign environmental laws and regulations governing,among other things, discharges to air and water, management of hazardoussubstances, handling and disposal of solid and hazardous waste, andinvestigation and remediation of hazardous substance contamination. Because ofthe nature of our business, we have incurred and will continue to incur costsrelating to compliance with these environmental laws and regulations.Compliance with current laws and regulations has not had and is not expected tohave a material adverse effect on our financial condition. However, new lawsand regulations, including those regulating the types of substances allowablein certain of our consumer products, stricter enforcement of existing laws andregulations, the discovery of previously unknown contamination or theimposition of new remediation or discharge requirements could require us toincur costs or become the basis for new or increased liabilities that couldhave a material adverse effect on our financial condition and results ofoperations.

 

Pursuant to theComprehensive Environmental Response, Compensation and Liability Act andsimilar state statutes, current or former owners or operators of a contaminatedproperty, as well as companies that generated, disposed of, or arranged for thedisposal of hazardous substances at a contaminated property can be held jointlyand severally liable for the costs of investigation and remediation of thecontaminated property, regardless of fault. Our present and past facilitieshave been in operation for many years and over that time, in the course ofthose operations, these facilities have used substances or generated anddisposed of wastes which are or might be considered hazardous. We have beenindemnified by prior owners and operators of certain of these facilities forcosts of investigation and/or remediation, but there can be no assurance thatwe will not ultimately be

 

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liablefor some or all of these costs. Therefore, it is possible that environmentalliabilities may arise in the future which we cannot now predict.

 

**Althoughwe believe cash from operations and availability under our senior securedcredit facility provide adequate resources to fund ongoing operatingrequirements, we may be limited in our ability to obtain additional capital oncommercially reasonable terms.**

 

Although we believe cashfrom operations and availability under our senior secured revolving creditfacility provide adequate resources to fund ongoing operating requirements, wemay need to seek additional financing to compete effectively. Our public debtratings affect our ability to raise capital and the cost of that capital.Future downgrades of our debt ratings may increase our borrowing costs andaffect our ability to access the equity capital markets on terms and in amountsthat would be satisfactory to us.

 

**Ourindebtedness could restrict our operations, make us more vulnerable to adverseeconomic conditions and make it more difficult to invest in our business.**

 

Our current and futureindebtedness could have important consequences to you. For example, it could:

 

•                                          impairour ability to obtain additional financing in the future;

 

•                                          reducefunds available to us for other purposes, including working capital, capitalexpenditures, research and development, strategic acquisitions and othergeneral corporate purposes;

 

•                                          restrictour ability to introduce new products or exploit business opportunities;

 

•                                          increaseour vulnerability to economic downturns and competitive pressures in theindustry we operate in;

 

•                                          increase our vulnerability to interest rate increases to theextent variable-rate debt is not effectively hedged;

 

•                                          limit, including as a result of the financial and otherrestrictive covenants in that indebtedness, our ability to dispose of assets orborrow additional funds; and

 

•                                          placeus at a competitive disadvantage.

 

We may incur additionalindebtedness in the future, either under the revolving credit facility that ispart of our senior secured credit facility, through future debt issuances,assumed in connection with future acquisitions or otherwise.

 

**Asignificant uninsured loss or a loss in excess of our insurance coverage couldmaterially adversely affect our financial condition.**

 

We maintain insurancecovering normal business operations, including fire, property and casualtyprotection that we believe is adequate. We do not generally carry insurancecovering wars, acts of terrorism, earthquakes or other similar catastrophicevents. Because insurance has generally become more expensive, we may not beable to obtain adequate insurance coverage on financially reasonable terms. Asignificant uninsured loss or a loss in excess of our insurance coverage couldmaterially adversely affect our financial condition.

 

**We havein the past reduced the size of our workforce and may need to do so again inthe future.**

 

In response to the levelof business and outlook for future business, in recent years we have reducedthe size of our workforce. During 2002 and 2003, we reduced our workforce by atotal of approximately 350 employees and recorded pretax charges related tothese workforce reductions of

 

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approximately$2.5 million for employee termination benefits during 2002. During thefirst quarter of 2004, we reduced our Connectivity Solutions segment workforceby 45 employees and recorded net pretax charges related to these workforcereductions of approximately $1.3 million for employee terminationbenefits. As a result of the organizational and cost reduction initiatives atCSMI’s Omaha, Nebraska facility, we incurred pretax charges of$5.9 million related to employee severance costs, which were included inthe fourth quarter 2004 restructuring charge. This charge was reduced byreleasing $1.3 million of the reserve in the first quarter of 2005 as a resultof fewer reductions in personnel under the initiatives than we originallyprojected, primarily due to higher than anticipated levels of businessvolume.  If we reduce our expectationsfor future business, we may again reduce our workforce and incur restructuringcharges.

 

**We mayexperience difficulties in obtaining or protecting intellectual property.**

 

We may encounterdifficulties, costs or risks in protecting our intellectual property rights orobtaining rights to additional intellectual property to permit us to continueor expand our business. Other companies, including some of our largestcompetitors, hold intellectual property rights in our industry and theintellectual property rights of others could inhibit our ability to introducenew products in our field of operations unless we secure licenses oncommercially reasonable terms, as such are needed.

 

In addition, we have beenand may be required in the future to initiate litigation in order to enforceany patents issued to or licensed to us or to determine the scope and/orvalidity of a third party’s patent or other proprietary rights. We also havebeen and may be subject in the future to lawsuits by third parties seeking toenforce their own intellectual property rights. Any such litigation, regardlessof outcome, could subject us to significant liabilities or require us to ceaseusing proprietary third party technology and, consequently, could have amaterial adverse effect on our results of operation and financial condition.

 

**We mayexperience significant variability in our effective income tax rate.**

 

Our acquisition of ConnectivitySolutions significantly expanded our international activities in jurisdictionswith differing tax rates. Variability in the profitability of domestic andinternational activities may significantly impact our effective income taxrate. A significant increase in our effective income tax rate could have amaterial impact on our results of operations.

 

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