SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1999

                         Commission File Number 0-25364

                                  ANICOM, INC.
             (Exact name of registrant as specified in its charter)

             Delaware                                 36-3885212
     (State of incorporation)             (IRS Employer Identification No.)

        6133 North River Road, Suite 1000, Rosemont, Illinois 60018-5171
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (847) 518-8700

        Securities registered pursuant to Section 12(b) of the Act: None

     Securities  registered  pursuant to Section 12(g) of the Act:

                          Common Stock, par value $.001
                                (Title of Class)

                         Preferred Stock Purchase Rights
                                (Title of Class)

Indicate by check mark whether the registrant: (1) filed all reports required to
be filed by  Section 13 or 15(d) of the  Exchange  Act during the past 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 |X| No |_|

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant (for the purpose of this calculation only, the registrant's directors
and executive officers are deemed affiliates), based on the closing price of the
registrant's Common Stock on March 27, 2000: $163,639,570.

The number of shares  outstanding of the  registrant's  Common Stock as of March
27, 2000: 25,248,611.

                       DOCUMENTS INCORPORATED BY REFERENCE

Certain  sections of the issuer's Notice of Annual Meeting of  Stockholders  and
Proxy  Statement for its Annual  Meeting of  Stockholders  to be held on May 17,
2000 are incorporated by reference into Part III of this report.

<PAGE>






                                     PART I

Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995
         The statements contained in Item 1 (Description of Business) and Item 7
(Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations)  that are not historical  facts may be  forward-looking  statements.
Whenever possible,  the Company has identified these forward-looking  statements
by words such as "believes",  "expects",  "anticipates" and similar expressions.
Anicom cautions readers that these  forward-looking  statements are subject to a
variety of risks and  uncertainties  that could cause Anicom's actual results in
2000 and beyond to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, Anicom.  These risks and  uncertainties are
more fully  described  under  "Financial  Condition  and Results of Operations -
Factors  That  Could  Affect  Our  Operations.  These  risks and  uncertainties
include,  without  limitation,  Anicom's  limited  operating  history  on  which
expectations regarding its future performance can be based, general economic and
business  conditions  affecting the industries of Anicom's customers in existing
and new  geographical  markets,  competition  from,  among others,  national and
regional  distributors  that have greater  financial,  technical  and  marketing
resources  and  distribution  capabilities  than  Anicom,  the  availability  of
sufficient  capital,  Anicom's  ability  to  implement  timely  its  centralized
distribution  centers,  the timing of  customer  projects,  Anicom's  ability to
identify  the right  product mix and to maintain  sufficient  inventory  to meet
customer  demand,  Anicom's  ability to  successfully  acquire and integrate the
operations of additional  businesses and Anicom's ability to operate effectively
in geographical areas in which it has no prior experience.

         You should not place undue reliance on any forward-looking  statements.
Except as  otherwise  required  by federal  securities  laws,  we  undertake  no
obligation to publicly update or revise any forward-looking statements,  whether
as a result of new  information,  future events,  changed  circumstances  or any
other reason after the date of this annual report.

         ITEM 1.  DESCRIPTION OF BUSINESS
GeneralGeneral
         Anicom,  Inc. ("Anicom" or the "Company") is a North American leader in
the sale and distribution of multimedia  technology products consisting of fiber
optics, communications related wire, cable and computer network and connectivity
components. Anicom provides products that "interconnect the Internet" serving as
a vital link for the flow of  information  that allows  people and  companies to
transact  business  online.  The  Company  operates  in a  single  business  and
geographic  segment.  The products  offered by Anicom  generally  fall into four
categories:  (i) voice and data  communications  and fiber  optics,  (ii) sound,
security, fire, alarm and energy management systems, (iii) electronic cable, and
(iv)  industrial  cable,  wiring and  assemblies for  automation,  computers and
robotics.

Background
         Several  of  the  industries   serviced  by  Anicom  have   experienced
significant  growth in recent  years,  and  management  expects  this  growth to
continue at a rapid pace.  As these  industries  continue to evolve,  management
believes that the demand for products  offered by the Company will also continue
to grow. Virtually every commercial,  industrial and residential enterprise is a
potential  customer.  By focusing on  distribution,  management  believes it can
readily  respond to the changing  demands of the  industries it serves and it is
not reliant upon the success of a particular product or product category.

         Many of the products distributed by the Company are components utilized
by  contractors  and  end-users  in the  installation  or  upgrading  of  highly
technical  communications  and power systems.  As such,  the Company's  products
often  are  subject  to strict  technical  specifications.  The  degree to which
products  adhere to these  technical  specifications,  such as class of cable or

                                       1
<PAGE>

specific  connector  impedance  specifications,   is  a  significant  factor  in
differentiating among products. Accordingly,  distributors primarily distinguish
themselves by the depth and breadth of products  offered and their  knowledge of
these products.

         Anicom's  sales  personnel,  who  average  approximately  ten  years of
experience in the sale and distribution of multimedia technology products,  work
with  Anicom's  customers  and  vendors  to  match  products  to  the  technical
specifications supplied by its customers. Management believes that this level of
service  is  important  in  attracting  and  retaining   customers  as  well  as
distinguishing itself as a provider of products, service and value.

         The  growing  market  for the  distribution  of  multimedia  technology
products,  such as communications related wire, cable, fiber optics and computer
network and connectivity  components,  is highly fragmented,  with few companies
maintaining greater than $100 million in annual net sales.

Products and Services
         Voice and Data Communications and Fiber Optics
         The  fastest  growing  products  for the  Company are in voice and data
communications  and fiber optics,  including an assortment of transmission media
(copper and fiber optic  cable),  components  (blocks,  brackets,  jacks,  patch
cords, patch panels,  connectors and stackable hubs), related hardware and cable
assemblies.  Management  believes that the  replacement  of existing  cable with
fiber optic cable represents a significant  opportunity for the Company.  Anicom
sells multimode,  single, duplex and multifiber cables for internal and external
data communication use in the computer network, computer interconnect,  Internet
access and  building  automation  and safety  markets.  Anicom also sells single
mode, multifiber cables for use in long line telecom and data connections to the
CLEC, ISP and RBOC markets.

         A  large  number  of  leading  telecommunications,  computer,  computer
software and  entertainment  companies have committed  significant  resources to
developing plans for the delivery of  communications  services that will involve
the  use  of  fiber  optic  cable,   copper  cable  or  wires   manufactured  to
specifications.  At the same time, the proliferation of electronic  commerce and
advances in networking  technology have resulted in increased demand for digital
networks and mobile data access to the internet,  private intranets,  local area
networks,  wide area  networks,  e-mail,  and other  on-line  data  services and
systems that utilize the products  offered by Anicom.  The growth of these types
of systems has resulted in a separate  purchasing  process for  electronic  data
transmission cable and components.  Anicom coordinates with systems integrators,
contractors,   end  users  and  network  cable   manufacturers   in  determining
specifications of the cable and connectivity  products required for a particular
system.

         Sound, Security, Fire, Alarm and Energy Management Systems
         The demand for the multimedia technology products offered by Anicom for
use in these  types of  systems  has  increased  in recent  years as a result of
technological  advances  in  commercial  building  automation,  greater  concern
regarding the safety features of commercial  buildings and the increased  demand
for  residential  security  systems.  These  products  include  many of the same
components used in voice and data communication.  Anicom sells these products to
low  voltage  contractors,   original  equipment   manufacturers   ("OEMs")  and
commercial end-users.  Growth in this market generally is regarded as the result
of  increased  concern  about  crime,  as well as the  result  of  technological
advances that have allowed  manufacturers  to improve  reliability  and features
while  lowering the  installed  costs of such systems.  Similarly,  publicly and
privately owned buildings,  such as office  buildings,  stadiums,  hospitals and
correctional  facilities,  also  continue  to use more  sophisticated  computer,
security,  communications  and  sound  systems  that  incorporate  the  types of

                                       2
<PAGE>

multimedia  technology  products  offered by Anicom.  The systems  installed  by
contractors and systems  integrators in these types of facilities not only offer
greater building  automation and more  sophisticated  communication  systems but
also are designed to meet the increasingly stringent safety requirements imposed
by local and national building codes.

         Electronic and Industrial Cable
         Anicom  offers  wire and cable  products  for use in a wide  variety of
electrical and electronic  systems.  Anicom sells these products to contractors,
end-users, systems integrators and OEMs. The wire and cable products are used in
the  manufacturing  of  electrical  and  electronic  equipment,  as  well as the
replacement  of wire and  cable in  existing  systems.  Anicom  also  sells  and
distributes  wire and  cable  products  for  industrial  use in the  automotive,
mining,  marine,  petro-chemical,  paper  and pulp and  other  natural  resource
industries.  These products  include portable cords,  power cables,  control and
instrumentation  cables,  mining and welding  cables,  armored and high  voltage
cables and building wire.

Sales and Marketing
         Anicom is committed to making it easier and more cost effective for its
customers  to acquire  fiber  optics,  wire,  cable,  and  computer  network and
connectivity  products.  Anicom has established  strong  customer  relationships
through an extensive and experienced  sales and marketing force of approximately
530 people operating throughout North America.

         Anicom  currently  has  created  eight  territories,  each of  which is
managed  by  a  General  Manager.  The  General  Managers  have  an  average  of
approximately  15 years of experience in the sale and distribution of multimedia
technology  products.  Each General Manager is responsible for the management of
operating  income and  short-term and long-term  sales and marketing  efforts in
their respective territory.

         The sales and  marketing  force is  responsible  for  establishing  and
maintaining  long-term   relationships  with  customers  and  industry  referral
sources,  soliciting new business from  prospective  customers and responding to
incoming  inquiries and orders.  Anicom monitors customer  satisfaction  through
internal systems and regular interaction with its customers.

         In addition to providing multimedia technology products to customers on
a  timely  basis,  Anicom  provides  value-added,  specialized  services  to its
customers,  including  customize  packaging  services,  just in  time  delivery,
technical support,  material management services,  training,  seminars and cable
assemblies,  in  response  to specific  customer  requests.  Anicom also has the
ability to procure selected  specialty items not readily  available to customers
or all of its competitors,  and, through its experienced sales personnel, Anicom
is able to offer its customers technical assistance and support in the selection
of appropriate  products.  Certain of Anicom's more experienced  sales personnel
have developed  extensive  knowledge in specific product categories (e.g., fiber
optics).  Anicom's sales personnel are trained to seek out assistance from those
particular salespersons who have developed this degree of knowledge.

         E-business is an important part of Anicom's sales, customer service and
marketing  strategy.  Our  website  allows  our  customers  to  access  product,
technical  information,  shipping  status  and many  other  features  that  make
transactions  simple and efficient.  During 2000, we expect to expand the volume
of  electronic  business  that we conduct with our  customers  and  suppliers by
increasing our e-business capabilities.

         Anicom identifies  potential customers through  telemarketing  efforts,
responses  to  direct  marketing  materials,  periodic  advertisements  in trade
journals,  industry  trade shows and  inquiries to its web site and from working

                                       3
<PAGE>

closely  with  our  supply   partners   that  provide   leads  and  new  product
announcements.  Anicom periodically  provides product and service information by
distributing  promotional  literature  and  product  catalogs  to  existing  and
potential  customers.  Sales and  marketing  representatives  initiate  customer
visits and  follow-up on customer  inquiries  through  further  distribution  of
Anicom's   informational   materials  and  on-site   visits.   Once  a  customer
relationship has been established,  Anicom focuses on identifying  opportunities
to market a broader array of product solutions to our customers.

         Anicom rewards its sales and marketing  force through a base salary and
an  incentive-based  bonus  program.  Under this program,  Anicom and each sales
associate  establish  quantifiable  performance  goals each year.  In  addition,
Anicom seeks to achieve  Company-wide  objectives and encourage a "team" concept
by  rewarding  its  sales  personnel  through  supplementary  bonuses  based  on
Company-wide or location-based goals.

Suppliers and Inventory
         Management believes that vendor relationships are important to Anicom's
success,  and  Anicom  focuses  sharply on  establishing  and  maintaining  such
relationships.   Management  believes  that  Anicom  is  not  dependent  on  any
particular supplier.  Anicom offers a large number of products manufactured by a
variety of vendors.  We have a centralized  purchasing  group which  coordinates
manufacturers   shipments  to  the  distribution  centers  and  other  warehouse
locations  (or,  in some  cases,  directly to  customers)  specified  by Anicom.
Management  believes  that  Anicom  has a good  working  relationship  with  its
existing suppliers.  No vendor accounted for more than 10% of Anicom's purchases
during any of the past three years,  and management  believes that Anicom is not
dependent on any particular vendor. Management does not believe that the loss of
any one supplier  would have a material  adverse impact on results of operations
or financial  condition because it generally  believes it can obtain competitive
products of comparable quality from other suppliers.

         Anicom's  objective is to provide its  customers  with a continuity  of
supply and delivery  scheduling  that responds to their needs without  requiring
excessive  levels of  inventory.  However,  to meet  customer  requirements  and
provide value as a materials management agent, Anicom may be required at a point
in time to increase its investment in inventory. In connection with the Metricom
arrangement  discussed  below,  Anicom did increase its inventory  levels during
1999 in anticipation of the rollout of this project in the late first quarter of
2000.  Exclusive of the Metricom  arrangement,  the emphasis on strict inventory
control has allowed the  Company to maintain  its order  completion  rate and to
support its increasing  sales levels without  significant  increases in relative
inventory  levels other than to further  expand the depth and breadth of product
offerings.  Anicom's  Vice  President  of  Purchasing,  who has over 16 years of
industry  experience,  leads the Company's inventory  management  programs.  The
inventory  control measures impose strict controls on the discretion of Anicom's
sales  personnel  and focus on continuing  improvement  of the  forecasting  and
monitoring models used.

         In 1999,  management  decided to  eliminate  the number of lower margin
product  offerings as well as began a supplier  selection program while reducing
the number of part numbers maintained in inventory. The Anicom Platinum Alliance
Program  finds  its  core  foundation  in the  simple  shared  belief  that  our
customer's needs of tomorrow must be planned and sourced today. Anicom continues
to take the  necessary  steps to  apply  solid  sourcing  techniques  through  a
supplier  selection  program that identifies our alliance partners who will help
Anicom  meet or exceed our  customer's  expectations.  The key to our  continued
success  will lie in our  ability  to listen  to our  customers  and react  with
excellent customer service. As a result, management reduced the number of active
vendors and part numbers from approximately 1,500 and 67,000,  respectively,  in
June of 1999 to  approximately  900 and 50,000,  respectively,  by December  31,
1999.  In  connection  with the  implementation  of this  strategy,  the Company
incurred charges for certain inventory write-downs.

                                        4
<PAGE>
Management Information Systems
         The Company's information technology system integrates sales, inventory
control and purchasing,  warehouse  management,  financial  control and internal
communications   while  providing  real-time  monitoring  of  inventory  levels,
shipping status and other key  operational and financial  benchmarks at Anicom's
sales and distribution locations.

         This  system  provides  management  a platform  capable  of  managing a
company  substantially larger than Anicom's current size. This system will allow
Anicom  to  maximize  productivity  and  integrate  acquired  operations,  which
management  believes  translates into a lower effective cost to customers.  This
system also  contributes to Anicom's  ability to increase sales  productivity by
enabling the sales force to provide customers with personalized  service drawing
on information  contained in the database,  and allows the Company's sales force
to provide  technical  product  information in marketing the products offered by
Anicom.

Customers
         The Company sells to a wide array of customers,  including contractors,
systems  integrators,  security/fire  alarm  companies,  regional Bell operating
companies,  utilities,   telecommunications  and  sound  contractors,   wireless
specialists,  construction  companies,  universities,  governmental agencies and
companies involved in the automotive, mining, marine, petro-chemical,  paper and
pulp  and  other  natural  resource  industries.  The  Company's  customers  are
principally located in North America. No customer accounted for more than 10% of
Anicom's net sales during any of the past three years,  and management  believes
that  Anicom  is  not  dependent  on  any  particular  customer.  With  Anicom's
increasing  North American  presence and inventory  selection,  management  will
continue  to focus more of its efforts on the  development  of sales to a larger
number of  national  customers.  Anicom's  net sales  outside  of North  America
represents less than 5% of total net sales for each of the last 3 years.

         In November of 1999,  Anicom  entered  into an  agreement to sell wire,
cable,  radios,  antennas and related  connectivity  products to Metricom,  Inc.
("Metricom")  in connection  with the deployment of Metricom's high speed mobile
wireless data access network. In addition, Anicom will provide Metricom logistic
and material management services.

         In December of 1999, Anicom agreed to supply advanced fiber optic cable
to Gateway  Telephone of Canada  ("Gateway")  for its high-speed  North American
wide Broadband network.  Gateway is the first independent  Multi-Service Carrier
Network in North  America  and its ribbon  fiber  deployment  is the  largest in
Canada.

Competition
         The market for multimedia technology products is highly competitive and
fragmented.  To compete successfully,  management believes that the Company will
need to  continue  to  distribute  a broad  range  of  technologically  advanced
products,  provide  competitive  pricing while maintaining its margins,  provide
prompt delivery of products,  deliver responsive customer service, establish and
maintain  strong  relationships  with suppliers and  customers,  and attract and
retain highly qualified  personnel.  Anicom faces  substantial  competition from
several international,  national and regional  distributors,  some of which have
greater   financial,   technical  and  marketing   resources  and   distribution
capabilities  than the  Company  and from  manufacturers  who sell  directly  to
end-users for certain large-scale projects.

                                      5

<PAGE>

Trade Names
         Anicom  maintains a number of registered  trademarks and trade names in
connection with its business activities,  including  "Anicom(R)",  "Exacpac(R),"
"Anicom  MultiMedia  Wiring  Systems(R)"   "RAPI-Change(R),"  "Northern  Wire  &
Cable(R),"    "NorthFlex(R),"   "CFC(R),"   "TW   CommCorp(R)",    "L.I.P.S.(R)"
"Interconnect the Internettm" and "The Distribution  Solution for Voice,  Video,
Data and  Powertm".  Anicom's  policy is to file for  trademark  and trade  name
protection for its trademarks and trade names.

Employees
         As of March 1, 2000,  Anicom  employed 1,088 persons.  Anicom  believes
that it has good relations with its employees.

ITEM 2.  DESCRIPTION OF PROPERTY

         As of March 1, 2000, Anicom is operating out of 61 different  locations
throughout  North  America.  Most of the locations at which Anicom  conducts its
business consist of a sales office and a warehouse,  except for its locations in
Rosemont, Illinois; Lexington, North Carolina; Wausau, Wisconsin; and Woodridge,
Illinois,  which do not include any  warehouse  space.  In  addition,  Anicom is
obligated for 4 locations  which are being phased out as a part of Anicom's 1999
restructuring.

         As of March 1,  2000,  Anicom's  aggregate  executive  office and sales
office space was approximately  262,000 square feet and its aggregate  warehouse
space was approximately  953,000 square feet. Of this total, 254,000 square feet
of executive  and sales office space is being  utilized in the conduct of day to
day  operations  while  868,000  square feet of  warehouse  space is being used.
Anicom is actively  seeking to sublease or negotiate  buyouts where  practicable
for the excess space not utilized in its day to day operations.

         Generally, Anicom maintains short-term leases for its sales offices and
warehouses,  with options to renew,  where  possible.  Anicom  believes that its
facilities are adequate for its present  foreseeable needs in these geographical
markets; however, the Company will continue to increase or decrease space as the
need arises.  Management  believes  that adequate  replacement  space is readily
available in each market.

ITEM 3.  LEGAL PROCEEDINGS

         Anicom is not a party to any material legal proceeding nor, to Anicom's
knowledge, is any material legal proceeding threatened against it.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters were submitted to a vote of security holders during Anicom's
fiscal quarter ended December 31, 1999.

                                        6

<PAGE>


                                     PART II
ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Anicom's Common Stock is traded on the Nasdaq National Market under the
symbol "ANIC." The following table sets forth,  for the periods  indicated,  the
range of high and low last sale  prices for the Common  Stock as reported on the
Nasdaq National Market:

                                     1999                       1998
                            -----------------------    ------------------------
                              High          Low          High           Low
                            ----------    ---------    ----------    ----------

             1st quarter      $10.000       $6.310       $16.750       $13.625
             2nd quarter      $10.813       $8.063       $16.063       $12.875
             3rd quarter      $10.875       $4.625       $15.125        $6.750
             4th quarter       $5.375       $3.875       $10.750        $6.250



As of March 24,  2000,  the  approximate  number of record  holders of  Anicom's
Common Stock was 2,098.

         Anicom has not paid cash dividends or distributions on its Common Stock
during 1999 or 1998. Anicom  anticipates that it will retain any future earnings
to finance the continuing  growth and development of its business.  Accordingly,
Anicom does not  anticipate  paying cash  dividends  on its Common  Stock in the
foreseeable  future.  The  payment  of  any  future  dividends  will  be at  the
discretion  of Anicom's  Board of Directors  and will depend  upon,  among other
things, future earnings, the success of Anicom's development activities, capital
requirements,  restrictions  in financing  arrangements,  the general  financial
condition  of Anicom and  general  business  conditions.  At  present,  Anicom's
ability to declare or pay  dividends  is limited  under its bank line of credit,
which  provides  that Anicom may not declare or pay any  dividends on its Common
Stock if at the time of such declaration or payment,  any event of default shall
have occurred or be continuing.


                                       7

<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA

         The data set forth  below is derived  from the  Consolidated  Financial
Statements  of  the  Company.  These  historical  results  are  not  necessarily
indicative of the results to be expected in the future.
<TABLE>
<CAPTION>

                                                                            Year ended December 31,
                                                ---------------------------------------------------------------------------------
                                                    1999 (1)        1998 (1)         1997 (2)           1996            1995
                                                -------------    -----------      -----------      -----------     -----------

                                                                     (in thousands, except per share data)

Selected Statement of Income Data:
<S>                                            <C>              <C>              <C>              <C>             <C>
Net sales                                      $     536,721    $   470,279      $   243,664      $   115,993     $    29,358
                                                =============    ===========      ===========      ===========     ===========
Net income (loss) available to common
   stockholders                                $     (10,420)   $     7,374      $         4      $     2,622     $       764
                                                =============    ===========      ===========      ===========     ===========
Net income per common share:
  Basic                                        $       (0.41)   $      0.31      $   --           $      0.20     $      0.14
                                                =============    ===========      ===========      ===========     ===========
  Diluted                                      $       (0.41)   $      0.30      $   --           $      0.19     $      0.14
                                                =============    ===========      ===========      ===========     ===========
Weighted average number of shares outstanding:
  Basic                                               25,113         23,918           17,476           13,384           5,408
                                                =============    ===========      ===========      ===========     ===========
  Diluted                                             25,113         24,816           17,476           13,580           5,658
                                                =============    ===========      ===========      ===========     ===========
</TABLE>
<TABLE>
<CAPTION>


                                                                             As of December 31,
                                                ------------------------------------------------------------------------------
                                                    1999            1998             1997             1996            1995
                                                -------------    -----------      -----------      -----------     -----------

Selected Balance Sheet Data:
<S>                                            <C>              <C>              <C>              <C>             <C>
Total assets                                   $     383,697    $   353,221      $   215,457      $    87,954     $    41,169
                                                =============    ===========      ===========      ===========     ===========
Long term obligations and convertible
   redeemable preferred stock                  $     151,570    $   109,604      $     8,549      $     3,952     $       597
                                                =============    ===========      ===========      ===========     ===========
</TABLE>



1.  See Note 9 in the Consolidated Financial Statements.

2.  See Note 10 in the Consolidated Financial Statements.



                                       8
<PAGE>


ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The  following  table  sets  forth  selected  income  statement  data of  Anicom
expressed as a percentage of net sales for the periods indicated:

                                        1999           1998           1997
                                     ------------   ------------   ------------
Income Statement Data:
Net sales                                  100.0%         100.0%         100.0%
Cost of sales                               79.8           77.7           76.8
                                     ------------   ------------   ------------
Gross profit                                20.2           22.3           23.2
Operating expenses and other:
   Selling                                  10.5            9.3           10.7
   General and administrative               10.1            8.5            9.7
   Restructuring charge                      1.1             --             --
   Acquisition integration charge             --            1.1             --
   Reengineering costs                        --             --            2.3
                                     ------------   ------------   ------------
Income (loss) from operations               (1.8)           3.4             .6
Interest expense, net                        1.3             .6             .3
                                     ------------   ------------   ------------
Income (loss) before income taxes           (3.0)           2.8             .4
Income tax provision (benefit)              (1.2)           1.2             .3
                                     ------------   ------------   ------------
Net income (loss)                           (1.8)           1.6             .1
Less:  Dividend on preferred stock            --             --            (.1)
                                     ------------   ------------   ------------
Net income available to common
    stockholders                           (1.9)%          1.6%            --%
                                     ============   ============   ============

------------------
Note:  Percentages may not sum due to rounding.


<PAGE>



Results of Operations
         Year ended December 31, 1999 compared to year ended December 31, 1998
         Net sales for the year ended  December  31,  1999  increased  by 14% to
$536.7  million  when  compared  to net sales of $470.3  million in 1998.  These
increases  are primarily  attributable  to  acquisitions,  which have led to new
customers,  new products,  and expanded market  penetration.  These results were
adversely  impacted  by  declining  sales  levels at  certain  of the  locations
acquired from TW Communication Corporation ("TW") in December 1997.

         For the year ended  December 31, 1999,  gross profit  increased by $3.7
million or approximately  3.5% to $108.4 million versus $104.7 million for 1998.
This increase,  resulting primarily from increased  revenues,  was significantly
offset  by  costs  associated  with  Anicom's  third  quarter  1999  companywide
restructuring,   which  included  costs   associated   with   accelerating   the
implementation of its distribution  centers.  As part of the restructuring,  the
Company  consolidated  its 75  North  American  locations  into  61  facilities,
downsized  12  other  locations,  reduced  its  workforce  of  1,200 by about 10
percent,  and reduced the number of part numbers maintained in inventory reduced
the number of lower  margin  product  offerings  and began a supplier  selection
program (cumulatively referred to as the "Plan"). Principally as a result of the
Plan and in addition to the  restructuring  charges discussed below, the Company
incurred  approximately  $4.8 million in one-time  charges  during  1999,  which
increased  cost of goods sold for inventory  writedowns and reductions in vendor
rebates  due.  Management  believes  in  2000  the  Company  will  realize  more
efficiencies and cost containment in 2000 out of its integrated  operations as a
result of the Plan which should result in greater profitability.

                                       9

<PAGE>

         As a percentage of net sales,  gross profit for the year ended December
31, 1999  decreased as gross margins  reflected  the impact of lower  historical
gross profit margins at certain of our more recently  acquired  companies  which
have  historically  had lower margin product  offerings and the costs associated
with the Plan as discussed above.  Management  continues to work to mitigate the
impact of these  historically  lower  gross  margins at  acquired  companies  by
increasing  premium products offered by all of its locations,  eliminating lower
margin product lines,  beginning a supplier selection program, and by continuing
to leverage its purchasing  volume with its vendor  partners.  At the same time,
the Company has entered into arrangements with Metricom and Gateway that provide
for lower gross  margins than  historical  levels.  To the extent that Anicom is
able to  generate  significant  sales  from these  arrangements,  such sales may
result in higher gross profits but lower gross margins.

         Selling expenses increased by $12.8 million for the year ended December
31, 1999 when  compared to the same period in 1998.  This  increase  occurred in
conjunction  with the Company's  increase in net sales and the increase in sales
headcount that resulted from the Company's  recent  acquisitions.  Additionally,
selling expenses were impacted by additional  provisions for bad debts and other
factors  associated  with the Plan that are discussed  above.  Selling  expenses
increased  from 9.3% of net  sales in 1998 to 10.5% of net  sales in 1999.  This
increase  resulted from  additional  provisions  for bad debts and other factors
associated  with the Plan,  along with the impact of lower than  expected  sales
volume  experienced  in the second and third  quarters of 1999  attributable  to
certain TW locations.

         General and  administrative  expenses  increased from $39.9 million for
the year ended  December 31, 1998 to $54.0  million for the year ended  December
31, 1999.  General and  administrative  expenses for 1999 increased from 8.5% of
net sales in 1998 to 10.1% of net sales in 1999.  These increases  resulted from
redundant  expenditures  incurred as a result of  implementing  the Plan and the
realization  of a full year of  expenses  in 1999  related to  acquisitions  the
Company completed during the first nine months of 1998.

         In connection  with the Plan,  the Company  consolidated  and downsized
locations,  reduced its workforce and began a supplier selection program. During
the third  quarter of 1999,  costs  associated  with  terminating  or abandoning
leases and related  leasehold  improvements,  offering  severance to  associates
whose positions were  eliminated,  bank fees associated with taking a charge for
the Plan and other costs  associated  with notes  receivable from suppliers were
incurred.   These  costs  totaled  $6.1  million  and  are   categorized   as  a
restructuring  charge on the  income  statement (see Note 9 in the  Consolidated
Financial Statements).

         During the second quarter of 1999, the Company  reached an agreement to
settle  a  civil  lawsuit  stemming  from  the  March  1997  disposition  of its
non-strategic  cable assembly  product line. In connection  with the settlement,
the Company  recognized a charge of approximately $1.4 million during the second
quarter of 1999.

         For the year ended December 31, 1999, net interest expense increased to
$6.7  million  from $2.7  million  in 1998.  This is  primarily  a result of the
Company's  increased  borrowings  under  its  credit  facility  to fund the cash
consideration and debt payoff related to acquisitions, and to meet the increased
working capital  requirements  associated with sales growth and anticipated 2000
project business, including the Metricom and Gateway arrangements.

         The Company  recognized  a benefit for income taxes of $6.5 million for
the year ended  December  31, 1999  compared to a provision  of $5.6 million for
1998. The change is a result of the Company incurring a loss before income taxes
as a result of costs associated with the Plan and other matters discussed above.

                                       10
<PAGE>


         Year ended December 31, 1998 compared to year ended December 31, 1997
         Net sales for the year ended  December  31, 1998  increased to a record
$470.3  million,  a 93% increase over net sales of $243.7  million in 1997.  The
significant  increase is primarily  attributable  to  acquisitions  coupled with
internal  growth,  which led to new customers,  new products,  increased  market
share, expanded market penetration and increased volume with existing customers.
For the year ended December 31, 1998, net income and diluted  earnings per share
were $7.5 million or $0.30 per share  compared to $300,000 or $0.00 per share in
1997.  Results  in 1997  included  $5.6  million  of costs  associated  with the
Company's  implementation  of a business  process  reengineering  plan which was
centered around a new information technology system.

         Anicom's gross profit for the year ended December 31, 1998 increased by
$48.1 million or 84.9% to $104.7 million versus $56.6 million for the year ended
December 31, 1997.  This increase  resulted from Anicom's  acquired sales volume
and internal  growth.  As a percentage  of net sales,  gross profit was 22.3% in
1998 compared to 23.2% in 1997. The gross margin improvements that resulted from
the economic  efficiencies  created by Anicom's increased purchasing volume were
offset by the impact of lower  historical gross profit margins of certain of the
Company's recent  acquisitions  which have historically had lower margin product
offerings.

         Selling  expenses as a percentage  of net sales  improved from 10.7% of
net  sales in 1997 to 9.3% of net  sales in 1998.  These  improvements  resulted
primarily  from the Company  realizing  operating  leverage  from its growth and
acquisitions and conforming the selling incentive programs of acquired companies
to those of Anicom.  Selling  expenses  increased by $17.8  million for the year
ended December 31, 1998 in conjunction with the Company's  increase in net sales
and the increase in sales  headcount  resulting from the Company's  acquisitions
and internal growth.

         General  and  administrative  expenses  as a  percentage  of net sales,
improved  to 8.5% in 1998 from 9.7% in 1997.  This  improvement  relates  to the
continued  reduction of acquired companies overhead costs as the Company further
realized  operating  leverage  from  its  acquisition-based   integrated  growth
strategy. Negatively affecting the percentages are the costs associated with the
Company's  broadband  product line which were, in part,  offset by a gain on the
December,   1998  disposition  of  these  non-strategic   assets.   General  and
administrative expenses increased from $23.6 million in 1997 to $39.9 million in
1998.  The Company's  acquisitions  in the fourth  quarter of 1997 and the first
nine months of 1998, led to these increases.

         The Company incurred a one-time  acquisition  integration charge during
the third quarter of 1998 of  approximately  $5.2 million.  This charge includes
$2.8  million  for  settlement  of real estate  obligations,  the  write-off  of
leasehold improvements, and facility relocation costs; $1.4 million for one-time
acquisition  incentive bonuses;  and $1.0 million related to severance and other
costs.

         In 1998 interest expense increased to $2.9 million compared to $762,000
in 1997. This is primarily a result of the Company's increased  borrowings under
its credit facility during 1998 to fund the cash  consideration  and debt payoff
of acquired  companies,  and to meet the increased working capital  requirements
associated with increasing the depth and breadth of product  offering  available
and sales growth experienced during this period.

         The provision  for income taxes  increased to $5.6 million in 1998 from
$650,000  in 1997.  The  increase is a result of the  increase in income  before
income taxes.  For the years ended December 31, 1998 and 1997, the provision for
income taxes, as a percentage of income before income taxes,  decreased to 42.6%
from  68.4%.   The  decrease  is  primarily   attributable   to  the  impact  of

                                       11

<PAGE>

non-deductible  meals and  entertainment  expenses and  non-deductible  goodwill
amortization on a significantly higher income before income tax amount in 1998.

         Net income for the year ended  December  31,  1998 was $7.5  million or
1.6% of net sales as compared to $300,000 for the year ended  December 31, 1997.
For the year ended  December  31,  1998,  basic and diluted  earnings per common
share  increased to $0.31 and $0.30 per share,  respectively,  up from $0.00 per
share for the year ended  December  31,  1997.  These  increases  were  reported
despite an increase in diluted weighted average shares of approximately 37% from
the same period in 1997. Excluding the impact of acquisition related charges and
net  losses  incurred  from  non-strategic   assets  divested  by  the  Company,
management  believes  that basic and diluted  earnings per share would have been
$0.48 and $0.47 per share in 1998.

Liquidity and Capital Resources
         In December  1999,  the Company  entered  into a  Multicurrency  Credit
Agreement (the  "Facility")  with its then current bank group and other lenders,
which  resulted in a 25% increase in available  borrowings  to $150 million from
the $120 million  available  under its previous  revolving  credit facility (the
"Prior Facility").  The Facility provides for borrowings of up to $15 million in
currencies other than U.S.  dollars.  It also provides for various interest rate
options,  determined  from time to time,  based upon  certain  of the  Company's
financial ratios, as defined.  The Facility expires in July 2001 with extensions
available at the option of the Company and the lenders  through  July 2003.  The
Facility  contains certain financial  covenants,  including minimum tangible net
worth and EBITDA,  interest coverage,  leverage and debt to earnings ratios. The
Facility is secured by the Company's  receivables  and inventory,  with eligible
advance  rates  of 85%  and  60%,  respectively.  Prior  to the  closing  of the
Facility,  Anicom  obtained a waiver of  compliance  related to the plan for the
Prior Facility dated September 30, 1999.

         Management  believes  that cash flows from  operations  and  borrowings
available under the Facility will be sufficient to fund current operations.  The
Company does not currently have any significant  long-term capital  requirements
that it believes cannot be funded from these sources.  The Company  continues to
examine  opportunities to raise funds through the issuance of additional  equity
or debt  securities  through  private  placements  or  public  offerings  and to
increase its available line of credit.

         As of December 31, 1999,  Anicom had working  capital of  approximately
$168.8  million as  compared  to $136.1  million as of  December  31,  1998.  At
December 31, 1999,  amounts  outstanding  under the Facility were  approximately
$125.1 million.

         During  the year ended  December  31,  1999 cash  flows from  operating
activities  used $33.7  million of cash  compared to $33.9  million  used during
1998. This increase relates primarily to changes in working capital  components,
anticipated tax refunds resulting from the Company's 1999 loss and the impact of
amounts accrued and not yet paid related to the Plan.

         For the  year  ended  December  31,  1999  cash  flows  from  investing
activities  used $4.5 million  compared to  approximately  $30.7 million  during
1998.  During 1998,  Anicom  completed the  acquisitions of Yankee  Electronics,
Optical Fiber  Components,  Superior  Cable and Supply Company and Texcan Cables
Limited, Texcan Cables, Inc. and Texcan Cables International, Inc. (collectively
referred to as  "Texcan").  Cash paid for these  acquisitions  accounted for the
majority of cash used for investing  activities  during 1998.  During the second
quarter of 1999, the Company  received the remaining cash proceeds from the 1998
disposition  of the  Broadband  cable  television  product  line and a favorable
purchase price adjustment from a previous acquisition,  which was offset in part
by investments in property and equipment.

                                       12

<PAGE>

         During  the year ended  December  31,  1999 cash  flows from  financing
activities  provided  approximately  $37.5 million  compared to providing  $66.5
million  during the same period in 1998.  The change  relates to a reduction  in
additional borrowings to fund acquisition activity and increased working capital
requirements when compared to the prior year.

         In  September  1999,  Anicom's  Board of  Directors  authorized a share
repurchase program that will allow the Company to repurchase up to 10 percent of
the  Company's  outstanding  common  stock  over a 24-month  period,  subject to
certain restrictions. During the fourth quarter of 1999, Anicom acquired 344,000
shares of its  outstanding  common stock for prices  between $4.13 and $4.84 per
share.

Inflation
         Although the  operations of Anicom are  influenced by general  economic
conditions,  Anicom does not believe that inflation had a material effect on the
results of the operations during 1999.

Seasonality
         In the fourth quarter, Anicom has historically experienced, and expects
to experience in future years, a modest  decrease in the level of activity among
many of its customers around the Thanksgiving and Christmas holidays.

         Year 2000  Readiness  and Related  Risks As of the date of this report,
all of our  mission-critical  systems have been tested for Year 2000  compliance
and we have not  experienced  any  significant  Year 2000  problems with our own
mission-critical  systems or any  mission-critical  third parties systems.  Many
currently installed computer systems,  software programs and embedded data chips
are  programmed  using a  two-digit  date  field  and are  therefore  unable  to
distinguish dates beyond the 20th Century. A failure to identify and correct any
mission-critical  internal or third-party  Year 2000  processing  problems could
have a material  adverse  operational  or financial  consequence  to us.  Anicom
established a Year 2000 Project Team that developed a process for addressing the
Year 2000 issue including  performing an inventory,  an assessment,  remediation
procedures   (to  the  extent   necessary)   and  testing   procedures   of  all
mission-critical   information  systems  and  equipment  that  contain  embedded
technology,  as well as obtaining  assurances  from all  mission-critical  third
parties as to their own Year 2000 preparedness. Although we have not experienced
any  significant  Year 2000 problems to date, we plan to continue to monitor the
situation  closely.  We cannot be sure that we will be completely  successful in
our efforts to address  the Year 2000 issue or that  problems  arising  from the
Year  2000  issue  will not cause a  material  adverse  effect on our  operating
results or financial condition.  We believe,  however,  that our most reasonably
likely  worst-case  scenario  would relate to problems with the systems of third
parties rather than with our internal systems.  We are limited in our efforts to
address  the Year 2000 issue as it relates to third  parties  and rely solely on
the  assurances  of these third parties as to their Year 2000  preparedness.  As
part of our broader contingency  planning, we also developed business continuity
plans to address each critical  process and activity that we believe would cause
a significant disruption to operations if not functional. Despite these efforts,
we cannot  guarantee  that the  contingency  plan will  adequately  address  all
circumstances  that may disrupt  operations  or that such  planning will prevent
circumstances  that may cause a material adverse effect on our operating results
or financial condition.

Factors That Could Affect Our Operations
          Investing in the shares offered by Anicom, Inc. involves a high degree
of risk.  In  addition  to other  information  contained  in this  Form  10-K or
incorporated by reference into this filing,  you should  consider  carefully the
following  factors  before  deciding  to  purchase  the  shares of the  Company.
Statements in this Form 10-K that are not historical  facts are  forward-looking

                                       13

<PAGE>

statements.  These statements are made pursuant to the safe harbor provisions of
the Private Securities  Litigation Reform Act of 1995. A number of factors could
cause the Company's  future results to be different from those  expressed in any
forward-looking statements made by the Company. Some of these factors are listed
below.

Risks Associated with Integrating Acquired Companies
         As of December 31,  1999,  the Company  operated in over 60  locations,
many of  which  were  locations  of  companies  which  we had  acquired.  We are
continuing  to integrate  some of these  acquired  facilities  into our existing
distribution system. Our ability to expand successfully into these and other new
geographical  markets  is  dependant  on a  number  of  factors,  including  the
following:

         o        economic  and  business   conditions   affecting  customers  o
                  competition
         o        availability of sufficient capital
         o        availability of sufficient inventory to meet customer demand
         o        ability to obtain  suitable  sales officers  and/or  warehouse
                  facilities
         o        ability to attract and retain qualified personnel

As a result of these factors,  we cannot assure you that we will be able to take
advantage of these geographical  markets on a timely or profitable basis or that
we will be able to  manage  these  operations  effectively.  Furthermore,  these
factors,  among others,  create  difficulties in integrating  acquired locations
into our existing distribution system.  Therefore,  we cannot assure you that we
will be able to manage  these  operations  effectively,  that we will be able to
maintain  or  accelerate  our  recent  growth or that we will be able to operate
profitably.

Risks Associated with Canadian Operations
         Anicom has significant  operations in Canada.  Accordingly,  we will be
influenced by the political,  economic and other factors affecting Canada. These
factors include,  without  limitation,  taxation policies,  changing federal and
provincial political conditions,  compliance with a variety of Canadian laws and
unexpected  changes in  regulatory  requirements.  One or more of these  factors
could  adversely  affect  the  Company's  business,  results of  operations  and
financial condition. Also, we now receive a portion of our cash flow in Canadian
dollars.  Changes in the exchange rate between the Canadian and U.S.  currencies
could  adversely  affect  the  Company's  business,  results of  operations  and
financial condition.

Capital Needs for Expansion
         We may require  additional  capital if we continue to grow. The Company
may raise this capital through public or private equity offerings or financings.
However,  such  capital  may  not be  available  or,  if  available,  may not be
available on  acceptable  terms.  The  Company's  inability to raise funds could
restrict our growth. In addition, existing ownership interests may be diluted if
funds are raised by issuing additional equity securities.

Effective Implementation of Platinum Service Distribution Centers
         During 1999, we implemented the Platinum Service  Distribution  Centers
in an effort to lower costs by reducing  redundancy in our distribution  system.
This  new  system  of  distribution   centers  allowed  us  to  consolidate  our
distribution network,  reducing the total number of our North American locations
from 75 to 61. While we expect that we will be able to improve  customer service
from these centralized  locations,  we cannot assure you that we will be able to
effectively meet customer demand from this new distribution  network. If our new
distribution  network  proves  ineffective or fails to justify our investment in
it, our gross profits and gross margins may be reduced.

                                       14

<PAGE>

Timing of Performance and Payment under Certain Contracts
         In 1999,  we entered  into  contracts  to supply  cable  nationwide  to
Metricom  for its  rollout  of a wireless  mobile  information  network,  and to
Gateway,  for its high-speed  wide broadband  network.  In order to purchase the
inventory  necessary to meet the supply  requirements under these contracts,  we
borrowed  significant  funds  from our  lenders,  incurring  increased  interest
expense.  Large  infrastructure  projects such as those described above can face
periodic delays for a variety of reasons,  including zoning and other regulatory
problems,  construction  delays and other  developments that are outside our and
our  customers'  control.  If a project  is  delayed,  we may be forced to carry
inventory  longer  than  anticipated  and incur  larger than  expected  interest
expense. Therefore, if a customer experiences significant delays on a project of
the scale described above, we may have increased  interest expense and delays in
our revenue  recognition  which would adversely affect our earnings during those
quarters in which the project delays occur.

Risks Associated With Shares Eligible for Future Sale
         Anicom has shares of Common  Stock  registered  for resale under active
Registration  Statements on Form S-3 and S-8. The perception  that sales of such
shares could occur, or the actual sale of a substantial number of shares,  could
adversely affect the market price of the Common Stock.

         Pursuant to its Amended and Restated Certificate of Incorporation,  the
Company has the authority to issue additional  shares of Common Stock and shares
of one or more series of  preferred  stock.  The Company may issue shares on the
authority of the Board of Directors without stockholder approval. If the Company
issues  additional  Common Stock or preferred stock, the voting power and rights
of the  outstanding  shares of Common Stock could be diluted.  In addition,  the
possibility of issuing  additional  shares of preferred stock may deter a change
of control.

         As of December 31,  1999,  there were  outstanding  options to purchase
5,163,000  shares of Common Stock, at a weighted  average price of approximately
$7.99  per  share,  issued  to  employees,   former  employees,   directors  and
consultants  pursuant to the Company's  stock incentive  plans. In addition,  we
have reserved  1,403,508  shares of Common Stock for issuance upon conversion of
the Series B Preferred Stock.  The Company has  registration  statements on Form
S-8 in effect  covering an aggregate of 4,450,000 of the shares  issuable  under
its stock incentive plans.

         We may issue additional  capital stock or other forms of convertible or
exchangeable  securities to raise capital in the future. In order to attract and
retain key personnel,  we also may issue additional securities,  including stock
options,  in connection  with our employee  benefit  plans.  During the terms of
these  options,  the holders may exercise the options in order to benefit from a
rise in the market price of the Common  Stock.  The exercise of such options may
adversely  affect the market value of the Common Stock.  Also,  the existence of
these options may adversely  affect the terms on which we can obtain  additional
equity financing.

                                       15

<PAGE>


Highly Competitive Market
         The market for the distribution of multimedia wiring products is highly
competitive and fragmented. To compete successfully,  we believe we will need to
continue to:

         o        offer a broad  range of  technologically  advanced  products o
                  provide competitive pricing while maintaining its margins
         o        provide prompt delivery of products
         o        deliver responsive customer service
         o        establish and maintain strong relationships with suppliers and
                  customers
         o        attract and retain highly qualified personnel

We face substantial  competition from several national and regional distributors
and from  manufacturers  who sell directly to end-users for certain  large-scale
projects.  We may be required to lower our prices to maintain or increase market
share in light of competitive pressures from current or future competitors. Such
measures may adversely affect the Company's business,  results of operations and
financial condition.

Risks Associated with Inventory

         We  must  identify  the  right  product  mix  and  maintain  sufficient
inventory on hand to meet  customer  orders.  We may not be able to identify and
offer products necessary to remain competitive,  or we may suffer losses related
to product obsolescence. Further, there is no assurance that we will achieve and
maintain  sufficient  inventory  levels to meet our customers'  needs or that we
will not have to take inventory write-offs in the future.

Dependence on Management and Key Personnel

         We are highly  dependent upon the services of certain members of senior
management.  We have entered  into  employment  agreements  with a number of key
executive  officers.  Our success is also  dependent upon its ability to attract
and retain highly qualified management, marketing and sales personnel. If we are
not able to continue to attract and retain  qualified  management  and other key
personnel, our ability to sustain our growth strategy and profitable results may
be adversely affected.

Possible Volatility of Stock Price

         Changes in  quarterly  operating  results  and  earnings  could lead to
significant  fluctuations in the market price of the Common Stock.  Estimates by
analysts,  general conditions in the industries in which the Company's customers
compete  and other  events or  factors  could also lead to  fluctuations  in the
market price of the Common Stock.

We Cannot Be Sure That The Year 2000 Problem Will Not Affect Our Business

  Thus far,  we have had no  significant  problems  related  to Year 2000
issues  associated  with the  computer  systems,  software,  other  property and
equipment we use.  However,  we cannot guarantee that the Year 2000 problem will
not adversely affect our business,  operating results or financial  condition at
some point in the future.
                                       16

<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Interest Rate Risk
         The  Company's  Facility is priced on a floating rate basis at either a
spread over LIBOR or under the credit  facility  agent's  Domestic Rate which is
tied to the U.S.  Prime  Rate.  The rate used in  subject  to  selection  by the
Company based on the terms of the Facility.  Accordingly,  any movement in LIBOR
or the Domestic Rate will impact the Company's interest expense. The outstanding
balance  under the  Facility at December 31, 1999 was $125.1  million.  Based on
this balance,  a hypothetical  10% increase in LIBOR would result in an increase
in annual  interest  expense of  approximately  $1,060,000.  The Company has not
historically  used  interest  rate  swaps,  caps or other  derivative  financial
instruments  for the purpose of hedging  fluctuations  in interest  rates on its
floating  rate debt.  Consequently,  increases  in  interest  rates could have a
material adverse effect on the Company's future results.

Foreign Currency Exchange Rate Risk
         A portion of the Company's  sales are  denominated in Canadian  dollars
thereby creating an exposure to foreign currency  exchange rate risk which could
have a material adverse effect on the Company's  financial results.  The Company
has not historically used forward foreign exchange contracts or other derivative
financial  instruments  for the  purpose of  hedging  fluctuations  in  Canadian
dollars.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
         The  information  in response to this item is included in the Company's
consolidated   financial  statements,   together  with  the  report  thereon  of
PricewaterhouseCoopers  LLP,  appearing  on pages F-1 through  F-25 of this Form
10-K.

ITEM 9. CHANGES AND  DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE None.


                                       17

<PAGE>


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
         The  information in response to this item is  incorporated by reference
from  the  sections  captioned  "PROPOSAL  NO.  1--ELECTION  OF  DIRECTORS"  and
"EXECUTIVE OFFICERS" of the definitive Proxy Statement to be filed in connection
with the  Company's  2000  Annual  Meeting  of  Stockholders  (the  "2000  Proxy
Statement").

ITEM 11. EXECUTIVE COMPENSATION
         The  information in response to this item is  incorporated by reference
from the section of the 2000 Proxy Statement captioned "EXECUTIVE COMPENSATION."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
         The  information in response to this item is  incorporated by reference
from the section of the 2000 Proxy Statement  captioned  "SECURITY  OWNERSHIP OF
MANAGEMENT AND PRINCIPAL STOCKHOLDERS."

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
         The  information in response to this item is  incorporated by reference
from the sections of the 2000 Proxy Statement captioned "CERTAIN TRANSACTIONS."

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K


(a)      1.       The following consolidated financial statements and notes
                  thereto,  and the related Report of  Independent  Accountants,
                  are included on pages F-1 through F-24 on this Form 10-K:

                  Report of Independent Accountants
                  Consolidated Balance Sheets as of December 31, 1999 and 1998
                  Consolidated Statements of Operations for the Years Ended
                    December 31, 1999, 1998 and 1997
                  Consolidated Statements of Stockholders' Equity for the
                    Years Ended December 31, 1999, 1998 and 1997
                  Consolidated Statements of Cash Flows for the Years Ended
                    December 31, 1999, 1998 and 1997
                  Notes to Consolidated Financial Statements

         2.       Schedule

                           The  following   consolidated   financial   statement
schedule is included on page F-25:

                Schedule II -- Valuation and Qualifying Accounts

                           All other financial  statement  schedules are omitted
                           because  such  schedules  are  not  required  or  the
                           information   required  has  been  presented  in  the
                           aforementioned financial statements.


                                       18
<PAGE>




         3.       Exhibits.  The following exhibits are filed with the report or
                  incorporated herein by reference as set forth below.


     Exhibit No.        Description
----------------------  --------------------------------------------------------

                  2.1(1)   Asset Purchase  Agreement by and among Anicom,  Inc.,
                           Anicom Multimedia Wiring Systems Incorporated, Texcan
                           Cables, Inc., Texcan Cables International,  Inc., and
                           Texcan Cables Limited, dated as of September 21, 1998
                  3.1(2)   Restated Certificate of Incorporation of Anicom.
                  3.2(3)   Restated Bylaws of Anicom.
                  4.1(3)   Specimen Stock Certificate representing Common Stock.
                  10.1(2)  1996 Stock Incentive Plan, as Amended.
                  10.2(2)  Form  of  Employment  Agreement  between  Anicom  and
                           Donald Welchko.
                  10.3(2)  1998 Associate Stock Purchase Plan
                  10.4(2)  Form of Employment Agreement between Anicom and Scott
                           C. Anixter.
                  10.5(2)  Form of Employment  Agreement between Anicom and Carl
                           E. Putnam.
                  10.6(3)  Form  of  Employment  Agreement  between  Anicom  and
                           Robert L. Swanson.
                  10.7(3)  Shareholders Agreement.
                  10.8(3)  Form of Tax Indemnification Agreement.
                  10.9(4)  Stockholders'  Agreement,  dated May 23,  1997  among
                           Anicom,  Scott C. Anixter and each of the  purchasers
                           listed on the signature page thereto.
                  10.10(5) Form of Amended and  Restated  1995  Directors  Stock
                           Option Plan.
                  10.11    Amendment to the Amended and Restated  1995  Director
                           Stock Option Plan.
                  10.12(6) Anicom 401(k) Savings Plan
                  10.13    Multicurrency Credit Agreement,  dated as of December
                           17, 1999, among Anicom, Harris Trust and Savings Bank
                           and Bank One, NA.
                  21(2)    List of Subsidiaries.
                  23.1     Consent of Independent Accountants.
                  27       Financial Data Schedule.

------------------

         (1)      Previously  filed as an exhibit to Anicom's  quarter ly report
                  on Form 10-Q for the  quarter  ended  September  30,  1998 and
                  incorporated herein by reference.
         (2)      Previously  filed as an Exhibit to Anicom's  annual  report on
                  Form  10-K  for  the  year  ended   December   31,   1998  and
                  incorporated herein by reference.
         (3)      Previously  filed  as  an  Exhibit  to  Anicom's  Registration
                  Statement  on  Form  SB-2,   registration  no.  33-87736C  and
                  incorporated herein by reference thereto.
         (4)      Previously  filed as an Exhibit to Anicom's  current report on
                  Form  8-K,  dated May 30,  1997,  and  incorporated  herein by
                  reference.
         (5)      Previously filed as an Exhibit to Anicom's quarterly report on
                  Form  10-QSB,  for the quarter  ended  September  30, 1996 and
                  incorporated herein by reference.
         (6)      Previously  filed  as  an  Exhibit  to  Anicom's  registration
                  statement  on  Form  S-8,  registration  no.  333-68119,   and
                  incorporated herein by reference.

                  (b)      Reports on Form 8-K.  The  following  Reports on Form
                           8-K or Form 8-K/A were filed  during the last quarter
                           of 1999

                           None


                                       19

<PAGE>

                                  Anicom, Inc.
   Index to Consolidated Financial Statements and Financial Statement Schedule
<TABLE>
<CAPTION>

                                                                                          Page(s)

<S>                                                                                             <C>
Report of Independent Accountants                                                             F-2
Financial Statements:
         Consolidated Balance Sheets as of December 31, 1999 and 1998                         F-3
         Consolidated Statements of Operations for the years ended
          December 31, 1999, 1998 and 1997                                                    F-4
         Consolidated Statements of Stockholders' Equity for the years ended
          December 31, 1999, 1998 and 1997                                                    F-5
         Consolidated Statements of Cash Flows for the years ended
           December 31, 1999, 1998 and 1997                                                   F-6
         Notes to Consolidated Financial Statements                                    F-7 - F-24

The following consolidated financial statement schedule of
Anicom, Inc. is included in Item 14:
          Schedule II - Valuation and Qualifying Accounts                                    F-25
</TABLE>

         All other  schedules  for  which  provision  is made in the  applicable
regulation of the Securities and Exchange  Commission are not required under the
related instructions and are inapplicable and, therefore, have been omitted.



<PAGE>


                        Report of Independent Accountants

To the Stockholders and the Board of Directors of Anicom, Inc.

In our  opinion,  the  consolidated  financial  statements  listed  in the index
appearing  under Item 14(a)(1) on page 18 of this Form 10-K present  fairly,  in
all material  respects,  the  financial  position of Anicom Inc. at December 31,
1999 and 1998,  and the results of its operations and its cash flows for each of
the three years in the period  ended  December  31,  1999,  in  conformity  with
accounting  principles generally accepted in the United States. In addition,  in
our opinion,  the financial  statement  schedule  listed in the index  appearing
under Item 14(a)(2) on page 18 this Form 10-K presents  fairly,  in all material
respects,  the information  set forth therein when read in conjunction  with the
related  consolidated  financial  statements.  These  financial  statements  and
financial statement schedule are the responsibility of the Company's management;
our  responsibility  is to express an opinion on these  statements  based on our
audits.  We conducted our audits of these statements in accordance with auditing
standards  generally  accepted in the United States,  which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements,  assessing the accounting  principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion  expressed
above.


/s/ PricewaterhouseCoopers LLP


Chicago, Illinois
March 30, 2000


<PAGE>


                                  Anicom, Inc.
                           Consolidated Balance Sheets
                        As of December 31, 1999 and 1998
                      (in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                                      1999             1998
                                                                                 ----------------   --------------
                                    ASSETS
Current assets:
<S>                                                                              <C>                <C>
     Cash and cash equivalents                                                   $         1,928    $       2,589
       Accounts receivable, less allowance for doubtful
            accounts of $2,703 and $4,140, respectively                                  113,729          106,043
       Inventory                                                                         105,488           87,250
       Deferred income taxes                                                               4,670            3,176
       Other current assets                                                               18,247           14,273
                                                                                 ----------------   --------------
                    Total current assets                                                 244,062          213,331
  Property and equipment, net                                                             11,005            9,963
  Goodwill, net of accumulated amortization of
    $7,376 and $3,740, respectively                                                      127,701          128,280
  Deferred income taxes                                                                      579               --
  Other assets                                                                               350            1,647
                                                                                 ----------------   --------------

                    Total assets                                                 $       383,697    $     353,221
                                                                                 ================   ==============

                     LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
       Accounts payable                                                          $        66,485    $      58,205
       Accrued expenses                                                                    3,423           10,429
       Restructuring liabilities                                                           3,663            1,477
       Acquisition liabilities                                                             1,512            5,687
       Deferred income taxes                                                                  --              222
       Long-term debt, current portion                                                       195            1,227
                                                                                 ----------------   --------------
                    Total current liabilities                                             75,278           77,247
  Long-term debt, net of current portion                                                 125,359           85,516
  Restructuring liabilities, noncurrent                                                    2,562            1,021
  Acquisition liabilities, noncurrent                                                      3,581            2,845
  Other liabilities                                                                           68              222
                                                                                 ----------------   --------------
                    Total liabilities                                                    206,848          166,851
                                                                                 ----------------   --------------
  Commitments and contingencies
  Convertible  redeemable  preferred stock,  series B, par value $.01 per share,
    liquidation value $1,000 per share; 20 shares authorized,
    issued and outstanding                                                                20,000           20,000
                                                                                 ----------------   --------------

  Stockholders' equity:
       Common stock, par value $.001 per share; 100,000 shares authorized;
         24,796 and 25,083 shares issued and outstanding, respectively                        17               17
         Preferred stock, series C, par value $.01 per share; 50 shares
       authorized,        no shares issued and outstanding                                    --               --
       Preferred stock, undesignated, par value $.01 per share;
         903 shares authorized, no shares issued and outstanding                              --               --
        Treasury stock, 344 and 0 shares, respectively                                    (1,560)              --
       Additional paid-in capital                                                        155,900          155,653
       Retained earnings                                                                     177           10,597
       Cumulative Translation Adjustment                                                   2,315              103
                                                                                 ----------------   --------------
                    Total stockholders' equity                                           156,849          166,370
                                                                                 ----------------   --------------

                    Total liabilities and stockholders' equity                   $       383,697    $     353,221
                                                                                 ================   ==============
</TABLE>

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




                                      F-3
<PAGE>


                                  Anicom, Inc.
                      Consolidated Statements of Operations
              For the years ended December 31, 1999, 1998 and 1997
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                     1999               1998                1997
                                                                 --------------     --------------  -----------------

<S>                                                              <C>                <C>             <C>
Net sales                                                        $     536,721      $     470,279   $        243,664
Cost of sales                                                          428,347            365,613            187,098
                                                                 --------------     --------------  -----------------
    Gross profit                                                       108,374            104,666             56,566
                                                                 --------------     --------------  -----------------

Operating expenses:
  Selling                                                               56,536             43,702             25,948
  General and administrative                                            53,994             39,924             23,547
   Restructuring charge (Note 8)                                         6,067                 --                 --
   Legal settlement  (Note 15)                                           1,352                 --                 --
  Acquisition integration charge (Note 8)                                   --              5,156                 --
  Reengineering costs (Note 9)                                              --                 --              5,584
                                                                 --------------     --------------  -----------------
    Total operating expenses                                           117,949             88,782             55,079
                                                                 --------------     --------------  -----------------

Income (loss) from operations                                            (9,575)           15,884              1,487

Other income (expense):
   Interest income                                                          142               111                225
   Interest expense                                                      (6,862)           (2,853)              (762)
                                                                 --------------     --------------  -----------------
    Total other income (expense)                                         (6,720)           (2,742)              (537)
                                                                 --------------     --------------  -----------------
Income (loss) before income taxes                                      (16,295)            13,142                950

Income tax provision (benefit)                                          (6,475)             5,600                650
                                                                 --------------     --------------  -----------------

Net income (loss)                                                       (9,820)             7,542                300

Less: dividends on preferred stock                                         600                168                296
                                                                 --------------     --------------  -----------------

Net income (loss) available to common stockholders               $     (10,420)     $       7,374   $              4
                                                                 ==============     ==============  =================

Earnings per common share:
  Basic                                                          $       (0.41)     $        0.31   $             --
                                                                 ==============     ==============  =================
  Diluted                                                        $       (0.41)     $        0.30   $             --
                                                                 ==============     ==============  =================

Weighted average common shares outstanding:
  Basic                                                                 25,113             23,918             17,476
                                                                 ==============     ==============  =================
  Diluted                                                               25,113             24,816             17,476
                                                                 ==============     ==============  =================

</TABLE>


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



                                      F-4
<PAGE>
                                  Anicom, Inc.
                 Consolidated Statements of Stockholders' Equity
              For the years ended December 31, 1999, 1998 and 1997
                                 (in thousands)
<TABLE>
<CAPTION>

                        Convertible                           Addi                    Other
                      Preferred Stock       Common Stock    -tional               Comprehensive                  Treasury Stock
                    ------------------  -----------------   Paid-In     Retained     Income     Stockholders'  --------------------
                     Shares     Amount    Shares  Amount    Capital     Earnings     (Loss)        Equity       Shares      Amount
                    -------    -------   ------  -------   --------    --------    ---------    -----------     ------    ---------
Balance,
<S>                                      <C>           <C>   <C>         <C>                        <C>
 January 1, 1997                         15,561        7     56,465      3,387                      59,859
Net income                                                                 300                         300
Proceeds from                                                                                       26,155
issuance of
  Convertible
  preferred
  stock, net of
  offering costs       27     $26,155
Dividends
  issued to
  Convertible
  preferred
  stockholders in
  common stock                               29                 296       (296)
Conversion of
  convertible
  Preferred stock
  to common stock     (27)    (26,155)    3,130        3     26,152
Proceeds from
issuance of
  Common stock,
  net of offering
  costs                                   2,900        3     36,131                                 36,134
Issuance of
common stock
  for acquisitions                        1,646        2     21,627                                 21,629
Exercise of stock
  options
  and warrants                               27                  72                                     72
                    -------    -------   ------  -------   --------    --------    ---------   -----------      ------     ---------
Balance,
  December 31, 1997    --          --    23,293       15    140,743      3,391                     144,149
Net income                                                               7,374                       7,374
Foreign currency
  translation
  adjustments                                                                            103           103
                                                                                                ----------
Total
  comprehensive
  income                                                                                             7,477
Issuance of
common stock                              1,732        2     14,579                                 14,581
  for acquisitions
Exercise of stock
options                                      58                 331                                    331
  and warrants
Dividends on
convertible
  Redeemable
  preferred stock,
  Series B                                                                (168)                       (168)
                    -------    -------   ------  -------   --------   --------     ---------    -----------     ------     ---------
Balance, December
  31, 1998              --         --    25,083       17    155,653     10,597           103       166,370

Net loss                                                                (9,820)                     (9,820)
Foreign currency
  translation
  adjustments                                                                          2,212         2,212
                                                                                                 ----------
Total
  comprehensive
  loss                                                                                              (7,608)
Exercise of stock
  options
  and warrants                               57       --        247                                    247
Dividends on
  convertible
  Redeemable
  preferred stock,
  Series B                                                                (600)                       (600)
Acquisition of
  Treasury Stock                           (344)                                                    (1,560)        344      $(1,560)
                    -------    -------   ------  -------   --------    --------    ---------    -----------     ------     ---------
Balance, December
  31, 1999                       $ --    24,796    $  17   $155,900      $ 177       $ 2,315     $ 156,849         344      $(1,560)
                    =======    =======   ======  =======   ========    ========    =========    ===========     ======     =========
</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                      F-5
<PAGE>




                                  Anicom, Inc.
                      Consolidated Statements of Cash Flows
              For the years ended December 31, 1999, 1998 and 1997
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                        1999             1998              1997
                                                                     -------------   --------------   --------------
Cash flows from operating activities:
<S>                                                                  <C>             <C>              <C>
  Net income (loss) available common stockholders                    $    (10,420)   $       7,374    $         301
  Adjustments to reconcile net income to net cash
    (used in) provided by operating activities:
    Depreciation and Amortization                                           6,415            4,005            2,163
    Deferred income taxes                                                  (2,295)             359              615
    Provision for doubtful accounts                                         3,934            2,406            2,183
    Gain on sale of product lines                                              --          (1,000)            (483)
    Loss on disposal of property and equipment                                 --               --              278
    Increase (decrease) in cash attributable to change in assets
      and liabilities:
      Marketable securities                                                    --               --            4,345
      Accounts receivable                                                 (12,120)         (27,409)         (8,885)
      Inventory                                                           (19,063)         (8,827)         (12,710)
      Other assets                                                           (465)         (8,615)          (1,865)
      Accounts payable                                                      8,040            4,303            3,693
      Accrued expenses                                                     (7,718)         (6,478)          (2,648)
                                                                     -------------   --------------   --------------
        Net cash provided by (used in) operating activities               (33,692)        (33,912)         (13,013)
                                                                     -------------   --------------   --------------

Cash flows from investing activities:
  Purchase of property and equipment                                       (4,467)         (3,493)          (2,297)
  Cash paid for acquired companies                                             --         (29,908)         (33,801)
  Cash received on sale of product lines                                       --            2,700              200
                                                                     -------------   --------------   --------------
        Net cash provided by (used in) investing activities                (4,467)        (30,701)         (35,898)
                                                                     -------------   --------------   --------------

Cash flows from financing activities:
  Proceeds from long-term debt                                            121,200         142,550           57,340
  Payment of long-term debt and assumed bank debt                         (82,389)        (76,129)         (70,302)
   Purchase treasury stock                                                 (1,560)              --               --
  Proceeds from equity offerings, net of offering costs                        --               --           62,365
  Other                                                                       247               94               --
                                                                     -------------   --------------   --------------
        Net cash provided by (used in) financing activities                37,498           66,515           49,403
                                                                     -------------   --------------   --------------

Net increase (decrease) in cash and cash equivalents                         (661)           1,902              492
Cash and cash equivalents, beginning of year                                2,589              687              195
                                                                     -------------   --------------   --------------

Cash and cash equivalents, end of year                               $      1,928    $       2,589    $         687
                                                                     =============   ==============   ==============

Supplemental cash flow information:
  Cash paid for interest                                             $      6,927    $       2,896    $         695
                                                                     =============   ==============   ==============
  Cash paid for income taxes                                         $      2,730    $       4,869    $       4,098
                                                                     =============   ==============   ==============
</TABLE>


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






                                      F-6
<PAGE>



                                  Anicom, Inc.
                   Notes to Consolidated Financial Statements
                  (dollars in thousands, except per share data)





1.       Nature of Business and Summary of Significant Accounting Policies

         Nature of Business
         Anicom,  Inc. and Subsidiaries (the "Company")  specializes in the sale
         and  distribution  of multimedia  technology  products  including fiber
         optics,  communications  related wire,  cable, and computer network and
         connectivity  products.  The Company  operates in a single business and
         geographical segment.

         The Company sells to a wide array of customers,  including contractors,
         systems  integrators,  security/fire  alarm  companies,  regional  Bell
         operating companies,  distributors,  utilities,  telecommunications and
         sound  contractors,   wireless  specialists,   construction  companies,
         universities,  governmental  agencies  and  companies  involved  in the
         automotive,  mining, marine,  petro-chemical,  paper and pulp and other
         natural resource  industries.  The Company's  customers are principally
         located in North America.  The Company generally sells to its customers
         on an unsecured basis.

         Summary of Significant Accounting Policies

         Consolidation
         The accompanying  consolidated  financial statements consist of Anicom,
         Inc. and its wholly owned  subsidiaries.  All significant  intercompany
         accounts and transactions have been eliminated.

         Use of Estimates
         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that  affect  the  reported  amounts  of  assets  and
         liabilities,  disclosure of contingent  assets and  liabilities  at the
         date of the consolidated  financial statements and the reported amounts
         of revenues and expenses  during the reporting  period.  Actual results
         could differ from those estimates.

         Cash and Cash Equivalents
         The Company  considers all highly  liquid  investments  purchased  with
         original maturities of three months or less to be cash equivalents.

         Inventory
         Inventory, which primarily consists of finished goods, is stated at the
         lower of cost or market.  Cost is  determined  by the weighted  average
         method.

         Property and Equipment
         Property  and   equipment   are  stated  at  cost.   Depreciation   and
         amortization  are  computed  using the  straight-line  method over five
         years or the terms of the lease for leasehold  improvements,  generally
         three to seven years.  Major renewals and improvements are capitalized.
         Expenditures for maintenance and repairs are expensed as incurred. Upon
         retirement  or other  disposition  of  property,  the cost and  related
         accumulated  depreciation are removed from the accounts and any gain or
         loss is recognized.

                                      F-7

<PAGE>


1.       Nature of Business and Summary of Significant Accounting Policies,
         continued

         Goodwill
         Goodwill  arising from  business  combinations  is amortized  using the
         straight-line  method over forty years. The Company's evaluation of the
         recoverability   of  goodwill   includes   consideration  of  operating
         performance and undiscounted cash flows of the acquired business units.

         Income Taxes
         The Company applies the asset and liability  approach to accounting for
         income taxes.  Deferred tax assets and  liabilities are established for
         the expected future tax consequences of temporary  differences  between
         the financial statement and tax bases of assets and liabilities,  using
         enacted tax rates.

         Financial  Instruments  The fair value of cash and cash  equivalents is
         assumed to  approximate  the carrying  value of these assets due to the
         short duration of these assets. The fair value of the Company's debt is
         estimated  to be the  carrying  value of these  liabilities  based upon
         borrowing rates currently  available to the Company for borrowings with
         similar terms. The fair value of the Company's Series B Preferred Stock
         can not be readily determinable as such stock is not traded in the open
         market and a market price is not readily available.

         Revenue Recognition
         Sales and the related cost of sales are recognized upon the shipment of
         products.

         Earnings (Loss) Per Common Share
         Basic earnings  (loss) per common share is computed based on net income
         (loss) available to common shareholders divided by the weighted average
         common shares outstanding.  Diluted earnings (loss) per common share is
         computed based on net income (loss) divided by weighted  average common
         shares and  potentially  dilutive  securities such as stock options and
         warrants  and  further   assumes  the   conversion   of  the  Company's
         convertible  redeemable  preferred stock to common stock as of the date
         of issuance.

         Segment Information
         Statement of Financial  Accounting Standards No. 131, "Disclosure About
         Segments of an  Enterprise  and  Related  Information,"  requires  that
         management  identify  operating  segments  based on the way  management
         disaggregates  the entity for making operating  decisions.  The Company
         currently operates in a single business and geographic segment.

         Stock-Based Compensation
         The Company  applies the  provisions  of  Accounting  Principles  Board
         Opinion No. 25 "Accounting for Stock Issued to Employees" in accounting
         for its stock-based  employee  compensation  arrangements and discloses
         pro forma net income (loss) and earnings  (loss) per share  information
         in its footnotes as if the fair value method  suggested in Statement of
         Financial  Accounting  Standards No. 123,  "Accounting  for Stock-Based
         Compensation" ("SFAS No. 123") had been applied.


                                      F-8
<PAGE>


1.       Nature of Business and Summary of Significant Accounting Policies,
         continued

         Foreign Currency Translation
         All assets and  liabilities  are  translated at current and  historical
         rates of exchange and operating transactions are translated at weighted
         average  rates during the year.  The  translation  gains and losses are
         accumulated as a component of stockholders' equity.

         Reclassifications
         Certain reclassifications have been made to the 1997 and 1998 financial
         statements to conform to the 1999 presentation.

2.       Property and Equipment

         At December 31,  property  and  equipment  consisted  of the  following
components:

Category (useful life)                                1999               1998
----------------------------------          -----------------  -----------------

Machinery, equipment and vehicles (5 yrs)    $          5,088   $         5,142
Office equipment (5 yrs)                                2,501             1,511
Computer equipment and software (5-7 yrs)               7,532             4,975
Leasehold improvements (life of lease)                  2,654             1,938
                                             -----------------  ----------------
Total cost                                             17,775            13,566
Less:  Accumulated depreciation                        (6,770)           (3,603)
                                             -----------------  ----------------

Property and equipment, net                  $         11,005   $         9,963
                                             =================  ================



3.       Long-Term Debt

         In December  1999,  the Company  entered  into a  Multicurrency  Credit
         Agreement (the  "Facility")  with its then current bank group and other
         lenders.  This  agreement  resulted  in a  25%  increase  in  available
         borrowings to $150,000 from the $120,000  available  under its previous
         revolving credit facility.  The Facility  provides for borrowings of up
         to $15,000 in currencies other than U.S. dollars.  It also provides for
         various interest rate options, determined from time to time, based upon
         certain of the Company's  financial  ratios,  as defined.  The Facility
         expires  in July 2001 with  extensions  available  at the option of the
         Company  and the  lenders  through  July 2003.  The  Facility  contains
         certain financial  covenants,  including minimum tangible net worth and
         EBITDA,  interest  coverage,  leverage and debt to earnings ratios. The
         Facility is collateralized by the Company's  receivables and inventory,
         with eligible advance rates of 85% and 60%, respectively.

         Prior to entering into the Facility, the Company had a revolving credit
         facility (the "Prior  Facility).  In November 1998, the Company entered
         into an agreement  with its lenders to increase the Prior Facility from
         $100,000 to $120,000.  The Prior Facility provided for borrowings of up
         to $15,000 in  currencies  other than U.S.  dollars.  It  provided  for
         various interest rate options, determined from time to time, based upon
         the Company's interest coverage and leverage ratios, as defined.  Prior
         to the closing of the Facility,  Anicom obtained a waiver of compliance
         under the Prior Facility dated September 30, 1999.

                                      F-9
<PAGE>

         In connection  with the  acquisition of Texcan Cables  Limited,  Texcan
         Cables,  Inc.  and  Texcan  Cables  International,  Inc.  (collectively
         referred to as "Texcan") described in Note 13, the Company entered into
         a new $35,000  term  facility in  September  1998 with a Canadian  bank
         ("Canadian  Bank Loan").  In November  1998, the Canadian Bank Loan was
         acquired with proceeds from the Facility.

         At December 31, long-term debt consisted of the following:
<TABLE>
<CAPTION>

                                                                                           1999          1998
                                                                                        ------------  ------------

<S>                                                                                     <C>          <C>
         Amounts due under the Facility                                                 $   125,100  $      85,000
         Noncollateralized loans payable to former shareholders of
           acquired companies, each due in equal installments
           6.55% note due March 12, 1999                                                         --          1,000
           Prime rate note (8.50% at December 31, 1999), payable in
             monthly installments through July 1, 2002                                          275            382
           6.00% notes due May 30, 1997 to 1999                                                  --             84
         Other                                                                                  179            277
                                                                                         -----------    -----------
                                                                                            125,554         86,743
         Less current portion                                                                  (195)       (1,227)
                                                                                        ------------ --------------

                                                                                        $   125,359  $      85,516
                                                                                        ============ ==============
</TABLE>


         The following is a schedule of the aggregate  maturities in each of the
         three years ending December 31, 2000, and thereafter:

                                                             Amount
         2000                                            $           195
         2001                                                    125,207
         2002                                                        152
                                                         ----------------

                    Total                                $       125,554
                                                         ================

4.       Acquisition liabilities

         In  connection  with  each of the  Company's  acquisitions,  management
         evaluates  acquired  operations and develops a plan to integrate  these
         operations  into Anicom's  existing  structure.  In connection with the
         integrations,  the Company may complete limited workforce reductions or
         exit  acquired  lease  agreements.  As a part of the  determination  of
         purchase price for acquired companies,  liabilities are established for
         these costs as well as external deal costs and other costs  specific to
         each acquisition.  In each case, management establishes a plan specific
         to the acquisition as soon as practicable after closing.  Executions of
         the plans are typically completed within a year after closing.  Payment
         of liabilities  established may take place over several years depending
         upon the agreed upon settlement.

                                      F-10
<PAGE>

         Below is a summary of acquisition cost activity:
<TABLE>
<CAPTION>

                                              External      Severance      Lease Exit      Tax         Total
                                             Consultants                     Costs     Liabilities
                                                                                        and Other
                                               -----------    -----------   ----------    ----------  -----------
<S>                      <C>                        <C>           <C>          <C>           <C>          <C>
        Balance, January 1, 1998                    $ 478         $3,350       $2,195        $1,596       $7,619
        Establish liabilities                       3,350             33        1,322         2,807        7,512
        Expenditures/adjustments                   (2,651)        (2,996)        (225)         (727)      (6,599)
                                               -----------    -----------   ----------    ----------    ----------
        Balance, December 31, 1998                  1,177            387        3,292         3,676        8,532
        Expenditures/adjustments                   (1,146)          (387)        (609)       (1,297)      (3,439)
                                               -----------    -----------   ----------    ----------    ----------
        Balance, December 31, 1999                  $  31           $ --      $ 2,683        $2,379       $5,093
                                               ===========    ===========   ==========    ==========    ==========
</TABLE>


5.       Convertible Preferred Stock

         In September 1998, in connection with the Texcan acquisition  discussed
         in Note 13, the Company  issued  20,000  shares of Series B Convertible
         Redeemable  Preferred  Stock,  par  value  $.01 per  share,  which  are
         convertible,  in the aggregate,  into an additional 1,404,000 shares of
         common stock (the "Series B Preferred  Stock").  The Series B Preferred
         Stock  contains a liquidation  preference of $1,000 per share and earns
         dividends at the rate of 3% of the  liquidation  preference  per annum,
         payable semi-annually. Series B Preferred Stockholders are not entitled
         to any voting rights. The Series B Preferred Stock is redeemable at the
         holder's or the  Company's  option after 3 years from the date of issue
         for the liquidation  preference value plus accrued and unpaid interest.
         Mandatory  redemption  occurs on the fifth anniversary from the date of
         issue.  Conversion of the Series B Preferred  Stock to common stock may
         occur at anytime, in whole or in part, at the option of the holder. The
         number of common shares to be issued upon  conversion  will be computed
         by  dividing  the  liquidation  preference  for each  share of Series B
         Preferred Stock by $14.25 ("Conversion Price"),  rounded to the nearest
         whole share.

         In addition, mandatory conversion may occur based on the future trading
         price of the Company's common stock as follows:

              Trading Price as a Percentage        Number of Series B Preferred
                   of Conversion Price                Shares to be Converted*

                          130%                                 6.667
                          160%                                13.333
                          190%                                20.000

         * Number of shares less shares previously converted

         Pursuant to an agreement  dated May 20,  1997,  the Company sold 27,000
         shares of $.01 par value,  Series A  Convertible  Preferred  Stock (the
         "Series A Preferred  Stock") for $27,000.  Net proceeds  after  related
         costs and expenses were approximately $26,200.

         The Series A  Preferred  Stock was  convertible  into  Common  Stock if
         certain closing market price levels for the Company's Common Stock were
         achieved.  As of  September  23,  1997,  all of the  shares of Series A
         Preferred Stock were converted to shares of Common Stock.

                                      F-11
<PAGE>



6.       Common Stock

         Following approval by the Company's stockholders at its annual meetings
         the  number  of  authorized  shares of common  stock was  increased  to
         60,000,000 in June 1997 and to 100,000,000 in June 1998.

         In  December  1997,  the  Company  completed  a  private  placement  of
         2,900,000 shares of its common stock. Net proceeds to the Company after
         related costs and expenses were approximately $36,100.

7.       Treasury Stock

         During 1999,  the  Company's  Board of  Directors,  believing  that the
         Company's common stock was  undervalued at the time, authorized a share
         repurchase  program that will allow the Company to repurchase up to 10%
         of its  outstanding  Common Stock valued within a specified price range
         over a 24-month period.

         During 1999, the Company  reacquired  shares of its Common Stock in the
         open market. The Treasury Stock is carried at cost.

8.       Stockholder Rights Plan

         During the first  quarter of 1999,  the Company  adopted a  stockholder
         rights plan (the "Rights Plan"). Under the Rights Plan, preferred stock
         purchase rights  ("Rights") were  distributed to stockholders of record
         as of April 5,  1999,  at the rate of one  Right  for each  outstanding
         share of the Company's common stock. Generally,  the Rights will not be
         triggered  unless  a  person  or  group  acquires  15% or  more  of the
         Company's common stock or announces a tender offer upon consummation of
         which such person or group  would own 15% or more of the common  stock.
         Each Right, when exercisable, entitles the holder to purchase shares of
         the Company's  common stock at 50% of the then current market price. If
         the Company is acquired through a merger or other business  combination
         transaction, or 50% or more of the Company's assets or earning power is
         sold,  each Right will  entitle  the holder to purchase  the  surviving
         company's  common stock at 50% of the then current  market  price.  The
         Rights will expire in ten years unless earlier  redeemed or terminated.
         The  Company  generally  may amend the  Rights or redeem  the Rights at
         $0.01  per  Right at any time  prior to the time a person  or group has
         acquired 15% of the Company's common stock.

         In October 1999,  Anicom's  Board of Directors  approved a request made
         during  September  1999 by The  State  of  Wisconsin  Investment  Board
         permitting it to acquire up to 20% of Anicom's outstanding Common Stock
         without triggering the Company's Rights Plan.

9.       Restructuring, Acquisition Integration and Other One-Time Charges

         During the third quarter of 1999, the Company's management and Board of
         Directors  approved a companywide  restructuring  plan,  which included
         accelerating the implementation of its distribution centers. As part of
         the  restructuring,  the  Company  consolidated  its 75 North  American
         locations


                                      F-12
<PAGE>

         into 61  facilities,  downsized  12 other  locations  and  reduced  its
         workforce  of  approximately  1,200 by about 10  percent  (cumulatively
         referred to as the "Plan").  In connection  with the Plan,  the Company
         recognized a restructuring charge of approximately $6,100.

         Reductions in workforce under the Plan principally  impacted  warehouse
         and administrative employees.  Notice of workforce reductions was given
         on September 30, 1999.

         The Company incurred costs as a part of the  implementation of the Plan
         in addition to those costs categorized as  restructuring.  In the third
         quarter of 1999,  management  decided to eliminate  the number of lower
         margin product offerings as well as the number of non-strategic vendors
         and reduce the number of part numbers  maintained  in  inventory.  As a
         result,  the  Company  incurred  during  the  third  quarter  of  1999,
         approximately  $4,800 in one-time charges increasing cost of goods sold
         for actual and  anticipated  inventory  write-downs  and  reductions in
         vendor rebates. Other one-time charges during the third quarter of 1999
         of $1,000 are reflected in the general and administrative category.

         The Company incurred a one-time  acquisition  integration charge during
         the third quarter of 1998 of approximately  $5,156 in connection with a
         plan to integrate its recent acquisitions (the "Acquisition Integration
         Plan").  This  charge  related  to  the  Acquisition  Integration  Plan
         includes  $2,800  for  settlement  of  real  estate  obligations,   the
         write-off of leasehold  improvements,  and facility  relocation  costs;
         $1,350 one-time  acquisition  incentive bonuses;  and $1,006 related to
         severance and other costs.

         In  connection  with exiting or  downsizing  locations,  the Company is
         actively seeking to sublease or negotiate buyouts where practicable. In
         some  instances the length of the remaining  term,  unfavorable  market
         conditions  or  location  or the  Company's  inability  to  negotiate a
         sublease or buyout  under  mutually  agreeable  terms may result in the
         facility  remaining idle until the  expiration of the lease.  Remaining
         lease terms range from  January 2000 to January  2007.  The majority of
         all site closings, downsizing or moves were completed by December 1999.
         The full implementation of this portion of the Plan and the Acquisition
         Integration Plan is estimated to be completed by June 2000.


                                      F-13
<PAGE>


         A summary of the restructuring  costs recognized under the Plan and the
         Acquisition  Integration Plan which are included in accrued expenses is
         provided below:

<TABLE>
<CAPTION>

                                  Lease &         Severance                       Other
                                 Leasehold                       Acquisition      Asset
                                Improvement                       Incentive       Valuation
                                Abandonment                        Bonuses        Charges        Other       Total
                               --------------     -----------    ------------     ---------     --------    --------
<S>                                   <C>               <C>           <C>                         <C>        <C>
        Acquisition
        Integration
        Plan Charge                   $2,800            $271          $1,350                      $ 735      $5,156
        Expenditures                  (1,068)           (115)           (740)                      (735)     (2,658)
                               --------------     -----------    ------------                   --------    --------
        Balance
        December 31, 1998              1,732             156             610                         --       2,498
        The Plan Charge                3,270           1,872              --          $625          300       6,067
        Expenditures                      (9)           (796)           (610)         (625)        (300)     (2,340)
                               --------------     -----------    ------------     ---------     --------    --------
        Balance
        December 31, 1999             $4,993          $1,232             $--           $--          $--      $6,225
                               ==============     ===========    ============     =========     ========    ========
</TABLE>



10.      Reengineering Costs

         In the fourth quarter of 1997, the Company adopted a reengineering plan
         (the  "Reengineering  Plan")  designed  to  provide  additional  system
         capacity to continue the Company's integrated growth strategy,  further
         improve operating  efficiencies within the organization and to make the
         Company's   information   technology   systems  Year  2000   compliant.
         Non-recurring  charges related to the Reengineering  Plan include costs
         related to developing and implementing a business process reengineering
         plan, implementing a new information technology system, writing off all
         capitalized  costs  associated  with  the  Company's  previous  system,
         terminating   contracts  associated  with  certain  1996  acquisitions,
         consolidating  redundant facilities and internal resource costs related
         to the  implementation  of the new  information  technology  system and
         business process reengineering.

         The following table summarizes the costs of the Reengineering Plan:

Implementation of information technology system                 $     1,536
Internal resource costs incurred during reengineering
  development and implementation                                      1,159
Contract terminations and other location consolidation costs          2,889
                                                                -------------
                                                                $     5,584
                                                                =============



         As  of  December  31,  1999,   no  accrued   amounts   related  to  the
Reengineering Plan remain.

                                      F-14
<PAGE>



11.      Income Taxes

         The  components of income  (loss)  before the  provision  (benefit) for
income taxes are as follows:

                                   1999              1998              1997
                               -------------     -------------     -------------
       U.S. operations             $(18,777  )   $  12,603         $    950
       Foreign operations             2,882              539           --

                               -------------     -------------     -------------
                                   $(15,895  )   $  13,142         $    950
                               =============     =============     =============

         The provision  (benefit) for income taxes for the years ended  December
         31, 1999, 1998 and 1997 is comprised of the following:

                                   1999            1998             1997
                               ---------------  --------------  -------------
         Current:
            Federal            $      (3,832)   $       3,941   $         35
            State                       (762)             794             --
            Foreign                       134              66             --
                               ---------------  --------------  -------------
                                      (4,460)           4,801             35
                               ---------------  --------------  -------------
         Deferred:
            Federal                   (1,656)             601            475
            State                       (285)             113            140
            Foreign                        86              85             --
                               ---------------  --------------  -------------
                                      (1,855)             799            615
                               ---------------  --------------  -------------
                               $      (6,315)   $       5,600   $        650
                               ===============  ==============  =============


         The  following is a  reconciliation  of the  provision for income taxes
         computed  at the federal  statutory  rate to the  provision  for income
         taxes reported for the years ended December 31, 1999, 1998 and 1997:

                                           1999         1998          1997
                                        ------------ ------------  ------------
         Computed income taxes at
           federal statutory rate       $   (5,563)  $     4,600   $       323
         State income taxes, net of
           federal benefit                    (681)          590            91
         Non-deductible amortization            345          312           120
         Other nondeductible expenses           292          228           128
         Nontaxable investment income            --           --          (18)
         Foreign taxes                        (788)         (58)            --
         Other                                   80         (72)             6
                                        ------------ ------------  ------------
                                        $   (6,315)  $     5,600   $       650
                                        ============ ============  ============


                                      F-15
<PAGE>




11.      Income Taxes, continued

         At  December  31,  1999  and  1998,  deferred  income  tax  assets  and
         liabilities consisted of the following components:
<TABLE>
<CAPTION>

                                                              1999              1998
                                                         ----------------  ----------------
<S>                                                      <C>               <C>
Current deferred income tax asset (liability):
  Accounts receivable                                    $           709   $           237
  Inventory                                                        1,156             1,772
  Acquisition liabilities, current                                 1,132             (377)
  Reengineering costs                                              1,904               317
  Other                                                            (231)             1,227
                                                         ----------------  ----------------
                                                                   4,670             3,176
                                                         ----------------  ----------------
Long-term deferred income tax asset (liability):
  Property and equipment                                           (230)             (106)
  Intangibles                                                    (2,545)           (1,891)
  Gain on sale of product lines                                    (216)             (216)
   Net Operating Loss                                              3,570
  Acquisition liabilities, noncurrent                                 --             1,991
                                                         ----------------  ----------------
                                                                     579             (222)
                                                         ----------------  ----------------
       Net deferred income tax asset                     $         5,249   $         2,954
                                                         ================  ================
</TABLE>


         At December  31,  1999,  the Company  has  approximately  $3,100 in net
         operating  loss carry  forwards.  The federal net operating  loss carry
         forwards of  approximately  $2,900  expires in the year 2019. The state
         net  operating  loss carry  forwards of  approximately  $500 expires in
         years from 2002 through 2019.


12.      Stock Options

         In January 1995, the Company adopted the 1995 Stock Incentive Plan (the
         "1995  Plan") and the  Directors'  Option Plan (the  "Directors  Plan")
         which authorizes the granting of options to officers, key employees and
         directors to purchase  unissued  common stock of the Company subject to


                                      F-16
<PAGE>

         certain  conditions,  such as continued service.  The 1995 Plan and the
         Directors Plan initially authorized the granting of up to 1,200,000 and
         100,000 options to purchase common stock, respectively.

         In February 1996, the Company adopted the 1996 Employee Stock Incentive
         Plan (the "1996 Plan"),  which authorized the granting of an additional
         1,200,000 options to purchase common stock of the Company. Stockholders
         approved the adoption of the 1996 Plan in May, 1996.

         Subsequent  to the  adoption of the 1996 Plan and the  Directors  Plan,
         amendments  were  approved  to  increase  the number of shares of stock
         available  for grant under the plans.  Currently,  the number of shares
         reserved for issuance  under the 1996 Plan and the  Directors  Plan are
         3,800,000 and 500,000, respectively.

         The option price of options  granted  under these plans is equal to the
         fair market value on the date of grant.  All  outstanding  options vest
         ratably over periods ranging from three to five years.



                                      F-17
<PAGE>




12.      Stock Options, continued

         A summary of  information  related to these options for the years ended
         December 31, 1999, 1998 and 1997 follows (shares in thousands):

<TABLE>
<CAPTION>

                                                    1999                     1998                     1997
                                          -------------------------- ---------------------- -------------------------
                                            Shares      Weighted      Shares    Weighted     Shares      Weighted
                                                         Average                Average                   Average
                                                        Exercise                Exercise                 Exercise
                                                       Price/Share            Price/Share               Price/Share
                                          -------------------------- ---------------------- ---------- --------------

<S>                                             <C>           <C>       <C>          <C>        <C>            <C>
         Outstanding, beginning of year         3,921         $9.24     2,186        $7.19      1,668          $7.10
           Granted                              1,338          4.80     1,756         9.97        545          13.73
           Exercised/Canceled                     (96)         5.34       (21)        6.11        (27)          7.04
                                          -------------------------- ---------------------- ---------- --------------
         Outstanding, end of year               5,163         $8.13     3,921        $9.24      2,186          $7.19
                                          ========================== ====================== ========== ==============

         Available for grant, end of year         321                     329                   1,080
                                          ============               =========              ==========

         Price range at end of year          $3.00 to                $3.00 to                $3.00 to
                                               $16.87                  $16.87                  $16.87
                                          ============               =========              ==========

         Price range for exercised           $3.00 to                $3.00 to                $3.00 to
                                                $8.50                   $9.00                   $8.75
                                          ------------               ---------              ----------

         Weighted-average fair value of
           options granted during the year      $ 916                  $3,955                  $2,239
                                          ============               =========              ==========
</TABLE>




                                                  Weighted
                                                  Average     Weighted Average
                                                 Remaining     Exercise Price
Price per Share    Number         Number        Contractual       per Share
                 Outstanding    Exercisable         Life
--------------- -----------------------------  -------------  ------------------
$3.00 to $ 4.50          1,524           272     8.9 years               $ 4.28
$4.51 to $ 7.00          1,121           577     8.0 years                 5.86
$7.01 to $ 9.00            948           613     6.7 years                 8.67
$9.01 to $17.00          1,570           680     8.2 years                12.70
                -----------------------------                 ------------------
                         5,163         2,142                             $ 7.99
                =============================                 ==================





                                      F-18
<PAGE>




12.      Stock Options, continued

         SFAS No. 123  requires the Company to disclose pro forma net income and
         earnings  per share  determined  as if the  Company had  accounted  for
         stock-based  compensation  awards granted after December 31, 1994 under
         the fair value method described in that statement. For purposes of this
         disclosure, the fair value of options under SFAS No. 123 were estimated
         at each grant date using a Black-Scholes option pricing model, the most
         commonly used model, and the following assumptions:  risk-free interest
         rates from 4.2% to 7.2%, a dividend yield of zero, a volatility  factor
         of the expected  market price of the  Company's  common stock of 26% to
         28%, and an expected option life of three to six years.

         The  Black-Scholes  option  valuation  model was  developed  for use in
         estimating  the fair  value of  traded  options  that  have no  vesting
         restrictions and are fully  transferable.  The Company's employee stock
         options  have  characteristics  significantly  different  from those of
         traded options,  including  vesting  requirements  and  restrictions on
         transfer.  Because of these differences and the impact of the Company's
         limited history,  lack of comparable  public  companies,  the Company's
         rapid growth and the  significant  volatility  in stock price since its
         initial public  offering,  management  believes that the  Black-Scholes
         model  may not  provide a  reliable  measure  of the fair  value of the
         Company's employee stock options.

         The  Company's  results as reported and its pro forma results using the
         valuation model discussed above are as follows:
<TABLE>
<CAPTION>

                                                                    1999             1998             1997
                                                               ---------------  ---------------  ---------------

<S>                                                                <C>               <C>               <C>
         Net income (loss)                                         $ (10,180)        $  7,542          $   300
                                                                ==============  ==============   ==============
         Net income (loss), pro forma                              $ (11,096)        $  5,631       $  (1,939)
                                                                ==============  ==============   ==============

         Earnings per common share, as reported:
           Basic                                                    $  (0.41)        $   0.31           $   --
                                                                ==============  ==============   ==============
           Diluted                                                  $  (0.41)        $   0.30           $   --
                                                                ==============  ==============   ==============
         Earnings (loss) per common share, pro forma:
           Basic                                                    $  (0.44)        $   0.23        $  (0.11)
                                                                ==============  ==============   ==============
           Diluted                                                  $  (0.44)        $   0.23        $  (0.11)
                                                                ==============  ==============   ==============
</TABLE>


                                      F-19
<PAGE>


13.      Acquisitions

         In  September  1998,  the Company  purchased  substantially  all of the
         assets and assumed certain liabilities of Texcan Cables Limited, Texcan
         Cables,  Inc.  and  Texcan  Cables  International,  Inc.  (collectively
         referred to as "Texcan"). Headquartered in Vancouver, British Columbia,
         Texcan is a specialist in the distribution of wire, cable, fiber optics
         and connectivity  products.  Texcan has 13 locations  throughout Canada
         and seven locations in the United States.  The aggregate purchase price
         was  approximately  $56,900  and  consisted  of 1,404  shares of common
         stock; 20 shares of Series B Preferred Stock; and approximately $27,000
         in cash.  In  addition,  the Company  repaid  approximately  $12,000 of
         Texcan bank indebtedness upon closing.

         In June 1998, the Company acquired  substantially all of the assets and
         assumed   certain   liabilities  of  Superior  Cable  &  Supply,   Inc.
         ("Superior").  Superior is a specialty  distributor of multimedia  wire
         and cable products and has locations in Oklahoma,  Arkansas,  Louisiana
         and Texas.  The purchase  price  consisted of $3,044 in cash and common
         stock. In addition,  the Company assumed and repaid  approximately $686
         of bank indebtedness.

         In March 1998, the Company acquired substantially all of the assets and
         assumed certain  liabilities of Yankee Electronics Inc.  ("Yankee") and
         Optical Fiber Components Inc.  ("OFCI").  Yankee and OFCI are specialty
         distributors  of multimedia wire and cable located in New Hampshire and
         Virginia,  respectively.  The  purchase  price for  these  acquisitions
         consisted of $3,800 in cash and common stock. In addition,  the Company
         assumed  approximately  $255 of  Yankee  and OFCI debt that was paid at
         closing.

         In December 1997,  the Company  acquired TW  Communication  Corporation
         ("TW").  TW  is  a  distributor  of  wire,  cable,   fiber  optics  and
         installation supplies predominantly to the telecommunications, data and
         cable  television  industries in the United States.  The purchase price
         for this acquisition  consisted of $16,000 in cash and common stock. In
         connection with the acquisition, the Company paid in full approximately
         $13,600 of TW bank indebtedness.

         In October 1997, the Company  acquired  certain assets of Zack-DataCom,
         the voice and data division of Zack  Electronics,  Inc. ("Zack") of San
         Jose,  California,  a leader in the sale and distribution of multimedia
         low voltage products. The purchase price was $4,700 payable in cash and
         common stock.

         In July 1997, the Company acquired Energy Electric Cable, a division of
         Connectivity Products, Inc. ("Energy"). Energy is a national specialist
         in the sale and  distribution  of multimedia  wiring  products based in
         Auburn Hills, Michigan. The purchase price consisted of $12,000 in cash
         and common stock and the pay down of $17,000 of Connectivity  Products,
         Inc.


                                      F-20
<PAGE>

13.      Acquisitions, continued

         ("Connectivity")  bank debt by the Company.  In  addition,  the Company
         entered into a supply agreement with Connectivity.

         In March 1997, the Company  purchased all of the issued and outstanding
         common  stock of  Security  Supply,  Inc.  ("Security  Supply")  of New
         Orleans, Louisiana. Security Supply is a distributor of alarm, security
         and life safety  products in  Louisiana  and  surrounding  states.  The
         purchase  price was  approximately  $2,000  payable  in cash and common
         stock.

         In February 1997, the Company acquired  substantially all of the assets
         and assumed  certain  liabilities of Carolina  Cable & Connector,  Inc.
         ("Carolina  Cable") of Raleigh,  North  Carolina.  Carolina  Cable is a
         specialist in the sale and distribution of wire and cable, fiber optics
         and computer  network and  connectivity  products.  Carolina  Cable has
         seven  locations in the Carolinas  and  Tennessee.  The purchase  price
         consisted of $3,500 in cash and common stock. In addition,  the Company
         assumed approximately $3,500 of Carolina Cable indebtedness,  which was
         paid in full at closing.

         All  acquisitions  have  been  recorded  under the  purchase  method of
         accounting.  Accordingly,  the results of  operations  of the  acquired
         businesses  are  included  in the  Company's  consolidated  results  of
         operations  from  the  date  of  acquisition.  The  purchase  price  is
         allocated  to assets  acquired  and  liabilities  assumed  based on the
         estimated fair market value on the date of the acquisition.

14.      Earnings Per Share

         The  following  table sets forth the  computation  of basic and diluted
         earnings per share for each of the years ended December 31, 1999,  1998
         and 1997:

<TABLE>
<CAPTION>

                                                                           1999          1998           1997
                                                                      -------------  ------------  -------------
<S>                                                                       <C>             <C>             <C>
          Numerator:
             Net income (loss)                                            $  (9,820)      $ 7,542         $  300
             Less:  dividend on preferred stock                                (600)         (168)          (296)
                                                                        ------------   -----------   ------------
             Net income (loss) available to common stockholders          $  (10,420)      $ 7,374           $  4
                                                                        ============   ===========   ============

          Denominator:
             Denominator  for  basic  earnings  per  share  -  weighted
             average common shares outstanding                               25,113        23,918         17,476
             Plus:
                Effect of assumed conversion of
             convertible  preferred stock                                        --           388             --
                Effect of employee stock options and warrants                    --           510             --
                                                                        ------------   -----------   ------------
                                                                             25,113        24,816         17,476
                                                                        ============   ===========   ============
          Earnings per share:
             Basic                                                         $ (0.41)      $   0.31          $ --

                                                                        ============   ===========   ============
             Diluted                                                       $ (0.41)      $   0.30          $ --
                                                                        ============   ===========   ============

</TABLE>


                                      F-21
<PAGE>

15.      Commitments and Contingencies

         Employment Agreements
         Subsequent  to the  end of the  year,  the  Company  entered  into  new
         employment  agreements with certain officers.  In the event of a change
         in control, as defined in these agreements,  within five (5) years from
         the date of the  agreements,  the  Company is  required  to pay to each
         executive a  transaction  bonus.  The  transaction  bonuses under these
         agreements would total $3,750.  These transaction  bonuses would become
         due whether or not the  executives  are  employed by the Company at the
         time  of the  change  in  control.  In  addition,  if an  executive  is
         terminated  without cause or quits for good reason, the Company will be
         obligated to pay the executives two-thirds of the remaining base salary
         and bonus due under the agreements and provide certain benefits to such
         executives  in exchange  for each  executive's  covenant not to compete
         against the  Company  for as long as five years.  The total base salary
         due to these executives in 2000 is $1,250.

         Operating Leases

         The  Company  leases  certain   warehouse  and  office  facilities  and
         equipment under operating  leases.  Rental expense under the leases was
         approximately  $6,880,  $5,521, and $3,216 for the years ended December
         31, 1999, 1998 and 1997, respectively. Approximate minimum annual lease
         payments  required on noncancelable  leases having initial or remaining
         lease  terms in  excess  of one  year as of  December  31,  1999 are as
         follows:

         Year                   Amount
-------------------          ------------

2000                              $6,681
2001                               5,941
2002                               4,905
2003                               3,512
2004                               1,886
Thereafter                         5,655
                             ------------

Total                            $28,580
                            ===============


         The  Company is also  obligated  to pay certain  taxes and  assessments
         relating to these  leases.  Certain  leases  contain  renewal  options.
         Certain  amounts  for   noncancelable   leases  that  the  Company  has
         obligations  for are not occupied and are being charged against accrued
         abandonment reserves discussed in Note 9.

         Retirement Plan

         The  Company  maintains  a defined  contribution  retirement  plan (the
         "Anicom Plan").  Employer  contributions  under the plan are limited to
         25% of employee contributions up to 4% of compensation.

                                      F-22
<PAGE>

         With the  acquisition  of TW, the  Company  has an  additional  defined
         contribution  plan  (the  "TW  Plan").  The  TW  Plan  allows  employee
         contributions  of up to  15% of  compensation.  The TW  Plan  does  not
         require employer  contribution.  During 1998 the TW Plan was frozen and
         all  contributions  were ceased.  Participants in the TW Plan have been
         given the opportunity to participate in the Anicom Plan. The Company is
         in the process of terminating the TW Plan.

         Total Company contributions to the plans were approximately $225, $194,
         and $113 in 1999, 1998 and 1997, respectively.

         Litigation

         During the second quarter of 1999, the Company  reached an agreement to
         settle a civil lawsuit  stemming from the March 1997  disposition  of a
         non-strategic  cable  assembly  product line.  In  connection  with the
         settlement,  the Company  recognized a charge of approximately  $1,400.

         The Company is subject to legal  proceedings that arise in the ordinary
         course of  business.  In the opinion of  management,  the amount of any
         liability with respect to these actions will not materially  affect the
         financial position or results of operations of the Company.

16.      Supplemental Cash Flow Information

         The  following is a summary of the noncash  investing and financing for
         the years ended December 31, 1999, 1998 and 1997:
<TABLE>
<CAPTION>

                                                                       1999            1998             1997
                                                                  --------------- ---------------  ---------------
<S>                                                               <C>             <C>              <C>
         Acquisitions:
           Fair value of assets acquired                          $        1,732  $       97,627   $      108,591
           Acquisition liabilities and costs                              (1,732)        (7,802)          (8,843)
           Bank debt assumed                                                            (12,686)         (16,818)
           Other liabilities assumed                                                    (12,545)         (27,164)
           Convertible preferred stock issued                                           (20,000)               --
           Common stock issued                                                          (14,581)         (21,627)
                                                                   --------------   -------------   --------------
           Cash paid                                                          --          30,013           34,139
           Less:  cash acquired                                               --           (105)            (338)
                                                                   --------------   -------------   --------------
                                                                  $           --  $       29,908   $       33,801
                                                                   ==============

         Dispositions:
           Value of assets disposed of, net of transaction costs  $          258  $        5,627   $          117
                                                                  =============== ===============  ===============

           Short term receivable due                                              $        2,927
                                                                                  ===============
           Notes receivable accepted                                                               $          400
                                                                                                   ===============
         Conversion of Preferred Stock:
           Conversion to Common Stock                                                                      27,000
                                                                                                   ===============
           Payment of dividends in Common Stock                                                               297
                                                                                                   ===============
</TABLE>



                                      F-23
<PAGE>




17.      Related Party Transaction

         One of the  Company's  directors is the Chief  Executive  Officer of an
         insurance brokerage company that is used by the Company.

18.      Quarterly Operating Results (unaudited)
         Anicom's unaudited quarterly operating results for 1999 and 1998 are as
follows:

<TABLE>
<CAPTION>

                                                               Three Months Ended
                     -------------------------------------------------------------------------------------------------------
                     12/31/99       9/30/99       6/30/99      3/31/99     12/31/98     9/30/98      6/30/98       3/31/98
                     ----------    ----------     ---------    --------    ---------    ---------    ---------    ----------
<S>                   <C>           <C>           <C>          <C>         <C>          <C>          <C>           <C>
       Net sales      $134,213      $133,522      $131,744     $137,242    $130,859     $124,071     $113,252      $102,099
                     ==========    ==========     =========    ========    =========    =========    =========    ==========
       Gross profit   $ 28,020       $20,444       $29,430     $30,480       29,894       26,906       25,187        22,680
                     ==========    ==========     =========    ========    =========    =========    =========    ==========
       Operating
       earnings
       (loss)           $  191     $(18,684)        $2,291      $6,627        5,253          830        5,150         4,652
                     ==========    ==========     =========    ========    =========    =========    =========    ==========
       Net income
       (loss)         $ (1,301)    $(12,422)          $780      $3,123      $ 2,150       $ (88)       $2,813       $ 2,667
                     ==========    ==========     =========    ========    =========    =========    =========    ==========
       Earnings
       (loss) per
       share:
          Basic       $  (0.05)      $(0.50)         $0.03       $0.12        $0.08         $ --        $0.12         $0.12
                     ==========    ==========     =========    ========    =========    =========    =========    ==========
          Diluted     $  (0.05)      $(0.50)         $0.03       $0.12        $0.08         $ --        $0.12         $0.11
                     ==========    ==========     =========    ========    =========    =========    =========    ==========
</TABLE>


                                      F-24
<PAGE>


                                  Anicom, Inc.
                 Schedule II - Valuation and Qualifying Accounts
              For the years ended December 31, 1999, 1998 and 1997
                                 (in thousands)

                                             1999          1998         1997
                                          -----------  ------------  -----------
  Allowance for Doubtful Accounts
  Balance, beginning of year                  $4,140      $ 2,442        $  980
  Additions                                    3,698        2,406         2,183
  Write-offs, net of recoveries               (5,135)        (708)         (721)
                                           ----------   ----------   -----------
  Balance, end of year                        $2,703       $4,140       $ 2,442
                                           ==========   ==========   ===========

Inventory Valuation Allowance
  Balance, beginning of year                  $2,437      $ 2,276        $  300
  Additions                                    7,504        2,134         2,694
  Write-offs                                  (6,933)      (1,973)         (718)
                                           ----------   ----------   -----------
  Balance end of year                         $3,008       $2,437       $ 2,276
                                           ==========   ==========   ===========



                                      F-II
<PAGE>








                                   SIGNATURES
         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized, on the 30th day of March, 2000.

                                            ANICOM, INC.

                                            By:     /s/ SCOTT C. ANIXTER
                                                    ----------------------------

                                                    Scott C. Anixter
                                                    Chairman of the Board

         This report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

      Signature                Title                           Date
---------------------------    ------------------------------  -----------------


                                Chairman of the
      /s/ SCOTT C. ANIXTER      Board and a Director            March  30, 2000
---------------------------
        Scott C. Anixter


      /s/ ALAN B. ANIXTER      Director                         March  30, 2000
---------------------------
        Alan B. Anixter


                               President, Chief Executive
                               Officer and a Director
       /s/ CARL E. PUTNAM      (Principal Executive Officer)    March  30, 2000
---------------------------
         Carl E. Putnam


                               Senior Executive Vice President
                               Chief Financial Officer
                               and a Director (Principal
                               Financial and Accounting         March  30, 2000
     /s/ DONALD C. WELCHKO     Officer)
---------------------------
       Donald C. Welchko

      /s/ WILLIAM ANIXTER      Director                         March  30, 2000
---------------------------
        William Anixter


     /s/ PETER H. HUIZENGA     Director                         March  30, 2000
---------------------------
       Peter H. Huizenga

       /s/ IRA J. KAUFMAN      Director                         March  30, 2000
---------------------------
         Ira J. Kaufman


      /s/ THOMAS J. REIMAN     Director                         March  30, 2000
---------------------------
        Thomas J. Reiman

       /s/ MICHAEL SEGAL       Director                         March  30, 2000
---------------------------
         Michael Segal


        /s/ LEE B. STERN       Director                         March  30, 2000
---------------------------
          Lee B. Stern