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, 1997

                         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)


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 16, 1998: $282,075,206.

The number of  shares  outstanding  of  the  registrant's  Common  Stock  as  of
March 16, 1998: 23,294,408

                       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 20,
1998 are incorporated by reference into Part III of this report.


<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

         General
         Anicom,  Inc.  ("Anicom" or the "Company")  specializes in the sale and
distribution of communications  related wire,  cable,  fiber optics and computer
network and connectivity products. The products offered by Anicom generally fall
into five categories:  (i) voice and data  communications and fiber optics, (ii)
sound,  security,  fire, alarm and energy management  systems,  (iii) electronic
cable,  (iv) industrial cable,  wiring and assemblies for automation,  computers
and robotics,  and (v) cable  television.  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.  From its initial public offering
in February  1995 to December 31, 1997,  the Company grew from 7 to more than 50
locations  through  internal  expansion  and  the  successful  completion  of 12
acquisitions.

         Anicom is a national leader in the sale and  distribution of multimedia
wiring products.  The Company has assembled an experienced  management team and,
in the  fourth  quarter  of 1997,  completed  a  significant  investment  in the
implementation  of an information  technology and  distribution  system which is
year 2000 compliant and, in management's opinion, capable of supporting Anicom's
integrated growth strategy.  The five person management team that formed and has
grown Anicom  collectively has more than 100 years of experience in the sale and
distribution of multimedia wiring products. The Company's Chairman of the Board,
Alan B. Anixter,  and Board member William R. Anixter,  were the  co-founders of
Anixter  Bros.,  Inc.,  ("Anixter  Bros.") an  international  specialist  in the
distribution of wire, cable and related products.  Alan B. Anixter served as the
Chairman and Chief Executive  Officer of Anixter Bros.,  until 1988.  During his
career at  Anixter  Bros.,  that  company  consummated  more  than 40  corporate
acquisitions and by 1988, had grown to over $1.0 billion in annual net sales. In
addition,  the Company's Chairman and Chief Executive Officer, Scott C. Anixter,
previously was a director of Anixter Bros. while the Company's  President,  Carl
E. Putnam, previously was a Regional Vice President of Anixter Bros. The Company
believes that the extensive industry experience of its management team and sales
personnel has enabled it to establish  and maintain  strong  relationships  with
major vendors and customers and that such experience will continue to serve as a
valuable asset in the implementation of Anicom's integrated growth strategy.

Background
         Several  of  the  industries   serviced  by  Anicom  have   experienced
significant  growth in recent  years and are  expected  to continue to grow 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.  By
focusing on distribution, management believes that it can readily respond to the
changing demands of the industries it serves and is not reliant upon the success
of a particular  product or product  category.  The products  distributed by the
Company are components utilized by contractors and end-users in the installation
or upgrading of highly technical  communications 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 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 wiring 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.


                                       1
<PAGE>

         The growing market for the distribution of communications related wire,
cable,  fiber optics,  cable  television and computer  network and  connectivity
products is highly fragmented,  with few companies  maintaining greater than $50
million in annual net sales.  Anicom's integrated growth strategy focuses on (i)
increasing  revenue  through  acquisitions  and  internal  growth into  targeted
geographical markets;  (ii) expanding product offerings,  improving market share
and  providing  superior  customer  service  and  (iii)  continuing  to  achieve
profitability in existing and acquired  operations through the implementation of
financial and operational controls.

         Voice and Data Communications and Fiber Optics
         Anicom's  customer  base  consists  of  a  wide  array  of  businesses,
including  contractors,  systems  integrators,  security/fire  alarm  companies,
regional Bell operating companies, distributors,  utilities,  telecommunications
and  sound  contractors,  cable  television  installers,  wireless  specialists,
construction companies,  universities and governmental agencies. These customers
utilize the products offered by Anicom in a multitude of existing  applications.
In addition, a large number of leading  telecommunications,  computer,  computer
software and  entertainment  companies have committed  significant  resources to
developing plans for the delivery of broadband communications services which are
expected  to  increase  the use of  protocols  including  Ethernet(R)  and  Fast
Ethernet(R)  networks, as well as asynchronous transfer mode ("ATM") technology.
New systems and technology  such as these are  anticipated to involve the use of
fiber  optic  cable,  copper  cable  or  wires  manufactured  to  specifications
different from those  currently in use. At the same time, the  proliferation  of
personal  computers  and  advances in  networking  technology  have  resulted in
increased  demand for  interconnected  local area network  ("LAN") and wide area
network ("WAN") systems that utilize the products offered by Anicom.  The growth
of these types of networks  has  resulted in a separate  purchasing  process for
electronic data  transmission  cable and components  utilized in these networks.
Anicom  coordinates  with  end-users,  systems  integrators  and  network  cable
manufacturers  in  determining  specifications  of the  cable  and  connectivity
products required for a particular network.

         Sound, Security, Fire, Alarm and Energy Management Systems
         The demand for the multimedia wiring 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.  The  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 multimedia wiring products offered by Anicom. The systems used 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.

         Cable  Television
         Industry  sources  estimate  that U.S.  cable  systems pass 97% of U.S.
television  households  and in  excess  of 68% of  those  households  are  cable
subscribers.  Cable  operators  compete  to  provide  subscribers  with  greater
programming  selections,  interactive  entertainment  and educational  services,
competitive  access  services,  and  switched  voice,  data  and  other  two-way
telephone  communication  services.  In  addition,  the  entrance  of  telephone
companies  into the cable  industry,  the  consolidation  of cable and telephone
companies, new wireless technologies and direct broadcast satellite services are
expanding the variety of products and services available in this market.


                                       2
<PAGE>

         Anicom  was able to  enhance  its  presence  in the  CATV  distribution
business  with  its  acquisition  of TW  Communications  Corporation  ("TW")  in
December 1997.  Anicom is selling to cable television  installation  contractors
and  multisystem  cable  operators many of the same  multimedia  wiring products
distributed by Anicom to other markets.  Similarly, many of the products used by
cable companies have applications in the voice,  data and security markets.  The
ability  to provide a full line of  products  to a wide  range of  customers  is
crucial to the  success of any  supplier  to the cable  television  market.  The
market is highly  competitive,  and is based on performance,  quality,  service,
technical and administrative support, and product differentiation.

         Electronic and Industrial Cable
         Anicom also 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 original equipment  manufacturers  ("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.

The Acquisition Strategy
         Anicom has  implemented  an  integrated  growth  strategy  focusing  on
increasing  revenue through (i)  acquisitions  and internal growth into targeted
geographical markets,  (ii) expanding product offerings,  improving market share
and  providing  superior  customer  service,  and (iii)  continuing  to  improve
profitability in existing and acquired  operations through the implementation of
financial and operational controls.

         Generally, Anicom seeks to acquire established,  high-quality companies
in  targeted  geographical  markets.  Anicom  also  may  pursue  companies  with
substantially  greater  revenues  than those of the  Company.  Anicom  generally
expects to retain the  management  and sales  personnel of the acquired  company
while  seeking to increase its net sales through the  availability  of a greater
selection and depth of inventory and to improve its  profitability  by achieving
economies of scale  through the use of the  Company's  integrated  inventory and
information systems.  Anicom believes that management's  industry experience and
Anicom's  inventory  and  information  systems make it an  attractive  acquirer,
particularly  for those  companies  whose  owners  desire to remain  involved in
day-to-day operations. As consideration for future acquisitions, Anicom plans to
continue to use various combinations of cash, securities and notes.

The Products and Services
         Anicom offers a wide selection of  communications  related wire, cable,
fiber optics and computer network and connectivity products supplied by over 400
manufacturers. Anicom focuses on carrying quality, name brand products that meet
or exceed industry standards. The products offered by Anicom generally fall into
five categories: (i) voice and data communications and fiber optics, (ii) sound,
security,  fire, alarm and energy  management  systems,  (iii) electronic cable,
(iv)  industrial  cable,  wiring and  assemblies for  automation,  computers and
robotics, and (v) cable  television.

         The  fastest  growing  products  for  Anicom  are  in  voice  and  data
communications and fiber optics.  Management estimates that less than 25% of the
voice and data  transmission  systems currently in existence utilize fiber optic
cable, and management believes that the replacement of existing cable with fiber
optic cable represents a significant  opportunity for the Company.  Anicom sells
single,   duplex  and   multifiber   cables  for  internal  and  external   data
communication  use in the computer network,  computer  interconnect and building
automation and safety markets.


                                       3
<PAGE>

         The Company also offers custom and standard  cables,  both shielded and
unshielded,  to  transmit  data for LAN and WAN  systems.  Anicom  offers a wide
variety  of  electronic  multiconductor  cables  for  the  computer,   security,
instrumentation and interconnection  markets, wire and cable constructions (such
as a variety of shielded and unshielded  twisted pairs),  and ancillary products
such  as  blocks,  brackets,  jacks,  patch  cords,  patch  panels,  connectors,
stackable hubs, and related hardware and cable assemblies.

         The Company carries a wide selection of wire,  cable,  fiber optics and
related  computer  network and  connectivity  products used in sound,  security,
alarm  and  energy  management  systems  and  signaling  equipment  for fire and
life-safety systems.  These products include many of the same components used in
voice  and data  communication.  Anicom  sells  these  products  to low  voltage
contractors, OEMs and commercial end-users.

         Anicom also sells and distributes  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. Anicom also sells and
distributes  wire and cable  products for  industrial  use,  including  portable
cords,  power cables,  control and  instrumentation  cables,  mining and welding
cables, armored and high voltage cables and building wire.

         Anicom offers a variety of multimedia products (such as cable televison
wire, cable, connectors, wall plates, safety products, tools, etc.) to the cable
television  market.  Many of these products also have applications in the voice,
data and  security  markets.  Anicom  currently  sells  these  products to cable
television installation contractors and multisystem operators.

         In addition to providing  multimedia  wiring products to customers on a
timely  basis,  Anicom  provides   value-added,   specialized  services  to  its
customers,  including  cutting and re-spooling  services,  technical support and
cable  assemblies,  in response to specific customer  requests.  One of Anicom's
more popular value-added features is Exacpac(R), which marks packages of wire or
cable in one foot increments beginning at the base of the package.  This feature
allows  the  end-user  to  monitor  the  remaining  length of wire or cable in a
package without having to keep track of the length of wire or cable used. Anicom
also has the ability to procure selected  specialty items not readily  available
to customers,  and, through its experienced  sales personnel,  Anicom is able to
offer its  customers  technical  assistance  and  support  in the  selection  of
appropriate products.  Each significant product category has a dedicated project
manager who is  responsible  for  obtaining  the latest  information  on product
offerings  and  distributing  the  information  throughout  the sales force.  In
addition,  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 relevant
product  managers or  salespersons  who have developed this degree of knowledge.
Management  believes that Anicom more  aggressively  seeks to capitalize on this
expertise  and  experience  than  some  of the  larger,  national  and  regional
distributors of multimedia wiring products with which it competes.

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

         As a result of the Company's  business  reengineering  plan, Anicom has
created four  territories,  each of which is managed by a General  Manager.  The
General Managers have an average of approximately fifteen years of experience in
the sale and distribution of multimedia wiring products. Each General Manager is
responsible  for the management of short-term and long-term  sales and



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<PAGE>

marketing efforts in his geographic area. In addition,  the General Managers are
supported  by a network of eight  Regional  Managers  who have an average of ten
years experience in the industry.

         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 controls and regular interaction with its customers.

         Anicom identifies  potential customers through  telemarketing  efforts,
responses  to  direct  marketing  materials,  periodic  advertisements  in trade
journals,  industry  trade shows and inquiries to its internet web site.  Anicom
also receives numerous referrals from customers and vendors. Anicom periodically
provides  product and  service  information  to its  customers  by  distributing
promotional literature and product catalogs to existing and potential customers.
Sales and  marketing  representatives  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 products to the customer.

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

Suppliers and Inventory
         Management  believes  that Anicom is not  dependent  on any  particular
supplier.  Anicom offers a large number of products manufactured by a variety of
vendors. Management believes that vendor relationships are important to Anicom's
success,   and  Anicom  focuses  sharply  on  maintaining  such   relationships.
Purchasing decisions generally are made at Anicom's  headquarters in the Chicago
area and  manufacturers  are  instructed  to ship  inventory  to the  sales  and
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.  Management  believes that Anicom could obtain  competitive
products of  comparable  quality from other  suppliers and does not believe that
the loss of any one supplier  would have a material  adverse  impact on Anicom's
results of operations or financial condition.

         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.   Management  also  can  generate   real-time
information on inventory  levels using this on-line system.  While the depth and
breadth  of  products  offered  has  increased  over the last three  years,  the
emphasis on strict  inventory  control  has allowed the Company to maintain  its
order  completion  rate and to  support  its  increasing  sales  levels  without
increases in relative  inventory  levels.  The  Company's  inventory  management
programs are led by the Vice  President of  Purchasing  who has over 15 years of
experience.  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.  Anicom has not  experienced  any
significant inventory obsolescence.

The Management Information Systems
         During the fourth quarter of 1997, Anicom completed the  implementation
of  a  new  information  technology  system.  This  custom-designed  information
technology system builds upon the strengths inherent in Anicom's previous system
while allowing for the  reengineering of certain  business  processes which were
necessary to accommodate the explosive growth that Anicom has experienced in the




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<PAGE>

last two  years.  The new  information  system,  which is year  2000  compliant,
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 all of Anicom's sales and distribution locations.

         This  system  improves  management's  ability  to respond  quickly  and
efficiently to customer  demands.  All of Anicom's  locations are networked into
the  information  technology  system and  integrated  with Anicom's  centralized
processing  system.  This  system will allow  management  to continue to execute
their  integrated  growth strategy by providing a platform capable of managing a
company  substantially  larger than Anicom's  current size. This new system will
allow Anicom to continue to quickly integrate the operations of its acquisitions
and maximize  productivity  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.

         The Company does not anticipate incurring any material additional costs
with respect to the initial implementation of its information technology system,
which is  currently  year 2000  compliant.  The  Company's  payroll  outsourcing
service has confirmed that the systems used to process the Company's payroll are
year 2000  compliant.  The Company is in the process of determining  whether its
customers and suppliers are year 2000 compliant.

Customers
         Anicom's  customer  base  consists  of  a  wide  array  of  businesses,
including auto manufacturers,  contractors,  systems integrators,  security/fire
alarm companies,  regional Bell operating  companies,  distributors,  utilities,
telecommunications and sound contractors, cable television installers,  wireless
specialists,  construction companies, universities and governmental agencies. No
customer accounted for more than 10% of Anicom's net sales during the past three
years,  and  management  believes that Anicom is not dependent on any particular
customer.  With Anicom's increasing  national 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.

Competition
         The market for multimedia  wiring  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  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.

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)" and "L.I.P.S.(R)" Anicom's
policy is to file for trademark and trade name protection for its trademarks and
trade names.


                                       6
<PAGE>

Employees
         As of March 26, 1998, Anicom employed approximately 790 persons. Anicom
believes that it has good relations with its employees.


ITEM 2.  DESCRIPTION OF PROPERTY
         As of March 16, 1998, Anicom conducted its operations from 53 different
locations in 23 states, all of which are leased.  Each of its locations consists
of a sales  office  and a  warehouse,  except  for its  locations  in  Rosemont,
Illinois; Lexington, North Carolina; Wausau, Wisconsin and one of its offices in
Troy, Michigan which do not include any warehouse space.

         Anicom's aggregate  executive office and sales office space as of March
16, 1998 is approximately  248,000 square feet and its aggregate warehouse space
is  approximately  740,000 square feet.  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 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, 1997.


























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<PAGE>


                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         On September 25, 1996, the number of authorized  shares of common stock
was increased from 10,000,000 to 30,000,000 following approval of such action by
the  Company's  stockholders  at a special  meeting.  Following  such action,  a
2-for-1 stock split  effected in the form of a 100% stock  dividend was declared
for  holders  of record as of  October 1,  1996,  payable  October 7, 1996.  All
periods and sales prices presented have been restated to  retroactively  reflect
the 100% stock dividend.

         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:

                                    1997                        1996
                             -------------------        -------------------
                               High         Low           High        Low
                             -------     -------        -------      ------

        1st quarter           11           7 3/4          7 5/8       4 3/8
        2nd quarter           12 1/2       7 7/8         10 1/8       6 3/8
        3rd quarter           18 1/4      11 1/2          9 1/8       6 9/16
        4th quarter           18 5/8      12 7/8         10 1/8       7 7/8




         As of March 16,  1998,  the  approximate  number of record  holders  of
Anicom's Common Stock was 1,523.

         Anicom has not paid cash  dividends  or  distributions  on its  capital
stock  during 1996 or 1997.  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.













                                       8
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

         The data set forth  below is derived  from the  Consolidated  Financial
Statements of the Company, which have been audited by Coopers & Lybrand, L.L.P.,
independent accountants. These historical results are not necessarily indicative
of the results to be expected in the future.
<TABLE>
<CAPTION>
                                                                             Year ended December 31,
                                                              --------------------------------------------------
                                                                   1997         1996        1995         1994
                                                              -----------    ----------   ---------    ---------
                                                                     (in thousands, except per share data)
<S>                                                           <C>           <C>           <C>        <C>
Selected Statement of Income Data:
Net sales                                                     $   243,664    $  115,993   $  29,358   $   17,866
                                                              ===========    ==========   =========   ==========
Net Income                                                    $         4(3) $    2,623   $     764   $      412
                                                              ===========    ==========   =========   ==========
Pro forma net income(1)                                                                               $      247
                                                                                                      ==========
Net income per common share(2):
Basic                                                         $     --   (3) $     0.20   $    0.14   $     0.17
                                                              ===========    ==========   =========   ==========
Diluted                                                       $     --   (3) $     0.19   $    0.14   $     0.17
                                                              ===========    ==========   =========   ==========
Pro forma net income per share(1)(2) (unaudited):
Basic                                                                                                 $     0.10
                                                                                                      ==========
Diluted                                                                                               $     0.10
                                                                                                      ==========
Weighted average number of shares outstanding(2):
Basic                                                              17,476        13,384       5,408        2,400
                                                              ===========    ==========   =========   ==========
Diluted                                                            17,476        13,580       5,658        2,400
                                                              ===========    ==========   =========   ==========


                                                                             As of December 31,
                                                              ------------------------------------------------
                                                                  1997          1996        1995         1994
                                                              -----------    ----------   ---------   ----------

Selected Balance Sheet Data:
Total assets                                                  $   215,457    $   87,954   $  41,169   $    6,040
                                                              ===========    ==========   =========   ==========
Long term obligations                                         $     8,549    $    3,952   $     597   $    2,760
                                                              ===========    ==========   =========   ==========

<FN>
 _______________________________
(1)  Prior to the Company's  initial public offering in 1995, the Company was an
     S Corporation and not subject to Federal (and some State)  corporate income
     taxes.  The results for the year ended  December  31, 1994 are  adjusted to
     reflect  a pro  forma tax  provision  as if the  Company  were  subject  to
     corporate income taxes for such period.
(2)  Earnings  per share  has been  restated  in  accordance  with FAS No.  128,
     "Earnings Per Share."
(3)  During 1997, the Company incurred  approximately $5.6 million for the costs
     related to the  development  and  implementation  of the  business  process
     reengineering  plan,  implementing  a new  information  technology  system,
     writing off all capitalized  costs  associated with the Company's  previous
     system,  terminating certain  contractual  obligations that resulted from a
     1996  acquisition,  consolidating  redundant  facilities  and the  internal
     resource  costs  related  to the  implementation  of the new system and the
     business process reengineering plan.
</FN>
</TABLE>



                                       9
<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:

                                                 1997       1996       1995
                                                ------     ------     ------
Income Statement Data:
Net sales                                        100.0%     100.0%     100.0%
Cost of sales                                     76.8       75.4       76.3
                                                ------     ------     ------
Gross profit                                      23.2       24.6       23.7
Operating expenses and other:
   Selling                                        10.7       11.3       10.4
   General and administrative                      9.7        9.9        9.6
   Reengineering costs                             2.3        --         --
                                                ------     ------     ------
Operating income                                    .6        3.4        3.7
Interest expense                                   (.3)       (.2)       (.2)
Interest income                                    --          .5         .9
                                                ------     ------     ------
Income before income taxes                          .4        3.7        4.3
Provision for income taxes                          .3        1.4        1.7
                                                ------     ------     ------
Net income                                          .1        2.3        2.6
Less:  Dividend on preferred stock                 (.1)       --         --
                                                ------     ------     ------
Net income available to common stockholders        -- %       2.3%       2.6%
                                                ======     ======     ======

__________________________________
Note:  Percentages may not sum due to rounding.


Results of Operations

         Year ended December 31, 1997 compared to year ended December 31, 1996

         Net sales for the year ended  December  31, 1997  increased to a record
$243.7 million,  a 110.1% increase over net sales of $116.0 million in 1996. The
significant  increase is primarily  attributable  to  acquisitions  coupled with
internal growth, which has led to new customers, new products,  increased market
share, expanded market penetration and increased volume with existing customers.
For the year ended  December  31,  1997,  net income and earnings per share were
$300,000 or $0.00 per share  compared to $2.6 million or $0.20  (Basic  earnings
per common share) and $0.19  (Diluted  earnings per common share) in 1996.  This
change  is  principally  attributable  to costs  associated  with the  Company's
implementation  of a business  process  reengineering  plan  which was  centered
around a new  information  technology  system,  that is year 2000  compliant and
provides the capacity  necessary to continue  the  Company's  integrated  growth
strategy into the next millennium.  Details of the Company's  reengineering plan
are discussed below.

         Anicom's gross profit for the year ended December 31, 1997 increased by
$28.0 million or 97.9% to $56.6 million  versus $28.6 million for the year ended
December 31, 1996.  This increase  resulted from Anicom's  acquired sales volume
and internal  growth.  As a percentage  of net sales,  gross profit was 24.6% in
1996 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  recent
acquisitions.  TW, which the Company  acquired in December 1997 has  significant
operations in the New York City market and carries different,


                                       10
<PAGE>


lower  margin   product   offerings  than  Anicom  has   historically   offered.
Consequently,  management  anticipates  that 1998 gross margins may be less than
those reported for 1997. Management  anticipates partially mitigating the impact
of TW's historically  lower gross margins by increasing the depth and breadth of
product offerings maintained in stock at these locations, continuing to leverage
our  purchasing  volume  with common  vendors  and  working to develop  mutually
beneficial arrangements with vendors new to Anicom.

         Selling expenses increased by $12.9 million for the year ended December
31,  1997 in  conjunction  with the  Company's  increase  in net  sales  and the
increase in sales  headcount that resulted from the Company's  acquisitions  and
internal  growth.  Selling  expenses as a percentage of net sales  improved from
11.3% of net  sales in 1996 to 10.7% of net  sales in 1997.  These  improvements
resulted  from the  Company  realizing  operating  leverage  from its growth and
acquisitions and conforming the selling incentive programs of companies acquired
in 1996 with  those of  Anicom.  These  improvements  were,  in part,  offset by
differences in the selling  incentive  programs in place at Energy,  acquired in
July 1997. As currently structured, Anicom's selling incentive program calls for
increasing payouts as individual targets are achieved and surpassed.  Management
has found this program to be an effective tool to incent internal growth.

         General and  administrative  expenses  increased  from $11.6 million in
1996 to $23.6 million 1997. The Company's  acquisitions in the last half of 1996
and 1997,  non-recurring  costs  related to a product line sold during the first
quarter of 1997 and non-recurring  post acquisition  integration costs accounted
for the majority of the increase in general and  administrative  expenses.  As a
percentage of net sales,  general and  administrative  expenses improved to 9.7%
for the  year  ended  December  31,  1997  from  9.9% in the year  prior.  These
improvements  were  attributable  to increases in net sales  outpacing  required
expenses for general and  administrative  costs as the Company further  realized
operating leverage from its acquisition-based, integrated growth strategy.

         In the 22-month period from March, 1996 to December,  1997, the Company
completed nine acquisitions.  The revenues for these entities in the last fiscal
year prior to acquisition by Anicom totalled  approximately  $282.0 million.  Of
these nine acquisitions, three were completed within the last six months of 1997
and have  accounted for  approximately  $153.7  million or 54.5% of the acquired
revenue.  As the Company  developed  plans to implement the integration of these
businesses into the Anicom  information  technology system, it became clear that
the  capacity  of the  existing  system  would be  severally  strained  and that
improved  efficiencies  could be realized by  evaluating  each of the  Company's
significant business processes. This realization, along with the need to upgrade
the  Company's   systems  to  year  2000  compliance,   resulted  in  management
undertaking a significant business-reengineering program.

         In the fourth quarter, the Company implemented a complete reengineering
plan, designed to further improve operating efficiencies within the organization
by  leveraging  the  capabilities  inherent  in the new  information  system and
provide the  additional  information  system  capacity to continue the Company's
integrated growth strategy.

         In November,  1997,  the Emerging  Issues Task Force released Issue No.
97-13 Accounting for Costs Incurred in Connection with a Consulting  Contract or
an Internal Project That Combines Business Process Reengineering and Information
Technology  Transformation  ("EITF  97-13").  EITF 97-13 provides  authoritative
guidance on how companies are to account for third-party or internally generated
costs associated with business process reengineering and information  technology
transformation.

         After considering the status of the system  implementation  project and
the impact of EITF 97-13, management decided to accelerate the conversion to the
new platform to  mid-December,  historically



                                       11

<PAGE>

the slowest portion of the year, to slow down sales in an effort to minimize any
distraction  to our customers and to confine the costs to the fourth  quarter of
1997. During 1997, the Company incurred approximately $5.6 million for the costs
related  to  the  development  and   implementation   of  the  business  process
reengineering plan,  implementing a new information  technology system,  writing
off all  capitalized  costs  associated  with  the  Company's  previous  system,
terminating   certain   contractual   obligations  that  resulted  from  a  1996
acquisition,  consolidating redundant facilities and the internal resource costs
related  to the  implementation  of the  new  system  and the  business  process
reengineering plan. See Note 5 to the Consolidated Financial Statements included
elsewhere herein.

         Interest  income  decreased to $225,000 in 1997 from  $564,000 in 1996.
During the first and third quarters of 1996, the Company earned  interest income
on invested  funds  raised in common  stock  offerings.  In the second and third
quarters of 1997, the Company earned interest on funds raised in its May private
placement of convertible  preferred  stock.  The variance noted is the result of
the amounts and periods of time these funds were invested prior to their use.

         In 1997, interest expense increased to $762,000 from $256,000 for 1996.
The increase is due to the Company borrowing against its credit facility for its
acquisition  of  Energy  and  funding  increases  in  working  capital  required
principally by acquired locations.

         The provision for income taxes  decreased to $650,000 in 1997 from $1.6
million  1996.  The decrease is a result of the decrease in income before income
taxes.  For the years ended December 31, 1997 and 1996, the provision for income
taxes as a percentage of income  before  income  taxes,  increased to 68.4% from
38.2%.  The increase is primarily  attributable to the impact of  non-deductible
meals and entertainment  expenses and non-deductible  goodwill amortization on a
significantly lower income before income tax amount.

         Net  income  for the year  ended  December  31,  1997 was  $300,000  as
compared to $2.6  million or 2.3% of net sales for the year ended  December  31,
1996 as a result of the  reengineering  costs incurred and the impact of slowing
down sales in December 1997 to accommodate  the  acceleration of the information
system implementation.  Excluding the impact of sacrificed sales in December and
the one time,  non-recurring  accounting  charges,  management believes that net
earnings for 1997 would have been approximately $.30 per share.

         Effective  December 31, 1997, the Company adopted Financial  Accounting
Standards Board ("FASB")  Statement of Financial  Standards No. 128 Earnings Per
Share.  There are no basic or diluted  earnings  per common  share  based on the
level of net income and common shares  outstanding  for the year ended  December
31,  1997.  In 1996,  basic  earnings  per common  share  were $.20 and  diluted
earnings per common share were $.19.


         Year ended December 31, 1996 compared to year ended December 31, 1995

         For the year ended  December 31, 1996, the Company  established  record
net sales, net income and earnings per share ("EPS"). On a comparable basis with
1995,  net sales  increased  by more than 295% to  $116.0  million,  net  income
increased  approximately 243% to $2.6 million,  basic EPS increased 43% to $0.20
per share and diluted EPS increased 36% to $0.19 per share.  These  improvements
follow record 1995 results of $29.4 million in net sales, net income of $764,000
and basic and diluted EPS of $0.14 per share  (based on over 40% fewer  weighted
average shares outstanding).

         The increase in net sales is  primarily  attributable  to  acquisitions
completed in the fourth  quarter of 1995 and  throughout  1996. The remainder of
the improvement is attributable to the Company's  expanding breadth and depth of
product  offerings  which  lead  to  increased  market  share,  expanded  market
penetration and increased volume with many existing customers.



                                       12
<PAGE>

         For the year  ended  December  31,  1996,  Anicom's  gross  profit as a
percentage of net sales  increased to 24.6% compared to the 23.7% level achieved
in 1995.  The  improvement  is  principally  a result of  economic  efficiencies
achieved from  increased  purchasing  volume with vendors and  centralizing  the
purchasing  function.  These  factors,  combined with the acquired sales volume,
resulted in gross profit  increasing more than fourfold to $28.6 million in 1996
as compared to $7.0 million in 1995.

         Selling  expenses  increased from $3.1 million or 10.4% of net sales in
1995 to $13.1 million or 11.3% of net sales in 1996. The Company's  acquisitions
in 1996 resulted in an increase in sales  headcount and other  variable  selling
expenses.  For 1996, the change in selling expenses as a percentage of net sales
resulted from the  historically  higher selling  expenses of Northern;  however,
selling  expense as a  percentage  of net sales has  decreased  in each  quarter
subsequent to the Northern acquisition.

         General and administrative expenses increased from $2.8 million in 1995
to $11.6  million in 1996.  The  Company's  acquisitions  in 1996 resulted in an
increase in general and administrative  expenses.  As a percentage of net sales,
general  and  administrative  expenses  increased  to 9.9% from 9.6% in 1995 due
primarily to amortization of goodwill resulting from acquisitions, non-recurring
acquisition and integration  expenses,  increased  warehousing and  distribution
costs primarily  associated  with  industrial  cable (a product line the Company
acquired in its  acquisition of Northern) and increased  costs  associated  with
Anicom's  successful  implementation  of its integrated  growth  strategy net of
gains on the sale of product lines.

         Interest income increased by approximately $308,000 or 120% to $565,000
in 1996 from  $256,000 in 1995 as the Company  invested  the funds raised in its
November 1995  follow-on  offering and its September  1996 private  placement of
equity  pending use of such funds to finance  acquisitions  and working  capital
requirements.

         In 1996,  interest  expense rose by $183,000 to $256,000.  The increase
was a result  of  interest  incurred  on debt  issued  in  certain  acquisitions
completed during 1996 and other debt assumed in acquisitions.

         The provision  for income taxes  increased to $1.6 million in 1996 from
$764,000  in 1995 as a result of the $3.0  million  increase  in  income  before
taxes. As a percentage of income before income taxes, the provision decreased to
38.2% in 1996 from 39.2% in 1995.  This decrease was primarily  attributable  to
income earned on tax-exempt securities.

Liquidity and Capital Resources

         As of December 31, 1997,  Anicom had working  capital of  approximately
$67.5 million as compared to $33.4 million at December 31, 1996. Anicom also has
a $50 million  unsecured  revolving  credit  facility  (the  "Facility")  with a
syndicate of lenders,  including Harris Trust and Savings Bank, LaSalle National
Bank and The First  National  Bank of Chicago.  The  Facility  provides  various
annual  interest  rate  options,  determined  from time to time,  based upon the
Company's  leverage ratio,  as defined as either the agent's  Domestic Rate less
 .50% to .25% or LIBOR plus .50% to 1.00%. The Facility expires in July, 2000 and
can be extended at the  Company's  option to July,  2002 and contains  customary
financial  covenants,  including minimum tangible net worth,  interest coverage,
debt to  earnings  and current  ratios.  The  Facility  replaced  the  Company's
previous $10 million unsecured revolving credit facility.  At December 31, 1997,
the amount  outstanding  under the Facility was $4.7 million at an interest rate
of 8.0% per annum.

         Management  believes that existing cash, cash  equivalents,  cash flows
from  operations  and draws on the Facility  will be  sufficient to fund current
operations,  and its planned  integrated  growth strategy.  The Company does not
currently have any significant  long-term capital requirements which it believes



                                       13
<PAGE>

cannot be funded from the sources discussed above.  However,  in connection with
its  acquisition  and  integrated   growth  strategy,   the  Company's   capital
requirements  may change based upon various  factors,  primarily  related to the
timing of acquisitions  and the  consideration to be used as purchase price. 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 lines of credit.

         For the year ended December 31, 1997,  operating  activities used $13.0
million  of cash  compared  with the $9.1  million  provided  during  1996.  The
significant  change between years is principally a result of the  classification
of the Company's net marketable  securities activity.  This activity consists of
investing  funds  raised in  financing  activities  until their  liquidation  in
connection  with the  Company's  acquisition  and  integrated  growth  strategy.
Excluding the impact of marketable securities, Anicom used $17.4 million of cash
in operating  activities  during the year ended  December 31, 1997 compared with
the use of $12.1  million  during  1996.  The largest use of cash in  operations
resulted  from  acquisition  related  activities,  including  expanding  product
offerings at acquired  locations,  and funding working  capital  deficiencies of
acquired  companies  and  business  acquisition   liabilities.   Investments  in
receivables  and  inventory  were  funded,  in part,  by an increase in accounts
payable in both  periods.  Funding in both 1997 and 1996 was provided by private
placements of equity and borrowings under the facilities.

         Investing activities utilized approximately $35.9 million in 1997. Cash
paid for the five  acquisitions  in 1997 accounted for the majority of cash used
for  investing  activities.  The remainder  represents  funds used to expand the
Company's  facilities  to  accommodate  growth and the  capitalized  information
systems costs.

         Cash flows from financing activities in 1997 totaled $49.4 million. The
net  proceeds  from the sale of Preferred  Stock in May 1997 were  approximately
$26.2  million  and the net  proceeds  from a private  placement  of 2.9 million
shares of common stock in December 1997 were approximately $36.1 million.

         Additionally, the Company paid approximately $13.6 million of bank debt
assumed in the TW acquisition, $3.5 million of bank debt assumed in the Carolina
Cable  acquisition  and $1.0  million of debt issued in  connection  with a 1996
acquisition.  During both periods,  the Company drew against and made repayments
on its revolving credit facilities.

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 1997.

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.

Impact of Not Yet Effective Rules
         Statement  of  Financial   Accounting   Standards  No.  130,  Reporting
Comprehensive  Income  ("SFAS No. 130"),  was issued in June 1997.  SFAS No. 130
requires the reporting of comprehensive  income in a financial statement that is
presented with the same prominence as other financial statements.  The Company's
financial statements are prepared in accordance with SFAS No. 130.

         Statement of Financial  Accounting Standards No. 131, Disclosures about
Segments of an Enterprise and Related  Information  ("SFAS No. 131"), was issued
in June 1997.  This  statement,



                                       14
<PAGE>

effective for financial  statements  for periods  beginning  after  December 15,
1997,   requires  that  a  public  business   enterprise  report  financial  and
descriptive  information about its reportable  operating segments.  Based on the
Company's  current  operations,  management  does not  anticipate any additional
disclosure being required by SFAS No. 131.

         Statement  of  Financial  Accounting  Standards  No.  132,  "Employers'
Disclosures about Pensions and Other Postretirement  Benefits" ("SFAS No. 132"),
effective for fiscal years beginning after December 15, 1997,  standardizes  the
disclosure requirements for pensions and other postretirement benefits, requires
additional  information on changes in the benefit  obligation and fair values of
plan assets and eliminates  certain  disclosures that are no longer useful.  The
Company has not yet  determined  the impact of this  statement on its  financial
statements.

Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995
         The statements contained in Item 1 (Description of Business) and Item 6
(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
1998 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  in Anicom's  filings  with the  Securities  and  Exchange
Commission including,  without limitation,  those described under "Risk Factors"
in the Company's Registration Statement on Form S-3 (File No. 333-41225).  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 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.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
         Not applicable.


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 Coopers &
Lybrand, L.L.P., appearing on pages F-1 through F-26 of this Form 10-K.

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




                                       15
<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  1998  Annual  Meeting  of  Stockholders  (the  "1998  Proxy
Statement").

ITEM 11. EXECUTIVE COMPENSATION
         The  information in response to this item is  incorporated by reference
from the section of the 1998 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 1998 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 1998 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 independent auditors'  report, are
                   included on pages F-1 through F-25 on this Form 10-K:

                   Independent Auditors' Report

                   Consolidated Balance Sheets as of December 31, 1997 and 1996

                   Consolidated   Statements  of  Income  for  the  Years  Ended
                      December 31, 1997, 1996 and 1995

                   Consolidated Statements of Stockholders' Equity for the Years
                      ended December 31, 1997, 1996 and 1995

                   Consolidated  Statements  of Cash  Flows for the Years  Ended
                      December 31, 1997, 1996 and 1995

                   Notes to Consolidated Financial Statements

            2.     Schedules

                   The following consolidated  financial  statement  schedule is
                      included on page F-26:

                          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.







                                       16
<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**           Agreement  and  Plan of  Merger,  dated as of July 18,
                          1995,  among  Anicom,  Pinnacle  Wire &  Cable,  Inc.,
                          Raymond J. Costello and Robert A. Holous.
          2.2***          Stock Purchase  Agreement,  dated  September 19, 1995,
                          among  Anicom,  Morgan  Hill,  Inc.  and  Kenneth  Jay
                          Burgess.
          2.3****         Asset Purchase  Agreement,  dated as of March 4, 1996,
                          among Anicom,  Inc.,  Northern Wire & Cable, Inc., and
                          Copperhead Acquisition Corp.
          2.4*****        Agreement  and Plan of  Reorganization,  by and  among
                          Anicom, Inc.,  Anicom-Southeast,  Inc., Norfolk Wire &
                          Electronics,  Inc.,  and Ronald A.  Hurley,  Robert H.
                          Jennings,  Stephen M. Mobley and Vonda M. Hall,  dated
                          as of August 30, 1996.
          2.5********     Agreement  and Plan of Merger dated as of November 24,
                          1997 between Anicom,Inc., TWC Acquisition Corporation,
                          TW  Communications  Corporation,  Edward Goodstein and
                          Carl G. Palazzolo.
          2.6********     Stock Purchase Agreement dated as of November 24, 1997
                          between Anicom, Inc. and the Purchasers named therein.
          3.1*            Restated Certificate of Incorporation of Anicom.
          3.2*            Restated Bylaws of Anicom.
          3.3******       Certificate    of   Amendment   of    Certificate   of
                          Incorporation   of   Anicom.
          4.1*            Specimen Stock Certificate representing Common Stock.
          10.1*           Credit Agreement,  dated June 30, 1993, between Anicom
                          and Harris Trust and Savings Bank, as amended.
          10.2*           Commercial  Lease  Agreement,  dated  April 30,  1993,
                          between Anicom and Harris Trust and Savings Bank.
          10.3*******     Form of 1995  Stock  Incentive  Plan  as  Amended  and
                          Restated.
          10.4*******     Credit  Agreement,  dated  as  of  February  6,  1996,
                          between Anicom and Harris Trust and Savings Bank.
          10.6*           Shareholders Agreement
          10.8*           Form of Tax Indemnification Agreement
          10.9*           Form of Employment  Agreement between Anicom and Scott
                          C. Anixter.
          10.10*          Form of Employment  Agreement  between Anicom and Carl
                          E. Putnam.
          10.11*          Form of Employment Agreement between Anicom and Robert
                          L. Swanson.
          10.12******     Form of Amended  and  Restated  1995  Directors  Stock
                          Option Plan
          10.13****       Form of Employment Agreement between Anicom and Robert
                          Brzustewicz.
          10.14****       Form of Employment  Agreement  between Anicom and Glen
                          Nast.
          10.15****       Non-Negotiable  Note issued to Northern  Wire & Cable,
                          Inc.
          10.16****       Guaranty by Anicom to Northern Wire & Cable, Inc.
          10.18*******    1996 Stock Incentive Plan
          10.17*******    Form of Employment Agreement between Anicom and Donald
                          Welchko



                                       17
<PAGE>

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

          21              List of Subsidiaries.

          23.1            Consent of Independent Accountants

          27              Financial Data Schedule

_________________________

*         Previously filed as an Exhibit to Anicom's  Registration  Statement on
          Form SB-2,  registration  no.  33-87736C  and  incorporated  herein by
          reference  thereto.
**        Previously filed as an Exhibit to Anicom's current report on Form 8-K,
          dated August 10, 1995 and incorporated herein by reference.
***       Previously filed as an Exhibit to Anicom's current report on Form 8-K,
          dated October 16, 1995 and incorporated herein by reference.
****      Previously filed as an Exhibit to Anicom's current report on Form 8-K,
          dated March 12, 1996 and incorporated herein by reference.
*****     Previously filed as an Exhibit to Anicom's current report on Form 8-K,
          dated August 30, 1996 and incorporated herein by reference.
******    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.
*******   Previously  filed as an  Exhibit  to  Anicom's  annual  report on Form
          10-KSB,  for the quarter  ended  December  31,  1996 and  incorporated
          herein by reference.
********  Previously filed as an exhibit to Anicom's  registration  statement on
          Form S-3,  registration  no.  333-41225,  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 1997:

                Form 8-K, dated December 12, 1997 (TW Communication Corporation)















                                       18
<PAGE>


                                  Anicom, Inc.
   Index to Consolidated Financial Statements and Financial Statement Schedule



Report of Independent Accountants                                          F-2
Financial Statements:
     Consolidated Balance Sheets as of December 31, 1997 and 1996          F-3
     Consolidated Statements of Income for the years ended
       December 31, 1997, 1996 and 1995                                    F-4
     Consolidated Statements of Stockholders' Equity
       for the years ended December 31, 1997, 1996 and 1995                F-5
     Consolidated Statements of Cash Flows for the years ended
       December 31, 1997, 1996 and 1995                                    F-6
     Notes to Consolidated Financial Statements                     F-7 - F-25

The following consolidated financial statement schedule of
Anicom, Inc. is included in Item 14:
         Schedule II - Valuation and Qualifying Accounts                  F-26

         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.

























                                      F-1
<PAGE>



                        Report of Independent Accountants


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

We have audited the accompanying  consolidated balance sheets of Anicom, Inc. as
of December 31, 1997 and 1996 and the related consolidated statements of income,
stockholders'  equity and cash  flows for each of the three  years in the period
ended  December 31, 1997.  In  addition,  we have audited the related  financial
statement  schedule.  These  financial  statements  and  the  related  financial
schedule are the responsibility of the Company's management.  Our responsibility
is to express an opinion on these financial statements and the related financial
statement schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards 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.  An audit also includes
assessing  the  accounting  policies  used  and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Anicom,
Inc. as of  December  31,  1997 and 1996 and the  consolidated  results of their
operations  and their cash flows for each of the three years in the period ended
December 31, 1997 in conformity with generally accepted  accounting  principles.
In addition, in our opinion, the financial statement schedule referred to above,
when considered in relation to the basic financial  statements taken as a whole,
presents  fairly,  in all  material  respects,  the  information  required to be
included therein.


/s/ Coopers & Lybrand, L.L.P.

Chicago, Illinois
March 30, 1998


                                      F-2
<PAGE>


                                  Anicom, Inc.
                           Consolidated Balance Sheets
                        As of December 31, 1997 and 1996
                      (in thousands, except per share data)

                                                              1997       1996
                                                            --------   --------
                                     ASSETS
Current assets:
   Cash and cash equivalents                                $    687   $    195
   Marketable securities                                        --        4,345
   Accounts receivable, less allowance for doubtful
     accounts of $2,442 and $980, respectively                65,125     26,972
   Inventory                                                  57,099     23,453
   Deferred income taxes                                       2,478      1,557
   Other current assets                                        4,866      1,016
                                                            --------   --------
             Total current assets                            130,255     57,538
Property and equipment, net                                    5,771      2,820
Goodwill, net of accumulated amortization of
   $1,605 and $478, respectively                              76,869     26,771
   Deferred income taxes                                         835       --
Other assets                                                   1,727        825
                                                            --------   --------

             Total assets                                   $215,457   $ 87,954
                                                            ========   ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                         $ 47,740   $ 20,727
   Accrued expenses                                            7,909        613
   Acquisition liabilities                                     5,337      1,205
   Long-term debt, current portion                             1,773      1,598
                                                            --------   --------
             Total current liabilities                        62,759     24,143
Long-term debt, net of current portion                         6,267      3,013
Deferred income taxes                                           --          165
Other liabilities                                              2,282        774
                                                            --------   --------
             Total liabilities                                71,308     28,095
                                                            --------   --------
Commitments and contingencies
Stockholders' equity:
   Common stock, par value $.001 per share;
      60,000 and 30,000 shares authorized,
     respectively; 23,293 and 15,561 shares
      issued and outstanding, respectively                        15          7
   Preferred stock, undesignated,
      par value $.01 per share;
      973 and 1,000 authorized,respectively;
      no shares issued and outstanding                          --         --
   Additional paid-in capital                                140,743     56,465
   Retained earnings                                           3,391      3,387
                                                            --------   --------
             Total stockholders' equity                      144,149     59,859
                                                            --------   --------

             Total liabilities and stockholders' equity     $215,457   $ 87,954
                                                            ========   ========



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






                                       F-3
<PAGE>

                                  Anicom, Inc.
                        Consolidated Statements of Income
              For the years ended December 31, 1997, 1996 and 1995
                      (in thousands, except per share data)

                                              1997         1996         1995
                                           ---------    ---------    ---------

Net sales                                  $ 243,664    $ 115,993    $  29,358
Cost of sales                                187,098       87,442       22,404
                                           ---------    ---------    ---------
Gross profit                                  56,566       28,551        6,954
                                           ---------    ---------    ---------

Operating expenses:
Selling                                       25,948       13,068        3,058
General and administrative                    23,547       11,547        2,822
Reengineering costs                            5,584         --           --
                                           ---------    ---------    ---------
Total operating expenses                      55,079       24,615        5,880
                                           ---------    ---------    ---------

Income from operations                         1,487        3,936        1,074
                                           ---------    ---------    ---------
Other income (expense):
Interest income                                  225          564          256
Interest expense                                (762)        (256)         (73)
                                           ---------    ---------    ---------
Total other income (expense)                    (537)         308          183

Income before income taxes                       950        4,244        1,257
Provision for income taxes                       650        1,622          492
                                           ---------    ---------    ---------
Net income                                       300        2,622          765
Less: dividends on preferred stock              (296)        --           --
                                           ---------    ---------    ---------

Net income available
  to common stockholders                   $       4    $   2,622    $     765
                                           =========    =========    =========

Earnings per common share:
Basic                                      $    --      $     .20    $     .14
                                           =========    =========    =========
Diluted                                    $    --      $     .19    $     .14
                                           =========    =========    =========

Weighted average
  common shares outstanding:
Basic                                         17,476       13,384        5,408
                                           =========    =========    =========
Diluted                                       17,476       13,580        5,658
                                           =========    =========    =========




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, 1997, 1996 and 1995
                                 (in thousands)

<TABLE>
<CAPTION>

                                                Convertible
                                              Preferred Stock           Common Stock    Additional               Total
                                           --------------------    --------------------   Paid-In   Retained  Stockholders'
                                            Shares      Amount      Shares      Amount    Capital    Earnings     Equity
                                           --------    --------    --------    --------   --------   --------   --------

<S>                                             <C>    <C>            <C>      <C>                   <C>        <C>
Balance, January 1, 1995                                              2,400    $      1              $    156   $    157
Distribution to former
  Subchapter S shareholders                                                               $     (7)      (156)      (163)
Proceeds from issuance of
  common stock, net of
  offering costs                                                      9,660           5     35,578                35,583
Issuance of common stock
  for acquisitions                                                      154                    800                   800
Net income                                                                                                764        764
                                           --------    --------    --------    --------   --------   --------   --------
Balance, December 31, 1995                                           12,214           6     36,371        764     37,141
Proceeds from issuance of
  common stock, net of
  offering costs                                                      2,423           1     15,053                15,054
Issuance of common stock
  for acquisitions                                                      872                  5,537                 5,537
Exercise of stock options
  and warrants                                                          107                     11                    11
Receipt and cancellation of
  common stock received in
  sale of product line                                                  (55)                  (507)                 (507)
Net income                                                                                              2,623      2,623
                                           --------    --------    --------    --------   --------   --------   --------
Balance, December 31, 1996                                           15,561           7     56,465      3,387     59,859
Proceeds from issuance of
  convertible preferred stock,
  net of offering costs                          27    $ 26,155                                                   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
Net income                                                                                                300        300
                                           --------    --------    --------    --------   --------   --------   --------

Balance, December 31, 1997                     --      $   --      $ 23,293    $     15   $140,743   $  3,391   $144,149
                                           ========    ========    ========    ========   ========   ========   ========

</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 1997, 1996 and 1995
                                 (in thousands)
<TABLE>
<CAPTION>


                                                                   1997        1996        1995
                                                               --------    --------    --------
<S>                                                            <C>         <C>         <C>
Cash flows from operating activities:
  Net income                                                   $    301    $  2,623    $    764
  Adjustments to reconcile net income to net cash
    (used in) provided by operating activities:
      Depreciation                                                1,037         441         120
      Amortization                                                1,126         483          27
      Deferred income taxes                                         615         527         (11)
      Gain on sale of product lines                                (483)       (878)       --
      Loss on disposal of property and equipment                    278        --          --
      Increase (decrease) in cash attributable
        to change in assets and liabilities:
          Marketable securities                                   4,345      21,191     (25,536)
          Accounts receivable                                    (6,702)     (6,631)     (1,729)
          Inventory                                             (12,710)     (5,912)     (1,937)
          Other assets                                           (1,865)       (284)       (166)
          Accounts payable                                        3,693       2,366      (1,861)
          Accrued expenses                                       (2,648)     (4,799)        (56)
                                                               --------    --------    --------
         Net cash (used in) provided by operating activities    (13,013)      9,127     (30,385)
                                                               --------    --------    --------

Cash flows from investing activities:
  Purchase of property and equipment                             (2,297)     (1,105)       (395)
  Cash paid for acquired companies                              (33,801)    (14,201)     (1,434)
  Other                                                             200        --          --
                                                               --------    --------    --------
         Net cash used in investing activities                  (35,898)    (15,306)     (1,829)
                                                               --------    --------    --------

Cash flows from financing activities:
  Proceeds from equity offerings, net of offering costs          62,365      15,054      35,576
  Proceeds from long-term debt                                   57,340       4,190         727
  Payment of long-term debt and assumed bank debt               (70,302)    (12,884)     (3,926)
  Other                                                            --            11        (163)
                                                               --------    --------    --------
         Net cash provided by financing activities               49,403       6,371      32,214
                                                               --------    --------    --------

Net increase in cash and cash equivalents                           492         192        --
Cash and cash equivalents, beginning of year                        195           3           3
                                                               --------    --------    --------

Cash and cash equivalents, end of year                         $    687    $    195    $      3
                                                               ========    ========    ========

Supplemental cash flow information:
   Cash paid for interest                                      $    695    $     81    $     54
                                                               ========    ========    ========

   Cash paid for income taxes                                  $  4,098    $  1,382    $    592
                                                               ========    ========    ========

</TABLE>

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




                                      F-6
<PAGE>



                                  Anicom, Inc.
                   Notes to Consolidated Financial Statements
                      (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 communications  related wire,  cable,  fiber optics
         and computer network and connectivity products.

         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, cable television, mining, marine, petro-chemical, paper and
         pulp and other natural resource industries. The Company's customers are
         principally  located  throughout the United States of America and other
         parts of 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>


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

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.

         The  Company's S  Corporation  status was  terminated  as of January 1,
         1995.  A cash  distribution  of $163  was paid to the  Subchapter S
         Shareholders of the Company in 1995, representing tax payments due with
         respect to the taxable  income of the Company prior to the  termination
         of its S Corporation status.

         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 (current and long-term) is
         estimated  to be the  carrying  value of these  liabilities  based upon
         borrowing rates currently  available to the Company for borrowings with
         similar terms.

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

         Earnings Per Common Share
         The Company has adopted Financial  Accounting  Standards Board ("FASB")
         Statement of Financial  Standards No. 128,  "Earnings Per Share" ("SFAS
         No.  128"),  effective  December  31,  1997.  SFAS  128  specifies  the
         computation, presentation, and disclosure requirements for earnings per
         share.  The  computation of basic earnings per common share is computed
         based on net income  available  to common  shareholders  divided by the
         weighted average common shares outstanding.  The computation of diluted
         earnings  per common  share is based on net income  divided by weighted
         average common shares and potentially dilutive securities such as stock
         options and warrants.

         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  and  earnings  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 applied.



                                      F-8
<PAGE>


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

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

         Reclassifications
         Certain  1996 and 1995  amounts  have been  reclassified  to conform to
         their 1997 presentation.

         Recent Pronouncements
         In June  1997,  the  FASB  issued  Statement  of  Financial  Accounting
         Standards No. 130, "Reporting  Comprehensive  Income" ("SFAS No. 130").
         This statement, effective for fiscal years beginning after December 15,
         1997, requires the Company to report components of comprehensive income
         in a financial  statement that is displayed with the same prominence as
         other  financial  statements.  The Company's  financial  statements are
         prepared in accordance with SFAS No. 130.

         In June  1997,  the  FASB  issued  Statement  of  Financial  Accounting
         Standards No. 131,  "Disclosures  about  Segments of an Enterprise  and
         Related  Information." ("SFAS No. 131"). This statement,  effective for
         financial  statements  for periods  beginning  after December 15, 1997,
         requires  that  a  public  business  enterprise  report  financial  and
         descriptive information about its reportable operating segments.  Based
         on the Company's current operations, management does not anticipate any
         additional disclosure being required by SFAS No. 131.

         In February  1998,  the FASB issued  Statement of Financial  Accounting
         Standards No. 132,  "Employers'  Disclosures  about  Pensions and Other
         Postretirement  Benefits." This  statement,  effective for fiscal years
         beginning  after  December  15,  1997,   standardizes   the  disclosure
         requirements for pensions and other postretirement  benefits,  requires
         additional  information  on changes in the benefit  obligation and fair
         values of plan assets and eliminates  certain  disclosures  that are no
         longer  useful.  The Company has not yet  determined the impact of this
         statement on its financial statements.

2.       Property and Equipment

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

<TABLE>
<CAPTION>
                                                                      1997            1996
                                                                 -----------     -----------

<S>                                                              <C>             <C>
        Machinery, equipment and vehicles                        $     2,604     $       847
        Office equipment                                               1,104             928
        Computer equipment and software                                2,944           1,330
        Leasehold improvements                                           852             411
                                                                 ------------    ------------
        Total cost                                                     7,504           3,516
        Less:  Accumulated depreciation and amortization              (1,733)           (696)
                                                                 ------------    ------------

        Property and equipment, net                              $     5,771     $     2,820
                                                                 ===========     ===========

</TABLE>








                                      F-9
<PAGE>


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


3.       Long-Term Debt

         On July 3, 1997, the Company  replaced its previous  unsecured  $10,000
         revolving  credit facility with a $50,000  unsecured  revolving  credit
         facility (the "Facility") with a syndicate of lenders, including Harris
         Trust and Savings Bank,  LaSalle  National Bank and The First  National
         Bank of Chicago.  The Facility  provides various interest rate options,
         determined from time to time, based upon the Company's  leverage ratio,
         as defined  and either the agent's  Domestic  Rate less .50% to .25% or
         LIBOR plus .50% to 1.00%.  The  interest  rate at December 31, 1997 was
         8%. The Facility also contains customary financial covenants, including
         minimum tangible net worth and current,  interest  coverage and debt to
         earnings ratios. The Facility has an original  termination date of July
         3, 2000 which can be extended at the Company's  option to no later than
         July 3, 2002.

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

                                                                                      1997       1996
                                                                                   -------    -------
<S>                                                                                <C>        <C>
         Amounts due under the Facility                                            $ 4,700
         Noncollateralized loans payable to former shareholders of
         acquired companies, each due in equal installments (except as noted):
           6.55% note due March 12, 1999                                             2,000    $ 3,000
           Prime rate note (8.5% at December 31, 1997), payable in                     489        596
             monthly installments through July 1, 2002
           6.00% notes due May 30, 1997 to 1999                                        167        251
           6.00% note due October 27, 1998                                             167        333
           6.75% note due July 28, 1997                                               --          200
           5.5% to 5.9% demand notes                                                   368       --
         Other                                                                         149        231
                                                                                   -------    -------
                                                                                     8,040      4,611
         Less current portion                                                       (1,773)    (1,598)
                                                                                   -------    -------

                                                                                   $ 6,267    $ 3,013
                                                                                   =======    =======

</TABLE>














                                      F-10
<PAGE>


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

3.       Long-Term Debt, continued

         The following is a schedule of the aggregate  maturities in each of the
         five years ending December 31, 1998, and thereafter:

                                                        Amount
                                                    ---------------

                      1998                          $         1,773
                      1999                                    1,244
                      2000                                      138
                      2001                                      122
                      2002                                    4,763
                                                    ---------------

                                Total               $         8,040
                                                    ===============



4.       Common Stock

         On June 10, 1997,  the number of authorized  shares of Common Stock was
         increased  from 30,000 to 60,000  following  approval of such action by
         the Company's  stockholders at its annual  meeting.  This increase will
         provide additional authorized but unissued shares of Common Stock to be
         used for general  corporate  purposes,  future  acquisitions and equity
         financings.

         On September 25, 1996, the number of authorized  shares of Common Stock
         was increased from 10,000 to 30,000  following  approval of such action
         by the Company's  stockholders  at a special  meeting.  Following  such
         action,  a 2-for-1  stock  split  effected  in the form of a 100% stock
         dividend  was  declared  for  holders  of record as of October 1, 1996,
         payable October 7, 1996.

         On December 4, 1997, the Company completed a private placement of 2,900
         shares of its common  stock at $13.00 per share.  Net  proceeds  to the
         Company after related costs and expenses were approximately $36,100.

         On September  16, 1996,  the Company  completed a private  placement of
         2,423  shares of its Common  Stock at $6.50 per share.  Net proceeds to
         the  Company  after  related  costs  and  expenses  were  approximately
         $15,100.

         On November 27, 1995, the Company completed a follow-on public offering
         of 6,000 shares of its common stock at $4.50 per share. On November 29,
         1995,  the  underwriters   exercised  their  over-allotment  option  to
         purchase 900 shares of the Company's  common stock. Net proceeds to the
         Company,  after  underwriting  discounts and other  offering  costs and
         expenses were approximately $28,600.






                                      F-11
<PAGE>


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

4.       Common Stock, continued

         On March 1, 1995, the Company  completed an initial public  offering of
         2,400 shares of its common stock at $3.00 per share. On March 15, 1995,
         the underwriters  exercised their over-allotment option to purchase 360
         additional  shares of the Company's  common stock.  Net proceeds to the
         Company  after  underwriting  discounts and other  offering  costs were
         approximately  $7,000.  In connection  with the  offering,  the Company
         reincorporated in the State of Delaware.

5.       Reengineering Costs

         In the fourth quarter of 1997, the Company adopted a reengineering plan
         (the "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 Year 2000
         compliant.  Non-recurring  charges  related to the 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 these costs:

             Implementation of information technology system          $   1,536
             Internal resource costs
               incurred during reengineering
               development and implementation                             1,459
             Contract terminations and other
               location consolidation costs                               2,589
                                                                      ---------

                                                                      $   5,584
                                                                      =========


















                                      F-12
<PAGE>


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

6.       Income Taxes

         The provision  for income taxes for the years ended  December 31, 1997,
1996 and 1995 is comprised of the following:

                                       1997         1996          1995
                                    -------      -------       -------

         Current:
            Federal                 $    35      $   879       $   421
            State                                    216            82
                                    -------      -------       -------
                                         35        1,095           503
         Deferred:
            Federal                     475          442            (9)
            State                       140           85            (2)
                                    -------      -------       -------

                                        615          527           (11)
                                    -------      -------       -------

                                    $   650      $ 1,622       $   492
                                    =======      =======       =======


         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, 1997, 1996 and 1995:
<TABLE>
<CAPTION>

                                                              1997       1996       1995
                                                           -------    -------    -------

<S>                                                        <C>        <C>        <C>
         Computed income taxes at federal statutory rate   $   323    $ 1,443    $   427
         State income taxes, net of federal benefit             91        198         60
         Non-deductible amortization                           120         44         26
         Other nondeductible expenses                          128         73         25
         Nontaxable investment income                          (18)      (100)       (46)
         Other                                                   6        (36)
                                                           -------    -------    -------

                                                           $   650    $ 1,622    $   492
                                                           =======    =======    =======
</TABLE>









                                      F-13
<PAGE>

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


6.       Income Taxes, continued

         At  December  31,  1997  and  1996,  deferred  income  tax  assets  and
liabilities consisted of the following components:

                                                               1997       1996
                                                            -------    -------

         Current deferred income tax asset:
           Accounts receivable                              $  (752)   $    43
           Inventory                                          1,419        401
           Acquisition liabilities, current                     762      1,117
           Reengineering costs                                  792
           Other                                                257         (4)
                                                            -------    -------
                                                              2,478      1,557
                                                            -------    -------
         Long-term deferred income tax asset (liability):
           Property and equipment                               (73)      (127)
           Intangibles                                         (770)      (309)
           Gain on sale of product lines                       (182)       (51)
           Acquisition liabilities, noncurrent                1,860        322
                                                            -------    -------
                                                                835       (165)
                                                            -------    -------

                      Net deferred income tax asset         $ 3,313    $ 1,392
                                                            =======    =======


7.       Stock Options and Warrants

         In January 1995, the Company adopted the 1995 Stock Incentive Plan (the
         "1995  Plan") and the  Directors'  Option Plan (the  "Directors  Plan")
         which authorize the granting of options to officers,  key employees and
         directors to purchase  unissued  common stock of the Company subject to
         certain  conditions,  such as continued service.  The 1995 Plan and the
         Directors  Plan  authorized the granting of up to 1,200 and 100 options
         to purchase  common  stock,  respectively.  The option price of options
         granted  under  either of these plans is equal to the fair market value
         on the date of grant.

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

         The Company  amended the  Directors  Plan and the 1996 Plan to increase
         the total number of shares of stock  available  for grant to 200 shares
         and 1,800 shares, respectively in May 1996. This amendment was approved
         by stockholders in September 1996.

         All outstanding options vest ratably over periods ranging from three to
         five years.











                                      F-14
<PAGE>

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



7.       Stock Options and Warrants, continued

         A summary of information  related to  these options for the years ended
         December 31, 1997, 1996 and 1995 follows:
<TABLE>
<CAPTION>

                                                       1997                   1996                  1995
                                               --------------------- ----------------------- -----------------------
                                                           Weighted               Weighted                Weighted
                                                           Average                Average               Average
                                                           Exercise               Exercise               Exercise
                                                  Shares  Price/Share   Shares   Price/Share    Shares  Price/Share
                                               ---------  ----------  ---------  ----------- --------- -----------

<S>                                             <C>        <C>         <C>         <C>        <C>          <C>
         Outstanding, beginning of year            1,668   $    7.10        365    $    3.71      --          --
           Granted                                   545       13.73      1,310         8.02       365     $  3.71
           Exercised/Canceled                        (27)       7.04         (7)        3.00      --          --
                                                --------   ---------    -------    ---------   -------     -------
         Outstanding, end of year                  2,186   $    7.19      1,668    $    7.10       365     $  3.71
                                                ========   =========    =======    =========   =======     =======

         Available for grant, end of year          1,080                  1,625                    935
                                                ========                =======                =======

         Price range at end of year             $3.00 to               $3.00 to               $3.00 to
                                                 $16.87                  $9.00                  $4.50
                                               =========                =======                =======

         Price range for exercised              $3.00 to
                                                  $8.75                  $3.00                 $  --
                                               =========                =======                =======

         Weighted-average fair value of
           options granted during the year     $   2,239                $ 3,252                $   463
                                               =========                =======                =======
</TABLE>


<TABLE>
<CAPTION>
                                                          Weighted
                                                           Average          Weighted
                                                          Remaining          Average
                               Number         Number     Contractual        Exercise
           Price per Share   Outstanding   Exercisable      Life           Price/Share
         ------------------- ------------  ----------- ----------------  ----------------
<S>                                <C>            <C>     <C>            <C>
          $3.00 to $ 4.50            351          159     7.4 years      $          3.71
          $4.51 to $ 7.00            321          120     8.1 years                 6.12
          $7.01 to $ 9.00            976          250     8.6 years                 8.63
          $9.01 to $17.00            538           97     9.7 years                13.79
                             ------------  -----------                   ----------------

                                   2,186          626                    $          7.19
                             ============  ===========                   ================

</TABLE>








                                      F-15
<PAGE>

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

7.       Stock Options and Warrants, 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 5.7% to 7.2%, a dividend yield of zero, a volatility  factor
         of the expected market price of the Company's  common stock of 26%, and
         an expected option life of three to five years.

         The  Black-Scholes  option  valuation  model was  developed  for use in
         estimating  the fair  value of traded  options  which  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  appreciation 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>

                                                               1997       1996       1995
                                                            ---------  ---------  ---------

<S>                                                         <C>        <C>        <C>
         Net income                                         $     300  $   2,622  $     765
                                                            =========  =========  =========
         Net income (loss), pro forma                       $  (1,939) $    (629) $     302
                                                            =========  =========  =========

         Earnings per common share, as reported:
           Basic                                            $    --    $     .20  $     .14
                                                            =========  =========  =========
           Diluted                                          $    --    $     .19  $     .14
                                                            =========  =========  =========

         Earnings (loss) per common share, pro forma:
           Basic                                            $    (.11) $    (.05) $     .06
                                                            =========  =========  =========
           Diluted                                          $    (.11) $    (.05) $     .05
                                                            =========  =========  =========


</TABLE>


         In connection  with the initial  public  offering,  the Company  issued
         warrants to  purchase  up to 240 shares of common  stock at an exercise
         price  of  $3.60  to the  representatives  of the  underwriters.  These
         warrants are exercisable for a five year period  commencing on February
         22, 1996. To date, 162 of these warrants have been exercised.

         In connection  with an  acquisition,  warrants to purchase 36 shares of
         common stock were issued at an exercise price of $5.50.  These warrants
         become  exercisable  ratably over a three year period beginning October
         2, 1996.






                                      F-16
<PAGE>


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

8.       Acquisitions

         On December 4, 1997, TW Communication  Corporation  ("TW") was acquired
         when a  wholly-owned  subsidiary  of the  Company  was merged  into TW,
         resulting in TW becoming a wholly-owned  subsidiary of the Company.  TW
         is a distributor of wire, cable, fiber optics and installation supplies
         predominantly  to the  telecommunications,  data and  cable  television
         industries  primarily in the United  States.  The total  purchase price
         consisted  of $3,000 in cash,  and 874 shares of the  Company's  common
         stock.  In connection  with the  acquisition,  the Company paid in full
         approximately $13,600 of TW bank indebtedness.

         On  October  17,  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 stock.

         On July 11,  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.  ("Connectivity") bank debt by Anicom. In
         addition,   the  Company   entered   into  a  supply   agreement   with
         Connectivity.

         Anicom  purchased  all of the issued and  outstanding  common  stock of
         Security Supply, Inc. ("Security Supply") of New Orleans, Louisiana, on
         March 21, 1997. 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.

         On February 28, 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.

         On September 3, 1996,  the Company  acquired  substantially  all of the
         assets  and  assumed  certain  liabilities  of  Western  Wire and Alarm
         Products,  Inc.  ("Western") of Denver,  Colorado,  a specialist in the
         sale and  distribution of security devices and wire. The purchase price
         was $300  payable  in cash and common  stock.  In  connection  with the
         acquisition,   the  Company  paid  in  full  $50  of   Western's   bank
         indebtedness.






                                      F-17
<PAGE>


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


8.       Acquisitions, continued

         On September 1, 1996, the Company  acquired  Norfolk Wire & Electronics
         Inc.  ("Norfolk"),  through the purchase of all issued and  outstanding
         shares of common stock.  Norfolk's operations consisted  principally of
         the sale and  distribution of voice and data wire,  cable and ancillary
         products.  In addition to its four  locations in the state of Virginia,
         Norfolk had  locations in Tinton  Falls,  New Jersey and  Gaithersburg,
         Maryland.  The  purchase  price was  $8,000  payable in cash and common
         stock. At the closing, the Company paid in full approximately $2,600 of
         Norfolk bank indebtedness.

         On May 30, 1996, the Company acquired  substantially  all of the assets
         and assumed  certain  liabilities  of Southern  Alarm Supply Co.,  Inc.
         ("Southern")  of  Nashville,  Tennessee,  a specialist  in the sale and
         distribution of security  devices and wire. The purchase price was $350
         payable in cash and common stock.

         On March 12, 1996, the Company acquired substantially all of the assets
         and  assumed  certain  liabilities  of  Northern  Wire  &  Cable,  Inc.
         ("Northern"), a specialist in the sale and distribution of wire, cable,
         fiber optics and  connectivity  products for structured  wiring,  power
         cables,  cable  connector  assemblies  for  automation,  computers  and
         robotics and  value-added  services for the  industrial  management and
         technology market. Northern had branches in Troy, Michigan;  Cleveland,
         Ohio; Atlanta,  Georgia;  Tampa,  Florida;  and Las Vegas,  Nevada. The
         purchase price was $13,600 payable in cash,  notes and common stock. In
         connection  with the  acquisition,  the Company  assumed  approximately
         $5,600 of Northern bank indebtedness which was paid in full at closing.

         On February 22, 1996,  the Company  acquired  substantially  all of the
         assets and assumed certain liabilities of Medisco,  Inc. ("Medisco") of
         Indianapolis,  Indiana,  a distributor of wire and cable products.  The
         purchase price was $837 payable in cash.

         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.






                                      F-18
<PAGE>


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


8.       Acquisitions, continued

         The following pro forma consolidated financial information assumes that
         the Northern,  Norfolk, Energy and TW acquisitions and the issuances of
         equity discussed in Notes 4 and 11, which were a significant  source of
         the funds used in certain of the  acquisitions,  occurred on January 1,
         1996. It further assumes that the equity transaction  discussed in Note
         11 resulted in the issuance of common stock, based on the conversion of
         the Preferred Stock to Common Stock approximately four months after its
         issuance.  The  results do not purport to be  indicative  of what would
         have occurred had the acquisitions been made on January 1, 1996 nor are
         they indicative of the results which may occur in the future.

                                                           1997         1996
                                                        ----------   ----------
                                                              (unaudited)

               Net sales                                  $358,523     $286,373
                                                        ==========   ==========
               Operating income                              2,843*       7,469
                                                        ==========   ==========
               Net income                                    1,538*       4,682
                                                        ==========   ==========
               Pro forma earnings per common share:
                 Basic                                        $.07*        $.21
                                                        ==========   ==========
                 Diluted                                      $.07*        $.21
                                                        ==========   ==========
               Pro forma weighted average common
                 shares outstanding:
                 Basic                                      22,834       22,565
                                                        ==========   ==========
                 Diluted                                    23,591       22,760
                                                        ==========   ==========





               *  During 1997, the Company incurred approximately $5.6 million
                  for the costs related to the development and  implementation
                  of the business process  reengineering plan,  implementing a
                  new   information   technology   system,   writing  off  all
                  capitalized  costs  associated  with the Company's  previous
                  system,  terminating  certain  contractual  obligations that
                  resulted from a 1996  acquisition,  consolidating  redundant
                  facilities  and the internal  resource  costs related to the
                  implementation  of the new system and the  business  process
                  reengineering plan.












                                      F-19
<PAGE>


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


9.       Earnings Per Share

         The  following  table sets forth the  computation  of basic and diluted
         earnings per share:

<TABLE>
<CAPTION>
                                                                                     Weighted Avg.
                                                                   Net Income         Shares          Per Share
                                                                  (Numerator)      (Denominator)       Amounts
                                                                 -------------     -------------   -----------

<S>                                                              <C>                      <C>      <C>

         Year ended December 31, 1997:
            Basic EPS:
              Income available to common stockholders            $           4            17,476   $       -
                                                                 =============     =============   ===========
              Effect of dilutive options

            Diluted EPS:
              Income available to common stockholders
                  plus assumed conversions                       $           4            17,476   $        -
                                                                 =============     =============   ===========

         Year ended December 31, 1996:
            Basic EPS:
              Income available to common stockholders            $       2,623            13,384   $       .20
                                                                 =============     =============   ===========
              Effect of dilutive options                                                     196
                                                                                   =============

            Diluted EPS:
              Income available to common stockholders
                  plus assumed conversions                       $       2,623            13,580   $       .19
                                                                 =============     =============   ===========

         Year ended December 31, 1995:
            Basic EPS:
              Income available to common stockholders            $         764             2,704   $       .28
                                                                 =============     =============   ===========
              Effect of dilutive options                                                     125
                                                                                   =============

            Diluted EPS:
              Income available to common stockholders
              plus assumed conversions                           $         764             2,829   $       .27
                                                                 =============     =============   ===========

</TABLE>






                                      F-20
<PAGE>

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


10.      Commitments and Contingencies

         Employment Agreements
         The  Company  has  entered  into  employment  agreements  with  certain
         officers.  In the  event  of a  change  in  control,  as  defined,  the
         employment  agreements  provide for severance payments if employment is
         terminated.  The aggregate  base salary payable to these officers under
         the employment  agreements in 1998 is $1,026.  In the event of a change
         in control,  the Company may become obligated to make payments to these
         officers of up to approximately $3,250.

         Operating  Leases  The  Company  leases  certain  warehouse  and office
         facilities and equipment under operating  leases.  Rental expense under
         the  leases  was  approximately  $3,216 , $1,419 and $364 for the years
         ended  December  31,  1997,  1996 and 1995,  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, 1997 are as follows:


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

                      1998                      $       4,897
                      1999                              4,526
                      2000                              3,619
                      2001                              3,019
                      2002                              2,323
                      Thereafter                        4,893
                                                -------------

                      Total                     $      23,277
                                                =============


         The  Company is also  obligated  to pay certain  taxes and  assessments
         relating to these leases. Certain leases contain renewal options.

         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.

         Subsequent  to the  acquisition  of  Norfolk,  the  Company  gained  an
         additional  defined  contribution  retirement plan (the "Norfolk Plan")
         which required  Company  contributions  of 25% up to a maximum of 4% of
         employee   compensation.   Effective   September,   1997,   no  further
         contributions  to the Norfolk  Plan are  allowed.  Participants  in the
         Norfolk  Plan have been given the  opportunity  to  participate  in the
         Anicom Plan. Management anticipates the termination of the Norfolk Plan
         by the end of 1998.






                                      F-21
<PAGE>


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


10.      Commitments and Contingencies, continued

         Retirement Plan, continued
         With  the   acquisition   of  TW,  the  Company  has  a  third  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.

         Total Company  contributions to the plans were approximately $113, $104
         and $20 in 1997, 1996 and 1995, respectively.

         Other
         The  Company  is  subject to legal  proceedings  and claims  related to
         acquired  businesses  and those  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.














                                      F-22
<PAGE>

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


11.      Other Financial Information

         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.  Execution 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.

         Below is a summary of acquisition cost activity:

<TABLE>
<CAPTION>

                                                                                     Tax
                                                                         Lease   Liabilities
                                                 External                Exit        and
                                               Consultants  Severance    Costs      Other      Total
                                                  -------    -------    -------    -------    -------
<S>                                               <C>        <C>        <C>        <C>        <C>
         Balance, January 1, 1996                 $  --      $  --      $  --      $  --      $  --
         Establish liabilities                      1,077      1,686        614        237      3,614
         Expenditures                                (944)      (867)      (176)       (59)    (2,046)
                                                  -------    -------    -------    -------    -------
         Balance, December 31, 1996                   133        819        438        178      1,568
         Establish liabilities                      1,882      3,091      2,043      1,827      8,843
         Expenditures                              (1,537)      (560)      (286)      (409)    (2,792)
                                                  -------    -------    -------    -------    -------
         Balance, December 31, 1997               $   478    $ 3,350    $ 2,195    $ 1,596    $ 7,619
                                                  =======    =======    =======    =======    =======

</TABLE>



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

         The  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 Preferred
         Stock were converted to shares of Common Stock.






                                      F-23
<PAGE>


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


11.      Other Financial Information, continued

         Product lines
         On  December  31,  1996,  the  Company  sold its copper and fiber optic
         cutting and  splicing  kit product  line and its low voltage  cable and
         fiber optic connector product line in two separate transactions.

         On March 7, 1997,  the Company sold its third  assembled  product line.
         The Company recognized a pre-tax gain on these sales which is reflected
         in general and administrative expense in the statements of income.

         In connection with the sales,  the Company accepted notes for a portion
         of the purchase price. These notes are included in other assets.













                                      F-24
<PAGE>


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


12.      Supplemental Cash Flow Information

         The  following is a summary of the noncash  investing and financing for
         the years ended December 31, 1997, 1996 and 1995:

<TABLE>
<CAPTION>

                                                               1997         1996         1995
                                                            ---------    ---------    ---------
<S>                                                         <C>          <C>          <C>
         Acquisitions:
           Fair value of assets acquired                    $ 108,591    $  53,266    $   5,283
           Acquisition liabilities and costs                   (8,843)      (3,614)
           Bank debt assumed                                  (16,818)      (9,318)        (426)
           Other liabilities assumed                          (27,164)     (17,456)      (1,726)
           Long-term debt issued                                 --         (3,000)        (800)
           Common stock issued                                (21,627)      (5,537)        (897)
                                                            ---------    ---------    ---------

           Cash paid                                           34,139       14,341        1,434
           Less:  Cash acquired                                  (338)        (140)
                                                            =========    =========    =========

                                                            $  33,801    $  14,201    $   1,434
                                                            =========    =========    =========
         Dispositions:
           Value of assets sold, net of transaction costs   $     117    $     404
                                                            =========    =========

           Notes receivable accepted                        $     400    $     875
                                                            =========    =========

           Anicom common stock received                                  $     507
                                                                         =========

         Assets acquired through capital lease                                      $      76
                                                                                    =========

         Conversion of Preferred Stock:

           Conversion to Common Stock                       $  27,000
                                                            =========

           Payment of dividends in Common Stock             $     297
                                                            =========

</TABLE>

13.      Other Related Party Transactions

         One of the Company's  directors is a Managing Director of an investment
         banking  firm  which  served as a  placement  agent  for the  Company's
         private  placement in December 1997 and as one of the  underwriters  of
         the Company's follow-on offering in November 1995.

14.      Subsequent Events (Unaudited)

         In March 1998, the Company acquired substantially all of the assets and
         assumed  certain  liabilities  of Yankee  Electronics  Inc. and Optical
         Fiber  Components  Inc.  Yankee  Electronics  Inc.  and  Optical  Fiber
         Components   Inc.   are  located  in  New   Hampshire   and   Virginia,
         respectively.  The purchase price consists of $3,800 in cash and common
         stock.  In  addition,  the Company  will assume  approximately  $500 of
         Yankee  Electronics  Inc. and Optical Fiber  Components  Inc.  combined
         debt.






                                      F-25
<PAGE>



                                  Anicom, Inc.
                 Schedule II - Valuation and Qualifying Accounts
              For the years ended December 31, 1997, 1996 and 1995
                                 (in thousands)





                                                1997        1996        1995
                                              -------     -------     -------
     Allowance for Doubtful Accounts
       Balance, beginning of year             $   980     $   120     $    47
       Additions                                2,183         939          83
       Write-offs, net of recoveries             (721)        (79)        (10)
                                              -------     -------     -------
       Balance, end of year                   $ 2,442     $   980     $   120
                                              =======     =======     =======


     Inventory Valuation Allowance
       Balance, beginning of year             $   300     $    -      $   -
       Additions                                2,694         535
       Write-offs                                (718)       (235)
                                              -------     -------     -------
       Balance, end of year                   $ 2,276     $   300     $   -
                                              =======     =======     =======























                                      F-26
<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, 1998.

                            ANICOM, INC.

                                 By:  /s/ SCOTT C. ANIXTER
                                      -----------------------------------------
                                      Scott C. Anixter
                                      Chairman and Chief Executive Officer


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

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


<S>                                 <C>                                                               <C>
      /s/ SCOTT C. ANIXTER          Chairman, Chief Executive Officer
-------------------------------     and Director (Principal                                           March 30, 1998
        Scott C. Anixter            Executive Officer)


      /s/ ALAN B. ANIXTER           Chairman of the Board                                             March 30, 1998
-------------------------------
        Alan B. Anixter


       /s/ CARL E. PUTNAM           President, Chief Operating Officer                                March 30, 1998
-------------------------------
         Carl E. Putnam


     /s/ DONALD C. WELCHKO          Vice President, Chief Financial Officer and a Director            March 30, 1998
-------------------------------     (Principal Financial and Accounting Officer)
       Donald C. Welchko


       /s/ MICHAEL SEGAL            Director                                                          March 30, 1998
-------------------------------
         Michael Segal


        /s/ LEE B. STERN            Director                                                          March 30, 1998
-------------------------------
          Lee B. Stern


</TABLE>

<PAGE>




                                  EXHIBIT INDEX


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

      21                  Subsidiaries

      23.1                Consent of Coopers & Lybrand L.L.P.

      27                  Financial Data Schedule