SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    Form 10-Q


                   Quarterly Report under Section 13 or 15 (d)
                     of the Securities Exchange Act of 1934


For the quarterly period ended: June 30, 1999    Commission File Number: 0-19589
                                -------------                            -------



                              ARGUSS HOLDINGS, INC.
           ----------------------------------------------------------

             (Exact name of Registrant as specified in its Charter)


                Delaware                                     02-0413153
    ---------------------------------              -----------------------------
     (State of other jurisdiction of                      (I.R.S. Employer
     incorporation of organization)                    Identification Number)


One Church Street, Suite 302, Rockville, Maryland              20850
-------------------------------------------------        -----------------
    (Address of Principal Executive Offices)                 (Zip Code)


Registrant's Telephone Number, including Area Code:         301-315-0027




Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.


  Yes:   X                 No:
       -----                   -----



As of July 19, 1999,  there were  11,863,261  shares of Common Stock,  $ .01 par
value per share, outstanding.




<PAGE>


                              ARGUSS HOLDINGS, INC.


                                      INDEX




Part I - Financial Information:                                             Page
                                                                            ----

         Item 1 - Financial Statements


                  Consolidated Balance Sheets (Unaudited)-
                  June 30, 1999 and December 31, 1998                          3

                  Consolidated Statements of Operations (Unaudited)-
                  Three Months and Six Months Ended June 30, 1999
                  and June 30, 1998                                            4

                  Consolidated Statements of Cash Flows (Unaudited)-
                  Six Months Ended June 30, 1999 and June 30, 1998             5

                  Notes to Consolidated Financial Statements
                  (Unaudited)                                                  7


         Item 2 - Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                         15

         Item 3 - Quantitative and Qualitative Disclosure about Market Risk   20

Part II - Other Information                                                   20

          Items 1 through 6

          Signatures

          Exhibits




                                       2
<PAGE>



                              ARGUSS HOLDINGS, INC.

                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)


                                                   June 30, 1999   Dec. 31, 1998
                                                   -------------   -------------
  Assets

Current assets:
  Cash                                              $    577,000    $  1,809,000
  Restricted cash from customer advances               6,888,000         978,000
  Accounts receivable trade, net of allowance
    for doubtful accounts of $362,000  and
    $265,000 in 1999 and 1998, respectively           22,863,000      31,877,000
  Costs and earnings in excess of billings            30,677,000       9,565,000
  Inventories                                            298,000         413,000
  Other current assets                                 1,662,000       1,233,000
  Deferred tax assets                                  1,469,000       1,485,000
                                                    ------------    ------------
  Total current assets                                64,434,000      47,360,000

Property, plant and equipment, net                    34,857,000      29,858,000
Goodwill, net                                         73,798,000      71,728,000
Net assets of discontinued operations                  4,562,000       4,914,000
                                                    ------------    ------------
                                                    $177,651,000    $153,860,000
                                                    ============    ============

  Liabilities and Stockholders' Equity

Current liabilities:

  Current portion long-term debt                    $  7,348,000    $ 11,372,000
  Short-term borrowings                               25,060,000       6,777,000
  Accounts payable                                    13,569,000      12,343,000
  Billings in excess of costs and earnings                  --           748,000
  Customer advances                                   13,840,000       7,000,000
  Accrued expenses and other liabilities               9,528,000       6,117,000
  Due to former Schenck Communications
    shareholders                                            --        18,696,000
                                                    ------------    ------------
    Total current liabilities                         69,345,000      63,053,000
                                                    ------------    ------------

Long-term debt, excluding current portion             22,186,000      22,259,000
Deferred income taxes                                  3,510,000       3,675,000
                                                    ------------    ------------
    Total liabilities                                 95,041,000      88,987,000
                                                    ------------    ------------

Stockholders' equity:
  Common stock $.01 par value                            119,000         109,000
  Additional paid-in capital                          76,878,000      61,327,000
  Retained earnings                                    5,613,000       3,437,000
                                                    ------------    ------------
    Total stockholders' equity                        82,610,000      64,873,000
                                                    ------------    ------------
                                                    $177,651,000    $153,860,000
                                                    ============    ============



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



                                       3
<PAGE>



<TABLE>
<CAPTION>
                                             ARGUSS HOLDINGS, INC.

                                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                                  (UNAUDITED)

                                                      Three Months Ended              Six Months Ended
                                                June 30, 1999   June 30, 1998   June 30, 1999   June 30, 1998
                                                -------------   -------------   -------------   -------------
<S>                                              <C>             <C>             <C>             <C>
Net sales                                        $ 43,856,000    $ 30,435,000    $ 81,663,000    $ 49,625,000
Cost of sales, excluding depreciation              31,936,000      22,736,000      62,518,000      38,087,000
                                                 ------------    ------------    ------------    ------------
  Gross profit, excluding depreciation             11,920,000       7,699,000      19,145,000      11,538,000

Selling, general and administrative expenses        3,327,000       2,653,000       6,016,000       4,871,000
Depreciation                                        2,019,000       1,416,000       3,917,000       2,686,000
Goodwill amortization                               1,056,000         651,000       2,004,000       1,305,000
                                                 ------------    ------------    ------------    ------------
  Operating income                                  5,518,000       2,979,000       7,208,000       2,676,000
                                                 ------------    ------------    ------------    ------------

Other income (expense):
  Interest income and other                           159,000         120,000         192,000         171,000
  Interest expense                                 (1,099,000)       (723,000)     (1,953,000)     (1,351,000)
                                                 ------------    ------------    ------------    ------------

Income from continuing operations
  before income tax expense                         4,578,000       2,376,000       5,447,000       1,496,000
Income tax expense                                 (2,194,000)     (1,211,000)     (2,906,000)     (1,121,000)
                                                 ------------    ------------    ------------    ------------

Income from continuing operations                   2,384,000       1,165,000       2,541,000         375,000
                                                 ------------    ------------    ------------    ------------

Discontinued operations:
  Income (loss) from discontinued
    operations net of tax benefit of $104,000
    and $116,000 in 1999 and tax expense
    of $1,000 and $11,000 in 1998,
    respectively                                     (156,000)          1,000        (182,000)         18,000
  Loss on disposal of discontinued operations,
    net of tax benefit of $101,000 and
    $121,000 in 1999                                 (152,000)                       (182,000)
                                                 ------------    ------------    ------------    ------------
  Net income                                     $  2,076,000    $  1,166,000    $  2,177,000    $    393,000
                                                 ============    ============    ============    ============

Earnings per common share -- basic:
  Income from continuing operations              $        .20    $        .11    $        .22    $        .04
  Loss from discontinued operations                      (.01)           --              (.02)           --
  Loss on disposal of discontinued operations            (.01)                           (.01)
                                                 ------------    ------------    ------------    ------------
  Earnings per common share                      $        .18    $        .11    $        .19    $        .04
                                                 ============    ============    ============    ============

Earnings per common share -- diluted:
  Income from continuing operations              $        .18    $        .11    $        .20    $        .04
  Loss from discontinued operations                      (.01)           --              (.02)           --
  Loss on disposal of discontinued operations            (.01)                           (.01)
                                                 ------------    ------------    ------------    ------------
  Earnings per common share                      $        .16    $        .11    $        .17    $        .04
                                                 ============    ============    ============    ============

Weighted average shares outstanding:
               -- basic                            11,751,000      10,421,000      11,704,000      10,388,000
                                                 ============    ============    ============    ============
               -- diluted                          13,044,000      11,103,000      12,816,000      11,041,000
                                                 ============    ============    ============    ============
</TABLE>


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



                                       4
<PAGE>



                              ARGUSS HOLDINGS, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                                         Six Months Ended
                                                  June 30, 1999   June 30, 1998
                                                  -------------   -------------
Cash flows from operating activities:
  Net income                                       $  2,177,000    $    393,000
(Income) loss from discontinued operations, net         182,000         (18,000)
Loss on disposal of discontinued operations, net        182,000            --
  Adjustments to reconcile net income to net
    cash provided by (used in) operating
    activities of continuing operations:
      Depreciation                                    3,917,000       2,686,000
      Goodwill amortization                           2,004,000       1,305,000
      Non cash stock compensation                          --         1,101,000
      Deferred income taxes                                --            99,000

Changes in assets and liabilities:
  Accounts receivable                                 9,886,000      (9,338,000)
  Costs and earnings in excess of billings          (20,182,000)     (6,006,000)
  Inventories                                           115,000            --
  Other current assets                                 (377,000)        780,000
  Accounts payable                                    1,115,000       6,078,000
  Billings in excess of costs and earnings             (748,000)           --
  Accrued expenses and other liabilities              3,246,000        (121,000)
                                                   ------------    ------------
  Net cash flows provided by (used in) operating
    activities of continuing operations               1,517,000      (3,041,000)
                                                   ------------    ------------

Cash flows from investing activities:
  Additions to property, plant and equipment         (8,422,000)     (7,258,000)
  Additional payment to former Schenck
    Communications shareholders                      (7,604,000)           --
  Purchase of telecom construction
    companies, net                                   (1,750,000)    (13,799,000)
                                                   ------------    ------------
  Net cash used in investing activities of
    continuing operations                           (17,776,000)    (21,057,000)
                                                   ------------    ------------

Cash flows from financing activities:
  Proceeds from lines of credit                      18,283,000      26,188,000
  Net repayments of lines of credit                  (4,097,000)     (2,552,000)
  Issuance of common stock                              841,000         713,000
                                                   ------------    ------------
  Net cash provided by financing activities
    of continuing operations                         15,027,000      24,349,000
                                                   ------------    ------------
  Net increase (decrease) in cash                    (1,232,000)        251,000
                                                   ------------    ------------

  Cash at beginning of period                         1,809,000       1,189,000
                                                   ------------    ------------

  Cash at end of period                            $    577,000    $  1,440,000
                                                   ============    ============



                                       5
<PAGE>




                              ARGUSS HOLDINGS, INC.
                                  CONSOLIDATED
                      STATEMENTS OF CASH FLOWS (CONTINUED)


                                                         Six Months Ended
                                                  June 30, 1999   June 30, 1998
                                                  -------------   -------------

Supplemental disclosures of cash paid for:
Interest                                           $  1,825,000    $  1,437,000
Corporate income taxes                                1,392,000         138,000

Supplemental disclosure of
  investing and financing activities:

Fair value of assets acquired:

Accounts receivable                                     872,000    $  5,710,000
Other current assets                                     36,000         375,000
Property and equipment                                  494,000       5,398,000
                                                   ------------    ------------
    Total non-cash assets                             1,402,000      11,483,000

Liabilities                                            (271,000)     (3,620,000)
Long-term debt                                         (111,000)     (1,888,000)
                                                   ------------    ------------

Net non-cash assets acquired                          1,020,000       5,975,000

Cash acquired                                              --         1,725,000
                                                   ------------    ------------

Fair value of net assets acquired                     1,020,000       7,700,000

Excess of costs over fair value
  of net assets acquired                              2,767,000      27,373,000
                                                   ------------    ------------

Purchase price                                     $  3,787,000    $ 35,073,000
                                                   ============    ============

Common stock issued                                   2,037,000    $ 21,274,000
Cash paid                                             1,750,000      15,524,000
Cash acquired                                              --        (1,725,000)
                                                   ------------    ------------

Purchase price                                     $  3,787,000    $ 35,073,000
                                                   ============    ============



(1)   During the six months ended June 30, 1999, former Schenck Communications
      shareholders received an additional $7.6 million in cash and 777,000
      shares of the Company's common stock in full satisfaction of their
      additional payments.

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



                                       6
<PAGE>


                              ARGUSS HOLDINGS, INC.

                              NOTES TO CONSOLIDATED
                              FINANCIAL STATEMENTS
                                   (UNAUDITED)

         A)       ORGANIZATION

         Prior to May 1997, Arguss Holdings,  Inc. (the "Company") operated as a
single entity under the name Conceptronic, Inc. On May 9, 1997, the shareholders
of the Company  approved a plan providing for the internal  restructuring of the
Company  whereby the Company became a holding  company and its operating  assets
were held by wholly owned operating subsidiaries.  Accordingly,  on May 9, 1997,
the Company  transferred  substantially all of its Conceptronic,  Inc. operating
assets to a newly  formed,  wholly  owned  subsidiary  of the  Company,  and the
Company changed its name to "Arguss Holdings,  Inc." The subsidiary then adopted
the name "Conceptronic, Inc." ("Conceptronic"). The Company's other wholly owned
operating subsidiary is Arguss Communications Group, Inc. ("ACG") formerly White
Mountain Cable Construction Corp.

         The  Company   conducts  its   operations   through  its  wholly  owned
subsidiaries,  ACG  and  Conceptronic.  ACG  is  engaged  in  the  construction,
reconstruction, maintenance, repair and expansion of telecommunications systems,
cable  television and data systems,  including  providing aerial and underground
construction  and  splicing  of both  fiber  optic  and  coaxial  cable to major
telecommunications  customers.  ACG  operates  through  its  divisions  -- White
Mountain ("WMC"),  Can-Am ("CA"),  TCS ("TCS"),  Schenck ("SC"), and Underground
Specialties  ("US").   Conceptronic  manufactures  and  sells  highly  advanced,
computer-controlled equipment used in the SMT circuit assembly industry.

         On March 17, 1999, the Company  announced the proposed  spin-off of its
wholly owned subsidiary,  Conceptronic, Inc., to a new entity. Also announced as
part of the  spin-off  transaction  was the  merger of Heller  Industries,  Inc.
("Heller")  into the new entity.  The Company has terminated  negotiations  with
Heller, and ceased plans to spin-off  Conceptronic to shareholders.  The Company
is currently  pursuing other alternatives with interested  parties.  The Company
believes that the carrying amount of Conceptronic  approximates  its fair value.
Loss on disposal of  discontinued  operations  reflects the estimated  operating
loss,  net of income tax  benefit,  for the period  subsequent  to June 30, 1999
through the date of  disposition  which the Company  believes  will occur during
1999.

         B)       BASIS FOR PRESENTATION

         As permitted  by the rules of the  Securities  and Exchange  Commission
(the "Commission") applicable to quarterly reports on Form 10-Q, these notes are
condensed  and do not contain all  disclosures  required by  generally  accepted
accounting principles.  Reference should be made to the financial statements and
related notes included in the Company's  Annual Report on Form 10-K for the year
ended December 31, 1998, filed with the Commission on March 16, 1999.

         In the opinion of the Company,  the  accompanying  unaudited  financial
statements  contain all adjustments  considered  necessary to present fairly the
financial  position  of the  Company  as of June  30,  1999 and the  results  of
operations and cash flows for the periods  presented.  The Company  prepares its
interim financial  information  using the same accounting  principles as it does
for its annual financial statements.

         The  Company's  telecom  construction  operations  are expected to have
seasonally  weaker results in the first and fourth quarters of the year, and may
produce stronger  results in the second and third quarters.  This seasonality is
primarily due to the effect of winter weather on outside plant activities in the
northern  areas  served by ACG, as well as reduced  daylight  hours and customer
budgetary  constraints.  Certain  customers  tend to complete  budgeted  capital
expenditures  before the end of the year, and postpone  additional  expenditures
until the subsequent fiscal period.

         Certain amounts in the 1998 financial statements have been reclassified
for comparability with the 1999 presentation.

         (C)      EARNINGS PER SHARE

         Basic  earnings  per common  share are computed by dividing net income,
income from continuing operations, loss from discontinued operations and loss on
disposition of discontinued  operations  available to common stockholders by the
weighted  average number of common shares  outstanding  for the period.  Diluted
earnings per common share reflect the maximum  dilution that would have resulted
from the  exercise  of stock  options and  warrants  and  contingently  issuable



                                       7
<PAGE>


shares.  Diluted  earnings per common share are computed by dividing net income,
income from continuing operations, loss from discontinued operations and loss on
disposition of discontinued  operations by the weighted average number of common
shares and all dilutive securities.

<TABLE>
<CAPTION>
                                                            Six Months Ended
                                                             June 30, 1999
                                                             -------------
                                                      Effect of   Effect of Estimated
                                                        Stock        Contingently
                                                     Options and       Issuable
                                      Basic            Warrants          Shares            Diluted
                                      -----            --------          ------            -------
<S>                               <C>                   <C>             <C>             <C>
Income from
  continuing operations           $  2,541,000             --              --           $  2,541,000
                                  ------------          -------         -------         ------------
Loss from
  discontinued operations             (182,000)            --              --               (182,000)
Loss on disposal of
  discontinued operation              (182,000)            --              --               (182,000)
                                  ------------          -------         -------         ------------
Net income                        $  2,177,000             --              --           $  2,177,000
                                  ============          =======         =======         ============

Per share:
Income from
  continuing operations           $        .22             (.01)           (.01)        $        .20
Loss from
  discontinued operations                 (.02)            --              --                   (.02)
Loss on disposal of
  discontinued operations                 (.01)            --              --                   (.01)
                                  ------------          -------         -------         ------------
Net income                        $        .19             (.01)           (.01)        $        .17
                                  ============          =======         =======         ============

Weighted average shares
  Outstanding                       11,704,000          561,000         551,000           12,816,000
                                  ============          =======         =======         ============
</TABLE>


<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                             June 30, 1999
                                                             -------------
                                                      Effect of   Effect of Estimated
                                                        Stock        Contingently
                                                     Options and       Issuable
                                      Basic            Warrants          Shares            Diluted
                                      -----            --------          ------            -------
<S>                               <C>                   <C>             <C>             <C>
Income from
  continuing operations           $  2,384,000             --              --           $  2,384,000
                                  ------------          -------         -------         ------------
Loss from discontinued
  operations                          (156,000)            --              --               (156,000)
Loss on disposal of
  discontinued operations             (152,000)            --              --               (152,000)
                                  ------------          -------         -------         ------------
Net income                        $  2,076,000             --              --           $  2,076,000
                                  ============          =======         =======         ============

Per share:
Income from
  continuing operations           $        .20             (.01)           (.01)        $        .18
Loss from
  discontinued operations                 (.01)            --              --                   (.01)
Loss on disposal of
  discontinued operations                 (.01)            --              --                   (.01)
                                  ------------          -------         -------         ------------
Net income                        $        .18             (.01)           (.01)        $        .16
                                  ============          =======         =======         ============

Weighted average shares
  outstanding                       11,751,000          593,000         700,000           13,044,000
                                  ============          =======         =======         ============
</TABLE>


                                       8
<PAGE>



<TABLE>
<CAPTION>
                                                            Six Months Ended
                                                             June 30, 1998
                                                             -------------
                                                      Effect of   Effect of Estimated
                                                        Stock        Contingently
                                                     Options and       Issuable
                                      Basic            Warrants          Shares            Diluted
                                      -----            --------          ------            -------
<S>                               <C>                   <C>             <C>             <C>
Income from
  continuing operations           $    375,000             --              --           $    375,000
Income from
  discontinued operations               18,000             --              --                 18,000
                                  ------------          -------         -------         ------------

Net income                        $    393,000             --              --           $    393,000
                                  ============          =======         =======         ============

Per share:
Income from
  continuing operations           $        .04                                          $        .04
                                  ------------          -------         -------         ------------

Net income                        $        .04             --              --           $        .04
                                  ============          =======         =======         ============

Weighted average shares
  outstanding                       10,388,000          653,000            --             11,041,000
                                  ============          =======         =======         ============
</TABLE>


<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                             June 30, 1998
                                                             -------------
                                                      Effect of   Effect of Estimated
                                                        Stock        Contingently
                                                     Options and       Issuable
                                      Basic            Warrants          Shares            Diluted
                                      -----            --------          ------            -------
<S>                               <C>                   <C>             <C>             <C>
Income from
  continuing operations           $  1,165,000             --              --           $  1,165,000
Income from
  discontinued operations                1,000             --              --                  1,000
                                  ------------          -------         -------         ------------

Net income                        $  1,166,000             --              --           $  1,166,000
                                  ============          =======         =======         ============

Per share:
Income from
  continuing operations           $        .11             --              --           $        .11
                                  ------------          -------         -------         ------------

Net income                        $        .11             --              --           $        .11
                                  ============          =======         =======         ============

Weighted average shares
  outstanding                       10,421,000          682,000            --             11,103,000
                                  ============          =======         =======         ============
</TABLE>



         D)       CONTRACT ACCOUNTING

         The retainage  included in accounts  receivable,  representing  amounts
withheld by contract with respect to ACG accounts receivable, was $3,529,000 and
$3,384,000  at June 30, 1999 and December 31,  1998,  respectively.  The Company
expects to collect substantially all the retainage within one year.




                                       9
<PAGE>



                                                       June 30,     December 31,
                                                         1999           1998
                                                     -----------    ------------

Costs incurred on uncompleted contracts              $51,049,000     $42,561,000
Estimated earnings                                    11,441,000       8,242,000
                                                     -----------     -----------
                                                      62,490,000      50,803,000
Less: Billings to date                                31,813,000      41,986,000
                                                     -----------     -----------
                                                     $30,677,000     $ 8,817,000
                                                     ===========     ===========

Included in accompanying balance sheets
  under the following captions:
  Costs and earnings in excess of billings           $30,677,000     $ 9,565,000
                                                     ===========     ===========
  Billings in excess of costs and earnings           $      --       $   748,000
                                                     ===========     ===========


         E)       ACQUISITIONS

         During the six months ended June 30,  1999,  the Company paid former SC
shareholders  an  additional  $7.6  million  in cash and  777,000  shares of the
Company's  common stock in full  satisfaction of their additional  payments.  In
1998, the Company acquired US. The US purchase agreement contains provisions for
additional  payments by the Company to former US shareholders to be satisfied by
the Company's common stock and cash, if certain  adjusted EBITDA  thresholds for
the year ended July 31, 1999 are met. To meet EBITDA thresholds, the US division
must have adjusted  EBITDA in excess of $2.1  million.  Results in excess of the
adjusted  EBITDA  threshold  serve as the basis to  determine  the amount of the
additional  payment.  The Company  estimates  that the  additional  payment will
aggregate  approximately  $11.8  million  in  cash  and  760,000  shares  of the
Company's  common  stock.  Additional  payments  earned  under  the terms of the
agreements will be recorded as an increase in goodwill.


         F)       SEGMENT INFORMATION

         The Company  adopted SFAS No. 131,  "Disclosures  about  Segments of an
Enterprise and Related  Information" during the fourth quarter of 1998. SFAS No.
131 establishes  standards for reporting information about operating segments in
interim financial reports issued to stockholders.  It also establishes standards
for related  disclosures  about  products  and services  and  geographic  areas.
Operating  segments  are  defined as  components  of an  enterprise  about which
separate financial  information is available that is evaluated  regularly by the
chief  operating  decision  maker,  or decision making group, in deciding how to
allocate resources and assessing performance.

         The  Company's two  reportable  segments are telecom  construction  and
corporate/other.  Effective  with the quarter ended March 31, 1999,  the Company
removed  manufacturing  from its  reportable  segments  because  the  Company is
reporting the manufacturing segment as discontinued  operations.  (See Note H to
Consolidated  Financial  Statements.)  Summarized financial  information for the
three months and six months ended June 30, 1998 has been restated to reflect the
revised reportable segments.  The telecom construction segment is engaged in the
construction, reconstruction of telecommunications systems, cable television and
data  systems,  including  providing  aerial and  underground  construction  and
splicing  for both fiber  optic and  coaxial  cable to major  telecommunications
customers.  Because the  construction of a telecom system is a fully  integrated
undertaking,  the Company does not capture  individually  each  component of the
construction   functions   performed  for  revenue   reporting   purposes.   The
corporate/other  segment  provides  managerial,  capital  markets and  financial
reporting services to the Company.

         The Company's  reportable  segments are organized in separate  business
units  with  different  management,  technology  and  services.  The  respective
segments  account  for their  respective  businesses  using the same  accounting
policies used in the consolidated  financial  statements.  Summarized  financial
information  concerning the Company's  reportable  segments net of inter-company
transactions  is shown in the  following  table.  The  "Corporate/Other"  column
includes the Company's unallocated corporate expenses.




                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                        Six Months Ended
                                                        ----------------
                                                         June 30, 1999
                                                         -------------
                                           Telecom
                                         Construction    Corporate/Other         Total
                                         ------------    ---------------         -----
<S>                                     <C>                <C>              <C>
External sales                          $  81,663,000                       $  81,663,000
Cost of sales, excluding
   depreciation                            62,518,000                          62,518,000
                                        -------------                       -------------
Gross profit, excluding
   depreciation                            19,145,000                          19,145,000
Operating expenses,
   excluding depreciation                   6,013,000      $      3,000         6,016,000
Goodwill amortization                       2,004,000                           2,004,000
Depreciation                                3,917,000                           3,917,000

Interest and other income (expense)           178,000            14,000           192,000
Interest expense                           (1,953,000)             --          (1,953,000)
                                        -------------      ------------     -------------
Income before income tax
  from continuing operations            $   5,436,000      $     11,000     $   5,447,000
                                        =============      ============     =============

Capital expenditures                    $   8,420,000      $      2,000     $   8,422,000
                                        =============      ============     =============
Property, plant and equipment, net      $  34,832,000      $     25,000     $  34,857,000
                                        =============      ============     =============

Total assets                            $ 170,823,000      $  2,266,000     $ 173,089,000(1)
                                        =============      ============     =============

Total liabilities                       $  88,918,000      $  6,123,000     $  95,041,000
                                        =============      ============     =============
</TABLE>

(1)  Segment  information  does not add to total assets because of $4,562,000 in
     net assets of discontinued operations.


<TABLE>
<CAPTION>
                                                        Six Months Ended
                                                        ----------------
                                                         June 30, 1998
                                                         -------------
                                           Telecom
                                         Construction    Corporate/Other         Total
                                         ------------    ---------------         -----
<S>                                     <C>                <C>              <C>
External sales                          $  49,625,000                       $  49,625,000
Cost of sales, excluding
   depreciation                            38,087,000                          38,087,000
                                        -------------                       -------------
Gross profit, excluding
   depreciation                            11,538,000                          11,538,000
Operating expenses,
   excluding depreciation                   3,770,000                           3,770,000
Goodwill amortization                       1,305,000                           1,305,000
Non cash stock compensation                 1,064,000            37,000         1,101,000
Depreciation                                2,686,000                           2,686,000

Interest and other income                     156,000            15,000           171,000
Interest expense                           (1,351,000)             --          (1,351,000)
                                        -------------      ------------     -------------
Income before income tax expense
  from continuing operations            $   1,518,000      $    (22,000)    $   1,496,000
                                        =============      ============     =============

Capital expenditures                    $   7,258,000                       $   7,258,000
                                        =============                       =============
Property, plant and equipment, net      $  21,828,000      $     33,000     $  21,861,000
                                        =============      ============     =============

Total assets                            $ 113,153,000      $    738,000     $ 113,891,000(2)
                                        =============      ============     =============

Total liabilities                       $  59,592,000      $  2,207,000     $  61,799,000
                                        =============      ============     =============
</TABLE>

(2)  Segment  information  does not add to total assets because of $5,681,000 in
     net assets of discontinued operations.


                                       11
<PAGE>


<TABLE>
<CAPTION>
                                                       Three Months Ended
                                                       ------------------
                                                         June 30, 1999
                                                         -------------
                                           Telecom
                                         Construction    Corporate/Other         Total
                                         ------------    ---------------         -----
<S>                                     <C>                <C>              <C>
External sales                          $  43,856,000                       $  43,856,000
Cost of sales, excluding
   depreciation                            31,936,000                          31,936,000
                                        -------------                       -------------
Gross profit, excluding
   depreciation                            11,920,000                          11,920,000
Operating expenses,
   excluding depreciation                   3,327,000                           3,327,000
Goodwill amortization                       1,056,000                           1,056,000
Depreciation                                2,019,000                           2,019,000

Interest and other income                     154,000             5,000           159,000
Interest expense                           (1,099,000)             --          (1,099,000)
                                        -------------      ------------     -------------
Income before income tax expense
  from continuing operations            $   4,573,000      $      5,000     $   4,578,000
                                        =============      ============     =============

Capital expenditures                    $   4,781,000      $      2,000     $   4,783,000
                                        =============      ============     =============
Property, plant and equipment, net      $  34,832,000      $     25,000     $  34,857,000
                                        =============      ============     =============

Total assets                            $ 170,823,000      $  2,266,000     $ 173,089,000(1)
                                        =============      ============     =============

Total liabilities                       $  88,918,000      $  6,123,000     $  95,041,000
                                        =============      ============     =============
</TABLE>

(1)  Segment  information  does not add to total assets because of $4,562,000 in
     net assets of discontinued operations.


<TABLE>
<CAPTION>
                                                       Three Months Ended
                                                       ------------------
                                                         June 30, 1998
                                                         -------------
                                           Telecom
                                         Construction    Corporate/Other         Total
                                         ------------    ---------------         -----
<S>                                     <C>                <C>              <C>
External sales                          $  30,435,000                       $  30,435,000
Cost of sales, excluding
   depreciation                            22,736,000                          22,736,000
                                        -------------                       -------------
Gross profit, excluding
   depreciation                             7,699,000                           7,699,000
Operating expenses,
   excluding depreciation                   1,963,000                           1,963,000
Goodwill amortization                         651,000                             651,000
Non cash stock compensation                   678,000            12,000           690,000
Depreciation                                1,416,000                           1,416,000

Interest and other income                     111,000             9,000           120,000
Interest expense                             (723,000)             --            (723,000)
                                        -------------      ------------     -------------
Income before income tax expense
  from continuing operations            $   2,379,000      $     (3,000)    $   2,376,000
                                        =============      ============     =============

Capital expenditures                    $   2,771,000                       $   2,771,000
                                        =============                       =============
Property, plant and equipment, net      $  21,828,000      $     33,000     $  21,861,000
                                        =============      ============     =============

Total assets                            $ 113,153,000      $    738,000     $ 113,891,000(2)
                                        =============      ============     =============

Total liabilities                       $  59,592,000      $  2,207,000     $  61,799,000
                                        =============      ============     =============
</TABLE>

(2)  Segment  information  does not add to total assets because of $5,681,000 in
     net assets of discontinued operations.


                                       12
<PAGE>


         (G)      BANK FINANCING

         In March 1999,  the Company  increased  its  availability  under credit
facilities with banks.  The Company expanded the credit facility to $100 million
from approximately $50 million,  and increased the number of banks participating
to six money center and regional banks. The Company pledged the capital stock of
its wholly owned subsidiaries and the majority of the Company's assets to secure
the credit  facility.  The Company intends to use the credit facility to provide
working capital to finance  acquisitions  and the purchase of capital assets and
for other corporate  purposes.  The credit facility has a $70 million  revolving
credit  feature,  as well as a $30 million  amortizing  five-year term facility.
Amounts  borrowed under the credit facility will bear interest as a relationship
to the  London  Interbank  Offered  Rate  ("LIBOR"),  plus  1.25%  to  2.25%  as
determined  by the ratio of the  Company's  total  funded  debt to  EBITDA.  The
Company incurs commitment fees of .25% to .50% as determined by the ratio of the
Company's total funded debt to EBITDA on any unused borrowing capacity under the
credit facility.

         In the ordinary course of business,  the Company is exposed to floating
interest rate risk. In March 1999,  the Company  terminated  interest rate swaps
entered into as a hedge  against  variable  term loan  interest  rate risk.  The
aggregate  loss of  approximately  $330,000 on  termination of the interest rate
swaps is being  amortized over the remaining life of the related term loan which
was hedged.

         To hedge the variable  term loan  interest rate risk for $30 million in
notional amount,  five-year,  term financing  facility,  the Company has entered
into an interest  rate swap pursuant to which it pays fixed  interest  rates and
receives  variable  interest rates on the same notional  amount.  During the six
months ended June 30, 1999,  the Company's  payment under the interest rate swap
was $17,550. The Company had no receipts pursuant to the interest rate swap.

         (H)      DISCONTINUED OPERATIONS

         On March 17, 1999, the Company  announced the proposed  spin-off of its
wholly owned subsidiary,  Conceptronic, Inc., to a new entity. Also announced as
part of the  spin-off  transaction  was the  merger of Heller  Industries,  Inc.
("Heller")  into the new entity.  The Company has terminated  negotiations  with
Heller, and ceased plans to spin-off  Conceptronic to shareholders.  The Company
is currently  pursuing other alternatives with interested  parties.  The Company
believes that the carrying amount of Conceptronic  approximates  its fair value.
Loss on disposal of  discontinued  operations  reflects the estimated  operating
loss,  net of income tax  benefit,  for the period  subsequent  to June 30, 1999
through the date of  disposition  which the Company  believes  will occur during
1999.

         The Company's  consolidated  financial statements have been restated to
reflect  the  categorization  of  Conceptronic  as  a  discontinued   operation.
Accordingly,  the revenues, costs and expenses,  assets and liabilities and cash
flows of  Conceptronic  have been excluded from the  respective  captions in the
Consolidated   Balance  Sheets,   Consolidated   Statements  of  Operations  and
Consolidated  Statements  of Cash  Flows  and have  been  reported  through  the
estimated date of disposition as "Income from discontinued  operations",  net of
applicable  income  taxes,  and as  "Net  assets  of  discontinued  operations",
respectively.

         Summarized financial information for the discontinued  operations is as
follows:

                                                   For the six months ended:
                                              June 30, 1999        June 30, 1998
                                              -------------        -------------
Net sales                                      $ 7,951,000          $9,777,000
Income (loss) before income tax
  expense (benefit)                               (298,000)             29,000
Net income (loss)                              ($  182,000)         $   18,000


                                             At June 30, 1999   At June 30, 1998
                                             ----------------   ----------------
Current assets                                 $ 7,976,000          $9,036,000
Total assets                                     9,665,000          10,728,000
Current liabilities                              3,986,000           4,090,000
Total liabilities                                5,103,000           5,047,000
Net assets of discontinued operations          $ 4,562,000(1)       $5,681,000

(1) Includes effect of loss on disposal of discontinued operations.


                                       13
<PAGE>


                                                 For the three months ended:
                                             June 30, 1999         June 30, 1998
                                             -------------         -------------
Net sales                                      $ 4,022,000          $4,728,000
Income (loss) before income tax
  expense (benefit)                               (260,000)              2,000
Net income (loss)                              ($  156,000)         $    1,000


         (I)      RELATED-PARTY TRANSACTIONS

         During the three  months  ended June 30,  1999,  the  Company  acquired
offices and equipment  maintenance  facilities  from the former owners of CA and
SC, who are significant shareholders in Arguss, as well as employees of ACG. The
aggregate   purchase  price  was  $2,608,000,   and  was  negotiated   based  on
independent, third party appraisals.






                                       14
<PAGE>


                              ARGUSS HOLDINGS, INC.

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

RESULTS OF OPERATIONS

         Prior to May 1997, Arguss Holdings,  Inc. (the "Company") operated as a
single entity under the name Conceptronic, Inc. On May 9, 1997, the shareholders
of the Company  approved a plan providing for the internal  restructuring of the
Company  whereby the Company became a holding  company and its operating  assets
were held by wholly owned operating subsidiaries.  Accordingly,  on May 9, 1997,
the Company  transferred  substantially all of its Conceptronic,  Inc. operating
assets to a newly  formed,  wholly  owned  subsidiary  of the  Company,  and the
Company changed its name to "Arguss Holdings,  Inc." The subsidiary then adopted
the name "Conceptronic, Inc." ("Conceptronic"). The Company's other wholly owned
operating  subsidiary  is Arguss  Communications  Group ("ACG")  formerly  White
Mountain Cable  Construction  Corp. ACG operates  through its divisions -- White
Mountain ("WM"), Can-Am ("CA"), TCS, Schenck ("SC"), and Underground Specialties
("US").

         The  Company   conducts  its   operations   through  its  wholly  owned
subsidiaries,  ACG  and  Conceptronic.  ACG  is  engaged  in  the  construction,
reconstruction, maintenance, repair and expansion of telecommunications systems,
cable  television and data systems,  including  providing aerial and underground
construction  and  splicing  of both  fiber  optic  and  coaxial  cable to major
telecommunications   customers.   Conceptronic  manufactures  and  sells  highly
advanced,  computer-controlled  equipment  used in the Surface Mount  Technology
circuit assembly industry.

         On March 17, 1999, the Company  announced the proposed  spin-off of its
wholly owned subsidiary,  Conceptronic, Inc., to a new entity. Also announced as
part of the  spin-off  transaction  was the  merger of Heller  Industries,  Inc.
("Heller")  into the new entity.  The Company has terminated  negotiations  with
Heller, and ceased plans to spin-off  Conceptronic to shareholders.  The Company
is currently  pursuing other alternatives with interested  parties.  The Company
believes that the carrying amount of Conceptronic  approximates  its fair value.
Loss on disposal of  discontinued  operations  reflects the estimated  operating
loss,  net of income tax  benefit,  for the period  subsequent  to June 30, 1999
through the date of  disposition  which the Company  believes  will occur during
1999.

         The Company's  consolidated  financial statements have been restated to
reflect  Conceptronic as a discontinued  operation.  Accordingly,  the revenues,
costs and expenses,  assets and liabilities and cash flows of Conceptronic  have
been excluded from the respective  captions in the Consolidated  Balance Sheets,
Consolidated  Statements of Operations and Consolidated Statements of Cash Flows
and have been reported through the estimated date of disposition as "Income from
discontinued operations",  net of applicable income taxes, and as "Net assets of
discontinued operations", respectively.

         Summarized financial information for the discontinued  operations is as
follows:

                                                  For the six months ended:
                                             June 30, 1999         June 30, 1998
                                             -------------         -------------
Net sales                                      $ 7,951,000          $9,777,000
Income (loss) before income tax
  expense (benefit)                               (298,000)             29,000
Net income (loss)                              $  (182,000)         $   18,000

                                               At June 30,       At December 31,
                                                  1999                1998
                                               -----------       ---------------
Current assets                                 $ 7,976,000           9,036,000
Total assets                                     9,665,000          10,728,000
Current liabilities                              3,986,000           4,090,000
Total liabilities                                5,103,000           5,047,000
Net assets of discontinued operations          $ 4,562,000(1)       $5,681,000

(1)  Includes effect of loss on disposal of discontinued operations.

                                                  For the three months ended:
                                             June 30, 1999         June 30, 1998
                                             -------------         -------------
Net sales                                      $ 4,022,000          $4,728,000
Income (loss) before income tax
  expense (benefit)                               (260,000)              2,000
Net income (loss)                              ($  156,000)         $    1,000


                                       15
<PAGE>


THREE MONTHS ENDED JUNE 30, 1999, COMPARED TO THREE MONTHS ENDED JUNE 30, 1998.

         The Company had  consolidated  net income of $2,076,000 for the quarter
ended June 30, 1999, compared to income of $1,166,000 for the quarter ended June
30, 1998 and income from  continuing  operations of  $2,384,000  for the quarter
ended June 30, 1999, compared to income from continuing operations of $1,165,000
in the  comparable  period  in  1998.  The  Company's  results  from  continuing
operations were favorably  impacted by the maturation of projects started during
1998 in Orlando, FL, Portland, OR and Denver CO.

         Consolidated net sales in the second quarter of 1999 were approximately
$43,856,000,  compared to  approximately  $30,435,000  for the second quarter of
1998, an increase of 44% due, in part, to the  acquisition of US which accounted
for $9,738,000 or 32% of the net sales for the three months ended June 30, 1998.
Operations  of ACG  owned  for at least  one year had a net  sales  increase  of
$3,683,000 or 12% for the quarter ended June 30, 1999. The Company believes that
internal  growth should  continue at the level achieved for the six months ended
June 30, 1999 with the start of the San Jose, CA contract and general  increased
levels of activity at all ACG divisions.

         Consolidated gross profit margin,  excluding  depreciation,  was 27% of
sales in the second  quarter of 1999,  compared to 25% for the second quarter of
1998.  The  improvement  in margins is due  primarily  to US, which had superior
margins  in  its  long-haul   business.   Margins  are  also  improving  in  the
aforementioned  maturing projects in Orlando,  FL, Portland,  OR and Denver, CO.
The  improvements  in  margins  was  offset,  in  part,  by  reduced  levels  of
construction  activity in Alaska and customer delays in the roll-out of projects
in New England.

         Consolidated  selling,  general  and  administrative  expenses  for the
second  quarter  of 1999  were  $3,327,000  or 7.6% of net  sales,  compared  to
$2,653,000  or 8.7% of net sales for the  second  quarter  of 1998.  The  dollar
increase  was largely  due to US,  which had  $325,000  in selling,  general and
administrative  expenses  for the  quarter  ended  June 30,  1999,  and  general
increase in overall  activity at ACG. The Company  experienced  reduced selling,
general and administrative  expenses as a percentage of net sales because in the
second quarter of 1998 the Company had $678,000 of non-cash stock  compensation,
compared to none in the second quarter of 1999.

         Depreciation expense increased to $2,019,000 for the quarter ended June
30,  1999,  compared  to  $1,416,000  for the  quarter  ended June 30,  1998 due
primarily to ACG which made significant  equipment  acquisitions during calendar
year 1998,  and during the six months  ended June 30,  1999.  The  equipment  is
depreciated over sixty months.  Further, US had $304,000 in depreciation for the
quarter ended June 30, 1999.

         Goodwill  amortization  increased to  $1,056,000  from  $651,000 in the
comparable period one year ago due to SC, whose former shareholders  realized an
additional  payment of  $18,696,000  in cash and stock in full  satisfaction  of
their additional  payment.  The additional  payment earned under the terms of SC
purchase  agreement  was  recorded  as an increase in  goodwill.  The  increased
goodwill is amortized  over the  remaining  nineteen year  amortization  period,
which increased goodwill  amortization during the quarter ended June 30, 1999 by
$246,000. In addition, US had $49,000 in goodwill for the quarter ended June 30,
1999.

         Interest  expense for the quarter  ended June 30, 1999 was  $1,099,000,
compared to $723,000 for the comparable period in 1998. The ACG interest expense
increased  for the quarter  ended June 30,  1999,  due to US whose  purchase was
partially  financed through bank lines of credit,  due to the additional payment
of $7.6 million to former SC shareholders  and due to increased use of financing
lines for the capital assets purchases in support of ACG's revenue growth.  (See
discussion  of  expanded  bank  credit   facilities  in  LIQUIDITY  and  CAPITAL
RESOURCES.)

         Income tax expense from  continuing  operations  was $2,194,000 for the
quarter  ended June 30, 1999,  compared to  $1,211,000 in income tax expense for
the quarter ended June 30, 1998.  The effective  income tax rate was 48% and 51%
for the  three  months  ended  June 30,  1999 and 1998,  respectively.  Goodwill
amortization,  which is  nondeductible  for income  tax  purposes,  impacts  the
effective  income tax rate  creating  an unusual  relationship  of the  expected
effective tax rate to pretax  income or loss.  During the quarter ended June 30,
1999,  the  Company  utilized  a 39%  effective  income tax rate prior to giving
effect to the impact of  nondeductible  goodwill  amortization on pretax income,
compared to a 40% estimated tax rate in the comparable period of one year ago.

SIX MONTHS ENDED JUNE 30, 1999, COMPARED TO SIX MONTHS ENDED JUNE 30, 1998

         The Company had a consolidated net income of  approximately  $2,177,000
for the six months ended June 30,  1999,  compared to net income of $393,000 for
the six months  ended June 30,  1998.  The  Company's  results  from  continuing



                                       16
<PAGE>


operations were favorably  impacted by the maturation of projects started during
1998 in Orlando, FL, Portland, OR and Denver CO.

         Consolidated  net sales for the six  months  ended  June 30,  1999 were
approximately  $81,663,000,   compared  to  approximately  $49,625,000  for  the
comparable  period in 1998, an increase of 64% due primarily to the  acquisition
of US,  which  accounted  for  $19,731,000  or 39% of the net  sales for the six
months ended June 30, 1998.  Operations of ACG owned for at least one year had a
net sales increase of $12,307,000 or 25% for the six months ended June 30, 1999.

         Consolidated gross profit margin,  excluding  depreciation,  was 23% of
sales for the six months ended June 30, 1999  compared to 23% for the six months
ended June 30, 1998.  Improved margins from the Company's  long-haul  operations
and aforementioned maturing projects were offset by lower levels of construction
activity in Alaska and the northeastern United States.

         Consolidated selling,  general and administrative  expenses for the six
months  ended June 30, 1999 were  $6,016,000  or 7.4% of net sales,  compared to
$4,871,000 or 9.8% of net sales for the  comparable  period in 1998.  The dollar
increase  was  largely  due to the  acquisition  of US,  which had  $676,000  in
selling,  general and administrative  expenses for the six months ended June 30,
1998, as well as an increased level of activity at ACG. The Company  experienced
reduced  selling,  general and  administrative  expenses as a percentage  of net
sales because in the six months ended June 30, 1998,  the Company has $1,101,000
in non cash stock  compensation,  compared to none in the six months  ended June
30, 1999.

         Depreciation  expense  increased to $3,917,000 for the six months ended
June 30, 1999, compared to $2,686,000 for the six months ended June 30, 1998 due
primarily  to ACG,  which made  significant  equipment  acquisitions  during the
calendar  year 1998 and during the six months ended June 30,  1999.  The capital
assets  are  depreciated  over  sixty  months.   Further,  US  had  $565,000  in
depreciation  for the six months  ended  June 30,  1999.  Goodwill  amortization
increased to $2,004,000  from  $1,305,000 in the comparable  period one year ago
due to the acquisition of US and the additional payment to SC.

         Net  interest  expense  for the six  months  ended  June  30,  1999 was
$1,953,000,  compared to $1,351,000 for the comparable  period in 1998.  This is
due to the acquisition of US, whose purchase was partially financed through bank
financing,  due  to  the  additional  payment  of  $7.6  million  to  former  SC
shareholders,  and due to  equipment  financing  lines  for the  above  expanded
capital  assets  acquisition  program.  (See  discussion of expanded bank credit
facilities in LIQUIDITY AND CAPITAL RESOURCES.)

         Income tax expense  increased  to  $2,906,000  for the six months ended
June 30,  1999 from  $1,121,000  in the  comparable  period  one year  ago.  The
effective income tax rate was 53% and 75% for the six months ended June 30, 1999
and 1998,  respectively.  Goodwill  amortization,  which is  non-deductible  for
income tax purposes,  impacts the effective  income tax rate creating an unusual
relationship of the expected effective tax rate to pretax income or loss. During
the six months ended June 30, 1999, the Company  utilized a 39% effective income
tax rate  prior  to  giving  effect  to the  impact  of  nondeductible  goodwill
amortization  on pretax  income,  compared  to a 40%  effective  tax rate in the
comparable period one year ago.

LIQUIDITY AND CAPITAL RESOURCES

         Effective  August 1, 1998,  the  Company  acquired  US. The US purchase
agreement contains  provisions for additional  payments by the Company to former
US  shareholders  to be satisfied  by the  Company's  common stock and cash,  if
certain adjusted EBITDA  thresholds for the year ended July 31, 1999 are met. To
meet EBITDA thresholds,  US division must have adjusted EBITDA in excess of $2.1
million.  Results in excess of the adjusted EBITDA  threshold serve as the basis
to determine the amount of the additional  payment.  Additional  payments earned
under the terms of the  agreements  are  recorded as an  increase  in  goodwill.
One-half of any additional  payment to former US shareholders  will be satisfied
by the  issuance  of shares of common  stock  valued at the lesser of $15.50 per
share or the market value on July 31, 1999 with a minimum price of $13.625.  The
Company estimates that the additional payment will aggregate approximately $11.8
million in cash and  760,000  shares of the  Company's  common  stock.  The cash
portion will be paid in the fourth  quarter of 1999 and funded by the  revolving
line of credit.

         During  the six  months  ended June 30,  1999,  former SC  shareholders
received an additional  $7.6 million in cash and 777,000 shares of the Company's
common stock in full  satisfaction  of their  additional  payments.  The Company
funded the payment using its lines of credit.



                                       17
<PAGE>


         Consolidated net cash provided by operating  activities from continuing
operations for the six months ended June 30, 1999 was $1,517,000,  compared to a
use of cash of $3,041,000  for the six months ended June 30, 1998.  The increase
in cash  provided by operating  activities  from  continuing  operations  is due
primarily to the  increase in net income,  as well as a reduction in the rate of
the growth in contract  receivables  when compared to the  comparable  period on
year ago. (Contract  receivables  include both accounts receivable and costs and
earnings  in excess of  billings).  Net cash used for  investing  activities  of
continuing  operations  for the six months ended June 30, 1999 was  $17,776,000,
compared to $21,057,000 in the second quarter of 1998. The decrease in investing
activities in  continuing  operations  is primarily  due to the  acquisition  of
Longnecker for $1,750,000 in cash in 1999,  compared with the acquisitions of CA
and SC for  $13,799,000  in cash during the six months ended June 30, 1998.  The
Company expended  $7,604,000 in 1999 for the additional payment due to former SC
shareholders.  Net cash flows  provided by financing  activities  of  continuing
operations was $15,027,000  for the six months ended June 30, 1999,  compared to
net cash flows  provided by financing  activities  of  continuing  operations of
$24,349,000  for the same  period in 1998.  The  decrease in net cash flows from
financing  activities  of  continuing  operations  reflects  the  impact  of the
acquisition of CA and SC in the first quarter of 1998 whose cash amount exceeded
the aggregate cash expended to purchase  Longnecker,  and to make the additional
payment to former SC shareholders.

         In March 1999 the  Company  increased  its  availability  under  credit
facilities with banks.  The Company expanded the credit facility to $100 million
from approximately $50 million,  and increased the number of banks participating
to six money center and regional banks. The Company pledged the capital stock of
its wholly owned subsidiaries and the majority of the Company's assets to secure
the credit  facility.  The Company will  utilize the credit  facility to provide
working capital, to finance  acquisitions,  to purchase  equipment,  and to fund
other  corporate  activities.  The credit  facility has a $70 million  revolving
credit  line,  as well as a $30  million  decreasing  five-year  term  financing
facility.  Amounts  borrowed  under the credit  facility will bear interest as a
relationship to the London Interbank Offered Rate ("LIBOR"), plus 1.25% to 2.25%
as  determined  by the  Company's  ratio of funded  debt to EBITDA.  The Company
incurs  commitment  fees  of .25% to .50%  as  determined  by the  ratio  of the
Company's total funded debt to EBITDA on any unused borrowing capacity under the
credit facility.

         The  Company  had  $70  million  in  revolving  lines  of  credit  with
commercial banks of which $26,952,000 was drawn down as of June 30, 1999 to fund
the additional  payment to former SC  shareholders,  the purchase of Longnecker,
capital  equipment  purchases  and working  capital.  In the ordinary  course of
business,  the Company is exposed to variable  interest  rate risk. To hedge the
variable  term loan  interest  rate risk for $30  million  in  notional  amount,
five-year  term,  financing  facility,  the Company has entered into an interest
rate  swap  pursuant  to which it pays a fixed  interest  rate  and  receives  a
variable interest rate on the same notional amount.  During the six months ended
June 30,  1999,  the  Company's  payment  under  interest  rate swap  aggregated
$17,550.  The Company had no receipts  pursuant to the  interest  rate swap.  In
March 1999, the Company  terminated  interest rate swaps entered into as a hedge
against   variable-term   loan  interest  rate  risk.   The  aggregate  loss  of
approximately  $330,000  on  termination  of the  interest  rate  swaps is being
amortized over the remaining life of the related term loan which was hedged.

         The Company  continues to actively  pursue  acquisitions in the telecom
construction and other  industries.  In the event that one or more  satisfactory
acquisition  candidates  are  identified,  the  Company  may seek to expand  its
existing credit facilities or issue additional equity or subordinated debt.

         The Company believes it has sufficient cash flow from operations,  cash
on hand and availability under its credit line to meet its liquidity needs.

         The  Company's  telecom  construction  operations  are expected to have
seasonally  weaker results in the first and fourth quarters of the year, and may
produce stronger  results in the second and third quarters.  This seasonality is
primarily due to the effect of winter weather on outside plant activities in the
northern  areas  served by ACG, as well as reduced  daylight  hours and customer
budgetary  constraints.  Certain  customers  tend to complete  budgeted  capital
expenditures  before  the end of the year,  and are slow to  return to  expected
production levels in the first quarter of the subsequent fiscal period.


YEAR 2000 DATE CONVERSION

         The Year 2000  issue  relates  to the  inability  of  certain  computer
software programs to properly recognize and process  date-sensitive  information
relative to the year 2000 and beyond.  Without corrective  measures,  this issue



                                       18
<PAGE>


could  cause  computer  applications  to fail or to  create  erroneous  results.
Incomplete  or untimely  resolution  of the Year 2000 issue by the Company or by
its key vendors,  customers,  suppliers or by other third  parties  could have a
materially  adverse  impact on the Company's  business,  operations or financial
condition in the future.

         During 1998,  ACG commenced  the upgrading of its business  information
systems through common integrated  computer and software systems throughout ACG.
As a by-product of the  implementation of the new integrated  business reporting
system,  ACG remediated Year 2000 compliance issues at certain of its divisions.
All ACG divisions are operating on the new integrated business system as of July
31, 1999.

         In conjunction with its review of its Year 2000 compliance  issues, the
Company has  conducted  an inventory of its  information  technology  ("IT") and
manufacturing  and  telecom  construction  systems  ("non-IT"),  as  well as its
telecommunications systems. ACG has addressed its Year 2000 compliance issue for
IT,  non-IT  and  telecommunications  systems.  The total  cost with  respect to
systems and other  modifications  to Company IT,  non-IT and  telecommunications
systems did not exceed  $300,000,  more than  one-half of which was  expended in
1998. The Company  expended less than $100,000 on Year 2000  remediation  during
the six months ended June 30, 1999.

         The Company has also identified and prioritized  critical suppliers and
customers  and  communicated  with  them  about  their  plans  and  progress  in
addressing  the Year 2000  problem.  Detailed  evaluations  of the most critical
third parties have been completed. Contingency plans were developed in the first
quarter of 1999 in response to the detailed evaluations.

         The  Company has  completed  all phases of its Year 2000  Project.  The
Company currently  believes that the Year 2000 issue should not pose significant
operational problems to the Company.  There can be no assurance,  however,  that
the  systems  of  other  parties  upon  which  the  Company's  business  relies,
including, but not limited to, the Company's key vendors,  customers,  suppliers
and other third parties will be converted on a timely basis.  If the systems and
applications  of key third  parties  are  materially  impacted  by the Year 2000
issue, the Company could lose certain of its abilities to efficiently  engage in
normal  business  activities  which could have a material  adverse effect on the
Company's business, financial condition or results of operations.  Although some
business  disruption in the Company's business may possibly occur as a result of
Year 2000  failures by third  parties,  the Company  does not believe  that such
disruption would have a materially adverse effect on its operations. Contingency
plans were  developed in the first  quarter of 1999 in response to the Company's
evaluation of Year 2000 business exposures.  The Company believes that, with the
implementation of new business systems and contingency  planning with respect to
key  vendors  and  customers,  as  well  as the  expansion  of its  bank  credit
facilities,  the  possibility of significant  business  interruptions  of normal
operations should be reduced.

         The  Company  believes  that  the most  reasonably  likely  worst  case
scenario  which  could occur with  respect to Year 2000 is a delay in  receiving
payments on  accounts  receivable  from  customers.  In March 1999,  the Company
expanded its available liquidity through expanded bank financing facilities. The
Company  believes that such  expanded  financing  should  mitigate the cash flow
impact of delays in collections of amounts due from customers.

         In addition to its internal systems and external  supplier and customer
relationships,  the Company has  exposure  to Year 2000  compliance  issues with
respect to potential acquisitions.  The Company includes Year 2000 compliance in
its  evaluation of  acquisition  candidates,  as well as in its due diligence in
progress.  At June  30,  1999,  the  Company  had no  acquisition  in  progress.
Non-compliance  with Year 2000  could have an adverse  impact on  valuations  of
potential acquisitions or reduce the Company's program of making acquisitions.

FORWARD LOOKING STATEMENTS

         Statements  made in the  quarterly  report that are not  historical  or
current facts are "forward-looking  statements" made pursuant to the safe harbor
provisions of the Private  Securities  Litigation Reform Act of 1995.  Investors
are  cautioned   that  actual  results  may  differ   substantially   from  such
forward-looking statements. Forward looking statements may be subject to certain
risks and uncertainties, including -- but not limited to -- continued acceptance
of  the  Company's  products  and  services  in the  marketplace,  uncertainties
surrounding  new  acquisitions,  floating rate debt,  risks of the  construction
industry,  including  weather and an  inability  to plan and  schedule  activity
levels,  doing business overseas and risks inherent in concentration of business
in certain  customers.  All of these risks are detailed from time to time in the
Company's filings with the Securities and Exchange Commission.  Accordingly, the
actual results of the Company could differ materially from such  forward-looking
statements.



                                       19
<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         In the ordinary course of business,  the Company is exposed to interest
rate risk. To reduce  variable  term loan  interest  rate risk,  the Company has
entered into an interest  rate swap in the same  notional  amount as its related
term loan debt with the same interest rate relationship base to LIBOR as that of
the  Company's  floating  rate debt,  and for the same term as the variable rate
debt. At June 30, 1999, the Company's  variable rate term loan of $28,250,000 in
notional  amount  and  maturing  in more  than 180 days was  hedged  through  an
interest rate swap pursuant to which Arguss pays a weighted  fixed interest rate
of 5.78%. The Company continues to be exposed to variable-term loan interest for
the bank's  applicable  margins ranging from 1.25% to 2.25% as determined by the
ratio of the Company's total funded debt to EBITDA.

         Interest  rate swaps are  entered  into as a hedge of  underlying  debt
instruments  to  effectively  change the  characteristics  of the interest  rate
without actually  changing the debt instrument.  For fixed rate debt,.  Interest
rate  changes  affect the fair value,  but do not impact  earnings or cash flow.
Conversely,  for floating  rate debt,  interest  rate  changes  generally do not
affect the fair market value, but do impact future earnings and cash flow. A one
percentage  point  decrease in interest  rates would  decrease the fair value of
interest rate swaps by approximately $300,000. The earnings and cash flow impact
for the next year  resulting  from a one  percentage  point increase in interest
rates would be neutral because of the cash flow received from the swaps.  All of
the  principal of the variable rate debt subject to the interest rate swap would
be repaid  over the next five  years  thereby  diminishing  the impact of market
valuations on hedges.





                              ARGUSS HOLDINGS, INC.


                                     PART II

                                Other Information


Items 1,2, 3, 4, 5 and 6: Not Applicable.

     (a) 27  Financial Data Schedule

     (b) Reports on Form 8-K

           None.






                                       20
<PAGE>


                                   SIGNATURES


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

                                      Arguss Holdings, Inc.



         August 2, 1999               By:  /s/ Rainer H. Bosselmann
                                           -------------------------------------
                                           Rainer H. Bosselmann
                                           Chief Executive Officer



         August 2, 1999               By:  /s/ Arthur F. Trudel
                                           -------------------------------------
                                           Arthur F. Trudel
                                           Principal Financial Officer and
                                           Principal Accounting Officer