---



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: March 31, 2001
Commission File Number: 0-19589




|ARGUSS COMMUNICATIONS, INC.                           
|------------------------------------------------------
|(Exact name of Registrant as specified in its Charter)



Delaware

02-0413153(State or other jurisdiction of incorporation of organization)

(I.R.S. Employer 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 May 1, 2001, there were 14,425,944 shares of Common Stock, $ .01 par value per share, outstanding.



---

ARGUSS COMMUNICATIONS, INC.

INDEX



Part I - Financial Information:
PageItem 1 - Financial StatementsConsolidated Balance Sheets (Unaudited) -
                           March 31, 2001 and December 31, 2000
3Consolidated Statements of Operations (Unaudited)-
                           Three Months Ended March 31, 2001 and March 31, 2000
4Consolidated Statements of Cash Flows (Unaudited)-
                           Three Months Ended March 31, 2001 and March 31, 2000
5Notes to Consolidated Financial Statements
                           (Unaudited)
7Item 2 - Management's Discussion and Analysis of Financial
                           Condition and Results of Operations
11Item 3 - Quantitative and Qualitative Disclosure about Market Risk
14Part II - Other Information
15Items 1 through 6Signatures
17




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ARGUSS COMMUNICATIONS, INC.



CONSOLIDATED BALANCE SHEETS
(Unaudited)

|                                                                                                                                    | March 31, 2001       |  | Dec. 31, 2000     
|----------------------------------------------------------------------------------------------------------------------------------- | -------------------- |  | ------------------
|Assets                                                                                                                              |                      |  |                   
|                                                                                                                                    |                      |  |                   
|Current assets:                                                                                                                     |                      |  |                   
|Cash                                                                                                                                | $        448,000     |  | $        474,000  
|Restricted cash from customer advances                                                                                              | 78,000               |  | 303,000           
|Accounts receivable trade, net of allowance
     for doubtful accounts of $299,000 and
     $276,000 in 2001 and 2000, respectively | 49,461,000           |  | 57,133,000        
|Costs and earnings in excess of billings                                                                                            | 14,967,000           |  | 18,156,000        
|Inventories                                                                                                                         | 5,279,000            |  | 4,610,000         
|Other current assets                                                                                                                | 2,183,000            |  | 2,690,000         
|                                                                                                                                    |                      |  |                   
|Total current assets                                                                                                                | 72,416,000           |  | 83,366,000        
|                                                                                                                                    |                      |  |                   
|Property, plant and equipment, net                                                                                                  | 46,643,000           |  | 47,851,000        
|Goodwill, net                                                                                                                       | 125,596,000          |  | 127,393,000       
|                                                                                                                                    |                      |  |                   
|Total Assets                                                                                                                        | $ 244,655,000        |  | $ 258,610,000     
|                                                                                                                                    |                      |  |                   
|                                                                                                                                    |                      |  |                   
|Liabilities and Stockholders' Equity                                                                                                |                      |  |                   
|                                                                                                                                    |                      |  |                   
|Current liabilities:                                                                                                                |                      |  |                   
|                                                                                                                                    |                      |  |                   
|Current portion of long-term debt                                                                                                   | $    7,306,000       |  | $        7,322,000
|Short-term borrowings                                                                                                               | 66,957,000           |  | 70,246,000        
|Accounts payable                                                                                                                    | 14,083,000           |  | 19,731,000        
|Billings in excess of costs and earnings                                                                                            | 56,000               |  | 470,000           
|Customer advances                                                                                                                   | -                    |  | 4,000             
|Accrued expenses and other liabilities                                                                                              | 9,352,000            |  | 10,223,000        
|Deferred income taxes                                                                                                               | 261,000              |  | 261,000           
|                                                                                                                                    |                      |  |                   
|Total current liabilities                                                                                                           | 98,015,000           |  | 108,257,000       
|                                                                                                                                    |                      |  |                   
|                                                                                                                                    |                      |  |                   
|Long-term debt, excluding current portion                                                                                           | 10,850,000           |  | 12,688,000        
|Deferred income taxes
Other liabilities                                                                                             | 4,345,000
56,000     |  | 4,377,000
-       
|                                                                                                                                    |                      |  |                   
|Total liabilities                                                                                                                   | 113,266,000          |  | 125,322,000       
|                                                                                                                                    |                      |  |                   
|Stockholders' equity:                                                                                                               |                      |  |                   
|Common stock $.01 par value                                                                                                         | 144,000              |  | 144,000           
|Additional paid-in capital                                                                                                          | 113,930,000          |  | 113,860,000       
|Retained earnings
Accumulated comprehensive loss                                                                                    | 17,417,000
<102,000> |  | 19,284,000
-      
|                                                                                                                                    |                      |  |                   
|Total stockholders' equity                                                                                                          | 131,389,000          |  | 133,288,000       
|                                                                                                                                    |                      |  |                   
|Total liabilities and stockholders' equity                                                                                          | $  244,655,000       |  | $     258,610,000 
|                                                                                                                                    |                      |  |                   



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



---



ARGUSS COMMUNICATIONS, INC.



CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)



|                                             | Three Months Ended March 31:
|-------------------------------------------- | ----------------------------
|                                             | 2001                        
|                                             |                             
|Net sales                                    | $48,974,000                 
|Cost of sales, excluding depreciation        | 40,445,000                  
|                                             |                             
|Gross profit, excluding depreciation         | 8,529,000                   
|                                             |                             
|Selling, general and administrative expenses | 5,746,000                   
|Depreciation                                 | 3,222,000                   
|Goodwill amortization                        | 1,798,000                   
|Non-cash stock compensation                  | 171,000                     
|Engineering and development expenses         | 212,000                     
|                                             |                             
|Operating income <loss>                      | <2,620,000>                 
|                                             |                             
|                                             |                             
|Other income <expense>:                      |                             
|Interest income and other                    | 157,000                     
|Interest expense                             | <1,686,000>                 
|                                             |                             
|                                             |                             
|Income <loss> before income taxes            | <4,149,000>                 
|Income tax expense <benefit>                 | <2,282,000>                 
|                                             |                             
|Net income <loss>                            | <$1,867,000>                
|                                             |                             
|                                             |                             
|Earnings <loss> per common share:            |                             
|-- basic                                     | <$.13>                      
|                                             |                             
|-- diluted                                   | <$.13>                      
|                                             |                             
|                                             |                             
|Weighted average shares outstanding:         |                             
|-- basic                                     | 14,425,000                  
|                                             |                             
|-- diluted                                   | 14,425,000                  
|                                             |                             



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





---

ARGUSS COMMUNICATIONS, INC.



CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)



|                                                                | Three Months Ended March 31:
|--------------------------------------------------------------- | ----------------------------
|                                                                | 2001                        
|Cash flows from operating activities:                           |                             
|Net income <loss>                                               | <$1,867,000>                
|Adjustments to reconcile net income to net                      |                             
|Cash provided by <used in>
 operating activities:               |                             
|Depreciation                                                    | 3,222,000                   
|Goodwill amortization                                           | 1,798,000                   
|Non cash stock compensation                                     | 171,000                     
|                                                                |                             
|Changes in assets and liabilities:                              |                             
|Accounts receivable                                             | 7,672,000                   
|Costs and earnings in excess of billings                        | 3,410,000                   
|Inventories                                                     | <669,000>                   
|Other current assets                                            | 507,000                     
|Accounts payable                                                | <5,648,000>                 
|Billings in excess of costs and earnings                        | <414,000>                   
|Accrued expenses and other liabilities                          | <1,119,000>                 
|                                                                |                             
|Net cash provided by <used in>
operating activities             | 7,063,000                   
|                                                                |                             
|                                                                |                             
|Cash  flows from investing activities:                          |                             
|Additions to property, plant and equipment                      | <2,470,000>                 
|Disposal of property, plant and equipment                       | 456,000                     
|Additional payment to former shareholders of acquired companies | -                           
|Purchase of telecom services companies, net                     | -                           
|                                                                |                             
|Net cash used in investing activities                           | <2,014,000>                 
|                                                                |                             
|                                                                |                             
|Cash flows from financing activities:                           |                             
|Proceeds from <repayments on>
lines of credit                   | <3,289,000>                 
|Net repayments of long term debt                                | <1,854,000>                 
|Issuance of common stock                                        | 68,000                      
|                                                                |                             
|Net cash <used in>
provided by financing activities             | <5,075,000>                 
|                                                                |                             
|                                                                |                             
|Net decrease in cash                                            | <26,000>                    
|                                                                |                             
|Cash at beginning of period                                     | 474,000                     
|                                                                |                             
|                                                                |                             
|Cash at end of period                                           | $     448,000               
|                                                                |                             







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



---



ARGUSS COMMUNICATIONS, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS (continued)
(Unaudited)





|                                           | Three Months Ended March 31:
|------------------------------------------ | ----------------------------
|                                           | 2001                        
|                                           |                             
|Supplemental disclosures of cash paid for: |                             
|Interest                                   | $1,334,000                  
|Corporate income taxes                     | <$1,311,000>                
|                                           |                             
|Supplemental disclosure of                 |                             
|investing and financing
activities:        |                             
|                                           |                             
|Fair value of assets acquired:             |                             
|                                           |                             
|Accounts receivable                        |                             
|Other current assets                       |                             
|Inventory                                  |                             
|Property and equipment                     |                             
|                                           |                             
|Total non cash assets                      |                             
|                                           |                             
|Liabilities                                |                             
|Long-term debt                             |                             
|                                           |                             
|Net non-cash assets acquired               |                             
|                                           |                             
|Cash acquired                              |                             
|                                           |                             
|Fair value of net assets acquired          |                             
|Excess of costs over fair value            |                             
|of net assets acquired                     |                             
|                                           |                             
|Purchase price                             |                             
|                                           |                             
|                                           |                             
|Common stock issued                        |                             
|Cash paid                                  |                             
|Cash acquired                              |                             
|                                           |                             
|Purchase price                             |                             
|                                           |                             



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



---



ARGUSS COMMUNICATIONS, INC.NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Unaudited)

A)          Organization

The Company conducts its operations through its wholly owned subsidiaries, Arguss Communications Group, MBT ("ACG") and Conceptronic, Inc. ("Conceptronic"). ACG is a
leading provider of telecommunications infrastructure services including project management, design, engineering, construction and maintenance for Internet, telecommunications, wireless and broadband service providers. Conceptronic manufactures and sells
highly advanced, computer-controlled equipment used in the surface mount electronics circuit assembly industry ("SMT").



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, 2000, filed with the
Commission on March 7, 2001.

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 March 31, 2001 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.

Certain amounts in the 2000 financial statements have been reclassified for comparability with the 2001 presentation.



C)          Goodwill

Goodwill is calculated using a twenty-year amortization period.  The Company continually evaluates whether events or circumstances have occurred that indicate that the
remaining useful life of goodwill may warrant revision or that the remaining balance may not be recoverable.  When factors indicate that goodwill should be evaluated for possible impairment, the Company uses the estimated undiscounted cash flow of the
business enterprise over the remaining life of the asset in determining whether the asset is recoverable.



D)          Earnings <Loss>
per Share

Basic earnings <loss>
per common share are computed by dividing net income <loss> available to common stockholders by the weighted average number of common shares outstanding for the period.  Diluted earnings <loss>
per common share reflect the maximum dilution that would have resulted from the exercise of stock options and warrants and contingently issuable shares.  Diluted earnings <loss>
per common share are computed by dividing net income <loss> by the weighted average number of common shares and all potentially dilutive securities. During the three months ended March 31, 2001, the Company reported a loss. Consequently, the Company
did not give effect to  176,000 potentially dilutive securities in the calculation of loss per common share, as the result would have been
anti-dilutive.



|                                         |               |  | For the Three Months Ended March 31: |  |             
|---------------------------------------- | ------------- |  | ------------------------------------ |  | ------------
|                                         |               |  | 2001                                 |  |             
|                                         |               |  |                                      |  |             
|                                         | LossPer Share |  | Shares                               |  | NetLoss     
|                                         |               |  |                                      |  |             
|Basic                                    | <$.13>        |  | 14,425,000                           |  | <$1,867,000>
|Effect of stock options
    and warrants | -             |  | -                                    |  | -           
|                                         |               |  |                                      |  |             
|Diluted                                  | <$.13>        |  | 14,425,000                           |  | <$1,867,000>
|                                         |               |  |                                      |  |             



E)          Contract Accounting

The retainage included in accounts receivable, representing amounts withheld by contract with respect to ACG accounts receivable, was $5,945,000 and $7,227,000 at March 31,
2001 and December 31, 2000, respectively.  The Company expects to collect substantially all the retainage within one year.



|                                                                        | March 31, 2001 |  | December 31, 2000
|----------------------------------------------------------------------- | -------------- |  | -----------------
|                                                                        |                |  |                  
|Costs incurred on uncompleted contracts                                 | $44,378,000    |  | $129,847,000     
|Estimated earnings                                                      | 3,850,000      |  | 29,880,000       
|                                                                        |                |  |                  
|                                                                        | 48,228,000     |  | 159,727,000      
|Less: Billings to date                                                  | 33,317,000     |  | 142,041,000      
|                                                                        |                |  |                  
|                                                                        | $14,911,000    |  | $17,686,000      
|                                                                        |                |  |                  
|                                                                        |                |  |                  
|Included in accompanying balance sheets
   under the following caption: |                |  |                  
|Costs and earnings in excess of billings                                | $14,967,000    |  | $18,156,000      
|                                                                        |                |  |                  
|Billings in excess of costs and earnings                                | $       56,000 |  | $     470,000    
|                                                                        |                |  |                  



F)          Segment Information

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information" 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 services and manufacturing.  The Company conducts its operations through its wholly owned subsidiaries, Arguss Communications
Group, MBT ("ACG") and Conceptronic, Inc. ("Conceptronic"). ACG is a leading provider of telecommunications infrastructure services including project management, design, engineering, construction and maintenance for Internet, telecommunications and
broadband service providers. Conceptronic manufactures and sells highly advanced, computer-controlled equipment used in the surface mount electronics circuit assembly industry ("SMT").

Because the telecom system projects are fully integrated undertakings, the Company does not capture individually each component of the service functions performed for revenue
reporting purposes.  The manufacturing segment manufactures and sells highly advanced, computer-controlled equipment used in the SMT circuit assembly industry.  The "All Other" column includes the Company's corporate and unallocated expenses.

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.



|                                              | Three Months EndedMarch 31, 2001
|--------------------------------------------- | --------------------------------
|                                              |                                 
|                                              | Telecom    Services             
|                                              |                                 
|External sales                                | $  45,295,000                   
|Cost of sales, excluding
   depreciation      | 37,191,000                      
|                                              |                                 
|Gross profit, excluding
   depreciation       | 8,104,000                       
|Operating expenses,
   excluding depreciation | 4,720,000                       
|Goodwill amortization                         | 1,798,000                       
|Depreciation                                  | 3,191,000                       
|Engineering and development                   | -                               
|Non cash compensation expense                 | 95,000                          
|                                              |                                 
|Interest and other income                     | 152,000                         
|Interest expense                              | <1,603,000>                     
|                                              |                                 
|Pretax income <loss>                          | <$3,151,000>                    
|                                              |                                 
|                                              |                                 
|Capital expenditures                          | $    2,455,000                  
|                                              |                                 
|                                              |                                 
|Total assets                                  | $233,049,000                    
|                                              |                                 
|                                              |                                 
|                                              | Three Months EndedMarch 31, 2000
|                                              |                                 
|                                              | Telecom    Services             
|                                              |                                 
|External sales                                | $   49,570,000                  
|Cost of sales, excluding
   depreciation      | 38,702,000                      
|                                              |                                 
|Gross profit, excluding
   depreciation       | 10,868,000                      
|Operating expenses,
   excluding depreciation | 3,768,000                       
|Goodwill amortization                         | 1,427,000                       
|Depreciation                                  | 2,324,000                       
|Engineering and development                   | -                               
|Non cash compensation expense                 | 3,000                           
|                                              |                                 
|Interest and other income                     | 200,000                         
|Interest expense                              | <1,160,000>                     
|                                              |                                 
|Pretax income <loss>                          | $    2,386,000                  
|                                              |                                 
|                                              |                                 
|Capital expenditures                          | $    2,681,000                  
|                                              |                                 
|                                              |                                 
|Total assets                                  | $200,302,000                    
|                                              |                                 



G)          Bank Financing

The Company has a $120 million revolving credit facility, for which it pledges, as security, the capital stock of its wholly owned subsidiaries and the majority of the
Company's assets. The Company uses the credit facility to provide working capital to finance acquisitions, the purchase of capital assets and for other corporate purposes.  The Company also has a $30 million, in original notional amount, amortizing
five-year term facility with $16 million outstanding at March 31, 2001. Under the provisions of the credit agreement, borrowings are limited to a multiple of the Company's adjusted EBITDA. Amounts borrowed under the line bear interest either as a
relationship to the London Interbank Offered Rate ("LIBOR"), plus 1.25% to 2.25%, or to the Prime Rate plus up to 1.00%, as determined by the ratio of the Company's total funded debt to EBITDA. The Company also incurs a commitment fee on the unused
portion of the loan at a rate of up to 0.50%, as determined by the ratio of the Company's total funded debt to EBITDA. The revolving line of credit has an initial term, maturing on March 19, 2003, and is renewable for up to one additional year. The term
facility has an expiration of March 1, 2004.



H)          Derivative  Instruments  and  Hedging  Activities

To hedge the Company's variable-term loan interest rate risk for the $30 million, in original notional amount, five-year, term financing facility, the Company has entered into
an interest rate swap pursuant to which it pays fixed interest at a rate of 5.78% and receives variable interest on the same notional amount. During the three months ended March  31, 2001, the Company's receipts under the interest rate swap aggregated
$42,000.  The expiration of the swap coincides with the maturity of the debt on March 1, 2004.  The purpose of the hedge is to provide a measure  of  stability  in the volatile environment of interest rates. The Company's interest rate swap agreement in
place is designated as cash flow hedge.

As  of  January  1,  2001,  the  Company  adopted Statement of Financial Accounting Standards  ("SFAS")  No. 133, "Accounting for Derivative Instruments and Hedging
Activities"  as  amended  by SFAS No. 137 and No. 138.  SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivative  instruments embedded in other contracts, and hedging activities.  It requires
the recognition of all derivative instruments as assets or liabilities in  the  Company's  balance  sheet  and measurement of those instruments at fair value.  The  accounting  treatment  of  changes  in fair value is dependent upon whether  or  not a
derivative instrument is designated as a hedge and if so, the type  of hedge.  For derivatives designated as cash flow hedges, changes in fair value  are  recognized  in  other  comprehensive income until the hedged item is recognized  in  earnings.

The cumulative effect of adopting SFAS No. 133 at January 1, 2001, was not material to the Company's financial statements.  At March  31, 2001, the fair value of the swap was
<$226,000>.  During the three months ended March 31, 2001 the Company had an unrealized loss on the hedge of $102,000, net of tax, which is included in other comprehensive income.



I)          Comprehensive Income

Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"), requires the disclosure of comprehensive income to reflect changes
in equity that result from transactions and economic events from non-owner sources. Total other comprehensive loss for the quarter and accumulated other comprehensive loss as of March 31, 2001 is $102,000, net of tax.





---



ARGUSS COMMUNICATIONS, INC.



|Item 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

Results of Operations

The Company conducts its operations through its wholly owned subsidiaries, Arguss Communications Group, MBT ("ACG") and Conceptronic, Inc. ("Conceptronic"). ACG is a leading
provider of telecommunications infrastructure services including project management, design, engineering, construction and maintenance for Internet, telecommunications and broadband service providers. Conceptronic manufactures and sells highly advanced,
computer-controlled equipment used in the surface mount electronics circuit assembly industry ("SMT").

Three Months Ended March 31, 2001, Compared to Three Months Ended March 31, 2000

The Company had consolidated earnings before interest, taxes, depreciation, amortization and non cash stock compensation (EBITDA) of $2,728,000 for the three months ended
March 31, 2001, compared to $6,956,000 for the same period one year ago.  For the three months ended March 31, 2001, EBITDA, as a percentage of consolidated net sales (EBITDA margin), was 5.6%, compared to 12.6% for the comparable period in 2000. ACG had
EBITDA of $3,536,000 for the three months ended March 31, 2001, compared to $7,299,000 for the same period in 2000. ACG achieved an EBITDA margin of 7.8% for the three months ended March 31, 2001 and 14.7% for the three months ended March 31, 2000. The
Company had consolidated net loss of $1,867,000 for the three months ended March 31, 2001, compared to a net income of $647,000 for the three months ended March 31, 2000. ACG's weaker EBITDA margin performance, and net loss, in the first quarter of 2001
was attributable to reduced project activity by its largest customer, as well as poor weather conditions in New England and California. ACG's largest customer represented 47% of its net sales for the three months ended March 31, 2000 compared to 14% for
the three months ended March 31, 2001.

Consolidated net sales for the three months ended March 31, 2001 were $48,974,000, compared to $55,044,000 for the three months ended March 31, 2000, a decrease of 11%.
Operations owned for at least one year had a net sales decrease of $15,782,000 or 29% for the three months ended March 31, 2001. Operations acquired since March 31, 2000 contributed $9,712,000 of revenue during the three months ended March 31, 2001.

Consolidated gross profit margin, excluding depreciation, was 17% of sales for the three months ended March 31, 2001, compared to 22% for the three months ended March 31,
2000. The decrease in margins is due to ACG,  which experienced both customer and weather related project delays.

Consolidated selling, general and administrative expenses for the three months ended March 31, 2001 were $5,746,000 or 12% of net sales, compared to $5,106,000 for the three
months ended March 31, 2000 or 9% of net sales.  The increase in expenses is due primarily from acquisitions made since March 31, 2000.  Ongoing operations had a reduced level of selling, general and administrative expenses, but with a reduced level of
revenue.

Depreciation expense increased to $3,222,000 for the three months ended March 31, 2001, compared to $2,366,000 for the three months ended March 31, 2000 due primarily to ACG
which made significant equipment acquisitions during calendar year 2000. The equipment is depreciated primarily over sixty months.   Depreciation expense from companies acquired after March 31, 2000 was $420,000 during the three months ended March 31, 2001.

Goodwill amortization, which is calculated using a twenty-year amortization period, increased to $1,798,000 from $1,427,000 from the comparable period one year ago due
primarily to acquisitions made since March 31, 2000.   Amortization expense of the goodwill related to these acquisitions was $323,000 for the three months ended March 31, 2001.

Interest expense for the three months ended March 31, 2001 was $1,686,000, compared to $1,227,000 for the comparable period in 2000.  The increase is due primarily to ACG
acquisitions made since March 31, 2000, which were partially financed through bank lines of credit, and due to increased use of financing lines for the purchase of capital assets. Lower prevailing interest rates on the revolving credit line during the
three months ended March 31, 2001, compared to the three months ended March 31, 2000, partially offset the increase in interest expense due to the higher outstanding balances.  (See discussion of expanded bank credit facilities in Liquidity and Capital Resources.)

Income tax benefit was $2,282,000 for the three months ended March 31, 2001, compared to an expense of $1,285,000 in income tax expense for the three months ended March 31,
2000.  The effective income tax rate was 55% and 67% or the three months ended March 31, 2001 and 2000, 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.

Liquidity and Capital Resources

Net cash provided by operations for the three months ended March 31, 2001 was $7,063,000 compared with cash used in operations of $6,866,000 for the three months ended March
31, 2000.  The increase in cash provided by operating activities is due to strong collection of accounts receivable which provided $7,672,000 during the three months ended March 31, 2001. During the three months ended March 31, 2000 accounts receivable
used $6,743,000.

Net cash used for investing activities for the three months ended March 31, 2001 was $2,014,000, compared to $7,172,000 in the comparable period of 2000. During the three
months ended March 31, 2001 there was $2,470,000 spent on capital equipment compared to $2,686,000 in 2000. The slight decrease from 2000 reflects timing differences of capital asset purchases. The Company has budgeted a reduced level of expenditure of
approximately $10,000,000 for 2001, compared to 2000, when the Company had $17,849,000 in capital expenditures. There were no acquisitions made during the three months ended March 31, 2001 compared to $4,064,000 spent in 2000 for an acquisition.  In 2000,
pursuant to the provisions of the purchase agreements, $634,000 was paid to former shareholders of acquired companies, no payments were made in 2001.

Net cash used in financing activities was $5,075,000 for the three months ended March 31, 2001, compared to net cash provided by financing activities of $8,926,000 for the
comparable period in 2000.  The financing activity in 2001 reflects the repayment of lines of credit from the strong cash flow from operations during the three months ended March 31, 2001.

The Company has a $120 million revolving credit facility, for which it pledges, as security, the capital stock of its wholly owned subsidiaries and the majority of the
Company's assets. The Company uses the credit facility to provide working capital to finance acquisitions, the purchase of capital assets and for other corporate purposes.  The Company also has a $30 million, in original notional amount, amortizing
five-year term facility with $16 million outstanding at March 31, 2001. Under the provisions of the credit agreement, borrowings are limited to a multiple of the Company's adjusted EBITDA. Amounts borrowed under the line bear interest either as a
relationship to the London Interbank Offered Rate ("LIBOR"), plus 1.25% to 2.25%, or to the Prime Rate plus up to 1.00%, as determined by the ratio of the Company's total funded debt to EBITDA. The Company also incurs a commitment fee on the unused
portion of the loan at a rate of up to 0.50%, as determined by the ratio of the Company's total funded debt to EBITDA. The revolving line of credit has an initial term, maturing on March 19, 2003, and is renewable for up to one additional year. The term
facility has an expiration of March 1, 2004.

To hedge the variable-term loan interest rate risk for the $30 million, in original notional amount, five-year, term financing facility, the Company has entered into an interest rate swap
pursuant to which it pays fixed interest at a rate of 5.78% and receives variable interest on the same notional amount. The purpose of the hedge is to provide a measure  of  stability  in the volatile environment of interest rates. The Company's interest
rate swap agreement in place is designated as cash flow hedge.

During the three months ended March  31, 2001, the Company's receipts under the interest rate swap aggregated $42,000. At March  31, 2001, the fair value of the swap, which
expires with the maturity of the debt on March 1, 2004, was <$226,000>.  Adoption  of  SFAS No. 133, was not material to the financial statements. During the three months ended March 31, 2001 the Company had an unrealized loss on the hedge of
$111,000, net of tax.

The Company's borrowings are limited to a multiple of EBITDA.  At March 31, 2001 the Company had $51,000,000 remaining in its credit facility. Of that amount, at March 31,
2001 $16,000,000 was available to borrow for operations with the remainder available for acquisitions.

The Company's telecom services 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.

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.



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|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, term and interest rate relationship to LIBOR as the Company's $16,000,000 variable rate term loan. Arguss pays a fixed interest rate of 5.78% pursuant to the interest rate swap. The Company continues to
incur interest expense for the bank's applicable margins ranging from 1.25% to 2.25% above LIBOR 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 $160,000.  The earnings and cash flow impact for the next year resulting from a one-percentage point increase
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 four years thereby diminishing the impact of market
valuations on hedges.



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ARGUSS COMMUNICATIONS, INC.

PART II

Other Information



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

Item 3     Exhibits

The following exhibits required to be filed herewith are attached or incorporated by reference to the filings previously made by the Company as noted below:



Exhibit No.



|3(a)    | Certificate of Incorporation, as amended, incorporated by reference as an Exhibit to the Company's Registration Statement on Form S-18 (No. 33-36142-B).                                                                                                                                                         
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3(a)(I) | Certificate of Designation establishing Class A common stock incorporated by reference to Exhibit 4(a) to the Company's Registration Statement Form S-8 (No. 333-19277).                                                                                                                                         
|3(b)    | Bylaws, as amended, incorporated by reference as an Exhibit to the Company's Registration Statement Form S-18 (No. 33-36142-B).                                                                                                                                                                                  
|10(a)   | Equipment Lease between the Company and Eaton Financial Corporation incorporated by reference as an Exhibit to the Company's Registration Statement on Form S-18 (No. 33-36142-B).                                                                                                                               
|10(b)   | Line of Credit Agreement dated May 1, 1995 between the Company and the First National Bank of Boston incorporated by reference as an Exhibit to the Company's Form 10-KSB for 1995.                                                                                                                              
|10(c)   | Guarantee Agreement dated March 5, 1997 by Conceptronic in favor of Citizens Bank New Hampshire incorporated by reference in the Company's Current Report on Form 8-K, dated March 5, 1997.                                                                                                                      
|10(d)   | Agreement and Plan of Merger dated January 2, 1998 by and between Can-Am Construction, Inc. Arguss Holdings, Inc. and White Mountain Cable Construction Corp. incorporated by reference to Exhibit 10 to the Company's Current Report on Form
8-K, dated January 2, 1998.                                        
|10(e)   | Agreement and Plan of Merger dated January 2, 1998 by and between Schenck Communications, Inc., Arguss Holdings, Inc. and White Mountain Cable Construction Corp. incorporated by reference to Exhibit 10 to the Company's Current Report on
Form 8-K, dated January 2, 1998.                                    
|10(f)   | Agreement and Plan of Merger dated October 6, 1997 by and between Rite Cable Construction, Inc., Arguss Holdings, Inc. and White Mountain Cable Construction Corp. incorporated by reference to Exhibit 10 to the Company's Current Report on
Form 8-K, dated January 2, 1998.                                   
|10(g)   | Financing and Security Agreement dated September 11, 1997 by and among Arguss Holdings, Inc., White Mountain Cable Construction Corp., Conceptronic and Bank of America and related promissory notes incorporated by reference to Exhibit 10
as an Exhibit to the Company's Form 10-KSB for 1997.                
|10(h)   | First Amendment to Financing and Security Agreements dated October 6, 1997 by Arguss Holdings, Inc., White Mountain Cable Construction Corp., Conceptronic and Bank of America and related promissory notes incorporated by reference to
Exhibit 10 in the Company's Form 10-KSB for 1997.                       
|10(i)   | Second Amendment to Financing and Security Agreement, dated January 2, 1998, by and among Arguss Holdings, Inc., White Mountain Cable Construction Corp., Conceptronic, Inc. and Bank of America incorporated by reference to Exhibit 10 to
the Company's Form 10-QSB for the quarter ended March 31, 1998.      
|10(j)   | Third Amendment to Financing and Security Agreement dated May 11, 1998, by and among Arguss Holdings, Inc., White Mountain Cable Construction Corp., Conceptronic, Inc. and Bank of America, incorporated by reference to Exhibit 10 to the
Company's Form-10-10-QSB for the quarter ended March 31, 1998.       
|10(k)   | Fourth Amendment to Financing and Security Agreement dated May 26, 1998, by and among Arguss Holdings, Inc., White Mountain Cable Construction Corp., Conceptronic, Inc. and Bank of America incorporated by reference to Exhibit 10 to the
Company's Form-10-K, dated March 16, 1999.                           
|10(l)   | Fifth Amendment to Financing and Security Agreement dated May 31, 1998, by and among Arguss Holdings, Inc., White Mountain Cable Construction Corp., Conceptronic, Inc. and Bank of America, incorporated by reference to Exhibit 10 to the
Company's Form-10-K, dated March 16, 1999.                           
|10(m)   | Sixth Amendment to Financing and Security Agreement dated June 26, 1998, by and among Arguss Holdings, Inc., White Mountain Cable Construction Corp., Conceptronic, Inc. and Bank of America, incorporated by reference to Exhibit 10 to the
Company's Form 10-QSB for the quarter ended June 30, 1998.          
|10(n)   | Credit Agreement dated March 19, 1999 by and among Arguss Holdings, Inc., and Bank of America, incorporated by reference to Exhibit 10 to the Company's Form 10-Q for the quarter ended March 31, 1999.                                                                                                          
|10(o)   | Agreement and Plan of Merger dated September 4, 1998 by and between Underground Specialties, Inc., Arguss Holdings, Inc. and White Mountain Cable Construction Corp. incorporated by reference to Exhibit 10 to the Company's current report
on Form 8-K dated September 4, 1998 and filed on September 18, 1998.
|10(p)   | First Amendment to Credit Agreement dated March 22, 2000 by and among Arguss Holdings, Inc. and Bank of America, incorporated by reference to exhibit 10 to the Company's Form 10-Q for the quarter ended March 31, 2000.                                                                                        
|10(q)   | Agreement and Plan of Merger dated May 26, 2000 by and between U.S. Communications and Arguss Communications, Inc., incorporated by reference to Exhibit 10 to the Company's form 8-K, dated June 9, 2000.                                                                                                       



Item 6:     Exhibits and Reports on form 8-K

None.





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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 Communications, Inc.                                  
| | ------------ | --- | -------------------------------------------------------------
| |              |     |                                                              
| |              |     |                                                              
| | May 11, 2001 | By: | \s\ Rainer H. Bosselmann                                     
| |              |     | Rainer H. Bosselmann                                         
| |              |     | Chief Executive Officer                                      
| |              |     |                                                              
| |              |     |                                                              
| |              |     |                                                              
| | May 11, 2001 | By: | \s\ Arthur F. Trudel                                         
| |              |     | Arthur F. Trudel                                             
| |              |     | Principal Financial Officer and Principal
 Accounting Officer
| |              |     |                                                              
| |              |     |