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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2003

Commission File No. 0-22724

CABLE DESIGN TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in its charter)

Foster Plaza 7

661 Andersen Drive

Pittsburgh, PA 15220

(Address of principal executive offices)

(412) 937-2300

Registrant’s telephone number, including area code

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  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes  x  No  ¨

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

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CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

INDEPENDENT ACCOUNTANTS’ REPORT

To the Board of Directors and Stockholders of Cable Design Technologies Corporation and subsidiaries:

We have reviewed the accompanying condensed consolidated balance sheet of Cable Design Technologies Corporation and subsidiaries as of April 30, 2003, and the related condensed consolidated statements of operations for the three-month and nine-month periods ended April 30, 2003 and 2002 and the related condensed consolidated statements of cash flows for the nine-month periods ended April 30, 2003 and 2002. These financial statements are the responsibility of the Corporation’s management.

We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to such condensed consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of Cable Design Technologies Corporation and subsidiaries as of July 31, 2002, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated October 11, 2002 (October 25, 2002 as to the third paragraph of Note 19), we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of July 31, 2002 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ DELOITTE & TOUCHE LLP

Pittsburgh, Pennsylvania

June 6, 2003

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CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – UNAUDITED

(In thousands, except share and per share data)

The accompanying notes are an integral part of these statements.

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CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS-UNAUDITED

(In thousands, except share and per share data)

The accompanying notes are an integral part of these statements.

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CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(In thousands)

The accompanying notes are an integral part of these statements.

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CABLE DESIGN TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

1. BASIS OF PRESENTATION

The condensed consolidated financial statements presented herein are unaudited. Certain information and footnote disclosures normally prepared in accordance with accounting principles generally accepted in the United States of America have been either condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Although the registrant believes that all adjustments necessary for a fair presentation have been made, interim period results are not necessarily indicative of the results of operations for a full year. As such, these financial statements should be read in conjunction with the financial statements and notes thereto included in the registrant’s most recent Form 10-K which was filed for the fiscal year ended July 31, 2002.

Certain reclassifications have been made to the prior year statements to conform with the current year presentation.

2. SIGNIFICANT ACCOUNTING POLICIES

Shipping and Handling

Amounts billed to customers for shipping and handling costs are included in net sales in the accompanying consolidated statements of operations. Shipping and handling costs incurred by the Company for the delivery of goods to customers were historically classified as a component of either cost of sales or selling, general and administrative expenses, depending on the specific operating unit. Effective August 1, 2002, all shipping and handling costs are included in cost of sales, and prior year statements have been reclassified to conform to the current year presentation.

Impact of Newly Adopted Accounting Standards

Effective August 1, 2002, the Company adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) 142, Goodwill and Other Intangible Assets. See Note 5 “Goodwill and Other Identifiable Intangible Assets” for additional information.

The Financial Accounting Standards Board (“FASB”) issued SFAS 143, Accounting for Asset Retirement Obligations, in June 2001. SFAS 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets. In August 2001, the FASB issued SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS 144 supercedes SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, and provides further guidance regarding the accounting and disclosure of long-lived assets. The Company adopted SFAS 143 and SFAS 144 effective August 1, 2002. The adoption of SFAS 143 did not have a material impact on the Company’s consolidated financial statements. In accordance with the provisions of SFAS 144, the sale of NORCOM was accounted for as a discontinued operation (see Note 12 “Discontinued Operations”) and certain assets to be disposed of have been classified as assets held for sale in the accompanying condensed consolidated balance sheets. The Company has also evaluated certain of its long-lived assets for impairment under SFAS 144 and has determined that the carrying value of such long-lived assets does not exceed the fair value using current assumptions. However, if events or circumstances arise that indicate that the carrying value of the assets may not be recoverable, the Company will reevaluate the assets for impairment under SFAS 144.

In June 2002, the FASB issued SFAS 146, Accounting for Costs Associated with Exit or Disposal Activities, which addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force Issue 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred in a Restructuring). The provisions of SFAS 146 are effective for exit or disposal activities initiated after December 31, 2002. Application of the provisions of SFAS 146 did not have a material impact on the Company’s financial position, results of operations or cash flows.

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In November 2002, the FASB issued Interpretation No. 45, Guarantors’ Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (“FIN 45”). FIN 45 provides guidance on disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued and clarifies (for guarantees issued after January 1, 2003) that a guarantor is required to recognize, at inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. See Note 7 “Commitments and Contingencies” for disclosures concerning guarantees.

In December 2002, the FASB issued SFAS 148, Accounting for Stock-Based Compensation-Transition and Disclosure, which amends SFAS 123, Accounting for Stock-Based Compensation. SFAS 148 provides alternative methods of transition for companies that voluntarily change to the fair value-based method of accounting for stock-based employee compensation, and also requires expanded disclosures in both interim and annual financial statements. The Company has adopted the expanded disclosure requirements of SFAS 148 for the quarter ended April 30, 2003. See Note 3 “Stock Benefit Plans”.

In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN 46”). FIN 46 addresses the requirement for business enterprises to consolidate any variable interest entities in which they are determined to be the primary economic beneficiary as a result of their variable economic interests. FIN 46 requires disclosures about the variable interest entities that a company is not required to consolidate, but in which it has a significant variable interest. The Company does not believe it has any variable interests in variable interest entities as of April 30, 2003.

In April 2003, the FASB issued SFAS 149, Amendments of Statement 133 on Derivative Instruments and Hedging Activities (“SFAS 149”). This Statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities. This statement is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The Company is currently evaluating the effect of SFAS 149 on its financial position, results of operations and cash flows.

3. STOCK BENEFIT PLANS

The Company maintains various stock benefit plans which provide for the grant of stock options, restricted stock and other types of incentive awards to employees and other key individuals. Stock options generally are granted at fair market value at the date of grant. Options vest over periods ranging from three to five years, and have a maximum option term of ten years from the date of grant. The Company accounts for stock-based compensation in accordance with the provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, using the intrinsic value method. Costs associated with restricted stock grants are amortized to expense over the vesting period. Stock-based compensation expense, net of tax, recognized by the Company related to stock awards and option grants was $0.1 million and $0.0 million for the three months ended April 30, 2003 and 2002 and $0.2 million and $0.4 million for the nine months ended April 30, 2003 and 2002, respectively.

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The Company’s net income (loss) and earnings (loss) per share would have been reduced to the pro forma amounts shown below if compensation cost had been determined based on the fair value method for all stock-based awards in accordance with SFAS 123 and SFAS 148, Accounting for Stock-Based Compensation:

4. INVENTORIES

Inventories, net of reserves, of the Company consist of the following:

5. GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

Effective August 1, 2002, the Company adopted the provisions of SFAS 142, Goodwill and Other Intangible Assets, under which goodwill and intangible assets with indefinite lives are no longer amortized but are reviewed annually, or more frequently if impairment indicators arise, for impairment. Separable intangible assets that are not deemed to have indefinite lives will continue to be amortized over their useful lives.

The Company tested its goodwill attributable to each of its reporting units for impairment under the transition provisions of SFAS 142 by comparing the fair value (determined on a discounted cash flow basis) of each reporting unit with its carrying value. The impact of recent global economic and industry specific conditions resulted in fair values below carrying values (including goodwill) for certain of the Company’s reporting units within both the Network Communication and Specialty Electronic business segments, which is expected to result in a non-cash goodwill impairment charge currently estimated at $30 to $35 million, net of tax. The second phase of testing, which will determine the actual goodwill impairment charge, will be completed during the fiscal quarter ending July 31, 2003. In accordance with SFAS 142, the resulting non-cash impairment charge recognized upon adoption will be reflected retroactively to August 1, 2002 as a cumulative effect of a change in accounting principle. Any impairment charge incurred will be excluded from bank covenant compliance.

The change in the carrying amount of goodwill attributable to each business segment for the nine months ended April 30, 2003 was as follows:

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The Company also reassessed the useful lives of its identifiable intangible assets and determined that the lives were appropriate other than for the Company’s tradenames and trademarks acquired prior to June 30, 2001, which were concluded to have indefinite useful lives. As a result, the Company ceased amortization of the cost of such assets as of August 1, 2002, and tested each of its tradenames and trademarks for impairment by comparing the fair value of each asset to its carrying value as of August 1, 2002. Fair value was estimated by using the relief from royalty method (a discounted cash flow methodology). Based on these tests, the Company concluded that none of its tradenames or trademarks were impaired. The Company will test the carrying value of its indefinite-lived intangible assets for impairment at least annually.

Total amortization expense of goodwill, tradenames and trademarks was $0.5 and $1.6 million for the three-month and nine- month periods ended April 30, 2002, respectively. Application of the nonamortization provision of SFAS 142 would have resulted in increases in net income of $0.4 million, or $0.01 per diluted share, for the three-month and $1.3 million, or $0.03 per diluted share, for the nine-month periods ended April 30, 2002, respectively.

The gross carrying amount and accumulated amortization of the Company’s other identifiable intangible assets as of April 30, 2003 and July 31, 2002 are as follows:

The change in the carrying amount of definite-lived intangible assets was due to the effect of currency translation. The estimated useful lives of the Company’s identifiable intangible assets with finite lives range from two to ten years. Aggregate amortization expense related to these intangible assets was $0.8 million for both the nine-month periods ended April 30, 2003 and 2002. At April 30, 2003, estimated future amortization expense of intangible assets is as follows: $0.3 million for the remaining three months of fiscal 2003 and $1.0 million, $0.9 million, $0.5 million, $0.1 million, and $0.0 million in fiscal 2004, 2005, 2006, 2007 and 2008, respectively.

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6. FINANCING ARRANGEMENTS

The Company’s revolving credit facility (the “Credit Facility”) is comprised of a $150.0 million U.S. Facility, including European and U.K. sub-facilities, and a $65.0 million revolving facility for its Canadian operations (the “Canadian Facility”), which facility is supported by a letter of credit under the U.S. Facility and reduces the availability under the U.S. Facility. The Credit Facility is secured by a pledge of substantially all of the Company’s U.S. and Canadian non-real estate assets. The U.S. and Canadian Facilities expire on January 2, 2005 and December 2, 2004, respectively. Borrowings under the U.S. Facility bear interest at either LIBOR plus 1.05% to 2.00%, or a base rate, as defined, plus 0.20% to 0.50%. The applicable interest rate margin is based on the Company’s leverage ratio as calculated under the facility. A facility fee margin of 0.20% to 0.50%, which is also based on the Company’s leverage ratio, is payable on the maximum facility amount. Fees for letters of credit under the U.S. Facility are charged at the applicable interest rate margin. Borrowings under the Canadian Facility bear interest at the Canadian Banker’s Acceptance rate, plus an applicable margin of 0.30%. A facility fee of 0.15% is payable under the Canadian Facility. As of April 30, 2003, the Company had availability of approximately $42.8 million and $26.2 million under the U.S. Facility and Canadian Facility, respectively.

The U.S. and Canadian Facilities have customary financial and non-financial covenants. The financial covenants consist of fixed charge and leverage ratios and a minimum net worth test. Compliance with these covenants is dependent on a number of factors, including, in the case of the fixed charge ratio, trailing four fiscal quarter capital expenditures and taxes paid, interest and scheduled principal payments and, in the case of the leverage ratio, the Company’s consolidated debt. Important to both of these ratios is the Company’s net operations before interest, taxes, depreciation and amortization (“EBITDA”), as calculated under the U.S. Facility, for the trailing four fiscal quarters. In the case of the leverage ratio, pro forma adjustments are made to EBITDA for acquisitions and, in the case of both ratios, add-backs to EBITDA are permitted at the discretion of the agent for the lenders in the case of certain types of charges, which included the loss on the sale of NORCOM in the first quarter of fiscal 2003 and certain business restructuring expenses. The Company is currently in compliance with the financial and non-financial covenants. Continued compliance with the financial covenants is dependent on the levels of the various components that are included in the calculations.

7. COMMITMENTS AND CONTINGENCIES

Evergreen letters of credit in the amount of $1.7 million and bank guarantees of $0.8 million were outstanding under the Credit Facility as of April 30, 2003, exclusive of the $65.0 million letter of credit in support of the Canadian Facility discussed in Note 6 “Financing Arrangements”. The bank guarantees expire on seven days notice. The Company also maintains a $1.2 million bond in connection with workers’ compensation self-insurance in the state of Massachusetts.

The Company records a liability for product warranty obligations at the time of sale to a customer based upon historical warranty experience. The Company also records a liability for specific warranty matters when they become known and are reasonably estimable. Product warranty accruals as of April 30, 2003 and July 31, 2002 as well as the related charges for the nine-month period ended April 30, 2003 were not material.

The Company had granted, in connection with the fiscal 1999 acquisition of its HEW/CDT subsidiary, a put option to the sellers for the 20% minority interest in HEW/CDT. The put option expired unexercised on January 31, 2003.

The Company remains responsible for providing post-retirement benefits to employees of the discontinued NORCOM operating unit (see Note 12 “Discontinued Operations”) who retired prior to the sale closing or who retire during the two years following the sale closing. The union has filed a grievance regarding the Company’s policy with respect to the provision of certain post-retirement benefits to a survivor after the death of the retiree. The Company has denied this grievance, and the matter is scheduled to go to arbitration. As the outcome of this matter is unknown at this time, no accrual has been recorded in the current period. The estimated liability involved, based on current actuarial assumptions, is $0.9 million.

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8. EARNINGS (LOSS) PER COMMON SHARE

Basic earnings per common share are computed based on the weighted average common shares outstanding. Diluted earnings per common share are computed based on the weighted average common shares outstanding plus additional potential shares assumed to be outstanding to reflect the dilutive effect of common stock equivalents. The following table sets forth the computation of basic and diluted earnings per share:

As a result of the net loss reported for the nine months ended April 30, 2003, common stock equivalents totaling 51,663 were excluded from the calculation of diluted loss per common share due to their anti-dilutive effect. Additionally, options outstanding which were excluded from the computation of common stock equivalents as the options’ exercise prices were greater than the average market price of the common stock totaled 4,180,200 and 2,257,051 for the three months ended April 30, 2003 and 2002 and 4,180,200 and 2,244,051 for the nine months ended April 30, 2003 and 2002, respectively.

9. INDUSTRY SEGMENT INFORMATION

The Company’s operations are organized into two business segments: the Network Communication segment and the Specialty Electronic segment. Network Communication encompasses connectivity products used within computer networks and communication infrastructures for the electronic and optical transmission of data, voice, and multimedia. Products included in this segment are high performance network cable, fiber optic cable and passive components, including connectors, wiring racks and panels, and interconnecting hardware for end-to-end network structured wiring systems, and communication cable products for local loop, central office, wireless and other applications. The Specialty Electronic segment encompasses electronic cable products for automation and process control applications as well as specialized wire and cable products for niche markets, including commercial aviation and automotive electronics.

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The Company evaluates segment performance based on operating profit excluding business restructuring expenses, after allocation of Corporate expenses. Business restructuring income of $0.1 million associated with operations in the Network Communication segment was recognized in the three-month period ended April 30, 2003. Business restructuring expense of $8.5 million was recognized for the nine months ended April 30, 2003, of which approximately $6.8 million was associated with operations in the Network Communication segment. Business restructuring expenses of $0.4 million and $5.2 million were incurred in the three-month and nine-month periods ended April 30, 2002, respectively, and approximately $0.2 million and $4.6 million of the total business restructuring expenses for the respective periods were associated with operations in the Network Communication segment. See Note 11 “Business Restructuring Expenses” for further discussion.

The Company has no inter-segment revenues. Summarized financial information for the Company’s business segments is as follows:

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Segment operating profit differs from consolidated income (loss) from continuing operations before income taxes and minority interest reported in the consolidated statements of operations as follows:

10. OTHER COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) consists of net income (loss), foreign currency translation adjustments and minimum pension liability adjustments. The components of comprehensive income (loss) for the three and nine-month periods ended April 30, 2003 and 2002 are as follows:

11. BUSINESS RESTRUCTURING EXPENSES

For the nine months ended April 30, 2003, the Company incurred net business restructuring expenses of $8.5 million, including severance and other employee termination costs of approximately $5.2 million, asset impairment charges related to property and equipment to be abandoned or held for sale, net of recoveries, of approximately $1.9 million, future rent payments under noncancelable operating leases of $0.8 million, and other costs associated with facility consolidations of $0.6 million. The operating leases expire at various dates through July 31, 2005, and the majority of the other remaining cash expenditures are expected to be made by October 31, 2003. Business restructuring income of $0.1 million recognized in the three-month period ended April 30, 2003 was due to an adjustment of the original estimate of severance costs associated with the previous restructuring activities. During the three months and nine months ended April 30, 2002, the Company incurred restructuring charges of $0.4 million and $5.2 million, respectively. Restructuring expenses for the three months ended April 30, 2002 represented severance and other employee termination costs and for the nine months represented severance and other employee termination costs of approximately $3.0 million, asset impairment charges related to property and equipment of approximately $1.7 million, and other costs associated with the closing of a facility of $0.5 million. Substantially all of the costs recorded during the prior year period have been paid to date, with the exception of minimal severance payments remaining for certain individuals under the terms of their separation agreements.

The following table displays the activity related to the restructuring plans for the nine months ended April 30, 2003:

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The Company continues to review its business strategies and evaluate further potential restructuring actions, which could result in additional restructuring charges in future periods.

12. DISCONTINUED OPERATIONS

On October 31, 2002, the Company sold substantially all of the operating assets (consisting principally of accounts receivable, inventory and fixed assets) of its NORCOM operating unit, a manufacturer of outside plant and central office cables located in Kingston, Ontario. The assets were sold for $11.3 million of cash, plus assumption by the buyer of certain current liabilities. The sale price is subject to adjustment for asset values as of the closing date, and such adjustment is expected to be finalized in the quarter ended July 31, 2003. The Company retained ownership of the NORCOM real estate and is leasing the property to the purchaser essentially rent free for the first year of the lease agreement. Accordingly, $1.7 million, representing the estimated fair market value of annual lease payments, of the proceeds from the sale were recorded as deferred rental income and are being amortized to revenue on a straight-line basis over the rental period. Net sales included $0.5 million and $0.9 million of deferred rental income for the three and nine- month periods ended April 30, 2003, respectively. Under the terms of sale agreement, the purchaser is responsible for certain of the building operating costs during the period of occupancy. The purchaser is likely to vacate the facility during the first half of the Company’s fiscal year beginning August 1, 2003, at which time the Company would resume responsibility for such operating costs until a sale of the building could be completed. Such costs are currently estimated to be $0.7 to $1.0 million annually. The sale agreement provides for contingent additional purchase price of up to $8.1 million over a three year period, primarily dependent on the purchaser’s achievement of future business levels and sales of certain inventory items. Under the sale agreement, the Company retained various liabilities, including certain pension and postretirement obligations related to the transferred employees. See Note 7 “Commitments and Contingencies” and Note 13 “Pension and Other Employee Benefits”.

Net sales and pretax operating income (loss) of the discontinued NORCOM operations for the three-month and nine-month periods ending April 30, 2003 and 2002 were as follows:

The results of operations for NORCOM have been reported separately as discontinued operations in the consolidated statements of operations for all periods presented.

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13. PENSION AND OTHER EMPLOYEE BENEFITS

During the first fiscal quarter of 2003, the Company recognized a curtailment loss of $2.3 million resulting from the sale of NORCOM (see Note 12 “Discontinued Operations”). The curtailment loss was recorded in “Loss on sale of business” in the accompanying condensed consolidated statement of operations for the nine-month period ended April 30, 2003.

The Company is reviewing its obligations to settle certain of the Company’s pension liabilities with respect to employees of the discontinued operation. Under SFAS No. 88, Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits, the cost to settle these liabilities would be recognized at the settlement date when the liabilities are funded in cash or through the purchase of annuities. If the Company is required or elects to settle such liabilities, the Company estimates the cost of settlement to be $2 to $3 million based on current actuarial assumptions.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cable Design Technologies Corporation (the “Company”) is a leading manufacturer of technologically advanced connectivity products for the Network Communication and Specialty Electronic marketplaces. Network Communication encompasses connectivity products used within computer networks and communication infrastructures for the electronic transmission of data, voice and multimedia. Products included in this segment are high bandwidth network and interconnect cables, fiber optic cable and passive components, including connectors, wiring racks and panels, and interconnecting hardware for end-to-end network structured wiring systems, and communication cable products for local loop, central office, wireless and other applications. The Specialty Electronic segment encompasses electronic cable products for automation and process control applications as well as specialized wire and cable products for niche markets, including commercial aviation and automotive electronics.

This discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and the notes thereto.

Results of Operations

Three Months Ended April 30, 2003 Compared to

Three Months Ended April 30, 2002

Sales for the three months ended April 30, 2003 (“third quarter 2003”) decreased 6% to $122.1 million compared to $129.8 million for the three months ended April 30, 2002 (“third quarter 2002”), as reduced sales volumes and decreased selling prices more than offset a favorable effect of foreign currency translation, primarily on European revenues, of approximately 6%. Network Communication segment sales decreased $7.4 million, or 9%, to $70.5 million for the third quarter 2003 compared to $77.9 million for the third quarter 2002. The decline in Network Communication segment sales was primarily due to reduced sales volume of telecommunication products in the European marketplace. Specialty Electronic segment sales for the quarter were $51.6 million compared to $51.9 million for the same period last year, a decline of less than 1%. For the Specialty Electronic segment, the effect on sales of lower demand and decreased selling prices for many specialty products, including products for sound, safety and security, industrial and commercial aviation applications, was mostly offset by favorable currency translation on international revenues. Sales outside of North America decreased 2%, to $45.2 million for the third quarter 2003 compared to $46.2 million for the third quarter 2002. The decrease in sales outside of North America was primarily due to lower demand for Network Communication products in Europe and Southeast Asia, which was mostly offset by the favorable effect of foreign currency translation. Excluding the impact of currency translation, sales outside of North America declined 23% and 5% for the Network Communication and Specialty Electronic segments, respectively.

Gross profit for the third quarter 2003 was $28.6 million compared to $35.1 million for the third quarter 2002, and the gross margin was 23.4% compared to 27.1% last year. The decrease in the gross margin was primarily a result of a lower gross margin for the Network Communication segment due to decreases in selling prices of the Company’s network connectivity products and the unfavorable impact of lower sales volume on absorption of fixed manufacturing overhead. Third quarter 2003 gross margin was also negatively impacted by approximately $0.7 million of expense relating to increases in provisions for slow moving inventory associated with products for the telecommunication central office marketplace and costs to exit leased warehouse space.

Selling, general and administrative expenses (“SG&A”) for the third quarter 2003 decreased $0.4 million, to $23.2 million compared to $23.6 million for the same period last year. SG&A as a percentage of sales increased to 19.0% for the third quarter 2003 compared to 18.2% for the third quarter 2002. The higher SG&A as a percentage of sales for the current quarter was due to approximately $0.5 million of severance costs and a $0.4 million charge to adjust the carrying value of certain real estate held for sale to fair market value. Additionally, the Company is experiencing and expects to continue to incur rising costs for auditing and accounting and consulting services as a result of the implementation of new accounting pronouncements and compliance with new regulations, including the Sarbanes-Oxley Act of 2002. These increasing costs are expected to negatively impact SG&A and operating earnings over the next twelve to eighteen months.

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Business restructuring income of $0.1 million recognized in the third quarter 2003 represents an adjustment of the original estimate of severance costs associated with previous restructuring activities. Due to the current economic environment, the Company continues to review business strategies and pursue further cost reduction activities, which may include the sale, restructuring or closing of certain operations and which could result in additional restructuring charges in future periods.

Interest expense was $1.2 million for the third quarter 2003, a decrease of $0.7 million compared to interest expense of $1.9 million for the same period last year. The reduction in interest expense was primarily due to the lower average borrowings outstanding during the current quarter.

The Company continually evaluates its annual effective tax rate based on actual and projected results of operations and adjusts the current period tax provision or benefit accordingly. As a result of changes in such estimates, the tax benefit for the nine months ended April 30, 2003 was adjusted to the current projected annual effective tax rate of 53.7%, resulting in a third quarter 2003 effective tax rate from continuing operations of 33.8% compared to 40.5% last year. Based on current estimates, the Company anticipates an effective tax rate from continuing operations of 53.7% for its quarter ending July 31, 2003.

Net income from continuing operations for the third quarter 2003 was $2.1 million, or $0.05 per diluted share, compared to net income from continuing operations of $3.9 million, or $0.09 per diluted share, for the third quarter 2002. The decrease in net income from continuing operations was primarily due to the lower gross profit, which was partially offset by the lower interest and tax expense, as discussed above, and by the recognition of other income, net of $0.4 million representing gains on foreign currency transactions in the current quarter versus other expense, net of $0.7 million for the same period last year.

Net income including discontinued operations was $2.0 million, or $0.05 per diluted share for the third quarter 2003, compared to net income of $3.9 million, or $0.09 per diluted share for the same period last year. See Note 12 “Discontinued Operations” of the Notes to Consolidated Condensed Financial Statements.

Nine Months Ended April 30, 2003 Compared to

Nine Months Ended April 30, 2002

Sales for the nine months ended April 30, 2003 (“first nine months 2003”) were $355.2 million compared to $373.6 million for the nine months ended April 30, 2002 (“first nine months 2002”), a decrease of 5%. Excluding additional sales attributable to acquisitions and a favorable effect of foreign currency translation on international revenues, sales decreased 12% over the same period last year. Network Communication segment sales decreased $12.3 million, or 6%, to $208.1 million for the first nine months 2003 compared to $220.4 million for the first nine months 2002, and Specialty Electronic segment sales declined $6.1 million, or 4%, to $147.1 million for the first nine months 2003 compared to $153.3 million for the first nine months 2002. Within the Network Communication segment, sales of network products declined 8% due to decreases in selling prices and lower demand for structured wiring products, particularly in the U.S. and Southeast Asia regions. Sales of products for the telecommunication market increased 1% compared to the first nine months 2002 due to the additional sales of an acquired business in Europe. The decrease in sales for the Specialty Electronic segment was primarily due to lower sales of commercial aviation products resulting from reduced demand from aircraft manufacturers. Sales outside of North America increased to $128.1 million for the first nine months 2003 compared to sales of $117.9 million for the first nine months 2002. The increase in sales outside of North America was primarily due to the additional sales of acquired businesses in Europe and the favorable effect of currency translation.

Gross profit for the first nine months 2003 was $82.1 million compared to $96.4 million for the first nine months 2002, and the gross margin was 23.1% compared to 25.8% last year. The decrease in the gross margin was primarily a result of a lower gross margin for the Network Communication segment due primarily to decreases in selling prices of the Company’s network connectivity products.

SG&A for the first nine months 2003 decreased 9%, to $68.4 million compared to $75.0 million for the first nine months 2002. Excluding the additional SG&A of acquired businesses the decrease in SG&A was $7.9 million, primarily due to reduced employee costs resulting from the Company’s efforts to reduce expenses in response to economic conditions as well as lower sales volume related expenses. SG&A as a percentage of sales decreased to 19.3% for the first nine months 2003 compared to 20.1% for the first nine months 2002, due to the reasons noted above.

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During the first nine months 2003, the Company incurred net business restructuring expenses of $8.5 million. The restructuring expenses include severance and other employee termination costs of approximately $5.2 million, asset impairment charges related to property and equipment to be abandoned or held for sale, net of recoveries, of approximately $1.9 million, future rent payments under noncancelable operating leases of $0.8 million, and other costs associated with the facility consolidations of $0.6 million. Business restructuring charges of $5.2 million were incurred in the first nine months 2002 representing severance and other employee termination costs of approximately $3.0 million, asset impairment charges related to property and equipment to be abandoned or held for sale of approximately $1.7 million, and other costs associated with the closing of a facility of $0.5 million.

Net loss from continuing operations for the first nine months 2003 was $(1.4) million, or $(0.03) per diluted share, compared to net income from continuing operations of $2.9 million, or $0.07 per diluted share, for the first nine months 2002. The net loss for the first nine months 2003 versus net income for the same period last year is due primarily to the effect of the lower sales levels and higher business restructuring expenses, which were partially offset by reduced SG&A expenses and the elimination of goodwill amortization expense.

On October 31, 2002, the Company sold substantially all of the operating assets of its NORCOM operating unit, a manufacturer of outside plant and central office cable for the U.S. and Canadian marketplaces. Loss from discontinued operations was $(32.7) million, net of tax benefit of $13.0 million, and $(1.5) million, net of tax benefit of $0.7 million, for the first nine months 2003 and 2002, respectively. The first nine months 2003 net loss includes a $(32.1) million net of tax loss on the sale. See also Note 12 “Discontinued Operations” of the Notes to Consolidated Condensed Financial Statements.

The Company’s net loss for the first nine months 2003 including discontinued operations was $(34.0) million, or $(0.76) per diluted share, compared to net income of $1.4 million, or $0.03 per diluted share, for the same period last year.

Financial Condition

Liquidity and Capital Resources

The Company generated $22.9 million of net cash from operating activities during the first nine months 2003, including $6.8 million provided by a decrease in operating working capital. The change in operating working capital was primarily the result of decreases in accounts receivable and inventory of $10.9 million and $3.5 million, respectively, partially offset by a decrease in accounts payable and other current liabilities of $2.2 million and an increase in other current assets of $3.0 million. The change in operating working capital excludes changes in cash and cash equivalents and current maturities of long-term debt.

Cash provided by investing activities of $5.2 million included $9.6 million of proceeds from the sale of discontinued operations and $0.4 million of proceeds from the sale of other assets, partially offset by $4.5 million of capital expenditures and $0.3 million expended to acquire additional shares of a non-wholly owned subsidiary. Net cash used by financing activities of $34.7 million represented a net reduction of outstanding debt of $35.1 million offset by $0.4 million of proceeds received from the issuance of common stock pursuant to the Company’s employee stock purchase plan.

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The Company’s revolving credit facility (the “Credit Facility”) is comprised of a $150.0 million U.S. Facility, including European and U.K. sub-facilities, and a $65.0 million revolving facility for its Canadian operations (the “Canadian Facility”), which facility is supported by a letter of credit under the U.S. Facility and reduces the availability under the U.S. Facility. The Credit Facility is secured by a pledge of substantially all of the Company’s U.S. and Canadian non-real estate assets. The U.S. and Canadian Facilities expire on January 2, 2005 and December 2, 2004, respectively. Borrowings under the U.S. Facility bear interest at either LIBOR plus 1.05% to 2.00%, or a base rate, as defined, plus 0.20% to 0.50%. The applicable interest rate margin is based on the Company’s leverage ratio as calculated under the facility. A facility fee margin of 0.20% to 0.50%, which is also based on the Company’s leverage ratio, is payable on the maximum facility amount. Fees for letters of credit under the U.S. Facility are charged at the applicable interest rate margin. Borrowings under the Canadian Facility bear interest at the Canadian Banker’s Acceptance rate, plus an applicable margin of 0.30%. A facility fee of 0.15% is payable under the Canadian Facility. As of April 30, 2003, the Company had availability of approximately $42.8 million and $26.2 million under the U.S. Facility and Canadian Facility, respectively.

The U.S. and Canadian Facilities have customary financial and non-financial covenants. The financial covenants consist of fixed charge and leverage ratios and a minimum net worth test. Compliance with these covenants is dependent on a number of factors, including, in the case of the fixed charge ratio, trailing four fiscal quarter capital expenditures and taxes paid, interest and scheduled principal payments and, in the case of the leverage ratio, the Company’s consolidated debt. Important to both of these ratios is the Company’s net income before interest, taxes, depreciation and amortization (“EBITDA”), as calculated under the U.S. Facility, for the trailing four fiscal quarters. In the case of the leverage ratio, pro forma adjustments are made to EBITDA for acquisitions and, in the case of both ratios, add-backs to EBITDA are permitted at the discretion of the agent for the lenders in the case of certain types of charges, including the loss on the sale of NORCOM in the first quarter of fiscal 2003 and certain business restructuring expenses. The Company is currently in compliance with the financial and non-financial covenants. Continued compliance with the financial covenants is dependent on the levels of the various components that are included in the calculations.

Based on current expectations for improvement in its business, management believes that the Company’s cash flow from operations and the available portion of its credit facilities will provide it with sufficient liquidity to meet its current liquidity needs.

Critical Accounting Policies and Estimates

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America which require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. Information with respect to the Company’s critical accounting policies which the Company believes could have the most significant effect on the Company’s reported results and require subjective or complex judgments by management is contained in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2002. Management believes that at April 30, 2003, there has been no material change to this information.

Fluctuation in Copper Price

The cost of copper in inventories, including finished goods, reflects purchases over various periods of time ranging from one to several months for each of the Company’s operations. For certain communication cable products, profitability is generally not significantly affected by volatility of copper prices as selling prices are generally adjusted for changes in the market price of copper, however, differences in the timing of selling price adjustments do occur and may impact near term results. For other products, although selling prices are not generally adjusted to directly reflect changes in copper prices, the relief of copper costs from inventory for those operations having longer inventory cycles may affect profitability from one period to the next following periods of significant movement in the cost of copper. The Company does not generally engage in activities to hedge the underlying value of its copper inventory.

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New Accounting Standards

In December 2002, the FASB issued SFAS 148, Accounting for Stock-Based Compensation-Transition and Disclosure, which amends SFAS 123, Accounting for Stock-Based Compensation. SFAS 148 provides alternative methods of transition for companies that voluntarily change to the fair value-based method of accounting for stock-based employee compensation, and also requires expanded disclosures in both interim and annual financial statements. The Company has adopted the expanded disclosure requirements of SFAS 148 for the quarter ending April 30, 2003, and such disclosures are included in Note 3 “Stock Benefit Plans” of the Notes to Consolidated Condensed Financial Statements.

In November 2002, the FASB issued Interpretation No. 45, Guarantors’ Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (“FIN 45”). FIN 45 provides guidance on disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued and clarifies (for guarantees issued after January 1, 2003) that a guarantor is required to recognize, at inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. See Note 7 “Commitments and Contingencies” of the Notes to Consolidated Condensed Financial Statements for disclosures concerning guarantees.

In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN 46”). FIN 46 requires a company to consolidate any variable interest entities in which the company has a controlling financial interest. FIN 46 also requires disclosures about the variable interest entities that a company is not required to consolidate, but in which it has a significant variable interest. The Company does not believe it has any variable interests in variable interest entities as of April 30, 2003.

In April 2003, the FASB issued SFAS 149, Amendments of Statement 133 on Derivative Instruments and Hedging Activities (“SFAS 149”). This Statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities. This statement is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The Company is currently evaluating the effect of SFAS 149 on its financial position, results of operations and cash flows.

Forward-Looking Statements—Under the Private Securities Litigation Act of 1995

Certain statements in this quarterly report are forward-looking statements, including, without limitation, statements regarding future financial results and performance and available liquidity, future debt paydown or incurrence, amount, or date of recognition of, future pension obligations, effect of SFAS 142 testing of goodwill for impairment, and the Company’s or management’s beliefs, expectations or opinions. These statements are subject to various risks and uncertainties, many of which are outside the control of the Company, including the level of market demand for the Company’s products, competitive pressures, the ability to achieve reductions in operating costs and to continue to integrate acquisitions, the ability to remain in compliance with financial and other covenants contained in the Company’s credit facilities (which, in part, depends on the Company’s indebtedness, fixed charges and adjusted EBITDA, each as calculated under the credit facilities), litigation exposure, price fluctuations of raw materials and the potential unavailability thereof, foreign currency fluctuations, technological obsolescence, environmental matters and other specific factors discussed in the Company’s Annual Report on Form 10-K for the year ended July 31, 2002, and other Securities and Exchange Commission filings. The information contained herein represents management’s best judgment as of the date hereof based on information currently available; however, the Company does not intend to update this information to reflect developments or information obtained after the date hereof and disclaims any legal obligation to the contrary.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There was no material change in the Company’s exposure to market risk from July 31, 2002.

Item 4. Controls and Procedures

a. Evaluation of disclosure controls and procedures. Based on their evaluation as of a date within 90 days of the filing date of this Form 10-Q, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934 (the “Exchange Act”)) are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

b. Changes in internal control. There were no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation described above. There were no significant deficiencies or material weaknesses, and therefore there were no corrective actions taken.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 2. Changes in Securities and Use of Proceeds

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

The Company’s chief executive officer and chief financial officer have provided as part of this filing the certification with respect to this Form 10-Q that is required by Section 906 of the Sarbanes-Oxley Act of 2002.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

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