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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Form 10-K

For the Fiscal Year Ended September 30, 2003

or

For the Transition Period From           to          

IPC ACQUISITION CORP.

Registrant’s telephone number, including area code: (212) 825-9060

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

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

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 o

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

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

The common stock of the registrant is not publicly traded. Therefore, the aggregate market value of the common stock is not readily determinable.

As of November 30, 2003, 14,724,380 shares of common stock, par value $0.01 per share, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
Certain exhibits are incorporated by reference in Item 15 of this report.

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IPC ACQUISITION CORP.
FORM 10-K
For the Fiscal Year Ended September 30, 2003
INDEX

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PART I

Item 1. Business

Overview

     Our primary business is the design, manufacture, installation and service of turret systems for the trading operations of the financial community, which includes investment and commercial banks, foreign exchange and commodity brokers and dealers, market exchanges, mutual and hedge fund companies, asset managers and insurance companies. Turrets are specialized telephone systems that are designed for high reliability and provide users instant access to hundreds of dedicated telephone lines that are directly connected to other trading partners and customers. Traders, brokers and salespersons occupy desks known as trading positions from which they trade various financial instruments including stocks, bonds, currencies, and futures using turrets. We are the leader in the turret industry, based on our base of approximately 110,000 turrets and related equipment installed in trading positions worldwide. We also install and service the cabling infrastructure and networks within buildings that connect voice and data communications devices for traders and others in the global financial, trading and exchange trading industries, as well as sell network voice and data services to customers primarily in the financial community. Our customers include Deutsche Bank, JPMorgan Chase, Morgan Stanley, Goldman Sachs, UBS Paine Webber, Citigroup/Smith Barney, Bank of America, Lehman Brothers, Wachovia and Dresdner Bank. We have offices in 18 major financial centers and our installed base of turret systems is located in 47 countries, with the majority located in the United States. As of September 30, 2003, we provide maintenance, service and support to more than 669 customers.

     We manage our business through three major operating divisions called Trading Systems, Information Transport Systems, or I.T.S., and Network Services. For the fiscal year ended September 30, 2003, Trading Systems accounted for approximately 76% of our revenues and approximately 97% of our net income, I.T.S. accounted for approximately 20% of our revenues and approximately 14% of our net income and our Network Services division, which was created in April 2003, accounted for approximately 4% of our revenues and approximately (11)% of our net income.

     Our operations include both domestic and international sales. For the fiscal year ended September 30, 2003, domestic sales accounted for approximately 76% of our total consolidated revenues and international sales accounted for approximately 24% of our total consolidated revenues. Sales in the United Kingdom accounted for approximately 16% of our total consolidated revenues, or approximately 67% of our international revenues during this period.

     For the fiscal year ended September 30, 2003, we had a working capital surplus of approximately $45.6 million, net income of approximately $4.0 million and an accumulated deficit of approximately $5.2 million. For the period from November 15, 2001 (date of initial capitalization) to September 30, 2002, we had a working capital surplus of approximately $43.5 million, a net loss of approximately $9.2 million and an accumulated deficit of approximately $9.2 million. For the fiscal year ended September 30, 2001, our predecessor had a working capital deficit of approximately $52.2 million, a net loss of approximately $12.8 million and an accumulated deficit of approximately $32.7 million.

     Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, registration statements and amendments to those filings are filed with the Securities and Exchange Commission and are available free of charge on our website at www.ipc.com under the “Investors and Media” caption as soon as reasonably practicable after we electronically file such material with or furnish it to the Securities and Exchange Commission. Our filings are also available to the public at the website maintained by the Securities and Exchange Commission at www.sec.gov.

History

     Our business was established in 1973 as Interconnect Planning Corporation to provide telephone equipment specifically designed for the financial trading community. The business originally went public in 1983. In 1986, it was acquired by Contel Corporation and became known as Contel IPC. Shortly thereafter, Contel IPC opened our current manufacturing facility in the United States and commenced operations in the United Kingdom. In 1990, Contel was acquired by GTE, and in October 1991, GTE sold the business to Richard and Peter Kleinknecht and others who renamed the business IPC Information Systems, Inc. In October 1994, IPC Information Systems, Inc. completed an initial public offering, and in April 1998, Citicorp Venture Capital Ltd. acquired the business. In December 1998, we purchased the assets of Reuters Voice Systems, a business unit of Reuters Group PLC, which included 9,000 trading positions. In June 1999, we acquired V-Band Corporation, which included 17,000 trading positions. In June 2000, IPC Information Systems, Inc. was acquired by Global Crossing Ltd., and in July 2001, Global Crossing sold our Asian operations to Asia Global Crossing Ltd. In November 2001, IPC Acquisition Corp. was incorporated by a group led by GS Capital Partners 2000, L.P., or GSCP 2000, and other private equity funds affiliated with Goldman, Sachs & Co., to acquire IPC Information Systems from Global Crossing Ltd. and its affiliates. IPC Acquisition Corp. did not have any assets or operations prior to its acquisition of IPC Information Systems. In December 2001, Global Crossing and its affiliates sold IPC Information Systems to IPC Acquisition Corp. In March 2002, we purchased the international customer base and related assets of

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the turret business of Hitachi, Ltd., which included approximately 1,800 positions. In April 2003, we acquired Gains International (US) Inc. and Gains International (Europe) Limited, which provide voice and data services to the financial community, from GSCP 2000 and other private equity funds affiliated with Goldman, Sachs & Co. In August 2003, we invested in Purple Voice Holdings Limited, or Purple Voice, which will allow us to provide users such as researchers, analysts, and retail brokers who are based off the main trading floor with seamless access to audio broadcasts, intercom calls, group calls and hoot and holler applications, an open broadcast system that allows users to communicate with other users located around the world, regardless of the user’s location. IPC Information Systems, Inc., a Delaware corporation, is expected to convert to a Delaware limited liability company.

Trading Systems

     Our Trading Systems division designs, manufactures, sells, installs and maintains turret systems. Our turret systems can support up to 4,000 trading positions and 23,000 telephone lines, and can be networked to build one integrated trading floor across multiple sites. The largest trading floor that currently uses our products has approximately 2,500 trading positions and approximately 14,600 telephone lines. These turret systems incorporate a proprietary design, including many features designed to increase trader productivity, such as:

	•		expanded access to telephone lines;
	•		rapid call completion;
	•		high voice quality;
	•		built-in redundancy;
	•		trader mobility;
	•		personalized call button layouts; and
	•		the ability to implement system upgrades via software changes as opposed to hardware changes.

     We anticipate that the continuing emphasis on disaster recovery and contingency planning will lead to increased purchases of new turret systems and related services by our customers.

     Industry Overview

     The turret systems industry is characterized by a small number of manufacturers who have developed highly specialized voice communications systems sold primarily to companies in the financial community. Traders require highly reliable, “non-blocking” simultaneous access to multiple lines which cannot be provided by traditional telephone systems used by companies. Turret systems must be highly reliable because of the time-sensitive nature of trading activity and the high potential opportunity cost of a service outage. As a result, product reliability is one of the most significant factors in choosing among turret system vendors. Other factors include service quality and the ability to provide a standardized technology platform on a global basis. We believe our market leadership is based on our success in meeting customer requirements.

     We have found that demand for new turret systems is primarily event-driven. We believe the key events that drive demand are:

	•		physical facility moves of trading positions;
	•		customer decisions to upgrade technology;
	•		the standardization of trading platforms worldwide; and
	•		the addition of new trading positions due to customer growth.

     Facility moves are triggered primarily by:

	•		beneficial real estate pricing or lease/sublease arrangements;
	•		merger and acquisition activity among firms;
	•		obsolescence of trading facilities; and
	•		headcount changes beyond current facility capacity.

     Disaster recovery and contingency planning have gained increasing importance among our customers and we anticipate increased growth in this area. In addition, categories such as derivatives, the emergence of new specialty firms such as sector-focused hedge funds, and the expansion of firms internationally drive new purchase orders for turret systems. Demand is also fueled by customer decisions to upgrade technology and standardize trading platforms worldwide.

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Organizational Structure

Trading Systems has five major focus areas:

•		Advanced Communication Systems. We provide highly reliable voice communications between institutional traders, their trading counterparties and their associated middle and back office support personnel. We believe our flagship Alliance MX trading platform, which is the back office system that manages voice communications from turret users, is currently the industry’s most widely used platform and is used by a majority of our customers. To meet evolving client needs, we also offer turrets and other products that integrate voice, data, and video at the trading position utilizing Voice over Internet Protocol, or VoIP, technology. VoIP is the method by which voice communication is delivered from one computer to another over a network. Our VoIP turret, known as the IQMXTM system, is the first turret in the industry to utilize VoIP technology. As of September 30, 2003, we have delivered approximately 13,000 IQMX positions.
•		Application Development. We develop software applications that integrate our turret systems into our customers’ business environments. Our applications are a strategic extension of our turret systems, providing value-added solutions that help to automate trading activities. In addition, we have published our application program interface, or API, to allow third-party software vendors to deploy software solutions that interoperate with our turret systems.
•		Rich Media Delivery. Rich Media Delivery allows users to access Internet Protocol, or IP, based media services, including broadcast television and streaming online programming on the turret. Enabled by broadband IP connectivity, we believe Rich Media services are beginning to change the way people communicate and access information. We address this market opportunity through our TraderVision desktop video application that runs on our IQMX.
•		Professional Services. Our project management, field service and development organizations provide a variety of customized services to our customers to support the needs of their complex trading floors. Customized product and application developments coordinated through an experienced staff of more than 90 professionals, with significant experience in trading communications.
•		Service and Support. Global service and support are an important part of Trading Systems’ value. Our 24-hour-a-day, 7-day-a-week global operations organization supports clients in 36 countries through both contract-based maintenance services and on an as-needed basis. Often these services involve teams of dedicated on-site personnel. Because of the mission-critical nature of our products, our service standards are higher than those typically offered for other commercial products. We also receive service revenue through moves, adds and changes, or MACs, of existing trading positions.

     In June 2003, we launched a new service called Managed Services, which is a suite of services that can manage trading floor voice operations and all associated infrastructure worldwide. Through Managed Services, we can custom design a customer’s services suite to operate in tandem with their own resources, internal business processes and user needs.

IPC Managed Services products include:

•		IPC Trader Voice Service. IPC Trader Voice Service can deliver a single trading floor communications solution globally. We can assume responsibility for the day-to-day operations of voice trading systems and related equipment to ensure a uniform user experience worldwide that is backed by a premium level of service.
•		IPC Connectivity Service. IPC Connectivity Service can simplify the complexity of circuit management while maintaining carrier diversity so that customers can stay in control of trading floor connectivity. We can design, provision, coordinate site installation and provide button-to-button testing for all voice and data circuits.
•		IPC Hoot and Holler Service. IPC Hoot and Holler Service is a secure, high quality conference solution that can support specialized design requirements for hoot and holler applications. We can manage the entire process from network design through on-going monitoring and maintenance.

     Competition

     In the worldwide market for turret systems, our principal competitor is Syntegra, an affiliate of British Telecom. While we and Syntegra are the two largest providers of turret equipment and service worldwide, there are smaller competitors that have historically achieved strong market shares in their respective domestic markets. These competitors include Etrali S.A., an affiliate of France Telecom, Hitachi Ltd., and Siemens A.G. In the future, we expect additional competition from start-up entities and others that are developing both equipment and software based products and service offerings, including call center systems and

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other telephony software and equipment focused on deployment over the Internet. Although competitive pricing pressures could cause us to lose market share to these companies, we believe we are able to compete effectively due to the high quality of our products, our experience and reputation for providing outstanding service, our ability to provide a standardized technology platform on a global scale and our investment in research and development that focuses on new products and technologies. It has been those competitive strengths that have enabled us to be the industry leader in the turret market.

     Products and Services

     Our Trading Systems division designs, manufactures, installs and maintains turret systems, highly specialized telephone systems that are used by traders, brokers and other salespersons in the financial trading industry to trade financial instruments, including stocks, bonds, currencies and futures. Within the trading operations of the financial community, traders, brokers and salespeople occupy desks known as trading positions from which they trade various financial instruments including stocks, bonds, currencies, and futures. A variety of equipment is located on top of these desks to enable traders to obtain information and communicate when making trades. This equipment includes computers, market data screens and turrets (known in Europe as dealerboards).

     Key features of our turret systems include:

	•		Reliability. On a trading floor, a lost connection could result in a lost transaction, and the outage of the entire telecommunications system would mean that the traders would not be able to make transactions in response to real time market conditions, which could be damaging to a trading firm from a financial and reputational perspective. Our turret systems are designed with redundant equipment and circuitry that have parallel internal transmission paths to ensure that no single failure within the system can cause a failure of the entire system.
	•		Call Capacity. Our turret systems are designed to allow every user to be on one or more telephone lines simultaneously without blocking other calls or the degrading of call setup speed. A typical turret system has two handsets for conversation and a number of speaker channels available for monitoring a large number of telephone lines. The turret system also allows many connections to be in progress simultaneously. For example, a broker may have a buyer on the left handset and a seller on the right handset while monitoring speaker channels for other trading activity. The Tradenet MX and the Alliance MX systems, discussed below, are designed to support up to 23,000 telephone lines in simultaneous use by up to 2,000 and 4,000 trading positions, respectively.
	•		User Programmability and Mobility. Our turret systems allow each trader to customize the system with personal speed-dial and direct connections and associated displays, and to store personal settings in memory in the system’s backroom switching equipment. A trader can access his customized settings from any other turret on the system at the same location or at any remote network-linked location.

Our turret systems products and services include:

	•		VoIP Desktop Turret Systems. We believe our VoIP turret systems, branded IQMX, will simplify and expand a traders’ ability to access and integrate information from all sources — voice, video and data — on one platform and enhance the opportunities for creating new tools and advanced network services that accommodate traders’ needs for instantly accessible and readily managed information from all sources. The IQMX includes four basic modules:

	•		The Control Module is the primary building block of the turret system. It includes controls for two handsets, a telephone keypad, ten soft keys and 30 dynamic buttons per page. These give end-users access to as many as 600 lines.
	•		The Application Module is designed around a high-resolution, full color touch screen. The module includes 40 on-screen dynamic buttons per page, eight soft keys and the equivalent of a Slimline ClearDealTM 8-channel speaker module. The application module is capable of delivering new services, including broadcast television, streaming media and the Internet.
	•		The 4-Channel Speaker Module consists of four programmable channels, volume control knobs and a speaker. Additional speakers can be added to support up to 32 channels per position.
	•		The Button Module includes 30 hard buttons that may access up to 600 lines across multiple pages and an integrated 8-channel speaker module.

Customers can combine these modules for flexibility to meet a trader’s button and speaker requirements.

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•

Voice Trading Systems—Desktop Trading Consoles. We have developed a variety of desktop trading consoles including:

	•		ICMX. The ICMX is a VoIP intercom module built for the Alliance MX platform. It extends intercom functionality to managers, support staff and other non-traders, providing hands-free communication between sites, a unified numbering plan, group calls and all calls and support for hoot and holler applications.
	•		MX Slimline. MX Slimline consoles offer the same basic features and functions as our IQMX turret offering, with more traditional network connections as opposed to VoIP.
	•		Slimline ClearDeal. The Slimline ClearDeal speaker is similar in operation to the IQMX 4-channel speaker, but with a capacity of 8 speaker channels. Like the MX Slimline turret, the ClearDeal does not make use of VoIP technology.
	•		TradePhone MX. The TradePhone MX is a multi-button telephone that is designed to operate with both the Tradenet MX and the Alliance MX switching platforms. This product is targeted at support personnel located off the trading floor who communicate directly with traders. The TradePhone MX is a cost effective solution that provides the functionality of a turret system in a scaled down version.
	•		ExchangeFone II. Specialized products such as our ExchangeFone II telephone system were designed specifically for exchange floors and work with our Alliance MX voice trading system and the Tradenet MX.

•

Voice Trading Systems—Backroom Switching Platforms. We have developed a variety of backroom switching platforms. Our backroom switching platforms include:

	•		Tradenet MX. Introduced in 1992, Tradenet MX is our first digital system. The fully digital proprietary system, based on a fault tolerant switch is not vulnerable to isolated component failure. Its distributed architecture design provides reliability by harnessing the computing power of multiple SUN® Microsystems SPARC microprocessors throughout the system and provides rapid and easily programmable switching of voice calls. Tradenet MX is designed to allow software upgrades without major hardware upgrades, which enables us to respond rapidly to market developments or to a customer’s request.
	•		Alliance MX. Introduced in 1997, the Alliance MX offers all of the same functionality as the Tradenet MX but provides higher density configurations, four times the switching bandwidth, universal slots, on-demand selective recording and a simplified power distribution system.
	•		Alliance VS/MX. Alliance VS/MX is the backroom switching platform offered to small offices with up to 32 traders. The Alliance VS/MX system chassis is housed in a reduced size cabinet and plugs into a standard electrical outlet. Alliance VS/MX is a digital connectivity panel with universal slots which enables it to provide traditional voice functions and gives it the ability to act as a gateway to the data network.
	•		Alliance MX Integrated Recorder. One integral part of the trading environment is call recording. It can resolve problem trades, reduce liability insurance premiums and train new recruits. By incorporating the recording function into the Alliance MX system, Trading Systems offers increased recording capacity, plus advanced features such as trader-initiated recording, call marking for quick retrieval, selective recording and trader-controlled playback with quick access to the last 10 calls.

•

Integrated Software Applications. We have developed software applications to complement our turret systems:

	•		TradeSmart CTI. Computer Telephony Integration, or CTI, is the method by which computers communicate with telephone systems. The TradeSmart CTI is a suite of software applications that allows traders and their support staff to enhance their productivity, profitability and effectiveness. These applications allow traders to, among other things, prioritize incoming calls to maximize profitability, as well as provide a call log history that gives traders information on the nature of incoming calls.
	•		Application Programming Interface. API enables clients’ programming staff and third-party vendors to develop integrated applications for our voice trading systems. Many customers have comprehensive, in-house programming staffs to build all of their trading floor applications. We complement them by providing a Software Developer’s Kit, or SDK, a tool that allows developers to write software applications that access the Alliance MX turret system.

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	•		Custom-Developed Applications. Our professional services department is dedicated to delivering customers solutions that enhance their trading systems. These solutions may include elements from the TradeSmart CTI standardized product offerings, as well as customized software that solves specific business problems. Custom-developed applications extend the functionality of the Alliance MX turret systems and integrate the turret system with other applications running on the trading desk.
	•		Purple Voice. IPC UK Holdings Limited, or IPC UK, one of our subsidiaries, entered into a series of transactions with Purple Voice, a business-to-business IP software company that provides VoIP solutions to the financial community. As a result of these transactions, which closed on August 1, 2003:

	•		IPC UK acquired approximately 40% of the currently outstanding common shares (calculated on a non-diluted basis) of Purple Voice, together with a warrant for additional shares from certain minority shareholders of Purple Voice, for approximately $120,000;
	•		IPC UK invested $1.0 million in a 7% secured convertible note, due September 2007, issued by Purple Voice, which is convertible into 49% of Purple Voice’s share capital on a fully diluted basis;
	•		the remaining shareholders of Purple Voice granted a call option to IPC UK, which permits IPC UK to acquire the remaining issued share capital of Purple Voice for an aggregate amount of $0.8 million, plus an earn-out of up to $9.0 million, dependent on certain revenue targets being met; and
	•		IPC Information Systems, Inc. and Purple Voice entered into an agreement under which IPC Information Systems, Inc. has been appointed Purple Voice’s exclusive reseller worldwide.
	With our recent investment in Purple Voice, we will provide users such as researchers, analysts, and retail brokers who are based off the main trading floor with seamless access to audio broadcasts, intercom calls, group calls and hoot and holler broadcasts regardless of the user’s location. Purple Voice software operates on standard personal computers over existing corporate data networks and integrates with our turret systems via the Alliance MX switch.

	•		TradeCentral Applications Platform and IP-Video. We have also developed video applications to complement our turret systems. The first applications were launched in June 2002:

	•		TraderVision™ Streaming Video. TraderVision is a video application that allows traders to access media services, including broadcast television and streaming online programming via the IQMX applications module. Up to 30 channels are supported.
	•		TradeCentral™ Applications Platform. TradeCentral is the platform used to operate applications on the IQMX applications module. It also permits third-party software vendors to deploy software solutions that operate on our IQMX applications module.

•

Turret System Installation, Maintenance and Support. The installation of a turret system involves extensive planning to ensure that all materials and labor are coordinated to be completed on-time and within budget. Detailed analysis is performed, defining all required features and lines. The cabling infrastructure is installed and tested prior to delivery of backroom switching equipment. The desktop consoles are installed and the complete system is rigorously tested. In addition to turret system installation, we provide contractual maintenance services to our customers, which provide us with recurring revenue which in the fiscal year 2003 accounted for $88.5 million, or 43.9% of Trading Systems total revenues of $201.5 million.

     Sales and Marketing

     Our Trading Systems sales efforts are organized on a global basis to promote relationships with, and to provide enhanced services to, customers that have significant global operations. The organization is managed through three regions. The regions and associated direct offices include:

	•		The Americas, which include Atlanta, Boston, Chicago, Cincinnati, Connecticut, Dallas, Houston, Los Angeles, Minneapolis, New Jersey, New York, Philadelphia, San Francisco and Toronto;
	•		Europe, the Middle East and Africa, or EMEA, which includes London, Frankfurt and Milan; and
	•		Asia Pacific, which includes Hong Kong, Singapore, Sydney and Tokyo.

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     Distributors are used in emerging markets, in territories where the installed base does not support a direct presence and where language and cultural differences require a local presence. Key areas covered by distributors include:

	•		Latin and South America, including Argentina, Brazil, the Caribbean, Chile, Mexico and Venezuela;
	•		EMEA, including Italy, Portugal, Russia, Saudi Arabia, Scandinavia, South Africa, Spain, Sweden, Turkey and the United Arab Emirates; and
	•		Asia, including India, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Taiwan and Thailand.

     Accounts are classified as either global or regional. Global accounts are assigned a global account director to manage and coordinate account activity on a global basis. Regional account managers are assigned to both global and regional accounts to support local selling efforts. This approach allows the sales management team to coordinate account strategies across regions in order to provide a seamless support infrastructure for global financial institutions. Customers designated as global accounts benefit from standard pricing, volume purchase agreements and a single point of contact for their global communications requirements.

     We manage our business through the Sales Information System, or SIS, that tracks and forecasts five quarters of customer demand on a job-by-job basis. This system is used by our sales and finance departments to project quarterly results, and by our manufacturing department to assist in schedule production and procurement.

     An SIS report is maintained for each direct office or distributor. It is updated and managed on a bi-weekly basis through the regional sales organizations. The results and the overall performance of the business are consolidated automatically and reviewed at a monthly business review by our sales, finance, operations, manufacturing and engineering departments.

Information Transport Systems

     Our I.T.S. division provides physical connectivity within buildings among both voice and data communications devices, including turret systems, telephone switching equipment, traditional telephone systems, facsimile machines, computer networks and video conference facilities. The I.T.S. organization targets its business towards medium to large companies in the New York metropolitan area. I.T.S. also bundles its services with Trading Systems products so that customers, construction consultants and general contractors can benefit from a turnkey trading floor solution from a single vendor. Because information and communications systems are mission–critical functions, many customers prefer that the same company installs and maintains their turret systems and the cabling that supports them.

     Industry Overview

     Integrated high-speed internal data communications networks are critical to many companies. Companies are installing increasingly complex computing environments centered around local area networks, or LANs, and wide area networks, or WANs, that connect networked desktop personal computers and workstations, printers, telecommunications equipment, file servers and facsimile machines. As network requirements have grown and network designs have become more complex, many companies have chosen to outsource their LAN/WAN design, installation and maintenance needs to independent specialists.

     Organizational Structure

     Our I.T.S. division has two major focus areas:

	•		Structured Cabling Systems. Providing a customer with cabling infrastructure includes several distinct phases: network design, documentation, installation, certification and ongoing service and maintenance. I.T.S. offers its cabling infrastructure customers design input on various system elements, including diversity of cable routing, uninterruptible power systems, security safeguards and cable management systems. I.T.S. has narrowed its focus on the higher margin components of design, installation and support of LANs, WANs and data connectivity and reduced its involvement in the more competitive and lower margin cabling infrastructure projects. I.T.S. places special emphasis on the testing and certification phases of the project because today’s high-speed networks demand that products be installed in accordance with strict manufacturer specifications.
	•		Network Maintenance and Support. I.T.S. offers a broad line of post-installation maintenance and support services to customers for MACs or as part of a technical services contract. These contracts provide customers with access to a wide range of our technical and operational resources, including network engineering analysis, on-site technical support, help desk support, user training and network reconfiguration. I.T.S. technicians maintain close relationships with their customer counterparts to ensure service reliability.

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     Competition

     We have many competitors in the I.T.S. business due to the highly fragmented nature of the data networking market, which includes large public telecommunications companies and privately held electrical providers. Although a number of companies compete for parts of our I.T.S. business, such as cable installation, we believe that our expertise and our ability to support the full range of data network design and installation requirements of large national and international customers enable us to compete effectively in this market.

     Products and Services

     Our I.T.S. division provides cabling infrastructure, design, implementation and maintenance services for high speed data networks, including LANs and WANs. This business line includes four major product and service areas: (1) value-added services; (2) networking products; (3) cabling infrastructure; and (4) network maintenance and support. Customers purchase these products and services on a stand-alone basis or in bundled combinations. All of our fiscal year 2003 I.T.S. revenue was from projects performed in the New York City metropolitan area. In addition, I.T.S. has a core group of highly skilled project managers and design engineers who are dispatched to manage installation projects. Our I.T.S. division provides the following products and services:

	•		Value-Added Services. We provide a wide range of value-added services, including network and trading room design, consulting, engineering implementation, project management, staging and operational testing of workstations and technology and operational outsourcing.
	•		Networking Products. We market and service a full line of third-party manufactured networking products including LAN hubs, adapters, bridges, routers, network management software and protocol converters. We are a certified reseller of third-party networking products. We sell these products on a stand-alone basis or fully installed, configured and integrated with customer systems.
	•		Cabling Infrastructure. Cabling infrastructure provides physical connectivity within buildings among communications devices, including turret systems, telephone switching equipment, traditional telephone systems, facsimile machines, computer networks and video conference facilities. Providing a customer with cabling infrastructure includes several distinct phases: network design, documentation, installation, certification and ongoing service and maintenance. We offer our cabling infrastructure customers design input on various system elements, including diversity of cable routing, uninterruptible power systems, security safeguards and cable management systems.
	•		Network Maintenance and Support. We offer a broad line of post-installation maintenance and support services to customers for MACs or as part of a technical services contract. These contracts provide customers with access to a wide range of our technical and operational resources, including network engineering analysis, on-site technical support, help desk support, user training and network reconfiguration. These services provide us with a recurring revenue stream, which in fiscal year 2003 accounted for $9.1 million, or 17.1% of I.T.S. total revenues of $52.8 million.

     Sales and Marketing

     Through a coordinated sales and marketing effort with Trading Systems, I.T.S. is able to position itself early in the contract bid process. Sales of turret systems for a new or reconfigured trading floor have significantly more lead time than bidding and contracting for cabling services. As a result, I.T.S. often has knowledge regarding large projects in a customer’s pipeline before its competition. The ability to market and sell the I.T.S. product into the Trading Systems customer base is an important synergy that exists between the two divisions. I.T.S. has one employee dedicated to sales, with responsibility for developing and managing relationships with general contractors and construction consultants.

Network Services

     Industry Overview

     Our Network Services division provides network voice and data services primarily to the financial community over a global network linking many major financial centers. The voice or data lines are provided to customers by linking the customer sites to the nearest point of the global network. Network Services, which has offices in New York and London, currently targets its business towards companies in the United States and Europe and connects trading counter-parties across six continents.

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     Competition

     Competitors of our Network Services division generally are the large telecommunications providers such as AT&T, MCI, Sprint, British Telecom, and Deutsche Telecom, as well as specialist telecommunication providers such as Global Crossing, Westcom, Etrali, Sector and Radianz. Management believes that our Network Services division achieves a small market share when compared to our competitors. This niche market for telecommunications providers is extremely competitive, is highly price and performance sensitive and is subject to risk from technology change.

     Product and Services

     The following are some of the products and services that our Network Services division provides:

	•		Ring Down. This service provides an instantaneous connection between two parties.
	•		Hoot and Holler Broadcast. Hoot and Holler Broadcast is a dedicated private network that allows multiple users to access a continuously open network line.
	•		T1/E1. A T1/E1 is a digital transmission line used to link different locations together.
	•		DS3. A DS3 is a high-speed digital transmission line used to link different locations together. DS3 lines have traditionally been used by our customers to support customer disaster recovery programs.
	•		Corporate Virtual Private Network. Provides a customer with interoffice bandwidth used primarily to transfer data within a customers’ office.

Customers

     In general, our customers are concentrated primarily in the global financial, trading and exchange trading industries. We also provide equipment and services to commodity trading operations in non-financial firms. Historically, almost all of our consolidated revenues have been derived from sales to customers in the financial trading community. Our customers include Deutsche Bank, JPMorgan Chase, Morgan Stanley, Goldman Sachs, UBS Paine Webber, Citigroup/Smith Barney, Bank of America, Lehman Brothers, Wachovia and Dresdner Bank, which were our top 10 customers for the 2003 fiscal year. These customers accounted for approximately 61% of our total consolidated revenues in the 2003 fiscal year. For the 2003 fiscal year, one customer accounted for approximately 21% of our total consolidated revenues. There were no other customers in the 2003 fiscal year that accounted for more than 10% of our total consolidated revenues and our total consolidated accounts receivable balance at September 30, 2003. For the 2002 fiscal year, no single customer accounted for more than 10% or more of our total consolidated revenues.

Research and Development

     Our research and development efforts are driven by our sales and product management teams. Interoperability and integration of trading positions are a strategic focus. We utilize our core competencies in voice communications systems, application services and Rich Media delivery to provide solutions that meet the evolving needs of our customers. We work closely with our customers to understand their future requirements and invest in research and development to ensure that our products address customer needs.

     Historically, the research and development budget has represented 9% to 11% of new turret systems sales. The research and development budget is determined annually through the evaluation of each product category and its expected impact on revenue over the succeeding 24 months.

     For the fiscal year ended September 30, 2001, the period from October 1, 2001 to December 20, 2001, the period from November 15, 2001 (date of initial capitalization) to September 30, 2002 and the fiscal year ended September 30, 2003, we recorded expenses of $15.5 million, $3.5 million, $11.6 million and $11.7 million, respectively, on research and development. As of September 30, 2003, we employed approximately 80 persons in the area of research, development and product engineering.

Backlog

     Our estimated consolidated order backlog was $39.4 million and $43.0 million at September 30, 2002 and 2003, respectively.

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Intellectual Property

     We rely on a combination of patents, trade secrets, trademarks, copyrights and other intellectual property rights, nondisclosure agreements and other protective measures to protect our proprietary rights. We currently have 18 United States patents, including design patents. We also rely on unpatented know-how and trade secrets and employ various methods, including confidentiality agreements with employees and consultants, to protect our trade secrets and know-how.

Environmental Matters

     We are subject to various federal, state and local environmental laws and regulations, including those governing the use, discharge and disposal of hazardous substances in the ordinary course of our manufacturing process. Although we believe that our current manufacturing operations comply in all material respects with applicable environmental laws and regulations, there is no assurance that environmental legislation may not in the future be enacted or interpreted to create environmental liability with respect to our facilities or operations.

Employees

     As of September 30, 2003, we had 650 full-time non-union employees worldwide with 590 associated with Trading Systems, 10 associated with I.T.S. and 50 associated with Network Services. This includes 420 in North America, 180 in EMEA, and 50 in Asia. Of these, 75 were engaged in marketing and sales, 80 in research, 100 in manufacturing and 395 in branch operations, finance and corporate administration.

     As of September 30, 2003, approximately 370 of our United States workers are represented by collective bargaining units, including approximately 330 workers who are retained under labor pooling agreements that IPC Information Systems has entered into with Kleinknecht Electric Company, a New York corporation, or KEC-NY, and Kleinknecht Electric Company, a New Jersey corporation, or KEC-NJ, each a former affiliate of ours and companies owned by one of our minority stockholders. Under these agreements, KEC-NY and KEC-NJ are signatories to collective bargaining agreements with the union locals that represent these employees. In addition, pursuant to these agreements, KEC-NY and KEC-NJ are responsible for paying our employees, remitting payroll taxes and making any required contributions to any union benefit plans covering the employees. We reimburse KEC-NJ and KEC-NY for these expenses, pay them a total fee of $50,000 per month and have agreed to indemnify them for liabilities related to our employees. IPC Information Systems, Inc. has a standby letter of credit in place in favor of KEC-NY and KEC-NJ in an amount of $1.5 million for labor compensation and benefits related to these employees. The agreements also require IPC Information Systems, Inc. to indemnify the shareholders of KEC-NJ and KEC-NY for losses, up to $5.0 million, in the event we breach the agreement or otherwise cause the shareholders to be subject to multi-employer pension plan withdrawal liability under Title IV of the Employee Retirement Income Security Act of 1974, as amended.

     We have never experienced a work stoppage. Management believes that current relations with labor are good and that existing union contracts will be renewed.

Item 2. Properties

     We have two product development facilities that are located in Fairfield, Connecticut and Westbrook, Connecticut. Additionally, we lease our executive offices in New York City, our branch offices and sales offices in the United States, United Kingdom, Australia, Canada, Germany, Hong Kong, Italy, Japan, and Singapore, and our network operating centers in New York City and London. The 32,000 square foot Fairfield facility is leased and houses the engineering organization. The 85,000 square foot Westbrook facility owned by us is used for production, with 30,000 square feet designated for assembly and testing, 30,000 square feet designated for warehousing and 25,000 square feet designated for administrative purposes. The production facility is scaleable and has sufficient capacity to meet the future anticipated demand. Although we carry insurance, including business interruption insurance, and have a disaster recovery plan on the Westbrook facility, a calamity at the facility could have a material adverse effect on us.

     Prior to the completion of the acquisition of IPC Information Systems, we leased six floors at 67-73 Worship Street, London, England at an annual rate of approximately £565,000, or $942,000, assuming an exchange rate of £1 to $1.667. Of these six floors, we use one floor for office space and an affiliate of Global Crossing uses five floors for telecommunications and networking equipment. Under the lease, which expires in 2010, we remain liable to the landlord for all six floors. Pursuant to the purchase agreement with Global Crossing relating to our acquisition of IPC Information Systems, we entered into a sublease for a portion of these premises with an affiliate of Global Crossing and the landlord has consented to that sublease. Through September 30, 2003, Global Crossing’s affiliate has made all of its required sublease payments.

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Item 3. Legal Proceedings

     Except as described below, we are not a party to any pending legal proceedings other than claims and lawsuits arising in the ordinary course of business. We believe these proceedings will not have a material adverse effect on our financial condition or results of operations.

     On June 27, 2000, an action was brought against several defendants, including IPC Communications, Inc., in the United States District Court for the Southern District of New York by two telecommunications cabling contractors alleging that IPC Communications, Inc. violated federal antitrust and New York state law by conspiring with the International Brotherhood of Electrical Workers Local Union Number 3, AFL-CIO, and five electrical contractors to exclude plaintiffs from telecommunications wiring and systems installation jobs in the New York City metropolitan area. Subsequently, the complaint was amended to add an additional plaintiff and an additional defendant contractor. We believe the suit is without merit. However, there can be no assurance that the resolution of this lawsuit will ultimately be favorable. Plaintiffs are seeking injunctive relief and damages from the defendants, jointly and severally, in excess of an aggregate of $75.0 million.

     On September 8, 2003, an action was brought against several defendants, including IPC Information Systems, Inc. and its President, in the United States District Court for the Eastern District of New York by Advance Relocation & Storage Co., Inc., a moving company. The complaint alleges that IPC Information Systems, Inc. and 23 other defendants violated the Racketeer Influenced and Corrupt Organizations Act and engaged in tortious interference with prospective business advantage by preventing the plaintiff from obtaining work as a mover in jobs performed in large commercial buildings in New York City. We believe the suit is without merit and intend to vigorously defend against all claims alleged against us in the complaint. Plaintiffs are seeking injunctive relief and damages from the defendants, jointly and severally, in an aggregate amount of approximately $7.0 million.

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

     No matters were submitted to a vote of security holders during the fourth quarter of fiscal year 2003.

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PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters

     There is no public trading market for our common stock. As of November 30, 2003, there were 26 shareholders of record of our common stock. To date, we have not paid any dividends, but do expect to declare and pay a special cash dividend of approximately $18.0 million by December 31, 2003 to all shareholders of record of our outstanding common stock. The indenture governing our senior subordinated notes and our amended and restated senior secured credit facilities place restrictions on our ability to pay dividends in the future.

     On April 30, 2003, we issued 664,380 shares of common stock valued at approximately $5.7 million to GSCP 2000 and other private equity funds affiliated with Goldman, Sachs & Co. in connection with our acquisition of Gains International (US), Inc. and Gains International (UK) Ltd. These shares were sold in reliance upon Section 4(2) of the Securities Act of 1933, as amended.

Item 6. Selected Financial Data

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(1)  Predecessors refers to the company as it operated (a) on a stand-alone basis through June 14, 2000 as IPC Information Systems, Inc. and (b) through December 20, 2001 following the acquisition of IPC Information Systems, Inc. by Global Crossing. Accordingly, the financial statements from June 15, 2000 through December 20, 2001 reflect the changes and adjustments for purchase accounting as well as changes as a result of ownership under Global Crossing. Accordingly, the financial statement periods are presented in the following manner:

	(a)		Fiscal Year 1999 – for the period from October 1, 1998 to September 30, 1999, IPC Information Systems, Inc. operated as an independent company.
	(b)		Fiscal Year 2000 – for the period from October 1, 1999 to June 14, 2000, IPC Information Systems, Inc. operated as an independent company. On June 15, 2000, IPC Information Systems, Inc. was acquired by Global Crossing. The period from June 15, 2000 to September 30, 2000 is shown as a separate column as a result of the change in ownership.
	(c)		Fiscal Year 2001 – for the period from October 1, 2000 through September 30, 2001, IPC Information Systems, Inc. operated under Global Crossing’s ownership.
	(d)		Fiscal Year 2002 – for the period from October 1, 2001 to December 20, 2001, IPC Information Systems, Inc. operated under Global Crossing’s ownership. IPC Acquisition Corp. was formed and initially capitalized on November 15, 2001 and had no assets or operations until it acquired IPC Information Systems on December 20, 2001. The period from October 1, 2001 through December 20, 2001 and the period from November 15, 2001 (date of initial capitalization) through September 30, 2002 are shown as separate columns as a result of the change in ownership.
	(e)		Fiscal Year 2003 – for the period from October 1, 2002 through September 30, 2003, we have operated as an independent company.

(2)  For the period from June 15, 2000 through September 30, 2000, cost of goods sold reflects fair value inventory adjustments of $24.9 million associated with the purchase accounting treatment of the acquisition of IPC Information Systems, Inc. by Global Crossing in June 2000. Fiscal year ended September 30, 2001 cost of goods sold reflects fair value inventory adjustments of $10.7 million associated with the purchase accounting treatment of the acquisition of IPC Information Systems, Inc. by Global Crossing in June 2000. We had no operations prior to our acquisition of IPC Information Systems from Global Crossing on December 20, 2001. For the period from November 15, 2001 (date of initial capitalization) through September 30, 2002, costs of goods sold reflects fair value inventory adjustments of $34.3 million associated with the purchase accounting treatment of the acquisition of IPC Information Systems in December 2001.

(3)  In accordance with Statement of Financial Accounting Standards No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment to FASB Statement No. 13, and Technical Corrections”, effective for fiscal years beginning after May 15, 2002, any gain or loss on extinguishment of debt that was classified as an extraordinary loss in prior periods shall be reclassified. Accordingly, the $10.6 million extraordinary loss on retirement of debt in the period June 15, 2000 to September 30, 2000 has been reclassified as an approximately $17.8 million expense under “Other income (expense), net” and as a tax benefit of approximately $7.3 million under “Provision (benefit) for income taxes”.

(4)  EBITDA represents earnings before interest, taxes, depreciation and amortization. We believe that EBITDA helps investors more meaningfully evaluate and compare the results of our operations from period to period. We believe that our investors, as debt investors and not equity investors, are primarily focused on EBITDA rather than net income, as it is a useful indicator of operating performance and cash generated from operations exclusive of working capital changes.

     Our management uses EBITDA as a measurement of operating performance because it assists us in comparing performance on a consistent basis as it removes the impact of our recent changes in ownership, including different capital structures and asset bases, from our operating results. Management also uses EBITDA as one of its core measures for planning and forecasting overall consolidated company and individual business division expectations and for evaluating actual results against such expectations. We have consistently included EBITDA in presentations to our board of directors and investors to enable them to have the same consistent measurement basis of operating performance used by management. We also use EBITDA as a valuation methodology in assessing the fair value of our reporting divisions for required impairment testing. Further, we use EBITDA measurements for our compensation plans and overall strategy. The most significant component of the financial targets of our management incentive plan are measured and bonuses are paid based on achievement of such EBITDA targets and our overall strategy is directed towards pursuing development opportunities intended to increase EBITDA and/or the valuation multiple of EBITDA our businesses would command on a fair value basis.

     However, EBITDA is not a measurement prepared in accordance with generally accepted accounting principles. In addition, other companies in our industry may calculate EBITDA differently than we do. Significant factors not captured by EBITDA include trends in our period over period revenue, profitability measured by gross margin and effective tax rate. The following table sets forth a reconciliation of EBITDA to net income for the periods indicated:

(5)  The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, “earnings” include net income (loss) before taxes and fixed charges (adjusted for interest capitalized during the period). “Fixed charges” include interest, whether expensed or capitalized, amortization of deferred financing fees and the portion of rental expense that is representative of the interest factor in these rentals. For the period from June 15, 2000 to September 30, 2000, earnings were insufficient to cover fixed charges by $29.8 million because of the inclusion of the inventory fair value step-up in cost of sales of $24.9 million and the amortization of the goodwill of $6.2 million from the acquisition of IPC Information Systems, Inc. by Global Crossing in June 2000. For the year ended September 30, 2001, earnings were insufficient to cover fixed charges by $8.4 million because of the inclusion of the inventory fair value step-up in cost of sales of $10.7 million and the amortization of goodwill of $21.1 million from the acquisition of IPC Information Systems, Inc. by Global Crossing in June 2000. For the period from October 1, 2001 to December 20, 2001, earnings were insufficient to cover fixed charges by $11.3 million because of the year end intercompany charge of $6.9 million, the inclusion of $2.5 million of other bonus amounts and goodwill amortization of $4.7 million resulting from the ownership of IPC Information Systems by Global Crossing. For the period from November 15, 2001 (date of initial capitalization) to September 30, 2002, earnings were insufficient to cover fixed charges by $11.5 million because of the inclusion of the fair value step-up of inventory in cost of sales of $34.3 million resulting from the acquisition of IPC Information Systems in December 2001.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     You should read the following discussion of our financial condition and results of operations with our consolidated financial statements and related notes included elsewhere in this filing.

     Some of the matters discussed in this filing include forward-looking statements. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, “thinks”, and similar expressions are forward-looking statements. These statements involve known and unknown risks, uncertainties and other risk factors, including but not limited to those described in our Registration Statement on Form S-1 (No. 333-103264), that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements.

     Although we believe that these statements are based upon reasonable assumptions, we can give no assurance that our goals will be achieved. Given these uncertainties, prospective investors are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are made as of the date of this filing. We assume no obligation to update or revise them or provide reasons why actual results may differ.

Overview

     Our primary business is the design, manufacture, installation and service of turret systems for the trading operations of the financial community, which includes investment and commercial banks, foreign exchange and commodity brokers and dealers, market exchanges, mutual and hedge fund companies, asset managers and insurance companies. Turrets are specialized telephone systems that are designed for high reliability and provide users instant access to hundreds of dedicated telephone lines that are directly connected to other trading partners and customers. Traders, brokers and salespersons occupy desks known as trading positions from which they trade various financial instruments including stocks, bonds, currencies and futures using turrets. We are the leader in the turret industry, based on our base of approximately 110,000 turrets and related equipment installed in trading positions worldwide. We also install and service the cabling infrastructure and networks within buildings that connect voice and data communications devices for traders and others in the global financial, trading and exchange trading industries, as well as sell network voice and data services to customers primarily in the financial community.

     Our major operating divisions are Trading Systems, I.T.S., and Network Services. Trading Systems reports (1) sales of turret systems to distributors and direct sales and installations of turret systems as “Product sales and installations,” and (2) revenue from turret system maintenance, including annual and multi-year service contracts, and from MACs to existing turret system installations as “Service”.

     I.T.S. reports (1) revenue from the design, integration and implementation of cabling infrastructure projects, including local and wide area networks, and from sales of intelligent network products, such as hubs, bridges and routers, as “Product sales and installations” and (2) revenue from on-site maintenance of customer cable infrastructures and from the provision of outsourcing services for the support, expansion and upgrading of existing customer networks as “Service”. Network Services records the sale of voice and data services as “Service”.

     Revenue from product sales and installations is recognized upon completion of the installation or, for contracts that are completed in stages and include contract specified milestones, upon achieving such contract milestones, and delivery and customer acceptance of a fully functional system has occurred. Revenue from sales to distributors is recognized upon shipment. Customers are generally progress-billed prior to the completion of the installations. The revenue related to these advance payments is deferred until the system installations are completed or specified milestones are attained. Costs incurred on uncompleted contracts and stages are accumulated and recorded as inventory awaiting installation. In addition, contracts for annual recurring turret and I.T.S. services are generally billed in advance, and are recorded as revenue ratably (on a monthly basis) over the contractual periods. Revenue from MACs to turret systems is recognized upon completion, which generally occurs in the same month or the month following the order for services. Revenue from our Network Services division, which provides voice and data services to the financial community, is billed in advance and recorded ratably (on a monthly basis) over the contractual period, which generally range from three months to one year.

     Cost of revenue for our Trading Systems and I.T.S. divisions includes the costs of equipment sold, the costs of parts used for service of the equipment, labor to install the equipment sold, labor to provide service, warehouse and project management costs and the depreciation of the equipment in our manufacturing and assembly facility. Cost of revenue for our Network Services division includes the costs to lease local and long distance circuits and depreciation of the equipment.

     Our revenues and operating results fluctuate significantly from period to period. Given the relatively large sales price of our trading systems and our recognition of revenue only upon completion of installations or specified contract milestones, a limited number of system installations may account for a substantial portion of revenues in any particular period. As a result of

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these and other factors, we could experience significant fluctuations in revenues and operating results in future periods. In addition, our customers are concentrated in the global financial, trading and exchange trading industries and our revenues will likely decline during periods of economic downturn that impact those sectors.

Our Strategy

The key elements of our strategy are to:

	•		Generate revenue growth through replacement sales, technology upgrades and trading floor expansions. Regular turnover of our installed base is driven primarily by customers’ facility moves, mergers or consolidations and the development of new trading markets and products. Additionally, other factors, such as customer business initiatives, including global trading platform standardization, regulatory developments, and customer expansion affect turnover, as customers require more flexible, efficient and technologically advanced turret systems. By developing new systems, such as IQMX, that address these factors in a timely, proactive fashion, we believe we can increase overall turnover rates, as customers are motivated to replace older, less-advanced equipment with our latest most-advanced product offerings.
	•		Expand the addressable market by developing new products and services and capitalizing on new trends. We believe there is an opportunity to increase our revenues by strategically broadening our product portfolio, enhancing our technology architecture and addressing new developments in the marketplace. Examples of our efforts include:

	•		Providing voice, data and video communications. The introduction of our IQMX product with expansion modules provides the ability to communicate by exchanging text (such as Chat and Instant Messaging programs) and video (such as popular desktop video conferencing systems) as quickly and easily as the communications systems currently allow traders to do so with voice. By creating a communications system that utilizes IP to deliver communications, and by combining this delivery methodology with the expansion modules that support exchanging text and video in addition to voice, we eliminate the need for our customers to purchase stand-alone equipment to deliver these solutions and leverage our installed base, service and delivery capabilities and desktop presence.
	•		Developing applications. Application integration and development is driven by the need to create a seamless and efficient work environment in much the same way that increasingly sophisticated call centers were developed in the mid-1990s. We have demonstrated our capability in this market through sales of our CTI products which allow telephony devices to communicate with computers.
	•		Increasing our penetration of disaster recovery and contingency planning markets. We intend to further penetrate the growing disaster recovery and business continuity market. We believe we can effectively leverage our leading market position and customer relationships to drive future business in this area from both existing customers and emerging third-party providers.
	•		Penetrating middle office support positions. In June 2002, we released the ICMX, a VoIP intercom module, and a member of our IQMX family of turret products. The ICMX extends intercom functionality by providing hands-free communication between sites, a unified numbering plan, group calls and all calls and support for hoot and holler applications. Compact in size and with features designed specifically for support functions of a trading floor, we believe the ICMX will position us to penetrate a large number of trading support positions.
	•		Increase our product offerings. With the acquisition of Gains International (US) Inc. and Gains International (Europe) Limited in April 2003, we created a new business division called Network Services. Our Network Services division provides network voice and data services that connect traders across six continents. In addition, in June 2003, we launched a suite of services under the name Managed Services. Managed Services are a set of premium, specialized services that deliver fully managed connectivity to trading floors worldwide. We believe we can provide these services to customers in combination with sales of our turrets. With several different service products being offered, we believe we can provide complete service to our customers’ trading floors worldwide. Also, with our investment in Purple Voice in August 2003, we will provide users such as researchers, analysts, and retail brokers who are based off the main trading floor with seamless access to audio broadcasts, intercom calls, group calls and hoot and holler broadcasts regardless of the user’s location.

•

Increase our market share through organic growth and opportunistic acquisitions. We intend to continue to increase our market share by (1) converting customers from competitors’ systems to our own, (2) further expanding into currently under-penetrated markets, (3) winning competitive bids for new installation opportunities, and (4) expanding geographically into areas where we are not already a market leader. We plan to achieve these objectives through a combination of expanding our direct presence, continuing our new product development efforts and making strategic acquisitions and/or alliances.

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•

Continue and leverage our track record of service excellence. We believe our high level of customer service differentiates us from our competition, positions us to capture more revenue from our existing client base by providing value-added services, and allows us to maintain our pricing and profitability.

Recent Events

     We expect to declare and pay a special cash dividend of approximately $18.0 million by December 31, 2003 to all shareholders of record of our outstanding common stock.

Comparison of the Year Ended September 30, 2003 (“FY 2003”) to the Year Ended September 30, 2002 (“FY 2002”) and FY 2002 to the Year Ended September 30, 2001 (“FY 2001”).

     The amounts presented below for the fiscal year ended September 30, 2002 represent the sum of the amounts separately reported for the pre-IPC Information Systems acquisition period from October 1, 2001 to December 20, 2001 and the post-IPC Information Systems acquisition period from December 21, 2001 to September 30, 2002.

     The following table sets forth, as a percentage of consolidated revenue, our consolidated statements of operations for the periods indicated. The following table also presents, as a percentage of division revenue, our statements of operations for our three major operating divisions for the periods indicated. The following table does not present our statement of operations for our Network Services division for FY 2002 and FY 2001 as it was created in April 2003.