ITEM 1. BUSINESS
GENERAL DESCRIPTION OF BUSINESS
Cable Design Technologies Corporation (the "Company", the "Registrant" or "CDT") was incorporated on May 18, 1988 under the laws of the State of Delaware with its principal office located at 661 Andersen Drive, Pittsburgh, Pennsylvania 15220 (Telephone: 412-937-2300).
CDT is a designer and manufacturer of specialty electronic data transmission cables and network structured wiring systems. CDT products include high performance copper, fiber optic, and composite cable constructions, connectors and component assemblies that are used in network, communication, computer interconnect, wireless, commercial aviation, automotive, automation & process control, and other applications.
The Company, as it exists today, was incorporated on May 18, 1988, but was conceived in 1985 by its current President and Chief Executive Officer, Paul Olson, together with other members of current management, shortly after acquiring the West Penn Wire Corporation ("West Penn/CDT"). In 1988, the Company underwent a recapitalization pursuant to which Golder, Thoma, Cressey Fund II purchased a controlling interest in the Company. On July 14, 1988, the Company acquired all of the outstanding capital stock of Cable Design Technologies Inc. (formerly Intercole Inc.).
Acquisitions have been an important part of CDT's strategy. In March 1986, the Company acquired Mohawk Wire & Cable Corporation ("Mohawk/CDT") , a cable manufacturer which had established relationships with companies involved in the early stages of computer network development. In December 1988, the Company purchased Montrose Products Company ("Montrose/CDT"), a specialty electronics cable company with established relationships with IBM and other major purchasers of computer interconnect products. In August 1990, the Company established CDT International to respond to increasing demand for data transmission cable products in international markets. In May 1991, the Company expanded its international presence by purchasing Anglo-American Cables Ltd. ("Anglo/CDT"), a European cable distributor. In March 1993, the Company established Phalo/CDT to further increase its production capabilities and broaden its product line. In May 1994, the Company acquired all the outstanding stock of Nya NEK Kabel AB ("NEK/CDT"), located near Gothenburg, Sweden, to enter the sophisticated broadcast, CATV and antenna cable markets and to expand network systems cable manufacturing capacity into Europe. In June 1995, the Company purchased all of the operating assets of Manhattan Electric Cable Corporation ("Manhattan/CDT") based in Rye, New York to enhance sales of specialty electronics cable for industrial automation and robotic applications. In August 1995, the Company purchased Cole-Flex Corporation of West Babylon, New York to combine its sleeving and tubing capabilities with Manhattan/CDT. In September 1995, the Company purchased the operating assets of the Raydex Division of Volex Group, p.l.c. ("Raydex/CDT") (United Kingdom) to provide additional international manufacturing capabilities of specialty and high performance electronic cable for computer network systems, telecommunication, aerospace, CATV, and industrial applications. On February 2, 1996, the Company acquired the assets of Northern Telecom Limited's ("Nortel") communication cable and IBDN network structured wiring products businesses ("NORDX/CDT") (Canada). On June 4, 1996, the Company acquired the stock of Cekan A/S ("Cekan/CDT") (Denmark), a manufacturer of high performance, telecommunication connectors. On July 25, 1996, the Company acquired, in exchange for shares of its common stock, X-Mark Industries ("X- Mark/CDT") (Washington,
PA), a manufacturer of specialized metal enclosures for network systems. On March 14, 1997 the Company acquired 51% of the outstanding stock of Stronglink, Pty. Ltd. ("Stronglink/CDT") (Australia), to enhance international distribution of network and specialty cable in the Australian marketplace. On April 7, 1997, the Company acquired the assets of Dearborn Wire & Cable, L.P. and its affiliates, Dearborn West, L.P. and Thermax Wire, L.P. (collectively, "Dearborn/CDT"), a manufacturer of specialty electronic cable for instrumentation and control, commercial aviation, automotive and marine applications, and component assemblies for wireless applications. In September 1997, the Company acquired all the outstanding stock of Barcel Acquisition Corporation ("Barcel/CDT") of Irvine, California, a manufacturer of high performance specialty cable for commercial and military aviation applications. In March 1998, the Company acquired all the outstanding stock of (Orebro/CDT) of Orebro, Sweden, a manufacturer of custom designed wire and cable for wireless communication, robotics and other industries.
Subsequently, on August 3, 1998, the Company acquired 80% of HEW-Kabel Heinz Eilentropp GmbH & Co. KG and related entities ("HEW-Kabel/CDT") located in Wipperfurth, Germany, a manufacturer of specialty cable for process control, robotics, transportation, medical and other specialty applications.
PRODUCTS
The Company's products are generally comprised of electronic copper and fiber optic cable and network structured wiring components which are categorized into two principal product groups, Network Communication and Specialty Electronics. The markets served by the Company's products include computer local area networks ("LANS") and wide area networks ("WANS"), communication, computer interconnect, wireless, commercial aviation, automotive, automation & process control, and other applications.
Network Communication Product Group: - ------------------------------------
Network - This product line encompasses the cable and the components, including connectors, wiring racks and panels, outlets and interconnecting hardware, to complete the end-to-end network structured wiring system requirements of LANS and WANS. Additional capital expenditures and acquisitions over the last three years have greatly increased the Company's capacity in this product area. Sales of network products were $270.7 million, $249.3 million and $189.0 million in fiscal 1998, 1997 and 1996, respectively. Sales of these products represented approximately 42%, 48% and 53% of the Company's total sales for the fiscal years 1998, 1997 and 1996, respectively.
Communication - Through the acquisition of NORDX/CDT in fiscal 1996, the Company entered the market for outside communication, switchboard and equipment cable. This product group is primarily manufactured by the Company's NORCOM/CDT facility in Kingston, Ontario, which is the largest communication cable operation in Canada. Sales of communication products were $122.6 million for fiscal 1998, $98.2 million for fiscal 1997, and $53.1 million for the six month post-acquisition period in fiscal 1996, and represented approximately 19%, 19% and 15% of the Company's total sales for fiscal 1998, 1997 and 1996, respectively.
Specialty Electronics Product Group: - ------------------------------------
Automation & Process Control - The automation & process control product line encompasses four distinct applications for data and signal transmission cables. Automation applications include climate control, premise video distribution and sophisticated security and signal systems involving motion detection, electronic card and video surveillance technologies. Process control applications include remote signaling and electronic monitoring systems. Sound applications include voice activation, evacuation and other similar systems. Safety applications refer to certain attributes of data transmission cable that improve the safety and performance of such cable under hazardous conditions, particularly in buildings for advanced fire alarm and safety systems. The Company's sales for this product line were $143.4 million, $106.0 million and $81.2 million in fiscal 1998, 1997 and 1996, respectively. These products represented 22%, 21% and 23% of the Company's total sales in fiscal 1998, 1997 and 1996, respectively.
Specialty - Specialty products refers to a family of highly engineered wire and cable products for a variety of specialized applications and niche markets, including commercial aviation and marine, automotive electronics, broadcast, wireless component assemblies, CATV, microwave antenna, medical electronics, electronic testing equipment, robotics, electronically controlled factory equipment, copiers, home entertainment and appliances. Sales of these products were $103.8 million, $51.4 million and $26.4 million for fiscal 1998, 1997 and 1996, respectively. Sales of these products represented approximately 16%, 10% and 7% of the Company's total sales for fiscal July 31, 1998, 1997 and 1996, respectively.
Non-Cable - Non-cable manufacturing activities unrelated to the Company's core business include precision tire molds and sheet metal products. These products represented less than 2% of the Company's total sales in each of the last three fiscal years.
RAW MATERIALS
The principal raw materials used by CDT are copper and insulating compounds. Raw materials are purchased on a consolidated basis whenever possible to reduce costs and improve supplier service levels. Copper is purchased from several domestic suppliers. Price terms are generally producers' prices at time of shipment. The Company does not generally engage in hedging transactions for the purchase of copper. Currently, world stocks of and capacity for copper are adequate to meet the Company's requirements. CDT purchases insulating compounds, including Teflon/(R)/, from various suppliers. Other raw materials used by CDT include LEXAN/(R)/, optical fiber, reels, tapes, textiles, chemicals and other materials. Currently, supplies of these other raw materials are adequate to meet the Company's needs and are expected to remain so for the foreseeable future.
CUSTOMERS
The Company sells its products directly to original equipment manufacturers (OEMs), regional Bell operating companies, certified system vendors, and established distributors. The Company supports over 9,500 customers. No single customer accounted for more than 10% of sales in fiscal 1998, 1997 or 1996, except that sales to business units of Bell Canada Enterprises represented approximately 11% of fiscal 1997 and 1996 sales.
COMPETITION
The markets served by the Company's products are highly competitive. Although some of the Company's competitors are substantially larger and have greater resources than the Company, management believes that it competes successfully in its markets due to its experienced management team, large sales force, established reputation, breadth of product offerings, large number of customer approved specifications and emphasis on quality.
The principal competitive factors in all the markets for Network Communication and Specialty Electronics products are availability, customer support, price and product features. The relative importance of each of these factors varies depending on the specific product category.
In the market for network structured wiring system products, the Company competes with a large number of competitors, several of which are significantly larger than the Company. The Company competes in the network structured wiring systems market by adapting to shifting customer demand for new products, and in the case of NORDX/CDT, by offering complete, end to end certified network structured wiring systems. In the markets for communication, switchboard and equipment cable, price, reputation, production quality and availability are principal competitive factors. In the automation & process control market, the Company competes against a relatively large number of companies, most of which are smaller in size than the Company. Product prices, company reputation and product integrity are principal factors which affect competition in the automation & process control market. In the specialty products market, production quality, engineering capabilities and price are principal competitive factors.
BACKLOG
Backlog orders believed to be firm were $75.3 million at July 31, 1998, compared to $62.2 million at July 31, 1997. The Company believes that substantially all of the backlog is shippable within the next twelve months. Generally, customers may cancel orders for standard cable products without penalty upon thirty days notice.
ENVIRONMENTAL MATTERS
The Company is subject to numerous federal, state, provincial, local and foreign laws and regulations relating to the storage, handling, emission and discharge of materials into the environment, including the United States Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the Clean Water Act, the Clean Air Act, the Emergency Planning and Community Right-To-Know Act and the Resource Conservation and Recovery Act. Regulations of particular significance to the Company include those pertaining to handling and disposal of solid and hazardous waste, discharge of process wastewater and storm water and release of hazardous chemicals. Although the Company believes it is in substantial compliance with such laws and regulations, the Company may from time to time not be in full compliance and may be subject to fines or other penalties for noncompliance.
The Company does not currently anticipate any material adverse effect on its business as a result of compliance with federal, state, provincial, local or foreign environmental laws or regulations. However, some risk of environmental liability and other costs is inherent in the nature of the Company's business, and there can be no assurance that material environmental costs will not arise in the future.
EMPLOYEES
As of July 31, 1998, the Company had approximately 3,200 full time employees, of which approximately 1,400 were represented by labor unions. The Company has not experienced any material work stoppages at its plants and believes its current relations with its employees are good, however, there can be no assurance that conflicts will not arise with unions or other employee groups or that such conflicts would not have a material adverse effect on the Company's business.
FOREIGN OPERATIONS
For information regarding the Company's foreign and domestic operations and export sales, see Note 14, "Geographic Segments and Export Sales" as presented in the Company's Notes to Consolidated Financial Statements.
RESEARCH AND DEVELOPMENT
For information concerning expenditures on research and development activities, see Note 2, "Significant Accounting Policies," as presented in the Company's Notes to Consolidated Financial Statements.
RISK FACTORS
Ability to Successfully Integrate Acquisitions. Although the Company has been successful in integrating previous acquisitions, no assurance can be given that it will continue to be successful in integrating future acquisitions. The integration and consolidation of acquired businesses will require substantial management, financial and other resources and may pose risks with respect to production, customer service and market share. While the Company believes that it has sufficient financial and management resources to accomplish such integration, there can be no assurance in this regard or that the Company will not experience difficulties with customers, personnel or others. In addition, although the Company believes that its acquisitions will enhance the competitive position and business prospects of the Company, there can be no assurance that such benefits will be realized or that any combination will be successful.
Technological Obsolescence. Many of the markets that the Company serves are characterized by rapid technological change. The Company believes that its future success will depend in part upon its ability to enhance existing products and to develop and manufacture new products that meet or anticipate such changes. The failure to successfully introduce new or enhanced products on a timely and cost-competitive basis could have a material adverse effect on the Company's business.
Fiber optic technology represents a potential substitute for copper-based cable products. A significant decrease in the cost of fiber optic systems or increase in the cost of copper-based systems could make fiber optic systems superior on a price performance basis to copper systems and may have a material adverse effect on the Company's business. To date, fiber optic cables have not significantly
penetrated the markets served by the Company due to the high relative cost required to interface electronic and light signals and the high cost of fiber termination and connection. Although the Company is a fiber optic cable supplier in niche, specialty markets, there can be no assurance that the Company will have sufficient production capacity for fiber optic cable products in order to adapt to a potential significant increase in demand for fiber optic cable products.
Wireless technology may represent a threat to both copper and fiber optic- based network and communication systems by reducing the need for premise wiring. The Company believes that the limited signal security and the relatively slow transmission speeds of current wireless systems restrict the use of such systems in many data communication markets. However, there can be no assurance that future advances in wireless technology will not have a material adverse effect on the Company's business.
Products have recently been introduced by other companies that electronically expand cable bandwidth. By enhancing cable performance, these products allow expanded data services without upgrading existing cable. These devices are being sold primarily to telephone companies to enhance local loop and central office cable performance, eliminating costly replacement of aerial and/or direct burial telephone cable. The Company believes that the complexity these systems add to the maintenance and repair of a communication network limits their attractiveness to users and consequently limits their effect on the Company's business. There can be no assurance, however, that potential advances in electronic cable enhancement will not have a material adverse effect on the Company's business.
Price Fluctuations and Availability of Raw Materials. Copper is the principal raw material purchased by the Company, and the Company's sales may be affected by the market price of copper. The Company does not generally engage in hedging transactions for copper.
The Company also purchases compounds, such as Teflon(R), from various suppliers. From time to time, the supply of such materials has been limited. The inability of suppliers to supply such raw materials could have a material adverse effect on the Company's business until a replacement supplier is found or substitute materials are approved for use. Although the Company has generally been able to pass on increases in the price of copper and other raw materials to its customers, there can be no assurance that the company will be able to do so in the future. Additionally, significant increases in the price of copper or other raw materials could have a negative effect on demand for the Company's products. Similarly, significant decreases in the price of copper, or excess supplies of such other raw materials, over time could have a material adverse effect on the Company's business.
Foreign Currency Fluctuations. The Company's operations may be adversely affected by significant fluctuations in the value of the U.S. dollar against certain foreign currencies or by the enactment of exchange controls or foreign governmental or regulatory restrictions on the transfer of funds. The most significant foreign currencies for the Company, in order of dollar equivalent net sales, during fiscal 1998 were the Canadian dollar and the British pound.
Competition. The Company is subject to competition from a substantial number of international and regional competitors, some of which have greater financial, engineering, manufacturing and other resources than the Company. The Company's competitors can be expected to continue to improve the design and performance of their products and to introduce new products with competitive price and performance characteristics. Although the Company believes that it has certain technological and other
advantages over its competitors, realizing and maintaining such advantages will require continued investment by the Company in engineering, research and development, marketing and customer service and support. There can be no assurance that the Company will have sufficient resources to continue to make such investments or that the Company will be successful in maintaining such advantages. See "Business -- Competition."
Environmental Matters. The Company does not currently anticipate any material adverse effect on its business as a result of compliance with federal, state, provincial, local or foreign environmental laws or regulations or cleanup costs. However, some risk of environmental liability and other costs is inherent in the nature of the Company's business, and there can be no assurance that material environmental costs will not arise in the future. Moreover, it is possible that future developments, such as increasingly strict requirements of air emission control and other environmental laws and enforcement policies thereunder, could lead to material costs for environmental compliance and cleanup by the Company.
Year 2000 Compliance. The Company is in the process of completing a review of the potential impact of the Year 2000 date processing issue on its information technology ("IT") systems, non-IT systems, such as equipment and machinery controlled by microcontrollers with embedded technology, and key suppliers and customers. The Company has plans to modify or replace non-compliant IT systems prior to the end of the calendar year 1999. While the Company's review of non-IT systems and key suppliers and customers has not been completed, the Company has not become aware of any materially adverse Year 2000 compliance issues relating to such non-IT systems or key suppliers and customers. If, however, the Company, its key suppliers and customers or other entities upon which the Company relies (such as utility providers) fail to make necessary modifications, conversions and contingency plans on a timely basis, the year 2000 issue could have a material adverse effect on the Company's business, operations, cash flow and financial condition.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This report includes and incorporates by reference "Forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical fact included or incorporated in this report may constitute forward-looking statements. Although the company believes that the expectations reflected in such forward- looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the company's expectations ("cautionary statements") are disclosed in this report and the documents incorporated by reference herein, including without limitation in conjunction with the forward- looking statements included in this report and under "risk factors." All subsequent written and oral forward-looking statements attributable to the company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements.
ITEM 2.
ITEM 2. PROPERTIES
The Company uses various owned or leased properties as manufacturing facilities, warehouses, and sales and administration offices. The Company believes that current facilities, together with planned expenditures for normal maintenance, capacity and technological improvements, will provide adequate production capacity to meet expected demand for its products.
Listed below are the principal manufacturing, warehouse and sales facilities operated by the
Company. Additionally, the Company also owns or leases approximately 316,000 square feet of other warehouse and sales facilities and facilities of approximately 96,000 and 40,000 square feet are operated on behalf of the Company in Nogales, Mexico and Tijuana, Mexico, respectively, by third parties pursuant to contract manufacturing arrangements.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to various legal proceedings and administrative actions, all of which are of an ordinary or routine nature incidental to the operations of the Company. In the opinion of the Company's management, such proceedings and actions should not, individually or in the aggregate, have a material adverse effect on the Company's results of operations or financial condition.
Superior Modular Products, Inc. has offered NORDX/CDT a non-exclusive license under a patent it contends applies to certain NORDX/CDT patch panels. The matter is under negotiation and, at the present time, the Company does not believe a resolution would have a material adverse effect on its results of operations.
Berk-Tek, Inc. ("Berk-Tek") has offered the Company a non-exclusive license under a patent it contends applies to certain cables sold by Mohawk/CDT. The Company's special patent counsel has provided an opinion that the Company's products do not infringe any valid claims, and, consequently, the offer has been declined. Berk-Tek has filed an application to reissue the patent in consideration of relevant prior art which has been identified by the Company and others, and has re-offered a non-exclusive license. Currently, the probability that Berk-Tek's application to reissue the patent with claims of interest to the Company will be granted cannot be determined and, therefore, based upon the opinion of the Company's special patent counsel, at this time, the Company does not believe a resolution of this matter would have a material adverse effect on its results of operations.
In December, 1997, the Company and certain of its subsidiaries were named in a lawsuit filed by the
Furon Company (Case No. 1:97CF 3292, United States District Court, N.D. Ohio). In July, 1998, the Company, its subsidiaries and the Furon Company settled such litigation on mutually satisfactory terms. The settlement will not have a material adverse effect on the Company.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year covered by this report no matter was submitted to a vote of security holders.
ITEM 4.1. EXECUTIVE OFFICERS OF THE REGISTRANT
Age Present Office and Experience - --- -----------------------------
64 Paul M. Olson has been President and a director of the Company since 1985, and Chief Executive Officer of the Company since 1993. From 1972 to 1984 Mr. Olson was the President of Phalo Corporation, a wire and cable manufacturer, and directed sales and marketing at Phalo Corporation from 1967 to 1972. From 1963 to 1967, Mr. Olson was employed at General Electric and from 1960 to 1963, at General Cable, in wire and cable related sales and marketing positions. Mr. Olson has a Bachelor's Degree in Economics from Hobart College.
56 George C. Graeber has been Chief Operating Officer and a director of the Company since 1998. Mr. Graeber has also served as President of Montrose/CDT since 1994. From 1992 to 1994, Mr. Graeber was Executive Vice President of the Company and President of Phalo/CDT. From 1990 to 1992 Mr. Graeber was a Vice President and General Manager at Anixter Brothers, Inc., an international distributor of cable and communication equipment. From 1989 to 1990 Mr. Graeber was a consultant for Manhattan Electric Cable, a wire and cable company. From 1983 to 1989 he was President and from 1979 to 1983 he was Vice President-General Manager of Brand Rex Cable, a wire and cable company. Mr. Graeber has a Masters degree in Electrical Engineering from the University of Connecticut.
56 Michael A. Dudley has been an Executive Vice President of the Company and President - CDT International since 1991. From 1988 to 1991 he was the President of Superior Optics, a division of Superior Teletec, Inc., a publicly traded company that manufactures communication cable. Mr. Dudley has a doctorate degree in Material Science from The National College of Rubber Technology in London, England.
48 Normand R. Bourque has been an Executive Vice President of the Company and President and Chief Executive Officer of NORDX/CDT since its acquisition. Prior to the acquisition, Mr. Bourque was Vice President-Cable Group at Nortel from 1991 to 1995 and Vice President, Operations-Cable Group from 1989 to 1991. From 1985 to 1988, Mr. Bourque was Vice President and General Manager-Transmission Networks at Nortel, and prior to that, held a number of positions in general management and finance at Nortel. Mr. Bourque has a Bachelor's Degree in Business Administration from the Ecole des Hautes Etudes Commerciales in Montreal, Canada.
59 Dave R. Harden has been a Senior Vice President of the Company since 1988. He founded West
Penn Wire in 1971, and operated that company until 1984 when it was acquired by the Company. From 1984 until 1988 Mr. Harden was an Executive Vice President of West Penn/CDT.
37 Peter Sheehan has been an Executive Vice President of the Company since 1998. Mr. Sheehan joined the Company in 1995 in the area of international sales and marketing. Prior to joining the company Mr. Sheehan was Senior Vice President of Sales and Marketing of Berk-tek, a wire and cable company.
48 Kenneth O. Hale has been Vice President, Chief Financial Officer and Secretary of the Company since 1987. Mr. Hale holds a Certified Public Accountant's certificate and an MBA in finance from the University of Missouri.
37 Charles B. Fromm was appointed Vice President and General Counsel of the Company in October 1997. Prior thereto, Mr. Fromm was a Partner at Kirkland & Ellis, New York.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
As of October 5, 1998, there were 172 holders of record of the Company's Common Stock.
Additional information required by this item is set forth under the heading "Directors, Officers, and Corporate Information" on page 47 of the 1998 Annual Report and is incorporated herein by reference.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Information required by this item is set forth under the heading "Selected Historical Consolidated Financial Data" on page 46 of the 1998 Annual Report and is incorporated herein by reference.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of Operations appears on pages 14 through 22 of the 1998 Annual Report and is incorporated herein by reference.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information required by this item appears under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" on page 20 of the 1998 Annual Report and is incorporated herein by reference.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required by this item is set forth on pages 23 through 45 of the 1998 Annual Report and is incorporated herein by reference and filed electronically herewith as Exhibit 13.1.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III.
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
a. Information concerning the Registrant's directors is set forth in the Registrant's definitive proxy statement to be filed with the Securities and Exchange Commission on or before November 28, 1998. Such information is incorporated herein by reference.
b. Information concerning executive officers of the Registrant is set forth in Item 4.1 of Part I at page 10 of this Report under the heading "Executive Officers of the Registrant".
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Information concerning executive officers of the Registrant is set forth in the Registrant's definitive proxy statement to be filed with the Securities and Exchange Commission on or before November 28, 1998. Such information is incorporated herein by reference.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information concerning security ownership of certain beneficial owners and management is set forth in the Registrant's definitive proxy statement to be filed with the Securities and Exchange Commission on or before November 28, 1998. Such information is incorporated herein by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information concerning certain relationships and related transactions is set forth in the Registrant's definitive proxy statement to be filed with the Securities and Exchange Commission on or before November 28, 1998. Such information is incorporated herein by reference.
PART IV.
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
1. The following documents are included in the 1998 Annual Report, pages 23 through 45, and are incorporated herein by reference:
a. Report of Independent Public Accountants. b. Consolidated Statements of Income for the years ended July 31, 1998, 1997 and 1996. c Consolidated Balance Sheets as of July 31, 1998 and 1997. d. Consolidated Statements of Cash Flow for the years ended July 31, 1998, 1997 and 1996. e. Consolidated Statements of Stockholders' Equity for the years ended July 31, 1998, 1997 and 1996. f. Notes to Consolidated Financial Statements.
2. The following documents are filed as part of this report:
a. Report of Independent Public Accountants on Schedules. b. Schedule II Valuation and Qualifying Accounts for the three years ended July 31, 1998. c. List of Exhibits
3. List of Exhibits
2.1 - Asset Purchase Agreement, dated as of September 15, 1995, among Broomco (915) Limited, Volex Group, p.l.c. and Cable Design Technologies Corporation (with respect to Section 12 thereof only). Incorporated by reference to Exhibit 2.1 to CDT's Report on Form 8-K filed with the Commission on October 10, 1995.
2.2 - Asset Purchase Agreement by and among Cable Design Technologies (CDT) Canada Inc., Cable Design Technologies Corporation and Northern Telecom Limited, dated as of December 19, 1995. Incorporated by reference to Exhibit 10.16 to CDT's Registration Statement on Form S- 3 (File No. 333-00554).
2.3 - Asset Purchase Agreement, dated March 31, 1997, between Cable Design Technologies Inc., Dearborn/CDT, Inc., Dearborn West/CDT, Inc., and Thermax/CDT, Inc. and Dearborn Wire and Cable L.P., Dearborn West L.P. and Thermax Wire L.P. Incorporated by reference to Exhibit 10.1 to CDT's Report on Form 8-K, as filed on April 22, 1997.
3.1 - Amended and Restated Certificate of Incorporation of CDT as filed with the Secretary of State of Delaware on November 10, 1993, incorporated by reference to Exhibit 3.1 to CDT's Registration Statement on Form S-1 (File No. 33-69992), Certificate of Amendment of the Restated Certificate of Incorporation of CDT and Certificate of Designation, Preferences and Rights of Junior Participating
Preferred Stock, Series A of CDT, as filed with the Secretary of State of Delaware on December 11, 1996 and incorporated by reference to CDT's Registration Statement on Form 8-A/A, as filed on December 23, 1996.
3.2 - By-Laws of CDT, as amended to date, incorporated by reference to Exhibit 3.2 to the Post-Effective Amendment No. 1 to CDT's Registration Statement on Form S-3 (File No. 333-00554), as filed on February 28, 1996.
4.1 - Form of certificate representing shares of the Common Stock of CDT. Incorporated by reference to Exhibit 4.1 to CDT's Registration Statement on Form S-1 (File No. 33-69992).
4.2 - Rights Agreement dated as of December 11, 1996, between Cable Design Technologies Corporation and The First National Bank of Boston, as Rights Agent, including the form of Certificate of Designation, Preferences and Rights of Junior Participating Preferred Stock, Series A attached thereto as Exhibit A, the form of Rights Certificate attached thereto as Exhibit B and the Summary of Rights attached thereto as Exhibit C. Incorporated herein by reference to CDT's Registration Statement on Form 8-A, as filed on December 11, 1996.
10.1 - CDT Long-Term Performance Incentive Plan (adopted on September 23, 1993). Incorporated by reference to Exhibit 10.18 to CDT's Registration Statement on Form S-1 (File No. 33-69992).
10.2 - CDT Stock Option Plan. Incorporated by reference to Exhibit 4.3 to CDT's Registration Statement on Form S-8 as filed on December 22, 1993.
10.3 - Cable Design Technologies Corporation Management Stock Award Plan (adopted on September 23, 1993). Incorporated by reference to Exhibit 4.3 to CDT's Registration Statement on Form S-8, as filed on May 2, 1994.
10.4 - Description of CDT Bonus Plan. Incorporated by reference to Exhibit 10.20 to CDT's Registration Statement on Form S-1 (File No. 33-69992).
10.5 - Lease Agreement between Phalo and First Hartford Realty Corp., dated as of November 9, 1992. Incorporated by reference to Exhibit 10.23 to CDT's Registration Statement on Form S-1 (File No. 33-69992).
10.6 - Lease Agreement between Mohawk and 9 Mohawk Drive Realty Trust, dated as of March 24, 1986. Incorporated by reference to Exhibit 10.24 to CDT's Registration Statement on Form S-1 (File No. 33-69992).
10.7 - Consulting Agreement, dated as of July 14, 1988, and amendment thereto, dated as of July 14, 1988, between Golder, Thoma, Cressey & Rauner and CDT. Incorporated by reference to Exhibit 10.13 to CDT's Annual Report on Form 10-K, as filed on October 31, 1994.
10.8 - Consulting Agreement, dated as of July 14, 1988, and amendment thereto, dated as of July 14, 1994, between Northern Investment Ltd. Partnership II and CDT. Incorporated by reference to Exhibit 10.14 to CDT's Annual Report on Form 10-K, as filed on October 31, 1994.
10.9 - Employment Agreement dated February 2, 1996, among CDT, NORDX/CDT and Normand Bourque. Incorporated by reference to Exhibit 10.17 to CDT's Report on Form 8-K as filed on February 20, 1996.
10.10 - Collective Labour Agreement dated June 10, 1996, between NORDX/CDT and Canadian Union of Communications Workers Unit 4. Incorporated by reference to Exhibit 10.19 to CDT's Annual Report on Form 10-K, as filed on October 29, 1996.
10.11 - Lease Agreement between NORDX/CDT and Northern Telecom Limited dated February 2, 1996, governing the Lachine, Quebec facility. Incorporated by reference to Exhibit 10.20 to CDT's Annual Report on Form 10-K, as filed on October 29, 1996.
10.12 - 1996 Amendment of Lease between Mohawk and 9 Mohawk Drive Realty, dated as of September 3, 1996. Incorporated by reference to Exhibit 10.23 to CDT's Annual Report on Form 10-K, as filed on October 29, 1996.
10.13 - Registration Agreement among CDT, GTC Fund II, The Prudential Insurance Company of America and Pruco Life Insurance Company, dated as of July 14, 1988, as amended. Incorporated by reference to Exhibit 10.21 to CDT's Registration Statement on Form S-1 (File No. 33-69992).
10.14 - Employment Agreement, dated as of November 1, 1997, between CDT and Charles B. Fromm**
13.1 - CDT 1998 Annual Report to Stockholders (to the extent incorporated herein by reference).**
21.1 - List of Subsidiaries of CDT.**
23.1 - Consent of Arthur Andersen LLP.**
27.1 - Financial Data Schedule.**
99.1 - Legal Charge, dated as of September 22, 1995, between Broomco (915) Limited, as Charger, and Volex Group, p.l.c. Incorporated by reference to Exhibit 99.1 to CDT's Report on Form 8-K filed with the Commission on October 10, 1995.
99.2 - Agreement for the Granting of Leases, dated as of September 15, 1995, among Volex Group, p.l.c., Broomco (915) Limited and Cable Design Technologies Corporation. Incorporated by reference to Exhibit 99.2 to CDT's Report on Form 8-K filed on October 10, 1995.
99.3 - Lease of property known as land lying to the south of Railway Road, Skelmersdale, dated as of September 27, 1995, among Volex Group, p.l.c., Broomco (915) Limited and Cable Design Technologies Corporation. Incorporated by reference to Exhibit 99.4 to CDT's Report on Form 8-K filed on October 10, 1995.
99.4 - Credit Agreement dated April 10, 1997, among the Company, The First National Bank of Boston, Banque Paribas, Chicago Branch, Paribas Bank of Canada, Bank of America Illinois, Bank of America Canada and other lenders party thereto. Incorporated by reference to CDT's Report on Form 10-Q, as filed on June 16, 1997.
99.5**- First Amendment to Credit Agreement dated July 31, 1998 (effective August 3, 1998) among CDT, BankBoston N.A., Paribas, Paribas Bank of Canada, Bank of America NT & SA, Bank of America Canada and other Lenders party thereto.
99.6**- Second Amendment to Credit Agreement dated July 31, 1998 (effective August 3, 1998) among CDT, BankBoston N.A., Paribas, Paribas Bank of Canada, Bank of America NT & SA, Bank of America Canada and other Lenders party thereto.
** Filed Herein
(b) Reports on Form 8-k
None
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
Cable Design Technologies Corporation
By: /s/ Paul M. Olson October 29, 1998 ------------------ Paul M. Olson President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Bryan C. Cressey Chairman of the Board October 29, 1998 - --------------------- Director Bryan C. Cressey
/s/ Paul M. Olson Director, President, Chief October 29, 1998 - ------------------ Executive Officer (Principal Paul M. Olson Executive Officer)
/s/ George C. Graeber Director, Chief Operating October 29, 1998 - --------------------- Officer George C. Graeber
/s/ Kenneth O. Hale Vice President, Chief Financial October 29, 1998 - -------------------- Officer, Secretary (Principal Kenneth O. Hale Financial and Accounting Officer)
/s/ Myron S. Gelbach, Jr. Director October 29, 1998 - -------------------------- Myron S. Gelbach, Jr.
/s/ Michael F. O. Harris Director October 29, 1998 - ------------------------- Michael F. O. Harris
/s/ Glenn Kalnasy Director October 29, 1998 - ------------------ Glenn Kalnasy
/s/ Richard C. Tuttle Director October 29, 1998 - ---------------------- Richard C. Tuttle
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SUPPLEMENTAL SCHEDULE
We have audited in accordance with generally accepted auditing standards, the consolidated financial statements included in Cable Design Technologies Corporation and Subsidiaries' annual report to stockholders incorporated by reference in this Form 10-K, and have issued our report thereon dated September 11, 1998. Our audits were made for the purpose of forming an opinion on those financial statements taken as a whole. The schedule listed in the accompanying index is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania September 11, 1998
CABLE DESIGN TECHNOLOGIES CORPORATION SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED JULY 31, 1998, 1997, 1996
CABLE DESIGN TECHNOLOGIES CORPORATION INDEX TO EXHIBITS FILED HEREIN JULY 31, 1998
EXHIBIT NUMBER EXHIBIT
10.14 - Employment Agreement, dated as of November 1, 1997, between CDT and Charles B. Fromm.
13.1 - CDT 1998 Annual Report to Stockholders (to the extent incorporated herein by reference).
21.1 - List of Subsidiaries of CDT.
23.1 - Consent of Arthur Andersen LLP.
27.1 - Financial Data Schedule.
99.5 - First Amendment to Credit Agreement dated July 31, 1998 (effective August 3, 1998) among CDT, BankBoston N.A., Paribas, Paribas Bank of Canada, Bank of America NT & SA, Bank of America Canada and other Lenders party thereto.
99.6 - Second Amendment to Credit Agreement dated July 31, 1998 (effective August 3, 1998) among CDT, BankBoston N.A., Paribas, Paribas Bank of Canada, Bank of America NT & SA, Bank of America Canada and other Lenders party thereto.