Cablenomics Introduction

This was an exciting month for technology companies. The NASDAQ index, which is heavily weighted towards technology, computer and telecommunications firms, continues to achieve record highs almost on a daily basis. When will it end? Hard to say. From our viewpoint, the seemlessly insatiable demand for bandwidth and technology will continue for the near foreseeable future. Many cabling professionals are commenting that there is a tremendous backlog of projects that will be released in the year 2000.

Interestingly enough, several companies and investment firms are taking advantage of this situation and are increasing their acquisition efforts, especially with contractors/installers/integrators. Many of Gerber & Company, LLC’s clients are these firms, who are looking to become part of a larger entity to help them withstand current profit pressures and cash flow issues, address national accounts, while simultaneously providing long-term upside with significantly less risk.

If you are considering selling your firm and are interested in having an initial, exploratory meeting with Gerber & Company, LLC, then you should contact us at your earliest convenience. Additionally, if you are a well-connected, cabling/wiring professional who would like to join Gerber & Company, LLC and work in the exciting field of Mergers & Acquisitions, then you are also encouarged to call us. Ron Gerber, President of Gerber & Company, LLC can be reached at 212-879-6808 (phone) or via email at rgerber@gerbercompany.com.

Please remember however that Cabling Business Magazine and Gerber & Company, LLC cannot be held responsible for any printing errors. Readers should use this article for informative purposes alone. Any investment decisions should be made with the advice of a financial professional.

Stock Price Table

		15-Mar-99	13-Jun-99	19-Sep	18-Dec-99
Cable/Wire Manufacturers
Spectran	SPTR	4.31	9.50	8.88	8.88
CDT	CDT	12.19	14.07	22.56	22.00
Corning	GLW	59.00	60.31	68.00	112.50
Tyco	TYC				30.00
Belden	BWC	17.88	22.69	22.25	18.50
Superior Telecom	SUT	21.50	28.75	15.50	14.06
General Cable	BGC	14.06	15.75	13.19	6.88
Encore	WIRE	9.06	9.38	9.50	6.64
Optical Cable	OCCF	11.25	12.44	9.63	19.88
Commscope	CTV	19.75	27.88	35.56	41.75
Hardware Manufacturers
3Com	COMS	25.69	25.81	27.75	48.75
Newbridge	NN	31.31	27.69	26.00	23.56
Molex	MOLX	29.75	30.80	36.88	53.13
Cabletron	CS	8.50	14.25	19.13	28.50
Hubbell	HUB/B	40.07	42.69	35.88	27.44
Microtest	MTST	2.25	2.63	3.75	10.69
Comm. Systems	CSII	10.00	12.75	11.63	11.88
Cisco	CSCO	57.50	55.35	73.19	99.60
Lucent	LU	53.00	59.06	69.82	80.50
Thomas & Betts	TNB	39.69	44.81	50.00	31.00
Advanced Electronic	AESP				1.88
LaGrand
Bandwidth Providers
Qwest	QWST	37.29	44.88	30.19	41.60
Distributors
Kent	KNT	10.75	15.63	19.56	22.44
Anicom	ANIC	7.13	8.06	5.25	4.19
Alltel	AT	58.56	72.31	68.25	85.50
Anixter	AXE	`11.13	17.94	22.94	21.75
Systemax	SYX	15.56	11.25	9.25	8.13
Integrators/VAR’s
MasTec	MTZ				41.84
Norstan	NRRD	10.38	10.75	9.25	5.63
Datatec	DATC	2.78	2.50	2.56	5.63
Pomeroy	PMRY	17.75	13.50	12.19	10.25
Argus Holdings	ARGX	16.50	18.06	14.13	13.38
Black Box					66.00
Stock Market Averages
DJIA		9959	10490	10824	11257
S&P 500		1307	1294	1335	1421
Nasdaq Composite		2431	2448	2886	3753

Corning

Corning Incorporated (NYSE:GLW - news) and Oak Industries Inc. (NYSE:OAK - news) announced that the U.S. Federal Trade Commission has granted their request for early termination of the Hart-Scott-Rodino 30-day antitrust waiting period. The merger remains subject to other regulatory steps before closing, including review by the U.S. Securities and Exchange Commission.

Corning and Oak Industries announced on Nov. 14 that they had signed a definitive agreement for the companies to merge in a transaction that will strengthen Corning's position as a global leader in optical communications. Under the terms of the agreement, which have been unanimously approved by the Board of Directors of both companies, Corning will exchange .83 shares of Corning common stock for each share of Oak common stock.

The transaction will be accounted for as a pooling of interests and will be tax free to Oak Industries' shareholders. The transaction is expected to close in the first quarter of 2000, pending regulatory and Oak Industries' shareholder approval. Corning expects the transaction to be accretive to its earnings per share beginning in 2000.

The addition of Oak Industries will extend Corning's leading opto-electronic product portfolio into important new market segments. Specifically, Oak Industries' Lasertron, Inc. subsidiary, a pioneer in the development of active fiber-optic devices for telecommunications, will enhance Corning's photonic-technology product offering and development activities. Lasertron is a market leader in pump lasers, which are the key active component in optical amplifiers, and is also one of the few companies with both internal laser chip making capability and packaging expertise. Lasertron also manufactures transmission lasers and receivers that are targeted at the rapidly growing metropolitan transmission market.

Oak Industries is a leading manufacturer of highly engineered components that it designs and sells to manufacturers and service providers in selected industries, which includes communications. Headquartered in Waltham, Mass., Oak Industries has approximately 4,000 employees worldwide. For the nine months ending Sept. 30, 1999, Oak Industries had revenues of $323.2 million, operating income of $47.2 million and net income of $23.8 million. Information regarding Oak Industries is available at www.oakind.com.

Established in 1851, Corning Incorporated (www.corning.com) creates leading-edge technologies for the fastest-growing markets of the world's economy. Corning manufactures optical fiber, cable and photonic products for the telecommunications industry; and high-performance displays and components for television and other communications-related industries. The company also uses advanced materials to manufacture products for scientific, semiconductor and environmental markets. Corning's revenues in 1998 were $3.5 billion.

CDT

Cable Design Technologies Corporation (NYSE: CDT - news) announced today that it has executed an agreement to acquire an Italian manufacturer of coaxial cables. The closing is expected to take place in January, 2000 subject to customary conditions. Neither the name of the company nor any financial data has been released. The acquisition is expected to be accretive.

In commenting on the announcement, Paul M. Olson, president and CEO, stated, ``We are very pleased about this opportunity to enter the Italian market. This acquisition will give us a base in southern Europe to manufacture and sell coaxial and network cables. While the sales of this company are currently under $20 million, there are strong synergies and we expect it to become a meaningful part of CDT.''

Cable Design Technologies is a leading manufacturer of technologically advanced electronic data transmission cable for network, communication, specialty electronic, and automation and process control applications, including complete voice and data wiring solutions, fiber optic connective solutions and other components required to build high performance telecommunication infrastructures. The Company's products are manufactured or distributed under the trade names Montrose/CDT, Phalo/CDT, West Penn/CDT, Mohawk/CDT, Manhattan/CDT, X-Mark/CDT, Dearborn/CDT, Thermax/CDT, Barcel/CDT, Red Hawk, NORDX/CDT and NORCOM/CDT in North America, NEK/CDT and Orebro/CDT in Sweden, Anglo American/CDT and Raydex/CDT in the U.K., Cekan/CDT in Denmark, and HEW-KABEL/CDT in Germany.

Norstan

Norstan, Inc. (Nasdaq: NRRD - news) - a technology services leader providing information technology, networking and communications solutions to business clients worldwide -- today announced that its president and CEO, David R. Richard, has resigned effective today. Chairman of the Board Paul Baszucki will assume the position of CEO. The company also announced that its executive vice president and CFO, Kenneth S. MacKenzie, also has resigned, effective today, and that Vice Chairman of the Board Richard Cohen will assume the position of CFO. Mr. Baszucki and Mr. Cohen have held these positions at Norstan previously and they will retain their current board responsibilities.

Commenting on his decision to resign, Mr. Richard said: ``While I believe that the strategy Norstan has embarked on is correct, I am disappointed in the progress we have made in executing that strategy during my watch.'' Norstan reported a loss for second quarter fiscal 2000 of $12.2 million or $1.13 per share. Earnings for the same period in fiscal 1999 were $3.7 million or $0.35 per share.

In making the announcement, Norstan Chairman and CEO Paul Baszucki said: ``As in the first quarter, our second quarter performance was hampered by weakness in top-line revenue growth. Although there was some softness in our high-end product business caused by customer purchasing delays, this was largely off-set by new technology sales revenue growth. However, we experienced continued weakness in our cabling business as we continue to re- position that business from general cabling work to more technical work in support of our multiservice initiative. In our IT consulting services business, customers have postponed IT infrastructure work in preparation for the year 2000. These postponements resulted in lower revenues in the IT business.''

Mr. Baszucki added: ``These results do not reflect the tremendous effort expended by our employees in transforming Norstan to a world-class technology services company. In our communications business, we have made significant progress in building our multiservice networking practice and delivering bundled solutions to our customers as a sole-source provider of communications technology. And, we are accelerating the transition of our IT consulting business from staff augmentation to project-based e-development, e-commerce, enterprise relationship management, strategic advisory services and infrastructure services.''

Commenting on the financial results and the charges taken in the second quarter, CFO Richard Cohen said: ``In the second quarter, cost overruns identified in the communications business were more pronounced than we had anticipated and the charges taken in the second quarter include those identified overruns. We have initiated actions that will help assure that cost overruns will be minimized in the future.

``Given the rapid state of change in the communications industry, it also has become necessary to revalue portions of our communications equipment inventory as these industry changes have resulted in some obsolescence of our inventory. Charges we have taken in the second quarter reflect this revaluation of our inventory. We have also taken a restructuring charge within Norstan Consulting to consolidate branch offices and reduce general and administrative spending in that business. As Norstan Consulting transitions to a project-based model focused on a discrete set of practices, the physical presence of geographic branches becomes far less important than the ability to move skilled consulting resources to customer engagements.''

Mr. Cohen continued: ``Given these operating results, it is imperative that we re-double our focus on revenue growth and cost control in addition to our restructuring efforts. In the communications business, strong emphasis on our services portfolio, including multiservice opportunities, as well as exploitation of our service capabilities in new markets should result in revenue growth. In the IT consulting services business, the expansion of our high-value service offerings and the transition from staff augmentation work to longer-duration, project-based work should also translate to revenue growth.''